Shenzhen Textile (Holdings) Co., Ltd. Consolidated Balance sheet
I: Financial statements
Shenzhen Textile (Holdings) Co., Ltd. Consolidated Balance sheet Unit：RMB Assets
June 30, 2011
December 31, 2010
Current asset： Monetary fund
498,986,454.63
830,236,037.30
-
-
2,107,763.05
-
Account receivable
57,469,117.54
48,148,305.15
Prepayments
24,594,257.01
4,681,130.84
1,836,339.85
2,203,227.00
-
-
Other receivable
25,654,944.30
30,015,024.72
Inventories
67,936,176.52
60,986,770.44
Non-current asset due in 1 year
-
-
Other current assets
-
-
678,585,052.90
976,270,495.45
79,037,204.81
75,481,853.50
Expired investment in possess
-
-
Long-term receivable
-
-
46,947,791.21
47,250,337.33
Property investment
164,910,744.18
168,268,522.84
Fixed assets
160,142,264.53
166,482,617.12
Construction in progress
454,072,158.61
155,260,944.31
Engineering material
-
-
Fixed asset disposal
-
-
Production physical assets
-
-
Gas & petrol
-
-
47,605,567.53
48,642,431.17
-
-
Goodwill
9,614,758.55
9,614,758.55
Long-germ expenses to be amortized
1,111,955.26
897,757.98
Differed income tax asset
7,795,339.63
7,252,580.16
-
-
971,237,784.31
679,151,802.96
1,649,822,837.21
1,655,422,298.41
Trading financial assets Bill receivable
Interest receivable Dividend receivable
Total of current assets Non-current assets： Disposable financial asset
Long term share equity investment
Intangible assets R & D petrol
Other non-current asset Total of non-current assets Total of assets
Shenzhen Textile (Holdings) Co., Ltd. Consolidated Balance Sheet（Cont’d） Unit：RMB Liabilities & equity
June 30, 2011
December 31, 2010
Short-term loans
-
2,000,000.00
Financial liabilities held for trading
-
-
Bill payable
-
-
Accounts payable
34,112,216.58
33,098,532.04
Advances from customers
35,627,099.58
13,922,128.20
Salaries payable to Staff
18,308,399.02
20,785,444.97
-27,001,427.03
4,011,683.39
2,298,867.02
154,092.20
-
-
49,231,541.90
47,759,095.14
Non-current liabilities due in 1 year
-
21,000,000.00
Other current liabilities
-
-
112,576,697.07
142,730,975.94
96,719,008.30
96,719,008.30
Bonds payable
-
-
Long-term payable
-
-
Special payable
-
-
Accrued liabilities
-
-
Deferred income tax liabilities
14,039,722.96
15,446,103.51
Other Non-current liabilities
52,806,595.67
54,556,985.69
Total of non-current liabilities
163,565,326.93
166,722,097.50
Total of liability
276,142,024.00
309,453,073.44
Share capital
336,521,849.00
336,521,849.00
Capital reserves
835,144,726.68
839,797,115.13
-
-
34,086,443.10
34,086,443.10
167,927,794.43
135,563,817.74
1,373,680,813.21
1,345,969,224.97
-
-
Total of owners’ equity
1,373,680,813.21
1,345,969,224.97
Total of liabilities and owners’ equity
1,649,822,837.21
1,655,422,298.41
Current Liabilities
Taxes payable Interests payable Dividends payable Other payable
Total current liabilities Non-Current liabilities: Long-term loan
Owners’ equity
Less：Shares in stock Surplus reserves Undistributed profit Total of owner’s equity belong to the parent company Minor shareholders’ equity
Shenzhen Textile (Holdings) Co., Ltd. Consolidated Profit Statement January-June 2011 Unit：RMB Items
January-June 2011
January-June 2010
I.Income from the key business
319,182,717.75
322,369,136.74
II.Total business cost
297,505,664.40
308,208,839.07
Incl：Business cost
261,172,573.17
273,132,795.71
Operating taxes and extras
3,553,081.05
3,153,374.16
Sales expenses
3,444,774.44
1,815,600.87
Administrative expenses
30,654,365.07
26,403,627.56
Financial expenses
-4,343,761.14
2,175,589.19
3,024,631.81
1,527,851.58
-
-
3,502,158.53
11,883,866.62
97,453.88
979,077.01
III. Operational profit
25,179,211.88
26,044,164.29
Add：Non-business income
15,619,413.07
4,982,567.16
1,890.28
1,107.68
-
-
40,796,734.67
31,025,623.77
8,432,757.98
6,167,121.07
Loss of devaluation of assets Add：Changing income of fair value Investment income Incl: investment gains from affiliates
Less：Non business expenses Incl：Loss from disposal of non-current IV.Total profit Less：Income tax expenses
Shenzhen Textile (Holdings) Co., Ltd. Consolidated Cash flow statement Unit：RMB Items
January-June 2011
January-June 2010
I.Cash flows from operating activities Cash received from sales of goods or rending of services
311,780,179.42
326,450,091.77
23,683,459.82
26,585,651.90
7,189,737.10
900,678.20
Sub-total of cash inflow
342,653,376.34
353,936,421.87
Cash paid for purchasing of merchandise and services
259,863,190.15
294,294,890.06
Cash paid to staffs or paid for staffs
33,599,761.08
24,298,731.85
Taxes paid
18,805,471.26
15,839,658.03
Other cash paid for business activities
17,841,205.09
17,088,192.08
330,109,627.58
351,521,472.02
12,543,748.76
2,414,949.85
1,957,406.46 1,654,292.08 64,494.00
10,377,879.04 1,440,403.30 -
Tax returned Other cash received from business operation
Sub-total of cash outflow from business activities Cash flow generated by business 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
-
-
208,638,835.75
-
Sub-total of cash inflow due to investment activities
212,315,028.29
11,818,282.34
Cash paid for construction of fixed assets, intangible
330,575,486.29
61,974,424.22
-
-
330,575,486.29 -118,260,458.00
61,974,424.22 -50,156,141.88
-
-
2,850,000.00 2,850,000.00 23,000,000.00 564,471.66 23,564,471.66 -20,714,471.66
132,553,666.34 2,300,000.00 134,853,666.34 77,000,000.00 3,204,422.50 226,003.51 80,430,426.01 54,423,240.33
-248,959.27
212,147.38
-126,680,140.17
6,894,195.68
417,686,594.80
101,340,314.95
291,006,454.63
108,234,510.63
assets and other long-term assets Cash paid as investmen Cash paid as investmen 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 Incl: Cash received as investment from minor shareholders Cash received as loans 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 equivalents Add: balance of cash and cash equivalents at the beginning of term VI .Balance of cash and cash equivalents at the end of term
Consolidated Statement on Change in Owners’ Equity January-June 2011 Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Items I.Balance at the end of last year Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning of current year III.Changed in the current year （I） Net profit （II）Other misc.income Total of (I) and (II) (III) Investment or decreasing of capital by owners 1. Capital inputted by owners 2．Amount of shares paid and accounted as owners’ equity 3．Other （IV）Profit allotment 1.Providing of surplus reserves 2.Providing of common risk provisions 3．Other (V) 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 1Provided this year 2.Used this term IV. Balance at the end of this term
Unit：RMB
Share Capital
Capital reserves
Owner’s equity Attributable to the Parent Company Less: Common Specialized Surplus Shares in risk reserve reserves stock provission 34,086,443.10 34,086,443.10 -
Minor shareholders’ equity
Total of owners’ equity
Attrbutable profit
Other
135,563,817.74 135,563,817.74 32,363,976.69 32,363,976.69
-
-
336,521,849.00 336,521,849.00 -
839,797,115.13 839,797,115.13 -4,652,388.45
-
-4,652,388.45 -4,652,388.45 -
-
-
-
-
32,363,976.69 -
-
-
1,345,969,224.97 1,345,969,224.97 27,711,588.24 32,363,976.69 -4,652,388.45 27,711,588.24 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
336,521,849.00
835,144,726.68
-
-
34,086,443.10
-
167,927,794.43
-
-
1,373,680,813.21
Consolidated Statement of Change in Owners’ Equity January-June 2010 Prepared by: Shenzhen Textile (Holdings) Co., Ltd.
Unit: RMB Owner’s equity Attributable to the Parent Company
Items I.Balance at the end of last year Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning of current year III.Changed in the current year （I） Net profit （II）Other misc.income Total of (I) and (II) (III) Investment or decreasing of capital by owners 1. Capital inputted by owners 2．Amount of shares paid and accounted as owners’ equity 3．Other （IV）Profit allotment 1.Providing of surplus reserves 3．Allotment to the owners (or shareholders) 4．Other (V) 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 IV. Balance at the end of this term
Share Capital
Capital reserves
Less: Shares in stock
Specialize d reserve
Common risk provission
Surplus reserves
Attrbutable profit
Oth er
Minor shareholders’ equity
Total of owners’ equity
245,124,000.00 245,124,000.00
119,181,307.65 119,181,307.65
-
-
31,832,178.67 31,832,178.67
-
97,108,810.95 97,108,810.95
-
-
493,246,297.27 493,246,297.27
-
-23,136,556.04
-
-
-
-
24,858,502.70 24,858,502.70
-
-
-
-23,136,556.04 -23,136,556.04 -
-
-
-
-
24,858,502.70 -
-
-
1,721,946.66 24,858,502.70 -23,136,556.04 1,721,946.66 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
245,124,000.00
96,044,751.61
-
-
31,832,178.67
-
121,967,313.65
-
-
494,968,243.93
Shenzhen Textile (Holdings) Co., Ltd. Parent Company Balance sheet Unit：RMB Assets
June 30,2011
December 31, 2010
Current asset： Monetary fund
299,746,287.48
483,902,800.37
Trading financial assets
-
-
Bill receivable
-
-
Account receivable
-
-
Prepayments
2,092,000.00
881,080.00
Interest receivable
1,836,339.85
2,203,227.00
-
-
21,377,171.00
25,218,113.04
Dividend receivable Other receivable Inventories
-
Non-current asset due in 1 year
-
-
Other current assets
-
-
325,051,798.33
512,205,220.41
Total of current assets Non-current assets： Disposable financial asset
79,037,204.81
75,481,853.50
Expired investment in possess
-
-
Long-term receivable
-
-
Long term share equity investment
775,424,838.98
575,727,385.10
Property investment
154,844,864.74
157,914,202.69
33,764,093.25
34,758,106.27
2,006,624.19
-
Engineering material
-
-
Fixed asset disposal
-
-
Production physical assets
-
-
Gas & petrol
-
-
1,568,439.80
1,763,383.44
R & D petrol
-
-
Goodwill
-
-
Long-germ expenses to be amortized
-
-
4,374,127.20
4,339,038.67
Fixed assets Construction in progress
Intangible assets
Differed income tax asset Other non-current asset
-
-
Total of non-current assets
1,051,020,192.97
849,983,969.67
Total of assets
1,376,071,991.30
1,362,189,190.08
Shenzhen Textile (Holdings) Co., Ltd. Parent Company Balance sheet（Cont’d） Unit：RMB Liabilities & Equity
June 30, 2011
December 31, 2010
Short-term loans
-
-
Financial liabilities held for trading
-
-
Bill payable
-
-
Current Liabilities
Accounts payable
1,590,881.57
1,732,905.87
639,024.58
639,024.58
Salaries payable to Staff
4,581,840.45
6,529,841.13
Taxes payable
4,089,769.37
2,333,265.14
Interests payable
-
-
Dividends payable
-
-
65,138,344.05
63,396,499.56
Non-current liabilities due in 1 year
-
-
Other current liabilities
-
-
76,039,860.02
74,631,536.28
Long-term loan
-
-
Bonds payable
-
-
Long-term payable
-
-
Special payable
-
-
Accrued liabilities
-
-
Deferred income tax liabilities
13,927,636.24
15,334,016.79
Other Non--Current liabilities:
-
-
Total of non-current liabilities
13,927,636.24
15,334,016.79
Total of liability
89,967,496.26
89,965,553.07
Share capital
336,521,849.00
336,521,849.00
Capital reserves
826,561,744.89
831,214,133.34
-
-
Surplus reserves
34,086,443.10
34,086,443.10
Undistributed profit
88,934,458.05
70,401,211.57
Total of owners’ equity
1,286,104,495.04
1,272,223,637.01
Total of owners’ equity
1,286,104,495.04
1,272,223,637.01
Total of liabilities and owners’ equity
1,376,071,991.30
1,362,189,190.08
Advances from customers
Other payable
Total current liabilities Non-Current liabilities:
Owners’ equity
Less：Shares in stock
Shenzhen Textile (Holdings) Co., Ltd. Parent Company profit Statement January-June 2011 Unit：RMB ems
January-June
January-June 2011
2010
I. Business income
27,412,012.19
26,185,085.38
Less：Business cost
5,806,617.39
5,209,763.11
Operating taxes and extras
2,426,440.81
2,271,266.87
-
-
Administrative expenses
13,462,239.34
10,919,104.25
Financial expenses
-4,084,479.09
1,125,555.37
-146,202.21
3,287,704.58
-
-
2,960,216.90
11,391,272.25
Sales expenses
Loss of devaluation of assets Add：Changing income of fair value Investment income Incl: investment gains from affiliates
97,453.88
#
979,077.01
II. Operational profit
12,907,612.85
14,762,963.45
Add：Non-business income
10,919,223.05
-
88.28
200.00
-
-
23,826,747.62
14,762,763.45
5,293,501.14
2,785,058.36
18,533,246.48
11,977,705.09
（I）Basic earnings per share
0.06
0.05
(II)Diluted earnings per share
0.06
0.05
VII. Other comprehensive income
-4,652,388.45
-23,136,556.04
VIII. Total comprehensive income
13,880,858.03
-11,158,850.95
Total comprehensive income attributable to the owner of
13,880,858.03
-11,158,850.95
-
-
Less：Non business expenses Incl：Loss from disposal of non-current III. Total
profit
Less：Income tax expenses IV.Net profit V. Earnings per share：
the parent company Total comprehensive income attributable minority shareholders
Shenzhen Textile (Holdings) Co., Ltd. Parent Company Cash flow statement
Items
Unit：RMB January-June 2010
January-June 2011
I.Cash flows from operating activities Cash received from sales of goods or rending of services Tax returned
24,909,346.70
23,885,694.18
-
-
9,248,049.28
2,807,176.52
34,157,395.98
26,692,870.70
Cash paid for purchasing of merchandise and services
1,719,903.98
2,155,381.46
Cash paid to staffs or paid for staffs
8,992,339.31
5,260,089.92
4,895,304.51
3,612,360.21
Other cash paid for business activities
7,800,603.93
70,329,994.03
Sub-total of cash outflow from business activities
23,408,151.73
81,357,825.62
Cash flow generated by business operation, net
10,749,244.25
-54,664,954.92
1,957,406.46
10,377,879.04
1,415,634.56
947,808.93
52,994.00
-
-
-
201,433,611.71
-
Sub-total of cash inflow due to investment activities Cash paid for construction of fixed assets, intangible assets and other long-term assets
204,859,646.73
11,325,687.97
2,195,961.37
4,581,603.75
Cash paid as investment Net cash received from subsidiaries and other operational units
200,000,000.00
-
-
-
-
-
202,195,961.37
4,581,603.75
2,663,685.36
6,744,084.22
Other cash received from business operation Sub-total of cash inflow
Taxes paid
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
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 loans
-
130,000,000.00
Other financing –related ash received
-
-
Sub-total of cash inflow from financing activities
-
130,000,000.00
Cash to repay debts
-
70,000,000.00
Cash paid as dividend, profit, or interests
-
1,176,930.00
Other cash paid for financing activities
-
226,003.51
Sub-total of cash outflow due to financing activities
-
71,402,933.51
Net cash flow generated by financing IV.Influence of exchange rate alternation on cash and cash equivalents
-
58,597,066.49
-
-2,265.86
V.Net increase of cash and cash equivalents Add: balance of cash and cash equivalents at the beginning of term
13,412,929.61
10,673,929.93
84,353,357.87
19,539,632.30
VI .Balance of cash and cash equivalents at the end of term
97,766,287.48
30,213,562.23
Cash received as investment
Statement of Change in Owners’Equity January-June 2011 Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Owner’s equity Attributable to the Parent Company Items
Share Capital
Capital reserves
Less: Shares in stock
Specialized reserve
Surplus reserves
Common risk provission
Total of owners’ equity
Attrbutable profit
336,521,849.00
831,214,133.34
-
-
34,086,443.10
-
70,401,211.57
1,272,223,637.01
Add: Change of accounting policy
-
-
-
-
-
-
-
-
Correcting of previous errors
-
-
-
-
-
-
-
-
Other
-
-
-
-
-
-
-
-
336,521,849.00
831,214,133.34
-
-
34,086,443.10
-
70,401,211.57
1,272,223,637.01
-
-4,652,388.45
-
-
-
-
18,533,246.48
13,880,858.03
18,533,246.48
18,533,246.48
I.Balance at the end of last year
II.Balance at the beginning of current year III.Changed in the current year （I） Net profit
-4,652,388.45
（II）Other misc.income
-4,652,388.45
Total of (I) and (II) (III) Investment or decreasing of capital by owners 1. Capital inputted by owners
-
-4,652,388.45
-
-
-
-
18,533,246.48
13,880,858.03
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2 ． Amount of shares paid and accounted as owners’ equity 3．Other
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
（IV）Profit allotment
-
-
-
-
-
-
-
-
1.Providing of surplus reserves
-
-
-
-
-
-
-
-
3．Allotment to the owners (or shareholders)
-
-
-
-
-
-
-
-
4．Other
-
-
-
-
-
-
-
-
(V) 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
-
-
-
-
-
-
-
-
336,521,849.00
826,561,744.89
-
-
34,086,443.10
-
88,934,458.05
1,286,104,495.04
IV. Balance at the end of this term
Statement on Change in Owners’Equity January-June 2010 Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Owner’s equity Attributable to the Parent Company Items I.Balance at the end of last year
Less: Shares in stock
Capital reserves
Share Capital
Special reserve
Common risk provisions
Surplus reserves
Attributable profit
Total of owners’ equity
245,124,000.00
110,598,325.86
-
-
31,832,178.67
-
50,112,831.71
437,667,336.24
Add: Change of accounting policy
-
-
-
-
-
-
-
-
Correcting of previous errors
-
-
-
-
-
-
-
-
Other
-
-
-
-
-
-
-
-
245,124,000.00
110,598,325.86
-
-
31,832,178.67
-
50,112,831.71
437,667,336.24
-
-23,136,556.04
-
-
-
-
11,977,705.09
-11,158,850.95
II.Balance at the beginning of current year III.Changed in the current year （I） Net profit
11,977,705.09
（II）Other misc.income
-23,136,556.04
11,977,705.09 -23,136,556.04
Total of (I) and (II)
-
-23,136,556.04
-
-
-
-
11,977,705.09
-11,158,850.95
(III) Investment or decreasing of capital by owners
-
-
-
-
-
-
-
-
1. Capital inputted by owners 2．Amount of shares paid and accounted as owners’ equity 3．Other
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
（IV）Profit allotment
-
-
-
-
-
-
-
-
1.Providing of surplus reserves
-
-
-
-
-
-
-
-
2．Allotment to the owners (or shareholders)
-
-
-
-
-
-
-
-
4．Other
-
-
-
-
-
-
-
-
(V) 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
-
-
-
-
-
-
-
-
245,124,000.00
87,461,769.82
-
-
31,832,178.67
-
62,090,536.80
426,508,485.29
IV. Balance at the end of this term
II: Notes to Financial statements
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial statements January-June 2011 I.Basic Information of the Company 1. Enterprise registration address, organization mode and headquarter address. The company was previously the Shenzhen Textile Industry Company, on April 13, 1994, approved by the Letter(1114)No.15 issued by Shenzhen Municipal People's Government, the Company was restructured and named as Shenzhen Municipal Textile (Group) Co., Ltd. In the same year, approved by the (1994) No.19 file of Shenzhenshi, the shares of the company were listed in Shenzhen Stock Exchange. The Company has got the corporate business certification of Shensizi N246747, Registration address and headquarter address are Shenfang Building, Huaqiang Rd. North, Futian District, Shenzhen. 2. Enterprise’s business nature and major business operation. Majored in manufacturing and im-exporting trade on textile, LCD polarizer, clothes and associated products, concurrently managing property leasing, storage, real estate development and hotel business, etc. 3. Names of parent company and group parent company. The company’s parent company is Shenzhen Investment Holding Co., Ltd. 4. The reporting person of the approval of financial statements and the reporting date of the approval of financial statements. The reporting person of the approval of financial statements of the company: Board of Directors of the Company The reporting date of the approval of financial statements of the Company:August 13, 2011 II. Principal accounting policies, accounting estimates and early errors 1.Basis for the preparation of financial statements On the basis of continuous operation, in accordance with actual transactions and events, the company carried out confirmation and measurement in accordance with "Accounting Standards for Business Enterprises - Basic Standards" issued by the Ministry of Finance and other various accounting standards, on the basis of it, the Company prepared the financial statements. 2. Statement on complying with corporate accounting standards Based on the requirement that the financial reports edited according to above-mentioned editing conditions is accordance with enterprise accounting standards, the company reflected its financial condition on June 30, 2011 truly and completely and business result on January-June 2011 and cash flow information, etc. 3. Fiscal year A calendar year, that is, from January 1 to December 31 is a fiscal year. 4. Accounting standard money Accounting standard money is RMB. 5. Accounting process method of enterprise consolidation under same and different controlling. （1）Enterprise merger under same control：For the enterprise merger under same control, the assets and liabilities obtained by the merging party from enterprise merger was measured according to book value of the merged party on the merger date. The capital reserve was adjusted according to the deference between the book value of net assets obtained by the merging party and the book value of merger price paid (or the total book value of shares issued); if capital surplus was not big for the offset, the retained earnings should be adjusted. Amalgamating parties reckon every direct relate expenses produced in enterprise consolidation including auditing expense, valuation expense and legal service expense paid on enterprise consolidation to current profit and loss when those expenses produced. On parent subsidiary relationship formed via enterprise consolidation , parent company is responsible of editing amalgamation property balance sheet, amalgamation profit statement and amalgamation 13
cash flow meter of amalgamation date. In amalgamation property balance sheet, every asset and liability of amalgamated parties is measured according to its book value. For the accounting policy adopted by the amalgamated parties is not accordance with amalgamating party, and it is adjusted according to criterions, the book value after adjusted is measured. The amalgamating profit chart contains income, expenses and profit happened from the beginning of amalgamation and amalgamating date. The realized net profit before amalgamation from the amalgamated party shall be reflected on the amalgamating profit chart. Amalgamation cash flow meter contains the cash flow of every party in amalgation from the beginning of amalgamation and amalgamating date. （2）Enterprise merger under different control：For the enterprise merger under same control, the merger cost was the assets for the obtaining the control right of the party being purchased on the purchase date, the liabilities happened or undertook and the fair value of the equity securities. For the enterprise merger realized through a number of transactions, the merger cost was the sum of all individual transaction. All the direct costs and related costs for the enterprise merger were included in the cost of enterprise merger. The purchase date referred to date that the company had the control right of the party being purchased. The difference between merger cost over the fair value of identifiable net value obtained from the merger should be confirmed as goodwill. The difference between the identifiable net assets of the party being purchased obtained in the merger and the amount of identifiable net assets of the party being purch ased obtained in the merger should be included in the loss and gain of the current period. On parent subsidiary relationship formed via enterprise consolidation , parent company is responsible of editing amalgamation property balance sheet on amalgamation date; the acquired every identified asset, liability acquired from enterprise consolidation is listed via fair value. 6. The compiling method of combined financial statement （1）Combined financial statements has financial statements and other related material of every subsidiary company within combined financial statements as combination basis, adjust long-term equity investment of subsidiary company according to equity method, compensate investment, trade activities of the company and every subsidiary company within the combined financial statements, calculate few shareholder profit and loss and few shareholder rights and interests. Then compile the financial statements after those activities. （2）In compiling, if the accounting policy of any subsidiary company within the combination scope is not accordance with it of the company, adjust it according to the accounting policy of the company, then combine. （ 3 ） On the subsidiary company acquired from enterprise consolidation under same controlling, treat amalgamation produced at the beginning, bring its assets, liabilities, business result and cash flow into financial statements at the beginning of the amalgamation. （4）On the enterprise consolidation under same controlling, the net income and loss of the amalgamated parties is reckoned into nonrecurring profit and loss before amalgamation and separately listed in submitting financial statement. （5）Recombination belongs to enterprise non-combination issue under same company controller, when the combined parties combine the assets amount of last account year end, business income of last accounting year or total profit of last accounting year, if it reaches or excesses 20% of relative item of the company, compile income statements at the beginning of the combination period. （6）For the subsidiary company acquired from enterprise consolidation under non-same controlling, in compiling combination statements, adjust individual financial statements based on fair value of identified net assets at the purchasing date. 7.Confirmation standard of cash and cash equivalent Cash means the cash on hand and deposit for payment at any moment. Cash equivalent refers to the investment with few value alteration risks that the company holds the cash with the characters of short term (generally means 3 months from the purchasing date), strong fluidity, easy transferring to known amount. 8 . Translating of foreign currency operations and foreign currency report form （1）Accounting method of foreign currency operations The foreign currency operation is translated into recording currency according to approximate exchange rate at sight of business happening date. The approximate exchange rate at sight refers to the exchange rate at the beginning of the business happening month. On balance sheet date, dispose foreign currency monetary item and foreign currency non-monetary item according to the following regulations: A. Foreign currency monetary item is translated adopting exchange rate at sight of balance sheet date. The balance of exchange produced from the difference between exchange rate at sight at balance sheet date and initial 14
confirmation or exchange rate at sight at former balance sheet date shall be reckoned into profit and loss at current period. B.Foreign currency non-monetary item measured with historic cost, adopt exchange rate at sight on business happening date and not to change recording currency (amount). C. Foreign currency non-monetary item measured by fair value adopts exchange rate at sight of fair value confirmation date. The difference between recording currency after translating and the original recording currency is disposed as fair value alteration and reckoned into profit and loss at current period. （2）Method for foreign currency accounting The subsidiaries of the company whose standard currency was foreign currency, all asset and liability items should be converted into the standard money of parent company according to the spot rate on the balance sheet date, and all the owners’ equity items, accept for "retained profits", should be converted into the standard money of parent company according to the spot rate on the balance sheet date. The income and cost items in the profit statement should be converted into the standard money of parent company according to the spot rate during the period of consolidating financial statements. The conversion differences due to different exchange rate, should be reflected by opening the "foreign currency conversion difference statements" in RMB. And open the "foreign currency statements conversion differences" in cash flow statement in RMB. 9. Financial instruments (1) Classification of financial assets: Financial assets can be divided into: the financial assets which measured by fair value and its changes are included in the current loss and gain (including transactional financial assets and the financial assets which measured by fair value and its changes are included in the current loss and gain), the expired investments, loans and receivables held, and financial assets to be sold, the four categories; (2) Measurement of financial assets A. The initial recognition financial assets are accounted in accordance with fair values. For the financial assets which measured by fair value and its changes are included in the current loss and gain, the relevant transactional costs should be included in the current loss and gain; for other financial assets, the relevant transactional costs should be included in the initial recognition amount. B. The Company makes follow-up measurement on financial assets according to fair value, the transactional cost to deal with the financial assets which may happen in the future will not be deducted. But, except the following situations: (a). The expired investments, loans and receivables held, should be measured according to amortized costs by the actual interest method. (b). The equity tool investments which do not have quotation in market and their fair value can not be reliably measured, and the derivative financial assets which are related to the equity tool and are to be delivered to the equity tool to account, should be measured according to costs. (3) Determination of fair value of financial assets: A, The financial assets which exist in the market, the quotation in the market will be determined as fair value; B, The financial assets which do not exist in the market, adopt valuation techniques to determine the fair value. The results by the valuation techniques show the transaction prices which may be used in fair transactions on the valuation day. （4）Financial assets transfer The company will transfer almost all risk and earnings into the transferred parties on the ownership of financial assets or when the controlling on financial assets is given up, it will expire confirming the financial assets. (5). Impairment of financial assets: On the balance sheet date, carry out inspection on the book value of financial assets which are not included in the financial assets measured according to fair value and its changes are include in the current loss and gain. If there are objective evidence showing that the financial assets have impairment, the provision for impairment should be accounted. The objective evidences which show the impairment of financial assets include the following items: A. The issuing party or the debtor had serious financial difficulties; B. The debtor violated the terms in the contract, such as the payment of interest or principal had default or delayed; C. For the consideration in economy and law, the Company made concessions to the debtor in difficulties; D. The debtor was likely to collapse or carry out other financial restructuring; E. The issuing party had major financial difficulties, and the financial assets can not be traded in market; F. The debtor had major adverse changes in technology, market, economic and legal environment, and the Company was may not be able to recover the investment costs; G. The fair values of the equity tool investments had serious and non-temporary decline; H. Other objective evidences which show the impairment of financial assets. (6). Measurement of impairment losses of financial assets: A. The financial assets measured according to fair value and its changes are include in the current loss and gain 15
require no test of impairment; B. The measurement of impairment loss of expired investments: account provision for impairment according to the difference of the value of future cash flow lower than the book value; C. The confirmation standard and withdrawal method of doubtful accounts receivable: when single item amount is much, separately practice deduction testing and confirm its depreciation loss and withdrawal doubtful accounts according to the difference between future cash flow and its book value; when single item amount is not much, the non-decreased accounts receivable via testing, aging analysis method shall be adopted, depreciation loss is confirmed and withdrawal doubtful accounts according to aging of accounts of accounts receivables and regulated withdrawal ration; when single amount is not much, while the accounts receivables with bigger risk after combination according to credit risk nature and withdrawal doubtful accounts. The non-decreased accounts receivable via testing, aging analysis method shall be adopted, depreciation loss is confirmed according to aging of accounts of accounts receivables and regulated withdrawal ration. D. Judgment of impairment of the financial assets for sale: if the fair value of the financial asset is decreasing continuously and the decline is not temporary, the occurrence of the impairment of the financial asset will be recognized. 10. Account receivable 1.Accounts receivables confirmation standard and withdrawal method of doubtful accounts upon much single accounts （1）Account receivable belong t individual significance and individually assessed for impairment：
Criteria and norm individual significance
The Client Identifies single amount of accounts receivable that is not less less thanRMB 1 million as account receivable that are individually significant in amount.The Client Identifies single amount of accounts receivable that is not less less thanRMB 0.5 million as account receivable that are individually significant in amount.
of
Measurement of impairment allowances for receivables of individual significance
If it is objectively evidential that a receivable of individual significance has impaired, the impairment loss shall be recognized based on the difference of the book values higher than the present value of future cash flows.
（2）Accounts receivable belong to recognition of impairment allowances by group： Basis of determination of group Account’s age group
The classified according shall be recognized based on the accounts’age
Method for recognition of impairment allowances by group Account’s age group
Adopt the age analysis method.
Adpt the age analysis method： age
% for accounts receivable
% for other receivables
5%
5%
1－2 years
10.00%
10.00%
2－3 years
30.00%
30.00%
Over 3 years
50.00%
50.00%
Within 1 year（Incl.1 year）
（3）Accounts receivable belong to individuall insignificant but individually assessed for impairment：
16
The reason for individually assessed for impairment
There is evidence that differences in the receivable are apparently .
Method for recognitionof impairment allowances
A receivable which is individually insignificant but the credit riskis high, shoud be individuallt assessed for impairment, the impairment loss shall be recognized based on the difference of the book values higher than the present value of future cash flows.
11.Inventory （1）Inventory classification Inventory can be divided into five categories: raw materials, materials commissioned to process, products, finished products, working materials; （2）Pricing method of stock delivered Stock delivered is measured according to weighted average method. （3）Confirmation basis of stock net realizable value and withdrawal method of inventory falling price reserves. Inventory net realizable value is the integrant value that estimated sales price deducting estimated work completing cost and integrant estimated cost according to the normal business process. Withdrawal method of inventory falling price reserves: with the basis that the company making complete inventory taking at the end of medium term and end of year, on the inventory that suffered loss, entire or partial old and outdated or sale price lower than sales price, according to inventory cost and net realizable value (lower is preferred), the company measure it and reckoned it according to the difference of net realizable value of single inventory item upon similar inventory items lower than inventory cost as withdrawal inventory falling price reserves to profit and loss at current period. In confirming net realizable value, the infection upon future item shall be considered beside the price and cost fluctuation of the inventory at balance sheet date. （4）Inventory system Inventory system adopts the perpetual inventory method. （5）Amortization method of consumption goods with low value and wrappage Consumption goods with low value: Consumption goods with low value adopt one time amortization method when used. Packing: Wrappage adopts one time amortization when used. 12．Long-term equity investment （1）Investment cost confirmation A. The long-term equity investment formed via enterprise consolidation confirm its initial investment cost according to the following criterions: a. On enterprise consolidation under same controlling, amalgamating parties, managing payment cash, transferring non-cash assets or undertaking liability style as amalgamation consideration, treat the acquired equity book value share from amalgamated parties on amalgamation date as the initial investment cost of long-term equity investment. The difference between long-term equity investment initial investment cost and the paid cash transferred non-cash assets and undertook liability book value is adjusted to be capital reserves; if capital reserves are not sufficient to be deducted, which shall be adjusted to be retained earnings. When the amalgamating parties via issuing equity securities as amalgamation consideration, treat the acquired equity book value share from amalgamated parties on amalgamation date as the initial investment cost of long-term equity investment. Treat the book value amount of the issued shares as capital stock, the difference between the initial investment cost of long-term equity investment and book value amount of stock issued as capital stock is adjusted to be capital reserves; if capital reserves is not sufficient to be deducted, which shall be adjusted to be retained earnings. b. On enterprise consolidation under different controlling, the confirmed amalgamation cost according to the following criterions is as initial investment cost of long-term equity investment: 1/ On enterprise consolidation realized from one time exchanging deal, the amalgamation cost is the paid assets, reliabilities happened or undertook, and the fair value of issued equity securities from purchasing parties on purchasing date for the purpose of acquiring the controlling right upon the purchased parties. 2/ On the enterprise amalgation realized step by step by several times exchanging deal, the amalgamation cost is the summation of every deal cost. 3/ Every direct associated expense produced from purchasing parties for enterprise consolidation is reckoned to enterprise consolidation cost. 4/ If the future issues that possibly affect amalgamation cost in amalgamation contract or agreement is promised, on purchasing date, if the future issues that possibly happen and affect amalgamation cost can be reliably measured, purchasing parties shall reckon it to be amalgamation cost. 17
B、Except the long-term equity investment formed via enterprise consolidation , the long-term equity investment acquired through other methods is confirmed to be its initial investment cost according to the following regulations: a. The long-term equity investment acquired via cash payment is treated as initial investment cost according actually paid purchase price. The initial investment cost contains the expense, tax and other necessary payout that directly associated to long-term equity investment. B．The acquired long-term equity investment via issuing equity securities is as initial investment cost according to the fair value of equity securities. c. The long-term equity investment input by investor is as initial investment cost according to the value stipulated in investment contract or agreement, while the unfair value stipulated in contract or agreement is excluded. d.The long-term equity investment acquired via non-monetary assets exchange, e. g. if non-monetary assets exchange has commercial nature, then the long-term equity investment took in exchange is as initial investment cost according to fair value and payable relative taxation; if non-monetary assets exchange has no commercial nature, then the long-term equity investment intook in exchange has the book value of out took asset in exchange and payable relative taxation as initial investment cost. e. On the acquired long-term equity investment via liability recombination, its initial investment cost is confirmed by fair value and payable relative taxation. （2）Rear measuring and profit and loss confirmation method A. According to infection degree of investing enterprise against the invested unit , enlivening market or not, fair value reliably received or not, separately adopts cost method or equity method to measure. B. The confirmation of investment profit and loss Long-term equity investment reckoned via equity method, shall be adjusted in considering the infection of the following factors under the basis of book net profit of invested unit in confirming the net profit or net deficit enjoyed or undertook by invested unit. a. If the accounting policy adopted by invested unit is not accordance with investing unit, adjust according to accounting policy of investing enterprise and financial reports of invested unit to confirm the profit and loss of invested unit under the basis. b. With the fair value of fixed assets, intangible assets of invested unit as basis, the withdrawn depreciation amount or amortization amount and assets depreciation reserves produced infection upon the invested unit net profit. c. The unrealized profit and loss produced from the investing unit and its affiliated enterprise and joint enterprise shall be compensated. Namely the unrealized profit and loss between investing enterprise and affiliated enterprise and joint enterprise is calculated and attributes to investing enterprise according to no.8 share ratio, which will be compensated and investment benefit and loss shall be confirmed under the basis. The trade loss between investing enterprise and invested unit, attributing to assets depreciation loss, is completely confirmed. （3）Confirm the basis that has common control and major infection upon invested unit. A. Common controlling basis: a. Any join enterprise can not individually control production and operating activities of joint enterprise; b. The decision making related to basic business operations of joint enterprise shall be agreed by both parties; c. Every joint-venture enterprises nominate one joint enterprise according to contract or protocol to manage daily activities of joint-venture enterprise; it must implement management right within the wholly agreed financial and business policy scope. B. Major infection basis: a. Appoint represent in the board of invested unit or similar capability mechanism, enjoy relative actual participation decision making right, investing enterprise can participate in the constitution of business policy of the invested unit and realize implementing major infection upon the invested unit. b. Participate in the policy making of the invested unit including the making of dividend allotment policy. Under the circumstance, the represent can bring forward suggestion or idea for its own interest and bring large infection upon the invested unit. c. Realize important trade with the invested unit. Relative trade affects production operations decision-making of invested unit at certain degree. d. Appoint administrative person to the invested unit. Under the condition, appoint administrative person to the invested unit, the person has right and is responsible for the financial and business activities of the invested unit, so as to implement import infection on the invested unit. e. Offer key technical documents to the invested unit. Production operations of the invested unit relies upon the technique or technical document of the investing enterprise, which indicate investing enterprise has major infection upon the invested unit. To confirm investing unit has major infection upon the invested unit, one one side, consider the voting power share that investing unit directly or indirectly hold from the invested unit, one other side, consider the infection 18
produced by enterprise and other parties holding executable potential voting power presumably transferring into stock right of invested unit, such as the issued current transferable subscription warrant, stock option and transferable corporate bond, etc. If these transferred into stock right of invested unit, which can increase the voting power rate of investing enterprise or decrease the voting power rate of other investors in invested unit, so as to make investing enterprise joining in the financial and business policy-making of the invested unit, and consider investing enterprise have large infection upon the invested unit. （4）Depreciation testing method and depreciation reserve withdrawal method. On balance sheet date, inspect long-term equity investment, judge long term equity investment has the depreciation evidence or not. If the depreciation evidence of the operation state of invested unit appears, estimate its recoverable fund. The measured value of recoverable fund indicates the recoverable fund of long term equity investment is lower than its book value; deduct the book value of long term equity investment into recoverable fund. The deducted fund is confirmed to be the loss of assets depreciation and reckoned into benefit and loss at current period, meanwhile withdrawal relative long term investment depreciation deserve. Once the long term investment depreciation loss is confirmed, which will not be transferred in the later accounting period.13. Investment property 13. Investment property (1). Scope of investment real estate: refers to the real estate for rent or for capital appreciation or for both of them, including the rented land use rights, the land use rights held and to transferred, and the leased building; (2). Initial measurement of investment real estate: conduct initial measurement in accordance with the cost to obtain it; (3). Follow-up measurement of investment real estate: the Company conducts follow-up measurement on the investment real estate by cost model; the follow-up expenditure relating to investment real estate, if the related profit is likely to flow into the company and can be measured, then it should be included in the cost of the investment real estate, other follow-up expenditures should be recognized as the current loss and gain; (4) The classification, depreciation and amortization policies of real estate investments and the depreciation and amortization policies of fixed assets and intangible assets should be coherent. Provision for impairment of investment real estate should be treated according for asset impairment. 14．Fixed assets （1）Confirmation conditions of fixed assets The tangible assets held for producing goods, providing services, rent or operation, and the service time is longer than one fiscal year. （2）Fixed assets depreciation method Classification of fixed asset House and Building –Production House and Building-NonProduction Fixed assets decoration
Depreciable life（Year）
4%
35 years
4%
40 years
---
10 years
Machinery and equipment
10-14 years
Transportation equipment
8 years
Electronic Equipment
8 years
Other equipment
8 years
Residual rate（%）
4% 4% 4% 4%
Depreciation rate（%） 2.74% 2.40% 10.00% 9.60%-6.86% 12.00% 12.00% 12.00%
（3）Depreciation measuring method and depreciation reserves withdrawn method of fixed assets Judge fixed assets appearing the depreciation evidence or not at balance sheet date. If assets market value continuously decreases, or technology is old, damaged or long-term left un-used, draw back amount. The measured result of recoverable amount indicates the recoverable amount of fixed assets is lower than its book value; deduct the book value of fixed assets into recoverable amount. The deducted amount is confirmed to be assets depreciation loss and is reckoned into benefit and loss at current period; meanwhile withdraw relative fixed assets depreciation reserve. Once fixed assets depreciation loss is confirmed, which will not be transferred at the later accounting period. 19
（4）Cognizance evidence and pricing method of financial leasing fixed assets If all risk and reward associated to certain hired fixed asset actually have transferred, the company confirms it to be financial leasing. Financial leased fixed assets should take the lower one of fair value of leased assets at leasing date and lowest leasing payment, added with the initial direct expenses directly belonging to leasing item, will be book value of leased assets. Taking the lowest leasing amount as the book value of long term account payable, its difference will be unconfirmed financial charges. The unconfirmed financial charges will adopt actual interest rate method to allocate within leasing period. The leased fixed assets ensure depreciation rate according to lease term and estimated net salvage and accrual of depreciation. 15. Projects under construction (1). Methods for accounting projects under construction. The projects under construction include pre-construction preparations, the building projects under construction, installation projects, technical transformation projects and overhaul works, etc. The projects under construction should be accounted according to actual expenditures by items, and should be converted to fixed assets when the projects reached the predicted use state. The costs for borrowing relating to projects under construction (including loan interests, excess discount amortization, exchange gains and losses, etc.), which should be included in the cost before the related projects reach the predicted use state, and included in the current financial cost after the related projects reach the predicted use state; （2）Depreciation preparation of construction in progress Make complete inspection on construction in progress on the date of balance sheet, judge fixed assets occurring possible depreciation evidence or not. If yes: (1) project in progress without construction for long time is estimated not to start working again in future 3 years, (2) project in progress has evidence that its character and technology have fallen behind and the economic benefit brought has great uncertainty and other depreciation evidence, which shall be estimated its recoverable amount. The result of recoverable amount shows the recoverable amount of project in progress is loss than its book value, writedown its book value of project in progress into recoverable amount. The written down amount is confirmed to be assets depreciation loss and is reckoned into current period profit and loss, meanwhile withdraw relative depreciation reserve of project in progress. Once depreciation loss of project in progress is confirmed, which will not be transferred. 16.Borrowing cost (1). The borrowing expenses, if they comply with the capitalization conditions, should be capitalized and included in the cost of relevant assets; other borrowing expenses, should be determined according to the amount occurred and be included in the current loss and gain. If the borrowing expenses meet the following conditions at the same time, they should be capitalized: A. Capital expenditures have already occurred, capital expenditures include the expenditures paid by cash, transferring non-cash assets or by bearing interest-debt; B. The borrowing costs have occurred; C. The construction to make the asset to reach the intended use state or sale state, or the production activities have already begun. (2). When the assets which meet the capitalization condition reach the intended use or sale state, the capitalization of the borrowing expenses should be stopped. The borrowing expenses for the assets which meet the capitalization conditions and reach the intended use or sale state, the expenses should be confirmed according to the amount occurred, and be included in the current loss and gain. 17. Biological assets （1）Simultaneously, biological assets that meets the following conditions will be confirmed: A. For the past trade or issues, the company possesses or controls biological assets; B. The economic interest associated with the biological assets may flow into the company; C. The biological assets cost can be reliably measured. （2）Biological assets is divided into consumable biological assets, manufacturing biological assets and public welfare biological assets. （3）Biological assets is initially measured according to cost. （4）On the date of balance sheet, check consumable biological assets, if there are specific evidences showing the reasons like natural disasters, plant diseases and insect pests, animal epidemic situation attack or market requirements, make the net realizable value of consumable biological assets or recoverable amount of manufacturing biological assets are lower than their book value, according to the difference between net realizable value or recoverable amount and their book value, withdraw biological assets depreciation preparation or value decreasing preparation and reckon it to current profit and loss. If the contributing factor of consumable biological 20
assets value decreasing has already disappeared, the deducted amount will be resumed and is transferred within the original withdrawn price decreasing standard and transferred amount is reckoned into current profit and loss. 18..Intangible assets (1). Intangible asset refers to the non-monetary assets owned or controlled by a company with no identifiable physical forms, including proprietary technology, right to use land; (2). Intangible asset is valuated according the actual cost to obtain it; (3). For the intangible assets with definite service life, since the availability of the intangible assets, they should be amortized by straight-line method within the service life, and included in the current loss and gain; the intangible assets with no definite service life will not be amortized; the company should conduct review on the service life and amortization methods of the intangible assets at the end of the year, if the service life and amortization methods are inconsistent with what estimated previously, then the amortization period and amortization methods should be changed. （4）Provision for impairment of investment assets Inspect the ability of every intangible assets bring to future economic benefit to the company, when any one of the following exists: (1) certain intangible assets has been replaced by other new technology, which make its ability bringing benefit to enterprise seriously affected; (2) the market price of certain intangible assets greatly fall at the current period and will not resume within the left amortization period; (3) certain intangible assets has overpasses legal protection period, but it still has the depreciation evidence with partial usage value, then valuate its recoverable amount. The measuring result of recoverable amount shows if the recoverable amount is less than its book value, then write-down its book value into its recoverable amount, the written down amount is confirmed to be assets depreciation loss and reckoned into to current profit and loss, meanwhile withdraw corresponding intangible assets depreciation reserve; (4) For other conditions that fully prove certain intangible assets substantially produced depreciation reserve, withdraw intangible assets depreciation reserve according to the difference between recoverable amount and book value. Once intangible assets depreciation loss is confirmed, which will not be written back in the later accounting period. 19.Long-term amortization expenses (1). Long-term deferred expenses refer to all the expenses which should be amortized in the current period and in the future periods and the amortization period is longer than one year; (2). Long-term deferred expense is valuated according to actual cost, the installation cost should be equally amortized during two major overhauls or the contract period (depends on which is shorter), other long-term deferred expenses should be equally amortized according to the benefit period of the project. For the long-term deferred expenses which can not bring predicted profit in the future accounting period, all the unamortized value should be converted to the current loss and gain. 20.Predicted liabilities (1). The liabilities which are relevant to contingent events and meet the following conditions at the same time, the Company recognizes it as predicted liabilities: the liability is the current obligation the company undertakes; the performance of the liability may result in the outflow of economic interests; the amount of the liability can be reliably measured; (2). If the predicted liability to be fully or partly paid by the company and be compensated by the third party, the compensation amount can be recognized as assets individually only when it can be basically recovered, at the same time, the compensation on the asset should not be more than the corresponding book amount of the predicted liability. 21.Revenue (1). Revenue from goods sale After the risks and rewards of the goods are transferred to the buyer, the company will no longer conduct the management right and the actual control right, and the relevant incomes have been received or the documents of receiving have been obtained, and the cost of the goods can be reliably measured, the realization of the revenue should be confirmed. The time confirmation of specific sales of main trade styles: A. FOB is the trade style of goods exportation, means that the seller delivers when the goods pass the ship’s rail at the named port of shipment in contract; B. CIF is the trade style of goods exportation, means that the seller delivers when the goods pass the ship's rail in the destination port ; C. Domestic sales time confirmation means the time of commodities ownership evidence transfer or physical goods delivery. 21
(2). Revenue from service In the same fiscal year and the service has been completed, the income should be confirmed upon the completion of the service; If the starting and completion of the service belong to different fiscal year, then when the service can be reliably measured, the service income should be confirmed at the period end according to the percentage of the service not completed. (3). Incomes from transferring asset use right. Incomes from transferring asset use right include interest income and income from use payment; The amount of interest income, is determined in accordance with the time and actual interest rate; the income from use payment is determined according to the time and method of relevant contract and agreement. 22. Governmental subsidy It contains financial appropriations, financial discount, taxation return and transfer non-monitory assets free of charge. The governmental subsidy associated to assets, the company confirms it to be deferral benefit. When relative assets reach to scheduled usage condition, reckon it to be benefit and loss of every period at average within the usage lifetime of the assets. If relative assets is sold, transferred, scrapped or damaged before lifetime expiration, transfer the deferral benefit balance into current period benefit and loss of assets disposal. The received governmental subsidy associated to benefit is confirmed to be deferral benefit if used for the remedy of relative expense or loss of later period; and it is reckoned into benefit and loss at current period during relative expense confirmation; for those used for compensation of relative expense or loss happened, which will be reckoned directly into benefit and loss at current period 23. Deferred income tax assets/Deferred income tax liability （1）Confirmation of deferred income tax assets A.Limited by the company possibly acquired taxability amount for deducting temporary difference, confirm the deductible difference deferred income tax assets produced from temporary difference. But the deferred income tax assets produced from the initial confirmation of assets or liability in trade with the following characters are not confirmed: a. The trade is not enterprise consolidation ; b. When trade happens, which will neither affect accounting benefit nor affect taxability amount of income (or deduct loss). B. The company, on the deductible temporary difference associated to investment of subsidiary company, affiliated company and partnership business simultaneously meet the following conditions, confirms relative deferred income tax assets: a. Temporary difference most likely is transferred in the foresight future. b. Taxability amount of income that most likely used to deduct temporary difference in future. C. The company confirms relative deferred income tax assets for transferable later annual deductible loss and taxation decreasing with future taxability amount of income for deducting deductible loss and taxation decreasing as limitation. (2) The confirmation of deferred income tax liability Besides the deferred income tax liability produced under the following conditions, the company confirms all deferred income tax liability produced by all taxability temporary difference: A. The initial confirmation of business Goodwill; B. Simultaneously meeting the initial confirmation of assets or liability produced in trade with the characters of following characters: a. The trade is not enterprise consolidation; b. Trade occurrence affects neither accounting benefit nor taxability amount of income (or the deductible loss). C. When the company has relative taxability temporary difference with its subsidiary company, affiliated company and partnership business, and simultaneously meets the following conditions: a. Investment enterprise can control the transferring time of temporary difference; b. Temporary difference may possibly not transfer in the foreseeable future. 24. Hedging accounting (1) The hedged item of the company refers to storage raw material and raw material purchasing order appointed to be headged object that make company facing fair value alteration risk. (2) Hedging instruments of the company refers to the transferring instrument that is appointed and its fair value alteration can eliminate the fair value alteration of hedged items-----forward contract. (3) If fair value hedging simultaneously meet the following conditions, the company only can use hedging accounting method to dispose:
22
A. When hedging begins, the company has official appointment on hedging relation (namely the relation between hedging instrument and hedging items), and prepares the official written file about hedging period risk, risk management target and hedging policy. B. The estimated highness of the hedging period is effective, and meets the risk management policy confirmed originally by the company for the hedging relation. C. Hedging effectiveness can be reliably measured. D. The company continuously makes evaluation on the effectiveness of hedging period and confirms that the hedging period is highly effective during the accounting period appointed in hedging relations. (4) For fair value hedging that meeting above-mentioned conditions, implement accounting disposal according to the following regulations: A. The benefit or loss produced from alteration of fair value hedging is reckoned into benefit and loss at current period. B. The benefit or loss formed via risk in hedged period on hedged item is reckoned into benefit and loss at current period; meanwhile adjust the book value of the hedged item. C. Any one of the following conditions is satisfied in hedged period, the company will expire using faire value hedging account: a. Hedging instruments have expired, been sold, contract expire or come into practice. b. The hedging will not satisfy the conditions that using hedging c. Enterprise cancels the appointment of hedging relation. 25.Imporant Accounting policies and Accounting estimated Changed. （1）Accounting policy alteration The report mainly reflects accounting policy alteration Procedures for Alteration content and reason of examination and accounting policy approval Non --（2）Alteration of accountant estimation The report mainly reflects accounting estimation alteration Alteration content and reason of accounting estimation
Unit：RMB Item name in report forms affected
Amount affected
---
--Unit：RMB
Procedures for examination and approval
Item name in report forms affected
Amount affected
---
---
---
Non
26. Former accountant errors correction （1）Backward restatement method In the report period, find the error of former accountant via backward restatement method or not. unit:RMB Approved Correction content of Report forms name in different comparating Accumulated disposal accountant errors periods affected affected quantity condition ---
---
---
---
（2）Future applicable methods In the report period, find the error of former accountant via future applicable methods or not. Correction content of accountant errors
Approved disposal condition
Reason of adopting future applicable methods
---
---
---
III.Taxes of the Company 1. Main taxes categories and tax rate
23
Taxes
Tax references
Applicable tax rates
VAT
Incomes from product sales
13.00%、17.00%
Providing labor services, real estate sales, the transfer of intangible assets
3.00%、5.00%
VAT, sales tax, turnover tax, etc
5.00%、7.00%
Taxable income
24.00%、15.00%
Business tax. City construction tax Business income tax
The company has not the conditions that every branch company or branch plant independently hand in business income tax，The accrual proportion of city construction tax of the Enterprices in Shenzhen is increasing from 1% to 7% based on turnover tax on Dec,2010 2. Tax preference and approval file According to Enterprise Income Tax Law of the People's Republic of China (Order of the President of the People's Republic of China No. 63) and Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China (Decree No.512 of the State Council), from January 1, 2008, company begins to implement new enterprise income tax law and tax rate is 25%. Additionally, according to Notification of the State Council on Carrying out the Transitional Preferential Policies concerning Enterprise Income Tax (No. 39 [2007] of the State Council ), the enterprise who originally enjoy low tax rate preference policy, will gradually transfer into lawful tax rate within 5 years of new tax law implementation. Thereinto, enterprises enjoying 15% tax rate will implement tax rate 18% in 2008, 20% in 2009, 22% in 2010, 24% in 2011, and 25% in 2012. So the enterprise will implement enterprise income tax rate 24% in this year.Shenzhen Shengbo Photoelectric Technology CO., Ltd., the subsidiary company of our company, has been qualified as national hi-tech enterprise since 2010 and it enjoys reduced business income tax rate at 15% according to new law of enterprise income tax. IV. Enterprise consolidation and combined financial statements
24
1. Subsidiary （1）Subsidiary obtained through establishment or investment
Full name of subsidiary
Subsidiary type
Shenzhen Jinlan Decorative Articles Industrial Co., Ltd.
Wholly-owned subsidiary
Shenzhen Lisi Industrial Co., Ltd
Shenzhen Huaqiang Hotal
Shenzhen Shenfang Property Management Co., Ltd. Shenzhen Beauty Century
Registration place
Business
Registered capital
Business scope
Fabrics, bedding,clothing, textiles raw materials processing manufacturing, wholesale and retail. Domestic commerce, materials supply and sales (excluding franchise, special control, proprietary products) Accommodation, restaurants, business center; ticket consignment; Property Management (required to obtain the relevant qualification certificate for their operations)
Interest of minority shareholder
Amount used to write down lost included in minority shareholder interest
After wrote down current period loss of minority shareholders over equity beginning share of minority shareholders in the subsidiary from the parent company’s share ,Balance of Owner's equity
Yes
No
---
---
100.00
Yes
No
---
---
95.00
100.00
Yes
No
---
---
Actual capital amounts of the end
Other projects balance essentially from net investment to subsidiary
Holding proportion (%)
Proportion of voting rights(%)
Whether consolidation of report form
4,000,000.00
---
90.00
100.00
2,360,000.00
---
90.68
10,005,300.00
---
Shenzhen
Fabrics, bedding,clothing nabyfactubg
4,000,000.00
Wholly-owned subsidiary
Shenzhen
Domestic commerce, materials supply and sales
2,360,000.00
Wholly-owned subsidiary
Shenzhen
Accommodation, restaurants, business center
10,005,300.00
Wholly-owned subsidiary
Shenzhen
Property management
1,604,000.00
The Company property management
1,604,000.00
---
93.75
100.00
Yes
No
---
---
Wholly-owned subsidiary
Shenzhen
Production of fully electronic jacquard knitting
25,000,000.00
Production of fully electronic jacquard knitting whole
25,000,000.00
5,094,300.00
100.00
100.00
Yes
No
---
---
25
Full name of subsidiary
Subsidiary type
Registration place
Garment Co., Ltd.
Shenzhen Shenfang Import & Export Co., Ltd. Shenzhen Zhongxing Fibre Folds Cotton Clothing Ornament Co., Ltd. Shenzhen
Business
Registered capital
whole shape
Business scope
shape (without restrictions on the project); clothing, textiles and related accessories for buying and selling (excluding franchise, special control, proprietary products); operating import and export business (by "Import and Export Enterprise Qualification Certificate" deep free trade Certificate Zi No. 2002-339 tube business); industrial projects (the specific items to be declared separately). Operating import and export business (the specific approval by the relevant import and export business handled)
Shenzhen
Operating import and export business
Wholly-owned subsidiary
Shenzhen
Spewing acupuncture cloth, revision, and fusible interlining fabric
1,680,000.00
Production and operation of bedding, clothing and textiles for infants and young children.
Control
Shenzhen
Operating import
1,900,000.00
Textile production
Wholly-owned subsidiary
5,000,000.00
Interest of minority shareholder
Amount used to write down lost included in minority shareholder interest
After wrote down current period loss of minority shareholders over equity beginning share of minority shareholders in the subsidiary from the parent company’s share ,Balance of Owner's equity
Yes
No
---
---
---
No
No
---
---
---
No
No
---
---
Actual capital amounts of the end
Other projects balance essentially from net investment to subsidiary
Holding proportion (%)
Proportion of voting rights(%)
Whether consolidation of report form
5,000,000.00
12,168,680.72
100.00
100.00
1,680,000.00
618,769.07
75.00
1,900,000.00
686,391.83
50.00
26
Full name of subsidiary
Subsidiary type
Tianlong Industry and Trade Co., Ltd.
company
Shengtou (HK) Co., Ltd.
Wholly-owned subsidiary
Registration place
Business
Registered capital
and export business
Hongkong
Polaroid Sales
Business scope
Actual capital amounts of the end
Other projects balance essentially from net investment to subsidiary
Holding proportion (%)
Proportion of voting rights(%)
Whether consolidation of report form
---
100.00%
100.00
100.00
Yes
Interest of minority shareholder
Amount used to write down lost included in minority shareholder interest
After wrote down current period loss of minority shareholders over equity beginning share of minority shareholders in the subsidiary from the parent company’s share ,Balance of Owner's equity
No
---
---
and processing (production site business license to be declared separately); domestic commerce, materials supply and marketing industry (excluding franchise, franchising, has exclusive control of goods). Import and export business card in accordance with the trial of No. 126 "Shenzhen Municipal Foreign Trade Enterprise validation certificate" . HKD10000
----
Note: The shareholding proportion of consolidated subsidiaries is inconsistent with the vote right proportion, which is through the way of getting the cross-shareholdings among subsidiaries to make the parent company actually control 100%; Shenzhen Tianlong Industrial & Trading Co., Ltd, and Shenzhen Zhongxing Fiber Wimple Cotton Raiment Co., Ltd. had established liquidation group in 2009 and started liquidation procedures, they are in liquidation processing and these two companies will not be included in consolidation scope since they went into liquidation procedures. （2）The company has no subsidiary company acquired via enterprise consolidation under same controlling. （3）Subsidiary company acquired via enterprise consolidation under non-same controlling
27
Full name of subsidiary company
Shenzhen Shengbo Optoelectro nics Technology Co., Ltd
Subsid iary tyle
Limite d Liabili ty Comp any
Registra tion Place
Busin ess charac ter
Shenzhe n
Produ ction and sales of polari zer
Registration capital
RMB 200 million
Scope of business
Actual capital amounts of the end
Wholesale, manufacturing and process various specifications materials and apparatus of polarizer, LCD; import and export business (except projects inhibited by law, administrative regulation, State Department), the limited projects shall be managed with the permission.
RMB200 million
28
Other projects balance essentially from net investment to subsidiary
---
Holdi ng propor tion (%)
Propor tion of voting rights( %)
Whet her conso lidati on of report form
100
100
Yes
Inter est of mino rity share holde r
Amount used to write down lost included in minority shareholder interest
After wrote down current period loss of minority shareholders over equity beginning share of minority shareholders in the subsidiary from the parent company’s share ,Balance of Owner's equity
No
---
---
2. In the reporting period, the company has no main body with special target or operational entity with controlling right formed from entrusted management or leasing. 3.
Explanation of alteration of Consolidation scope
4. The main body taken into combination scope at current period and main body not to take into consolidation scope. 5. Enterprise consolidation under same controlling at the end of current period. 6. Enterprise consolidation under non-same controlling within the reporting period. 7. In report period, sell stock right losing controlling right to decrease subsidiary company. 8. Reverse purchase does not appear within the reporting period of the company. 9. Consolidation and amalgamation does not happen within the reporting period of the company. V. Notes of consolidated financial statements 1. Currency funds Unit：RMB Year-end balance Items
Year-beginning balance
Original currency
Exchange rate
RMB
Original currency
Exchange rate
RMB
RMB
188,551.30
1.00
188,551.30
77,003.08
1.00
77,003.08
HKD
33,387.25
0.84
28,163.62
84,916.75
0.87
73,650.73
USD
9,896.56
6.47
64,030.72
11,414.05
6.59
75,250.73
Japanese Yen
622,550.00
0.08
49,838.86
Subtotal
---
---
331,135.19
---
---
225,904.54
RMB
447,077,972.79
1.00
447,077,972.79
754,563,743.39
1.00
754,563,743.39
HKD
1,888,845.93
0.84
1,602,985.42
2,729,464.65
0.85
2,322,085.98
USD
782,990.80
6.47
5,065,950.50
1,371,929.52
6.62
9,084,231.32
Japanese Yen
---
---
---
15.00
0.08
1.21
Subtotal
---
---
453,746,908.71
---
---
765,970,061.9
RMB
41,728,100.31
1.00
41,728,100.31
53,788,277.96
1.00
53,788,277.96
HKD
---
---
---
381,679.79
6.62
2,527,292.74
USD
39,726,072.00
0.08
3,180,310.42
95,391,286.00
0.08
7,724,500.16
Japanese Yen
---
---
44,908,410.73
---
---
64,040,070.86
I. Cash
II.Bank deposit
III. Other capital
Subtotal
498,986,454.63
830,236,037.30
（1）As of June 31, 2011，Monetary fund has not these conditions such as usage limitation for mortgage, pledge or frozen fund, stored overseas, with potential recovery risk. （2）As of June 30, 2011，The fixed-term deposit balance of bank deposit is RMB 207,980,000.00, this part will not be treated as closing cash or closing cash equivalent in preparing cash flow statement. 2. Bill receivable （1）Classification Bill receivable Unit：RMB Classification
Year-end balance
Year-beginning balance
Bank acceptance
2,107,763.05
---
29
Total
2,107,763.05
---
（2）As of June 30, 2011，The company has no notes receivable pledged. （3）As of June 30, 2011， The company has not the condition that bill transferred into bill of account receivable for bill drawer has no ability of keeping a promise; the biggest former 5 conditions that the company has endorsed but unexpired: Unit：RMB Bill drawing Unit of bill drawing Expire date Amount Notes date Guangdong Midea Group, Wuhu Refrigeration Equipment Co., Ltd. Xiamen Kinglong United Autormotive Industry Co., Ltd. Shenzhen Ruifuda LCD Technology Co., Ltd. Anqing Ningcheng Materials Trading Co., Ltd. China Display Technology Co., Ltd.
2011-05-31
2011-11-30
700,000.00
---
2011-01-18
2011-07-18
500,000.00
---
2011-05-17
2011-08-15
2011-04-19
2011-10-19
2011-04-01
2011-09-30
Total
313,306.00
---
300,000.00 298,244.02 2,111,550.02
3.Account receivable （1）Classification Account receivable Year-end balance Book balance
Classification
Amount
Provision for bad debts
Proport ion(%)
Amount
Proporti on(%)
Receivables with major individual amount and bad debt provision provided individually Receivables provided bad debt provision in groups Account age group Subtotal of group Account receivable with minor individual amount but bad debtprovision is provided Total
60,541,837.07
93..13
3,092,719.53
5.11
60,541,837.07
93.13
3,092,719.53
5.11
4,463,952.68
6.87
4,443,952.68
99.55
65,005,789.75
100.00
7,536,672.21
Year-beginning balance Book balance
Classification
Receivables with major individual amount and bad debt provision provided individually
Provision for bad debts
Amount
Proport ion(%)
Amount
Proporti on(%)
---
---
---
---
Receivables provided bad debt provision in groups Account age group
50,755,487.10
93.66
2,607,181.95
5.14
Subtotal of group
50,755,487.10
93.66
2,607,181.95
5.14
3,438,415.81
6.34
3,438,415.81
100.00
54,193,902.91
100.00
6,045,597.76
---
Account receivable with minor individual amount but bad debtprovision is provided Total 30
Category explanation of accounts receivable: Receivables with significant individual amount and provision made for individual item refers to customer accounts receivable with single amount more than 1 million, its provision for impairment will be made based on specific identification method. For receivables without significant individual amount, after deducting those parts which had conducted individual impairment test for its obvious difference in collectability with concrete evidence, making group by aging with character of credit risks and making provision for impairment based on aging analysis method. The receivables made provision for impairment without significant individual amount refers to those receivables which has obvious difference in collectability with concrete evidence, its provision will be made based on specific identification method. Account receivables using the age analysis method for measurement of impairment allowances： Year-end balance Year-beginning balance Book balance Book balance Provision Age Provision for Proporti Proporti for bad bad debts Amount Amount on（%） on（%） debts Within 1 year 60,059,598.95
99.20
3,040,639.51
49,703,545.69
97.93
2,413,660.46
482,238.12
0.80
52,080.02
610,304.64
1.20
61,030.46
---
---
---
441,636.77
0.87
132,491.03
---
---
---
---
---
---
60,541,837.07
100.00
3,092,719.53
50,755,487.10
100.00
2,607,181.95
1-2 years 2-3 years Over 3 years Total （2） The company has no the conditions that account receivable is withdrew via recombination or other styles. （3）Separate amount is large at end of period or doubtful accounts reserves of account receivable with separate value decreasing test: Account receivable
Book balance
Provision for bad debts
Allotment rate
Reason
Above RMB 1 million
34,168,774.65
2,058,978.63
6.03
Obvious evidence displaying depreciation
Below RMB 1 million
4,463,952.68
4,443,952.68
99.55
Unable to recover
Subtotal
38,632,727.33
6,502,931.31
Separate amount is not large, the account receivable with big combination risk after combined via risk character: Unit ：RMB Year-end balance Book balance
Age
Within 1 year 1-2 years
Year-beginning balance Book balance
Amount
Proportion（%）
---
---
482,238.12
Provision for bad debts
Provision for bad debts
Amount
Proportion（%）
---
---
---
---
100.00
52,080.02
610,304.64
58.02
61,030.46
---
---
---
441,636.77
41.98
132,491.03
---
---
---
---
---
---
482,238.12
100.00
52,080.02
1,051,941.41
100.00
193,521.49
2-3 years 3-4 years Total
Separate amount is not large, the account receivable with big combination risk after combined via risk character:t Separate amount is not large, but the combination risk after combined according to credit risk character is big, these account receivable refers to those with ending balance being below 1 million RMB and account age is over 1 year. （4）This period has no bad debt reserve, or withdrawn bad debt reserves ratio is bigger, which is taken back or transferred wholly at this period, or the withdrawal or transferring ratio is bigger. This period has no account receivable taken back by recombination or other styles. 31
（5）The front 5 units’ information of account receivable Unit name Relation with the company
Amount
Ruli Baolai Photoelectriicity Technology Co., Ltd.
Client
9,036,941.76
Dongguan Fair LCD Co., Ltd.
Client
5,340,905.79
Jiangmen Jidu Semiconductor Co., Ltd.
Client
4,949,755.21
Jiangxi Helitai Micro-electronics Co., Ltd.
Client
4,536,624.80
Tianma Micro-electronics Co., Ltd.
Client
2,717,475.24
Total （6）Account receivable from relation parties Unit name Shenzhen Investment Holdling Co., Ltd.
Percentage of account receivable
Fixed year Within 1 year Within 1 year Within 1 year Within 1 year Within 1 year
13.90% 8.22% 7.61% 6.98% 4.18%
26,581,702.80
40.89%
Relation with the company
Amount
Percentage of account receivable
Controlling shareholders
47,725.00
0.07%
---
47,725.00
0.07%
Total 4.Other Account receivable （1）Category of other account receivable:
Year-end balance Classification
Book balance
Provision for bad debts
Amount
Proporti on（%）
Amount
Proportion （%）
12,075,436.43
31.29
10,547,991.83
87.35
Account age group
25,937,814.16
67.21
1,810,314.46
6.98
Subtotal of group
25,937,814.16
67.21
1,810,314.46
6.98
577,402.18
1.50
577,402.18
100.00
38,590,652.77
100.00
12,935,708.47
Receivables with major individual amount and bad debt provision provided individually Receivables provided bad debt provision in groups
Account receivable with minor individual amount but bad debtprovision is provided Total
Year-beginning balance Classification
Book balance
Receivables with major individual amount and bad debt provision provided individually Receivables provided bad debt provision in groups
32
Provision for bad debts
Amount
Proporti on（%）
Amount
Proportion （%）
15,075,436.43
34.98
10,547,991.83
69.97
Year-beginning balance Classification
Book balance
Provision for bad debts
Amount
Proporti on（%）
Amount
Proportion （%）
Account age group
27,444,096.79
63.68
1,956,516.67
7.13
Subtotal of group
27,444,096.79
63.68
1,956,516.67
7.13
577,402.18
1.34
577,402.18
100.00
43,096,935.40
100.00
13,081,910.68
Account receivable with minor individual amount but bad debtprovision is provided Total
Category explanation of Other accounts receivable: Receivables with significant individual amount and provision made for individual item refers to customer accounts receivable with single amount more than 0.5 million, its provision for impairment will be made based on specific identification method. For receivables without significant individual amount, after deducting those parts which had conducted individual impairment test for its obvious difference in collectability with concrete evidence, making group by aging with character of credit risks and making provision for impairment based on aging analysis method. The receivables made provision for impairment without significant individual amount refers to those receivables which has obvious difference in collectability with concrete evidence, its provision will be made based on specific identification method. Separate amount is not large, the account receivable with big combination risk after combined via risk character: Year-end balance Age
Year-beginning balance
Book balance Amount
Proportion （%）
Within 1 year
23,363,460.86
90.07
1-2 years
1,890,228.57
2-3 years Over 3 years Total
Provision for bad debts
Book balance
Provision for bad debts
Amount
Proportion （%）
1,571,502.94
23,867,212.74
86.96
1,228,439.77
7.29
164,695.50
1,890,228.57
6.89
164,695.50
589,731.73
2.28
26,919.52
649,731.73
2.37
44,919.52
94,393.00
0.36
47,196.50
1,036,923.75
3.78
518,461.88
25,937,814.16
100.00
1,810,314.46
27,444,096.79
100.00
1,956,516.67
(2)The company has no the conditions that account receivable is withdrew via recombination or other styles. (3）Separate amount is large at end of period or doubtful accounts reserves of account receivable with separate Other Account receivable
Book balance
Provision for bad debts
Allotment rate
Reason
Above RMB 0.5 million
12,075,436.43
10,547,991.83
87.35
Provision for the estimated recoverable
Below RMB 0.5 million
577,402.18
577,402.18
100%
Estimated irrecoverable
Subtotal
12,652,838.61
11,125,394.01
33
Separate amount is not large, the account receivable with big combination risk after combined via risk character: Year-end balance Age
Book balance Amount
Proportion（%）
---
---
1-2 years
1,890,228.57
2-3 years Over 3 years
Within 1 year
Total
Year-beginning balance
Provision for bad debts
Book balance
Provision for bad debts
Amount
Proportion（%）
---
---
---
---
7.29
164,695.50
1,890,228.57
6.89
164,695.50
589,731.73
2.28
26,919.52
649,731.73
2.37
44,919.52
94,393.00
0.36
47,196.50
1,036,923.75
3.78
518,461.88
2,574,353.30
9.93
238,811.52
3,576,884.05
13.04
728,076.90
Separate amount is not large, the account receivable with big combination risk after combined via risk character:t Separate amount is not large, but the combination risk after combined according to credit risk character is big, these account receivable refers to those with ending balance being below 0.5 million RMB and account age is over 1 year. （4）This period has no bad debt reserve, or withdrawn bad debt reserves ratio is bigger, which is taken back or transferred wholly at this period, or the withdrawal or transferring ratio is bigger. This period has no account receivable taken back by recombination or other styles. （5）Other account receivable actually cancelled after verification at this reporting period （6）As of June 20,2011 no loans of the shareholders holding 5% (inclusive of a 5%) or more voting right and other related units. (7) The front 5 units’ information of Other account receivable Unit name
Fixed year
Percentage of account receivable
Relation with the company
Amount
Export rebates
Non-related parties
18,197,075.10
Within 1 year
47.16%
Jiangxi Xuanli String Company
Non-related parties
11,389,044.60
2-3 years
29.51%
Not absorbed into subsidiary company within combination scope
2,200,000.00
Within 1 year
5.70%
Non-related parties
1,047,437.10
Within 1 year
2.71%
Not absorbed into subsidiary company within combination scope
686,391.83
Over 3 years
1.78%
Anhui Huapeng Textile Company Shenzhen Finance Committee Shenzhen Tianglong Industry and trade Co., Ltd. Total
33,519,948.63
86.86%
（8）Account receivable from Related affiliated parties Unit name
Relation with the company
Amount
Percentage of account receivable
Shenzhen Zhongxing Fibre Folds Cotton Clothing
Not absorbed into subsidiary company
618,769.07
1.60%
34
Ornament Co., Ltd. Shenzhen Dailisi Knitting Co., Ltd.
Affiliated enterprise
415,000.00
1.07%
Jordan Garnent Factory
Affiliated enterprise
183,906.56
0.48%
Shenzhen Xieli Automobile Co., Ltd.
Affiliated enterprise
169,262.00
0.44%
Anhui Huapeng Textile Company
Not absorbed into subsidiary company
2,200,000.00
5.70%
Shenzhen Tianglong Industry and trade Co., Ltd.
Not absorbed into subsidiary company
686,391.83
1.78%
4,273,329.46
11.07%
Total
（9）Account receivable confirmed at the expiration date of this period. （10）Securitization with account receivable as target does not appear. 5.Prepayments （1）Prepayments age : Unit:RMB Year-end balance
Year-beginning balance
Age Amount
Proportion（%）
Amount
Proportion（%）
24,563,617.65
99.88%
4,503,115.81
96.20%
30,639.36
0.12%
45,449.46
0.97%
2-3 years
84,567.38
1.80%
Over 3 years
47,998.19
1.03%
4,681,130.84
100.00%
Within 1 year 1-2 Years
Total
24,594,257.01
100.00%
The explanation of major units of Prepayments : The advance payment Increased 425.4% to RMB119.9132 million at the end of the period, compared to the beginning of the period. The increased was due to the advance payment from the export trading business being transferred to costs at the end of the period. （2）The front 5 units’ information of Prepayments Unit：RMB Relation with the company
Amount
Time
Reason of not clearing
Supplier
19,318,767.40
Within 1 year
Not available
Kingdee Software (China) Co., Ltd.
Software Supplier
1,297,480.00
Within 1 year
Software is not installed
Shenzhen Anhua Computer Company
Hardware Supplier
794,520.00
Within 1 year
Equipment is not acceptance
Guangtai Textile Co., Ltd.
Supplier
485,384.02
Within 1 year
Not available
Shenzhen Husimeng Textile Co., Ltd.
Supplier
316,850.75
Within 1 year
Not available
--
22,213,002.17
--
--
Unit name Shenzhen Lianya Textile Co., Ltd.
Total
35
（3）As of June 30,2011，In the balance of accounts payable, there were no payables to shareholders holding 5.00% (including 5.00%) or more of the voting right of the Company; 6. Interest receivable （1）Interest receivable Unit：RMB Items
Amount at year begining
Increase at this period
Decrease at this period
Balance in year -end
Interest on deposits
2,203,227.00
3,497,282.06
3,864,169.21
1,836,339.85
Total
2,203,227.00
3,497,282.06
3,864,169.21
1,836,339.85
（2）This did not occur overdue interest. 7.Inventory （1）Inventory types Unit :RMB Year-end balance Itmes Book balance
Year-beginning balance
Provision for bad debts
Book value
Provision for bad debts
Book balance
Book value
Raw materials
41,433,484.11
3,033,228.52
38,400,255.59
36,612,247.91
2,072,926.19
34,539,321.72
Processing products
12,645,102.69
---
12,645,102.69
8,694,383.99
---
8,694,383.99
Stock goods
20,175,329.82
3,354,980.20
16,820,349.62
20,247,735.05
2,902,920.58
17,344,814.47
1,598,561.17
1,598,561.17
---
1,668,104.01
1,598,561.17
69,542.84
70,468.62
---
70,468.62
338,707.42
---
338,707.42
75,922,946.41
7,986,769.89
60,986,770.44
67,561,178.38
6,574,407.94
60,986,770.44
Commissioned goods Low value consumable Total
（2）Allowance for duction of inventory to market Unit：RMB
Type Raw materials
Book balance at year beginning
Amount accounted in current period
2,072,926.19
1,027,790.58
Amount Decreased in current period Transferred Reselling back
Book balance at period end
---
67,488.25
3,033,228.52
---
---
---
Processing products
---
Stock goods
2,902,920.58
651,968.99
---
199,909.37
3,354,980.20
1,598,561.17
---
---
----
1,598,561.17
---
---
---
---
---
6,574,407.94
1,679,759.57
---
267,397.62
7,986,769.89
Commissioned goods Low value consumable Total
（3）Condition of stock value decline
36
Items
Reason of issueing back to Base of stock value decline stock value decline plan of this period
Proportion of issueing back amount to the the stock balance at this period
Raw materials
Notes 1
---
---
Stock goods
Notes 1
---
---
Processing products
Notes 1
---
---
Turnover materials
Notes 1
---
---
Consumptive biological assets
Notes 1
---
---
Notes1：As of June 30, 2011，The Company determines their net realizable value in acordance with the estimated selling price less the stock to completion estimated to occur when the cost of the estimated cost of sales and related post-tax amount and analyze with comparing the book value , whereby provision for impairment. 8. Disposable financial asset （1）Financial assets available for sale Unit：RMB Items
Ending fair value
Beginning fair value
Stock investment
79,037,204.81
75,481,853.50
Total
79,037,204.81
75,481,853.50
This issue will be re-held-to-maturity investments classified as available for sale financial assets, the current re-classification of the amount of RMB 0.00 , the total amount of re-classification before the held-to-maturity investments 0.00% the proportion of the total. Explaination of financial assets available for sale: (1)the amount of available for sale assets are held by Shenzhen Victor Onward Textile Industrial Co., Ltd. shares, * ST Shen Victor Onward A end of the company holds a total of 9,543,394 shares of the outstanding shares of the highest A share price of 7.25 yuan.(2) the amount of av ailable for sale assets are held by Guangdong Sunrise Group Co., Ltd.shares, *ST Sunrise A end of the company holds a total of 1,085,733 shares of the outstanding shares of the highest A share price of 9.07 yuan.
37
9. . Investment to joint venture and united venture Unit:：RMB
Name
I. Joint venture Shenzhen Haohao Property Leasing Co. Ltd. Shenzhen Xieli Automobile Co., Ltd. II. Affiliated enterprise Shenzhen Changlianfa Printing & dyeing Company Jordan Garment Factory Hengshun （Saipan） Industry Co., Ltd.
Corporation Registration Legal Type place Representative
Limited Company
Shenzhen
Feng Junbin
Limited Company
Shenzhen
Limited Company
Shenzhen
Limited Company
Jordan
Limited Company
Saipan
Business Nature
Company vote Company right Registered shareholding percentage in Capital percentage the invested (%) unittion of units (%)
Ending total assets
Ending total liabilities
Ending net assets
Total business revenues at this period
Current net profit
4.754 million
50.00%
50.00%
6,154,866.12
437,520.80
5,717,345.32
855,197.70
471,094.52
Ye Yongling Manufacturing
3.12 million
50.00%
50.00%
6,682,263.93
2,168,780.46
4,513,483.47
880,028.00
161,306.18
Zhu Meizhu
6.47 milllion
40.25%
40.25%
5,303,750.41
1,029,013.63
4,274,736.78
254,988.00
65,155.72
USD 1 million
35.00%
35.00%
USD6.96 million
35.00%
35.00%
Service
Service
Chen Wenxian Manufacturing
---
Manufacturing
USD1,815,831.54 USD795,964.70 USD1,019,866.84. USD1,376,607.47 USD-231,688.66
---
---
-
---
---
There is no significant difference among the significant accounting policy of joint venture and Affiliated enterprise , the accounting estimate and the company accounting policy, the accounting estimate. Joint ventrue of Shenzhen Trademark Factory Co. Ltd had officially changed the name to Shenzhen Haohao Property Leasing Co. Ltd. on June 28,2011. 10. Long term share equity investment. (1) Long-term equity investments are listed according to the situation of investment unit :
38
Unit：RMB
Name
Shenzhen Jintian Industry Co., Ltd. Shenzhen Haohao Property Leasing Co. Ltd. Shenzhen Xieli Automobile Co., Ltd. Shenzhen Changlianfa Printing and dyeing Company Jordan Garnent Factory Hengshun（Saipan）Industry Co., Ltd. Shenzhen Jiafeng Textile Co., ltd. Shenzhen Guanhua Prnting & dyeing Co., Ltd. Shenzhen Union Development Group Co., Ltd. Shenzhen Xiangjiang Trade Co., Ltd. Shenzhen Xinfang Knitting Co., Ltd. Hongkong Yehui International Co., Ltd.
Shenzhen Dailisi Knitting Co., Ltd.
Anhu Huapeng Textile Co., Ltd. Shenzhen South Textile Co., Ltd. Shenzhen Tongyi Silk Floss Co., Ltd. Shenzhen Zhongxing Fibre Folds Cotton Clothing Ornament Co., Ltd. Total
Accountin g method
Cost method Equity method Equity method Equity method Equity method Equity method Cost method Cost method Cost method Cost method Cost method Cost method Cost method Cost method Cost method Cost method Cost method --
Initial investment cost
Original balance
change
14,831,681.50
14,831,681.50
---164,844.57
2,040,102.73
Ending Balance
3,445,862.19 2,422,651.65 1,694,356.38 2,574,160.27
50.00%
50.00%
50.00%
40.25%
40.25%
35.00%
35.00%
35.00%
35.00%
2,309,488.46
---
---
---
16,800,000.00
16,800,000.00
---
16,800,000.00
5,491,288.71
5,491,288.71
---
5,491,288.71
2,600,000.00
2,600,000.00
---
2,600,000.00
160,000.00
50.00%
1,720,581.55
8,228,350.00
160,000.00
3.68%
2,523,396.74
-264,671.82 7,240,625.00
3.68%
3,281,017.62
26,225.18 2,524,500.00
Voting right proportion in the investee
14,831,681.50
100,745.09 1,529,483.67
Sharehold ing proportion in the investee
---
160,000.00
524,000.00
524,000.00
---
524,000.00
2,392,914.37
2,392,914.37
---
2,392,914.37
2,559,856.26
---
2,559,856.26
25,000,000.00
25,410,209.50
---
25,410,209.50
1,800,000.00 1,460,000.00 94,655,008.48
1,500,000.00 1,800,000.00 1,460,000.00 85,666,980.83
---
1,500,000.00
---
1,800,000.00
---302,546.12
1,460,000.00 85,364,434.71
-----------
10.80%
---
45.00%
45.00%
---
2.87%
2.87%
---
20.00%
20.00%
---
20.00%
20.00%
---
17.85%
17.85%
---
50.00%
1,500,000.00
---
10.80%
30.00% 532,062.50
Explaination of diffirence between shareholding proportion and voting right proportion in investee
9.80% 18.00% 100.00% ---
---
---
9.80% 18.00% -----
operate and contracted by the third party operate and contracted by the third party ----The company is being liquidating
（2）During the reporting period, the company is not limited to transfer funds to the Investment Company limited circumstances. （3）The company has no long-term equity investment of limited sales condtion in the end.
39
Devalue
Current devalue
Cash bonus
14,831,681.50
---
---
---
---
400,000.00
266,654.99
---
---
---
---
---
---
---
---
---
---
---
16,800,000.00
---
---
5,058,307.01
---
---
---
---
---
---
---
65,634.56
---
---
---
---
---
---
---
---
850,000.00
---
---
500,000.00
---
---
---
---
---
541,941.63
1,460,000.00 38,416,643.50
-----
--2,357,576.19
11.Investment real estate （1）Measured by the cost of investment in real estate Unit：RMB Book amount at year begining
Increase at this period
Decrease at this period
Book balance in year -end
1. Total original price
258,166,738.75
108,726.21
---
258,275,464.96
1.House, Building
258,166,738.75
108,726.21
---
258,275,464.96
---
---
---
---
89,898,215.91
3,466,504.87
---
93,364,720.78
89,898,215.91
3,466,504.87
---
93,364,720.78
---
---
---
---
Items
2.Land use right II.Total accumulated accumulated amortization
depreciation
1.House, Building 2.Land use right III. Total book value of investment real estate
168,268,522.84
164,910,744.18
1.House, Building
168,268,522.84
164,910,744.18
2.Land use right
---
---
IV. Total of accumulated provision for devaluation of investment real estate.
---
---
1.House, Building
---
---
2.Land use right
---
---
V. Total book value of investment real estate
168,268,522.84
164,910,744.18
1.House, Building
168,268,522.84
164,910,744.18
---
---
2.Land use right
Current amount of depreciation and amortization is RMB 3,466,504.87 . Current investment Property devalue plan amount is RMB 0.00. The company has no fair value measurement of investment real estate. 12. Fixed assets （1）Fixed assets Items
Book amount at year Increase at this begining period
Decrease at this period
Unit：RMB Book balance in year -end
1. Total original price
271,932,726.98
1,474,454.60
351,214.00
273,055,967.58
Including: House , Building Machinery equipment
109,707,395.31
599,100.86
---
110,306,496.17
145,158,482.07
113,756.41
---
145,272,238.48
40
Items
Book amount at year Increase at this begining period
Decrease at this period
Book balance in year -end
4,159,605.00
196,326.00
346,800.00
4,009,131.00
12,907,244.60
565,271.33
4,414.00
13,468,101.93
105,074,108.74
7,788,970.93
255,177.74
112,607,901.93
33,980,801.44
2,155,287.43
---
36,136,088.87
4,870,195.28 ---
66,971,852.03
Transportations Electronic and Other II. Total of accumulative depreciation Including: House , Building Machinery equipment
62,101,656.75 Transportations 1,628,391.51
163,268.05
250,852.02
1,540,807.54
4,325.72
7,959,153.49
---
---
160,448,065.65
75,726,593.87
---
---
74,170,407.30
83,056,825.32
---
---
78,300,386.45
2,531,213.49
---
---
2,468,323.46
5,543,985.56
---
---
5,508,948.44
376,001.12
---
70,200.00
305,801.12
---
---
---
---
---
---
---
---
376,001.12
---
70,200.00
305,801.12
---
---
---
---
---
160,142,264.53
75,726,593.87
---
---
74,170,407.30
83,056,825.32
---
---
78,300,386.45
2,155,212.37
---
---
2,162,522.34
Electronic and Other 7,363,259.04 III. Total book value of Fixed assets 166,858,618.24 Including: House , Building Machinery equipment
600,220.17
Transportations Electronic and Other IV. Total of Devalued Provision Including: House , Building Machinery equipment Transportations Electronic and Other --V. Total book value of Fixed assets 166,482,617.12 Including: House , Building Machinery equipment Transportations Electronic and Other 5,543,985.56 ----5,508,948.44 (2) Current depreciation is RMB 7,788,970.93 . (3) The issue of fixed assets transferred from construction in progress original price is RMB 246,450.00. (4)As of June 30,2011，The company has no temporary situation of idle fixed assets. (5)As of June 30,2011，The company has no lease by financing the fixed assets of the situation. 41
（6）As of June 30,2011，The fixed assets leased through operating leases. 13.Project under construction （1）Project under construction Unit：RMB Year-end balance Items Book balance TFT-LCD polarizing 451,907,752.42 film I project Guanhua Building 2,006,624.19 project Other Total
Provision for devaluation ---
Year-beginning balance Book Net value
Book balance
451,907,752.42 155,153,044.31
Provision for devaluation
Book Net value
---
155,153,044.31
---
2,006,624.19
---
---
---
157,782.00
---
157,782.00
107,900.00
---
107,900.00
454,072,158.61
---
---
155,260,944.31
454,072,158.61 155,260,944.31
42
（2）Significant changes in projects of construction-in-progress Unit：RMB Project Accumulated Increase at this Transferred to Other investment Project amount of interest period fixed assets reduction proportion of the progress capitalized budget
Thereinto: amount of Current Interest capitalized
Current Interest capitalization rate
TFT-LCD 92640 polarizing film 155,153,044.31 万 I project
296,754,708.11
---
--
2,962,393.65
2,186,064.53
---
Self451,907,752.42 Financing
Total
296,754,708.11
---
--
2,962,393.65
2,186,064.53
---
451,907,752.42
Name
Amount at year Budget begining
---
155,153,044.31
32%
49%
Capital source
Amount at year end
Notes: According to the resolutions of the 7th meeting of the fifth board of directors held on December 7, 2010, the total investment in phase-I project of polarizer sheet for TFT-LCD was adjusted from RMB 849.37 million to RMB 926.40 million(Refer to No. 2010-47 Announcement of the Company for details). (3) Devalue plan of Construction in progress Unit：RMB Items
Amount at year begining
Increase at this period
Decrease at this period
Amount at year end
Cause
No
---
---
---
---
---
Total
---
---
---
---
--
(4) Major projects under construction Items
Project progress
Notes
TFT-LCD polarizing film I project
49%
---
43
14. Intangible assets （1）Intangible assets Unit：RMB Book Balance in year-begin
Increase at this period
Decrease at this period
Book Balance in year-end
1. Total original price
60,590,330.50
---
---
60,590,330.50
Land Use right
48,765,130.50
---
---
48,765,130.50
Proprietary technology
11,825,200.00
---
---
11,825,200.00
II. Total amount of accumulated
11,947,899.33
1,036,863.64
---
12,984,762.97
Land Use right
3,276,299.33
642,663.64
---
3,918,962.97
Proprietary technology
8,671,600.00
394,200.00
---
9,065,800.00
IV. Book value of intangible assets
48,642,431.17
47,605,567.53
Land Use right
45,488,831.17
44,846,167.53
Proprietary technology
3,153,600.00
2,759,400.00
IV.Total value of provision for impairment
---
---
Land Use right
---
---
Proprietary technology
---
---
V. Total Book value of intangible assets
48,642,431.17
47,605,567.53
Land Use right
45,488,831.17
44,846,167.53
Proprietary technology
3,153,600.00
2,759,400.00
Items
(2) The amortization amount is RMB 1,036,863.64 . （3）The current expenditure on non-development projects 15.Goodwill Unit：RMB Book Balance in year-end
Ending devalue provision
2,167,431.21
2,167,431.21
2,167,431.21
Shenzhen Shenfang Import and Export Co., Ltd.
82,156.61
82,156.61
82,156.61
Shenzhen ShengBo Ophotoelectric Technology Co., Ltd
9,614,758.55
9,614,758.55
---
Total
11,864,346.37
11,864,346.37
2,249,587.82
Name of the investee or the matter of forming Goodwill Shenzhen Beauty Garment Co., Ltd.
Century
Increase at this period
Balance in year-begin
Decrease at this period
Description of the impairment of business reputation impairment testing methods and provisioning methods: goodwill related to the asset group or a combination of asset group signs of impairment exists, according to the following steps to deal with: first, do not include business reputation asset group or a Group portfolio of assets impairment testing, calculate recoverable amount, and with the relevant book value compared to the corresponding recognized devalue losses; and then again with the goodwill asset group or a group of portfolio asset impairment testing, compare the related assets group or groups of assets portfolio book value (including the share of the book value of business reputation in part) to its recoverable amount. 16. Long-term amortization expenses Unit ：RMB 44
Amount of Increase at this amortization at period current period
Items
Balance in year-begin
Other Decrease
Balance in year end
Other
Renovation costs
640,987.98
308,412.90
77,224.80
---
872,176.08
---
Other
256,770.00
---
16,990.82
---
239,779.18
---
Total
897,757.98
308,412.90
94,215.62
---
1,111,955.26
---
17. Deferred income tax assets/Deferred income tax liabilities (1）Recognized deferred income tax assets and deferred income tax liabilities Unit：RMB Items
Year-end balance
Year-beginning balance
7,353,495.75
6,810,736.28
441,843.88
441,843.88
7,795,339.63
7,252,580.16
13,927,636.24
15,334,016.79
112,086.72
112,086.72
14,039,722.96
15,446,103.51
Deferred income tax assets Assets depreciation reserves Unattained internal sales profits Total Deferred income tax liability Increase and decrease of fair value of available-for-sale financial assets Assessed tax-free periods of time caused by differences in income Total
（2）There is no deductible loss of unrecognized deferred income tax assets at the end of the reporting period which will be expired in the following year. （3）The temporary differences in corresponding of the assets or liabilities causing temporary differences. Unit：RMB Items
Amount of temporary differences
Provision for bad debts
20,472,380.68
Provision for devaluationof fexed assets
305,801.12
rovision for falling price of inventory
7,986,769.89
Impairment of long-term equity investments
5,227,896.65
Increase and decrease of fair value of available-for-sale financial assets Assessed tax-free periods of time caused by differences in income
58,031,817.67 467,028.00
Unattained internal sales profits
2,945,625.84
Total
95,437,319.85
45
18. Impairment of assets Unit：RMB Decrease at this period Book balance Year-beginning
Increase at this period
19,127,508.44
Book balance Year-end
Withdrawal aount in this
Transfer in
Transfer-out
1,344,872.24
---
---
----
20,472,380.68
6,574,407.94
1,679,759.57
---
267,397.62
---
7,986,769.89
376,001.12
---
--
70,200.00
---
305,801.12
38,416,643.50
---
---
---
---
38,416,643.50
V. Goodwill
2,249,587.82
---
---
---
---
2,249,587.82
Total
66,744,148.82
3,024,631.81
---
337,597.62
---
69,431,183.01
Items I.Provision for bad debts II. Provision for falling price of inventory III. Provision for devaluationof fexed assets IV. Provision for devaluation of Long-term equity investment
19. Short-term borrowings （1）Short-term borrowings Unit : RMB Year-end balance Items
Year-beginning balance
Currency
Mortgage loan Total
RMB
Amount of original currency
Transferred to RMB
Amount of original currency
Transferred to RMB
---
---
2,000,000.00
2,000,000.00
---
---
---
2,000,000.00
Description of short-term loans classifications: The short-term loans are classified by loans. （2）There are no expired outstanding short-term borrowings at the end of the reporting period. 20. Account payable （1）Accounts payable by item class. Unit：RMB Items
Year-end balance
Year-beginning balance
Within 1 year
26,451,660.61
25,820,167.05
1-2 years
6,934,803.51
5,856,108.52
2-3 years
151,568.36
374,033.42
3-4 years
12,737.13
351,694.84
4-5 years
---
466,223.57
Over 5 years
561,446.97
230,304.64
Total
34,112,216.58
33,098,532.04
（2）As of June 30,2010 In the balance of accounts payable, there were no payables to shareholders holding 5% (including 5%) or more of the voting right of the Company; 46
21. Received in advance Unit: RMB Items
Year-end balance
Year-beginning balance
34,920,576.37
13,231,071.92
1-2 years
12,600.00
46,227.70
2-3 years
244,913.60
639,024.58
3-4 years
449,009.61
-
4-5 years
---
100.00
Over 5 years
---
5,704.00
35,627,099.58
13,922,128.20
Within 1 year
Total
（2）As of June 30, 2011，In the balance of funds received in advance, there were no funds of shareholders holding 5% (including 5%) or more of the voting right of the Company; (3) The increase of received in advance is comparatively large because of the increase of the export trade orders for year-end. （4）The description of large-sum accounts payable with the age over 1 year: The receipts in advance with the age more than 1 year in the company’s advance receipts is the unsettled sporadic balance with the clients, so there is no large-sum advance receipts. 22. Employee salary of payable Unit :RMB Items
Book Balance in year-begin
Increase in the current period
Decrease in the current period
Book Balance in year-end
1.Wages, bonuses, allowances and 17,009,475.59 28,108,234.11 30,278,649.48 14,839,060.22 subsidies 2.Employee welfare --2,208,053.59 2,208,053.59 --3. ocial insurance premiums 107,943.44 2,555,423.82 2,486,215.38 177,151.88 Of Which: medical insurance 19,063.87 211,059.15 230,123.02 --Basic old-age insurance premiums 43,317.27 2,134,386.97 2,000,552.36 177,151.88 Pension Payment 38,829.56 108,585.97 147,415.53 --Unemployment insurance 1,276.61 29,691.50 30,968.11 --Work injury insurance 1,192.19 16,822.85 18,015.04 --Maternity insurance 2,191.44 38,175.86 40,367.30 --Personal accident insurance 2,072.50 16,701.52 18,774.02 --IV. Public reserves for housing 2,558,516.71 546,915.78 1,094,512.85 2,010,919.64 V. Union funds and staff education 918,497.23 838,506.59 656,829.40 1,100,174.42 fee VI. Non-monetary welfare --------VII. Compensation for cancellation --------of labor relations VIII. Other 191,012.00 89,001.74 98,920.88 181,092.86 Of which: equity payment by cash --------settlement Total 20,785,444.97 34,346,135.63 36,823,181.58 18,308,399.02 The amounts of arrears of staff salary and welfare payable are RMB 0 00. The amounts of trade union funds and staff education expenses are RMB 1,100,174.42, the amounts of non-monetary benefits are RMB 0.00, and the compensations for the lifting of labor relations are RMB 0.00 . 23. Tax Payable Unit：RMB Items VAT Consumption tax
Year-end balance -33,277,142.04 --47
Year-beginning balance 996,409.59 ---
Business Tax 477,510.83 513,473.67 City Construction tax 10,066.86 110,020.56 Enterprise Income tax 5,081,759.29 1,817,811.73 Individual Income tax 626,521.24 313,222.27 House property Tax 31,915.71 69,926.27 Surcharge for education 34,797.77 61,160.32 Other 13,143.31 129658.98 Total -27,001,427.03 4,011,683.39 Taxes payable description: The subsidiary and branch of the company have no taxable income transfers of each other. 24. Interest Payable Unit：RMB Items Long-term loans interest of installment and interest charge Total
Year-end balance
Year-beginning balance
2,298,867.02 2,298,867.02
154,092.20 154,092.20
25.Other Payable （1）Other payables by item class Unit：RMB Age Year-end balance Year-beginning balance Within 1 year 9,266,067.11 4,312,385.27 1-2 years 5,698,639.11 7,714,871.00 2-3 years 1,140,383.74 6,898,173.26 3-4 years 3,785,387.46 3,088,611.17 4-5 years 9,668,441.97 8,998,702.32 Over 5 years 20,072,622.51 16,746,352.12 Total 49,631,541.90 47,759,095.14 （2）In the balance of funds received in advance, there were no funds of shareholders holding 5% (including 5%) or more of the voting right of the Company, described in Notes VII,6. （3）There are no large-sum other payables with the age ove 1 year in ending other payables. （4）Large-sum other payables in ending other payables are mainly rental deposit. 26 Non-current liability due within one year （1）Classifications unit：RMB Items Year-end balance Year-beginning balance Long-term loan due within one -21,000,000.00 year Total --2. Long-term loan due within one year Unit：RMB Items Year-end balance Mortgage loan --Total --27. Long-Term borrowings （1）Long-term borrowing Unit:RMB Items
Currency
21,000,000.00
Year-beginning balance 21,000,000.00 21,000,000.00
Year-end balance Year-beginning balance Amount of Transferred to Amount of Transferred to original currency RMB original currency RMB Guarantee loan RMB 96,719,008.30 96,719,008.30 96,719,008.30 96,719,008.30 Total 96,719,008.30 96,719,008.30 96,719,008.30 96,719,008.30 As regards long-term loans classifications: Long-term loans are classified by loans. （2）The top five of long-term loans
48
Unit：RMB Year-end balance Loans Loans ending Interest Currency Amount of Amount of starting date date rate (%) original currency RMB
Loan unit Shenzhen Development Bank Shenzhen Development Bank Shenzhen Development Bank Shenzhen Development Bank Shenzhen Development Bank Shenzhen Development Bank Shenzhen Development Bank Total
Year-beginning balance Amount of Amount of Foreign currency RMB
2010.12.29
2015.06.24
RMB
4.65%
21,372,872.00
21,372,872.00 21,372,872.00
21,372,872.00
2010-6-24
2015.06.24
RMB
4.65%
1,553,666.34
1,553,666.34
1,553,666.34
1,553,666.34
2010-10-9
2015.06.24
RMB
4.65%
5,248,255.00
5,248,255.00
5,248,255.00
5,248,255.00
2010-11-25
2015.06.24
RMB
4.65%
21,225,294.00
21,225,294.00 21,225,294.00
21,225,294.00
RMB
4.65%
21,047,897.96
21,047,897.96 21,047,897.96
21,047,897.96
2015-06.-24 RMB
4.65%
18,088,119.00
18,088,119.00 18,088,119.00
18,088,119.00
4.65%
8,182,904.00
8,182,904.00
8,182,904.00
--
96,719,008.30
96,719,008.30 96,719,008.30
2010-07-14 2015-6-24
2010-11-09
2010-08-30 2015-06-24 --
RMB
8,182,904.00
96,719,008.30
There is no long term loan formed by overdue loan extension in the end of period.All final long-term loans are the loans issued to our company from Shenzhen Development Bank Co , Ltd which was entrusted by entrust lender Shenzhen Shenchao Technology Investment Corporation. 28. Other Non-current liabilities Unit ：RMB Items
Book balance year-end
Book balance Year-beginning
Deferred profits
52,806,595.67
54,556,985.69
Total
52,806,595.67
54,556,985.69
As regards other non-current liabilities （1）According to the "Notice on National Development and Reform Commission to the General Office of the textile project management of the special funds" (Faigaiban [2006]2841), on December 22, 2006, the Company received "Textile special" funds RMB 2,000,000.00 from Shenzhen Finance Bureau. The amortization in accordance with the corresponding equipment, the ending balance of uncompleted amortization is RMB 1,714,285.72 . (2) According to the document of Shenzhen Municipal Development and Reform Commission 【2009】 No. 416 that "The Notice On issued the Governmental Investment Plan in 2009 on Zhong Ke New Industrial Internet Security Audit System and Other High-tech Industrialization Demonstration Project and the Public Testing and Consultation Service of Information Security Industry and other National High-tech Industrial Base Platform Projects”, on May 26, 2009, the company received the Shenzhen Municipal Development and Reform Commission high-tech industrialization demonstration project supporting Capital RMB 2 million yuan allocated by Shenzhen City Bureau of Finance for the construction of “The Project of the Construction Line of Polaripiece for TFT-LCD”. Our company will use 10 years as asset depreciation period for amortization in current period.The non-operating income in current period is RMB 100,000.00 and the balance amount of unfinished final amortization is RMB 1,700,000.00. (3) According to the document of the Office of the State Development and Reform Commission on "The Office of the State Development and Reform Commission on the Reply of New Flat-Panel Display Industrialization Special Project” (Development and Reform Office High-Tech【2008】No. 2104), the company obtained the state subsidies RMB 10 million yuan from the State Development and Reform Commission New Flat-Panel Display Industrialization Special Project for the construction of “The Project of Polaripiece Industrialization for TFT-LCD”. On June 29, 2009, the company received the special subsidies of State Development and Reform 49
Commission RMB 5 million yuan allocated by Shenzhen City Bureau of Finance. On December 25, 2009, the company received the special subsidies of State Development and Reform Commission RMB 3.5 million allocated by Shenzhen City Bureau of Finance. On April 2010, the company received the special subsidies of State Development and Reform Commission RMB 1.5 million yuan allocated by Shenzhen City Bureau of Finance. Our company will use 10 years as asset depreciation period for amortization in current period.The non-operating income in current period is RMB 500,000.00 and the balance amount of unfinished final amortization is RMB 8,500,000.00. (4) According to the document of Shenzhen Science and Information【2009】No. 202 and Shenzhen Municipal Science and Technology Plan Project Contract, The company obtained the special subsidies RMB 0.8 million yuan from Shenzhen Bureau of Science Technology & Information for the project of “The Research and Development of A New Production Process of Dye Type Polaripiece”. （5）Company received RMB 800,000.00 of technology development fund key subsidies issued by Futian science and technology bureau in current period, project to be inspected. (6) On December 23, 2009, the Company received a loan discount RMB 992,000.00 yuan allocated by Shenzhen Bureau of Finance for phase-2 alteration project.Our company will use 10 years as asset depreciation period for amortization in current period.The non-operating income in current period is RMB 49,600.02 and the balance amount of unfinished final amortization is RMB 1,693,199.95. （7）The Company received R&D subsidy of RMB 39.5499 million from the government according to Shen Cai Jian (2010) No. 101 Document - Circular of Plan for Use of Special Funds for the 14th Group of Significant High-tech Projects in 2010. The Company plans to invest these funds in R&D in five years from 2011. Non-operating income recognized in current period was RMB 3,954,990. At the end of period, the balance to be amortized was RMB 35,594,910.00. （8）According to Shen State-owned Assets Bureau (2010) No. 270 Document, the Company obtained fund of RMB 1,800,000.00 for supporting an excellent project of independent innovation from Shenzhen State-owned Assets Bureau for phase-I project of polarizer sheet for TFT-LCD. 29.Stock capital Unit：RMB
Balance Year-beginning
Increase/decrease this time (+ , - ) Transferred Issuing of Bonus from new share shares reserves -------
Total of 336,521,849.00 capital shares 30. Capital reservesUnit：RMB
Other
Subtotal
---
---
Balance year-end 336,521,849.00
Items
Year-beginning balance
Increasein the current period
Decrease in the current period
Year-end balance
Share premium
782,656,413.49
---
---
782,656,413.49
Other
57,140,701.64
5,029,896.69
9,682,285.14
52,488,313.19
Total
839,797,115.13
5,029,896.69
9,682,285.14
835,144,726.68
As regards capital reserve: As regards the decreasing of other capital reserve, is the company to sell the holding of circulation stock of Shenzhen Victor Onward Textile Industrial Co., Ltd. in secondary market at current period, and is calculated as the capital reserve in accordance with the change of fair value to fully transfer. 31. Surplus reserve
50
Unit：RMB Items Statutory reserve
surplus
Total
Year-beginning balance
Increasein the current period
Decrease in the current period
Year-end balance
34,086,443.10
---
---
34,086,443.10
34,086,443.10
---
---
34,086,443.10
32. Retained profits Unit：RMB Amount
Extraction or distribution of the proportion
135,563,817.74
--
---
--
135,563,817.74
--
32,363,976.69
--
Less：Drawing statutory surplus reserve
---
---
Drawing discretionary surplus reserve
---
---
Drawing commonly risk provisions
---
---
Payable dividends of common shares
---
---
Transfer to common stock equity dividends
---
---
167,927,794.43
---
Intes Before adjustrments: Retained profits at the period end Adjustments:Total retained profits at the period beginning （+，-） After adjustments:Retained profits at the period beginning Add：Net profit belonging to the owner of the parent company
Retained profits at the period end
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. (5) Other adjustment of the total affected beginning undistributed profits are RMB 0.00 . 33.Business income, Business cost （1）Business income Unit：RMB Items
Amount of current period
Income from Business income
317,350,237.28
Amount of previous period 320,584,739.41
Other Business income
1,832,480.47
Total
319,182,717.75
Cost from Business cost
259,354,271.44
1,784,397.33 322,369,136.74 271,389,704.25 51
Other Business cost
1,818,301.73
Total
261,172,573.17
1,743,091.46 273,132,795.71 （2）Main business（Industry） Unit:：RMB Amount of current period
Amount of previous period
Name Business income
Business cost
Business income
Business cost
Domestic and foreign trade
133,615,874.79
132,959,760.68
156,603,026.79
155,998,551.52
Manufacturing
148,809,678.11
116,692,159.71
129,343,423.14
107,486,669.30
Property management, leasing
34,924,684.38
9,702,351.05
34,638,289.48
7,904,483.43
Total
317,350,237.28
259,354,271.44
320,584,739.41
271,389,704.25
（3）Main business（Production） Unit：RMB Amount of current period
Amount of previous period
Name Business income
Business cost
Business income
Business cost
Preperty and rental income
34,924,684.38
9,702,351.05
34,638,289.48
7,904,483.43
Textile income
36,470,974.48
28,463,448.04
23,277,796.52
20,397,678.91
Polaroid income
112,338,703.63
88,228,711.67
106,065,626.62
87,088,990.39
Trade income
133,615,874.79
132,959,760.68
156,603,026.79
155,998,551.52
Total
317,350,237.28
259,354,271.44
320,584,739.41
271,389,704.25
（4）Main Business（Area） Unit：RMB Amount of current period
Amount of previous period
Name Business income
Business cost
Business income
Business cost
Domestic
134,589,767.03
88,019,534.85
104,234,369.96
66,469,175.30
Oversea
182,760,470.25
171,334,736.59
216,350,369.45
204,920,528.95
Total
317,350,237.28
259,354,271.44
320,584,739.41
271,389,704.25
（5）Total income and the ratio of operating income from top five clients Unit：RMB Name
Business Income
Proportion(%)
Shenzhen Lianya Textile Co., Ltd
133,022,265.35
41.92%
CHORICO.,LTD
15,164,890.10
4.78
Jinsitai Investment Development Co., Ltd.
11,514,689.06
3.63%
Jiangmen Yidu Semiconductor Co., Ltd.
8,163,119.79
2.57%
52
Ruili Baolai Optoelectronics Technolog Co.,Ltd.
8,152,200.71
2.57%
Total
176,017,165.01
55.47%
34.Business taxes and surcharges Unit：RMB Items Business tax City construction tax Education surcharge Embankment fee Real estate Tex Other Total
Amount of current period Amount of previous period 1,948,592.33 1,843,811.84 365,136.39 66,258.90 155,820.13 198,916.16 1,748.13 1,481.94 825,326.71 783,872.67 256,457.36 259,032.65 3,553,081.05 3,153,374.16
Project payment standard Notes III.1 Notes III.1 Notes III.1 Notes III.1 Notes III.1 Notes III.1
35.Sales expenses Items Wage Sample and Depreciation expenses Exhibition fee Sales service charges Entertainment expenses Transportation changes Other Total 36.Administrative expenses
Amount of current period 704,667.44 31,992.00 179,443.00 974,548.70 318,326.61 1,049,227.40 186,569.29 3,444,774.44
Amount of previous period 595,492.33 21,872.75 177,040.00 186,045.17 185,995.40 588,990.96 60,164.26 1,815,600.87
Items Wage Taxes Insurance expenses Depreciation of fixed assets Amortization of intangible assets Amortization of long-term deferred expenses R& D costs Postal fees Office expenses Repairs fees Water and electricity Auto expenses Travel Expenses Audit expenses and assessment expenses Entertatnment expenses Low consumables amortization Lawsuit expenses Listing fees Other Management fee
Amount of current period 16,296,271.25 483,126.01 257,120.07 1,713,332.30 1,036,864.00
Amount of previous period 12,174,051.37 512,420.55 259,069.75 2,045,271.58 589,167.00
34,490.82
34,490.82
5,941,692.56 118,690.05 818,480.65 299,042.50 298,723.82 331,881.00 446,117.79
5,686,023.03 172,764.54 1,187,615.77 25,186.00 269,812.00 476,268.00 489,066.45
402,123.00
581,850.00
696,768.10 99,929.00 275,602.00 262,136.00 841,974.15 30,654,365.07
843,278.50 200,736.50 4,767.00 121,300.00 730,488.70 26,403,627.56
37. Financial expenses Items
Amount of current period 53
Amount of previous period
Items Interest expenses Interest income Exchange loss Exchange gain Discount interest Fees and other Total 38. .Loss of assets impairment Unit：RMB Items I .Losses for bad debts II. Losses for falling price of inventory III. Losses for financial assets sales IV. Losses for Long term equity investment V. Losses for devaluationof fexed assets VI. Losses for devaluation of gooldwill 7. Other Total
Amount of current period 542,726.95 -6,046,917.50 997,475.69 --162,953.72 -4,343,761.14
Amount of current period 1,344,872.24 1,679,759.57
Amount of previous period 4,048,416.10 -2,079,874.51 75,813.06 -59,951.38 191,185.92 2,175,589.19
Amount of previous period 1,409,333.66
-----
118,517.92 -----
---
---
---
---
--3,024,631.81
--1,527,851.58
39.Investment Income （1）Investment income Unit：RMB Amount of current Amount of previous period period Incomes from disposal of Long-term cost investment 1,922,576.19 1,895,403.30 Incomes from disposal of long-term equity investment 97,453.88 979,077.02 Investment income from financial assets sales 1,482,128.46 9,009,386.30 Deal income from futures investment --Stock right disposal benefit --Total 3,502,158.53 11,883,866.62 （2）Long term equity investment calculated via equity method： Unit：RMB Name Amount of current Amount of previous Cbange cause period period Shenzhen Haohao Property --Leasing Co. Ltd. 235,155.43 197,933.49 Shenzhen Xieli Automobile Co., --Ltd. 100,745.09 -197,985.46 Shenzhen Changlianfa Printing --and dyeing Company 26,225.18 14,822.80 Jordan Garment Factory -264,671.82 964,306.19 Notes 1 Total 97,453.88 979,077.02 Notes 1. Jordan Garment Factory with the economic recovery of peripheral area, its profit grows better. Notes 2. In the report period, the company has no big restriction on the investment earning repatriation. Items
40.Non-operating income （1）Classification of items about unrelated business income Unit: RMB Items Amount of Amount of current period previous period 54
The amount of non-operating
Cause
gains & lossed 52,994.00
Total income from 52,994.00 --liquidation of non-current assets 52,994.00 --52,994.00 Including：Income from liquidation of fixed asset Income of the sale of ------intangible assets Government Subsidy 4,690,090.02 4,982,567.16 4,690,090.02 10,876,329.05 --10,876,329.05 注1 Other Total 15,619,413.07 4,982,567.16 15,619,413.07 Notes (1): Mainly due to receipt of 1,085,733 A shares of Guangdong Sunrise Group Co., Ltd. (the market value of these shares was RMB 9,847,598.31 according to the closing price of A shares of * ST Sunrise on May 17, 2010 (the last trading day before suspension of listing), i.e., RMB 9.07 per share) and cash of RMB 702,694.14 (RMB 10,550,292.45 in total as recognized non-operating income) according to (2010) Shen Zhong Fa Min Qi Zhong Zhen Zi No. 5-5 Civil Award and the Plan for Reorganization of Guangdong Sunrise Group Co., Ltd and also the receipt of compensation of RMB 315,936.60 for subway construction. （2）Governmental subsidy list Items
Amount of current Amount of previous Notes period period Guangdong Trade Meeting support fund of Futian --Chamber of Commerce 85,500 --The subsidies from Shenzhen Development and Reform ----Commission Government R & D 3,954,990.00 The subsidy from Futian district government (Canton fair) --116,000.00 --Topic subsidies of “Engineering technology development --4,216,967.15 --on polarizer for TFT-LCD ” he counterpart funds for technology industrialization 100,000.00 100,000.00 --demonstration project The national subsidy for the industrialization of new type 500,000.00 500,000.00 --flat-panel display device special project The loan interest allocated by Shenzhen Finance Bureau 49,600.02 49,600.01 --Total 4,690,090.02 4,982,567.16
41. Non-operating expenses Unit：RMB Items
Amount of current period
Total Disposal of loss of non-current assets Including：Disposal of net loss of fixed assets Disposal of loss of Intangibles assets Donation expenses Fine expenses Other expenses Total
---
Amount of previous period
Recognized into current reporting period extraordinary profits or lossesGovernment ---
-----
-----
---
---
---
----1,890.28 1,890.28
----1,107.68 1,107.68
----1,890.28 1,890.28
42. .Income tax expenses Unit：RMB Items
Amount of current period 55
Amount of previous period
Income tax at current period according to taxation and related regulation 8,975,517.45 5,599,270.19 Adjustment Deferred income tax -542,759.47 567,850.88 Total 8,432,757.98 6,167,121.07 43. Calculation process of basic earnings per share and dilute earning per share （1）Calculating formula of income per share: Basic earnings per share= P/（S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk） dilute earning per share= P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ common stock weighted average of subscription warrant, stock option, transferable bond) （2）Calculating process of income per share Basic earnings per share belonging to common stock shareholder on January-June 2011=32,363,976.69 /336,521,849=0.10 RMB/shares Basic earnings per share belonging to common stock shareholder deducted non-recurring gains and losses On January-June 2011= 18,953,108.64 /336,521,849=0.06 RMB/shares. Dilute earning per share belonging to common stock shareholder On January-June 2011= 32,363,976.69 /336,521,849=0.10 RMB/share Dilute earning per share belonging to common stock shareholder deducted non-recurring gains and losses on January –June 2011= 18,953,108.64 /336,521,849=0.06 RMB/shares. 44. Other comprehensive income Unit：RMB Items
Amount of current period
Amount of previous period
-6,058,769.00
-29,671,389.46
-1,406,380.55
-6,534,833.42
---4,652,388.45
---23,136,556.04
---
---
---
---
---
---
-----
-----
---
---
---
---
---
---
-----
-----
---
---
-----
-----
---
---
---
---
---4,652,388.45
---23,136,556.04
1.Loss amount produced by sellable financial assets Less：Deduct: income tax infection produced by sellable financial assets Net amount transferred into profit and loss at current period that reckoned into other comprehensive income at former period Subtotal 2. The enjoyed share in other comprehensive income of other invested unit according to equity method Less：Deduct: income tax infection produced from the enjoyed share in other comprehensive income of other invested unit according to equity method Net amount transferred into profit and loss at current period that reckoned into other comprehensive income at former period Subtotal 3.. Benefit (or loss) amount produced from cash flow Less：Deduct: income tax infection produced from cash flow hedging instruments Net amount transferred into profit and loss at current period that reckoned into other comprehensive income at former period Transferred to the adjustment of initial confirmation amount of items at hedged period Subtotal 4. Translating difference in foreign currency financial reports Less：Deduct: net amount that transferred into profit and loss at current period in disposed overseas business Subtotal 5..Other Less：taxation infection arising from reckoning other comprehensive income. Net amount transferred into profit and loss at current period that reckoned into other comprehensive income at former period Subtotal Total Other comprehensive income shows: 56
（1）The asset for sale is circulation stock of Shenzhen Victor Onward Textile Industrial Co., Ltd. , and book value is adjusted according to market value alteration. 45.Cash flow statement Notes （1）Cash received related to other operating activities Unit：RMB Items Amount of current period Xuanli Company's debt funds implementation 3,000,000.00 Restucturing plan for Guangdong Sunrise Company 702,694.14 Summary of other scattered incomes 3,487,042.96 Total 7,189,737.10 （2） Cash paid related to other operating activities Unit：RMB Items Amount of current period Research & development expenses 5,941,692.56 Postal fees 118,690.05 Office expenses 818,480.65 Auto Expenses 331,881.00 Travel fee 446,117.79 Audit and assessment fee 402,123.00 Entertainment expenses 1,015,094.71 Transportation expnses 1,049,227.40 Lawsuit fee 275,602.00 Other 7,442,295.93 Total 17,841,205.09
Amount of previous period ----900,678.20 900,678.20
Amount of previous period 5,686,023.03 172,764.54 1,187,615.77 476,268.00 489,066.45 581,850.00 1,029,273.90 588,990.96 4,767.00 6,871,572.43 17,088,192.08
（3）Cash received related to financing activities Unit：RMB Items Interest income Transferred out of fixed deposit Total
Year 2010 4,069,393.25 204,569,442.50 208,638,835.75
Year 2009 -------
（4）Cash paid related to other investment activities Unit：RMB Items Amount of current period Government subsidy 2,850,000.00 Total 2,850,000.00 46. Supplement Information for cash flow statement （1）Supplement Information for cash flow statement Unit：RMB Supplement Information
Amount of previous period 2,300,000.00 2,300,000.00
Amount of current period
Amount of previous period
Net profit
32,363,976..69
24,858,502.70
Add: Impairment loss provision of assets
3,024,631.81
1,527,851.58
Depreciation of fixed assets, oil and gas assets and consumable biological assets
11,255,475.80
11,075,406.34
I. Adjusting net profit to cash flow from operating activities
57
Supplement Information
Amount of current period 1,036,863.64
Amount of previous period 589,167.64
94,215.62
164,971.28
-52,994.00
---
---
---
---
---
-3,526,646.30
2,624,213.61
-3,502,158.53
-11,883,866.62
-542,759.47
-567,850.88
-1,406,380.55
-6,534,833.42
-6,949,406.08
-16,366,319.20
3,616,534.80
15,226,615.80
-22,867,604.67
-21,544,508.02
---
3,245,599.04
12,543,748.76
2,414,949.85
---
-
---
-
---
-
--
-
---
-
291,006,454.63
108,234,510.63
417,686,594.80
101,340,314.95
---
-
---
-
Amortization of intangible assets Amortization of Long-term deferred expenses Loss on disposal of fixed assets, intangible assets and other long-term deferred assets Loss from Fixed assets Discard Loss of fair value fluctuation on assets Financial cost Loss on investment Decrease of deferred income tax assets Increased of deferred income tax liabilities Decrease of inventories Decease of operating receivables Increased of operating Payable Other Net cash flows arising from operating activities II. Significant investment and financing activities that without cash flows: Liability transfer to capital Convertible corporate bond due within 1 year Finance leased fixed assets III. Net increase of cash and cash equivalents Ending balance of cash Less: Beginning balance of cash Add: Ending balance of cash Less: Beginning balance of cash equivalents -126,680,140.17 6,894,195.68 Net increase of cash and cash equivalents （2）No related information on acquiring or disposing subsidiary company and other business unit at this period. （3）Cash and cash equivalents Unit：RMB Items Year-end balance Year-beginning balance I. Cash Of which: Cash in stock 331,135.19 225,904.54 Bank savings could be used at any time 245,766,908.71 353,420,619.40 58
Other monetary capital could be used at any time
44,908,410.73 -----------
64,040,070.86 -----------
Usable money in Central Bank Money saved in associated financial bodies Money from associated financial bodies II. Cash equivalents Of which: bond investment which will due in three months III. Balance of cash and cash equivalents at the period end 291,006,454.63 417,686,594.80 Notes：Cash and cash equivalents without the use of parent or ubsidiary within the group of restricted cash and cash equivalents. VI. Accounting treatment of asset securitization In the reporting period, the company has no asset securitization service. VII.Related parties and related-party transactions . 1. Parent company information of the enterprise
59
Unit：RMB
Parent company name Shenzhen Investment Holding Co., Ltd.
Related parties
Actual controlling person
Enterprise type
State-owned enterprise
Registration place
Legal representative
Business character
Registered capital
Fan Chunming
Investment
RMB 4600 million
Shenzhen
Share ratio of parent company against the company(%) 54.26%
Vote right ratio of parent company against the company(%) 54.26%
Ultimate controlling party State-owned Assets Supervision and Administration Commission of Shenzhen
Organization code 76756642-1
Parent company information of the company The company is authorized and approved to be state-owned independent company by Shenzhen Government, and it Executes financial contributor function on state-owned enterprise within authorization scope.
60
2. Subsidiary companies information of the enterprise Unit ：RMB Full name of subsidiary company
Subsidiar y company type
Enterpris e type
Shenzhen Jinlan Decorative Articles Industrial Co., Ltd.
wholly owned subsidiary
Limited Liability Company
Shenzhen Lisi Industrial Co., Ltd.
wholly owned subsidiary
Shenzhen Huaqiang Hotel Shenfang Property Management Co., Ltd. Shenzhen Beauty Century Garment Co., Ltd. Zhenzhen Zhongxing Fibre folds cotton Clothing ornament Co., Ltd. Shenzhen Shenfang Import & export Co., Ltd. Shenzhen Tianlong Industry and Trade Co., Ltd. Shenzhen Shengbo Ophotoelectri c Technology Co., Ltd Shengtou （HK）Co., Ltd.
Legal representativ e
Business character
Registered capital
Share holding ratios(% )
Vote right ratio (%)
Organizatio n code
Shenzhen
Zhang Hong
Fabrics, bedding,clothing,textile s raw materials processing manufacturing, wholesale and retail.
4,000,000.00
90.00
100.0 0
192172332
Limited Liability Company
Shenzhen
Zhu Jun
Domestic commerce, materials supply and sales
2,360,000.00
90.68
100.0 0
192180180
wholly owned subsidiary
Limited Liability Company
Shenzhen
Zhu Jun
Accommodation, restaurants, business center;
10,005,300.00
95.00
100.0 0
19223330X
wholly owned subsidiary
Limited Liability Company
Shenzhen
Gao Guoshi
Property Management
1,604,000.00
93.75
100.0 0
192225051
wholly owned subsidiary
Limited Liability Company
Shenzhen
ZHang Hong
Production of fully electronic jacquard knitting whole shape
25,000,000.00
100.00
100.0 0
741231236
Subsidiar y holding company
Limited Liability Company
Shenzhen
Feng Junbin
Spewing acupuncture cloth, revision, and fusible interlining fabric products
1,680,000.00
75.00
---
618810371
wholly owned subsidiary
Limited Liability Company
Shenzhen
ZHang Hong
Operating import and export business
5,000,000.00
100.00
100.0 0
728563236
Subsidiar y holding company
Limited Liability Company
Shenzhen
Gao Gluoshi
Operating import and export business
1,900,000.00
50.00
--
192174127
wholly owned subsidiary
Limited Liability Company
Shenzhen
Zhu Jun
Production and sales of polarizer
200,000,000.0 0
100.00
100.0 0
618877007
wholly owned subsidiary
Limited Liability Company
HK
Zhu Meizhu, Liu Honglei
Sales of polarizer
HKD10,000.0 0
100.00
100.0 0
---
Registratio n area
61
3. Joint-venture and affiliated enterprises information of the company Unit：RMB
Invested unit name
Enterprise Registration Legal type Place representative
Business character
Registered capital
Share holding ratio(%)
Liability vote right Assets amount at Net assets amount at amount at end ratio(%) end of period end of period of period
Business total income at this period
Serivice
475.4 万
50.00%
50.00%
6,154,866.12
437,520.80
5,717,345.32
855,197.70
471,094.52
Joint 61881295-9 enterprise
Net benefit at this Affiliation Organization period relation code
I.Joint enterprise
Shenzhen Haohao Property Leasing Limited Co. Ltd. Company
Shenzhen
Feng Junbin
Shenzhen Xieli Automobile Co., Limited Ltd Company
Shenzhen
Ye Yongling Manufacturing
312 万
50.00%
50.00%
6,682,263.93
2,168,780.46
4,513,483.47
880,028.00
161,306.18
Joint 618801838 enterprise
Shenzhen
Zhu Meizhu
647 万
40.25%
40.25%
5,303,750.41
1,029,013.63
4,274,736.78
254,988.00
65,155.72
Affiliated enterpris
618865073
Limited Company
Jordan
Chen Wenxian
Manufacturing USD100 万
35.00%
35.00% USD1,815,831.54 USD795,964.70 USD1,019,866.84. USD1,376,607.47 USD-231,688.66
Affiliated enterpris
---
Hengshun (Saipan) Industry Co., Limited Ltd. Company
Saipan
---
Manufacturing USD696 万
35.00%
35.00%
Affiliated enterpris
---
II. Affiliated enterpris
Shenzhen Changlianfa Printing and Limited dyeing Co., Ltd. Company
Jordan Garment Factory
62
---
---
-
---
---
4. Other Related parties information of the enterprise Other Related parties name
Relation of other Related parties with the company
Shenzhen Jintian Industrial Co., Ltd.
Sharing company
Shenzhen Jiafeng Textile Co., Ltd.
Sharing company
Shenzhen Guanhua Printing & dyeing Co., Ltd.
Sharing company
Union Development Group Co., Ltd.
Sharing company
Shenzhen Xiangjiang Trade Co., Ltd.
Sharing company
Shenzhen Xinfang Knitting Co., Ltd.
Sharing company
Hongkong Yehui International Co., Ltd.
Sharing company
Shenzhen Dailishi Underwear Co., Ltd.
Sharing company
Anhui Huapeng Textile Co., Ltd.
Sharing company
5. Related Transactions （1）The receiving labor service /purchasing goods. Non （2）The providing service/sells goods Occurred current term Ooccurred in previous term Subjects of Pricing and Percentage in Percentage in Related parties the related decision similar trades similar trades Amount Amount transactions making process （%） （%） Shenzhen Investment Holding Sells of 124,725.00 0.04% 22,000.00 0.01% Co., Ltd. Textile Market pricing （3）In the report period，The company has no associated trusteeship. （4）In the report period，The company has no associated contracting. （5）In the report period，The company has no associated lease. （6）The the report period, The company has no associated guarantee （7）In the report period，The company has no fund borrowing of Related parties. （8）Related transference and liabilities recombination of related parties 6. Account receivable and payable of related parties Unit ：RMB Name Related parties Year-end balance Year-beginning balance Account reveivable Shenzhen Investment Holding 47,725.00 77,325.00 Co., Ltd. Other account Shenzhen Tianlong Industry reveivable and Trade Co., Ltd. 686,391.83 686,391.83 Other account Shenzhen Dailishi Underwear reveivable Co., Ltd. -152,899.94 282,100.06 Other account reveivable Jordan Garment Factory 183,906.56 183,906.56 Other account Shenzhen Xieli Automobile reveivable Co., Ltd 169,262.00 169,262.00 Other account Anhui Huapeng Textile reveivable Company 2,200,000.00 1,800,000.00 Shenzhen Xinfang Knitting Other account payable Co., Ltd. 216,789.85 216,789.85 Shenzhen Xiangjiang Trade 240,000.00 350,000.00 Other account payable Co., Ltd. Shenzhen Changlianfa Printing 832,376.07 856,436.07 Other account payable and dyeing Co., Ltd. Shenzhen Hengsheng 1,367,940.67 1,367,940.67 Other account payable Investment Co., Ltd. Shenzhen Haohao Property 3,153,868.07 3,303,868.07 Other account payable Leasing Co. Ltd.. 63
VIII. Stock payment 1. General information of stock payment Unit：RMB Various equity instrument amount conferred at current period
---
Various equity instrument amount works at current period
---
Various equity instrument amount disable at current period
---
Price scope and left term of contract about stock option works issued at end of the period
---
Price scope and left term of contract about other equity instrument works issued at end of the period
---
2. Stock payment cleared by equity Unit :RMB Confirmation method of fair value of equity instrument on conforming date
---
The best estimated confirming method of equity instrument
---
The reason for big difference between estimation at current period and estimation at last period
---
Paid accumulated amount of stock settled on equity in capital reserves
---
Amount of stock payment settled on equity
---
3. Stock payment cleared by cash Unit ：RMB Indebted fair value confirmation method confirmed with stock share or other equity instrument as basis and undertook by company. Accumulated liability amount produced by stock payment under cash settlement in liability Total costs confirmed by stock payment under cash settlement 4. Service paid via stock
----Unit ：RMB
Employee services amount acquired via stock payment
---
Other services amount acquired via stock payment
---
5. In the report period，the company has no modification and termination of payment on stock. IX. Subsequent events 1.As of June 30, 2011，The company has no liabilities formed from pending lawsuit and mediation. 2.As of June 30, 2011，The company has no liabilities formed from other units offering。 X. Commitment events 1. As of June 30, 2011，the company has no important commitment events. 2. As of June 30, 2011，the company has no commitment information guaranteed at the former period. XI. Events Occurring after the balance sheet date 1. Closed from this report date, besides profit distribution, the company has No any important events occurring after the balance sheet date. 2. Profit distribution explanation after the balance sheet . After decision by the board of directors of the Company, the company is neither to distribute the net profit nor to capitalize and capital surplus. 64
XII. Other Important events 1. In the report period，the company has no non-monetary asset exchange service. 2. In the report period，the company has no liabilities recombination.。 3. In the report period，the company has no enterprise consolidation. 4. In the report period，the company has not large leasing. 5. As of June 30, 2011，the company has no financial instruments issued outside and can be transferred to stock at end period. 6. As of June 30, 2011，Items related to measurement of fair value。 Unit：RMB Item Amount at the Gains Accumulative Provision Amount at the beginning of and change of fair for end of period period losses value accounted impairment from for as rights and made in change interests current of fair period value in current period Financial assets 1. Financial assets calculated according to fair value whose ----------change is accounted for as profits or losses for current period 2.Derived financial asset ----------3.Trading financial assets 75,481,853.50 ------79,037,204.81 Subtotal of financial assets 75,481,853.50 ------79,037,204.81 Property investment ----------Production physical assets ----------Other ----------Total ----------Finalcial Liabilities ----------7. Foreign financial assets and foreign financial liability Unit：RMB Item
Financial assets 1. Financial assets calculated according to fair value whose change is accounted for as profits or losses for current period 2. Derived financial asset 3.Credit and account receivable 4. Trading financial assets 5.Held to term investment Subtotal of financial assets
Amount at the beginning of period
Gains and losses from change of fair value in current period
Accumulative change of fair value accounted for as rights and interests
Provision for impairment made in current period
Amount at the end of period
---
---
---
---
---
---
---
---
---
11,877,851.60
---
---
---
18,974,251.31
---
---
---
---
---
---
---
---
---
---
11,877,851.60
---
---
---
18,974,251.31
65
Item
Amount at the beginning of period
Gains and losses from change of fair value in current period
Accumulative change of fair value accounted for as rights and interests
Provision for impairment made in current period
Amount at the end of period
Finalcial Liabilities
------227,696.59 XIII.Notes s of main items in financial reports of parent company 1.Other receivable （1）Other receivable Unit：RMB Year-end balance Book balance Classification Amount Proport ion(%) Receivables with major individual amount and bad debt provision provided individually 12,075,436.43 35.43 Receivables provided bad debt provision in groups Account age group 21,695,477.13 63.66 Subtotal of group 21,695,477.13 63.66 Account receivable with minor individual amount but bad debtprovision is provided 311,486.35 0.91 Total 34,082,399.91 100.00 Year-beginning balance Book balance Amount Proport ion(%)
Classification
6,557,177.66
Provision for bad debts Amount Proporti on(%) 10,547,991.83
87.35
1,845,750.73 1,845,750.73
8.51 8.51
311,486.35 12,705,228.91
100.00
Provision for bad debts Amount Proporti on(%)
Receivables with major individual amount and bad debt provision provided individually 15,075,436.43 39.60 10,547,991.83 69.97 Receivables provided bad debt provision in groups Account age group 22,682,621.38 59.58 1,991,952.94 8.78 Subtotal of group 22,682,621.38 59.58 1,991,952.94 8.78 Account receivable with minor individual amount but bad debtprovision is provided 311,486.35 0.82 311,486.35 100.00 Total 38,069,544.16 100.00 12,851,431.12 Category explanation of accounts receivable: Receivables with significant individual amount and provision made for individual item refers to customer accounts receivable with single amount more than 0.5 million, its provision for impairment will be made based on specific identification method. For receivables without significant individual amount, after deducting those parts which had conducted individual impairment test for its obvious difference in collectability with concrete evidence, making group by aging with character of credit risks and making provision for impairment based on aging analysis method. The receivables made provision for impairment without significant individual amount refers to those receivables which has obvious difference in collectability with concrete evidence, its provision will be made based on specific identification method. Accounts receivable using the age analysis method for measurement of impairment allowances: Year-end balance Year-beginning balance Book balance Book balance Age Provision for Proportion Proportion bad debts Amount Amount （%） （%） Within 1 year 13,334,301.8 13,306,430.0 3 61.46 1,099,823.22 6 58.66 1-2 years 8,361,175.30 38.54 745,927.51 8,373,660.57 36.92 2-3 years ------60,000.00 0.26 Over 3 years ------942,530.75 4.16 66
Provision for bad debts 665,321.50 837,366.06 18,000.00 471,265.38
Total
21,695,477.1 22,682,621.3 1,991,952.9 3 100.00 1,845,750.73 8 100.00 4 （2） The company has no the conditions that account receivable is withdrew via recombination or other styles. （3）Separate amount is large at end of period or doubtful accounts reserves of account receivable with separate value decreasing test: Other Account Provision for Allotment Reason Book balance receivable bad debts rate Above RMB 0.5 Obvious evidence displaying million 12,075,436.43 10,547,991.83 69.97 depreciation Below RMB 0.5 Unable to recover million 311,486.35 311,486.35 100% Subtotal 12,386,922.78 10,859,478.18 Separate amount is not large, the account receivable with big combination risk after combined via risk character: Year-end balance Year-beginning balance Book balance Book balance Age Provision for Provision for Proportion Proportion bad debts bad debts Amount Amount （%） （%） Within 1 ------------year 1-2 years 8,361,175.30 100.00 745,927.51 8,373,660.57 89.31 837,366.06 2-3 years ------60,000.00 0.64 18,000.00 Over 3 years ------942,530.75 10.05 471,265.38 Total 8,361,175.30 100.00 745,927.51 9,376,191.32 100.00 1,326,631.44 Separate amount is not large, the account receivable with big combination risk after combined via risk character:t Separate amount is not large, but the combination risk after combined according to credit risk character is big, these account receivable refers to those with ending balance being below 0.5 million RMB and account age is over 1 year. （4）This period has no bad debt reserve, or withdrawn bad debt reserves ratio is bigger, which is taken back or transferred wholly at this period, or the withdrawal or transferring ratio is bigger. This period has no account receivable taken back by recombination or other styles. （5）Other account receivable actually cancelled after verification at this reporting period （6）As of December 31,2010 no loans of the shareholders holding 5% (inclusive of a 5%) or more voting right and other related units. (7) The front 5 units’ information of Other account receivable Unit name Relation with the Amount Fixed year Percentage of company account receivable Within 1 year Shenzhen Shenfang Imports & 13.13% subsidiary company 5,000,000.00 exports Co., Ltd. 1-2 years 7,168,680.72 18.83% Jiangxi Xuanli String Company Non-related parties 11,389,044.60 1-2 years 37.80% Shenzhen Beauty Century Garment Co., Ltd.
Anhui Huapeng Textile Company
Shenzhen Tianglong Industry and trade Co., Ltd.
Within 1 year subsidiary company Not absorbed into subsidiary company within combination scope Not absorbed into subsidiary company within combination scope
Total
5,113,176.00 75,600.00
2,200,000.00 186,391.83
1-2 years
500,000.00
2-3 years
31,632,893.15
（9）Account receivable from Related affiliated parties 67
1-2 years Within 1 year
13.18% 0.20%
4.73% 0.49%
1.31% 92.81%
Unit name Shenzhen Shenfang Imports & exports Co., Ltd. Shenzhen Beauty Century Garment Co., Ltd. Shenzhen Zhongxing Fibre Folds Cotton Clothing Ornament Co., Ltd. Shenzhen Xieli Automobile Co., Ltd. Jordan Garnent Factory
Anhui Huapeng Textile Company Shenzhen Tianglong Industry and trade Co., Ltd.
Relation with the company Internal Transactions within the scope of consolidation Internal Transactions within the scope of consolidation Internal Transactions within the scope of consolidation
Amount
Percentage of account receivable
Affiliated enterprise
169,262.00
0.50%
Affiliated enterprise Not absorbed into subsidiary company within combination scope Not absorbed into subsidiary company within combination scope
183,906.56
0.54%
12,168,680.72 35.71% 5,188,776.00 15.22% 618,769.07 1.82%
6.45% 2,200,000.00 686,391.83
2.01%
Total 21,215,786.18 62.25% （10）In the report period,Other account receivable that is not accord with expiration confirmation condition. （11）In the report period,the company does not treat other account receivable as underlying assets to make asset securitization.
68
2..Long –term stocks equity investment Unit：RMB
Name Shenzhen Jintian Industry Co., Ltd. Shenzhen Haohao Property Leasing Co. Ltd. Shenzhen Xieli Automobile Co., Ltd. Shenzhen Changlianfa Printing and dyeing Company Jordan Garnent Factory Hengshun（Saipan） Industry Co., Ltd. Shenzhen Haohao Property Leasing Co. Ltd. Shenzhen Jinlan Decorative Articles Industrial Co., Ltd. Shenzhen Lisi Industrial Co., Ltd. Shenzhen Beauty Centruty Garment Co., Ltd. Shenzhen Shenfang Import & Export Co., Ltd. Shenzhen Huaqiang Hotal Shenfang Property Management Co., Ltd. Zhenzhen Zhongxing Fibre folds cotton Clothing ornament Co., Ltd. Shenzhen Jiafeng Textile Co., Ltd. Shenzhen Guanhua Pruting and dyeing Co., Ltd. Union Development Group Co., Ltd. Shenzhen Xiangjiang
Ending Balance
Shareholding proportion in the investee
Voting right proportion in the investee
Explanation of diffidence between shareholding proportion and voting right proportion in investee
Devalue
Current devalue
14,831,681.50
3.68%
3.68%
---
14,831,681.50
---
-164,844.57
3,281,017.62
50.00%
50.00%
---
2,422,651.65
100,745.09
2,523,396.74
50.00%
50.00%
---
2,524,500.00
1,694,356.38
26,225.18
1,720,581.55
40.25%
40.25%
7,240,625.00
2,574,160.27
-264,671.82
2,309,488.46
35.00%
8,228,350.00
---
---
Cost method
40,500,000.00
468,500,000.00
Cost method
5,470,000.00
Cost method
Accounting method
Initial investment cost
Original balance
Cost method
14,831,681.50
14,831,681.50
Equity method
2,040,102.73
3,445,862.19
Equity method
1,529,483.67
Equity method
change
Cash bonus
---
400,000.00
266,654.99
---
---
---
---
---
---
35.00%
---
---
---
---
35.00%
35.00%
---
---
---
---
668,500,000.00
100.00%
100.00%
---
---
---
---
5,470,000.00
5,470,000.00
90.00%
100.00%
Notes 1
---
---
---
6,666,132.60
6,666,132.60
6,666,132.60
90.68%
100.00%
Notes 1
---
---
---
Cost method
30,867,400.00
30,867,400.00
30,867,400.00
100.00%
100.00%
---
2,167,431.21
---
---
Cost method
6,299,700.00
6,299,700.00
6,299,700.00
100.00%
100.00%
---
82,156.61
---
---
Cost method
14,623,003.00
14,623,003.00
14,623,003.00
95.00%
100.00%
Notes 1
---
---
---
Cost method
1,600,400.00
1,600,400.00
1,600,400.00
93.75%
100.00%
Notes 1
---
---
---
Cost method
1,260,000.00
1,260,000.00
1,260,000.00
75.00%
---
Notes 2
1,260,000.00
---
---
Cost method
16,800,000.00
16,800,000.00
16,800,000.00
10.80%
10.80%
---
16,800,000.00
---
---
Cost method
5,491,288.71
5,491,288.70
5,491,288.70
45.00%
45.00%
---
5,058,307.01
---
---
Cost method
2,600,000.00
2,600,000.00
2,600,000.00
2.87%
2.87%
---
---
---
---
Cost method
160,000.00
160,000.00
160,000.00
20.00%
20.00%
---
---
---
65,634.56
Equity method Equity method
200,000,000.00
69
Name Trade Co., Ltd. Shenzhen Xinfang Knitting Co., Ltd. Hongkong Yehui International Co., Ltd. Shenzhen Dailishi Underwear Co., Ltd. Anhu Huapeng Textile Co., Ltd. Total
Ending Balance
Shareholding proportion in the investee
Voting right proportion in the investee
Explanation of diffidence between shareholding proportion and voting right proportion in investee
Devalue
Current devalue
Cash bonus
524,000.00
524,000.00
20.00%
20.00%
---
---
---
---
2,392,914.37
2,392,914.37
2,392,914.37
17.85%
17.85%
---
---
---
---
532,062.50
2,559,856.26
2,559,856.26
30.00%
---
Notes 3
---
---
850,000.00
25,410,209.50
50.00%
---
Notes 3
---
---
500,000.00
40,466,231.32
---
1,815,634.56
Accounting method
Initial investment cost
Original balance
Cost method
524,000.00
Cost method Cost method Cost method
25,000,000.00
25,410,209.50
--
312,200,000.00
616,193,616.42
change
199,697,453.88
815,891,070.30
Notes 1: share holding ratio is not accord with voting power ratio in amalgamated subsidiary company. That is interlocking shareholding style of every subsidiary company making parent company actual share control being 100%. Notes 2：Shenzhen Zhongxing Fiber Wimple Cotton Raiment Co., Ltd. had established liquidation group in 2009 and started liquidation procedures, they are in liquidation processing and these two companies will not be included in consolidation scope since they went into liquidation procedures. Notes 3：Shenzhen Dailisi underwear Co., Ltd. and Anhui Huapeng textile Co., Ltd. had adopted outsourcing for contractual operation.
70
3. Business income, Business cost （1）Business income Unit：RMB Items
Amount of current period
Amount of previous period
Income from Business income
25,693,964.21
24,441,993.92
Other Business income
1,718,047.98
1,743,091.46
Total
27,412,012.19
26,185,085.38
Cost from Business cost Other Business cost
4,088,569.41 1,718,047.98
3,466,671.65 1,743,091.46
Total
5,806,617.39
5,209,763.11
（2）Main business（Industry） Unit：RMB Name
Amount of current period Business income Business cost
Amount of previous period Business income Business cost
Rental
25,693,964.21
4,088,569.41
24,441,993.92
3,466,671.65
Total
25,693,964.21
4,088,569.41
24,441,993.92
3,466,671.65
（3）Main business（Production） Unit：RMB Amount of current period
Amount of previous period
Rental income
Business income Business cost 25,693,964.21 4,088,569.41
Business income 24,441,993.92
Business cost 3,466,671.65
Total
25,693,964.21
24,441,993.92
3,466,671.65
Name
4,088,569.41
（4）Main Business（Area） Unit：RMB
Name Shenzhen Total
Amount of current period
Amount of previous period
Business income 25,693,964.21 25,693,964.21
Business income 24,441,993.92 24,441,993.92
Business cost 4,088,569.41 4,088,569.41
Business cost 3,466,671.65 3,466,671.65
（5）Total income and the ratio of operating income from top five clients Unit：RMB Name Jinsitai Investment Development Co., Ltd. Shenzhen Shixingkai Beauty Co., Ltd. China merchants Bank, Shenfang Building Branch Shenzhen Xinbaiwei Computer Technology Co., ltd.
Business Income 11,514,689.06 468,377.40 467,850.12 257,778.48
71
Proportion(%) 44.81% 1.82% 1.82% 1.01%
Shenzhen Jingfangyuan Cultural Development Corporation
256,061.16
Total
12,964,756.22
1.00% 50.46%
4. Investment income （1）Income from investment Unit：RMB Items
Amount of current period
Calculate income according to cost method Long term equity investment calculated via equity method
Amount of previous period 1,402,808.94
1,380,634.56 979,077.01 97,453.88
Stock right disposal benefit
-
Investment income from financial assets sales
1,482,128.46
9,009,386.30
Total
2,960,216.90
11,391,272.25
（2）Long term equity investment calculated to cost method： Name Shenzhen Xiangjiang Trade Co., Ltd.
Amount of current period
Amount of previous period
Cbange cause --
65,634.56
67,808.94
Shenzhen Dailishi Underwear Co., Ltd.
--415,000.00
435,000.00
Anhui Huapeng Prnting & dyeing Garnent Co., Ltd. Total
900,000.00 1,380,634.56
900,000.00 1,402,808.94
----
（3）Long term equity investment calculated via equity method Name Shenzhen Haohao Property Leasing Co. Ltd. Shenzhen Xieli Automobile Co., Ltd. Shenzhen Changlianfa Printing and dyeing Company Jordan Garment Factory Hengshun (Saipan) Industry Co., Ltd. Total
Amount of current period
Amount of previous period
Cbange cause ---
235,155.43
197,933.49 ---
100,745.09
-197,985.46 ---
26,225.18 -264,671.82
14,822.80 964,306.19
--97,453.88
--979,077.02
5. Supplement information for cash flow statement Unit ：RMB
72
-----
Supplement information
Amount of current period
Amount of previous period
I. Adjusting net profit to cash flow from operating activities Net profit Add : Impairment loss provision of assets
18,533,246.48 -146,202.21
11,977,705.09 3,287,704.58
4,496,879.76
4,432,535.13
Amortization of intanglble assets Amortization of long-term deferred expenses
194,943.64 ---
194,967.64 ---
Loss on disposal of non-current assets
-52,994.00
---
---
---
Loss of fair value fluctuation on assets Financial cost
---3,864,169.21
--2,256,930.00
Loss on investment
-2,960,216.90
-11,391,272.25
-35,088.53
-723,295.01
-1,406,380.55 ---
-6,534,833.42 ---
3,162,921.98
-63,498,183.51
Increase of operating receivables Other Net cash flows arising from operating activities
-7,173,696.21 --10,749,244.25
-1,202,046.59 6,534,833.42 -54,664,954.92
II. Significant investment and financing activities that withoutcash flows Liability transfer to capital Convertible corporate bond due within 1 year
-----
-----
Finance leased fixed assets
--
---
III. Net increase of cash and cash equivalents Ending balance of cash
97,766,287.48
30,213,562.23
Less: Beginning balance of cash Add: Ending balance of cash Less: Beginning balance of cash equivalents Net increase of cash and cash equivalents
84,353,357.87 ----13,412,929.61
19,539,632.30 ----10,673,929.93
Depreciation of fixed assets, oil and gas assets and consumablebiological assets
Loss from fixed assets discard
Decrease of deferred income tax assets Increase of deferred income tax assets Decrease of inventories Decrease of operating receivable
6, In the report period，The company does not appear using evaluated value entering in an account under reverse purchasing. XIV.Supplement information 1. Details of extraordinary gains and losses for the current report period Unit：RMB Items
Amount of current period
Gains from disposals of non-current assets Refunding and exemption of taxes in excess of
-52,994.00 ---
73
Amount of previous period -----
Notes
-----
Items
Amount of current period
Amount of previous period
Notes
Government subsidies accounted into current income account (except for those govemment subsidies closely related to the Company’s business, and received at national statutory standard and amount)
4,690,090.02
4,982,567.16
---
Capital adoption fee collected from non-financial organizations and accounted into current gain /loss
---
---
---
Gain/loss from differences between the cost of enterprise merger and the fair value of recognizable net asset of the invested entities Gain/loss from non-nonetary assets
---
---
---
---
---
---
Gain/loss from commissioned investment or assets Asset impairment provisions provided for force-majeur Gain/loss from debt reorganization
-----
-----
-----
---
---
---
Enterprise reorganizing expenses, such as emplovee placement fee and integration fee Gain/loss from trade departing from fair value Current net gain/loss of subsidiaries under same control from beginning of termtill date of consolidation
---
---
---
-----
-----
-----
Gain/loss generated by contingent liabilities without connection with main businesses
---
---
---
Gain/loss from change of fair value of transactional asset and liabilities, and investment gains from disposal of transactional financial assets and liabilities and sellable financial assets, other than valid period value instruments related to the Company’s common businesses Restoring of receivable account impairment provision tested individually Gain/loss from commissioned loans
1,482,128.46
9,009,386.30
---
---
---
---
---
---
Gain/loss from change of fair value of investment property measured at fair aluein follow-up measurement Influence of one-time adjustment made on current gain/loss account according to the laws and regulations regarding tax and accounting Consigning fee received for consigned operation Other non-business income and expenditures other than the above
---
---
---
---
---
---
--10,874,438.77
---1,107.68
-----
authority or without official approval documents
74
Items
Amount of current period
Amount of previous period
Notes
Other gain/loss items satisfying the definition of non-recurring gain/loss account
---
---
---
Influenced amount of income tax Influenced amount of minor shareholders’ equity （After tax ） Total
3,688,783.20 ---
3,077,986.07 ---
-----
13,410,868.05
10,912,859.71
---
2. Return on net assets and earnings per share Profit of the report period Net profit attributable to the owners of Company. Net profit attributable to the owners of Company after deducting of non-recurring gain/loss.
Net income on asset, weighted
Earnings per share Basic earnings per share
Diluted gains per share
2.38%
0.10
0.10
1.39%
0.06
0.06
3.The explanation of abnormal circumstance and and reasons of items in major accounting report. 1. The ending balance of monetary capital decreased by RMB 331.2496 million and 39.90% over beginning of period mainly due to the investment in the construction of phase-I project of polarizer sheet for TFT-LCD in current period; 2. The ending book balance of accounts receivable increased by RMB 9.3208 million and 19.36% mainly due to increase of income with the scale expansion of polarizer sheet business; 3.The ending balance of Prepayment Increased by RMB 19.9132 million and 425.40% over year-beginning balance mainly due to the increase of export trade orders at the end of current period over the same period of the previous year； 4. The end-of-period balance of construction in progress increased by RMB 298.8113 million over beginning of period mainly due to increase of investment in phase-I project of polarizer sheet for TFT-LCD; 5. The ending balance of advance payment Increased by RMB 21.7050 million and 155.9% over year-beginning balance mainly due to the increase of export trade orders at the end of current period over the same period of the previous year； 6.The end-of-period balance of taxes and levies payable decreased by RMB 31.0131 million and 773.07% over beginning of period mainly due to payment of value added tax on purchase for imported equipment for phase-I project of polarizer sheet for TFT-LCD and other equipment purchased; 7. The end-of-period balance of interest payable increased by RMB 2.1448 million over beginning of period mainly due to increase of special loan interest payable for the phase-I project of polarizer sheet for TFT-LCD; 8. The end-of-period balance of non-current liabilities to become due within one year decreased by RMB 21 million mainly due to repayment of the loan; 75
9. The selling expenses increased by RMB 1.6292 million and 89.73% year on year mainly due to increase of sales income from manufacturing industry; 10. Financial expenses decreased by RMB 6.5194 million year on year mainly due to decrease of bank loan interests and increase of interest income from fixed deposit of raised proceeds; 11. Investment income decreased by RMB 8.3817 million and 70.53% year on year mainly due to year-on-year decrease of sales of financial assets available for sale through secondary market in current period; 12. Non-operating income increased by RMB 10.6368 million and 213.48% year on year mainly due to receipt of 1,085,733 A shares of Guangdong Sunrise Group Co., Ltd. (the market value of these shares was RMB 9,847,598.31 according to the closing price of A shares of * ST Sunrise on May 17, 2010 (the last trading day before suspension of listing), i.e., RMB 9.07 per share) and cash of RMB 702,694.14 (RMB 10,550,292.45 in total as recognized non-operating income) according to (2010) Shen Zhong Fa Min Qi Zhong Zhen Zi No. 5-5 Civil Award and the Plan for Reorganization of Guangdong Sunrise Group Co., Ltd(Refer to No. 2011-39 Announcement of the Company for details)； 13. Other cash received relating to operating activities increased by RMB 6.2891 million year on year mainly due to according to (2010) Long Zhi Fei Zi No. 1-3 Award from implementation verdict of Jiangxi Longnan Peoples' Court(of law) and receipt of RMB 3 million from the enforcement of the case of debt owed by Jiangxi Xuanli Yarn Industry Co., Ltd. and receipt of cash of RMB 702,694.14 according to the reorganization plan of Guangdong Sunrise Group Co., Ltd； 14. Net cash flows from operating activities increased by RMB 10.1288 year on year mainly due to year-on-year increase of net cash flows from operating activities of Shenzhen Shengbo Optoelectronic Technology Co., Ltd. and recovery of partial arrears from Jiangxi Xuanli Yarn Industry Co., Ltd.; 15. Cash received from disposal of investments decreased by RMB 8.4205 million year on year mainly due to year-on-year decrease of sales of financial assets available for sale through secondary market in current period; 16. Other cash received relating to investing activities increased by RMB 208.6388 million year on year mainly due to receipt of fixed deposit interest of RMB 4.0694 million and writeback of fixed deposit of RMB 204.5694 million; 17. Net cash outflow from investing activities increased by RMB 68.1043 million year on year mainly due to increase of expenditure on phase-I project of polarizer sheet for TFT-LCD; 18. Net cash flows from financing activities decreased by RMB 75.1377 million year on year mainly due to year-on-year decrease of cash received from loans by RMB 130 million; 19. Net increase in cash and cash equivalents decreased by RMB 133.5743 million year on year mainly due to increase of investment in phase-I project of polarizer sheet for TFT-LCD and decrease of cash obtained from loans in current period.
76
Shenzhen Textile (Holdings) Co., Ltd. Consolidated Balance sheet Unit：RMB Assets
June 30, 2011
December 31, 2010
Current asset： Monetary fund
498,986,454.63
830,236,037.30
-
-
2,107,763.05
-
Account receivable
57,469,117.54
48,148,305.15
Prepayments
24,594,257.01
4,681,130.84
1,836,339.85
2,203,227.00
-
-
Other receivable
25,654,944.30
30,015,024.72
Inventories
67,936,176.52
60,986,770.44
Non-current asset due in 1 year
-
-
Other current assets
-
-
678,585,052.90
976,270,495.45
79,037,204.81
75,481,853.50
Expired investment in possess
-
-
Long-term receivable
-
-
46,947,791.21
47,250,337.33
Property investment
164,910,744.18
168,268,522.84
Fixed assets
160,142,264.53
166,482,617.12
Construction in progress
454,072,158.61
155,260,944.31
Engineering material
-
-
Fixed asset disposal
-
-
Production physical assets
-
-
Gas & petrol
-
-
47,605,567.53
48,642,431.17
-
-
Goodwill
9,614,758.55
9,614,758.55
Long-germ expenses to be amortized
1,111,955.26
897,757.98
Differed income tax asset
7,795,339.63
7,252,580.16
-
-
971,237,784.31
679,151,802.96
1,649,822,837.21
1,655,422,298.41
Trading financial assets Bill receivable
Interest receivable Dividend receivable
Total of current assets Non-current assets： Disposable financial asset
Long term share equity investment
Intangible assets R & D petrol
Other non-current asset Total of non-current assets Total of assets
Shenzhen Textile (Holdings) Co., Ltd. Consolidated Balance Sheet（Cont’d） Unit：RMB Liabilities & equity
June 30, 2011
December 31, 2010
Short-term loans
-
2,000,000.00
Financial liabilities held for trading
-
-
Bill payable
-
-
Accounts payable
34,112,216.58
33,098,532.04
Advances from customers
35,627,099.58
13,922,128.20
Salaries payable to Staff
18,308,399.02
20,785,444.97
-27,001,427.03
4,011,683.39
2,298,867.02
154,092.20
-
-
49,231,541.90
47,759,095.14
Non-current liabilities due in 1 year
-
21,000,000.00
Other current liabilities
-
-
112,576,697.07
142,730,975.94
96,719,008.30
96,719,008.30
Bonds payable
-
-
Long-term payable
-
-
Special payable
-
-
Accrued liabilities
-
-
Deferred income tax liabilities
14,039,722.96
15,446,103.51
Other Non-current liabilities
52,806,595.67
54,556,985.69
Total of non-current liabilities
163,565,326.93
166,722,097.50
Total of liability
276,142,024.00
309,453,073.44
Share capital
336,521,849.00
336,521,849.00
Capital reserves
835,144,726.68
839,797,115.13
-
-
34,086,443.10
34,086,443.10
167,927,794.43
135,563,817.74
1,373,680,813.21
1,345,969,224.97
-
-
Total of owners’ equity
1,373,680,813.21
1,345,969,224.97
Total of liabilities and owners’ equity
1,649,822,837.21
1,655,422,298.41
Current Liabilities
Taxes payable Interests payable Dividends payable Other payable
Total current liabilities Non-Current liabilities: Long-term loan
Owners’ equity
Less：Shares in stock Surplus reserves Undistributed profit Total of owner’s equity belong to the parent company Minor shareholders’ equity
Shenzhen Textile (Holdings) Co., Ltd. Consolidated Profit Statement January-June 2011 Unit：RMB Items
January-June 2011
January-June 2010
I.Income from the key business
319,182,717.75
322,369,136.74
II.Total business cost
297,505,664.40
308,208,839.07
Incl：Business cost
261,172,573.17
273,132,795.71
Operating taxes and extras
3,553,081.05
3,153,374.16
Sales expenses
3,444,774.44
1,815,600.87
Administrative expenses
30,654,365.07
26,403,627.56
Financial expenses
-4,343,761.14
2,175,589.19
3,024,631.81
1,527,851.58
-
-
3,502,158.53
11,883,866.62
97,453.88
979,077.01
III. Operational profit
25,179,211.88
26,044,164.29
Add：Non-business income
15,619,413.07
4,982,567.16
1,890.28
1,107.68
-
-
40,796,734.67
31,025,623.77
8,432,757.98
6,167,121.07
Loss of devaluation of assets Add：Changing income of fair value Investment income Incl: investment gains from affiliates
Less：Non business expenses Incl：Loss from disposal of non-current IV.Total profit Less：Income tax expenses
Shenzhen Textile (Holdings) Co., Ltd. Consolidated Cash flow statement Unit：RMB Items
January-June 2011
January-June 2010
I.Cash flows from operating activities Cash received from sales of goods or rending of services
311,780,179.42
326,450,091.77
23,683,459.82
26,585,651.90
7,189,737.10
900,678.20
Sub-total of cash inflow
342,653,376.34
353,936,421.87
Cash paid for purchasing of merchandise and services
259,863,190.15
294,294,890.06
Cash paid to staffs or paid for staffs
33,599,761.08
24,298,731.85
Taxes paid
18,805,471.26
15,839,658.03
Other cash paid for business activities
17,841,205.09
17,088,192.08
330,109,627.58
351,521,472.02
12,543,748.76
2,414,949.85
1,957,406.46 1,654,292.08 64,494.00
10,377,879.04 1,440,403.30 -
Tax returned Other cash received from business operation
Sub-total of cash outflow from business activities Cash flow generated by business 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
-
-
208,638,835.75
-
Sub-total of cash inflow due to investment activities
212,315,028.29
11,818,282.34
Cash paid for construction of fixed assets, intangible
330,575,486.29
61,974,424.22
-
-
330,575,486.29 -118,260,458.00
61,974,424.22 -50,156,141.88
-
-
2,850,000.00 2,850,000.00 23,000,000.00 564,471.66 23,564,471.66 -20,714,471.66
132,553,666.34 2,300,000.00 134,853,666.34 77,000,000.00 3,204,422.50 226,003.51 80,430,426.01 54,423,240.33
-248,959.27
212,147.38
-126,680,140.17
6,894,195.68
417,686,594.80
101,340,314.95
291,006,454.63
108,234,510.63
assets and other long-term assets Cash paid as investmen Cash paid as investmen 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 Incl: Cash received as investment from minor shareholders Cash received as loans 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 equivalents Add: balance of cash and cash equivalents at the beginning of term VI .Balance of cash and cash equivalents at the end of term
Consolidated Statement on Change in Owners’ Equity January-June 2011 Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Items I.Balance at the end of last year Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning of current year III.Changed in the current year （I） Net profit （II）Other misc.income Total of (I) and (II) (III) Investment or decreasing of capital by owners 1. Capital inputted by owners 2．Amount of shares paid and accounted as owners’ equity 3．Other （IV）Profit allotment 1.Providing of surplus reserves 2.Providing of common risk provisions 3．Other (V) 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 1Provided this year 2.Used this term IV. Balance at the end of this term
Unit：RMB
Share Capital
Capital reserves
Owner’s equity Attributable to the Parent Company Less: Common Specialized Surplus Shares in risk reserve reserves stock provission 34,086,443.10 34,086,443.10 -
Minor shareholders’ equity
Total of owners’ equity
Attrbutable profit
Other
135,563,817.74 135,563,817.74 32,363,976.69 32,363,976.69
-
-
336,521,849.00 336,521,849.00 -
839,797,115.13 839,797,115.13 -4,652,388.45
-
-4,652,388.45 -4,652,388.45 -
-
-
-
-
32,363,976.69 -
-
-
1,345,969,224.97 1,345,969,224.97 27,711,588.24 32,363,976.69 -4,652,388.45 27,711,588.24 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
336,521,849.00
835,144,726.68
-
-
34,086,443.10
-
167,927,794.43
-
-
1,373,680,813.21
Consolidated Statement of Change in Owners’ Equity January-June 2010 Prepared by: Shenzhen Textile (Holdings) Co., Ltd.
Unit: RMB Owner’s equity Attributable to the Parent Company
Items I.Balance at the end of last year Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning of current year III.Changed in the current year （I） Net profit （II）Other misc.income Total of (I) and (II) (III) Investment or decreasing of capital by owners 1. Capital inputted by owners 2．Amount of shares paid and accounted as owners’ equity 3．Other （IV）Profit allotment 1.Providing of surplus reserves 3．Allotment to the owners (or shareholders) 4．Other (V) 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 IV. Balance at the end of this term
Share Capital
Capital reserves
Less: Shares in stock
Specialize d reserve
Common risk provission
Surplus reserves
Attrbutable profit
Oth er
Minor shareholders’ equity
Total of owners’ equity
245,124,000.00 245,124,000.00
119,181,307.65 119,181,307.65
-
-
31,832,178.67 31,832,178.67
-
97,108,810.95 97,108,810.95
-
-
493,246,297.27 493,246,297.27
-
-23,136,556.04
-
-
-
-
24,858,502.70 24,858,502.70
-
-
-
-23,136,556.04 -23,136,556.04 -
-
-
-
-
24,858,502.70 -
-
-
1,721,946.66 24,858,502.70 -23,136,556.04 1,721,946.66 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
245,124,000.00
96,044,751.61
-
-
31,832,178.67
-
121,967,313.65
-
-
494,968,243.93
Shenzhen Textile (Holdings) Co., Ltd. Parent Company Balance sheet Unit：RMB Assets
June 30,2011
December 31, 2010
Current asset： Monetary fund
299,746,287.48
483,902,800.37
Trading financial assets
-
-
Bill receivable
-
-
Account receivable
-
-
Prepayments
2,092,000.00
881,080.00
Interest receivable
1,836,339.85
2,203,227.00
-
-
21,377,171.00
25,218,113.04
Dividend receivable Other receivable Inventories
-
Non-current asset due in 1 year
-
-
Other current assets
-
-
325,051,798.33
512,205,220.41
Total of current assets Non-current assets： Disposable financial asset
79,037,204.81
75,481,853.50
Expired investment in possess
-
-
Long-term receivable
-
-
Long term share equity investment
775,424,838.98
575,727,385.10
Property investment
154,844,864.74
157,914,202.69
33,764,093.25
34,758,106.27
2,006,624.19
-
Engineering material
-
-
Fixed asset disposal
-
-
Production physical assets
-
-
Gas & petrol
-
-
1,568,439.80
1,763,383.44
R & D petrol
-
-
Goodwill
-
-
Long-germ expenses to be amortized
-
-
4,374,127.20
4,339,038.67
Fixed assets Construction in progress
Intangible assets
Differed income tax asset Other non-current asset
-
-
Total of non-current assets
1,051,020,192.97
849,983,969.67
Total of assets
1,376,071,991.30
1,362,189,190.08
Shenzhen Textile (Holdings) Co., Ltd. Parent Company Balance sheet（Cont’d） Unit：RMB Liabilities & Equity
June 30, 2011
December 31, 2010
Short-term loans
-
-
Financial liabilities held for trading
-
-
Bill payable
-
-
Current Liabilities
Accounts payable
1,590,881.57
1,732,905.87
639,024.58
639,024.58
Salaries payable to Staff
4,581,840.45
6,529,841.13
Taxes payable
4,089,769.37
2,333,265.14
Interests payable
-
-
Dividends payable
-
-
65,138,344.05
63,396,499.56
Non-current liabilities due in 1 year
-
-
Other current liabilities
-
-
76,039,860.02
74,631,536.28
Long-term loan
-
-
Bonds payable
-
-
Long-term payable
-
-
Special payable
-
-
Accrued liabilities
-
-
Deferred income tax liabilities
13,927,636.24
15,334,016.79
Other Non--Current liabilities:
-
-
Total of non-current liabilities
13,927,636.24
15,334,016.79
Total of liability
89,967,496.26
89,965,553.07
Share capital
336,521,849.00
336,521,849.00
Capital reserves
826,561,744.89
831,214,133.34
-
-
Surplus reserves
34,086,443.10
34,086,443.10
Undistributed profit
88,934,458.05
70,401,211.57
Total of owners’ equity
1,286,104,495.04
1,272,223,637.01
Total of owners’ equity
1,286,104,495.04
1,272,223,637.01
Total of liabilities and owners’ equity
1,376,071,991.30
1,362,189,190.08
Advances from customers
Other payable
Total current liabilities Non-Current liabilities:
Owners’ equity
Less：Shares in stock
Shenzhen Textile (Holdings) Co., Ltd. Parent Company profit Statement January-June 2011 Unit：RMB ems
January-June
January-June 2011
2010
I. Business income
27,412,012.19
26,185,085.38
Less：Business cost
5,806,617.39
5,209,763.11
Operating taxes and extras
2,426,440.81
2,271,266.87
-
-
Administrative expenses
13,462,239.34
10,919,104.25
Financial expenses
-4,084,479.09
1,125,555.37
-146,202.21
3,287,704.58
-
-
2,960,216.90
11,391,272.25
Sales expenses
Loss of devaluation of assets Add：Changing income of fair value Investment income Incl: investment gains from affiliates
97,453.88
#
979,077.01
II. Operational profit
12,907,612.85
14,762,963.45
Add：Non-business income
10,919,223.05
-
88.28
200.00
-
-
23,826,747.62
14,762,763.45
5,293,501.14
2,785,058.36
18,533,246.48
11,977,705.09
（I）Basic earnings per share
0.06
0.05
(II)Diluted earnings per share
0.06
0.05
VII. Other comprehensive income
-4,652,388.45
-23,136,556.04
VIII. Total comprehensive income
13,880,858.03
-11,158,850.95
Total comprehensive income attributable to the owner of
13,880,858.03
-11,158,850.95
-
-
Less：Non business expenses Incl：Loss from disposal of non-current III. Total
profit
Less：Income tax expenses IV.Net profit V. Earnings per share：
the parent company Total comprehensive income attributable minority shareholders
Shenzhen Textile (Holdings) Co., Ltd. Parent Company Cash flow statement
Items
Unit：RMB January-June 2010
January-June 2011
I.Cash flows from operating activities Cash received from sales of goods or rending of services Tax returned
24,909,346.70
23,885,694.18
-
-
9,248,049.28
2,807,176.52
34,157,395.98
26,692,870.70
Cash paid for purchasing of merchandise and services
1,719,903.98
2,155,381.46
Cash paid to staffs or paid for staffs
8,992,339.31
5,260,089.92
4,895,304.51
3,612,360.21
Other cash paid for business activities
7,800,603.93
70,329,994.03
Sub-total of cash outflow from business activities
23,408,151.73
81,357,825.62
Cash flow generated by business operation, net
10,749,244.25
-54,664,954.92
1,957,406.46
10,377,879.04
1,415,634.56
947,808.93
52,994.00
-
-
-
201,433,611.71
-
Sub-total of cash inflow due to investment activities Cash paid for construction of fixed assets, intangible assets and other long-term assets
204,859,646.73
11,325,687.97
2,195,961.37
4,581,603.75
Cash paid as investment Net cash received from subsidiaries and other operational units
200,000,000.00
-
-
-
-
-
202,195,961.37
4,581,603.75
2,663,685.36
6,744,084.22
Other cash received from business operation Sub-total of cash inflow
Taxes paid
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
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 loans
-
130,000,000.00
Other financing –related ash received
-
-
Sub-total of cash inflow from financing activities
-
130,000,000.00
Cash to repay debts
-
70,000,000.00
Cash paid as dividend, profit, or interests
-
1,176,930.00
Other cash paid for financing activities
-
226,003.51
Sub-total of cash outflow due to financing activities
-
71,402,933.51
Net cash flow generated by financing IV.Influence of exchange rate alternation on cash and cash equivalents
-
58,597,066.49
-
-2,265.86
V.Net increase of cash and cash equivalents Add: balance of cash and cash equivalents at the beginning of term
13,412,929.61
10,673,929.93
84,353,357.87
19,539,632.30
VI .Balance of cash and cash equivalents at the end of term
97,766,287.48
30,213,562.23
Cash received as investment
Statement of Change in Owners’Equity January-June 2011 Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Owner’s equity Attributable to the Parent Company Items
Share Capital
Capital reserves
Less: Shares in stock
Specialized reserve
Surplus reserves
Common risk provission
Total of owners’ equity
Attrbutable profit
336,521,849.00
831,214,133.34
-
-
34,086,443.10
-
70,401,211.57
1,272,223,637.01
Add: Change of accounting policy
-
-
-
-
-
-
-
-
Correcting of previous errors
-
-
-
-
-
-
-
-
Other
-
-
-
-
-
-
-
-
336,521,849.00
831,214,133.34
-
-
34,086,443.10
-
70,401,211.57
1,272,223,637.01
-
-4,652,388.45
-
-
-
-
18,533,246.48
13,880,858.03
18,533,246.48
18,533,246.48
I.Balance at the end of last year
II.Balance at the beginning of current year III.Changed in the current year （I） Net profit
-4,652,388.45
（II）Other misc.income
-4,652,388.45
Total of (I) and (II) (III) Investment or decreasing of capital by owners 1. Capital inputted by owners
-
-4,652,388.45
-
-
-
-
18,533,246.48
13,880,858.03
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2 ． Amount of shares paid and accounted as owners’ equity 3．Other
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
（IV）Profit allotment
-
-
-
-
-
-
-
-
1.Providing of surplus reserves
-
-
-
-
-
-
-
-
3．Allotment to the owners (or shareholders)
-
-
-
-
-
-
-
-
4．Other
-
-
-
-
-
-
-
-
(V) 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
-
-
-
-
-
-
-
-
336,521,849.00
826,561,744.89
-
-
34,086,443.10
-
88,934,458.05
1,286,104,495.04
IV. Balance at the end of this term
Statement on Change in Owners’Equity January-June 2010 Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Owner’s equity Attributable to the Parent Company Items I.Balance at the end of last year
Less: Shares in stock
Capital reserves
Share Capital
Special reserve
Common risk provisions
Surplus reserves
Attributable profit
Total of owners’ equity
245,124,000.00
110,598,325.86
-
-
31,832,178.67
-
50,112,831.71
437,667,336.24
Add: Change of accounting policy
-
-
-
-
-
-
-
-
Correcting of previous errors
-
-
-
-
-
-
-
-
Other
-
-
-
-
-
-
-
-
245,124,000.00
110,598,325.86
-
-
31,832,178.67
-
50,112,831.71
437,667,336.24
-
-23,136,556.04
-
-
-
-
11,977,705.09
-11,158,850.95
II.Balance at the beginning of current year III.Changed in the current year （I） Net profit
11,977,705.09
（II）Other misc.income
-23,136,556.04
11,977,705.09 -23,136,556.04
Total of (I) and (II)
-
-23,136,556.04
-
-
-
-
11,977,705.09
-11,158,850.95
(III) Investment or decreasing of capital by owners
-
-
-
-
-
-
-
-
1. Capital inputted by owners 2．Amount of shares paid and accounted as owners’ equity 3．Other
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
（IV）Profit allotment
-
-
-
-
-
-
-
-
1.Providing of surplus reserves
-
-
-
-
-
-
-
-
2．Allotment to the owners (or shareholders)
-
-
-
-
-
-
-
-
4．Other
-
-
-
-
-
-
-
-
(V) 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
-
-
-
-
-
-
-
-
245,124,000.00
87,461,769.82
-
-
31,832,178.67
-
62,090,536.80
426,508,485.29
IV. Balance at the end of this term
II: Notes to Financial statements
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial statements January-June 2011 I.Basic Information of the Company 1. Enterprise registration address, organization mode and headquarter address. The company was previously the Shenzhen Textile Industry Company, on April 13, 1994, approved by the Letter(1114)No.15 issued by Shenzhen Municipal People's Government, the Company was restructured and named as Shenzhen Municipal Textile (Group) Co., Ltd. In the same year, approved by the (1994) No.19 file of Shenzhenshi, the shares of the company were listed in Shenzhen Stock Exchange. The Company has got the corporate business certification of Shensizi N246747, Registration address and headquarter address are Shenfang Building, Huaqiang Rd. North, Futian District, Shenzhen. 2. Enterprise’s business nature and major business operation. Majored in manufacturing and im-exporting trade on textile, LCD polarizer, clothes and associated products, concurrently managing property leasing, storage, real estate development and hotel business, etc. 3. Names of parent company and group parent company. The company’s parent company is Shenzhen Investment Holding Co., Ltd. 4. The reporting person of the approval of financial statements and the reporting date of the approval of financial statements. The reporting person of the approval of financial statements of the company: Board of Directors of the Company The reporting date of the approval of financial statements of the Company:August 13, 2011 II. Principal accounting policies, accounting estimates and early errors 1.Basis for the preparation of financial statements On the basis of continuous operation, in accordance with actual transactions and events, the company carried out confirmation and measurement in accordance with "Accounting Standards for Business Enterprises - Basic Standards" issued by the Ministry of Finance and other various accounting standards, on the basis of it, the Company prepared the financial statements. 2. Statement on complying with corporate accounting standards Based on the requirement that the financial reports edited according to above-mentioned editing conditions is accordance with enterprise accounting standards, the company reflected its financial condition on June 30, 2011 truly and completely and business result on January-June 2011 and cash flow information, etc. 3. Fiscal year A calendar year, that is, from January 1 to December 31 is a fiscal year. 4. Accounting standard money Accounting standard money is RMB. 5. Accounting process method of enterprise consolidation under same and different controlling. （1）Enterprise merger under same control：For the enterprise merger under same control, the assets and liabilities obtained by the merging party from enterprise merger was measured according to book value of the merged party on the merger date. The capital reserve was adjusted according to the deference between the book value of net assets obtained by the merging party and the book value of merger price paid (or the total book value of shares issued); if capital surplus was not big for the offset, the retained earnings should be adjusted. Amalgamating parties reckon every direct relate expenses produced in enterprise consolidation including auditing expense, valuation expense and legal service expense paid on enterprise consolidation to current profit and loss when those expenses produced. On parent subsidiary relationship formed via enterprise consolidation , parent company is responsible of editing amalgamation property balance sheet, amalgamation profit statement and amalgamation 13
cash flow meter of amalgamation date. In amalgamation property balance sheet, every asset and liability of amalgamated parties is measured according to its book value. For the accounting policy adopted by the amalgamated parties is not accordance with amalgamating party, and it is adjusted according to criterions, the book value after adjusted is measured. The amalgamating profit chart contains income, expenses and profit happened from the beginning of amalgamation and amalgamating date. The realized net profit before amalgamation from the amalgamated party shall be reflected on the amalgamating profit chart. Amalgamation cash flow meter contains the cash flow of every party in amalgation from the beginning of amalgamation and amalgamating date. （2）Enterprise merger under different control：For the enterprise merger under same control, the merger cost was the assets for the obtaining the control right of the party being purchased on the purchase date, the liabilities happened or undertook and the fair value of the equity securities. For the enterprise merger realized through a number of transactions, the merger cost was the sum of all individual transaction. All the direct costs and related costs for the enterprise merger were included in the cost of enterprise merger. The purchase date referred to date that the company had the control right of the party being purchased. The difference between merger cost over the fair value of identifiable net value obtained from the merger should be confirmed as goodwill. The difference between the identifiable net assets of the party being purchased obtained in the merger and the amount of identifiable net assets of the party being purch ased obtained in the merger should be included in the loss and gain of the current period. On parent subsidiary relationship formed via enterprise consolidation , parent company is responsible of editing amalgamation property balance sheet on amalgamation date; the acquired every identified asset, liability acquired from enterprise consolidation is listed via fair value. 6. The compiling method of combined financial statement （1）Combined financial statements has financial statements and other related material of every subsidiary company within combined financial statements as combination basis, adjust long-term equity investment of subsidiary company according to equity method, compensate investment, trade activities of the company and every subsidiary company within the combined financial statements, calculate few shareholder profit and loss and few shareholder rights and interests. Then compile the financial statements after those activities. （2）In compiling, if the accounting policy of any subsidiary company within the combination scope is not accordance with it of the company, adjust it according to the accounting policy of the company, then combine. （ 3 ） On the subsidiary company acquired from enterprise consolidation under same controlling, treat amalgamation produced at the beginning, bring its assets, liabilities, business result and cash flow into financial statements at the beginning of the amalgamation. （4）On the enterprise consolidation under same controlling, the net income and loss of the amalgamated parties is reckoned into nonrecurring profit and loss before amalgamation and separately listed in submitting financial statement. （5）Recombination belongs to enterprise non-combination issue under same company controller, when the combined parties combine the assets amount of last account year end, business income of last accounting year or total profit of last accounting year, if it reaches or excesses 20% of relative item of the company, compile income statements at the beginning of the combination period. （6）For the subsidiary company acquired from enterprise consolidation under non-same controlling, in compiling combination statements, adjust individual financial statements based on fair value of identified net assets at the purchasing date. 7.Confirmation standard of cash and cash equivalent Cash means the cash on hand and deposit for payment at any moment. Cash equivalent refers to the investment with few value alteration risks that the company holds the cash with the characters of short term (generally means 3 months from the purchasing date), strong fluidity, easy transferring to known amount. 8 . Translating of foreign currency operations and foreign currency report form （1）Accounting method of foreign currency operations The foreign currency operation is translated into recording currency according to approximate exchange rate at sight of business happening date. The approximate exchange rate at sight refers to the exchange rate at the beginning of the business happening month. On balance sheet date, dispose foreign currency monetary item and foreign currency non-monetary item according to the following regulations: A. Foreign currency monetary item is translated adopting exchange rate at sight of balance sheet date. The balance of exchange produced from the difference between exchange rate at sight at balance sheet date and initial 14
confirmation or exchange rate at sight at former balance sheet date shall be reckoned into profit and loss at current period. B.Foreign currency non-monetary item measured with historic cost, adopt exchange rate at sight on business happening date and not to change recording currency (amount). C. Foreign currency non-monetary item measured by fair value adopts exchange rate at sight of fair value confirmation date. The difference between recording currency after translating and the original recording currency is disposed as fair value alteration and reckoned into profit and loss at current period. （2）Method for foreign currency accounting The subsidiaries of the company whose standard currency was foreign currency, all asset and liability items should be converted into the standard money of parent company according to the spot rate on the balance sheet date, and all the owners’ equity items, accept for "retained profits", should be converted into the standard money of parent company according to the spot rate on the balance sheet date. The income and cost items in the profit statement should be converted into the standard money of parent company according to the spot rate during the period of consolidating financial statements. The conversion differences due to different exchange rate, should be reflected by opening the "foreign currency conversion difference statements" in RMB. And open the "foreign currency statements conversion differences" in cash flow statement in RMB. 9. Financial instruments (1) Classification of financial assets: Financial assets can be divided into: the financial assets which measured by fair value and its changes are included in the current loss and gain (including transactional financial assets and the financial assets which measured by fair value and its changes are included in the current loss and gain), the expired investments, loans and receivables held, and financial assets to be sold, the four categories; (2) Measurement of financial assets A. The initial recognition financial assets are accounted in accordance with fair values. For the financial assets which measured by fair value and its changes are included in the current loss and gain, the relevant transactional costs should be included in the current loss and gain; for other financial assets, the relevant transactional costs should be included in the initial recognition amount. B. The Company makes follow-up measurement on financial assets according to fair value, the transactional cost to deal with the financial assets which may happen in the future will not be deducted. But, except the following situations: (a). The expired investments, loans and receivables held, should be measured according to amortized costs by the actual interest method. (b). The equity tool investments which do not have quotation in market and their fair value can not be reliably measured, and the derivative financial assets which are related to the equity tool and are to be delivered to the equity tool to account, should be measured according to costs. (3) Determination of fair value of financial assets: A, The financial assets which exist in the market, the quotation in the market will be determined as fair value; B, The financial assets which do not exist in the market, adopt valuation techniques to determine the fair value. The results by the valuation techniques show the transaction prices which may be used in fair transactions on the valuation day. （4）Financial assets transfer The company will transfer almost all risk and earnings into the transferred parties on the ownership of financial assets or when the controlling on financial assets is given up, it will expire confirming the financial assets. (5). Impairment of financial assets: On the balance sheet date, carry out inspection on the book value of financial assets which are not included in the financial assets measured according to fair value and its changes are include in the current loss and gain. If there are objective evidence showing that the financial assets have impairment, the provision for impairment should be accounted. The objective evidences which show the impairment of financial assets include the following items: A. The issuing party or the debtor had serious financial difficulties; B. The debtor violated the terms in the contract, such as the payment of interest or principal had default or delayed; C. For the consideration in economy and law, the Company made concessions to the debtor in difficulties; D. The debtor was likely to collapse or carry out other financial restructuring; E. The issuing party had major financial difficulties, and the financial assets can not be traded in market; F. The debtor had major adverse changes in technology, market, economic and legal environment, and the Company was may not be able to recover the investment costs; G. The fair values of the equity tool investments had serious and non-temporary decline; H. Other objective evidences which show the impairment of financial assets. (6). Measurement of impairment losses of financial assets: A. The financial assets measured according to fair value and its changes are include in the current loss and gain 15
require no test of impairment; B. The measurement of impairment loss of expired investments: account provision for impairment according to the difference of the value of future cash flow lower than the book value; C. The confirmation standard and withdrawal method of doubtful accounts receivable: when single item amount is much, separately practice deduction testing and confirm its depreciation loss and withdrawal doubtful accounts according to the difference between future cash flow and its book value; when single item amount is not much, the non-decreased accounts receivable via testing, aging analysis method shall be adopted, depreciation loss is confirmed and withdrawal doubtful accounts according to aging of accounts of accounts receivables and regulated withdrawal ration; when single amount is not much, while the accounts receivables with bigger risk after combination according to credit risk nature and withdrawal doubtful accounts. The non-decreased accounts receivable via testing, aging analysis method shall be adopted, depreciation loss is confirmed according to aging of accounts of accounts receivables and regulated withdrawal ration. D. Judgment of impairment of the financial assets for sale: if the fair value of the financial asset is decreasing continuously and the decline is not temporary, the occurrence of the impairment of the financial asset will be recognized. 10. Account receivable 1.Accounts receivables confirmation standard and withdrawal method of doubtful accounts upon much single accounts （1）Account receivable belong t individual significance and individually assessed for impairment：
Criteria and norm individual significance
The Client Identifies single amount of accounts receivable that is not less less thanRMB 1 million as account receivable that are individually significant in amount.The Client Identifies single amount of accounts receivable that is not less less thanRMB 0.5 million as account receivable that are individually significant in amount.
of
Measurement of impairment allowances for receivables of individual significance
If it is objectively evidential that a receivable of individual significance has impaired, the impairment loss shall be recognized based on the difference of the book values higher than the present value of future cash flows.
（2）Accounts receivable belong to recognition of impairment allowances by group： Basis of determination of group Account’s age group
The classified according shall be recognized based on the accounts’age
Method for recognition of impairment allowances by group Account’s age group
Adopt the age analysis method.
Adpt the age analysis method： age
% for accounts receivable
% for other receivables
5%
5%
1－2 years
10.00%
10.00%
2－3 years
30.00%
30.00%
Over 3 years
50.00%
50.00%
Within 1 year（Incl.1 year）
（3）Accounts receivable belong to individuall insignificant but individually assessed for impairment：
16
The reason for individually assessed for impairment
There is evidence that differences in the receivable are apparently .
Method for recognitionof impairment allowances
A receivable which is individually insignificant but the credit riskis high, shoud be individuallt assessed for impairment, the impairment loss shall be recognized based on the difference of the book values higher than the present value of future cash flows.
11.Inventory （1）Inventory classification Inventory can be divided into five categories: raw materials, materials commissioned to process, products, finished products, working materials; （2）Pricing method of stock delivered Stock delivered is measured according to weighted average method. （3）Confirmation basis of stock net realizable value and withdrawal method of inventory falling price reserves. Inventory net realizable value is the integrant value that estimated sales price deducting estimated work completing cost and integrant estimated cost according to the normal business process. Withdrawal method of inventory falling price reserves: with the basis that the company making complete inventory taking at the end of medium term and end of year, on the inventory that suffered loss, entire or partial old and outdated or sale price lower than sales price, according to inventory cost and net realizable value (lower is preferred), the company measure it and reckoned it according to the difference of net realizable value of single inventory item upon similar inventory items lower than inventory cost as withdrawal inventory falling price reserves to profit and loss at current period. In confirming net realizable value, the infection upon future item shall be considered beside the price and cost fluctuation of the inventory at balance sheet date. （4）Inventory system Inventory system adopts the perpetual inventory method. （5）Amortization method of consumption goods with low value and wrappage Consumption goods with low value: Consumption goods with low value adopt one time amortization method when used. Packing: Wrappage adopts one time amortization when used. 12．Long-term equity investment （1）Investment cost confirmation A. The long-term equity investment formed via enterprise consolidation confirm its initial investment cost according to the following criterions: a. On enterprise consolidation under same controlling, amalgamating parties, managing payment cash, transferring non-cash assets or undertaking liability style as amalgamation consideration, treat the acquired equity book value share from amalgamated parties on amalgamation date as the initial investment cost of long-term equity investment. The difference between long-term equity investment initial investment cost and the paid cash transferred non-cash assets and undertook liability book value is adjusted to be capital reserves; if capital reserves are not sufficient to be deducted, which shall be adjusted to be retained earnings. When the amalgamating parties via issuing equity securities as amalgamation consideration, treat the acquired equity book value share from amalgamated parties on amalgamation date as the initial investment cost of long-term equity investment. Treat the book value amount of the issued shares as capital stock, the difference between the initial investment cost of long-term equity investment and book value amount of stock issued as capital stock is adjusted to be capital reserves; if capital reserves is not sufficient to be deducted, which shall be adjusted to be retained earnings. b. On enterprise consolidation under different controlling, the confirmed amalgamation cost according to the following criterions is as initial investment cost of long-term equity investment: 1/ On enterprise consolidation realized from one time exchanging deal, the amalgamation cost is the paid assets, reliabilities happened or undertook, and the fair value of issued equity securities from purchasing parties on purchasing date for the purpose of acquiring the controlling right upon the purchased parties. 2/ On the enterprise amalgation realized step by step by several times exchanging deal, the amalgamation cost is the summation of every deal cost. 3/ Every direct associated expense produced from purchasing parties for enterprise consolidation is reckoned to enterprise consolidation cost. 4/ If the future issues that possibly affect amalgamation cost in amalgamation contract or agreement is promised, on purchasing date, if the future issues that possibly happen and affect amalgamation cost can be reliably measured, purchasing parties shall reckon it to be amalgamation cost. 17
B、Except the long-term equity investment formed via enterprise consolidation , the long-term equity investment acquired through other methods is confirmed to be its initial investment cost according to the following regulations: a. The long-term equity investment acquired via cash payment is treated as initial investment cost according actually paid purchase price. The initial investment cost contains the expense, tax and other necessary payout that directly associated to long-term equity investment. B．The acquired long-term equity investment via issuing equity securities is as initial investment cost according to the fair value of equity securities. c. The long-term equity investment input by investor is as initial investment cost according to the value stipulated in investment contract or agreement, while the unfair value stipulated in contract or agreement is excluded. d.The long-term equity investment acquired via non-monetary assets exchange, e. g. if non-monetary assets exchange has commercial nature, then the long-term equity investment took in exchange is as initial investment cost according to fair value and payable relative taxation; if non-monetary assets exchange has no commercial nature, then the long-term equity investment intook in exchange has the book value of out took asset in exchange and payable relative taxation as initial investment cost. e. On the acquired long-term equity investment via liability recombination, its initial investment cost is confirmed by fair value and payable relative taxation. （2）Rear measuring and profit and loss confirmation method A. According to infection degree of investing enterprise against the invested unit , enlivening market or not, fair value reliably received or not, separately adopts cost method or equity method to measure. B. The confirmation of investment profit and loss Long-term equity investment reckoned via equity method, shall be adjusted in considering the infection of the following factors under the basis of book net profit of invested unit in confirming the net profit or net deficit enjoyed or undertook by invested unit. a. If the accounting policy adopted by invested unit is not accordance with investing unit, adjust according to accounting policy of investing enterprise and financial reports of invested unit to confirm the profit and loss of invested unit under the basis. b. With the fair value of fixed assets, intangible assets of invested unit as basis, the withdrawn depreciation amount or amortization amount and assets depreciation reserves produced infection upon the invested unit net profit. c. The unrealized profit and loss produced from the investing unit and its affiliated enterprise and joint enterprise shall be compensated. Namely the unrealized profit and loss between investing enterprise and affiliated enterprise and joint enterprise is calculated and attributes to investing enterprise according to no.8 share ratio, which will be compensated and investment benefit and loss shall be confirmed under the basis. The trade loss between investing enterprise and invested unit, attributing to assets depreciation loss, is completely confirmed. （3）Confirm the basis that has common control and major infection upon invested unit. A. Common controlling basis: a. Any join enterprise can not individually control production and operating activities of joint enterprise; b. The decision making related to basic business operations of joint enterprise shall be agreed by both parties; c. Every joint-venture enterprises nominate one joint enterprise according to contract or protocol to manage daily activities of joint-venture enterprise; it must implement management right within the wholly agreed financial and business policy scope. B. Major infection basis: a. Appoint represent in the board of invested unit or similar capability mechanism, enjoy relative actual participation decision making right, investing enterprise can participate in the constitution of business policy of the invested unit and realize implementing major infection upon the invested unit. b. Participate in the policy making of the invested unit including the making of dividend allotment policy. Under the circumstance, the represent can bring forward suggestion or idea for its own interest and bring large infection upon the invested unit. c. Realize important trade with the invested unit. Relative trade affects production operations decision-making of invested unit at certain degree. d. Appoint administrative person to the invested unit. Under the condition, appoint administrative person to the invested unit, the person has right and is responsible for the financial and business activities of the invested unit, so as to implement import infection on the invested unit. e. Offer key technical documents to the invested unit. Production operations of the invested unit relies upon the technique or technical document of the investing enterprise, which indicate investing enterprise has major infection upon the invested unit. To confirm investing unit has major infection upon the invested unit, one one side, consider the voting power share that investing unit directly or indirectly hold from the invested unit, one other side, consider the infection 18
produced by enterprise and other parties holding executable potential voting power presumably transferring into stock right of invested unit, such as the issued current transferable subscription warrant, stock option and transferable corporate bond, etc. If these transferred into stock right of invested unit, which can increase the voting power rate of investing enterprise or decrease the voting power rate of other investors in invested unit, so as to make investing enterprise joining in the financial and business policy-making of the invested unit, and consider investing enterprise have large infection upon the invested unit. （4）Depreciation testing method and depreciation reserve withdrawal method. On balance sheet date, inspect long-term equity investment, judge long term equity investment has the depreciation evidence or not. If the depreciation evidence of the operation state of invested unit appears, estimate its recoverable fund. The measured value of recoverable fund indicates the recoverable fund of long term equity investment is lower than its book value; deduct the book value of long term equity investment into recoverable fund. The deducted fund is confirmed to be the loss of assets depreciation and reckoned into benefit and loss at current period, meanwhile withdrawal relative long term investment depreciation deserve. Once the long term investment depreciation loss is confirmed, which will not be transferred in the later accounting period.13. Investment property 13. Investment property (1). Scope of investment real estate: refers to the real estate for rent or for capital appreciation or for both of them, including the rented land use rights, the land use rights held and to transferred, and the leased building; (2). Initial measurement of investment real estate: conduct initial measurement in accordance with the cost to obtain it; (3). Follow-up measurement of investment real estate: the Company conducts follow-up measurement on the investment real estate by cost model; the follow-up expenditure relating to investment real estate, if the related profit is likely to flow into the company and can be measured, then it should be included in the cost of the investment real estate, other follow-up expenditures should be recognized as the current loss and gain; (4) The classification, depreciation and amortization policies of real estate investments and the depreciation and amortization policies of fixed assets and intangible assets should be coherent. Provision for impairment of investment real estate should be treated according for asset impairment. 14．Fixed assets （1）Confirmation conditions of fixed assets The tangible assets held for producing goods, providing services, rent or operation, and the service time is longer than one fiscal year. （2）Fixed assets depreciation method Classification of fixed asset House and Building –Production House and Building-NonProduction Fixed assets decoration
Depreciable life（Year）
4%
35 years
4%
40 years
---
10 years
Machinery and equipment
10-14 years
Transportation equipment
8 years
Electronic Equipment
8 years
Other equipment
8 years
Residual rate（%）
4% 4% 4% 4%
Depreciation rate（%） 2.74% 2.40% 10.00% 9.60%-6.86% 12.00% 12.00% 12.00%
（3）Depreciation measuring method and depreciation reserves withdrawn method of fixed assets Judge fixed assets appearing the depreciation evidence or not at balance sheet date. If assets market value continuously decreases, or technology is old, damaged or long-term left un-used, draw back amount. The measured result of recoverable amount indicates the recoverable amount of fixed assets is lower than its book value; deduct the book value of fixed assets into recoverable amount. The deducted amount is confirmed to be assets depreciation loss and is reckoned into benefit and loss at current period; meanwhile withdraw relative fixed assets depreciation reserve. Once fixed assets depreciation loss is confirmed, which will not be transferred at the later accounting period. 19
（4）Cognizance evidence and pricing method of financial leasing fixed assets If all risk and reward associated to certain hired fixed asset actually have transferred, the company confirms it to be financial leasing. Financial leased fixed assets should take the lower one of fair value of leased assets at leasing date and lowest leasing payment, added with the initial direct expenses directly belonging to leasing item, will be book value of leased assets. Taking the lowest leasing amount as the book value of long term account payable, its difference will be unconfirmed financial charges. The unconfirmed financial charges will adopt actual interest rate method to allocate within leasing period. The leased fixed assets ensure depreciation rate according to lease term and estimated net salvage and accrual of depreciation. 15. Projects under construction (1). Methods for accounting projects under construction. The projects under construction include pre-construction preparations, the building projects under construction, installation projects, technical transformation projects and overhaul works, etc. The projects under construction should be accounted according to actual expenditures by items, and should be converted to fixed assets when the projects reached the predicted use state. The costs for borrowing relating to projects under construction (including loan interests, excess discount amortization, exchange gains and losses, etc.), which should be included in the cost before the related projects reach the predicted use state, and included in the current financial cost after the related projects reach the predicted use state; （2）Depreciation preparation of construction in progress Make complete inspection on construction in progress on the date of balance sheet, judge fixed assets occurring possible depreciation evidence or not. If yes: (1) project in progress without construction for long time is estimated not to start working again in future 3 years, (2) project in progress has evidence that its character and technology have fallen behind and the economic benefit brought has great uncertainty and other depreciation evidence, which shall be estimated its recoverable amount. The result of recoverable amount shows the recoverable amount of project in progress is loss than its book value, writedown its book value of project in progress into recoverable amount. The written down amount is confirmed to be assets depreciation loss and is reckoned into current period profit and loss, meanwhile withdraw relative depreciation reserve of project in progress. Once depreciation loss of project in progress is confirmed, which will not be transferred. 16.Borrowing cost (1). The borrowing expenses, if they comply with the capitalization conditions, should be capitalized and included in the cost of relevant assets; other borrowing expenses, should be determined according to the amount occurred and be included in the current loss and gain. If the borrowing expenses meet the following conditions at the same time, they should be capitalized: A. Capital expenditures have already occurred, capital expenditures include the expenditures paid by cash, transferring non-cash assets or by bearing interest-debt; B. The borrowing costs have occurred; C. The construction to make the asset to reach the intended use state or sale state, or the production activities have already begun. (2). When the assets which meet the capitalization condition reach the intended use or sale state, the capitalization of the borrowing expenses should be stopped. The borrowing expenses for the assets which meet the capitalization conditions and reach the intended use or sale state, the expenses should be confirmed according to the amount occurred, and be included in the current loss and gain. 17. Biological assets （1）Simultaneously, biological assets that meets the following conditions will be confirmed: A. For the past trade or issues, the company possesses or controls biological assets; B. The economic interest associated with the biological assets may flow into the company; C. The biological assets cost can be reliably measured. （2）Biological assets is divided into consumable biological assets, manufacturing biological assets and public welfare biological assets. （3）Biological assets is initially measured according to cost. （4）On the date of balance sheet, check consumable biological assets, if there are specific evidences showing the reasons like natural disasters, plant diseases and insect pests, animal epidemic situation attack or market requirements, make the net realizable value of consumable biological assets or recoverable amount of manufacturing biological assets are lower than their book value, according to the difference between net realizable value or recoverable amount and their book value, withdraw biological assets depreciation preparation or value decreasing preparation and reckon it to current profit and loss. If the contributing factor of consumable biological 20
assets value decreasing has already disappeared, the deducted amount will be resumed and is transferred within the original withdrawn price decreasing standard and transferred amount is reckoned into current profit and loss. 18..Intangible assets (1). Intangible asset refers to the non-monetary assets owned or controlled by a company with no identifiable physical forms, including proprietary technology, right to use land; (2). Intangible asset is valuated according the actual cost to obtain it; (3). For the intangible assets with definite service life, since the availability of the intangible assets, they should be amortized by straight-line method within the service life, and included in the current loss and gain; the intangible assets with no definite service life will not be amortized; the company should conduct review on the service life and amortization methods of the intangible assets at the end of the year, if the service life and amortization methods are inconsistent with what estimated previously, then the amortization period and amortization methods should be changed. （4）Provision for impairment of investment assets Inspect the ability of every intangible assets bring to future economic benefit to the company, when any one of the following exists: (1) certain intangible assets has been replaced by other new technology, which make its ability bringing benefit to enterprise seriously affected; (2) the market price of certain intangible assets greatly fall at the current period and will not resume within the left amortization period; (3) certain intangible assets has overpasses legal protection period, but it still has the depreciation evidence with partial usage value, then valuate its recoverable amount. The measuring result of recoverable amount shows if the recoverable amount is less than its book value, then write-down its book value into its recoverable amount, the written down amount is confirmed to be assets depreciation loss and reckoned into to current profit and loss, meanwhile withdraw corresponding intangible assets depreciation reserve; (4) For other conditions that fully prove certain intangible assets substantially produced depreciation reserve, withdraw intangible assets depreciation reserve according to the difference between recoverable amount and book value. Once intangible assets depreciation loss is confirmed, which will not be written back in the later accounting period. 19.Long-term amortization expenses (1). Long-term deferred expenses refer to all the expenses which should be amortized in the current period and in the future periods and the amortization period is longer than one year; (2). Long-term deferred expense is valuated according to actual cost, the installation cost should be equally amortized during two major overhauls or the contract period (depends on which is shorter), other long-term deferred expenses should be equally amortized according to the benefit period of the project. For the long-term deferred expenses which can not bring predicted profit in the future accounting period, all the unamortized value should be converted to the current loss and gain. 20.Predicted liabilities (1). The liabilities which are relevant to contingent events and meet the following conditions at the same time, the Company recognizes it as predicted liabilities: the liability is the current obligation the company undertakes; the performance of the liability may result in the outflow of economic interests; the amount of the liability can be reliably measured; (2). If the predicted liability to be fully or partly paid by the company and be compensated by the third party, the compensation amount can be recognized as assets individually only when it can be basically recovered, at the same time, the compensation on the asset should not be more than the corresponding book amount of the predicted liability. 21.Revenue (1). Revenue from goods sale After the risks and rewards of the goods are transferred to the buyer, the company will no longer conduct the management right and the actual control right, and the relevant incomes have been received or the documents of receiving have been obtained, and the cost of the goods can be reliably measured, the realization of the revenue should be confirmed. The time confirmation of specific sales of main trade styles: A. FOB is the trade style of goods exportation, means that the seller delivers when the goods pass the ship’s rail at the named port of shipment in contract; B. CIF is the trade style of goods exportation, means that the seller delivers when the goods pass the ship's rail in the destination port ; C. Domestic sales time confirmation means the time of commodities ownership evidence transfer or physical goods delivery. 21
(2). Revenue from service In the same fiscal year and the service has been completed, the income should be confirmed upon the completion of the service; If the starting and completion of the service belong to different fiscal year, then when the service can be reliably measured, the service income should be confirmed at the period end according to the percentage of the service not completed. (3). Incomes from transferring asset use right. Incomes from transferring asset use right include interest income and income from use payment; The amount of interest income, is determined in accordance with the time and actual interest rate; the income from use payment is determined according to the time and method of relevant contract and agreement. 22. Governmental subsidy It contains financial appropriations, financial discount, taxation return and transfer non-monitory assets free of charge. The governmental subsidy associated to assets, the company confirms it to be deferral benefit. When relative assets reach to scheduled usage condition, reckon it to be benefit and loss of every period at average within the usage lifetime of the assets. If relative assets is sold, transferred, scrapped or damaged before lifetime expiration, transfer the deferral benefit balance into current period benefit and loss of assets disposal. The received governmental subsidy associated to benefit is confirmed to be deferral benefit if used for the remedy of relative expense or loss of later period; and it is reckoned into benefit and loss at current period during relative expense confirmation; for those used for compensation of relative expense or loss happened, which will be reckoned directly into benefit and loss at current period 23. Deferred income tax assets/Deferred income tax liability （1）Confirmation of deferred income tax assets A.Limited by the company possibly acquired taxability amount for deducting temporary difference, confirm the deductible difference deferred income tax assets produced from temporary difference. But the deferred income tax assets produced from the initial confirmation of assets or liability in trade with the following characters are not confirmed: a. The trade is not enterprise consolidation ; b. When trade happens, which will neither affect accounting benefit nor affect taxability amount of income (or deduct loss). B. The company, on the deductible temporary difference associated to investment of subsidiary company, affiliated company and partnership business simultaneously meet the following conditions, confirms relative deferred income tax assets: a. Temporary difference most likely is transferred in the foresight future. b. Taxability amount of income that most likely used to deduct temporary difference in future. C. The company confirms relative deferred income tax assets for transferable later annual deductible loss and taxation decreasing with future taxability amount of income for deducting deductible loss and taxation decreasing as limitation. (2) The confirmation of deferred income tax liability Besides the deferred income tax liability produced under the following conditions, the company confirms all deferred income tax liability produced by all taxability temporary difference: A. The initial confirmation of business Goodwill; B. Simultaneously meeting the initial confirmation of assets or liability produced in trade with the characters of following characters: a. The trade is not enterprise consolidation; b. Trade occurrence affects neither accounting benefit nor taxability amount of income (or the deductible loss). C. When the company has relative taxability temporary difference with its subsidiary company, affiliated company and partnership business, and simultaneously meets the following conditions: a. Investment enterprise can control the transferring time of temporary difference; b. Temporary difference may possibly not transfer in the foreseeable future. 24. Hedging accounting (1) The hedged item of the company refers to storage raw material and raw material purchasing order appointed to be headged object that make company facing fair value alteration risk. (2) Hedging instruments of the company refers to the transferring instrument that is appointed and its fair value alteration can eliminate the fair value alteration of hedged items-----forward contract. (3) If fair value hedging simultaneously meet the following conditions, the company only can use hedging accounting method to dispose:
22
A. When hedging begins, the company has official appointment on hedging relation (namely the relation between hedging instrument and hedging items), and prepares the official written file about hedging period risk, risk management target and hedging policy. B. The estimated highness of the hedging period is effective, and meets the risk management policy confirmed originally by the company for the hedging relation. C. Hedging effectiveness can be reliably measured. D. The company continuously makes evaluation on the effectiveness of hedging period and confirms that the hedging period is highly effective during the accounting period appointed in hedging relations. (4) For fair value hedging that meeting above-mentioned conditions, implement accounting disposal according to the following regulations: A. The benefit or loss produced from alteration of fair value hedging is reckoned into benefit and loss at current period. B. The benefit or loss formed via risk in hedged period on hedged item is reckoned into benefit and loss at current period; meanwhile adjust the book value of the hedged item. C. Any one of the following conditions is satisfied in hedged period, the company will expire using faire value hedging account: a. Hedging instruments have expired, been sold, contract expire or come into practice. b. The hedging will not satisfy the conditions that using hedging c. Enterprise cancels the appointment of hedging relation. 25.Imporant Accounting policies and Accounting estimated Changed. （1）Accounting policy alteration The report mainly reflects accounting policy alteration Procedures for Alteration content and reason of examination and accounting policy approval Non --（2）Alteration of accountant estimation The report mainly reflects accounting estimation alteration Alteration content and reason of accounting estimation
Unit：RMB Item name in report forms affected
Amount affected
---
--Unit：RMB
Procedures for examination and approval
Item name in report forms affected
Amount affected
---
---
---
Non
26. Former accountant errors correction （1）Backward restatement method In the report period, find the error of former accountant via backward restatement method or not. unit:RMB Approved Correction content of Report forms name in different comparating Accumulated disposal accountant errors periods affected affected quantity condition ---
---
---
---
（2）Future applicable methods In the report period, find the error of former accountant via future applicable methods or not. Correction content of accountant errors
Approved disposal condition
Reason of adopting future applicable methods
---
---
---
III.Taxes of the Company 1. Main taxes categories and tax rate
23
Taxes
Tax references
Applicable tax rates
VAT
Incomes from product sales
13.00%、17.00%
Providing labor services, real estate sales, the transfer of intangible assets
3.00%、5.00%
VAT, sales tax, turnover tax, etc
5.00%、7.00%
Taxable income
24.00%、15.00%
Business tax. City construction tax Business income tax
The company has not the conditions that every branch company or branch plant independently hand in business income tax，The accrual proportion of city construction tax of the Enterprices in Shenzhen is increasing from 1% to 7% based on turnover tax on Dec,2010 2. Tax preference and approval file According to Enterprise Income Tax Law of the People's Republic of China (Order of the President of the People's Republic of China No. 63) and Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China (Decree No.512 of the State Council), from January 1, 2008, company begins to implement new enterprise income tax law and tax rate is 25%. Additionally, according to Notification of the State Council on Carrying out the Transitional Preferential Policies concerning Enterprise Income Tax (No. 39 [2007] of the State Council ), the enterprise who originally enjoy low tax rate preference policy, will gradually transfer into lawful tax rate within 5 years of new tax law implementation. Thereinto, enterprises enjoying 15% tax rate will implement tax rate 18% in 2008, 20% in 2009, 22% in 2010, 24% in 2011, and 25% in 2012. So the enterprise will implement enterprise income tax rate 24% in this year.Shenzhen Shengbo Photoelectric Technology CO., Ltd., the subsidiary company of our company, has been qualified as national hi-tech enterprise since 2010 and it enjoys reduced business income tax rate at 15% according to new law of enterprise income tax. IV. Enterprise consolidation and combined financial statements
24
1. Subsidiary （1）Subsidiary obtained through establishment or investment
Full name of subsidiary
Subsidiary type
Shenzhen Jinlan Decorative Articles Industrial Co., Ltd.
Wholly-owned subsidiary
Shenzhen Lisi Industrial Co., Ltd
Shenzhen Huaqiang Hotal
Shenzhen Shenfang Property Management Co., Ltd. Shenzhen Beauty Century
Registration place
Business
Registered capital
Business scope
Fabrics, bedding,clothing, textiles raw materials processing manufacturing, wholesale and retail. Domestic commerce, materials supply and sales (excluding franchise, special control, proprietary products) Accommodation, restaurants, business center; ticket consignment; Property Management (required to obtain the relevant qualification certificate for their operations)
Interest of minority shareholder
Amount used to write down lost included in minority shareholder interest
After wrote down current period loss of minority shareholders over equity beginning share of minority shareholders in the subsidiary from the parent company’s share ,Balance of Owner's equity
Yes
No
---
---
100.00
Yes
No
---
---
95.00
100.00
Yes
No
---
---
Actual capital amounts of the end
Other projects balance essentially from net investment to subsidiary
Holding proportion (%)
Proportion of voting rights(%)
Whether consolidation of report form
4,000,000.00
---
90.00
100.00
2,360,000.00
---
90.68
10,005,300.00
---
Shenzhen
Fabrics, bedding,clothing nabyfactubg
4,000,000.00
Wholly-owned subsidiary
Shenzhen
Domestic commerce, materials supply and sales
2,360,000.00
Wholly-owned subsidiary
Shenzhen
Accommodation, restaurants, business center
10,005,300.00
Wholly-owned subsidiary
Shenzhen
Property management
1,604,000.00
The Company property management
1,604,000.00
---
93.75
100.00
Yes
No
---
---
Wholly-owned subsidiary
Shenzhen
Production of fully electronic jacquard knitting
25,000,000.00
Production of fully electronic jacquard knitting whole
25,000,000.00
5,094,300.00
100.00
100.00
Yes
No
---
---
25
Full name of subsidiary
Subsidiary type
Registration place
Garment Co., Ltd.
Shenzhen Shenfang Import & Export Co., Ltd. Shenzhen Zhongxing Fibre Folds Cotton Clothing Ornament Co., Ltd. Shenzhen
Business
Registered capital
whole shape
Business scope
shape (without restrictions on the project); clothing, textiles and related accessories for buying and selling (excluding franchise, special control, proprietary products); operating import and export business (by "Import and Export Enterprise Qualification Certificate" deep free trade Certificate Zi No. 2002-339 tube business); industrial projects (the specific items to be declared separately). Operating import and export business (the specific approval by the relevant import and export business handled)
Shenzhen
Operating import and export business
Wholly-owned subsidiary
Shenzhen
Spewing acupuncture cloth, revision, and fusible interlining fabric
1,680,000.00
Production and operation of bedding, clothing and textiles for infants and young children.
Control
Shenzhen
Operating import
1,900,000.00
Textile production
Wholly-owned subsidiary
5,000,000.00
Interest of minority shareholder
Amount used to write down lost included in minority shareholder interest
After wrote down current period loss of minority shareholders over equity beginning share of minority shareholders in the subsidiary from the parent company’s share ,Balance of Owner's equity
Yes
No
---
---
---
No
No
---
---
---
No
No
---
---
Actual capital amounts of the end
Other projects balance essentially from net investment to subsidiary
Holding proportion (%)
Proportion of voting rights(%)
Whether consolidation of report form
5,000,000.00
12,168,680.72
100.00
100.00
1,680,000.00
618,769.07
75.00
1,900,000.00
686,391.83
50.00
26
Full name of subsidiary
Subsidiary type
Tianlong Industry and Trade Co., Ltd.
company
Shengtou (HK) Co., Ltd.
Wholly-owned subsidiary
Registration place
Business
Registered capital
and export business
Hongkong
Polaroid Sales
Business scope
Actual capital amounts of the end
Other projects balance essentially from net investment to subsidiary
Holding proportion (%)
Proportion of voting rights(%)
Whether consolidation of report form
---
100.00%
100.00
100.00
Yes
Interest of minority shareholder
Amount used to write down lost included in minority shareholder interest
After wrote down current period loss of minority shareholders over equity beginning share of minority shareholders in the subsidiary from the parent company’s share ,Balance of Owner's equity
No
---
---
and processing (production site business license to be declared separately); domestic commerce, materials supply and marketing industry (excluding franchise, franchising, has exclusive control of goods). Import and export business card in accordance with the trial of No. 126 "Shenzhen Municipal Foreign Trade Enterprise validation certificate" . HKD10000
----
Note: The shareholding proportion of consolidated subsidiaries is inconsistent with the vote right proportion, which is through the way of getting the cross-shareholdings among subsidiaries to make the parent company actually control 100%; Shenzhen Tianlong Industrial & Trading Co., Ltd, and Shenzhen Zhongxing Fiber Wimple Cotton Raiment Co., Ltd. had established liquidation group in 2009 and started liquidation procedures, they are in liquidation processing and these two companies will not be included in consolidation scope since they went into liquidation procedures. （2）The company has no subsidiary company acquired via enterprise consolidation under same controlling. （3）Subsidiary company acquired via enterprise consolidation under non-same controlling
27
Full name of subsidiary company
Shenzhen Shengbo Optoelectro nics Technology Co., Ltd
Subsid iary tyle
Limite d Liabili ty Comp any
Registra tion Place
Busin ess charac ter
Shenzhe n
Produ ction and sales of polari zer
Registration capital
RMB 200 million
Scope of business
Actual capital amounts of the end
Wholesale, manufacturing and process various specifications materials and apparatus of polarizer, LCD; import and export business (except projects inhibited by law, administrative regulation, State Department), the limited projects shall be managed with the permission.
RMB200 million
28
Other projects balance essentially from net investment to subsidiary
---
Holdi ng propor tion (%)
Propor tion of voting rights( %)
Whet her conso lidati on of report form
100
100
Yes
Inter est of mino rity share holde r
Amount used to write down lost included in minority shareholder interest
After wrote down current period loss of minority shareholders over equity beginning share of minority shareholders in the subsidiary from the parent company’s share ,Balance of Owner's equity
No
---
---
2. In the reporting period, the company has no main body with special target or operational entity with controlling right formed from entrusted management or leasing. 3.
Explanation of alteration of Consolidation scope
4. The main body taken into combination scope at current period and main body not to take into consolidation scope. 5. Enterprise consolidation under same controlling at the end of current period. 6. Enterprise consolidation under non-same controlling within the reporting period. 7. In report period, sell stock right losing controlling right to decrease subsidiary company. 8. Reverse purchase does not appear within the reporting period of the company. 9. Consolidation and amalgamation does not happen within the reporting period of the company. V. Notes of consolidated financial statements 1. Currency funds Unit：RMB Year-end balance Items
Year-beginning balance
Original currency
Exchange rate
RMB
Original currency
Exchange rate
RMB
RMB
188,551.30
1.00
188,551.30
77,003.08
1.00
77,003.08
HKD
33,387.25
0.84
28,163.62
84,916.75
0.87
73,650.73
USD
9,896.56
6.47
64,030.72
11,414.05
6.59
75,250.73
Japanese Yen
622,550.00
0.08
49,838.86
Subtotal
---
---
331,135.19
---
---
225,904.54
RMB
447,077,972.79
1.00
447,077,972.79
754,563,743.39
1.00
754,563,743.39
HKD
1,888,845.93
0.84
1,602,985.42
2,729,464.65
0.85
2,322,085.98
USD
782,990.80
6.47
5,065,950.50
1,371,929.52
6.62
9,084,231.32
Japanese Yen
---
---
---
15.00
0.08
1.21
Subtotal
---
---
453,746,908.71
---
---
765,970,061.9
RMB
41,728,100.31
1.00
41,728,100.31
53,788,277.96
1.00
53,788,277.96
HKD
---
---
---
381,679.79
6.62
2,527,292.74
USD
39,726,072.00
0.08
3,180,310.42
95,391,286.00
0.08
7,724,500.16
Japanese Yen
---
---
44,908,410.73
---
---
64,040,070.86
I. Cash
II.Bank deposit
III. Other capital
Subtotal
498,986,454.63
830,236,037.30
（1）As of June 31, 2011，Monetary fund has not these conditions such as usage limitation for mortgage, pledge or frozen fund, stored overseas, with potential recovery risk. （2）As of June 30, 2011，The fixed-term deposit balance of bank deposit is RMB 207,980,000.00, this part will not be treated as closing cash or closing cash equivalent in preparing cash flow statement. 2. Bill receivable （1）Classification Bill receivable Unit：RMB Classification
Year-end balance
Year-beginning balance
Bank acceptance
2,107,763.05
---
29
Total
2,107,763.05
---
（2）As of June 30, 2011，The company has no notes receivable pledged. （3）As of June 30, 2011， The company has not the condition that bill transferred into bill of account receivable for bill drawer has no ability of keeping a promise; the biggest former 5 conditions that the company has endorsed but unexpired: Unit：RMB Bill drawing Unit of bill drawing Expire date Amount Notes date Guangdong Midea Group, Wuhu Refrigeration Equipment Co., Ltd. Xiamen Kinglong United Autormotive Industry Co., Ltd. Shenzhen Ruifuda LCD Technology Co., Ltd. Anqing Ningcheng Materials Trading Co., Ltd. China Display Technology Co., Ltd.
2011-05-31
2011-11-30
700,000.00
---
2011-01-18
2011-07-18
500,000.00
---
2011-05-17
2011-08-15
2011-04-19
2011-10-19
2011-04-01
2011-09-30
Total
313,306.00
---
300,000.00 298,244.02 2,111,550.02
3.Account receivable （1）Classification Account receivable Year-end balance Book balance
Classification
Amount
Provision for bad debts
Proport ion(%)
Amount
Proporti on(%)
Receivables with major individual amount and bad debt provision provided individually Receivables provided bad debt provision in groups Account age group Subtotal of group Account receivable with minor individual amount but bad debtprovision is provided Total
60,541,837.07
93..13
3,092,719.53
5.11
60,541,837.07
93.13
3,092,719.53
5.11
4,463,952.68
6.87
4,443,952.68
99.55
65,005,789.75
100.00
7,536,672.21
Year-beginning balance Book balance
Classification
Receivables with major individual amount and bad debt provision provided individually
Provision for bad debts
Amount
Proport ion(%)
Amount
Proporti on(%)
---
---
---
---
Receivables provided bad debt provision in groups Account age group
50,755,487.10
93.66
2,607,181.95
5.14
Subtotal of group
50,755,487.10
93.66
2,607,181.95
5.14
3,438,415.81
6.34
3,438,415.81
100.00
54,193,902.91
100.00
6,045,597.76
---
Account receivable with minor individual amount but bad debtprovision is provided Total 30
Category explanation of accounts receivable: Receivables with significant individual amount and provision made for individual item refers to customer accounts receivable with single amount more than 1 million, its provision for impairment will be made based on specific identification method. For receivables without significant individual amount, after deducting those parts which had conducted individual impairment test for its obvious difference in collectability with concrete evidence, making group by aging with character of credit risks and making provision for impairment based on aging analysis method. The receivables made provision for impairment without significant individual amount refers to those receivables which has obvious difference in collectability with concrete evidence, its provision will be made based on specific identification method. Account receivables using the age analysis method for measurement of impairment allowances： Year-end balance Year-beginning balance Book balance Book balance Provision Age Provision for Proporti Proporti for bad bad debts Amount Amount on（%） on（%） debts Within 1 year 60,059,598.95
99.20
3,040,639.51
49,703,545.69
97.93
2,413,660.46
482,238.12
0.80
52,080.02
610,304.64
1.20
61,030.46
---
---
---
441,636.77
0.87
132,491.03
---
---
---
---
---
---
60,541,837.07
100.00
3,092,719.53
50,755,487.10
100.00
2,607,181.95
1-2 years 2-3 years Over 3 years Total （2） The company has no the conditions that account receivable is withdrew via recombination or other styles. （3）Separate amount is large at end of period or doubtful accounts reserves of account receivable with separate value decreasing test: Account receivable
Book balance
Provision for bad debts
Allotment rate
Reason
Above RMB 1 million
34,168,774.65
2,058,978.63
6.03
Obvious evidence displaying depreciation
Below RMB 1 million
4,463,952.68
4,443,952.68
99.55
Unable to recover
Subtotal
38,632,727.33
6,502,931.31
Separate amount is not large, the account receivable with big combination risk after combined via risk character: Unit ：RMB Year-end balance Book balance
Age
Within 1 year 1-2 years
Year-beginning balance Book balance
Amount
Proportion（%）
---
---
482,238.12
Provision for bad debts
Provision for bad debts
Amount
Proportion（%）
---
---
---
---
100.00
52,080.02
610,304.64
58.02
61,030.46
---
---
---
441,636.77
41.98
132,491.03
---
---
---
---
---
---
482,238.12
100.00
52,080.02
1,051,941.41
100.00
193,521.49
2-3 years 3-4 years Total
Separate amount is not large, the account receivable with big combination risk after combined via risk character:t Separate amount is not large, but the combination risk after combined according to credit risk character is big, these account receivable refers to those with ending balance being below 1 million RMB and account age is over 1 year. （4）This period has no bad debt reserve, or withdrawn bad debt reserves ratio is bigger, which is taken back or transferred wholly at this period, or the withdrawal or transferring ratio is bigger. This period has no account receivable taken back by recombination or other styles. 31
（5）The front 5 units’ information of account receivable Unit name Relation with the company
Amount
Ruli Baolai Photoelectriicity Technology Co., Ltd.
Client
9,036,941.76
Dongguan Fair LCD Co., Ltd.
Client
5,340,905.79
Jiangmen Jidu Semiconductor Co., Ltd.
Client
4,949,755.21
Jiangxi Helitai Micro-electronics Co., Ltd.
Client
4,536,624.80
Tianma Micro-electronics Co., Ltd.
Client
2,717,475.24
Total （6）Account receivable from relation parties Unit name Shenzhen Investment Holdling Co., Ltd.
Percentage of account receivable
Fixed year Within 1 year Within 1 year Within 1 year Within 1 year Within 1 year
13.90% 8.22% 7.61% 6.98% 4.18%
26,581,702.80
40.89%
Relation with the company
Amount
Percentage of account receivable
Controlling shareholders
47,725.00
0.07%
---
47,725.00
0.07%
Total 4.Other Account receivable （1）Category of other account receivable:
Year-end balance Classification
Book balance
Provision for bad debts
Amount
Proporti on（%）
Amount
Proportion （%）
12,075,436.43
31.29
10,547,991.83
87.35
Account age group
25,937,814.16
67.21
1,810,314.46
6.98
Subtotal of group
25,937,814.16
67.21
1,810,314.46
6.98
577,402.18
1.50
577,402.18
100.00
38,590,652.77
100.00
12,935,708.47
Receivables with major individual amount and bad debt provision provided individually Receivables provided bad debt provision in groups
Account receivable with minor individual amount but bad debtprovision is provided Total
Year-beginning balance Classification
Book balance
Receivables with major individual amount and bad debt provision provided individually Receivables provided bad debt provision in groups
32
Provision for bad debts
Amount
Proporti on（%）
Amount
Proportion （%）
15,075,436.43
34.98
10,547,991.83
69.97
Year-beginning balance Classification
Book balance
Provision for bad debts
Amount
Proporti on（%）
Amount
Proportion （%）
Account age group
27,444,096.79
63.68
1,956,516.67
7.13
Subtotal of group
27,444,096.79
63.68
1,956,516.67
7.13
577,402.18
1.34
577,402.18
100.00
43,096,935.40
100.00
13,081,910.68
Account receivable with minor individual amount but bad debtprovision is provided Total
Category explanation of Other accounts receivable: Receivables with significant individual amount and provision made for individual item refers to customer accounts receivable with single amount more than 0.5 million, its provision for impairment will be made based on specific identification method. For receivables without significant individual amount, after deducting those parts which had conducted individual impairment test for its obvious difference in collectability with concrete evidence, making group by aging with character of credit risks and making provision for impairment based on aging analysis method. The receivables made provision for impairment without significant individual amount refers to those receivables which has obvious difference in collectability with concrete evidence, its provision will be made based on specific identification method. Separate amount is not large, the account receivable with big combination risk after combined via risk character: Year-end balance Age
Year-beginning balance
Book balance Amount
Proportion （%）
Within 1 year
23,363,460.86
90.07
1-2 years
1,890,228.57
2-3 years Over 3 years Total
Provision for bad debts
Book balance
Provision for bad debts
Amount
Proportion （%）
1,571,502.94
23,867,212.74
86.96
1,228,439.77
7.29
164,695.50
1,890,228.57
6.89
164,695.50
589,731.73
2.28
26,919.52
649,731.73
2.37
44,919.52
94,393.00
0.36
47,196.50
1,036,923.75
3.78
518,461.88
25,937,814.16
100.00
1,810,314.46
27,444,096.79
100.00
1,956,516.67
(2)The company has no the conditions that account receivable is withdrew via recombination or other styles. (3）Separate amount is large at end of period or doubtful accounts reserves of account receivable with separate Other Account receivable
Book balance
Provision for bad debts
Allotment rate
Reason
Above RMB 0.5 million
12,075,436.43
10,547,991.83
87.35
Provision for the estimated recoverable
Below RMB 0.5 million
577,402.18
577,402.18
100%
Estimated irrecoverable
Subtotal
12,652,838.61
11,125,394.01
33
Separate amount is not large, the account receivable with big combination risk after combined via risk character: Year-end balance Age
Book balance Amount
Proportion（%）
---
---
1-2 years
1,890,228.57
2-3 years Over 3 years
Within 1 year
Total
Year-beginning balance
Provision for bad debts
Book balance
Provision for bad debts
Amount
Proportion（%）
---
---
---
---
7.29
164,695.50
1,890,228.57
6.89
164,695.50
589,731.73
2.28
26,919.52
649,731.73
2.37
44,919.52
94,393.00
0.36
47,196.50
1,036,923.75
3.78
518,461.88
2,574,353.30
9.93
238,811.52
3,576,884.05
13.04
728,076.90
Separate amount is not large, the account receivable with big combination risk after combined via risk character:t Separate amount is not large, but the combination risk after combined according to credit risk character is big, these account receivable refers to those with ending balance being below 0.5 million RMB and account age is over 1 year. （4）This period has no bad debt reserve, or withdrawn bad debt reserves ratio is bigger, which is taken back or transferred wholly at this period, or the withdrawal or transferring ratio is bigger. This period has no account receivable taken back by recombination or other styles. （5）Other account receivable actually cancelled after verification at this reporting period （6）As of June 20,2011 no loans of the shareholders holding 5% (inclusive of a 5%) or more voting right and other related units. (7) The front 5 units’ information of Other account receivable Unit name
Fixed year
Percentage of account receivable
Relation with the company
Amount
Export rebates
Non-related parties
18,197,075.10
Within 1 year
47.16%
Jiangxi Xuanli String Company
Non-related parties
11,389,044.60
2-3 years
29.51%
Not absorbed into subsidiary company within combination scope
2,200,000.00
Within 1 year
5.70%
Non-related parties
1,047,437.10
Within 1 year
2.71%
Not absorbed into subsidiary company within combination scope
686,391.83
Over 3 years
1.78%
Anhui Huapeng Textile Company Shenzhen Finance Committee Shenzhen Tianglong Industry and trade Co., Ltd. Total
33,519,948.63
86.86%
（8）Account receivable from Related affiliated parties Unit name
Relation with the company
Amount
Percentage of account receivable
Shenzhen Zhongxing Fibre Folds Cotton Clothing
Not absorbed into subsidiary company
618,769.07
1.60%
34
Ornament Co., Ltd. Shenzhen Dailisi Knitting Co., Ltd.
Affiliated enterprise
415,000.00
1.07%
Jordan Garnent Factory
Affiliated enterprise
183,906.56
0.48%
Shenzhen Xieli Automobile Co., Ltd.
Affiliated enterprise
169,262.00
0.44%
Anhui Huapeng Textile Company
Not absorbed into subsidiary company
2,200,000.00
5.70%
Shenzhen Tianglong Industry and trade Co., Ltd.
Not absorbed into subsidiary company
686,391.83
1.78%
4,273,329.46
11.07%
Total
（9）Account receivable confirmed at the expiration date of this period. （10）Securitization with account receivable as target does not appear. 5.Prepayments （1）Prepayments age : Unit:RMB Year-end balance
Year-beginning balance
Age Amount
Proportion（%）
Amount
Proportion（%）
24,563,617.65
99.88%
4,503,115.81
96.20%
30,639.36
0.12%
45,449.46
0.97%
2-3 years
84,567.38
1.80%
Over 3 years
47,998.19
1.03%
4,681,130.84
100.00%
Within 1 year 1-2 Years
Total
24,594,257.01
100.00%
The explanation of major units of Prepayments : The advance payment Increased 425.4% to RMB119.9132 million at the end of the period, compared to the beginning of the period. The increased was due to the advance payment from the export trading business being transferred to costs at the end of the period. （2）The front 5 units’ information of Prepayments Unit：RMB Relation with the company
Amount
Time
Reason of not clearing
Supplier
19,318,767.40
Within 1 year
Not available
Kingdee Software (China) Co., Ltd.
Software Supplier
1,297,480.00
Within 1 year
Software is not installed
Shenzhen Anhua Computer Company
Hardware Supplier
794,520.00
Within 1 year
Equipment is not acceptance
Guangtai Textile Co., Ltd.
Supplier
485,384.02
Within 1 year
Not available
Shenzhen Husimeng Textile Co., Ltd.
Supplier
316,850.75
Within 1 year
Not available
--
22,213,002.17
--
--
Unit name Shenzhen Lianya Textile Co., Ltd.
Total
35
（3）As of June 30,2011，In the balance of accounts payable, there were no payables to shareholders holding 5.00% (including 5.00%) or more of the voting right of the Company; 6. Interest receivable （1）Interest receivable Unit：RMB Items
Amount at year begining
Increase at this period
Decrease at this period
Balance in year -end
Interest on deposits
2,203,227.00
3,497,282.06
3,864,169.21
1,836,339.85
Total
2,203,227.00
3,497,282.06
3,864,169.21
1,836,339.85
（2）This did not occur overdue interest. 7.Inventory （1）Inventory types Unit :RMB Year-end balance Itmes Book balance
Year-beginning balance
Provision for bad debts
Book value
Provision for bad debts
Book balance
Book value
Raw materials
41,433,484.11
3,033,228.52
38,400,255.59
36,612,247.91
2,072,926.19
34,539,321.72
Processing products
12,645,102.69
---
12,645,102.69
8,694,383.99
---
8,694,383.99
Stock goods
20,175,329.82
3,354,980.20
16,820,349.62
20,247,735.05
2,902,920.58
17,344,814.47
1,598,561.17
1,598,561.17
---
1,668,104.01
1,598,561.17
69,542.84
70,468.62
---
70,468.62
338,707.42
---
338,707.42
75,922,946.41
7,986,769.89
60,986,770.44
67,561,178.38
6,574,407.94
60,986,770.44
Commissioned goods Low value consumable Total
（2）Allowance for duction of inventory to market Unit：RMB
Type Raw materials
Book balance at year beginning
Amount accounted in current period
2,072,926.19
1,027,790.58
Amount Decreased in current period Transferred Reselling back
Book balance at period end
---
67,488.25
3,033,228.52
---
---
---
Processing products
---
Stock goods
2,902,920.58
651,968.99
---
199,909.37
3,354,980.20
1,598,561.17
---
---
----
1,598,561.17
---
---
---
---
---
6,574,407.94
1,679,759.57
---
267,397.62
7,986,769.89
Commissioned goods Low value consumable Total
（3）Condition of stock value decline
36
Items
Reason of issueing back to Base of stock value decline stock value decline plan of this period
Proportion of issueing back amount to the the stock balance at this period
Raw materials
Notes 1
---
---
Stock goods
Notes 1
---
---
Processing products
Notes 1
---
---
Turnover materials
Notes 1
---
---
Consumptive biological assets
Notes 1
---
---
Notes1：As of June 30, 2011，The Company determines their net realizable value in acordance with the estimated selling price less the stock to completion estimated to occur when the cost of the estimated cost of sales and related post-tax amount and analyze with comparing the book value , whereby provision for impairment. 8. Disposable financial asset （1）Financial assets available for sale Unit：RMB Items
Ending fair value
Beginning fair value
Stock investment
79,037,204.81
75,481,853.50
Total
79,037,204.81
75,481,853.50
This issue will be re-held-to-maturity investments classified as available for sale financial assets, the current re-classification of the amount of RMB 0.00 , the total amount of re-classification before the held-to-maturity investments 0.00% the proportion of the total. Explaination of financial assets available for sale: (1)the amount of available for sale assets are held by Shenzhen Victor Onward Textile Industrial Co., Ltd. shares, * ST Shen Victor Onward A end of the company holds a total of 9,543,394 shares of the outstanding shares of the highest A share price of 7.25 yuan.(2) the amount of av ailable for sale assets are held by Guangdong Sunrise Group Co., Ltd.shares, *ST Sunrise A end of the company holds a total of 1,085,733 shares of the outstanding shares of the highest A share price of 9.07 yuan.
37
9. . Investment to joint venture and united venture Unit:：RMB
Name
I. Joint venture Shenzhen Haohao Property Leasing Co. Ltd. Shenzhen Xieli Automobile Co., Ltd. II. Affiliated enterprise Shenzhen Changlianfa Printing & dyeing Company Jordan Garment Factory Hengshun （Saipan） Industry Co., Ltd.
Corporation Registration Legal Type place Representative
Limited Company
Shenzhen
Feng Junbin
Limited Company
Shenzhen
Limited Company
Shenzhen
Limited Company
Jordan
Limited Company
Saipan
Business Nature
Company vote Company right Registered shareholding percentage in Capital percentage the invested (%) unittion of units (%)
Ending total assets
Ending total liabilities
Ending net assets
Total business revenues at this period
Current net profit
4.754 million
50.00%
50.00%
6,154,866.12
437,520.80
5,717,345.32
855,197.70
471,094.52
Ye Yongling Manufacturing
3.12 million
50.00%
50.00%
6,682,263.93
2,168,780.46
4,513,483.47
880,028.00
161,306.18
Zhu Meizhu
6.47 milllion
40.25%
40.25%
5,303,750.41
1,029,013.63
4,274,736.78
254,988.00
65,155.72
USD 1 million
35.00%
35.00%
USD6.96 million
35.00%
35.00%
Service
Service
Chen Wenxian Manufacturing
---
Manufacturing
USD1,815,831.54 USD795,964.70 USD1,019,866.84. USD1,376,607.47 USD-231,688.66
---
---
-
---
---
There is no significant difference among the significant accounting policy of joint venture and Affiliated enterprise , the accounting estimate and the company accounting policy, the accounting estimate. Joint ventrue of Shenzhen Trademark Factory Co. Ltd had officially changed the name to Shenzhen Haohao Property Leasing Co. Ltd. on June 28,2011. 10. Long term share equity investment. (1) Long-term equity investments are listed according to the situation of investment unit :
38
Unit：RMB
Name
Shenzhen Jintian Industry Co., Ltd. Shenzhen Haohao Property Leasing Co. Ltd. Shenzhen Xieli Automobile Co., Ltd. Shenzhen Changlianfa Printing and dyeing Company Jordan Garnent Factory Hengshun（Saipan）Industry Co., Ltd. Shenzhen Jiafeng Textile Co., ltd. Shenzhen Guanhua Prnting & dyeing Co., Ltd. Shenzhen Union Development Group Co., Ltd. Shenzhen Xiangjiang Trade Co., Ltd. Shenzhen Xinfang Knitting Co., Ltd. Hongkong Yehui International Co., Ltd.
Shenzhen Dailisi Knitting Co., Ltd.
Anhu Huapeng Textile Co., Ltd. Shenzhen South Textile Co., Ltd. Shenzhen Tongyi Silk Floss Co., Ltd. Shenzhen Zhongxing Fibre Folds Cotton Clothing Ornament Co., Ltd. Total
Accountin g method
Cost method Equity method Equity method Equity method Equity method Equity method Cost method Cost method Cost method Cost method Cost method Cost method Cost method Cost method Cost method Cost method Cost method --
Initial investment cost
Original balance
change
14,831,681.50
14,831,681.50
---164,844.57
2,040,102.73
Ending Balance
3,445,862.19 2,422,651.65 1,694,356.38 2,574,160.27
50.00%
50.00%
50.00%
40.25%
40.25%
35.00%
35.00%
35.00%
35.00%
2,309,488.46
---
---
---
16,800,000.00
16,800,000.00
---
16,800,000.00
5,491,288.71
5,491,288.71
---
5,491,288.71
2,600,000.00
2,600,000.00
---
2,600,000.00
160,000.00
50.00%
1,720,581.55
8,228,350.00
160,000.00
3.68%
2,523,396.74
-264,671.82 7,240,625.00
3.68%
3,281,017.62
26,225.18 2,524,500.00
Voting right proportion in the investee
14,831,681.50
100,745.09 1,529,483.67
Sharehold ing proportion in the investee
---
160,000.00
524,000.00
524,000.00
---
524,000.00
2,392,914.37
2,392,914.37
---
2,392,914.37
2,559,856.26
---
2,559,856.26
25,000,000.00
25,410,209.50
---
25,410,209.50
1,800,000.00 1,460,000.00 94,655,008.48
1,500,000.00 1,800,000.00 1,460,000.00 85,666,980.83
---
1,500,000.00
---
1,800,000.00
---302,546.12
1,460,000.00 85,364,434.71
-----------
10.80%
---
45.00%
45.00%
---
2.87%
2.87%
---
20.00%
20.00%
---
20.00%
20.00%
---
17.85%
17.85%
---
50.00%
1,500,000.00
---
10.80%
30.00% 532,062.50
Explaination of diffirence between shareholding proportion and voting right proportion in investee
9.80% 18.00% 100.00% ---
---
---
9.80% 18.00% -----
operate and contracted by the third party operate and contracted by the third party ----The company is being liquidating
（2）During the reporting period, the company is not limited to transfer funds to the Investment Company limited circumstances. （3）The company has no long-term equity investment of limited sales condtion in the end.
39
Devalue
Current devalue
Cash bonus
14,831,681.50
---
---
---
---
400,000.00
266,654.99
---
---
---
---
---
---
---
---
---
---
---
16,800,000.00
---
---
5,058,307.01
---
---
---
---
---
---
---
65,634.56
---
---
---
---
---
---
---
---
850,000.00
---
---
500,000.00
---
---
---
---
---
541,941.63
1,460,000.00 38,416,643.50
-----
--2,357,576.19
11.Investment real estate （1）Measured by the cost of investment in real estate Unit：RMB Book amount at year begining
Increase at this period
Decrease at this period
Book balance in year -end
1. Total original price
258,166,738.75
108,726.21
---
258,275,464.96
1.House, Building
258,166,738.75
108,726.21
---
258,275,464.96
---
---
---
---
89,898,215.91
3,466,504.87
---
93,364,720.78
89,898,215.91
3,466,504.87
---
93,364,720.78
---
---
---
---
Items
2.Land use right II.Total accumulated accumulated amortization
depreciation
1.House, Building 2.Land use right III. Total book value of investment real estate
168,268,522.84
164,910,744.18
1.House, Building
168,268,522.84
164,910,744.18
2.Land use right
---
---
IV. Total of accumulated provision for devaluation of investment real estate.
---
---
1.House, Building
---
---
2.Land use right
---
---
V. Total book value of investment real estate
168,268,522.84
164,910,744.18
1.House, Building
168,268,522.84
164,910,744.18
---
---
2.Land use right
Current amount of depreciation and amortization is RMB 3,466,504.87 . Current investment Property devalue plan amount is RMB 0.00. The company has no fair value measurement of investment real estate. 12. Fixed assets （1）Fixed assets Items
Book amount at year Increase at this begining period
Decrease at this period
Unit：RMB Book balance in year -end
1. Total original price
271,932,726.98
1,474,454.60
351,214.00
273,055,967.58
Including: House , Building Machinery equipment
109,707,395.31
599,100.86
---
110,306,496.17
145,158,482.07
113,756.41
---
145,272,238.48
40
Items
Book amount at year Increase at this begining period
Decrease at this period
Book balance in year -end
4,159,605.00
196,326.00
346,800.00
4,009,131.00
12,907,244.60
565,271.33
4,414.00
13,468,101.93
105,074,108.74
7,788,970.93
255,177.74
112,607,901.93
33,980,801.44
2,155,287.43
---
36,136,088.87
4,870,195.28 ---
66,971,852.03
Transportations Electronic and Other II. Total of accumulative depreciation Including: House , Building Machinery equipment
62,101,656.75 Transportations 1,628,391.51
163,268.05
250,852.02
1,540,807.54
4,325.72
7,959,153.49
---
---
160,448,065.65
75,726,593.87
---
---
74,170,407.30
83,056,825.32
---
---
78,300,386.45
2,531,213.49
---
---
2,468,323.46
5,543,985.56
---
---
5,508,948.44
376,001.12
---
70,200.00
305,801.12
---
---
---
---
---
---
---
---
376,001.12
---
70,200.00
305,801.12
---
---
---
---
---
160,142,264.53
75,726,593.87
---
---
74,170,407.30
83,056,825.32
---
---
78,300,386.45
2,155,212.37
---
---
2,162,522.34
Electronic and Other 7,363,259.04 III. Total book value of Fixed assets 166,858,618.24 Including: House , Building Machinery equipment
600,220.17
Transportations Electronic and Other IV. Total of Devalued Provision Including: House , Building Machinery equipment Transportations Electronic and Other --V. Total book value of Fixed assets 166,482,617.12 Including: House , Building Machinery equipment Transportations Electronic and Other 5,543,985.56 ----5,508,948.44 (2) Current depreciation is RMB 7,788,970.93 . (3) The issue of fixed assets transferred from construction in progress original price is RMB 246,450.00. (4)As of June 30,2011，The company has no temporary situation of idle fixed assets. (5)As of June 30,2011，The company has no lease by financing the fixed assets of the situation. 41
（6）As of June 30,2011，The fixed assets leased through operating leases. 13.Project under construction （1）Project under construction Unit：RMB Year-end balance Items Book balance TFT-LCD polarizing 451,907,752.42 film I project Guanhua Building 2,006,624.19 project Other Total
Provision for devaluation ---
Year-beginning balance Book Net value
Book balance
451,907,752.42 155,153,044.31
Provision for devaluation
Book Net value
---
155,153,044.31
---
2,006,624.19
---
---
---
157,782.00
---
157,782.00
107,900.00
---
107,900.00
454,072,158.61
---
---
155,260,944.31
454,072,158.61 155,260,944.31
42
（2）Significant changes in projects of construction-in-progress Unit：RMB Project Accumulated Increase at this Transferred to Other investment Project amount of interest period fixed assets reduction proportion of the progress capitalized budget
Thereinto: amount of Current Interest capitalized
Current Interest capitalization rate
TFT-LCD 92640 polarizing film 155,153,044.31 万 I project
296,754,708.11
---
--
2,962,393.65
2,186,064.53
---
Self451,907,752.42 Financing
Total
296,754,708.11
---
--
2,962,393.65
2,186,064.53
---
451,907,752.42
Name
Amount at year Budget begining
---
155,153,044.31
32%
49%
Capital source
Amount at year end
Notes: According to the resolutions of the 7th meeting of the fifth board of directors held on December 7, 2010, the total investment in phase-I project of polarizer sheet for TFT-LCD was adjusted from RMB 849.37 million to RMB 926.40 million(Refer to No. 2010-47 Announcement of the Company for details). (3) Devalue plan of Construction in progress Unit：RMB Items
Amount at year begining
Increase at this period
Decrease at this period
Amount at year end
Cause
No
---
---
---
---
---
Total
---
---
---
---
--
(4) Major projects under construction Items
Project progress
Notes
TFT-LCD polarizing film I project
49%
---
43
14. Intangible assets （1）Intangible assets Unit：RMB Book Balance in year-begin
Increase at this period
Decrease at this period
Book Balance in year-end
1. Total original price
60,590,330.50
---
---
60,590,330.50
Land Use right
48,765,130.50
---
---
48,765,130.50
Proprietary technology
11,825,200.00
---
---
11,825,200.00
II. Total amount of accumulated
11,947,899.33
1,036,863.64
---
12,984,762.97
Land Use right
3,276,299.33
642,663.64
---
3,918,962.97
Proprietary technology
8,671,600.00
394,200.00
---
9,065,800.00
IV. Book value of intangible assets
48,642,431.17
47,605,567.53
Land Use right
45,488,831.17
44,846,167.53
Proprietary technology
3,153,600.00
2,759,400.00
IV.Total value of provision for impairment
---
---
Land Use right
---
---
Proprietary technology
---
---
V. Total Book value of intangible assets
48,642,431.17
47,605,567.53
Land Use right
45,488,831.17
44,846,167.53
Proprietary technology
3,153,600.00
2,759,400.00
Items
(2) The amortization amount is RMB 1,036,863.64 . （3）The current expenditure on non-development projects 15.Goodwill Unit：RMB Book Balance in year-end
Ending devalue provision
2,167,431.21
2,167,431.21
2,167,431.21
Shenzhen Shenfang Import and Export Co., Ltd.
82,156.61
82,156.61
82,156.61
Shenzhen ShengBo Ophotoelectric Technology Co., Ltd
9,614,758.55
9,614,758.55
---
Total
11,864,346.37
11,864,346.37
2,249,587.82
Name of the investee or the matter of forming Goodwill Shenzhen Beauty Garment Co., Ltd.
Century
Increase at this period
Balance in year-begin
Decrease at this period
Description of the impairment of business reputation impairment testing methods and provisioning methods: goodwill related to the asset group or a combination of asset group signs of impairment exists, according to the following steps to deal with: first, do not include business reputation asset group or a Group portfolio of assets impairment testing, calculate recoverable amount, and with the relevant book value compared to the corresponding recognized devalue losses; and then again with the goodwill asset group or a group of portfolio asset impairment testing, compare the related assets group or groups of assets portfolio book value (including the share of the book value of business reputation in part) to its recoverable amount. 16. Long-term amortization expenses Unit ：RMB 44
Amount of Increase at this amortization at period current period
Items
Balance in year-begin
Other Decrease
Balance in year end
Other
Renovation costs
640,987.98
308,412.90
77,224.80
---
872,176.08
---
Other
256,770.00
---
16,990.82
---
239,779.18
---
Total
897,757.98
308,412.90
94,215.62
---
1,111,955.26
---
17. Deferred income tax assets/Deferred income tax liabilities (1）Recognized deferred income tax assets and deferred income tax liabilities Unit：RMB Items
Year-end balance
Year-beginning balance
7,353,495.75
6,810,736.28
441,843.88
441,843.88
7,795,339.63
7,252,580.16
13,927,636.24
15,334,016.79
112,086.72
112,086.72
14,039,722.96
15,446,103.51
Deferred income tax assets Assets depreciation reserves Unattained internal sales profits Total Deferred income tax liability Increase and decrease of fair value of available-for-sale financial assets Assessed tax-free periods of time caused by differences in income Total
（2）There is no deductible loss of unrecognized deferred income tax assets at the end of the reporting period which will be expired in the following year. （3）The temporary differences in corresponding of the assets or liabilities causing temporary differences. Unit：RMB Items
Amount of temporary differences
Provision for bad debts
20,472,380.68
Provision for devaluationof fexed assets
305,801.12
rovision for falling price of inventory
7,986,769.89
Impairment of long-term equity investments
5,227,896.65
Increase and decrease of fair value of available-for-sale financial assets Assessed tax-free periods of time caused by differences in income
58,031,817.67 467,028.00
Unattained internal sales profits
2,945,625.84
Total
95,437,319.85
45
18. Impairment of assets Unit：RMB Decrease at this period Book balance Year-beginning
Increase at this period
19,127,508.44
Book balance Year-end
Withdrawal aount in this
Transfer in
Transfer-out
1,344,872.24
---
---
----
20,472,380.68
6,574,407.94
1,679,759.57
---
267,397.62
---
7,986,769.89
376,001.12
---
--
70,200.00
---
305,801.12
38,416,643.50
---
---
---
---
38,416,643.50
V. Goodwill
2,249,587.82
---
---
---
---
2,249,587.82
Total
66,744,148.82
3,024,631.81
---
337,597.62
---
69,431,183.01
Items I.Provision for bad debts II. Provision for falling price of inventory III. Provision for devaluationof fexed assets IV. Provision for devaluation of Long-term equity investment
19. Short-term borrowings （1）Short-term borrowings Unit : RMB Year-end balance Items
Year-beginning balance
Currency
Mortgage loan Total
RMB
Amount of original currency
Transferred to RMB
Amount of original currency
Transferred to RMB
---
---
2,000,000.00
2,000,000.00
---
---
---
2,000,000.00
Description of short-term loans classifications: The short-term loans are classified by loans. （2）There are no expired outstanding short-term borrowings at the end of the reporting period. 20. Account payable （1）Accounts payable by item class. Unit：RMB Items
Year-end balance
Year-beginning balance
Within 1 year
26,451,660.61
25,820,167.05
1-2 years
6,934,803.51
5,856,108.52
2-3 years
151,568.36
374,033.42
3-4 years
12,737.13
351,694.84
4-5 years
---
466,223.57
Over 5 years
561,446.97
230,304.64
Total
34,112,216.58
33,098,532.04
（2）As of June 30,2010 In the balance of accounts payable, there were no payables to shareholders holding 5% (including 5%) or more of the voting right of the Company; 46
21. Received in advance Unit: RMB Items
Year-end balance
Year-beginning balance
34,920,576.37
13,231,071.92
1-2 years
12,600.00
46,227.70
2-3 years
244,913.60
639,024.58
3-4 years
449,009.61
-
4-5 years
---
100.00
Over 5 years
---
5,704.00
35,627,099.58
13,922,128.20
Within 1 year
Total
（2）As of June 30, 2011，In the balance of funds received in advance, there were no funds of shareholders holding 5% (including 5%) or more of the voting right of the Company; (3) The increase of received in advance is comparatively large because of the increase of the export trade orders for year-end. （4）The description of large-sum accounts payable with the age over 1 year: The receipts in advance with the age more than 1 year in the company’s advance receipts is the unsettled sporadic balance with the clients, so there is no large-sum advance receipts. 22. Employee salary of payable Unit :RMB Items
Book Balance in year-begin
Increase in the current period
Decrease in the current period
Book Balance in year-end
1.Wages, bonuses, allowances and 17,009,475.59 28,108,234.11 30,278,649.48 14,839,060.22 subsidies 2.Employee welfare --2,208,053.59 2,208,053.59 --3. ocial insurance premiums 107,943.44 2,555,423.82 2,486,215.38 177,151.88 Of Which: medical insurance 19,063.87 211,059.15 230,123.02 --Basic old-age insurance premiums 43,317.27 2,134,386.97 2,000,552.36 177,151.88 Pension Payment 38,829.56 108,585.97 147,415.53 --Unemployment insurance 1,276.61 29,691.50 30,968.11 --Work injury insurance 1,192.19 16,822.85 18,015.04 --Maternity insurance 2,191.44 38,175.86 40,367.30 --Personal accident insurance 2,072.50 16,701.52 18,774.02 --IV. Public reserves for housing 2,558,516.71 546,915.78 1,094,512.85 2,010,919.64 V. Union funds and staff education 918,497.23 838,506.59 656,829.40 1,100,174.42 fee VI. Non-monetary welfare --------VII. Compensation for cancellation --------of labor relations VIII. Other 191,012.00 89,001.74 98,920.88 181,092.86 Of which: equity payment by cash --------settlement Total 20,785,444.97 34,346,135.63 36,823,181.58 18,308,399.02 The amounts of arrears of staff salary and welfare payable are RMB 0 00. The amounts of trade union funds and staff education expenses are RMB 1,100,174.42, the amounts of non-monetary benefits are RMB 0.00, and the compensations for the lifting of labor relations are RMB 0.00 . 23. Tax Payable Unit：RMB Items VAT Consumption tax
Year-end balance -33,277,142.04 --47
Year-beginning balance 996,409.59 ---
Business Tax 477,510.83 513,473.67 City Construction tax 10,066.86 110,020.56 Enterprise Income tax 5,081,759.29 1,817,811.73 Individual Income tax 626,521.24 313,222.27 House property Tax 31,915.71 69,926.27 Surcharge for education 34,797.77 61,160.32 Other 13,143.31 129658.98 Total -27,001,427.03 4,011,683.39 Taxes payable description: The subsidiary and branch of the company have no taxable income transfers of each other. 24. Interest Payable Unit：RMB Items Long-term loans interest of installment and interest charge Total
Year-end balance
Year-beginning balance
2,298,867.02 2,298,867.02
154,092.20 154,092.20
25.Other Payable （1）Other payables by item class Unit：RMB Age Year-end balance Year-beginning balance Within 1 year 9,266,067.11 4,312,385.27 1-2 years 5,698,639.11 7,714,871.00 2-3 years 1,140,383.74 6,898,173.26 3-4 years 3,785,387.46 3,088,611.17 4-5 years 9,668,441.97 8,998,702.32 Over 5 years 20,072,622.51 16,746,352.12 Total 49,631,541.90 47,759,095.14 （2）In the balance of funds received in advance, there were no funds of shareholders holding 5% (including 5%) or more of the voting right of the Company, described in Notes VII,6. （3）There are no large-sum other payables with the age ove 1 year in ending other payables. （4）Large-sum other payables in ending other payables are mainly rental deposit. 26 Non-current liability due within one year （1）Classifications unit：RMB Items Year-end balance Year-beginning balance Long-term loan due within one -21,000,000.00 year Total --2. Long-term loan due within one year Unit：RMB Items Year-end balance Mortgage loan --Total --27. Long-Term borrowings （1）Long-term borrowing Unit:RMB Items
Currency
21,000,000.00
Year-beginning balance 21,000,000.00 21,000,000.00
Year-end balance Year-beginning balance Amount of Transferred to Amount of Transferred to original currency RMB original currency RMB Guarantee loan RMB 96,719,008.30 96,719,008.30 96,719,008.30 96,719,008.30 Total 96,719,008.30 96,719,008.30 96,719,008.30 96,719,008.30 As regards long-term loans classifications: Long-term loans are classified by loans. （2）The top five of long-term loans
48
Unit：RMB Year-end balance Loans Loans ending Interest Currency Amount of Amount of starting date date rate (%) original currency RMB
Loan unit Shenzhen Development Bank Shenzhen Development Bank Shenzhen Development Bank Shenzhen Development Bank Shenzhen Development Bank Shenzhen Development Bank Shenzhen Development Bank Total
Year-beginning balance Amount of Amount of Foreign currency RMB
2010.12.29
2015.06.24
RMB
4.65%
21,372,872.00
21,372,872.00 21,372,872.00
21,372,872.00
2010-6-24
2015.06.24
RMB
4.65%
1,553,666.34
1,553,666.34
1,553,666.34
1,553,666.34
2010-10-9
2015.06.24
RMB
4.65%
5,248,255.00
5,248,255.00
5,248,255.00
5,248,255.00
2010-11-25
2015.06.24
RMB
4.65%
21,225,294.00
21,225,294.00 21,225,294.00
21,225,294.00
RMB
4.65%
21,047,897.96
21,047,897.96 21,047,897.96
21,047,897.96
2015-06.-24 RMB
4.65%
18,088,119.00
18,088,119.00 18,088,119.00
18,088,119.00
4.65%
8,182,904.00
8,182,904.00
8,182,904.00
--
96,719,008.30
96,719,008.30 96,719,008.30
2010-07-14 2015-6-24
2010-11-09
2010-08-30 2015-06-24 --
RMB
8,182,904.00
96,719,008.30
There is no long term loan formed by overdue loan extension in the end of period.All final long-term loans are the loans issued to our company from Shenzhen Development Bank Co , Ltd which was entrusted by entrust lender Shenzhen Shenchao Technology Investment Corporation. 28. Other Non-current liabilities Unit ：RMB Items
Book balance year-end
Book balance Year-beginning
Deferred profits
52,806,595.67
54,556,985.69
Total
52,806,595.67
54,556,985.69
As regards other non-current liabilities （1）According to the "Notice on National Development and Reform Commission to the General Office of the textile project management of the special funds" (Faigaiban [2006]2841), on December 22, 2006, the Company received "Textile special" funds RMB 2,000,000.00 from Shenzhen Finance Bureau. The amortization in accordance with the corresponding equipment, the ending balance of uncompleted amortization is RMB 1,714,285.72 . (2) According to the document of Shenzhen Municipal Development and Reform Commission 【2009】 No. 416 that "The Notice On issued the Governmental Investment Plan in 2009 on Zhong Ke New Industrial Internet Security Audit System and Other High-tech Industrialization Demonstration Project and the Public Testing and Consultation Service of Information Security Industry and other National High-tech Industrial Base Platform Projects”, on May 26, 2009, the company received the Shenzhen Municipal Development and Reform Commission high-tech industrialization demonstration project supporting Capital RMB 2 million yuan allocated by Shenzhen City Bureau of Finance for the construction of “The Project of the Construction Line of Polaripiece for TFT-LCD”. Our company will use 10 years as asset depreciation period for amortization in current period.The non-operating income in current period is RMB 100,000.00 and the balance amount of unfinished final amortization is RMB 1,700,000.00. (3) According to the document of the Office of the State Development and Reform Commission on "The Office of the State Development and Reform Commission on the Reply of New Flat-Panel Display Industrialization Special Project” (Development and Reform Office High-Tech【2008】No. 2104), the company obtained the state subsidies RMB 10 million yuan from the State Development and Reform Commission New Flat-Panel Display Industrialization Special Project for the construction of “The Project of Polaripiece Industrialization for TFT-LCD”. On June 29, 2009, the company received the special subsidies of State Development and Reform 49
Commission RMB 5 million yuan allocated by Shenzhen City Bureau of Finance. On December 25, 2009, the company received the special subsidies of State Development and Reform Commission RMB 3.5 million allocated by Shenzhen City Bureau of Finance. On April 2010, the company received the special subsidies of State Development and Reform Commission RMB 1.5 million yuan allocated by Shenzhen City Bureau of Finance. Our company will use 10 years as asset depreciation period for amortization in current period.The non-operating income in current period is RMB 500,000.00 and the balance amount of unfinished final amortization is RMB 8,500,000.00. (4) According to the document of Shenzhen Science and Information【2009】No. 202 and Shenzhen Municipal Science and Technology Plan Project Contract, The company obtained the special subsidies RMB 0.8 million yuan from Shenzhen Bureau of Science Technology & Information for the project of “The Research and Development of A New Production Process of Dye Type Polaripiece”. （5）Company received RMB 800,000.00 of technology development fund key subsidies issued by Futian science and technology bureau in current period, project to be inspected. (6) On December 23, 2009, the Company received a loan discount RMB 992,000.00 yuan allocated by Shenzhen Bureau of Finance for phase-2 alteration project.Our company will use 10 years as asset depreciation period for amortization in current period.The non-operating income in current period is RMB 49,600.02 and the balance amount of unfinished final amortization is RMB 1,693,199.95. （7）The Company received R&D subsidy of RMB 39.5499 million from the government according to Shen Cai Jian (2010) No. 101 Document - Circular of Plan for Use of Special Funds for the 14th Group of Significant High-tech Projects in 2010. The Company plans to invest these funds in R&D in five years from 2011. Non-operating income recognized in current period was RMB 3,954,990. At the end of period, the balance to be amortized was RMB 35,594,910.00. （8）According to Shen State-owned Assets Bureau (2010) No. 270 Document, the Company obtained fund of RMB 1,800,000.00 for supporting an excellent project of independent innovation from Shenzhen State-owned Assets Bureau for phase-I project of polarizer sheet for TFT-LCD. 29.Stock capital Unit：RMB
Balance Year-beginning
Increase/decrease this time (+ , - ) Transferred Issuing of Bonus from new share shares reserves -------
Total of 336,521,849.00 capital shares 30. Capital reservesUnit：RMB
Other
Subtotal
---
---
Balance year-end 336,521,849.00
Items
Year-beginning balance
Increasein the current period
Decrease in the current period
Year-end balance
Share premium
782,656,413.49
---
---
782,656,413.49
Other
57,140,701.64
5,029,896.69
9,682,285.14
52,488,313.19
Total
839,797,115.13
5,029,896.69
9,682,285.14
835,144,726.68
As regards capital reserve: As regards the decreasing of other capital reserve, is the company to sell the holding of circulation stock of Shenzhen Victor Onward Textile Industrial Co., Ltd. in secondary market at current period, and is calculated as the capital reserve in accordance with the change of fair value to fully transfer. 31. Surplus reserve
50
Unit：RMB Items Statutory reserve
surplus
Total
Year-beginning balance
Increasein the current period
Decrease in the current period
Year-end balance
34,086,443.10
---
---
34,086,443.10
34,086,443.10
---
---
34,086,443.10
32. Retained profits Unit：RMB Amount
Extraction or distribution of the proportion
135,563,817.74
--
---
--
135,563,817.74
--
32,363,976.69
--
Less：Drawing statutory surplus reserve
---
---
Drawing discretionary surplus reserve
---
---
Drawing commonly risk provisions
---
---
Payable dividends of common shares
---
---
Transfer to common stock equity dividends
---
---
167,927,794.43
---
Intes Before adjustrments: Retained profits at the period end Adjustments:Total retained profits at the period beginning （+，-） After adjustments:Retained profits at the period beginning Add：Net profit belonging to the owner of the parent company
Retained profits at the period end
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. (5) Other adjustment of the total affected beginning undistributed profits are RMB 0.00 . 33.Business income, Business cost （1）Business income Unit：RMB Items
Amount of current period
Income from Business income
317,350,237.28
Amount of previous period 320,584,739.41
Other Business income
1,832,480.47
Total
319,182,717.75
Cost from Business cost
259,354,271.44
1,784,397.33 322,369,136.74 271,389,704.25 51
Other Business cost
1,818,301.73
Total
261,172,573.17
1,743,091.46 273,132,795.71 （2）Main business（Industry） Unit:：RMB Amount of current period
Amount of previous period
Name Business income
Business cost
Business income
Business cost
Domestic and foreign trade
133,615,874.79
132,959,760.68
156,603,026.79
155,998,551.52
Manufacturing
148,809,678.11
116,692,159.71
129,343,423.14
107,486,669.30
Property management, leasing
34,924,684.38
9,702,351.05
34,638,289.48
7,904,483.43
Total
317,350,237.28
259,354,271.44
320,584,739.41
271,389,704.25
（3）Main business（Production） Unit：RMB Amount of current period
Amount of previous period
Name Business income
Business cost
Business income
Business cost
Preperty and rental income
34,924,684.38
9,702,351.05
34,638,289.48
7,904,483.43
Textile income
36,470,974.48
28,463,448.04
23,277,796.52
20,397,678.91
Polaroid income
112,338,703.63
88,228,711.67
106,065,626.62
87,088,990.39
Trade income
133,615,874.79
132,959,760.68
156,603,026.79
155,998,551.52
Total
317,350,237.28
259,354,271.44
320,584,739.41
271,389,704.25
（4）Main Business（Area） Unit：RMB Amount of current period
Amount of previous period
Name Business income
Business cost
Business income
Business cost
Domestic
134,589,767.03
88,019,534.85
104,234,369.96
66,469,175.30
Oversea
182,760,470.25
171,334,736.59
216,350,369.45
204,920,528.95
Total
317,350,237.28
259,354,271.44
320,584,739.41
271,389,704.25
（5）Total income and the ratio of operating income from top five clients Unit：RMB Name
Business Income
Proportion(%)
Shenzhen Lianya Textile Co., Ltd
133,022,265.35
41.92%
CHORICO.,LTD
15,164,890.10
4.78
Jinsitai Investment Development Co., Ltd.
11,514,689.06
3.63%
Jiangmen Yidu Semiconductor Co., Ltd.
8,163,119.79
2.57%
52
Ruili Baolai Optoelectronics Technolog Co.,Ltd.
8,152,200.71
2.57%
Total
176,017,165.01
55.47%
34.Business taxes and surcharges Unit：RMB Items Business tax City construction tax Education surcharge Embankment fee Real estate Tex Other Total
Amount of current period Amount of previous period 1,948,592.33 1,843,811.84 365,136.39 66,258.90 155,820.13 198,916.16 1,748.13 1,481.94 825,326.71 783,872.67 256,457.36 259,032.65 3,553,081.05 3,153,374.16
Project payment standard Notes III.1 Notes III.1 Notes III.1 Notes III.1 Notes III.1 Notes III.1
35.Sales expenses Items Wage Sample and Depreciation expenses Exhibition fee Sales service charges Entertainment expenses Transportation changes Other Total 36.Administrative expenses
Amount of current period 704,667.44 31,992.00 179,443.00 974,548.70 318,326.61 1,049,227.40 186,569.29 3,444,774.44
Amount of previous period 595,492.33 21,872.75 177,040.00 186,045.17 185,995.40 588,990.96 60,164.26 1,815,600.87
Items Wage Taxes Insurance expenses Depreciation of fixed assets Amortization of intangible assets Amortization of long-term deferred expenses R& D costs Postal fees Office expenses Repairs fees Water and electricity Auto expenses Travel Expenses Audit expenses and assessment expenses Entertatnment expenses Low consumables amortization Lawsuit expenses Listing fees Other Management fee
Amount of current period 16,296,271.25 483,126.01 257,120.07 1,713,332.30 1,036,864.00
Amount of previous period 12,174,051.37 512,420.55 259,069.75 2,045,271.58 589,167.00
34,490.82
34,490.82
5,941,692.56 118,690.05 818,480.65 299,042.50 298,723.82 331,881.00 446,117.79
5,686,023.03 172,764.54 1,187,615.77 25,186.00 269,812.00 476,268.00 489,066.45
402,123.00
581,850.00
696,768.10 99,929.00 275,602.00 262,136.00 841,974.15 30,654,365.07
843,278.50 200,736.50 4,767.00 121,300.00 730,488.70 26,403,627.56
37. Financial expenses Items
Amount of current period 53
Amount of previous period
Items Interest expenses Interest income Exchange loss Exchange gain Discount interest Fees and other Total 38. .Loss of assets impairment Unit：RMB Items I .Losses for bad debts II. Losses for falling price of inventory III. Losses for financial assets sales IV. Losses for Long term equity investment V. Losses for devaluationof fexed assets VI. Losses for devaluation of gooldwill 7. Other Total
Amount of current period 542,726.95 -6,046,917.50 997,475.69 --162,953.72 -4,343,761.14
Amount of current period 1,344,872.24 1,679,759.57
Amount of previous period 4,048,416.10 -2,079,874.51 75,813.06 -59,951.38 191,185.92 2,175,589.19
Amount of previous period 1,409,333.66
-----
118,517.92 -----
---
---
---
---
--3,024,631.81
--1,527,851.58
39.Investment Income （1）Investment income Unit：RMB Amount of current Amount of previous period period Incomes from disposal of Long-term cost investment 1,922,576.19 1,895,403.30 Incomes from disposal of long-term equity investment 97,453.88 979,077.02 Investment income from financial assets sales 1,482,128.46 9,009,386.30 Deal income from futures investment --Stock right disposal benefit --Total 3,502,158.53 11,883,866.62 （2）Long term equity investment calculated via equity method： Unit：RMB Name Amount of current Amount of previous Cbange cause period period Shenzhen Haohao Property --Leasing Co. Ltd. 235,155.43 197,933.49 Shenzhen Xieli Automobile Co., --Ltd. 100,745.09 -197,985.46 Shenzhen Changlianfa Printing --and dyeing Company 26,225.18 14,822.80 Jordan Garment Factory -264,671.82 964,306.19 Notes 1 Total 97,453.88 979,077.02 Notes 1. Jordan Garment Factory with the economic recovery of peripheral area, its profit grows better. Notes 2. In the report period, the company has no big restriction on the investment earning repatriation. Items
40.Non-operating income （1）Classification of items about unrelated business income Unit: RMB Items Amount of Amount of current period previous period 54
The amount of non-operating
Cause
gains & lossed 52,994.00
Total income from 52,994.00 --liquidation of non-current assets 52,994.00 --52,994.00 Including：Income from liquidation of fixed asset Income of the sale of ------intangible assets Government Subsidy 4,690,090.02 4,982,567.16 4,690,090.02 10,876,329.05 --10,876,329.05 注1 Other Total 15,619,413.07 4,982,567.16 15,619,413.07 Notes (1): Mainly due to receipt of 1,085,733 A shares of Guangdong Sunrise Group Co., Ltd. (the market value of these shares was RMB 9,847,598.31 according to the closing price of A shares of * ST Sunrise on May 17, 2010 (the last trading day before suspension of listing), i.e., RMB 9.07 per share) and cash of RMB 702,694.14 (RMB 10,550,292.45 in total as recognized non-operating income) according to (2010) Shen Zhong Fa Min Qi Zhong Zhen Zi No. 5-5 Civil Award and the Plan for Reorganization of Guangdong Sunrise Group Co., Ltd and also the receipt of compensation of RMB 315,936.60 for subway construction. （2）Governmental subsidy list Items
Amount of current Amount of previous Notes period period Guangdong Trade Meeting support fund of Futian --Chamber of Commerce 85,500 --The subsidies from Shenzhen Development and Reform ----Commission Government R & D 3,954,990.00 The subsidy from Futian district government (Canton fair) --116,000.00 --Topic subsidies of “Engineering technology development --4,216,967.15 --on polarizer for TFT-LCD ” he counterpart funds for technology industrialization 100,000.00 100,000.00 --demonstration project The national subsidy for the industrialization of new type 500,000.00 500,000.00 --flat-panel display device special project The loan interest allocated by Shenzhen Finance Bureau 49,600.02 49,600.01 --Total 4,690,090.02 4,982,567.16
41. Non-operating expenses Unit：RMB Items
Amount of current period
Total Disposal of loss of non-current assets Including：Disposal of net loss of fixed assets Disposal of loss of Intangibles assets Donation expenses Fine expenses Other expenses Total
---
Amount of previous period
Recognized into current reporting period extraordinary profits or lossesGovernment ---
-----
-----
---
---
---
----1,890.28 1,890.28
----1,107.68 1,107.68
----1,890.28 1,890.28
42. .Income tax expenses Unit：RMB Items
Amount of current period 55
Amount of previous period
Income tax at current period according to taxation and related regulation 8,975,517.45 5,599,270.19 Adjustment Deferred income tax -542,759.47 567,850.88 Total 8,432,757.98 6,167,121.07 43. Calculation process of basic earnings per share and dilute earning per share （1）Calculating formula of income per share: Basic earnings per share= P/（S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk） dilute earning per share= P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ common stock weighted average of subscription warrant, stock option, transferable bond) （2）Calculating process of income per share Basic earnings per share belonging to common stock shareholder on January-June 2011=32,363,976.69 /336,521,849=0.10 RMB/shares Basic earnings per share belonging to common stock shareholder deducted non-recurring gains and losses On January-June 2011= 18,953,108.64 /336,521,849=0.06 RMB/shares. Dilute earning per share belonging to common stock shareholder On January-June 2011= 32,363,976.69 /336,521,849=0.10 RMB/share Dilute earning per share belonging to common stock shareholder deducted non-recurring gains and losses on January –June 2011= 18,953,108.64 /336,521,849=0.06 RMB/shares. 44. Other comprehensive income Unit：RMB Items
Amount of current period
Amount of previous period
-6,058,769.00
-29,671,389.46
-1,406,380.55
-6,534,833.42
---4,652,388.45
---23,136,556.04
---
---
---
---
---
---
-----
-----
---
---
---
---
---
---
-----
-----
---
---
-----
-----
---
---
---
---
---4,652,388.45
---23,136,556.04
1.Loss amount produced by sellable financial assets Less：Deduct: income tax infection produced by sellable financial assets Net amount transferred into profit and loss at current period that reckoned into other comprehensive income at former period Subtotal 2. The enjoyed share in other comprehensive income of other invested unit according to equity method Less：Deduct: income tax infection produced from the enjoyed share in other comprehensive income of other invested unit according to equity method Net amount transferred into profit and loss at current period that reckoned into other comprehensive income at former period Subtotal 3.. Benefit (or loss) amount produced from cash flow Less：Deduct: income tax infection produced from cash flow hedging instruments Net amount transferred into profit and loss at current period that reckoned into other comprehensive income at former period Transferred to the adjustment of initial confirmation amount of items at hedged period Subtotal 4. Translating difference in foreign currency financial reports Less：Deduct: net amount that transferred into profit and loss at current period in disposed overseas business Subtotal 5..Other Less：taxation infection arising from reckoning other comprehensive income. Net amount transferred into profit and loss at current period that reckoned into other comprehensive income at former period Subtotal Total Other comprehensive income shows: 56
（1）The asset for sale is circulation stock of Shenzhen Victor Onward Textile Industrial Co., Ltd. , and book value is adjusted according to market value alteration. 45.Cash flow statement Notes （1）Cash received related to other operating activities Unit：RMB Items Amount of current period Xuanli Company's debt funds implementation 3,000,000.00 Restucturing plan for Guangdong Sunrise Company 702,694.14 Summary of other scattered incomes 3,487,042.96 Total 7,189,737.10 （2） Cash paid related to other operating activities Unit：RMB Items Amount of current period Research & development expenses 5,941,692.56 Postal fees 118,690.05 Office expenses 818,480.65 Auto Expenses 331,881.00 Travel fee 446,117.79 Audit and assessment fee 402,123.00 Entertainment expenses 1,015,094.71 Transportation expnses 1,049,227.40 Lawsuit fee 275,602.00 Other 7,442,295.93 Total 17,841,205.09
Amount of previous period ----900,678.20 900,678.20
Amount of previous period 5,686,023.03 172,764.54 1,187,615.77 476,268.00 489,066.45 581,850.00 1,029,273.90 588,990.96 4,767.00 6,871,572.43 17,088,192.08
（3）Cash received related to financing activities Unit：RMB Items Interest income Transferred out of fixed deposit Total
Year 2010 4,069,393.25 204,569,442.50 208,638,835.75
Year 2009 -------
（4）Cash paid related to other investment activities Unit：RMB Items Amount of current period Government subsidy 2,850,000.00 Total 2,850,000.00 46. Supplement Information for cash flow statement （1）Supplement Information for cash flow statement Unit：RMB Supplement Information
Amount of previous period 2,300,000.00 2,300,000.00
Amount of current period
Amount of previous period
Net profit
32,363,976..69
24,858,502.70
Add: Impairment loss provision of assets
3,024,631.81
1,527,851.58
Depreciation of fixed assets, oil and gas assets and consumable biological assets
11,255,475.80
11,075,406.34
I. Adjusting net profit to cash flow from operating activities
57
Supplement Information
Amount of current period 1,036,863.64
Amount of previous period 589,167.64
94,215.62
164,971.28
-52,994.00
---
---
---
---
---
-3,526,646.30
2,624,213.61
-3,502,158.53
-11,883,866.62
-542,759.47
-567,850.88
-1,406,380.55
-6,534,833.42
-6,949,406.08
-16,366,319.20
3,616,534.80
15,226,615.80
-22,867,604.67
-21,544,508.02
---
3,245,599.04
12,543,748.76
2,414,949.85
---
-
---
-
---
-
--
-
---
-
291,006,454.63
108,234,510.63
417,686,594.80
101,340,314.95
---
-
---
-
Amortization of intangible assets Amortization of Long-term deferred expenses Loss on disposal of fixed assets, intangible assets and other long-term deferred assets Loss from Fixed assets Discard Loss of fair value fluctuation on assets Financial cost Loss on investment Decrease of deferred income tax assets Increased of deferred income tax liabilities Decrease of inventories Decease of operating receivables Increased of operating Payable Other Net cash flows arising from operating activities II. Significant investment and financing activities that without cash flows: Liability transfer to capital Convertible corporate bond due within 1 year Finance leased fixed assets III. Net increase of cash and cash equivalents Ending balance of cash Less: Beginning balance of cash Add: Ending balance of cash Less: Beginning balance of cash equivalents -126,680,140.17 6,894,195.68 Net increase of cash and cash equivalents （2）No related information on acquiring or disposing subsidiary company and other business unit at this period. （3）Cash and cash equivalents Unit：RMB Items Year-end balance Year-beginning balance I. Cash Of which: Cash in stock 331,135.19 225,904.54 Bank savings could be used at any time 245,766,908.71 353,420,619.40 58
Other monetary capital could be used at any time
44,908,410.73 -----------
64,040,070.86 -----------
Usable money in Central Bank Money saved in associated financial bodies Money from associated financial bodies II. Cash equivalents Of which: bond investment which will due in three months III. Balance of cash and cash equivalents at the period end 291,006,454.63 417,686,594.80 Notes：Cash and cash equivalents without the use of parent or ubsidiary within the group of restricted cash and cash equivalents. VI. Accounting treatment of asset securitization In the reporting period, the company has no asset securitization service. VII.Related parties and related-party transactions . 1. Parent company information of the enterprise
59
Unit：RMB
Parent company name Shenzhen Investment Holding Co., Ltd.
Related parties
Actual controlling person
Enterprise type
State-owned enterprise
Registration place
Legal representative
Business character
Registered capital
Fan Chunming
Investment
RMB 4600 million
Shenzhen
Share ratio of parent company against the company(%) 54.26%
Vote right ratio of parent company against the company(%) 54.26%
Ultimate controlling party State-owned Assets Supervision and Administration Commission of Shenzhen
Organization code 76756642-1
Parent company information of the company The company is authorized and approved to be state-owned independent company by Shenzhen Government, and it Executes financial contributor function on state-owned enterprise within authorization scope.
60
2. Subsidiary companies information of the enterprise Unit ：RMB Full name of subsidiary company
Subsidiar y company type
Enterpris e type
Shenzhen Jinlan Decorative Articles Industrial Co., Ltd.
wholly owned subsidiary
Limited Liability Company
Shenzhen Lisi Industrial Co., Ltd.
wholly owned subsidiary
Shenzhen Huaqiang Hotel Shenfang Property Management Co., Ltd. Shenzhen Beauty Century Garment Co., Ltd. Zhenzhen Zhongxing Fibre folds cotton Clothing ornament Co., Ltd. Shenzhen Shenfang Import & export Co., Ltd. Shenzhen Tianlong Industry and Trade Co., Ltd. Shenzhen Shengbo Ophotoelectri c Technology Co., Ltd Shengtou （HK）Co., Ltd.
Legal representativ e
Business character
Registered capital
Share holding ratios(% )
Vote right ratio (%)
Organizatio n code
Shenzhen
Zhang Hong
Fabrics, bedding,clothing,textile s raw materials processing manufacturing, wholesale and retail.
4,000,000.00
90.00
100.0 0
192172332
Limited Liability Company
Shenzhen
Zhu Jun
Domestic commerce, materials supply and sales
2,360,000.00
90.68
100.0 0
192180180
wholly owned subsidiary
Limited Liability Company
Shenzhen
Zhu Jun
Accommodation, restaurants, business center;
10,005,300.00
95.00
100.0 0
19223330X
wholly owned subsidiary
Limited Liability Company
Shenzhen
Gao Guoshi
Property Management
1,604,000.00
93.75
100.0 0
192225051
wholly owned subsidiary
Limited Liability Company
Shenzhen
ZHang Hong
Production of fully electronic jacquard knitting whole shape
25,000,000.00
100.00
100.0 0
741231236
Subsidiar y holding company
Limited Liability Company
Shenzhen
Feng Junbin
Spewing acupuncture cloth, revision, and fusible interlining fabric products
1,680,000.00
75.00
---
618810371
wholly owned subsidiary
Limited Liability Company
Shenzhen
ZHang Hong
Operating import and export business
5,000,000.00
100.00
100.0 0
728563236
Subsidiar y holding company
Limited Liability Company
Shenzhen
Gao Gluoshi
Operating import and export business
1,900,000.00
50.00
--
192174127
wholly owned subsidiary
Limited Liability Company
Shenzhen
Zhu Jun
Production and sales of polarizer
200,000,000.0 0
100.00
100.0 0
618877007
wholly owned subsidiary
Limited Liability Company
HK
Zhu Meizhu, Liu Honglei
Sales of polarizer
HKD10,000.0 0
100.00
100.0 0
---
Registratio n area
61
3. Joint-venture and affiliated enterprises information of the company Unit：RMB
Invested unit name
Enterprise Registration Legal type Place representative
Business character
Registered capital
Share holding ratio(%)
Liability vote right Assets amount at Net assets amount at amount at end ratio(%) end of period end of period of period
Business total income at this period
Serivice
475.4 万
50.00%
50.00%
6,154,866.12
437,520.80
5,717,345.32
855,197.70
471,094.52
Joint 61881295-9 enterprise
Net benefit at this Affiliation Organization period relation code
I.Joint enterprise
Shenzhen Haohao Property Leasing Limited Co. Ltd. Company
Shenzhen
Feng Junbin
Shenzhen Xieli Automobile Co., Limited Ltd Company
Shenzhen
Ye Yongling Manufacturing
312 万
50.00%
50.00%
6,682,263.93
2,168,780.46
4,513,483.47
880,028.00
161,306.18
Joint 618801838 enterprise
Shenzhen
Zhu Meizhu
647 万
40.25%
40.25%
5,303,750.41
1,029,013.63
4,274,736.78
254,988.00
65,155.72
Affiliated enterpris
618865073
Limited Company
Jordan
Chen Wenxian
Manufacturing USD100 万
35.00%
35.00% USD1,815,831.54 USD795,964.70 USD1,019,866.84. USD1,376,607.47 USD-231,688.66
Affiliated enterpris
---
Hengshun (Saipan) Industry Co., Limited Ltd. Company
Saipan
---
Manufacturing USD696 万
35.00%
35.00%
Affiliated enterpris
---
II. Affiliated enterpris
Shenzhen Changlianfa Printing and Limited dyeing Co., Ltd. Company
Jordan Garment Factory
62
---
---
-
---
---
4. Other Related parties information of the enterprise Other Related parties name
Relation of other Related parties with the company
Shenzhen Jintian Industrial Co., Ltd.
Sharing company
Shenzhen Jiafeng Textile Co., Ltd.
Sharing company
Shenzhen Guanhua Printing & dyeing Co., Ltd.
Sharing company
Union Development Group Co., Ltd.
Sharing company
Shenzhen Xiangjiang Trade Co., Ltd.
Sharing company
Shenzhen Xinfang Knitting Co., Ltd.
Sharing company
Hongkong Yehui International Co., Ltd.
Sharing company
Shenzhen Dailishi Underwear Co., Ltd.
Sharing company
Anhui Huapeng Textile Co., Ltd.
Sharing company
5. Related Transactions （1）The receiving labor service /purchasing goods. Non （2）The providing service/sells goods Occurred current term Ooccurred in previous term Subjects of Pricing and Percentage in Percentage in Related parties the related decision similar trades similar trades Amount Amount transactions making process （%） （%） Shenzhen Investment Holding Sells of 124,725.00 0.04% 22,000.00 0.01% Co., Ltd. Textile Market pricing （3）In the report period，The company has no associated trusteeship. （4）In the report period，The company has no associated contracting. （5）In the report period，The company has no associated lease. （6）The the report period, The company has no associated guarantee （7）In the report period，The company has no fund borrowing of Related parties. （8）Related transference and liabilities recombination of related parties 6. Account receivable and payable of related parties Unit ：RMB Name Related parties Year-end balance Year-beginning balance Account reveivable Shenzhen Investment Holding 47,725.00 77,325.00 Co., Ltd. Other account Shenzhen Tianlong Industry reveivable and Trade Co., Ltd. 686,391.83 686,391.83 Other account Shenzhen Dailishi Underwear reveivable Co., Ltd. -152,899.94 282,100.06 Other account reveivable Jordan Garment Factory 183,906.56 183,906.56 Other account Shenzhen Xieli Automobile reveivable Co., Ltd 169,262.00 169,262.00 Other account Anhui Huapeng Textile reveivable Company 2,200,000.00 1,800,000.00 Shenzhen Xinfang Knitting Other account payable Co., Ltd. 216,789.85 216,789.85 Shenzhen Xiangjiang Trade 240,000.00 350,000.00 Other account payable Co., Ltd. Shenzhen Changlianfa Printing 832,376.07 856,436.07 Other account payable and dyeing Co., Ltd. Shenzhen Hengsheng 1,367,940.67 1,367,940.67 Other account payable Investment Co., Ltd. Shenzhen Haohao Property 3,153,868.07 3,303,868.07 Other account payable Leasing Co. Ltd.. 63
VIII. Stock payment 1. General information of stock payment Unit：RMB Various equity instrument amount conferred at current period
---
Various equity instrument amount works at current period
---
Various equity instrument amount disable at current period
---
Price scope and left term of contract about stock option works issued at end of the period
---
Price scope and left term of contract about other equity instrument works issued at end of the period
---
2. Stock payment cleared by equity Unit :RMB Confirmation method of fair value of equity instrument on conforming date
---
The best estimated confirming method of equity instrument
---
The reason for big difference between estimation at current period and estimation at last period
---
Paid accumulated amount of stock settled on equity in capital reserves
---
Amount of stock payment settled on equity
---
3. Stock payment cleared by cash Unit ：RMB Indebted fair value confirmation method confirmed with stock share or other equity instrument as basis and undertook by company. Accumulated liability amount produced by stock payment under cash settlement in liability Total costs confirmed by stock payment under cash settlement 4. Service paid via stock
----Unit ：RMB
Employee services amount acquired via stock payment
---
Other services amount acquired via stock payment
---
5. In the report period，the company has no modification and termination of payment on stock. IX. Subsequent events 1.As of June 30, 2011，The company has no liabilities formed from pending lawsuit and mediation. 2.As of June 30, 2011，The company has no liabilities formed from other units offering。 X. Commitment events 1. As of June 30, 2011，the company has no important commitment events. 2. As of June 30, 2011，the company has no commitment information guaranteed at the former period. XI. Events Occurring after the balance sheet date 1. Closed from this report date, besides profit distribution, the company has No any important events occurring after the balance sheet date. 2. Profit distribution explanation after the balance sheet . After decision by the board of directors of the Company, the company is neither to distribute the net profit nor to capitalize and capital surplus. 64
XII. Other Important events 1. In the report period，the company has no non-monetary asset exchange service. 2. In the report period，the company has no liabilities recombination.。 3. In the report period，the company has no enterprise consolidation. 4. In the report period，the company has not large leasing. 5. As of June 30, 2011，the company has no financial instruments issued outside and can be transferred to stock at end period. 6. As of June 30, 2011，Items related to measurement of fair value。 Unit：RMB Item Amount at the Gains Accumulative Provision Amount at the beginning of and change of fair for end of period period losses value accounted impairment from for as rights and made in change interests current of fair period value in current period Financial assets 1. Financial assets calculated according to fair value whose ----------change is accounted for as profits or losses for current period 2.Derived financial asset ----------3.Trading financial assets 75,481,853.50 ------79,037,204.81 Subtotal of financial assets 75,481,853.50 ------79,037,204.81 Property investment ----------Production physical assets ----------Other ----------Total ----------Finalcial Liabilities ----------7. Foreign financial assets and foreign financial liability Unit：RMB Item
Financial assets 1. Financial assets calculated according to fair value whose change is accounted for as profits or losses for current period 2. Derived financial asset 3.Credit and account receivable 4. Trading financial assets 5.Held to term investment Subtotal of financial assets
Amount at the beginning of period
Gains and losses from change of fair value in current period
Accumulative change of fair value accounted for as rights and interests
Provision for impairment made in current period
Amount at the end of period
---
---
---
---
---
---
---
---
---
11,877,851.60
---
---
---
18,974,251.31
---
---
---
---
---
---
---
---
---
---
11,877,851.60
---
---
---
18,974,251.31
65
Item
Amount at the beginning of period
Gains and losses from change of fair value in current period
Accumulative change of fair value accounted for as rights and interests
Provision for impairment made in current period
Amount at the end of period
Finalcial Liabilities
------227,696.59 XIII.Notes s of main items in financial reports of parent company 1.Other receivable （1）Other receivable Unit：RMB Year-end balance Book balance Classification Amount Proport ion(%) Receivables with major individual amount and bad debt provision provided individually 12,075,436.43 35.43 Receivables provided bad debt provision in groups Account age group 21,695,477.13 63.66 Subtotal of group 21,695,477.13 63.66 Account receivable with minor individual amount but bad debtprovision is provided 311,486.35 0.91 Total 34,082,399.91 100.00 Year-beginning balance Book balance Amount Proport ion(%)
Classification
6,557,177.66
Provision for bad debts Amount Proporti on(%) 10,547,991.83
87.35
1,845,750.73 1,845,750.73
8.51 8.51
311,486.35 12,705,228.91
100.00
Provision for bad debts Amount Proporti on(%)
Receivables with major individual amount and bad debt provision provided individually 15,075,436.43 39.60 10,547,991.83 69.97 Receivables provided bad debt provision in groups Account age group 22,682,621.38 59.58 1,991,952.94 8.78 Subtotal of group 22,682,621.38 59.58 1,991,952.94 8.78 Account receivable with minor individual amount but bad debtprovision is provided 311,486.35 0.82 311,486.35 100.00 Total 38,069,544.16 100.00 12,851,431.12 Category explanation of accounts receivable: Receivables with significant individual amount and provision made for individual item refers to customer accounts receivable with single amount more than 0.5 million, its provision for impairment will be made based on specific identification method. For receivables without significant individual amount, after deducting those parts which had conducted individual impairment test for its obvious difference in collectability with concrete evidence, making group by aging with character of credit risks and making provision for impairment based on aging analysis method. The receivables made provision for impairment without significant individual amount refers to those receivables which has obvious difference in collectability with concrete evidence, its provision will be made based on specific identification method. Accounts receivable using the age analysis method for measurement of impairment allowances: Year-end balance Year-beginning balance Book balance Book balance Age Provision for Proportion Proportion bad debts Amount Amount （%） （%） Within 1 year 13,334,301.8 13,306,430.0 3 61.46 1,099,823.22 6 58.66 1-2 years 8,361,175.30 38.54 745,927.51 8,373,660.57 36.92 2-3 years ------60,000.00 0.26 Over 3 years ------942,530.75 4.16 66
Provision for bad debts 665,321.50 837,366.06 18,000.00 471,265.38
Total
21,695,477.1 22,682,621.3 1,991,952.9 3 100.00 1,845,750.73 8 100.00 4 （2） The company has no the conditions that account receivable is withdrew via recombination or other styles. （3）Separate amount is large at end of period or doubtful accounts reserves of account receivable with separate value decreasing test: Other Account Provision for Allotment Reason Book balance receivable bad debts rate Above RMB 0.5 Obvious evidence displaying million 12,075,436.43 10,547,991.83 69.97 depreciation Below RMB 0.5 Unable to recover million 311,486.35 311,486.35 100% Subtotal 12,386,922.78 10,859,478.18 Separate amount is not large, the account receivable with big combination risk after combined via risk character: Year-end balance Year-beginning balance Book balance Book balance Age Provision for Provision for Proportion Proportion bad debts bad debts Amount Amount （%） （%） Within 1 ------------year 1-2 years 8,361,175.30 100.00 745,927.51 8,373,660.57 89.31 837,366.06 2-3 years ------60,000.00 0.64 18,000.00 Over 3 years ------942,530.75 10.05 471,265.38 Total 8,361,175.30 100.00 745,927.51 9,376,191.32 100.00 1,326,631.44 Separate amount is not large, the account receivable with big combination risk after combined via risk character:t Separate amount is not large, but the combination risk after combined according to credit risk character is big, these account receivable refers to those with ending balance being below 0.5 million RMB and account age is over 1 year. （4）This period has no bad debt reserve, or withdrawn bad debt reserves ratio is bigger, which is taken back or transferred wholly at this period, or the withdrawal or transferring ratio is bigger. This period has no account receivable taken back by recombination or other styles. （5）Other account receivable actually cancelled after verification at this reporting period （6）As of December 31,2010 no loans of the shareholders holding 5% (inclusive of a 5%) or more voting right and other related units. (7) The front 5 units’ information of Other account receivable Unit name Relation with the Amount Fixed year Percentage of company account receivable Within 1 year Shenzhen Shenfang Imports & 13.13% subsidiary company 5,000,000.00 exports Co., Ltd. 1-2 years 7,168,680.72 18.83% Jiangxi Xuanli String Company Non-related parties 11,389,044.60 1-2 years 37.80% Shenzhen Beauty Century Garment Co., Ltd.
Anhui Huapeng Textile Company
Shenzhen Tianglong Industry and trade Co., Ltd.
Within 1 year subsidiary company Not absorbed into subsidiary company within combination scope Not absorbed into subsidiary company within combination scope
Total
5,113,176.00 75,600.00
2,200,000.00 186,391.83
1-2 years
500,000.00
2-3 years
31,632,893.15
（9）Account receivable from Related affiliated parties 67
1-2 years Within 1 year
13.18% 0.20%
4.73% 0.49%
1.31% 92.81%
Unit name Shenzhen Shenfang Imports & exports Co., Ltd. Shenzhen Beauty Century Garment Co., Ltd. Shenzhen Zhongxing Fibre Folds Cotton Clothing Ornament Co., Ltd. Shenzhen Xieli Automobile Co., Ltd. Jordan Garnent Factory
Anhui Huapeng Textile Company Shenzhen Tianglong Industry and trade Co., Ltd.
Relation with the company Internal Transactions within the scope of consolidation Internal Transactions within the scope of consolidation Internal Transactions within the scope of consolidation
Amount
Percentage of account receivable
Affiliated enterprise
169,262.00
0.50%
Affiliated enterprise Not absorbed into subsidiary company within combination scope Not absorbed into subsidiary company within combination scope
183,906.56
0.54%
12,168,680.72 35.71% 5,188,776.00 15.22% 618,769.07 1.82%
6.45% 2,200,000.00 686,391.83
2.01%
Total 21,215,786.18 62.25% （10）In the report period,Other account receivable that is not accord with expiration confirmation condition. （11）In the report period,the company does not treat other account receivable as underlying assets to make asset securitization.
68
2..Long –term stocks equity investment Unit：RMB
Name Shenzhen Jintian Industry Co., Ltd. Shenzhen Haohao Property Leasing Co. Ltd. Shenzhen Xieli Automobile Co., Ltd. Shenzhen Changlianfa Printing and dyeing Company Jordan Garnent Factory Hengshun（Saipan） Industry Co., Ltd. Shenzhen Haohao Property Leasing Co. Ltd. Shenzhen Jinlan Decorative Articles Industrial Co., Ltd. Shenzhen Lisi Industrial Co., Ltd. Shenzhen Beauty Centruty Garment Co., Ltd. Shenzhen Shenfang Import & Export Co., Ltd. Shenzhen Huaqiang Hotal Shenfang Property Management Co., Ltd. Zhenzhen Zhongxing Fibre folds cotton Clothing ornament Co., Ltd. Shenzhen Jiafeng Textile Co., Ltd. Shenzhen Guanhua Pruting and dyeing Co., Ltd. Union Development Group Co., Ltd. Shenzhen Xiangjiang
Ending Balance
Shareholding proportion in the investee
Voting right proportion in the investee
Explanation of diffidence between shareholding proportion and voting right proportion in investee
Devalue
Current devalue
14,831,681.50
3.68%
3.68%
---
14,831,681.50
---
-164,844.57
3,281,017.62
50.00%
50.00%
---
2,422,651.65
100,745.09
2,523,396.74
50.00%
50.00%
---
2,524,500.00
1,694,356.38
26,225.18
1,720,581.55
40.25%
40.25%
7,240,625.00
2,574,160.27
-264,671.82
2,309,488.46
35.00%
8,228,350.00
---
---
Cost method
40,500,000.00
468,500,000.00
Cost method
5,470,000.00
Cost method
Accounting method
Initial investment cost
Original balance
Cost method
14,831,681.50
14,831,681.50
Equity method
2,040,102.73
3,445,862.19
Equity method
1,529,483.67
Equity method
change
Cash bonus
---
400,000.00
266,654.99
---
---
---
---
---
---
35.00%
---
---
---
---
35.00%
35.00%
---
---
---
---
668,500,000.00
100.00%
100.00%
---
---
---
---
5,470,000.00
5,470,000.00
90.00%
100.00%
Notes 1
---
---
---
6,666,132.60
6,666,132.60
6,666,132.60
90.68%
100.00%
Notes 1
---
---
---
Cost method
30,867,400.00
30,867,400.00
30,867,400.00
100.00%
100.00%
---
2,167,431.21
---
---
Cost method
6,299,700.00
6,299,700.00
6,299,700.00
100.00%
100.00%
---
82,156.61
---
---
Cost method
14,623,003.00
14,623,003.00
14,623,003.00
95.00%
100.00%
Notes 1
---
---
---
Cost method
1,600,400.00
1,600,400.00
1,600,400.00
93.75%
100.00%
Notes 1
---
---
---
Cost method
1,260,000.00
1,260,000.00
1,260,000.00
75.00%
---
Notes 2
1,260,000.00
---
---
Cost method
16,800,000.00
16,800,000.00
16,800,000.00
10.80%
10.80%
---
16,800,000.00
---
---
Cost method
5,491,288.71
5,491,288.70
5,491,288.70
45.00%
45.00%
---
5,058,307.01
---
---
Cost method
2,600,000.00
2,600,000.00
2,600,000.00
2.87%
2.87%
---
---
---
---
Cost method
160,000.00
160,000.00
160,000.00
20.00%
20.00%
---
---
---
65,634.56
Equity method Equity method
200,000,000.00
69
Name Trade Co., Ltd. Shenzhen Xinfang Knitting Co., Ltd. Hongkong Yehui International Co., Ltd. Shenzhen Dailishi Underwear Co., Ltd. Anhu Huapeng Textile Co., Ltd. Total
Ending Balance
Shareholding proportion in the investee
Voting right proportion in the investee
Explanation of diffidence between shareholding proportion and voting right proportion in investee
Devalue
Current devalue
Cash bonus
524,000.00
524,000.00
20.00%
20.00%
---
---
---
---
2,392,914.37
2,392,914.37
2,392,914.37
17.85%
17.85%
---
---
---
---
532,062.50
2,559,856.26
2,559,856.26
30.00%
---
Notes 3
---
---
850,000.00
25,410,209.50
50.00%
---
Notes 3
---
---
500,000.00
40,466,231.32
---
1,815,634.56
Accounting method
Initial investment cost
Original balance
Cost method
524,000.00
Cost method Cost method Cost method
25,000,000.00
25,410,209.50
--
312,200,000.00
616,193,616.42
change
199,697,453.88
815,891,070.30
Notes 1: share holding ratio is not accord with voting power ratio in amalgamated subsidiary company. That is interlocking shareholding style of every subsidiary company making parent company actual share control being 100%. Notes 2：Shenzhen Zhongxing Fiber Wimple Cotton Raiment Co., Ltd. had established liquidation group in 2009 and started liquidation procedures, they are in liquidation processing and these two companies will not be included in consolidation scope since they went into liquidation procedures. Notes 3：Shenzhen Dailisi underwear Co., Ltd. and Anhui Huapeng textile Co., Ltd. had adopted outsourcing for contractual operation.
70
3. Business income, Business cost （1）Business income Unit：RMB Items
Amount of current period
Amount of previous period
Income from Business income
25,693,964.21
24,441,993.92
Other Business income
1,718,047.98
1,743,091.46
Total
27,412,012.19
26,185,085.38
Cost from Business cost Other Business cost
4,088,569.41 1,718,047.98
3,466,671.65 1,743,091.46
Total
5,806,617.39
5,209,763.11
（2）Main business（Industry） Unit：RMB Name
Amount of current period Business income Business cost
Amount of previous period Business income Business cost
Rental
25,693,964.21
4,088,569.41
24,441,993.92
3,466,671.65
Total
25,693,964.21
4,088,569.41
24,441,993.92
3,466,671.65
（3）Main business（Production） Unit：RMB Amount of current period
Amount of previous period
Rental income
Business income Business cost 25,693,964.21 4,088,569.41
Business income 24,441,993.92
Business cost 3,466,671.65
Total
25,693,964.21
24,441,993.92
3,466,671.65
Name
4,088,569.41
（4）Main Business（Area） Unit：RMB
Name Shenzhen Total
Amount of current period
Amount of previous period
Business income 25,693,964.21 25,693,964.21
Business income 24,441,993.92 24,441,993.92
Business cost 4,088,569.41 4,088,569.41
Business cost 3,466,671.65 3,466,671.65
（5）Total income and the ratio of operating income from top five clients Unit：RMB Name Jinsitai Investment Development Co., Ltd. Shenzhen Shixingkai Beauty Co., Ltd. China merchants Bank, Shenfang Building Branch Shenzhen Xinbaiwei Computer Technology Co., ltd.
Business Income 11,514,689.06 468,377.40 467,850.12 257,778.48
71
Proportion(%) 44.81% 1.82% 1.82% 1.01%
Shenzhen Jingfangyuan Cultural Development Corporation
256,061.16
Total
12,964,756.22
1.00% 50.46%
4. Investment income （1）Income from investment Unit：RMB Items
Amount of current period
Calculate income according to cost method Long term equity investment calculated via equity method
Amount of previous period 1,402,808.94
1,380,634.56 979,077.01 97,453.88
Stock right disposal benefit
-
Investment income from financial assets sales
1,482,128.46
9,009,386.30
Total
2,960,216.90
11,391,272.25
（2）Long term equity investment calculated to cost method： Name Shenzhen Xiangjiang Trade Co., Ltd.
Amount of current period
Amount of previous period
Cbange cause --
65,634.56
67,808.94
Shenzhen Dailishi Underwear Co., Ltd.
--415,000.00
435,000.00
Anhui Huapeng Prnting & dyeing Garnent Co., Ltd. Total
900,000.00 1,380,634.56
900,000.00 1,402,808.94
----
（3）Long term equity investment calculated via equity method Name Shenzhen Haohao Property Leasing Co. Ltd. Shenzhen Xieli Automobile Co., Ltd. Shenzhen Changlianfa Printing and dyeing Company Jordan Garment Factory Hengshun (Saipan) Industry Co., Ltd. Total
Amount of current period
Amount of previous period
Cbange cause ---
235,155.43
197,933.49 ---
100,745.09
-197,985.46 ---
26,225.18 -264,671.82
14,822.80 964,306.19
--97,453.88
--979,077.02
5. Supplement information for cash flow statement Unit ：RMB
72
-----
Supplement information
Amount of current period
Amount of previous period
I. Adjusting net profit to cash flow from operating activities Net profit Add : Impairment loss provision of assets
18,533,246.48 -146,202.21
11,977,705.09 3,287,704.58
4,496,879.76
4,432,535.13
Amortization of intanglble assets Amortization of long-term deferred expenses
194,943.64 ---
194,967.64 ---
Loss on disposal of non-current assets
-52,994.00
---
---
---
Loss of fair value fluctuation on assets Financial cost
---3,864,169.21
--2,256,930.00
Loss on investment
-2,960,216.90
-11,391,272.25
-35,088.53
-723,295.01
-1,406,380.55 ---
-6,534,833.42 ---
3,162,921.98
-63,498,183.51
Increase of operating receivables Other Net cash flows arising from operating activities
-7,173,696.21 --10,749,244.25
-1,202,046.59 6,534,833.42 -54,664,954.92
II. Significant investment and financing activities that withoutcash flows Liability transfer to capital Convertible corporate bond due within 1 year
-----
-----
Finance leased fixed assets
--
---
III. Net increase of cash and cash equivalents Ending balance of cash
97,766,287.48
30,213,562.23
Less: Beginning balance of cash Add: Ending balance of cash Less: Beginning balance of cash equivalents Net increase of cash and cash equivalents
84,353,357.87 ----13,412,929.61
19,539,632.30 ----10,673,929.93
Depreciation of fixed assets, oil and gas assets and consumablebiological assets
Loss from fixed assets discard
Decrease of deferred income tax assets Increase of deferred income tax assets Decrease of inventories Decrease of operating receivable
6, In the report period，The company does not appear using evaluated value entering in an account under reverse purchasing. XIV.Supplement information 1. Details of extraordinary gains and losses for the current report period Unit：RMB Items
Amount of current period
Gains from disposals of non-current assets Refunding and exemption of taxes in excess of
-52,994.00 ---
73
Amount of previous period -----
Notes
-----
Items
Amount of current period
Amount of previous period
Notes
Government subsidies accounted into current income account (except for those govemment subsidies closely related to the Company’s business, and received at national statutory standard and amount)
4,690,090.02
4,982,567.16
---
Capital adoption fee collected from non-financial organizations and accounted into current gain /loss
---
---
---
Gain/loss from differences between the cost of enterprise merger and the fair value of recognizable net asset of the invested entities Gain/loss from non-nonetary assets
---
---
---
---
---
---
Gain/loss from commissioned investment or assets Asset impairment provisions provided for force-majeur Gain/loss from debt reorganization
-----
-----
-----
---
---
---
Enterprise reorganizing expenses, such as emplovee placement fee and integration fee Gain/loss from trade departing from fair value Current net gain/loss of subsidiaries under same control from beginning of termtill date of consolidation
---
---
---
-----
-----
-----
Gain/loss generated by contingent liabilities without connection with main businesses
---
---
---
Gain/loss from change of fair value of transactional asset and liabilities, and investment gains from disposal of transactional financial assets and liabilities and sellable financial assets, other than valid period value instruments related to the Company’s common businesses Restoring of receivable account impairment provision tested individually Gain/loss from commissioned loans
1,482,128.46
9,009,386.30
---
---
---
---
---
---
Gain/loss from change of fair value of investment property measured at fair aluein follow-up measurement Influence of one-time adjustment made on current gain/loss account according to the laws and regulations regarding tax and accounting Consigning fee received for consigned operation Other non-business income and expenditures other than the above
---
---
---
---
---
---
--10,874,438.77
---1,107.68
-----
authority or without official approval documents
74
Items
Amount of current period
Amount of previous period
Notes
Other gain/loss items satisfying the definition of non-recurring gain/loss account
---
---
---
Influenced amount of income tax Influenced amount of minor shareholders’ equity （After tax ） Total
3,688,783.20 ---
3,077,986.07 ---
-----
13,410,868.05
10,912,859.71
---
2. Return on net assets and earnings per share Profit of the report period Net profit attributable to the owners of Company. Net profit attributable to the owners of Company after deducting of non-recurring gain/loss.
Net income on asset, weighted
Earnings per share Basic earnings per share
Diluted gains per share
2.38%
0.10
0.10
1.39%
0.06
0.06
3.The explanation of abnormal circumstance and and reasons of items in major accounting report. 1. The ending balance of monetary capital decreased by RMB 331.2496 million and 39.90% over beginning of period mainly due to the investment in the construction of phase-I project of polarizer sheet for TFT-LCD in current period; 2. The ending book balance of accounts receivable increased by RMB 9.3208 million and 19.36% mainly due to increase of income with the scale expansion of polarizer sheet business; 3.The ending balance of Prepayment Increased by RMB 19.9132 million and 425.40% over year-beginning balance mainly due to the increase of export trade orders at the end of current period over the same period of the previous year； 4. The end-of-period balance of construction in progress increased by RMB 298.8113 million over beginning of period mainly due to increase of investment in phase-I project of polarizer sheet for TFT-LCD; 5. The ending balance of advance payment Increased by RMB 21.7050 million and 155.9% over year-beginning balance mainly due to the increase of export trade orders at the end of current period over the same period of the previous year； 6.The end-of-period balance of taxes and levies payable decreased by RMB 31.0131 million and 773.07% over beginning of period mainly due to payment of value added tax on purchase for imported equipment for phase-I project of polarizer sheet for TFT-LCD and other equipment purchased; 7. The end-of-period balance of interest payable increased by RMB 2.1448 million over beginning of period mainly due to increase of special loan interest payable for the phase-I project of polarizer sheet for TFT-LCD; 8. The end-of-period balance of non-current liabilities to become due within one year decreased by RMB 21 million mainly due to repayment of the loan; 75
9. The selling expenses increased by RMB 1.6292 million and 89.73% year on year mainly due to increase of sales income from manufacturing industry; 10. Financial expenses decreased by RMB 6.5194 million year on year mainly due to decrease of bank loan interests and increase of interest income from fixed deposit of raised proceeds; 11. Investment income decreased by RMB 8.3817 million and 70.53% year on year mainly due to year-on-year decrease of sales of financial assets available for sale through secondary market in current period; 12. Non-operating income increased by RMB 10.6368 million and 213.48% year on year mainly due to receipt of 1,085,733 A shares of Guangdong Sunrise Group Co., Ltd. (the market value of these shares was RMB 9,847,598.31 according to the closing price of A shares of * ST Sunrise on May 17, 2010 (the last trading day before suspension of listing), i.e., RMB 9.07 per share) and cash of RMB 702,694.14 (RMB 10,550,292.45 in total as recognized non-operating income) according to (2010) Shen Zhong Fa Min Qi Zhong Zhen Zi No. 5-5 Civil Award and the Plan for Reorganization of Guangdong Sunrise Group Co., Ltd(Refer to No. 2011-39 Announcement of the Company for details)； 13. Other cash received relating to operating activities increased by RMB 6.2891 million year on year mainly due to according to (2010) Long Zhi Fei Zi No. 1-3 Award from implementation verdict of Jiangxi Longnan Peoples' Court(of law) and receipt of RMB 3 million from the enforcement of the case of debt owed by Jiangxi Xuanli Yarn Industry Co., Ltd. and receipt of cash of RMB 702,694.14 according to the reorganization plan of Guangdong Sunrise Group Co., Ltd； 14. Net cash flows from operating activities increased by RMB 10.1288 year on year mainly due to year-on-year increase of net cash flows from operating activities of Shenzhen Shengbo Optoelectronic Technology Co., Ltd. and recovery of partial arrears from Jiangxi Xuanli Yarn Industry Co., Ltd.; 15. Cash received from disposal of investments decreased by RMB 8.4205 million year on year mainly due to year-on-year decrease of sales of financial assets available for sale through secondary market in current period; 16. Other cash received relating to investing activities increased by RMB 208.6388 million year on year mainly due to receipt of fixed deposit interest of RMB 4.0694 million and writeback of fixed deposit of RMB 204.5694 million; 17. Net cash outflow from investing activities increased by RMB 68.1043 million year on year mainly due to increase of expenditure on phase-I project of polarizer sheet for TFT-LCD; 18. Net cash flows from financing activities decreased by RMB 75.1377 million year on year mainly due to year-on-year decrease of cash received from loans by RMB 130 million; 19. Net increase in cash and cash equivalents decreased by RMB 133.5743 million year on year mainly due to increase of investment in phase-I project of polarizer sheet for TFT-LCD and decrease of cash obtained from loans in current period.
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