深圳中冠纺织印染股份有限公司
Shenzhen Victor Onward Textile Industrial Co., Ltd.
2013 Annual Report
February 2014
I. Important Notice, Table of Contents and Definitions
The Board of Directors ,Supervisory Committee, all directors, supervisors and senior executives of the Company hereby guarantees that there are no misstatement, misleading representation or important omissions in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof. All the directors attended the board meeting for reviewing the Annual Report.
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. Mr.Hu Yongfeng, The Company leader, Mr. Zhang Jinliang, Chief financial officer and the Mr.Ren Changzheng, the person in charge of the accounting department (the person in charge of the accounting ) hereby confirm the authenticity and completeness of the financial report enclosed in this annual report.
Da Hua Certified PublicAccountants（Special General Partnership) issued an unqualified auditor's report with highlighted paragraphs to the Company. The board of directors and the supervisory committee of the Company have explained relevant matters in detail. Investors are advised to read relevant statements.
Table of Contents
2013 Annual Report
I...Important Notice, Table of contents and Definitions
II. Basic Information of the Company
III. Summary of Accounting Highlights and Business Highlights
IV. Report of the Board of Directors
V. Important Events
VI. Change of share capital and shareholding of Principal Shareholders
VII. Information about Directors, Supervisors and Senior Executives
VIII. Administrative structure
IX. Internal Control
X. Financial Report
XI. Documents available for inspection
Definition
||||
|-|-|-|
||Refers||
|Terms to be defined||Definition|
||to||
||Refers||
|Company/The Company/||Shenzhen Victor Onward Textile Industrial Co., Ltd.|
||to||
||Refers||
|Company Law||Company Law of the People‘s Republic of China|
||to||
||Refers||
|Securities Law||Securities Law of the People‘s Republic of China|
||to||
||Refers||
|―CSRC‖||China Securities Regulatory Commission|
||to||

Indication of major risks
This Report has been prepared in both Chinese and English. In case of any discrepancy, the Chinese version shall prevail. Please pay attention.
II. Basic Information of the Company
1. Company Information
|||||
|-|-|-|-|
||*ST Shen Victor Onward A,*ST Shen|||
|Stock abbreviation||Stock code|000018、200018|
||Victor Onward B|||
|Stock exchange for listing：|Shenzhen Stock Exchange|||
|Name in Chinese|深圳中冠纺织印染股份有限公司|||
|Chinese Abbreviation|中冠|||
|English name (If any)|Shenzhen Victor Onward Textile Industrial Co., Ltd|||
|English abbreviation (If any)|VICTOR ONWARD|||
|Legal Representative|Hu Yongfeng|||
|Registered address|26 Kuipeng Road, Kuiyong Town, Longgang District, Shenzhen|||
|Postal code of the Registered||||
||518119|||
|Address||||
|Office Address|26 Kuipeng Road, Kuiyong Town, Longgang District, Shenzhen|||
|Postal code of the office||||
||518119|||
|address||||
|Internet Web Site|http://www.udcgroup.com|||
|E-mail|szvo@chinaszvo.com|||

2. Contact person and contact manner
||||
|-|-|-|
||Board secretary|Securities affairs Representative|
|Name|Zhang Jinliang|Wu Xia|
||Room 1308, Hualiang Building, No.2008|Room 1308, Hualiang Building, No.2008|
|Contact address|||
||Shennan Zhong Road, Shenzhen|Shennan Zhong Road, Shenzhen|
|Tel|(755)83668425|(755)83667895|
|Fax|(755)83668427|(755)83668427|
|E-mail|zhangjl@udcgroup.com|wux@udcgroup.com|

3. Information disclosure and placed
|||
|-|-|
|Newspapers selected by the Company for||
||Securities Times and Hongkong Commercial Daily.|
|information disclosure||
|Internet website designated by CSRC for||
||http: // www.cninfo. com. cn|
|publishing the Annual report of the Company||
|The place where the Annual report is prepared and||
||Room 1308, Hualiang Building, No.2008 Shennan Zhong Road, Shenzhen|
|placed||

4.Changes in Registration
|||||||
|-|-|-|-|-|-|
||||Number of|||
||Date of|Authority|Business License|Taxation|Organization|
||Registration|Registered with|of Enterprise as|Registration No.:|Code|
||||Legal Person|||
|Initial registration|April 1, 1984|Shenzhen|440301501131182|440301618801483|61880148-3|
|Registration at the||||||
|end of the reporting|November 9, 1991|Shenzhen|440301501131182|440301618801483|61880148-3|
|period||||||
|Changes in principal business activities||||||
|||No Changes||||
|since listing (if any)||||||
|Changes is the controlling shareholder in||||||
|||No Changes||||
|the past (is any)||||||

V. Other Relevant Information
CPAs engaged
|||
|-|-|
|Name of the CPAs|Da Hua Certified Public Accountants(Special General Partnership)|
|Office address：|8/F, B Union Square , No.5022. Binhe Road, Futian District , Shenzhen|
|Names of the Certified Public||
||Xu Haining, Yang Chunxiang|
|Accountants as the signatories||

The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
□Applicable√ Not applicable
The Financial advisor performing persist ant supervision duties engaged by the Company in the reporting period□Applicable√ Not applicable
III. Summary of Accounting Highlights and Business Highlights
I.Summary of accounting /Financial Data
May the Company make retroactive adjustment or restatement of the accounting data of the previous years due to change of the accounting policy and correction of accounting errors.
□ Yes√ No
||||||
|-|-|-|-|-|
||||Changed over last year||
||2013|2012||2011|
||||（％）||
|Operating Gross income（RMB）|26,998,990.00|11,095,669.00|143.33%|9,850,484.00|
|Net profit attributable to the|8,214,810.00|-247,331.00|||
|shareholders of the listed company|||-3,421.38%|-17,361,593.00|
|（RMB）|||||
|Net profit after deducting of|||||
|non-recurring gain/loss attributable|||||
||-5,711,308.00|300,041.00|-2,003.51%|-17,375,777.00|
|to the shareholders of listed|||||
|company（RMB）|||||
|Cash flow generated by business|1,708,608.00|-384,418.00|||
||||-544.47%|4,202,430.00|
|operation, net（RMB）|||||
|Basic earning per|0.0486|-0.0015|||
||||-3,340%|-0.1|
|share(RMB/Share)|||||
|Diluted gains per|0.0486|-0.0015|||
||||-3,340%|-0.1|
|share(RMB/Share)(RMB/Share)|||||
|Net asset earning ratio（%）|6.7%|-0.21%|6.91%|-12.93%|
||End of|End of|Changed over last|End of|
||2013|2012|year（％）|2011|
|Gross assets（RMB）|170,502,789.00|172,002,557.00|-0.87%|172,238,794.00|
|Shareholders‘ equity attributable to|126,320,072.00|118,852,391.00|||
|shareholders of the listed company|||6.28%|119,047,096.00|
|（RMB）|||||

II．Items and amount of non-current gains and losses
Unit:RMB
||||||
|-|-|-|-|-|
|Items|Amount (2013)|Amount (2012)|Amount(2011)|Notes|
|Non-current asset disposal|13,906,305.00||||
|gain/loss(including the write-off part|||||
|||5,174.00|-522.00||
|for which assets impairment provision|||||
|is made)|||||
|Except the effective hedge business|||||
|||6,045.00|13,965.00||
|related to the normal operation|||||

||||||
|-|-|-|-|-|
|business of the Company, the profit|||||
|and loss in the changes of fair values|||||
|caused by the holding of tradable|||||
|financial assets and tradable financial|||||
|liabilities as well as the investment|||||
|returns in disposal of tradable|||||
|financial assets, tradable financial|||||
|liabilities and saleable financial assets|||||
|Other non-operating income and|19,813.00||||
|expenditure beside for the above||-558,591.00|741.00||
|items|||||
|Total|13,926,118.00|-547,372.00|14,184.00|--|

For theCompany‘s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason.
□Applicable√ Not applicable
IV. Report of the Board of Directors
I. General
1. In the report period, the printing and dyeing mill of the Company in Shenzhen continued production suspense while the parent company and five subsidiaries continued the suspension of printing and dyeing business due to the production suspense of the printing and dyeing mill. The parent company, Nanhua Company and Hong Kong Company maintained daily operation through property lease. The other three subsidiaries had suspended business. The Company planned to invest in the joint venture project of Nanjing East Asia Textile Printing and Dyeing Co., Ltd. with partial machinery and equipment. Due to change of foundation of joint venture and prospect of the industry, the capital increase was not completed,the lawsuit has been made. Within this year, the company disposed all textile machinery and equipment, the company has not textile processing capacity. Although this year the company saled the property located in Kowloon, Hongkong But the rental income still a major part of the cash flows and the main part of the current main business income.
2. The risks that the Company is facing and countermeasures
Production suspense brought significant influence on the production and operating activities and continuous development of the Company. 2The audited net profits of the Company for two
consecutive fiscal years (i.e., 2011 and 2012) were both negative. According to relevant regulations including Stock Listing Rules of Shenzhen Stock Exchange, Shenzhen Stock Exchange enforced special treatment ("delisting risk caution") of the stocks of the Company from April 24, 2013. In order to have the caution of delisting risk revoked, the Company made all efforts to enhance operating efficiency and increase return through various measures and successfully reversed loss into profit in 2013.
II. Analysis on principal Business
1.General
In 2013, the textile, printing and dyeing business of the head office subsidiaries of the Company did not recover and continued to be suspended for rectification. The Company leased its idle properties and carried out domestic trade of textile products on a small scale, The disposal of real estate investment .
Progress of development strategy and operation plans in this period that are disclosed by the company in the previous annual reports.
As the plan of investing in Nanjing East Asia Textile Printing and Dyeing Co., Ltd. with part of machinery and equipment was not fulfilled, part of the Company's assets have been in idle status for long time since production suspense for rectification. At present, the investment project (Nanjing East Asia Textile Printing and Dyeing Co., Ltd.) has entered litigation procedure. There will be no possibility of investment completion. The Company has finished disposing the fixed assets
(machinery and equipment ) and machine parts.
Reasons for difference of actual operation performance has20% lower or higher than profit forecast of the Year disclosed
□Applicable√ Not applicable
2. Revenue
Notes:
Scope of key business :Production and sales of textile products, necessary raw materials, auxiliary materials, various fabrics and garments and provision of relevant services.
In 2013, the total income from main operation was RMB 26.99 million, including rent income was RMB 10.09 million , Textile trade income was RMB 1.29 million and disposal of real estate investment income was 15.61 million.
Is the income from sales in kind greater than the service income?
□ Yes√ No
Significant orders in hand
□Applicable√ Not applicable
Significant change in or adjustment of the products or services in the reporting period:
□Applicable√ Not applicable
Main customers
|||
|-|-|
|Total sales amount to top 5 customers (RMB)|24,266,117.00|
|Proportion of sales to top 5 customers in the||
||89.87%|
|annual sales(%)||

Information of theCompany‘s top 5 customers
√Applicable□ Not applicable
|||||
|-|-|-|-|
|No|Name|Amount of sales|Proportion(%)|
|1|China Real Estate (HK) Group Co., Ltd.|15,611,945.00|57.82%|
||Shenzhen Jinrongyuan Development Co.,|||
|2||5,851,500.00|21.67%|
||Ltd.|||
|3|Zhejiang Helan Industry Co., Ltd.|1,292,308.00|4.79%|
|4|SCS Express International Limited|910,364.00|3.37%|
||Shenzhen Hebainian Investment|||
|5||600,000.00|2.22%|
||Development Co., Ltd.|||
|Total|--|24,266,117.00|89.87%|

 3.Costs
Classification of Industry
Unit:RMB
||||||
|-|-|-|-|-|
|Classification|Items|2013|2012|Increase/Decre|

|||||||
|-|-|-|-|-|-|
|of industry||Proportion in||Proportion in|ase(%)|
||Amount|operation|Amount|operation costs||
|||costs(5(||(%||
|Textile||||||
||1,282,051.00|13.55%|1,248,550.00|23.06%|-9.51%|
|Industry||||||
|Leasing||||||
||4,602,706.00|48.65%|4,164,806.00|76.94%|-28.29%|
|Industry||||||
|Real estate||||||
||3,576,246.00|37.8%||||
|Industry||||||

Classification of products
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
|||2013||2012|||
|Classification|||||||
||||Proportion in||Proportion in|Increase/Decre|
|of products|Items||||||
|||Amount|operation|Amount|operation|ase(%)|
||||costs(%)||costs(%)||
|Sales of|||||||
|viscosestaple||1,282,051.00|13.55%|1,248,550.00|23.06%|-9.51%|
|fiber|||||||
|Leasing||4,602,706.00|48.65%|4,164,806.00|76.94%|-28.29%|
|The disposal of|||||||
|real estate||3,576,246.00|37.8%||||
|investment|||||||

Notes
The real estate for investment disposed of in the report period is the house property of Victor Onward Printing and Dyeing (Hong Kong) Co., Ltd., a wholly-owned subsidiary of the Company, which is located at Room 1801-1804, Huachuang Center, 889 Chuang Sha Wan Road, Kowloon, Hong Kong.
Principal suppliers
|||
|-|-|
|Total sales volume of top 5 clients (RMB)|0.00|
|Percentage of total sales volume of top 5 clients in total||
||0%|
|annual sales volume （%）||

Information about the top 5 suppliers
□Applicable√ Not applicable
3.Expenses
The financial expenses for 2013 were RMB247,455, which increased by RMB 691.629 and155.71% over those for 2012 (RMB -444,174) mainly due to exchange gains and losses,Income tax were RMB 2,384,583, which
increased by RMB -41,869 for 2012, The increase mainly due to the profits tax generated from the disposal of
investment property real by Hongkong Victor Onward.
6.Cash Flow
Unit:RMB
|||||
|-|-|-|-|
|Items|2013|2012|Increase/Decrease(%)|
|Subtotal of cash flow|12,450,237.00|13,498,118.00||
|received from operation|||-7.76%|
|activities||||
|Subtotal of cash flow paid|10,741,629.00|13,882,536.00||
||||-22.62%|
|for operating activities||||
|Net cash flow arising from|1,708,608.00|-384,418.00||
||||-544.47%|
|operating activities||||
|Subtotal of investment|20,749,535.00|30,000.00||
||||69,065.12%|
|activity cash inflows||||
|Subtotal of investment|36,411.00|690,127.00||
||||-94.72%|
|activity cash outflows||||
|Net cash flow arising from|20,713,124.00|-660,127.00||
||||-3,237.75%|
|investment activities||||
|Subtotal of fund raising|10,124,439.00|126,343.00||
||||7,913.45%|
|activity cash outflows||||
|Net cash flow arising from|-10,124,439.00|-126,343.00||
||||7,913.45%|
|raising activities||||
|Net increase in cash and|11,275,648.00|-1,172,054.00||
||||-1,062.04%|
|cash equivalents||||

Notes to the year-on-year change of the relevant data by over30%
√Applicable□Not applicable
Net cash flows from operating activities increased mainly because the payment of RMB 1.5 million for goods collected in the form of banker's acceptance bill in the previous year was encashed in the report year. The cash inflows from investing activities increased mainly due to inflow of RMB 15.61 million from the disposal of the house property located at Room 1801-1804, Huachuang Center, 889 Chuang Sha Wan Road, Kowloon, Hong Kong and inflow of RMB 5.13 million from the disposal of dyeing machines and equipment. Net cash flows from financing activities decreased mainly due to payment of loan principal of RMB 10 million to Union Group, a related party, which was borrowed in the previous year.
Notes to the big difference between cash flow from operating activities and net profit in the reporting year√Applicable□Not applicable
The reason for the big difference between the net cash flows of RMB 1,708,608 from operating activities in the report period and the net profit of RMB 8,214,810 for the report year for the shareholders of the Company is
that the important sources of the net profit of the Company for the report year are the disposal of fixed assets
(which generated net profit of RMB 1.9 million) and sales of real estate for investment (which generated net profit
of RMB 9.65 million).
III. Composition of principal businesses
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
||||||Increase/decrea|Increase/decrea|
|||||Increase/decrea|||
||||||se of principal|se of gross|
|||||se of reverse in|||
||||||business cost|profit rate over|
||Operating||Gross profit|the same|||
|||operating costs|||over the same|the same|
||revenue||rate(%)|period of the|||
||||||period of|period of the|
|||||previous|||
||||||previous year|previous year|
|||||year(%)|||
||||||(%)|(%)|
|Industry|||||||
|Textile|||||||
||1,292,308.00|1,282,051.00|0.79%|2.02%|2.68%|-0.65%|
|Industry|||||||
|Lease Industry|10,094,737.00|4,602,706.00|54.4%|2.7%|10.51%|-3.23%|
|Real estate|15,611,945.00|3,576,246.00|77.09%||||
|Product|||||||
|viscose staple|||||||
||1,292,308.00|1,282,051.00|0.79%|2.02%|2.68%|-0.65%|
|fiber|||||||
|Leasing|10,094,737.00|4,602,706.00|54.4%|2.7%|10.51%|-3.23%|
|The disposal of|||||||
|real estate|15,611,945.00|3,576,246.00|77.09%||||
|investment|||||||
|District|||||||
|Domestic|9,553,683.00|4,151,650.00|56.54%|0.75%|-2.58%|1.48%|
|Hong Kong|17,445,307.00|5,309,353.00|69.57%|981.17%|361.03%|40.94%|

 Under the circumstance that the statistic specifications for theCompany‘s principal business data experienced adjustment in the reporting period, the principal business data upon adjustment of the statistic specifications at the end of the reporting period in the latest year.
□Applicable√ Not applicable
IV. Analysis on Assets and Liabilities
1.Significant Change in assets
Unit:RMB
|||||||
|-|-|-|-|-|-|
|End of 2013||End of 2012||Proportio||
|||||n||
||Proportion in||Proportion in|||
|||||increase/d|Notes to the significant change|
|Amount|the total|Amount|the total|||
|||||ecrease||
||assets(%)||assets(%)|||
|||||(%)||

||||||||
|-|-|-|-|-|-|-|
||63,502,910.00||52,227,262.00|||The main reason for increase is the|
|||||||profit from the disposal of real estate|
|Monetary capital||37.24%||30.36%|6.88%||
|||||||for investment by Hong Kong Victor|
|||||||Onward|
|Accounts|||744,712.00|||Full amount provision for bad debts in|
|||||0.43%|-0.43%||
|receivable||||||respect of accounts receivable|
||||101,536.00|||Full amount provision for impairment|
|Inventories||||0.06%|-0.06%||
|||||||in respect of inventories|
|Real estate for|23,458,153.00||31,041,484.00|||Disposal of real estate for investment|
|||13.76%||18.05%|-4.29%||
|investment||||||by Hong Kong Victor Onward|
|Long-term equity|66,931,685.00||65,784,312.00|||Hangzhou Bay Venture Company made|
|||39.26%||38.25%|1.01%||
|investment||||||profit|
|Fixed assets|7,191,205.00|4.22%|12,416,459.00|7.22%|-3%|Disposal of machinery and equipment|

 2.Significant Change in Liabilities
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
||2013||2012||Proporti||
||||||on||
|||Proportion||Proportion|||
||||||increase|Notes to the significant change|
||Amount|in the total|Amount|in the total|||
||||||/decreas||
|||assets (%)||assets (%)|||
||||||e(%)||
|Long-term loan|1,101,349.00|0.65%|1,033,936.00|0.6%|0.05%|For the reason of interest|
|||||||Advance receipts decreased because|
|||||||the advance receipts from disposal of|
|Advance receipts|1,076,531.00|0.63%|2,778,488.00|1.62%|-0.98%|machinery and equipment were carried|
|||||||forward after completion of|
|||||||transactions in the report year.|
|||||||Remuneration payable to staff and|
|Remuneration||||||workers increased because the|
|payable to staff|1,109,352.00|0.65%|766,680.00|0.45%|0.2%|remuneration payable to the board of|
|and workers||||||directors was not paid yet at the end of|
|||||||the year.|
|||||||Taxes and levies payable increased due|
|||||||to provision for profit tax in respect of|
|Taxes and levies|||||||
||4,250,191.00|2.49%|1,622,074.00|0.94%|1.55%|the disposal of real estate for|
|payable|||||||
|||||||investment in Hong Kong in the report|
|||||||year.|
|||||||Other payables decreased due to|
|Other payables|21,762,365.00|12.76%|32,227,317.00|18.74%|-5.97%|repayment of loans to related|
|||||||companies in the report year.|

3.Assets and liabilities Measured with Fair value
Unit:RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Gain/loss on|Cumulative|||||
||Amount at|||Impairment|Purchased|Sold amount||
|||fair value|fair value||||Amount at|
|||||provisions in|amount in|in the||
|Item|year|change in the|change|||||
|||||the reporting|the reporting|reporting|year end|
||beginning|reporting|recorded into|||||
|||||period|period|period||
|||period|equity|||||
|Financial||||||||
|assets||||||||
|3.Financial|751,542.00||-168,600.00||||582,942.00|
|assets||||||||
|available for||||||||
|sales||||||||
|Subtotal of|751,542.00||-168,600.00||||582,942.00|
|Financial assets||||||||
|Aforementio|751,542.00||-168,600.00||||582,942.00|
|ned total||||||||
|Financial|0.00||||||0.00|
|liabilities||||||||

Did great change take place in measurement of the principal assets in the reporting period ?
□ Yes√ No
V. Analysis on core Competitiveness
N/A
VI. Analysis on investment Status
1. External Equity investment
（1）External investment
||||
|-|-|-|
|External investment|||
|Investment Amount in 2013(RMB)|Investment Amount in 2012(RMB)|Change rate|
|0.00|0.00|0%|
|Particulars of investees|||
|Companies|Principal business|Proportion in the investees‘ equity (%)|
|Zhejiang Union Hangzhou Bay Chuangye|||
||Real estate|25%|
|Co., Ltd.|||

2.Analysis on principal subsidiaries and Mutual Shareholding Companies
Particulars about the principal subsidiaries and Mutual shareholding companies
Unit：RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Leading|||||||
|||Sectors|||Total|||Operating||
|Company|Company||products|Registered||Net assets|Tumover||Net Profit|
|||engaged|||assets(RM|||profit||
|Name|type||and|capital||(RMB)|(RMB)||(RMB)|
|||in|||B)|||(RMB)||
||||services|||||||
|Hong||||||||||
|Kong||||||||||
|||Textile|Textile|2,400,002|121,632,880|50,734,564.|17,445,307.|11,913,267.|9,530,660.0|
|Victor|Subsidiary|||||||||
|||industry|trade|（HKD）|.00|00|00|00|0|
|Onward||||||||||
|Co.Ltd||||||||||
||||Textile|||||||
|Nanhua||Textile|Printing|85,494,700|29,250,478.|-17,259,520|6,486,700.0|||
||Subsidiary|||||||502,352.00|490,235.00|
|Company||industry|and|（HKD）|00|.00|0|||
||||dyeing|||||||
|Zhejiang||||||||||
|Union||||||||||
||Sharehold||Real estate|||||||
|Hangzhou||Real estate||247,476,832|1,414,590,8|305,663,374|55,875,550.|5,072,925.0|3,399,130.0|
||ing||Develop|||||||
|Bay||Industry||.6|02.00|.00|00|0|0|
||companies||ment|||||||
|Chuangye||||||||||
|Co., Ltd.||||||||||

Particulars about the principal subsidiaries and Mutual holding companies
Victor Onward Printing and Dyeing (Hong Kong) Co., Ltd., a subsidiary of the Company, entered into real estate purchase and sale contract with China Real Estate (Hong Kong) Group Co., Ltd., a related party, on December 6, 2013. The real estate is located at Room 1801-1804, Huachuang Center, 889 Chuang Sha Wan Road, Kowloon, Hong Kong . This transaction involved amount of HKD 19.55 million (equivalent to RMB 15.61 million), which contributed net profit of RMB 9.65 million to the Company in 2013. It is an important asset transaction that helped the Company successfully turned losses into profits in 2013.
Acquirement and disposal of subsidiaries in the Reporting period
□Applicable√ Not applicable
VII. Prediction of business performance for January -March 2014.
Estimation of accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation of reason.
√ Applicable□Not applicable
Forenotice of earning :Losses
Type of data filet for the prediction
||||
|-|-|-|
|Year beginning to end of next|Same period of|Increase or decrease%|

||||||||||
|-|-|-|-|-|-|-|-|-|
||report period|||the previous|||||
|||||year|||||
|Estimated amount of|||||||||
|accumulative net|-200|--|0|-266|--|-24.81%|--|0%|
|profit(RMB‘0000)|||||||||
|Basic earnings per shares|||||||||
||-0.011|--|0|-0.016|--|-31.25%|--|0%|
|(Yuan/share)|||||||||
||Due to loss of real estate projects of Zhejiang Union Hangzhou Bay Ventures Co.,||||||||
|Notes to forenotice of|Ltd. Accounted for on equity basis, the accumulative net profit for the period from||||||||
|earnings|January 2014 to March 2014 is estimated to be loss and about RMB -2 million to||||||||
||RMB 0.||||||||

VIII. Special purpose principal under the control of the Company
N/A
IX. Development prospect
Controlling shareholder of the Company and the management of the company attaches greatimportance to thecompany‘s continued operational problems, through a wariety of ways, including saling the assets and business of the company or its subsidiaries, joint venture or expand an existing business, aiming to improve the company asset quality, iprofitability, and enhance capacity for sustainable development .
X. Explanation of the Board of Directions Concerning the― non-standard auditreport‖ issued by the CPAs firm for the reporting period.
1．Basic information
Da Hua Certified Public Accountants(Special General Partnership) issued unqualified auditor's report with paragraph of emphasized matters for the Company's financial statements for 2013 Basic information of
emphasized matters: Since March 2007, Shenzhen Victor Onward Textile Industrial Co., Ltd. stopped production and dismissed most of workers. And most subsidiaries of the company had stopped production and it maintained daily operation by house leasing., Shenzhen Victor Onward Textile Industrial Co., Ltd. had disclosed its
improvement measures in Note 11of Financial Statement,but its sustainable operation ability is still uncertain. 2. Basic opinions of certified public accountants on such matter:
Da Hua Certified Public Accountants(Special General Partnership) accepted entrustment, completed the audit of the financial statements of the Company for 2013 and issued unqualified auditor's report with paragraph of emphasized matters for the Company's financial statements for 2013. In accordance with No. 14 Rule for
Preparation and Report of Information Disclosure by Companies Publicly Issuing Securities - Non-standard Unqualified Audit Opinions and Treatment of Matters Involved Therein, relevant notes are as follows:
As noticed by Shine Wing Certified Public Accountants during audit, Since March 2007, Shenzhen Victor
Onward Textile Industrial Co., Ltd. stopped production and dismissed most of workers. The company currently
only had house leasing business.
Except that Shenzhen East Asia Victor Onward Textile Printing and Dyeing Co., Ltd. is still operating normally, other 5 subsidiaries controlled by the Company have stopped operation or are maintaining daily operation by house property lease. It plans to invest in Nanjing East Asia Textile Printing and Dyeing Co., Ltd. with part of machinery and equipment in 2007, The investment plan has not been implemented, the proposed investment has been idle equipment stored in the Victor Onward Company. On June 4, 2012, The Victor Onward Company has instituted court action at Jiangsu Province Higher People's Court, and asked to terminate the contracts and agreement on investment on Nanjing project. We believe that the sustainable operation ability of Shenzhen Victor Onward Textile Industrial Co., Ltd. is still uncertain, so I emphasized the situation in the audit reports and issued unqualified auditor's report with paragraph of emphasized matters. The matters involved in highlighted statement did not apparently violate Accounting Standards for Business Enterprises and regulations on relevant information disclosure standardization.
3.The opinions of the board of directors, supervisory committee and management of the Company on this matter:
The board of directors, Supervisory Committee and managers believed that the printing and dyeing plant of the company had stopped operation or maintained daily operation by house leasing. .It plans to invest in Nanjing East Asia Textile Printing and Dyeing Co., Ltd. with part of machinery and equipment, Due to the reason on the side of the other party of joint venture and change of industry prospect.. Partners disagree with our views in the replenishment of the things, thus cooperation is difficult to continue. Although we sent our staff to Nanjing many times for negotiation, but failed to reach a consensus. Therefore, we decided the proceedings in the People's Court.
4. Extent of influence of this matter on the Company:
This event greatly impacted the production& operation activities and sustainable development of company, it made company had the situation of implementing other special treatment which was stipulated in Shenzhen Stock Exchange Listing Rules , the stock of our company had been implemented for other special treatment. As the audited net profits of the Company for 2011 and 2012 were negative, According to the relevant regulations including Stock Listing Rules of Shenzhen Stock Exchange, on April 24, 2013 on the Shenzhen Stock Exchange implemented the "delisting risk warning" to the company stock trading.
5.The possibility of eliminating this matter and its influence:
In order to have the caution of delisting risk revoked, the Company made all efforts to enhance operating efficiency and increase return through various measures and successfully reversed loss into profit in 2013. 6.The concrete measures of eliminating this matter and its influence
Controlling shareholder of the Company and the management of the company attaches greatimportance to thecompany‘s continued operational problems, through a wariety of ways, including saling the assets and business of the company or its subsidiaries, joint venture or expand an existing business, aiming to improve the company asset quality, iprofitability, and enhance capacity for sustainable development .
XI. Explain change of the accounting policy, accounting estimate and measurement methods as compared with the financial reporting of last year.
N/A
XII. Explain retrospective restatement due to correction of significant accounting errors in the reporting period. N/A
XIII. Explain change of the consolidation scope as compared with the financial reporting of last year.
N/A
XIV. Dividend Distribution Preparation
Implementation or adjustment of theCompany‘s profit Distribution policy, Especially Cash Dividend Distribution Policy in the Reporting Period.
√Applicable□ Not applicable
The Company's profit distribution policy, based primarily on the 4th meeting of the sixth board of directors of the Company considered and approved the "Articles of Association" in the relevant provisions on the Company's Profit Distribution Policy and Planning for Return to Shareholders in the Nest Three Years (2012-2014), The revised profit distribution policy defined dividend distribution standards and proportion was clear, improved the Company's decision making and supervision mechanism for profit distribution and ensured return to shareholders.. independent directors conducted effective supervision of the profit distribution plan of the Company and expressed independent opinions. Minority shareholders have adequate opportunity to express their views and aspirations,Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com.cn respectively on August 16, 2012. for the Articles of Association of the Company concerning profit distribution.
|||
|-|-|
|Special cash dividend policy description||
|Whether meets the requirements of the||
|provisions of the articles of association or|Compliance with regulations and requirements|
|shareholders' meeting resolutions:||
|Whether dividends standard and proportion are clear|Dividends standard and proportion are clear|
|Whether decision making and supervision mechanism for||
||Decision making and supervision mechanism for profit distribution are|
|profit distribution are completed||
||completed|
|Whether independent directors perform their duties|Independent directors implemented the status of the company's profit|
|responsibly and play its due role:|distribution plan for the effective oversight and independent opinion|
|whether the Minority shareholders have adequate||
||Minority shareholders have adequate opportunity to express their views|
|opportunity to express their views and aspirations and||
||and aspirations，Their legitimate rights and interests have been fully|
|Their legitimate rights and interests have been fully||
||protected|
|protected||
|Whether the Cash dividend policy to adjust or change the|In 2013, there are no cash dividend policy adjustments and|
|conditions and procedures are compliant and transparent|changes..|

Notice: During the reporting period the company should disclose the profit distribution policy, especially cash
dividend policy formulation, implementation or adjustments, explain the requirements of the provisions of the
articles of association or shareholders' meeting resolutions, whether the Minority shareholders legitimate rights
and interests have been fully protected, whether the Independent directors implemented opinions, Whether
dividends standard and proportion are clear, and Whether the Cash dividend policy to adjust or change the conditions and procedures are compliant and transparent.
The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into share capital in the past three years(with the reporting period inclusive):
Thecompany‘s annual profit distribution for 2011.
As audited by Shinewing Certified Public Accountants, the total profit of the Company for 2011 is RMB-17,466,414 , After deduction of minority gains and losses of RMB-61,919 and income tax expenses of -42,902, net profit is RMB-17,361,593,the total year-end undistributed profit is - RMB -116,026,610. The Company is neither to distribute profit nor to capitalize capital surplus for the current year.
Thecompany‘s annual profit distribution for 2012.
1 As audited by Da Hua Certified Public Accountants(Special General Partnership) , the total profit of the Company for 2012 is RMB-289,200 , After deduction of minority gains and losses of RMB 0 and income tax expenses of -41,869, net profit is RMB-247,331,the total year-end undistributed profit is - RMB-116,273,941. The Company is neither to distribute profit nor to capitalize capital surplus for the current year.
Profit distribution preplan for2013：
1 As audited by Da Hua Certified Public Accountants(Special General Partnership) , the total profit of the Company for 2013 is RMB10,234,487 , After deduction of minority gains and losses of RMB-364,906 and income tax expenses of2,384,583, net profit is RMB8,214,810,the total year-end undistributed profit is RMB-108,059,131. The Company is neither to distribute profit nor to capitalize capital surplus for the current year.
2. According to the decisions of the 12th meeting of the sixth board of directors of the Company held on February 26, 2014, the Company will neither distribute profit nor capitalize capital surplus for 2013 and will use the profit to make up the losses of the previous year.
The above profit distribution preplan is to be submitted to 2013 annual shareholders' general meeting for examination.
3.. The reason for no profit distribution for 2013, use of profit and relevant plan
At present, the Company has no main operation and only leases some factory buildings. As of the end of the report period, the profit available for distribution to shareholders was still negative. After the discussion in Board of directorsmeeting， the Company will neither distribute profit nor capitalize capital surplus for 2013 and will use the profit to make up the losses of the previous year.
4.. The independent opinions expressed by the independent directors of the Company on the profit distribution preplan made by the board of directors for 2013
In the opinion of the independent directors, the Profit Distribution Preplan for 2013 examined and adopted at the board meeting of the Company was made based on fully considering the current conditions of the Company, complied with the Company's actual conditions and contributed to the Company's normal operation and the safeguarding of shareholders' long-term interest. It also completely complied with relevant provisions of the Articles of Association of the Company and Accounting Regulations for Business Enterprises. The profit
distribution preplan of the Company for 2013 was approved. It was also approved to submit this preplan to 2013 annual shareholders' general meeting of the Company for examination.
Dividend distribution of the latest three years
Unit：RMB
|||||
|-|-|-|-|
|||Net profit attributable to the|Ratio in net profit attributable to|
|||over of the parent company in|the parent company in the|
|Year|Cash dividend (Including Tax)|||
|||the consolidated financial|consolidated financial|
|||statements|statements|
|2013||8,214,810.00||
|2012||-247,331.00||
|2011||-17,361,593.00||

In the reporting period, both theCompany‘s profit and the parentcompany‘s retained earnings were positive however not cash dividend distribution proposal has been put forward.
□Applicable√ Not applicable
XV.Preplan for profit distribution and transferring capital reserve into share capital for the report period
||
|-|
|Cash dividend policy：|
|Notes|
|According to the decisions of the 12th meeting of the sixth board of directors of the Company held on February|
|26, 2014, the Company will neither distribute profit nor capitalize capital surplus for 2013 and will use the profit|
|to make up the losses of the previous year. It was also approved to submit this preplan to 2013 annual|
|shareholders' general meeting of the Company for examination.|

XVI. Social responsibility
(I) Protecting shareholders' rights and interests
1. The company established a standardized corporate governance structure, the effective implementation and monitoring of the operating mechanism to ensure that the company operates in accordance with law, standardized operation and promote common development with all stakeholders. Concerned about public welfare and environmental protection issues, and maximize shareholders' equity, the pursuit of economic efficiency into account social, practicing corporate social responsibility.
2. The Company perfected the mechanism forshareholders‘ general meeting, standardized the procedure of convening and holding shareholders' general meeting and its agenda and ensured middle and small shareholders' right of knowing facts about the Company, participation and voting.
(II) Safeguarding employees' rights and interests
1. The Company implemented the system of all employees signing labor contracts according to relevant provisions of Labor Law and Labor Contract Law and formulated and unceasingly perfected the regulations on safeguarding employees' rights and interests. It has sound remuneration appraisal system so as to ensure reasonable allocation of remuneration to employees.
2. Despite current production suspense, the Company has always adhered to the work policy of "safety first",
regularly organized employees to study and unceasingly improved all safety systems to earnestly safeguard
employees' rights and interests.
Whether the listed company and its subsidiaries belong to the heavy polluting industries regulated by the state environmental protection department.
□ Yes√ No
Whether the listed company and its subsidiary exist the major social security issues.
□ Yes√ No
Whether has been punished during the report period.
□ Yes√ No
XVII.Statement of such activities as reception, research, communication, interview in the reporting period
|||||||
|-|-|-|-|-|-|
||||||Discussion topics and|
|Reception time|Reception place|Way of reception|Types of visitors|Visitors received||
||||||provision of materials|
||||||Inquiry about the|
||||||possibility of the|
||BOD office of the|||||
|January 9, 2013||By phone|Individual|Investor|conversion of the|
||Company|||||
||||||Company's B shares into H|
||||||shares|
||||||Inquiry about the date of|
||BOD office of the|||||
|May 30,2013||By phone|Individual|Investor|shareholders' general|
||Company|||||
||||||meeting of the Company|
||||||Inquire about the possibility|
||BOD office of the||||of the Company's loss|
|July 30,2013||By phone|Individual|Investor||
||Company||||reversal at the end of the|
||||||year|
||||||Inquiry about the time of|
||BOD office of the|||||
|December 27, 2013||By phone|Individual|Investor|disclosure of the annual|
||Company|||||
||||||report of the Company|

V. Important Events
I. Major lawsuits and Arbitration affairs
√Applicable□ Not applicable
|||||||||
|-|-|-|-|-|-|-|-|
|Basic information||||||||
||Amount|Whether comes|Progress of||Judgment|||
|of||||Trial results and||Disclosure|Index of|
||involved|to accrual|lawsuits(arb||enforcement|||
|lawsuits(Arbitratio||||influence||date|disclosure|
||(RMB‘0000)|liability or not|itration)||situation|||
|n)||||||||
|On June 4, 2012,||||||||
|The company has||||||||
|instituted court||||||||
|action against||||||||
|below three||||||||
|companies at||||||||
|Jiangsu Province||||||||
|Higher People's||||||||
|Court, and asked||||||||
|to terminate the||||||||
|contracts and||||||||
|agreements signed|||||||Announceme|
|with Nanjing East|||||||nt No.|
|Asia Textile|||||||2012-0614)|
|Printing & Dyeing|||The case||||Securities|
|Co., Ltd., Nanjing|||hasn‘t||||Times , Hong|
||4,792|No||||June 16,2012||
|East Asia|||yet been||||Kong|
|Investment &|||tried||||Commercial|
|Development|||||||Daily and|
|Group Co., Ltd.|||||||www.cninfo.|
|and Hong Kong|||||||com.cn|
|Yaojunxing Co.,||||||||
|Ltd., who shall pay||||||||
|RMB47,922,902.9||||||||
|2 to the company||||||||
|for the pecuniary||||||||
|loss of implicative||||||||
|compensation and||||||||
|undertake the costs||||||||
|of litigation. The||||||||
|company has||||||||
|received the||||||||

||
|-|
|Su-Shang-Wai-Ch|
|u-Zi No.0002|
|(2012) of ―Notice|
|on Indictment|
|Acceptance and|
|Collegial Panel|
|Announcement‖|
|issued by Jiangsu|
|Province Higher|
|People's Court on|
|June 14, 2012. The|
|Defendant Nanjing|
|East Asia Textile|
|Printing and|
|Dyeing Co., Ltd.|
|made objection to|
|the jurisdiction of|
|this case during the|
|period of defence|
|submission. The|
|court formed a|
|collegial bench|
|and conducted|
|examination|
|according to law.|
|2On December 24,|
|2013, Jiangsu|
|Higher People's|
|Court issued Civil|
|Ruling Paper to|
|reject the objection|
|made by Nanjing|
|East Asia Textile|
|Printing and|
|Dyeing Co., Ltd.|
|about the|
|jurisdiction.|
|((2013) SSWXCZ|
|No. 0001 Civil|
|Ruling Paper of|
|Jiangsu Higher|
|People's Court|
|Civil Ruling|
|Paper)|

II.Query form media
□Applicable√ Not applicable
In the reporting year, the Company had no query from media
III. Bankruptcy or Reorganization Related Events
N/A.
IV. Assets Transactions
1. Sales of Assets
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||Pr||||||||
|||||||op||||||||
|||||||ort||||||||
|||||||ion||||||||
|||||||of||||||||
|||||||the||||||||
|||||||net||||||||
|||||Net||||||||||
|||||||pr||||||||
|||||profit||||||||||
|||||||ofi||||||||
|||||contribu||||||||||
|||||||t||||||||
|||||ted to|||||Connect|||||
|||||||co||||||||
|||||the|||||ivity|||||
|||||||ntr||||||||
|||||compan|||||Relation|Has all||||
|||||||ibu|||||Has all|||
|||||y from||||Is it a|s with|the||||
|||||||ted|||||the|||
|Other|||Transact|the|||Pricing|related|the|ownersh||||
|||||||by|||||credit|||
|party of|||ion|beginni|Gain/loss||principl|transacti|other|ip of the|||Disclos|
||Assets|Date of||||the|||||/debt|Disclos||
|the|||price|ng of|arising from||e for the|on Is it a|party|assets|||ure|
||sold|sale||||ass|||||involve|ure date||
|transacti|||(RMB‘0|the|sales||asset|related|(applica|involve|||index|
|||||||et|||||d been|||
|on|||000）|reportin|||sold|transacti|ble to|d been||||
|||||||for|||||transferr|||
|||||g year||||on|the|transferr||||
|||||||the|||||ed|||
|||||to the|||||related|ed||||
|||||||co||||||||
|||||date of|||||transacti|||||
|||||||mp||||||||
|||||sales of|||||on)|||||
|||||||an||||||||
|||||the asset||||||||||
|||||||y||||||||
|||||(RMB‘0||||||||||
|||||||in||||||||
|||||000)||||||||||
|||||||the||||||||
|||||||tot||||||||
|||||||al||||||||
|||||||pr||||||||
|||||||ofi||||||||
|||||||t||||||||
|||||||(%||||||||

|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||)||||||||
||Room|||||||||||||
||1801-18|||||||||||||
||,Huachu||||||||The||||http://w|
|China||||||||||||||
||ang||||||||related||||ww.cnin|
|Real||||||||||||||
||Genter,||||||||parties||||fo.com.|
|Estate||||||12||||||||
||No.889.|Decemb|||||||controll|||Decemb|cn/final|
|(Hongk||||||2.9|Evaluati|||||||
||Cheung|er 6,|1,561|965|Turnaround|||Yes|ed the|Yes|Yes|er 31,|page/20|
|ong)||||||5|on|||||||
||Sha|2013|||||||same|||2013|13-12-3|
|Group||||||%||||||||
||Wan||||||||Actual||||1/63434|
|Co.,||||||||||||||
||Road,||||||||controll||||860.PD|
|Ltd.||||||||||||||
||Kowloo||||||||er||||F|
||n,Hongk|||||||||||||
||ong.|||||||||||||
|Wuxi||||||||||||||
|Guokan||||||||||||||
|g||||||||||||||
|Printing||||||||||||||
|&||||||||||||||
|Dyeing||||||||||||||
|Machin||||||||||||||
||Fixed||||||||||||http://w|
|e Plant,||||||||||||||
||Assets||||||||||||ww.cnin|
|Guangz||||||||||||||
||（Mach||||||||||||fo.com.|
|hou||||||||||||||
||inery|||||24.|||||||cn/final|
|Yongjun||June 30,|||Ppofit||Agreem|||||June 4,||
||and||675|190||22||No||Yes|Yes||page/20|
|ye||2013|||increased||ent|||||2013||
||Equipm|||||%|||||||13-06-0|
|Investm||||||||||||||
||ent ）||||||||||||4/62551|
|ent Co.,||||||||||||||
||and Part||||||||||||854.PD|
|Ltd.,||||||||||||||
||||||||||||||F|
|Yingde||||||||||||||
|Jifeng||||||||||||||
|Dyeing||||||||||||||
|&||||||||||||||
|Weavin||||||||||||||
|g Co.,||||||||||||||
|Ltd.||||||||||||||

V. Implementation of theCompany‘s Equity Incentive plan and its influences
N/A.
VI. Material related transactions
1.Other material related transactions
The house property of Victor Onward Printing and Dyeing (Hong Kong) Co., Ltd., a wholly-owned subsidiary of the Company, which is located at Room 1801-1804, Huachuang Center, 889 Chuang Sha Wan Road, Kowloon, Hong Kong, was sold to China Real Estate (Hong Kong) Group Co., Ltd., a related party, in the form of agreed assignment and at the price of HKD 19.55 million (equivalent to RMB 15.50 million) appraised by Loyalty Surveyors Co., Ltd., a Hong Kong appraisal agency, and Shenzhen Tianjian Guozhonglian Assets Appraisal& Land and Real Estate Valuation Co., Ltd.
Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com. cn respectively on November 6, 2013 (Announcement No. 0650)
On December 6, 2013, Victor Onward Printing and Dyeing (Hong Kong) Co., Ltd. and China Real Estate (Hong Kong) Group Co., Ltd. entered into purchase and sale contract and completed the transaction in the witness of the laywers of both parties. The payment for the house property has been fully received.
Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com. cn respectively on December 31, 2013 (Announcement No. 0651)
The purchase and sale contract has been registered and filed with Hong Kong Government Land Registry and the real estate transaction has been fully completed.
Relevant inquiry with the internet website for disclosing provisional report on material related transactions
||||
|-|-|-|
||Date of disclosing provisional|Description of the website for disclosing|
|Description of provisional announcement|||
||announcement|provisional announcements|
|Related Transaction Announcement ofShenzhen Victor Onward Textile IndustrialCo., Ltd.|||
||October 11, 2013|(http//www.cninfo.com.cn)|
|Announcement on the progress of the realestate transaction|December 31, 2013|(http//www.cninfo.com.cn)|
||February 14, 2014|(http//www.cninfo.com.cn)|

VII. Important contracts and implementation
1..Other related transaction
On December 6, 2013, Victor Onward Printing and Dyeing (Hong Kong) Co., Ltd. and China Real Estate (Hong Kong) Group Co., Ltd. entered into purchase and completed the sale contract in the witness of the laywers of both parties. This transaction involved amount of HKD 19.55 million (equivalent to RMB 15.61 million). The payment for the property has been fully received. The contract has been recorded in Hong Kong Land Registry registration, thus the real estate transactions have been completed.
VIII. Implementation of Commitments
1. The commitments of the Company and its shareholders holding over5% of theCompany‘s total shares in the report year of extending to the report year from previous year.
|||||||
|-|-|-|-|-|-|
||Commitment||Time of making|Period of||
|Commitment||Contents|||Fulfillment|
||maker||commitment|commitment||
|Commitment on share reform||Committed||||
|||when the||||
|||restricted-for-sal||||
|||e shares from||||
|||the shares||||
|||restructuring||||
|||were listed for||||
|||circulation in the||||
|||market: i. if they||||
|||plan to sell the||||
|||shares through||||
|||the securities||||
|||exchange||||
|||system in the||||
|||future, and the||||
|||decrease of the||||
|||shares they hold||||
|||reaches 5%||||
||Union Holdings||||Under|
|||within 6 months|June 3, 2009|In effect||
||Co., Ltd||||Fulfillment|
|||after the first||||
|||decrease, they||||
|||will disclose an||||
|||announcement||||
|||indicating the||||
|||sale through the||||
|||company within||||
|||two trading days||||
|||before the first||||
|||decrease; ii.||||
|||They shall||||
|||strictly observe||||
|||the ―Guidelines||||
|||on Transfer of||||
|||Restricted-for-sa||||
|||le Original||||
|||Shares of Listed||||
|||Companies‖ and||||

||||
|-|-|-|
|||the provisions of|
|||the relevant|
|||business|
|||principles of|
|||Shenzhen Stock|
|||Exchange.|
|Commitment in the acquisition report orthe report on equity changes|||
||Not applicable||
|Commitments made in Material assetsReorganization|||
||Not applicable||
|Commitments made in issuing|Not applicable||
|Other commitments offered tothe company‘s minorityshareholders|||
||Not applicable||
|Whether the commitments|||
||Yes||
|fulfilled in a timely manner|||
|The specific reason for the|||
|unfinished commitments and|Not applicable||
|the next step（If any）|||

2.There existed profit anticipation for theCompany‘s assets or projects while the reporting period was still within the duration of the profit anticipation. The Company made explanation on whether the assets or projects reached the anticipated profit and the cause
|||||||||
|-|-|-|-|-|-|-|-|
||||||Cause of|||
||||Predicted result|Actual result in|failure to|||
|Profit-predicte|||||||Predicteddisclosureindex|
||Predicted|Predicted|in the reporting|the reporting|realize the|Predicted||
|d assets or||||||||
||staring time|ending time|period(RMB|period (RMB|predicted|disclosure date||
|name of project||||||||
||||‗0000)|‗0000)|result(if|||
||||||applicable)|||

IX. Engagement/Disengagement of CPAs
CPAs currently engaged
|||
|-|-|
|Name of the domestic CPAs|Da Hua Certified Public Accountants(Special General Partnership)|
|Remuneration for domestic accounting firm||
||30|
|(RMB‘0000)||
|Continuous life of auditing service for domestic||
||1|
|accounting firm||
|Name of domestic CPA|Xu Haining, Yang Chunxiang|

Has the CPAs been changed in the current period
□ Yes√ No
Description of the CPAs, financial adviser or sponsor engaged for internal control auditing
□ Yes√ No
In the report year, the Company engaged Da Hua Certified Public Accountants (special general partnership) as the auditing body for internal control for 2013 and paid it remuneration of RMB 0.15 million.
X. Explanation of the Supervisory Committee and Independent Directors (If applicable)on the QualifiedAuditor‘s Report Issued by the CPAs.
Da Hua Certified Public Accountants(Special General Partnership) issued unqualified auditor's report with highlighted paragraphs for the financial statements of the Company for 2013. The board of directors of the Company made a special statement on the matters involved in the Unqualified Auditor's Report of the Company for 2013 with Highlighted Paragraphs. The independent directors of the Company expressed independent opinions on this. The supervisory committee of the Company held the opinion that this statement matched its actual conditions and agreed to opinions of the board of directors of the Company.
XI. Punishment and Rectification
||||||||
|-|-|-|-|-|-|-|
||||Type of||||
|||||Conclusion(if||Index of|
|Name|Type|Reasons|investigation and||Disclosure date||
|||||applicable)||disclosure|
||||penalty||||

Notes
□Applicable√Not applicable
About directors, supervisors, senior executives or shareholders holding over5% of theCompany‘s total shares suspected of being involved in trading of theCompany‘s shares against the regulations and recovery of the profit obtained by such persons suspected of being involved in trading of theCompany‘s shares against the regulations as disclosed by the Company.
□Applicable√Not applicable
XII. Situation of being confronted of suspension or termination of listing upon disclosure of the Annual report
N/A.
XIII. Notes to other significant Events
1.Announcement on lawsuits.of Shenzhen Victor Onward Textile Industrial Co., Ltd. AnnouncementNo.:2012-0614，Announcement Date: June 16,2012.(www.cninfo.com.cn)，Investors are advised to pay attention to investment risks.http://www.cninfo.com.cn/finalpage/2012-06-16/61144742.PDF
2．1.
Announcement of Shenzhen Victor Onward Textile Industrial Co., Ltd. on Assignment of Partial Equity of A Joint Venture
Named Zhejiang Union Hangzhou Bay Ventures Co., Ltd. by A Wholly-owned Subsidiary Named Victor Onward Printing and
Dyeing (Hong Kong) Co., Ltd and relevant announcements disclosed on Securities Times, Hong Kong Commercial Daily and
www.cninfo.com.cn on June 18, 2013 (Announcement No. 0639).
3. Related Transaction Announcement of Shenzhen Victor Onward Textile Industrial Co., Ltd.
Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com. cn respectively on October 11, 2013. (Announcement No. 0644)
4.Announcement of resolutions of the
10th
Meeting of the Sixth board of Directors of Shenzhen Victor Onward Textile Industrial Co., Ltd.
Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com. cn respectively on October 11, 2013. (Announcement No. 0645)
5. The Company entered into transaction contract with Wuxi Guokang Printing and Dyeing Machinery Plant, Guangzhou Yongjunye Investment Co., Ltd. and Yingde Jifeng Dyeing and Weaving Co., Ltd. in respect of disposal of fixed assets (machinery and equipment) and parts. The said asset sale was voted through at the seventh meeting of the sixth board of directors of the Company. Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com. cn respectively on June 4, 2013. (Announcement No. 0634), At the end of the report year, relevant transaction was completed. RMB 6.75 million was collected in total and net profit of RMB 1.90 million from the disposal was made.
6. During the reporting period, the company has not the relevant issues of promises required in―Guideline No. 4 on Supervision and Administration of Listed Companies– The Commitment and Performance of The Listed Company and its Actual Controller, Shareholders, Affiliated Party andOfferor‖ or overdue unfulfilled commitments.
XIV. Significant events of subsidiaries
The house property of Victor Onward Printing and Dyeing (Hong Kong) Co., Ltd., a wholly-owned subsidiary of the Company, which is located at Room 1801-1804, Huachuang Center, 889 Chuang Sha Wan Road, Kowloon, Hong Kong, was sold to China Real Estate (Hong Kong) Group Co., Ltd., a related party, in the form of agreed assignment and at the price of HKD 19.55 million (equivalent to RMB 15.50 million) appraised by Loyalty Surveyors Co., Ltd., a Hong Kong appraisal agency, and Shenzhen Tianjian Guozhonglian Assets Appraisal& Land and Real Estate Valuation Co., Ltd.
（Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.co m.cn respectively on November 6, 2013, October 31, 2013 and Fubruary 14, 2014. (Announcement No.
2013-0650,2013-0651and 2013-0654)
XV.Issuing of Company Bonds
N/A.
VI. Change of share capital and shareholding of Principal Shareholders
(I).Changes in share capital
Unit:Shares
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Increase/decrease（+，-）|||||After the Change||
||Amount|Proportion|||Capitalizat|||||
||||Share|Bonus|ion of||||Proportio|
||||||common|Other|Subtotal|Quantity||
||||allotment|shares|||||n|
||||||reserve|||||
||||||fund|||||
|I. Share with conditional||||||||||
||0|0%|0|0|0|0|0|0|0%|
|subscription||||||||||
|1.State-owned shares|0|0%|0|0|0|0|0|0|0%|
|2..Staee-owned legal||||||||||
||0|0%|0|0|0|0|0|0|0%|
|person shares||||||||||
|3.Other domestic shares|0|0%|0|0|0|0|0|0|0%|
|Of which：Domestic legal||||||||||
||0|0%|0|0|0|0|0|0|0%|
|person shares||||||||||
|Domestic natural person||||||||||
||0|0%|0|0|0|0|0|0|0%|
|shares||||||||||
|4.Share held by foreign||||||||||
||0|0%|0|0|0|0|0|0|0%|
|investors||||||||||
|Of which：Foreign legal||||||||||
||0|0%|0|0|0|0|0|0|0%|
|person shares||||||||||
|Foreign natural person||||||||||
||0|0%|0|0|0|0|0|0|0%|
|shares||||||||||
|II. Shares with|169,142,3|||||||169,142,3||
|||100%|0|0|0|0|0||100%|
|unconditional subscription|56|||||||56||
|.Common shares in||||||||||
||99,720,45|||||||99,720,45||
|||58.96%|0|0|0|0|0||58.96%|
|MB|3|||||||3||
|.Foreign shares in||||||||||
||69,421,90|||||||69,421,90||
|||41.04%|0|0|0|0|0||41.04%|
|omestic market|3|||||||3||
|.Foregin shares in overseas||||||||||
||0|0%|0|0|0|0|0|0|0%|
|arket||||||||||
|4.Other|0|0%|0|0|0|0|0|0|0%|
|III. Total of capital shares|169,142,3|100%|0|0|0|0|0|169,142,3|100%|

|||
|-|-|
|56|56|

Reasons for share changed
□Applicable√Not applicable
Approval of Change of Shares
□Applicable√Not applicable
Ownership transfer of share changes
□Applicable√Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
□Applicable√Not applicable
Other information necessary to disclose for the company or need to disclosed under requirement from security regulators
√Applicable□Not applicable
II. Issuing and listing
1.. Change of asset and liability structure caused by change of total capital shares and structure
N/A.
2. About the existingemployees‘ shares
||||
|-|-|-|
|Date of issuing the employees‘||Issuing quantity of the employees‘|
||Issuing price of the employees‘ shares (RMB)||
|shares||shares(shares)|
|Notes to the existing employees‘|||
||N/A||
|shares|||

III. Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
Unit: Shares
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||Total shareholders at the end of the 5th day from||||||
|Total shareholder at period-end||9,164||||||9,088||
|||||the date of disclosing the annual report||||||
|Particular about shares held by top ten shareholders||||||||||
||||Quantity|Increase/d|Number|Number of|Pledging or freezing|||
|||Share|at the end|ecrease in|of the|the||||
|Shareholder|Properties of|||||||||
|||proportion|of the|the|restricted|Non-restri|Status of the|||
|name|shareholder||||||||Quantity|
|||%|reporting|reporting|shares|cted shares|shares|||
||||period|period|held|held||||
|Union Holdings|Domestic Non-|25.51%|43,141,03|0|0|43,141,03||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Co., Ltd.|State-owned legalperson||2|||2|||
|STYLE-SUCCESS LIMITED|Foreign legalperson|14.46%|24,466,029|0|0|24,466,029|||
|Rich CrownInvestment Co.,Ltd.|Foreign legalperson|3.62%|6,114,556|0|0|6,114,556|||
|UnionDevelopmentGroup Co., Ltd.|Domestic Non-State-owned legalperson|3.36%|5,681,089|-140,000|0|5,681,089|||
|Liuzhou JialiReal estateDevelopmentCo., ltd.|Domestic Non-legal personState-owned legalperson|2.54%|4,300,000|+80,000|0|4,300,000|||
|Shenzhen Textile(Group)HoldingsLtd|State-ownedLegal person|2.21%|3,744,594|-5,488,800|0|3,744,594|||
|Zeng Ying|Domestic Naturalperson|1.21%|2,049,600|+10,000|0|2,049,600|||
|LiuzhouRuihengMechatronicsCo., Ltd.|Domestic Non-State-owned legalperson|1.01%|1,700,000|-10,000|0|1,700,000|||
|Shing YingChieh|Foreign Naturalperson|0.54%|909,962|-625,000|0|909,962|||
|Nie Zongdao|Domestic Naturalperson|0.51%|854,350||0|854,350|||
|Strategy investors or general|||||||||
|legal person becomes top 10|||||||||
|shareholders due to rights||N/A|||||||
|issued (if applicable)See Notes|||||||||
|3）|||||||||
|Explanation on associated||The controlling shareholder of the above-mentioned largest shareholder Shenzhen Union|||||||
|relationship among the aforesaid||Holdings Ltd.and third shareholder Rich Crown Investment Co., Ltd.. Is Union Development|||||||
|shareholders||Group Ltd.|||||||
|Shareholding of top 10 shareholders of unrestricted shares|||||||||
|||Quantity of unrestricted shares held at the end|||||Share type||
|Name of the shareholder|||||||||
|||of the reporting period|||||Share type|Quantity|
|Union Holdings Co., Ltd.||43,141,032|||||RMB Common||
|||||||||43,141,032|
||||||||shares||

|||||
|-|-|-|-|
|STYLE-SUCCESS LIMITED|24,466,029|Foreign shares||
|||placed in||
||||24,466,029|
|||domestic||
|||exchange||
|Rich Crown Investment Co.,Ltd.|6,114,556|Foreign shares||
|||placed in||
||||6,114,556|
|||domestic||
|||exchange||
|Union Development GroupCo., Ltd.|5,681,089|RMB Common||
||||5,681,089|
|||shares||
|Liuzhou Jiali Real estateDevelopment Co., ltd.|4,300,000|RMB Common||
||||4,300,000|
|||shares||
|Shenzhen Textile(Group)Holdings Ltd|3,744,594|RMB Common||
||||3,744,594|
|||shares||
|Zeng Ying|2,049,600|Foreign shares||
|||placed in||
||||2,049,600|
|||domestic||
|||exchange||
|Liuzhou RuihengMechatronics Co., Ltd.|1,700,000|RMB Common||
||||1,700,000|
|||shares||
|Shing Ying Chieh|909,962|Foreign shares||
|||placed in||
||||909,962|
|||domestic||
|||exchange||
|Nie Zongdao|854,350|RMB Common||
||||854,350|
|||shares||
|Explanation on associated||||
|relationship or consistent||||
|action among the top 10||||
|shareholders of non-restricted|The controlling shareholder of the above-mentioned largest shareholder|||
|negotiable shares and that|Shenzhen Union Holdings Ltd. and fourth shareholder Rich Crown Investment|||
|between the top 10|Co., Ltd.. Is Union Development Group Ltd.|||
|shareholders of non-restricted||||
|negotiable shares and top 10||||
|shareholders||||
|Notes to the shareholders||||
|involved in financing securities|N/A|||
|(if any)(See Notes 4)||||

Did any shareholder of the Company carry out an agreed buy-back in the reorting period?
□ Yes√ No
2．Information about the controlling shareholder of the Company
Corporation
|||||||
|-|-|-|-|-|-|
||Legal|||||
|||Date of||||
|Name of the controlling|representati|||||
|||establish|Institution code|Registered capital|Main business|
|shareholder|ve/person in|||||
|||ment||||
||charge|||||
||||||Production of and|
||||||dealing in various|
||||||fabrics, garments|
||||||chemical fibers and|
||||||textile equipment,|
||||||domestic commerce,|
||||||material supply and|
||||||marketing|
||||||(excluding|
||||||monopolized|
||||||commodities),|
||||||management of|
||||||self-owned|
||||||properties,|
||||||processing with|
||||||imported materials|
|Shenzhen Union||Septembe||||
||Dong|||RMB 1123.8877|and designs, internal|
|Holdings Co., Ltd.||r11,|19247150-0|||
||Binggen|||million|introduction and|
|||1989||||
||||||foreign cooperation,|
||||||assembling with|
||||||imported spare parts|
||||||and cooperation in|
||||||compensation trade.|
||||||real estate|
||||||development and|
||||||sales within the|
||||||scope of land use|
||||||right legally|
||||||obtained, property|
||||||management and|
||||||lease services and|
||||||sales of automobiles|
||||||（not including|
||||||Limit term）.|
|Operating results,|At the end of September 2013, the total assets and net profit of Union Holdings Co.,|||||
|financial position, cash|Ltd. were RMB 4309.12 million and RMB 63.25 million respectively. The company|||||

|||
|-|-|
|flow and future|will develop real estate business as its main operation as ever.|
|development strategy||
|Equity of other||
|domestic/foreign listed||
|company controlled by|N/A|
|actual controller in||
|reporting period||

Change of the actual controller in the reporting period
□Applicable√Not applicable
3．Information about the controlling shareholder of the Company
Corporation
|||||||
|-|-|-|-|-|-|
||Legal|||||
|||Date of||||
|Name of the controlling|representati|||||
|||establish|Institution code|Registered capital|Main business|
|shareholder|ve/person in|||||
|||ment||||
||charge|||||
||||||Production and sales|
||||||of chemical, textile|
||||||and garment|
||||||products (the license|
||||||of product site is|
||||||subject to separate|
||||||application), import|
||||||and export business,|
||||||contracting of|
||||||project construction,|
||||||import and export of|
||||||necessary|
|Union Development|Dong|August||||
||||19033795-7|RMB 90.61million|engineering|
|Group Co., Ltd.|Binggen|23, 1983||||
||||||equipment and|
||||||materials, export of|
||||||labor, external|
||||||investment,|
||||||technical consulting|
||||||services, real estate|
||||||development and|
||||||sales within the|
||||||scope of land use|
||||||right legally|
||||||obtained, property|
||||||management and|

||||
|-|-|-|
|||lease services and|
|||sales of automobiles|
|||(including cars).|
||At the end of 2012, the total assets, shareholders' equity, Shareholders‘ equity attributable to||
|Operating results,|||
||shareholders of the parent company and net profit of Union Developing Group Co., Ltd. were||
|financial position, cash|||
||RMB7907.77 million, RMB 3384.88 million,1476.29 million and RMB 70.79 million respectively.||
|flow and future|||
||The future development strategy is to become an excellent operator of city compound development.||
|development strategy|||
|Equity of other|||
|domestic/foreign listed|||
||Union Holdings Co., Ltd.（000036）Quantity of shares held 352.0493 million，Shareholding||
|company controlled by|||
||ratio31.32%.||
|actual controller in|||
|reporting period|||

Change of the actual controller in the reporting period
□Applicable√Not applicable
Particulars about the actual controller of the Company
Union Group Co., Ltd. holds31.32% equity capital of China Union Holding Ltd. and has controlling relationship with China Union Holding Ltd. which is the controlling shareholder of the company. Thus, Hualian Development Group Co., Ltd. is the actual controller of the company. At present, the Company only has the largest shareholder but no actual controller. Regarding actual controller, Union Group makes the following statement:
(1) Brief introduction of Union Group
Union Group was jointly sponsored and established by 21 corporate shareholders including Ministry of Textile Industry and textile departments or bureaus of 18 provinces or cities in August 1983. Registeredcapital：RMB 90.61 million By taking the policy advantages of Shenzhen Special Zone, Union Group, as a model enterprise in Chinese textile industry, is specially engaged in investment and operation in textile industry and import and export of Textile products, which is directly under Ministry of Textile Industry.
Throughout the years, due to constant reform of economic management system and quick development of socialist market economy, the Group has experienced management mechanism 's adjustment and equity structure change for many times. In 1993 when the State Council carried out structural reform, Ministry of Textile Industry was dissolved and China Textile Federation was established. The Group's relationship of subordination continued. After China Textile Federation was dissolved in 1998, the Group was put under the supervision of Central Enterprise Industrial Committee. In 2003, State-owned Assets Supervision and Administration Commission of the State Council was established. In April 2005, The Group became one of the enterprises under its supervision. State-owned Assets Supervision and Administration Commission of the State Council transferred12.09%
state-owned equity of Union Group to OCT Group Company and authorized OCT Group Company to perform the
capital contributor's responsibilities on behalf of12.09% state-owned equity. OCT Group Company became the largest shareholder of Union Group.
Union Group has been engaged in textile and garment industry for long term. Due to fierce market competition, state-owned capital has left or is leaving textile and garment industry. The provincial management mechanism to which the Group's shareholders are subject has also undergone great change. From 2004, some shareholders of the Group as promoters began to assign shares of Union Group in succession according to the change of situation and their own conditions. Some private enterprises became the shareholders of Union Group. By November 2005, Hangzhou Jinjiang Group Co., Ltd. acquired20.89% equity of Union Group and became the largest shareholder. OCT Group became the second largest shareholder.
(1) At present, Union Group has 16 corporate shareholders. The particulars are as follows:
||||||
|-|-|-|-|-|
|No.|Name of shareholder|Amount of capitalcontribution (RMB‘0000)|Proportion of capitalcontribution (%)|Remarks|
|1|Hangzhou Jinjiang Group Co., Ltd.|1,892.8120|20.8896|Private|
|2|OCT Group|1,094.9500|12.0842|State-owned|
|3|Henan Fuxin Investment Co., Ltd.|984.2567|10.8600|Private|
|4|Changan International Trust Co., Ltd|926.0019|10.2196|State-owned|
|5|Shandong Textile Industrial Association|569.9196|6.2898|State-owned|
|6|Hebei National assets Holding Co., Ltd.|531.4800|5.8655|State-owned|
|7|Zhejiang Zhengcai Trade Co., Ltd|530.0000|5.8492|Private|
|8|Heilongjiang Textile Industry Association|500.0000|5.5181|State-owned|
|9|Sichuan Shulian Co., Ltd.|329.0240|3.6312|Private|
|10|Hubei Textile Industry AssociationSecretariat|300.0000|3.3108|State-owned|
|11|Jiangsu Textile (Group) Co., Ltd.|288.6723|3.1859|State-owned|
|12|Liaoning Textile Industry Association|286.4400|3.1612|State-owned|
|13|Shenzhen Textile (Group)Holdings Ltd|260.0000|2.8694|State-owned|
|14|Xinjiang Uygur Autonomous RegionTextile Industry Association|236.4600|2.6096|State-owned|
|15|Beijing Textile Holdings Co., Ltd.|215.8400|2.3820|State-owned|
|16|China Textile Machinery (Group)Co., Ltd.|115.1435|1.2707|State-owned|
||Total|9061.00|100.00||

As of the day of issuing this report, Union Group has 16 shareholders in total, which are all corporate shareholders. 12 shareholders are state-owned enterprises or enterprises with government background, which collectively hold58.77% equity of Union Group. 4 shareholders are private enterprises, which collectively hold41.23% equity of Union Group.
(2) Composition of board members of Union Group
According to the Articles of Association of Union Group, the directors shall be appointed by the corporate shareholders that contribute capital of more than RMB 5 million (not including RMB 5 million) and be elected by the shareholders' meeting. The board of directors shall be composed of 7 to 11 members. The current sixth board of directors was elected in May 2012.. It has 7 members, including 5 members coming from corporate shareholders, 1 member jointly recommended by shareholders and 1 independent director. The particulars are as follows:
||||
|-|-|-|
|Name of shareholder|Directors appointed|Remarks|
|Hangzhou Jinjiang Group Co., Ltd.|1 person/Dou Baibing||
|OCT Group|1 person /WangXiaowen||
|Shandong Textile Industrial Association|1 person/Xia Zhilin||
|Hebei National assets Holding Co., Ltd.|1 person /ZhuangZhiming||
|Zhejiang Zhengcai Trade Co., Ltd|1 person/Zhang Sijie||
||Dong Binggen|Commonrecommended|
||Long Xingping|IndependentDirector|

(3) Description of the actual controllers
Union Group has been a standardized limited liability company since its establishment. Despite decentralized equity and large number of shareholders, the department in charge of industry and state asset management department has been incontrovertible direct administrator because they were all state-owned shareholders and engaged in the same industry before 2004. Private capital has entered since 2004 and its
proportion has been unceasingly enlarged. The largest shareholder turned from national administrative
department into a state-owned enterprise, which was then replaced by a private enterprise. The actual controller
of Union Group gradually changed. The concrete process of change is as follows:
(1) After the establishment of Union Group and before State-owned Assets Commission under the State Council transferred12.09% equity held by it to OCT Group, the relationship of subordination of Union Group was definite. State administrative agencies (Ministry of Textile Industry, China Textile Federation, industrial commission of national enterprise and State-owned Assets Commission under the State Council) exercised management rights. Relevant national departments were responsible for the establishment of board of directors, appointment of management, audit and supervision.
(2) From April 2005, OCT Group became the largest shareholder of Union Group. The management methods adopted when State-owned Assets Commission under the State Council conducted supervision were still adopted in some aspects. For examples, Union Group regularly submitted financial data to state assets management department and accepted the economy audit by the supervisory committee under the State Council. The financial statements of OCT Group consolidated those of Union Group. However, changes started in some aspects. The establishment of board of directors and the appointment of management were carried out completely according to the Articles of Association of Union Group. The shareholders' general meeting and the board of directors independently exercised the powers assigned by laws and regulations. The reelection of board of directors and the appointment of management were no longer reported to relevant department for examination and approval.
(3) In 2005, Hangzhou Jinjiang Group held20.89% equity of Union Group through acquisition and became the largest shareholder of Union Group by replacing OCT Group. Hangzhou Jinjiang Group and OCT Group respectively appointed one of 8 members of the fifth board of directors reelected in that year.
(4) In 2007, Union Group did not submit various financial data to OCT Group and state-owned regulatory authority. The statements of OCT Group did not consolidate those of Union Group. State assets supervision organ did not conduct regular economy audit of Union Group either.
(5) Though private enterprise Hangzhou Jinjiang Group is the largest shareholder, only one of 1 member of the board of directors comes from it and it has no substantial influence on important decisions of Union Group. Meanwhile, Hangzhou Jinjiang Group neither participated in the daily management and operation of Union Group, nor required submission of daily financial statements, nor consolidated financial statements nor sent personnel to conduct economy audit
(6) From the fifth board of directors, Dong Binggen was jointly recommended by all shareholders to enter the board of directors and was elected as board chairman. He does not represent any shareholder. Instead, he is responsible for all shareholders.
Based on the above facts, Union Group holds the opinion that Union Group, as a limited liability company with a history of 31 years, has formed a standardized mode of operation according to law and business management during change of equity and its corporate governance structure has been increasingly stable and mature. The shareholders' meeting is the highest power organ of the Company. The board of directors is responsible to the shareholders' meeting and exercises the right to make decisions on important matters of Union Group according to the articles of association. The management is responsible for daily operation management of Union Group. At present, Union Group does not have administrative department or unit in charge. The largest shareholder only holds20.89% equity of Union Group. No shareholder has absolute control over or absolute influence on the shareholders' meeting and board of directors of Union Group and is daily operation. The mutual restriction between shareholders of Group is quite apparent. Therefore, Union Group only has the largest shareholder and does not have actual controller at present.
The particulars of the shareholders holding more than10% of total shares on the level of final control
√Yes □ No
Corporate shareholders:
|||||||
|-|-|-|-|-|-|
|Name of||||||
|shareholder|Legal|Date of||||
||||Organizatio|Registered||
|on the level|representati|incorporatio|||Main business|
||||n code|Capital||
|of final|ve/Leader|n||||
|control||||||
||||14375868-7|99000|Licensed business: Coal wholesale. General|
||||||business: wholesale and retail of paper, paper|
||||||products and raw materials, general|
||||||merchandises, electrical wires and cables,|
||||||communication equipment, building|
|Hangzhou|||||materials, decorative materials, hardware and|
|Jinjiang|Dou|March 17,|||electrical appliances, electronic products,|
|Group Co.,|Zhenggang|1993|||chemical products and raw materials (except|
|Ltd.|||||chemical hazardous articles and poisonous|
||||||chemicals), metal material and plastic|
||||||products; export and import business, all|
||||||lawful businesses not subject to examination|
||||||and approval, including the business scope of|
||||||branches.|
||||190346175|630000|Key business: Export of textile products and|
|OCT Group|Ren Kelei|June 6, 1986|||light industrial products and business of|
||||||commodities and mechanical equipment of|
||||||the first category for self use in the special|

|||||||
|-|-|-|-|-|-|
||||||zone approved by competent department of|
||||||special zone, import of industrial products|
||||||(subject to (92) Wai Jing Mao Guan Ti Shen|
||||||Zheng Zi No. A19024 Document issued by|
||||||Economic and Trade Ministry), compensation|
||||||trade, investment in industries, tourism, real|
||||||estate, commerce and trade, finance and|
||||||insurance, packaging, decoration and printing|
||||||industries, domestic sales of commodities|
||||||produced for export and imported|
||||||commodities, tourism, warehouse lease,|
||||||culture and art business, donation, bonded|
||||||warehouse for automobiles, convention and|
||||||exhibition services (the businesses subject to|
||||||permit can be operated only after the|
||||||obtainment of relevant permits) and sales of|
||||||automobiles (including cars).|
|Henan|||56984136-5|1100|Investment in industries|
|Fuxin||||||
||Yan Sanyin|March 4, 2011||||
|Investmen||||||
|t Co., Ltd.||||||
||||22060745-3|125888|Fund trust, personal estate trust, real estate|
||||||trust, securities trust, trust of other properties|
||||||or property rights, doing investment fund|
||||||businesses as a sponsor of investment funds|
||||||or fund management companies,|
||||||reorganization, takeover and merger of|
||||||enterprise assets, project financing, money|
||||||management for enterprises, financial|
|Changan|||||consultation, securities underwriting|
|Internation|Gao|December|||approved by relevant department of the State|
|al Trust|Chengcheng|28,1999|||Council, intermediary services, consultation|
|Co., Ltd.|||||and credit inquiry, trusted safekeeping and|
||||||safety-deposit box business, application of|
||||||inherent properties by means of deposit with|
||||||banks, due from banks, loan, lease and|
||||||investment, providing guarantee to others|
||||||with inherent properties, and other businesses|
||||||stipulated in laws and regulations or|
||||||approved by China Banking Industry|
||||||Regulatory Commission.|
|Operating|1.As of December 31, 2013, the total assets and net assets of Hangzhou Jinjiang Group Co., Ltd. were|||||
|results,|respectively RMB 40.439 billion and RMB 14.92 billion. Its operating income and net profit for 2013|||||

|||
|-|-|
|financial|were respectively RMB 24.988 billion million and RMB 0.591 billion.|
|position,|2. . As of December 31, 2013, the total assets and net assets of OCT Group . were respectively RMB|
|cash flow|104.5 billion and RMB 33 billion. Its operating income and net profit for 2013 were respectively|
|and future|RMB48.2 billion and RMB 4.8 billion.|
|developmen||
||3. As of December 31, 2013, the total assets and net assets of Henan Fuxin Investment Co., Ltd. were|
|t strategy||
||respectively RMB 42.50 million and RMB 11.93 million. Its operating income and net profit for 2013|
||were respectively RMB 0 million and RMB 0.53 million.|
||4.. As of December 31, 2013, the total assets and net assets of Changan International Trust Co., Ltd.|
||were respectively RMB 4.003 billion and RMB 3.095 billion. Its operating income and net profit for|
||2013 were respectively RMB 2.329 billion million and RMB 0.944 billion.|
||The above-mentioned shareholders on the level of control have no control relationship with the|
||Company and its actual controller Union Group. There is a difference between their business|
||operations and strategic positioning. There is no substantial influence on the development of the|
||Company.|
|The equity||
|of other||
|domestic||
|and||
|foreign||
|listed||
|companies||
|controlled||
||Not applicable|
|by the||
|shareholde||
|rs on the||
|level of||
|final||
|control in||
|the report||
|period||

Block Diagram of the ownership and control relations between the company and the actual controller
Hangzhou Jinjiang Group
Co., Ltd.
20.89%
Union Development Group Co.,
Ltd.
31.32% 99.99%
3.36%
Union Ho ldings Co., Ltd. Rich Crown Investment Co.,
Ltd.
25.51% 3.62%
Shenzhen Victor Onward Textile Industrial Co., Ltd.
The actual controller controls the company by means of trust or managing the assets in other way□Applicable√Not applicable
4.Other corporate shareholder holding over10% of theCompany‘s shares
|||||||
|-|-|-|-|-|-|
||Legal|||||
|||Date of|||Principal businesses|
||represent|||||
|Corporate shareholder||incorpora|Organization code|Registered capital|or management|
||actives/Lea|||||
|||tion|||activities|
||der|||||
||Miss Amy|Novembe||||
|Style-Success Ltd.|||||Investment|
||Wang|r4, 1999||||

IV. Share Acquisition plan proposed or implemented by theCompany‘s Shareholder and its concerted actor in the reporting period
||||||||
|-|-|-|-|-|-|-|
|||||||Date of disclosing|
||||||Date of initial||
|Name of the|Quantity of the|Proportion of the|Quantity of|Proportion of the||the end of|
||||||disclosure of the||
|shareholder/conce|shares to be|shares to be|shares actually|shares actually||implementation|
||||||shares to be||
|rted actor|acquired|acquired (%)|acquired|acquired (%)||of the share|
||||||acquired||
|||||||acquisition plan|
|N/A|||||||

Notice to other conditions
N/A
VII. Information about Directors, Supervisors and Senior Executives
I. Change in shares held by directors, supervisors and senior executives
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||Number|Volume|Volume|Number|
||||||||of shares|of shares|of shares|of shares|
||||||||acquired|acquired|sold|held at|
||||||Starting|Expiry|||||
|||Office|||||at end of|during|during|end of|
|Name|Positions||Sex|Age|date of|date of|||||
|||status|||||the|the|the|the|
||||||tenure|tenure|||||
||||||||reporting|reporting|reporting|reporting|
||||||||period(sh|period|period(sh|period(sh|
||||||||ares)|(shares)|ares)|ares)|
|Hu|Board||||October|October|||||
|||In office|Male|51|||0|0|0|0|
|Yongfeng|chairman||||18,2011|18, 2014|||||
||Vice Board||||October|October|||||
|Ding Yue||In office|Male|55|||0|0|0|0|
||chairman||||18,2011|18, 2014|||||
||Vice Board||||October|October|||||
|Shu Yibo||In office|Female|41|||0|0|0|0|
||chairman||||18,2011|18, 2014|||||
||||||October|October|||||
|Zhang Mei|Director|In office|Female|38|||0|0|0|0|
||||||18,2011|18, 2014|||||
|Feng|||||October|October|||||
||Director|In office|Male|51|||0|0|0|0|
|Junbin|||||18,2011|18, 2014|||||
|Zhang|||||October|October|||||
||Director|In office|Male|51|||0|0|0|0|
|Jinliang|||||18,2011|18, 2014|||||
||Independe||||October|October|||||
|Jin Ligang||In office|Male|54|||0|0|0|0|
||nt director||||18,2011|18, 2014|||||
|Shen|Independe||||October|October|||||
|||In office|Male|56|||0|0|0|0|
|Songqin|nt director||||18,2011|18, 2014|||||
|Chen|Independe||||August 31,|October|||||
|||In office|Female|61|||0|0|0|0|
|Jinmei|nt director||||2012|18,2014|||||
||Chairman||||||||||
||of the||||||||||
|Dong|||||October|October|||||
||supervisor|In office|Male|64|||0|0|0|0|
|Binggen|||||18,2011|18, 2014|||||
||y||||||||||
||committee||||||||||
|Huang|||||October|October|||||
||Supervisor|In office|Female|56|||0|0|0|0|
|Xiaoping|||||18,2011|18, 2014|||||
|Pan|||||October|October|||||
||Supervisor|In office|Male|62|||0|0|0|0|
|Weichao|||||18,2011|18, 2014|||||
|Zhang|Deputy|In office|Male|51|October|October|0|0|0|0|

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Jinliang|general||||18,2011|18, 2014|||||
||Manager,||||||||||
||Board||||||||||
||secretary||||||||||
|Ren|Manager||||||||||
||||||October|October|||||
|Changzhe|of Finance|In office|Male|38|||0|0|0|0|
||||||18,2011|18, 2014|||||
|ng|Dept||||||||||
|Total|--|--|--|--|--|--|0|0|0|0|

 II. Posts holding
Work Experience in the past five years of Directors, supervisors and senior Executives in Current office
Board chairman:
Hu Yongfeng, male, was born in July 1962,with bachelor degree, SeniorEngineer，graduated from Southeast Textile Technology Institute in 1983. He is ever took the post of section chief of state textile headquarters general office, He now serves as Vice President of Union Development Group Co., Ltd. and Vice chairman of the Board of Union Holdings Co., Ltd., He served as chairman of the Board of the Company from Oct., 2000 till now. He served as General manager of the Company since April 2008.
Vice Chairman of the Board :
Ding Yue, male, was born in March 1958, with bachelor degree, Senior Economist, graduated from Lanzhou University in 1983. He took the turns of deputy section chief of personnel labor department of Textile Technology Department, section chief of personnel labor department of textile headquarters, deputy director of personnel labor department of textile headquarters and concurrently director of talents exchange center of Textile Headquarters and chairman of the Board of Union Holdings Co., Ltd., He now serves as Vice President of Union Development Group Co., Ltd. and convener of the supervisory committee of Union Holdings Co., Ltd., He served as director of the Company from June 2002 till now. He served as Vice Chainman board of the Company since April 2008. Vice
Chairman of the Board :
Shu Yibo,Female，was born in February 1972, who is studying for EMBA. ,ever took the post of Manager of Sale of Manqi Industry Co., Ltd., Director of Manqi Investment Development Co., Ltd..He is now in charge of Chairman of the board , General Manager of Manqi Industry Co.., Ltd.,Chairman of board of Manqi Investment Development Co., Ltd.She served as director of the Company since April 18, 2008, He served as Vice Chairman of board of the Company since July 2008.
Director：
Zhang Mei, Female, was born in February 1975, is a certified public accountant with Master's degree, She once worked at Financial Division of China Garment Corporation. she now serves as Deputy manager of Finance Dept of Union Development Group Co., Ltd, She served as Director of the Company since April 2008.
Feng Junbin, male, was born in July 1962, is a junior college graduate. He has served successively as special enterprise controller of Dapu Financial Bureau of Guangdong Province, deputy division chief of Fengshun Financial Bureau and director of Audit Dept, Manager of Management Dept , He now serves as Deputy General
Manager, Supervisor of Shenzhen Textile (Holdings) Co., Ltd. He now serves as Deputy General Manager of
Shenzhen Textile (Holdings) Co., Ltd, He served as director of the Company April 2008.
Zhang Jinliang, male, was born in May 1962, Senior Accountant, a senior accountant with bachelor degree, was
born in May 1962. He ever took the post of senior section chief of Shenyang Dispatch and Shenzhen Dispatch of Audit Administration, manager of operation department of Shenzhen Property Union Holdings Co., Ltd., deputy director and director of auditing office of Union Development Group Co., Ltd., deputy general manager of Shenzhen Union Holdings Co., Ltd. and general manager of Yuyao Union Textile Co., Ltd., and he held the position of deputy general manager of the Company since December 2004, He served as Board secretary of the company since December 27, 2010, He served as Director of the Company since October 2011.
Independent directors:
Jin Ligang, male, was born in August 1959, graduated from Beijing Foreign Trade College in 1980. From 1981 to 1983, he majored in international economy at Rome LUISS Private University. He once worked at North America and Oceania Department of Third Bureau of Ministry of Foreign Trade and Economic Cooperation, who was in charge of U.S.-related affairs. He has served as assistant of board chairman and president and office director of West Europe China Trade Center (Hamburg, West Germany), deputy chief and chief of America and Oceania Department of Ministry of Foreign Trade and Economic Cooperation, business counselor of Economic and Commercial Department of Embassy in U.S. and business counselor of Economic and Business Office of Consulate General in New York in succession. He now serves as board chairman of American Stone Bridge International Company and director of Beijing Decision Making& Consultation Center.. He served as Independent directors of the company since April 2008.
Shen Songqin, male, was born in January 1957, has doctor's degree. In 1980, he graduated from Hangzhou University and worked there after graduation. He studied for Master's degree at Hangzhou University from 1985 and obtained the degree of master of Arts in 1988. He studied for doctor's degree from 1995 and obtained the degree of doctor of literature in 1998. His dissertation was appraised "Excellent Dissertation for Doctor's Degree in China in 2000". He now is a professor, doctor tutor and deputy dean of Chinese Language Department of Zhejiang University. In 2006, he was appraised as Qianjiang Scholor of Zhejiang Province (specially engaged professor). In 2007, he was appraised as Middle-aged/Young Expert with Outstanding Contribution in Zhejiang Province". He served as independent director of the Company since April 2008.
Chen Jinmei, female, born in June 1952, is a senior accountant of professor level with master's degree. She studied in Hangzhou Electronic Industry College, Party School of Zhejiang Provincial Party Committee, Macao Science and Technology University and Zhejiang University in succession. She once served as director general and secretary of Party committee of Financial Bureau and Local Taxation Bureau of Hangzhou, a member of Hangzhou municipal Party committee and a NPC deputy of Hangzhou and Zhejiang Province. She has now retired. She served as Independent director of the Company since August 2012.
Ms. Chen Jinmei is appointed as an independent director of the company and resigned from the Board of Directors for her personal reasons on January 21, 2014. Her resignation application will be effective after a new independent director elected by theshareholders‘ meeting of the company replaces her. During this transitional phase, Ms. Chen will continue to assume responsibility as an independent director.
Supervisors:
Dong Binggen, male, was born in July 1949, an engineer, with bachelor degree, graduated from East China Textile Technology Institute in 1977. He ever took the post of deputy president of Zhejiang Silk Technology Institute, general manager of China Clothes Headquarters and board chairperson of China Clothes Association, etc.; he is now in charge of secretary of Party Committee, chairman of the board and general manager of Shenzhen Union Development Group Co., Ltd. and chairman of the Board of Shenzhen Union Holdings Co., Ltd., He served as
Chairman and held the position of Chairman of the Supervisory Committee of the Company from June 2002 till
now.
Huang Xiaoping, female, Was born in January 1957, an Economist, is a junior college graduate, once served as policewoman of Public Security Bureau of Dan County, Hainan, chief staff and deputy director of office, deputy chief and chief of Personnel& Labor Division and office director of China Garment Industry Corporation, vice chairman of China Garment Association.. She now serves as deputy secretary of Party committee and secretary of discipline committee of Union Development Group Co., Ltd. Co., Ltd. she served as Supervisor of the company since April 2008.
Pan Weichao, male, Was born in August 1951, is a junior college graduate., has worked at the Company since April 1984. He has served successively as vice chairman of labor union, Manager of General Affairs Dept. and chairman of labor union. He now serves as Manager of affairs Dept of the Company, he has served as employee-representing supervisor of the Company Since April 2008.
Secretary of the Board of Directors:
Zhang Jinliang (Refer to Director column for details)
Manager of Finance Dept:
Ren Changzheng, male, was born in August 1975, In 1997,he graduated from Guizhou Finance University, once worked at Financial Division of Guizhou Yunman Aircraft Factory and Planning and Finance Division of Union Development Group Co., Ltd. He now serves as Manager of Finance Dept of the Company.
Office taking in shareholder companies
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
|||Titles|||Does he /she|
|Names of the||engaged in|Sharing date||receive|
|||||Expiry date of||
|persons in|Names of the shareholders|the|of office||remuneration or|
|||||office term||
|office||shareholder|term||allowance from|
|||s|||the shareholder|
|||Secretary||||
|||of Party||||
|||committee,||||
|Dong||chairman|May 18,|||
||Union Development Group Co., Ltd.|||May 17, 2015|Yes|
|Binggen||of board of|2012|||
|||directors||||
|||and||||
|||President||||
|Dong||Board||||
||Union Holdings Co., Ltd.||June 21, 2013|June 20, 2016|No|
|Binggen||chairman||||
|||Vice|May 28,|||
|Ding Yue|Union Development Group Co., Ltd.|||May 17, 2015|Yes|
|||President|2012|||
|||Convener||||
|Ding Yue|Union Holdings Co., Ltd.|of the|June 21, 2013|June 20, 2016|No|
|||Supervisor||||

|||||||
|-|-|-|-|-|-|
|||y||||
|||Committee||||
|||Vice||||
|Hu Yongfeng|Union Development Group Co., Ltd.||May 18, 2012|May 17, 2015|Yes|
|||President||||
|||Vice Board||||
|Hu Yongfeng|Union Holdings Co., Ltd.||June 21, 2013|June 20, 2016|No|
|||chairman||||
|||Secretary||||
|||of Party||||
|Huang||committee,|October 1,|||
||Union Development Group Co., Ltd.||||Yes|
|Xiaoping||secretary of|2008|||
|||discipline||||
|||committee||||
|Huang||||||
||Union Holdings Co., Ltd.|Director|June 21, 2013|June 20, 2016|No|
|Xiaoping||||||
|||Manager of||||
||||February 1,|||
|Zhang Mei|Union Development Group Co., Ltd.|Finance|||Yes|
||||2011|||
|||Dept.||||
|Zhang Mei|Union Holdings Co., Ltd.|Director|June 21, 2013|June 20, 2016|No|
|||Deputy||||
||Shenzhen Textile(Holding) Co.,||August 17,|||
|Feng Junbin||general||August 16, 2016|Yes|
||Ltd.||2013|||
|||manager||||
|Notes|N/A|||||

Offices taken in other organizations
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
||||||Whether|
||||||receiving|
||||Office term|Office term||
|Name|Name of other units|Position|||remuneration|
||||start from|ended||
||||||from other units|
||||||or not|
||Manqi Investment Development Co.,|Board||||
|Shu Yibo|||July 1, 2002||Yes|
||Ltd|chairman||||
||STONEBRIDGE Enterprise|Board|January 1,|||
|Jin Ligang|||||Yes|
||Consultant （Beijing）Co., Ltd.|chairman|2008|||
|Shen||||||
||Hangzhou Normal University|President|June 1, 2009||Yes|
|Songqin||||||
|Notes|N/A|||||

III. Remuneration to directors, supervisors and senior executives
Decision-making procedures, basis for determination and actual payment of the remuneration to directors ,
supervisors and senior executives
The remuneration appraisal committee of the board of directors of the Company proposed remuneration standards according to the responsibilities, work scope and importance of directors, supervisors and senior executives, the earnings of the Company for the current year and the remuneration level of relevant post and submitted it to the board of directors for approval. After approval, the remuneration was paid on monthly basis. The remuneration of independent directors is subject to approval by the shareholders' meeting.
Remuneration to directors, supervisors and senior executives in the reporting period
Unit：RMB’0000
|||||||||
|-|-|-|-|-|-|-|-|
||||||||Remuneratio|
||||||Total|Total||
||||||||n actually|
||||||remuneration|remuneration||
||||||||receives at|
|Name|Positions|Sex|Age|Office status|received|received||
||||||||the end of|
||||||from the|from the||
||||||||the reporting|
||||||Company|shareholder||
||||||||period|
||Board|||||||
||chairman/Ge|||||||
|Hu Yongfeng||Male|51|In Office|38||38|
||neral|||||||
||Manager|||||||
||Vice Board|||||||
|Ding Yue||Male|55|In Office|0|||
||chairman|||||||
||Vice Board|||||||
|Shu Yibo||Female|41|In Office|0|||
||chairman|||||||
|Zhang Mei|Director|Female|38|In Office|0|||
|Feng Junbin|Director|Male|51|In Office|0|||
|Zhang|Director ，|||||||
|||Male|51|In Office|0|||
|Jinliang|Deputy GM|||||||
||Independent|||||||
|Jin Ligang||Male|54|In Office|5||5|
||director|||||||
||Independent|||||||
|She Songqin||Male|56|In Office|5||5|
||director|||||||
||Independent|||||||
|Chen Jinmei||Female|61|In Office|5||5|
||director|||||||
||Chairman of|||||||
|Dong|the|||||||
|||Male|64|In Office|0|||
|Binggang|supervisory|||||||
||committee|||||||
|Huang|Supervisor|Female|56|In Office|0|||

|||||||||
|-|-|-|-|-|-|-|-|
|Xiaoping||||||||
|Pan Weichao|Supervisor|Male|62|In Office|9||9|
|Zhang|Board|||||||
|||Male|51|In Office|23||23|
|Jinliang|secretary|||||||
|Ren|Manager of|||||||
|||Male|38|In Office|15||15|
|Changzheng|Finance Dept|||||||
|Total|--|--|--|--|100|0|100|

 Incentive equity to directors, supervisors or/and senior executives in the reporting period
□Applicable√Not applicable
IV. Retirement and dismissal of Directors, Supervisors and senior Executives
||||||
|-|-|-|-|-|
|Names|Titles|Types|Date|Causes|
|||||Ms. Chen Jinmei resigned from the Board of Directors for|
|||||her personal reasons，Her resignation application will be|
||Independent||||
|Chen Jinmei||Dimission|January 21, 2014|effective after a new independent director elected by the|
||director||||
|||||shareholders’ meeting of the company replaces her.|
|||||During this transitional phase.|

V. Change of the Core Team of Technology of Key technical personnel (Other than director, supervisor or senior executive) in the Reporting Period
There is no change of the Core Team of Technology of Key technical personnel (Other than director, supervisor or senior executive)in the Reporting Period
VI. Particulars about employees.
|||||
|-|-|-|-|
|Classified|Divided by function|Number of persons|Proportion|
|Classified according typrofessions|Financial|5|16%|
||Administrative|4|13%|
||Logistics|22|71%|
||Total|31|100%|
|Classified according byeducation background|Postgraduate or above|1|3%|
||Universities|3|10%|
||Colleges|3|10%|
||Mid-school or below|24|77%|
||Total|31|100%|

As of December 31, 2013, The Company should bear expenses for 1 retired employees.
（1） The figure of professional composition
（1） The figure of education background of the professional composition
VIII. Administrative structure
I. General situation
Thecompany‘s governance meets the requirements of regular documents on the governance of the listed companies issued by China Securities Regulatory Commission.
During the reporting period, The company has strictly abided by the relevant laws, rules and regulations requested on―CorporateLaw‖,―SecuritiesLaw‖,―Listing Rules of Shenzhen StockExchange‖ and―Governance Rules of ListedCompanies‖ and by China Securities Regulatory Commission, established and perfected the internal control management system, and constantly made the deep improvement of the corporate governance activities to further standardize the company operations and improve the management level. Thecompany‘s governance meets the basic requirements of regular documents on the governance of the listed companies issued by China Securities Regulatory Commission.
(1).. Shareholders and shareholders' general meeting: The Company convened and held shareholders' general meeting strictly according to the requirements of Opinions on Standardization of Shareholders' General Meeting of Listed Companies, formulated Rules of Procedure of Shareholders' General Meeting, ensured all shareholders, especially medium and small shareholders, enjoy equal position and can fully exercise their own rights.
(2).. Relationship between the controlling shareholder and the Company: The acts of the controlling shareholder of the Company were standardized. It did not exceed the authority of the shareholders' general meeting to directly or indirectly intervene with the decision-making and operating activities of the Company. The Company is independent from its controlling shareholder in respect of
personnel, assets, finance, organ and business. The board of directors, the supervisory committee and internal organ of the Company are able to operate independently.
3. The Directors and The Board of Directors: the Board of Directors includes four special committees, such as Audit Committee, Nomination Committee, Strategy Committee and Remuneration and Appraisal Committee, which has provided a favorable support to the company for the decision-making related issues. Each special committee has operated according to their work responsibilities and procedure rules, made research and examination for the relative business and major issues of the company, and expressed the professional opinions in the Board of Directors to offer support and advice for the scientific decision-making of the Board and ensure theBoard‘s work more scientific and efficient. Also, the organization of the Board of Directors is in line with the requirement of laws and regulations, and the independent directors play an important role in the corporate decision-making. So, the company attaches importance to the function of the independent directors. In thecompany‘s management, the independent directors make careful review and express the independent views for the financial audit, the affiliated transactions and other issues.
(4).Supervisors and the supervisory committee: The number and composition of the Supervisory Committee of the Company complied with the requirements of laws and regulations. The Supervisory Committee of the Company formulated the Rules of Procedure of the Supervisory
Committee. The supervisors of the Company were able to perform their duties seriously, take the attitude of being responsible for all shareholders and supervise the legality and regulation conformity of the Company's finance and the duty performance of the directors, managers and other senior executives of the Company.
5. The Company and The Affiliated Party: the affiliated transactions between the company and the affiliated party are strictly managed and the audit of the affiliated transactions is performed in accordance with the relevant procedures. Also, the affiliated transactions are in compliance with the laws and regulations, and there not exist the issues that the major shareholders make use of the affiliated transactions to occupy the funds of the listed company.
(6)Information disclosure and transparency: The Company designated the secretary to the board of directors to be responsible for information disclosure, Regulations on Management of Information Disclosure,Regulations on Management of External Information Users and reception of shareholder and consultation. In the report period, the Company was able to truly, accurately, completely and timely disclose relevant information according to the provisions of laws, regulations and the Articles of Association of the Company. The Company will continue to operate in a standardized way strictly according to the requirements of relevant laws and regulations including the Company Law, further perfect company administration structure and establish and improve various regulations in light of the gap with the requirements of Standards of Administration of Listed Companies, ensure the maximization of shareholders' interests and safeguard the lawful rights and interests of all shareholders.
In the report period, The Company further increased information transparency and properly carried out publicity work for protection of investors. It timely answered the questions of investors and communicated with medium and small investors by making use of telephone, email, especially the platform for communication with investors set up by Shenzhen Stock Exchange to let them know itself better and improve its information
transparency.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions of CSRC,
□ Yes√ No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions of CSRC.
Implementation of the Campaign of Corporate Governance and Preparation and Implementation of the
Registration Management System for insiders
In the Report period, The company has not found the situation that the relevant personnel is engaged in the insider transaction by using the insider information and suggest others to conduct the transaction with the insider information, there is no the situation that the insider information is disclosed, and not exists the situation that the company shall be taken a crackdown and ordered for rectification by the regulatory department because of the implementation of the Registration System on Learners of Insider Information or the suspicion of insider transaction.
II. Annual General Meeting and ExtraordinaryShareholders‘ Meetings in the Reporting Period
1.Annual General Meeting
|||||||
|-|-|-|-|-|-|
|||Description of||||
|Sessions|Meeting Date||Resolution|Disclosure date|Disclosure index|
|||proposals||||
|||(1) The Work||||
|||Report of the||||
|||Board of||||
|||Directors for||||
|||2012;||||
|||(2) The Work||||
||||||Announcement|
|||Report of the||||
||||||No. 2013-0640)|
|||supervisory||||
||||||Securities Times ,|
|||Committee for||||
||||||Hong Kong|
|2012 Shareholders‘||2012; （3）、||||
||June 26, 2013||Adoption|June 27, 2013|Commercial|
|general meeting||Annual Report||||
||||||Daily and|
|||for 2012 and its||||
||||||www.cninfo.com.|
|||summary; (4) The||||
||||||cn on June 27,|
|||Preplan for Profit||||
||||||2013.|
|||Distribution for||||
|||2012;(5) The||||
|||Proposal for||||
|||Retaining Certified||||
|||Public Accountants||||
|||in 2013.||||

2.ProvisionalShareholders‘ Meetings
|||||||
|-|-|-|-|-|-|
|||Description of||||
|Sessions|Meeting Date||Resolution|Disclosure date|Disclosure index|
|||proposals||||
||||||Announcement|
||||||No. 2013-0650)|
||||||Securities Times ,|
|The first provisional||||||
||||||Hong Kong|
|shareholders‘||Proposal on real||||
||November 5, 2013||Adoption|November 6, 2013|Commercial|
|General meeting in||estate for sale||||
||||||Daily and|
|2013||||||
||||||www.cninfo.com.|
||||||cn on November|
||||||6, 2013.|

III. Duty performance of independent Directors
1. Attendance of Board Meetings and General Meetings
||||||||
|-|-|-|-|-|-|-|
|Independent Directors‘ Attendance at Board Meetings|||||||
||Number of||||||
|||||||Failure to|
||Board||Number of||||
|||||||personally|
||meetings|Number of|meetings|Number of|||
|Independent|||||Number of|attend board|
||necessary to|spot|attended by|attendances by|||
|Directors|||||absence|meetings|
||be attended in|attendances|Communicatio|representative|||
|||||||successively|
||the reporting||n||||
|||||||twice (Yes/No)|
||period||||||
|Chen Jinmei|6|1|5|0|0|No|
|Jin Ligang|6|1|5|0|0|No|
|Shen Songqin|6|1|5|0|0|No|
|Number of general meetings|||||||
|attended by independent directors||2|||||
|as non-voting delegates|||||||

Notes to failure to personally attend Board Meetings Successively Twice
N/A
2.Objection of independent directors on some relevant issues
Objection of independent directors on some relevant issues
□ Yes√No
Independent directors proposed no objection against the relevant matters in the reporting period.
3. Other notes to duty performance of independent directors
Has an independentdirector‘s advice to the Company been accepted
√Yes□No
Explanation on acceptance of or failure to accept an independentdirector‘s advice to the Company.
In the report period, the independent directors of the Company attended the meetings of the board of
directors and all special committees on time, expressed independent opinions on the proposals of the board of directors. They gave many opinions and suggestions during meetings and adjournment and the Company adopted all of them.
IV. Duty Performance of Special Committees under the Board of Directors in the Reporting Period
The board of directors of the Company has special committees including audit committee, remuneration and
appraisal committee, strategy committee and nomination committee. According to the scope of authority specified
in the working rules for them, the committees conducted study and put forward opinions and suggestions for
reference by the board of directors for decision making.
According to relevant regulations of CSRC, the audit committee of the board of directors of the Company did the following work during the preparation of the annual report of the Company for 2013:
1. On November 18, 2013, the Audit Committee and the management of the company and the certified accountants for annual audit (CPAs) of Dahua Accounting Office Ltd. (special general partner) held the first meeting on the audit work of the year 2013 annual financial report. The members of the Audit Committee and the management of the company made the detailed introduction of the basic situation of the company to the CPAs. 2. On January 3, 2014, the Audit Committee of the company examined the audit work plans of the year 2013 annual financial report, heard the audit schedule and progress made by the accountants for annual audit, and agreed to the audit work of the 2013 annual financial report proposed by Accounting Office.
3. On January 9, 2013, the Audit Committee under the Board of Directors reviewed the year 2013 annual financial accounting statements offered by the company, and made the following comments: the year 2013 annual financial accounting statements basically reflected the assets condition and operation performance, the Audit Committee agreed to conduct the audit work of annual financial report on this basis, and advised the Finance Department to actively cooperate and coordinate this audit work, in order to strengthen communication and contact and timely reflect some issues in the process of audit and the advancement of audit work to the Audit Committee.
4. On January 27, 2014, the Audit Committee under the Board of Directors and the certificated accountants of annual audit held a conference call. CPAs described the audit conditions on the phone, and the members of the Audit Committee believed that the views of CPAs on all major matters were basically reflect thecompany‘s financial condition on December 31, 2013 and the business performance and cash flows of the year 2013 truly and fairly. So, theydidn‘t make objection to the preliminary results of the certificated accountants of annual audit. 5. On February 26, 2014, the Audit Committee under the Board of Directors examined thecompany‘s 2013 annual audit report issued by Dahua Accounting Office Ltd. (special general partner), and the Audit Committee agreed to the audit results on the year 2013 annual accounting statements by Dahua Accounting Office Ltd. (special general partner) and agreed to submit the financial audit report to the Board of Directors to examine. For the summary report of the year 2013 annual audit work issued by Dahua Accounting Office Ltd. (special general partner), the Audit Committee believed that Dahua Accounting Office Ltd. (special general partner) has strictly followed the provisions of auditing regulations and standards to develop and complete thecompany‘s 2013 annual audit work with the sufficient auditing time, high professional quality and strong performance ability and sense of risk, the issued audit report fully reflected thecompany‘s financial condition, business performance and cash flows of the year 2013, and its audit conclusion truly reflected the actual situation of the company.
The Duty Performance of the Remuneration Committee under the Board of Directors of the Company: the Remuneration Committee under the Board of Directors has reviewed the remuneration of the directors, the supervisors and the senior management members of the company which was disclosed in 2013 according to the provisions of the―Detailed Work Rules of the Remuneration and Appraisal Committee under the Board ofDirectors‖, and believed that the remuneration of the directors, the supervisors and the senior management members disclosed in year 2013 annual report of the company has been strictly implemented as per the relevant provisions.
V. Work of the supervisory Committee
Did the supervisory Committee find any risk existing in performing the supervision activities in the reporting
period
□Yes√No
The supervisory Committee has no objection against any matters under supervision in the reporting period VI. Independence and Completeness in business, personnel , assets, organization and finance The Company is independent from its controlling shareholder in respect of personnel, assets, finance, organization and business. The particulars are as follows:
1. Business: The Company has complete business and the ability of independent operation. It is completely independent from its controlling shareholder in respect of business.
2. Personnel: The Company is independent in respect of labor, personnel and wage management. Senior
executives received remuneration from the Company, who neither held position at nor received remuneration from the controlling shareholder.
3. Assets: The Company has complete assets. Its property rights are definite and not related to its controlling shareholder and other shareholders.
4. Organization: The Company established an organizational structure that is completely independent of its controlling shareholder. The board of directors, the supervisory committee and internal organs of the Company are able to operate independently.
5. Finance: The Company has independent finance. It set up independent finance department and established independent financial accounting system. It has standardized and independent financial and accounting system and financial control system applicable to branches and subsidiaries. The Company independently pays taxes according to law. It opened accounts with banks independently. The Company and its controlling shareholder do not use the same bank account.
VII. Horiontal Competitions
1. There not exists the inter-industry competition between the company and the controlling shareholder& its other controlled enterprises..
2. There not exists the inter-industry operation between the company and the subordinate enterprise of actual controller.
3. Currently, the main affiliated transaction between the company and the actual controller is house tenancy, and the affiliated transaction follows the fair principle of the market. So, there is no the situation that the authenticity of thecompany‘s operation results is affected.
VIII. Assessment and incentive Mechanism for Senior executives
We appraise the performance of executives according to relevant index and criterions, the results of performance appraisal are recorded in the archives of executives, and are linked to the compensations and hiring of executives.
IX. Internal Control
I. Internal control Construction
The company has abided by the requirements of regular documents such as―CorporateLaw‖ and―Internal Control Guideline in ListedCompanies‖, established and improved the corporate governance structure, perfected the internal control system, and met all the provisions of the relevant rules and regulations. Also, the company has strictly implemented the relevant systems on the internal control, promoted the normative operations and healthy development of the company, protected the legitimate rights and interests of investors, guaranteed thecompany‘s assets security and accelerated the stable, healthy and sustainable development for the company. For the details about the self-evaluation of internal control of the company during the reporting period, please see the―Annual Self-evaluation Report of Internal Control in2013‖.
II. Statement of the Board of directors on the Responsibility of internal control
The Internal control is implemented by the Board of Directors, the Supervisory Committee, Management and all employees of the company aiming at the achievement of control target processes. The Board of Directors complies with the national laws and regulations and the requirements of securities regulatory authorities to constantly improve all the rules and regulations of thecompany‘s internal control, promote the establishment, perfection and effective operation of thecompany‘s internal control, and assume important responsibility for the integrity and rationality of all construction of internal control system. Also, the company senior managers bear the primary responsibility for the implementation of the internal control system.
III.Basis for establishment of internal control of the Financial Report
The company, regarding the related laws and regulations of―Accounting Law of thePeople‘s Republic ofChina‖,―Fundamental Norms for Enterprise InternalControl‖ and―Application Guidelines of Enterprise Internal Control (No.14)— FinancialReport‖ as the basis of establishment of the internal control of financial report for the company, implements the internal control for the standardization of preparing the financial report, submitting and analysis of use of control processes, improvement the authorization and approval system on all aspects of financial report, establishment of daily information verification system, full use of accounting information technology, accounting treatment of determination of the major issues, verification of debt of inventory assets, establishment and implementation of calculation and budget and other key aspects, in order to ensure the legality, compliance, trueness and integrity.
IV. Self-assessment report of the internal control
|||
|-|-|
|About the significant Defects of the internal control found in the internal control self-assessment report in the||
|reporting period||
|No significant defect of internal control was found in the reporting period||
|Date of disclosing the internal||
|control self-assessment report,|February 28, 2014|
|full text||

|||
|-|-|
|Index of disclosing the||
|internal control||
||Refer to Announcement that disclosed on www.cninfo.com.cn on February 28, 2014.|
|self-assessment report, full||
|text||

V.Internal control audit report
√Applicable□Not applicable
|||
|-|-|
|Review opinions in the internal control audit report||
|We believe that, Shenzhen Victor Onward Textile Industrial Co., Ltd. maintained efficient internal control of||
|financial reports in all significant aspects according to ― Basic Standards of Corporate Internal Control‖ and||
|relevant regulations on December 31, 2013.||
|Date of disclosing the internal||
||Februar 28, 2014|
|control audit report, full text||
|Index of disclosing the||
|internal control audit report,|Refer to Announcement that disclosed on www.cninfo.com.cn on February 28, 2014.|
|full text||

Has the CPAs issued a qualifiedauditor‘s report of internal control .
□ Yes√No
Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of Directors
√Yes□No
VI. Establishment and implementation of the Responsibility investigation system for serious Errors in the Annual Report
In the report period, The company examine itself accordingto―Responsibility Claim System on Significant Error in Information Disclosure of AnnualReport‖,there are no the occurrence of serious accounting errors correction, grave omission of information supplements.
X. Financial Report
I. Audit report
|||
|-|-|
||Issued unqualified auditor's report with paragraph of|
|Type of audit opinion||
||emphasized matters|
|Date for signing the auditor‘s report|February 26, 2014|
||Da Hua Certified Public Accountants(Special General|
|Name of audit firm||
||Partnership)|
|Document No. of the auditor‘s report|Dahuashenzi[2014]No.001429|
|Name|Xu Haining , Yang Chunxiang|

Auditors‘ Report
Dahuashenzi[2014]No.001429 To All shareholders of Shenzhen Victor onward Textile Industrial Co.,Ltd.：
We audited accompanying financial statements of Shenzhen Victor Onward Textile Industrial Co., Ltd . (hereinafter referred to as "the Company"), including Consolidation and parent Company balance sheet on December 31, 2013, Consolidation and parent Company profit statement, Consolidation and parent Company cash flow statement for the year 2013 and Consolidation and parent Company statement of change in shareholders' equity and the notes to financial statements.
I.Management‘s responsibility for the financial statements
The Management is responsible for the preparation and the true and fair presentation of these financial statements in accordance with Accounting Standard for Business Enterprises and China Accounting System For Business Enterprises. These responsibilities include: (i) designing, implementing and maintaining internal control relevant to the preparation and the true and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error;(ii) selecting and applying appropriate accounting policies; (iii) and making accounting estimates that are reasonable in the circumstances.
II.Auditor‘s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted
our audit in accordance with the Standards on Auditing for Certified Public Accountants. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to
whether the financial statements free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on theauditor‘s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity‘s preparation and true and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the propose of expressing an opinion on the effectiveness of theentity‘s internal control.. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Auditing opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Company as of 31 December 2013 and its financial performance and cash flows for the year then ended in accordance with the Accounting Standards for Business Enterprises and China Accounting System for Business Enterprises.
IV. Matters emphasized
We remind the users of financial statements to pay attention to the fact that the Company stopped production and dismissed most of workers since March 2007. And most subsidiaries of the company had stopped production and it maintained daily operation by house leasing. Shenzhen Victor Onward Textile Industrial Co., Ltd. had disclosed its improvement measures in Note 11of Financial Statement, but its sustainable operation ability is still uncertain. This paragraph does not affect audit opinions that have been given.
Da Hua Certified Public Accountants(Special General C.P.A：Xu Haining
Partnership)
Beijing China
C.P.A：Yang Chunxiang
February 26, 2014
II. Financial Statements
Statement in Financial Notes are carried in RMB/CNY
1.Consolidated Balance sheet
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
Unit：RMB
||||
|-|-|-|
|Items|Year-end balance|Year-beginning balance|
|Current asset：|||
|Monetary fund|63,502,910.00|52,227,262.00|
|Settlement provision|||
|Outgoing call loan|||
|Trading financial assets|||
|Bill receivable|1,500,000.00|1,500,000.00|
|Account receivable||744,712.00|
|Prepayments|25,192.00|176,443.00|
|Insurance receivable|||
|Reinsurance receivable|||
|Provisions of Reinsurance|||
|contracts receivable|||
|Interest receivable|79,340.00|38,414.00|
|Dividend receivable|||
|Other account receivable|311,279.00|260,005.00|
|Repurchasing of financial assets|||
|Inventories||101,536.00|
|Non-current asset due in 1 year|||
|Other current asset|||
|Total of current assets|65,418,721.00|55,048,372.00|
|Non-current assets：|||
|Loans and payment on other‘s|||
|behalf disbursed|||
|Disposable financial asset|582,942.00|751,542.00|
|Expired investment in possess|||
|Long-term receivable|||
|Long term share equity|||
||66,931,685.00|65,784,312.00|
|investment|||

||||
|-|-|-|
|Property investment|23,458,153.00|31,041,484.00|
|Fixed assets|7,191,205.00|12,416,459.00|
|Construction in progress|||
|Engineering material|||
|Fixed asset disposal|||
|Production physical assets|||
|Gas & petrol|||
|Intangible assets|1,820,459.00|1,860,764.00|
|R & D petrol|||
|Goodwill|5,099,624.00|5,099,624.00|
|Long-germ expenses to be|||
|amortized|||
|Differed income tax asset|||
|Other non-current asset|||
|Total of non-current assets|105,084,068.00|116,954,185.00|
|Total of assets|170,502,789.00|172,002,557.00|
|Current liabilities|||
|Short-term loans|||
|Loan from Central Bank|||
|Deposit received and hold for|||
|others|||
|Call loan received|||
|Trade off financial liabilities|||
|Bill payable|||
|Account payable|3,186,939.00|3,239,571.00|
|Advance payment|1,076,531.00|2,778,488.00|
|Selling of repurchased financial|||
|assets|||
|Fees and commissions receivable|||
|Employees‘ wage payable|1,109,352.00|766,680.00|
|Tax payable|4,250,191.00|1,622,074.00|
|Interest payable|||
|Dividend payable|1,215,946.00|1,215,946.00|
|Other account payable|22,663,345.00|32,227,317.00|
|Reinsurance fee payable|||

||||
|-|-|-|
|Insurance contract provision|||
|Entrusted trading of securities|||
|Entrusted selling of securities|||
|Non-current liability due in 1 year|||
|Other current liability|1,547,263.00|1,547,263.00|
|Total of current liability|35,049,567.00|43,397,339.00|
|Non-current liabilities：|||
|Long-term loan|1,101,349.00|1,033,936.00|
|Bond payable|||
|Long-term payable|8,230,694.00|8,488,953.00|
|Special payable|||
|Expected liabilities|||
|Differed income tax liability|702,735.00|766,660.00|
|Other non-current liabilities|836,792.00|836,792.00|
|Total of non-current liabilities|10,871,570.00|11,126,341.00|
|Total of liability|45,921,137.00|54,523,680.00|
|Owners‘ equity|||
|Share capital|169,142,356.00|169,142,356.00|
|Capital reserves|39,645,048.00|39,790,784.00|
|Less：Shares in stock|||
|Special reserves|||
|Surplus reserves|26,704,791.00|26,704,791.00|
|Common risk provision|||
|Undistributed profit|-108,059,131.00|-116,273,941.00|
|Different of foreign currency|||
||-1,112,992.00|-511,599.00|
|translation|||
|Total of owner‘s equity belong to|||
||126,320,072.00|118,852,391.00|
|the parent company|||
|Minority shareholders‘ equity|-1,738,420.00|-1,373,514.00|
|Total of owners‘ equity|124,581,652.00|117,478,877.00|
|Total of liabilities and owners‘|||
||170,502,789.00|172,002,557.00|
|equity|||

Legal representative：Hu Yongfengn
Person-in-charge of the accountingwork：Zhang Jinliang
Person-in -charge of the accountingorgan：Ren Changzhengi
2. Balance sheet of Parent Company
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
Unit：RMB
||||
|-|-|-|
|Items|Year-end balance|Year-beginning balance|
|Current asset：|||
|Monetary fund|10,557,501.00|17,293,509.00|
|Trading financial assets|||
|Bill receivable|1,500,000.00|1,500,000.00|
|Account receivable|||
|Prepayments|||
|Interest receivable|||
|Dividend receivable|||
|Other account receivable|80,967,376.00|72,818,786.00|
|Inventories||101,536.00|
|Non-current asset due in 1 year|||
|Other current asset|||
|Total of current assets|93,024,877.00|91,713,831.00|
|Non-current assets：|||
|Disposable financial asset|||
|Expired investment in possess|||
|Long-term receivable|||
|Long term share equity|||
||36,788,953.00|36,788,953.00|
|investment|||
|Property investment|4,723,575.00|5,060,748.00|
|Fixed assets|4,384,712.00|9,145,661.00|
|Construction in progress|||
|Engineering material|||
|Fixed asset disposal|||
|Production physical assets|||
|Gas & petrol|||
|Intangible assets|1,820,459.00|1,860,764.00|
|R & D petrol|||

||||
|-|-|-|
|Goodwill|||
|Long-germ expenses to be|||
|amortized|||
|Differed income tax asset|||
|Other non-current asset|||
|Total of non-current assets|47,717,699.00|52,856,126.00|
|Total of assets|140,742,576.00|144,569,957.00|
|Current liabilities|||
|Short-term loans|||
|Trade off financial liabilities|||
|Bill payable|||
|Account payable|113,344.00|113,344.00|
|Advance payment|302,540.00|2,002,540.00|
|Employees‘ wage payable|677,181.00|735,970.00|
|Tax payable|767,076.00|573,074.00|
|Interest payable|||
|Dividend payable|||
|Other account payable|1,158,902.00|884,092.00|
|Non-current liability due in 1 year|||
|Other current liability|1,547,263.00|1,547,263.00|
|Total of current liability|4,566,306.00|5,856,283.00|
|Non-current liabilities：|||
|Long-term loan|||
|Bond payable|||
|Long-term payable|||
|Special payable|||
|Expected liabilities|||
|Differed income tax liability|4,180,138.00|4,180,138.00|
|Other non-current liabilities|836,792.00|836,792.00|
|Total of Non-current liabilities|5,016,930.00|5,016,930.00|
|Total of liability|9,583,236.00|10,873,213.00|
|Owners‘ equity|||
|Share capital|169,142,356.00|169,142,356.00|
|Capital reserves|31,606,598.00|31,606,598.00|

||||
|-|-|-|
|Less：Shares in stock|||
|Special reserves|||
|Surplus reserves|26,309,287.00|26,309,287.00|
|Provision of general risk|||
|Undistributed profit|-91,500,667.00|-88,963,263.00|
|Different of foreign currency|||
||-4,398,234.00|-4,398,234.00|
|translation|||
|Total of owners‘ equity|131,159,340.00|133,696,744.00|
|Total of liabilities and owners‘|||
||140,742,576.00|144,569,957.00|
|equity|||

Legal representative：Hu Yongfengn
Person-in-charge of the accountingwork：Zhang Jinliang
Person-in -charge of the accountingorgan：Ren Changzhengi
3.Consolidated Profit Statement
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
Unit：RMB
||||
|-|-|-|
|Items|Amount in this period|Amount in last period|
|I. Income from the key business|26,998,990.00|11,095,669.00|
|Incl：Business income|26,998,990.00|11,095,669.00|
|Interest income|||
|Insurance fee earned|||
|Fee and commission received|||
|II. Total business cost|19,403,168.00|13,388,125.00|
|Incl：Business cost|9,461,003.00|5,413,356.00|
|Interest expense|||
|Fee and commission paid|||
|Insurance discharge payment|||
|Net claim amount paid|||
|Insurance policy dividend paid|||
|Insurance policy dividend paid|||
|Reinsurance expenses|||

||||
|-|-|-|
|Business tax and surcharge|597,749.00|487,000.00|
|Sales expense|300,128.00|295,678.00|
|Administrative expense|8,073,279.00|7,567,920.00|
|Financial expenses|247,455.00|-444,174.00|
|Asset impairment loss|723,554.00|68,345.00|
|Add：Gains from change of fir|||
|||-25,480.00|
|value （―-‖for loss）|||
|Investment gain（―-‖for loss）|849,782.00|2,582,153.00|
|Incl: investment gains from|||
||849,782.00|2,576,108.00|
|affiliates|||
|Gains from currency exchange|||
|（―-‖for loss）|||
|III. Operational profit（―-‖for loss|8,445,604.00|264,217.00|
|Add：Non-business income|1,923,105.00|29,498.00|
|Less：Non business expenses|134,222.00|582,915.00|
|Incl ： Loss from disposal of|||
||32,666.00||
|non-current assets|||
|IV.Total profit(―-‖for loss)|10,234,487.00|-289,200.00|
|Less：Income tax expenses|2,384,583.00|-41,869.00|
|V. Net profit（―-‖for net loss）|7,849,904.00|-247,331.00|
|Including: Net profit realized by|||
|the entity taken over before the|||
|takeover|||
|Net profit attributable to the|||
||8,214,810.00|-247,331.00|
|owners of parent company|||
|Minority shareholders‘ equity|-364,906.00||
|VI. Earnings per share：|--|--|
|（I）Basic earnings per share|0.0486|-0.0015|
|(II)Diluted earnings per share|0.0486|-0.0015|
|VII. Other comprehensive income|-747,129.00|52,626.00|
|VIII. Total comprehensive income|7,102,775.00|-194,705.00|
|Total comprehensive income|||
|attributable to the owner of the|7,467,681.00|-194,705.00|
|parent company|||
|Total comprehensive income|||
||-364,906.00||
|attributable minority shareholders|||

Legal representative：Hu Yongfengn
Person-in-charge of the accountingwork：Zhang Jinliang
Person-in -charge of the accountingorgan：Ren Changzheng
4. Profit statement of the Parent Company
Prepared by:
Shenzhen Victor Onward Textile Industrial Co., Ltd.
Unit：RMB
||||
|-|-|-|
|Items|Amount in this period|Amount in last period|
|I. Income from the key business|3,067,093.00|2,834,664.00|
|Less：Business cost|1,619,224.00|1,585,723.00|
|Business tax and surcharge|205,239.00|143,998.00|
|Sales expense|||
|Administrative expense|5,680,368.00|5,266,633.00|
|Financial expenses|-80,168.00|-2,253,351.00|
|Asset impairment loss|-21,157.00|61,132.00|
|Add：Gains from change of for|||
|||-25,480.00|
|value （―-‖for loss）|||
|Investment gain（―-‖for loss）||6,045.00|
|Incl: investment gains from|||
|affiliates|||
|II. Operational profit（―-‖for loss）|-4,336,413.00|-1,988,906.00|
|Add：Non-business income|1,907,472.00|5,174.00|
|Less：Non- business expenses|108,463.00|582,915.00|
|Incl：Loss from disposal of|||
|non-current assets|||
|III.Total profit(―-‖for loss)|-2,537,404.00|-2,566,647.00|
|Less：Income tax expenses|||
|IV. Net profit（―-‖for net loss）|-2,537,404.00|-2,566,647.00|
|V. Earnings per share：|--|--|
|（I）Basic earnings per share|-0.015|-0.0152|
|(II)Diluted earnings per share|0.015|-0.0152|
|VI. Other comprehensive income||-2,267.00|

||||
|-|-|-|
|VII. Total comprehensive income|-2,537,404.00|-2,568,914.00|

 Legal representative：Hu Yongfengn
Person-in-charge of the accountingwork：Zhang Jinliang
Person-in -charge of the accountingorgan：Ren Changzhengi
5. Consolidated Cash flow statement
Prepared by:
Shenzhen Victor Onward Textile Industrial Co., Ltd.
Unit：RMB
||||
|-|-|-|
|Items|Amount in this period|Amount in last period|
|I.Cash flows from operating|||
|activities|||
|Cash received from sales of goods|||
||11,387,046.00|9,739,794.00|
|or rending of services|||
|Net increase of customer deposits|||
|and capital kept for brother|||
|company|||
|Net increase of loans from central|||
|bank|||
|Net increase of inter-bank loans|||
|from other financial bodies|||
|Cash received against original|||
|insurance contract|||
|Net cash received from|||
|reinsurance business|||
|Net increase of client deposit and|||
|investment|||
|Net increase of trade financial|||
|asset disposal|||
|Cash received as interest,|||
|processing fee and commission|||
|Net increase of inter-bank fund|||
|received|||
|Net increase of repurchasing|||
|business|||

||||
|-|-|-|
|Tax returned|||
|Other cash received from business|||
||1,063,191.00|3,758,324.00|
|operation|||
|Sub-total of cash inflow|12,450,237.00|13,498,118.00|
|Cash paid for purchasing of|||
||1,500,000.00|1,460,804.00|
|merchandise and services|||
|Net increase of client trade and|||
|advance|||
|Net increase of savings n central|||
|bank and brother company|||
|Cash paid for original contract|||
|claim|||
|Cash paid for interest, processing|||
|fee and commission|||
|Cash paid for policy dividend|||
|Cash paid to staffs or paid for|||
||3,429,791.00|3,953,848.00|
|staffs|||
|Taxes paid|2,044,981.00|2,149,524.00|
|Other cash paid for business|||
||3,766,857.00|6,318,360.00|
|activities|||
|Sub-total of cash outflow from|||
||10,741,629.00|13,882,536.00|
|business activities|||
|Cash flow generated by business|||
||1,708,608.00|-384,418.00|
|operation, net|||
|II.Cash flow generated by|||
|investing|||
|Cash received from investment|||
|retrieving|||
|Cash received as investment gains|||
|Net cash retrieved from disposal|||
|of fixed assets, intangible assets,|20,749,535.00|30,000.00|
|and other long-term assets|||
|Net cash received from disposal|||
|of subsidiaries or other|||
|operational units|||
|Net cash received from disposal|||
|of subsidiaries or other|||
|operational units|||

||||
|-|-|-|
|Sub-total of cash inflow due to|||
||20,749,535.00|30,000.00|
|investment activities|||
|Cash paid for construction of|||
|fixed assets, intangible assets and|36,411.00|690,127.00|
|other long-term assets|||
|Cash paid as investment|||
|Net increase of loan against|||
|pledge|||
|Net cash received from|||
|subsidiaries and other operational|||
|units|||
|Other cash paid for investment|||
|activities|||
|Sub-total of cash outflow due to|||
||36,411.00|690,127.00|
|investment activities|||
|Net cash flow generated by|||
||20,713,124.00|-660,127.00|
|investment|||
|III.Cash flow generated by|||
|financing|||
|Cash received as investment|||
|Incl: Cash received as investment|||
|from minor shareholders|||
|Cash received as loans|||
|Cash received from bond placing|||
|Other financing –related ash|||
|received|||
|Sub-total of cash inflow from|||
|financing activities|||
|Cash to repay debts|10,094,025.00|126,343.00|
|Cash paid as dividend, profit, or|||
||30,414.00||
|interests|||
|Incl: Dividend and profit paid by|||
|subsidiaries to minor shareholders|||
|Other cash paid for financing|||
|activities|||
|Sub-total of cash outflow due to|||
||10,124,439.00|126,343.00|
|financing activities|||
|Net cash flow generated by|-10,124,439.00|-126,343.00|

||||
|-|-|-|
|financing|||
|IV. Influence of exchange rate|||
|alternation on cash and cash|-1,021,645.00|-1,166.00|
|equivalents|||
|V.Net increase of cash and cash|||
||11,275,648.00|-1,172,054.00|
|equivalents|||
|Add: balance of cash and cash|||
|equivalents at the beginning of|52,227,262.00|53,399,316.00|
|term|||
|VI.Balance of cash and cash|||
||63,502,910.00|52,227,262.00|
|equivalents at the end of term|||

Legal representative：Hu Yongfengn
Person-in-charge of the accountingwork：Zhang Jinliang
Person-in -charge of the accountingorgan：Ren Changzhengi
6. Cash flow statement of the Parent Company
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
Unit：RMB
||||
|-|-|-|
|Items|Amount in this period|Amount in last period|
|I.Cash flows from operating|||
|activities|||
|Cash received from sales of goods|||
||3,067,093.00|1,567,887.00|
|or rending of services|||
|Tax returned|||
|Other cash received from business|||
||2,375,794.00|2,466,260.00|
|operation|||
|Sub-total of cash inflow|5,442,887.00|4,034,147.00|
|Cash paid for purchasing of|||
||1,500,000.00|1,460,804.00|
|merchandise and services|||
|Cash paid to staffs or paid for|||
||2,379,494.00|2,557,382.00|
|staffs|||
|Taxes paid|953,849.00|905,283.00|
|Other cash paid for business|||
||12,497,027.00|3,330,336.00|
|activities|||

||||
|-|-|-|
|Sub-total of cash outflow from|||
||17,330,370.00|8,253,805.00|
|business activities|||
|Cash flow generated by business|||
||-11,887,483.00|-4,219,658.00|
|operation, net|||
|II.Cash flow generated by|||
|investing|||
|Cash received from investment|||
|retrieving|||
|Cash received as investment gains|||
|Net cash retrieved from disposal|||
|of fixed assets, intangible assets,|5,152,000.00||
|and other long-term assets|||
|Net cash received from disposal|||
|of subsidiaries or other||30,000.00|
|operational units|||
|Other cash receivable for|||
|investment activities|||
|Sub-total of cash inflow due to|||
||5,152,000.00|30,000.00|
|investment activities|||
|Cash paid for construction of|||
|fixed assets, intangible assets and|||
|other long-term assets|||
|Cash paid as investment|||
|Net cash received from|||
|subsidiaries and other operational|||
|units|||
|Other cash paid for investment|||
|activities|||
|Sub-total of cash outflow due to|||
|investment activities|||
|Net cash flow generated by|||
||5,152,000.00|30,000.00|
|investment|||
|III.Cash flow generated by|||
|financing|||
|Cash received from absorbing|||
|investment|||
|Cash received as loans|||
|Cash received from bond placing|||

||||
|-|-|-|
|Other financing –related ash|||
|received|||
|Sub-total of cash inflow from|||
|financing activities|||
|Cash to repay debts|||
|Cash paid as dividend, profit, or|||
|interests|||
|Other cash paid for financing|||
|activities|||
|Sub-total of cash outflow due to|||
|financing activities|||
|Net cash flow generated by|||
|financing|||
|IV. Influence of exchange rate|||
|alternation on cash and cash|-525.00|4.00|
|equivalents|||
|V.Net increase of cash and cash|||
||-6,736,008.00|-4,189,654.00|
|equivalents|||
|Add: balance of cash and cash|||
|equivalents at the beginning of|17,293,509.00|21,483,163.00|
|term|||
|VI.Balance of cash and cash|||
||10,557,501.00|17,293,509.00|
|equivalents at the end of term|||

Legal representative：Hu Yongfengn
Person-in-charge of the accountingwork：Zhang Jinliang
Person-in -charge of the accountingorgan：Ren Changzheng
7. Consolidated Statement on Change inOwners‘ Equity
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
Amount in this period
Unit：RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Amount in this period||||||||||
||Owner‘s equity Attributable to the Parent Company||||||||Minor||
|||||||||||Total of|
|Items|||||||||||
||||||||||sharehol||
||Share|Capital|Less:|Special|Surplu|Comm|Attribu|||owners‘|
|||||||||Other|ders‘||
||Capita|l reserve|Shares|ized|s|on risk|table|||equity|
||||||||||equity||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||s|in|reserve|r eserve|provisi|profit||||
||||stock||s|on|||||
||169,142|39,790,7|||26,704,||-116,27|-511,59|-1,373,51|117,478,87|
|I.Balance at the end of last year|||||||||||
||,356.00|84.00|||791.00||3,941.00|9.00|4.00|7.00|
|Add: Change of accounting|||||||||||
|policy|||||||||||
|Correcting of previous errors|||||||||||
|Other|||||||||||
|II.Balance at the beginning of|169,142|39,790,7|||26,704,||-116,27|-511,59|-1,373,51|117,478,87|
|current year|,356.00|84.00|||791.00||3,941.00|9.00|4.00|7.00|
|||-145,73|||||8,214,81|-601,39|-364,906.|7,102,775.|
|III.Changed in the current year|||||||||||
|||6.00|||||0.00|3.00|00|00|
||||||||8,214,81||-364,906.|7,849,904.|
|（I） Net profit|||||||||||
||||||||0.00||00|00|
|||-145,73||||||-601,39||-747,129.0|
|（II）Other misc.income|||||||||||
|||6.00||||||3.00||0|
|||-145,73|||||8,214,81|-601,39|-364,906.|7,102,775.|
|Total of (I) and (II)|||||||||||
|||6.00|||||0.00|3.00|00|00|
|(III) Investment or 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．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||||||||
|（VII）Other||||||||
|IV. Balance at the end of this|169,142|39,645,0|26,704,|-108,05|-1,112,9|-1,738,42|124,581,652.00|
|term|,356.00|48.00|791.00|9,131.00|92.00|0.00||

 Amount in last year
Unit：RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Amount in last year||||||||||
||Owner‘s equity Attributable to the Parent Company||||||||||
||||||||||Minor||
||||Less:||Surplu|Comm||||Total of|
|Items|||||||||||
|||Capital||Special|||Attribu||sharehol||
||Share||Shares||s|on risk||||owners‘|
|||reserve||ized|||table|Other|ders‘||
||Capital||in||reserve|provisi||||equity|
|||s||reserve|||profit||equity||
||||stock||s|on|||||
||169,142|39,742,4|||26,704,||-116,02|-515,91|-1,373,51|117,673,58|
|I.Balance at the end of last year|||||||||||
||,356.00|73.00|||791.00||6,610.00|4.00|4.00|2.00|
|Add：Retrospective adjustment|||||||||||
|caused by merger of entities|||||||||||
|under common control|||||||||||
|Add: Change of accounting|||||||||||
|policy|||||||||||
|Correcting of previous errors|||||||||||
|Other|||||||||||
|II.Balance at the beginning of|169,142|39,742,4|||26,704,||-116,02|-515,91|-1,373,51|117,673,58|
|current year|,356.00|73.00|||791.00||6,610.00|4.00|4.00|2.00|
|\ III.Changed in the current||48,311.0|||||-247,33|||-194,705.0|
|||||||||4,315.00|||
|year||0|||||1.00|||0|
||||||||-247,33|||-247,331.0|
|（I） Net profit|||||||||||
||||||||1.00|||0|
|||48,311.0|||||||||
|（II）Other misc.income||||||||4,315.00||52,626.00|
|||0|||||||||
|||48,311.0|||||-247,33|||-194,705.0|
|Total of (I) and (II)||||||||4,315.00|||
|||0|||||1.00|||0|
|(III) Investment or 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．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||||||||
|（VII）Other||||||||
|IV. Balance at the end of this|169,142|39,790,7|26,704,|-116,27|-511,59|-1,373,51|117,478,87|
|term|,356.00|84.00|791.00|3,941.00|9.00|4.00|7.00|

 Legal representative：Hu Yongfengn
Person-in-charge of the accountingwork：Zhang Jinliang
Person-in -charge of the accountingorgan：Ren Changzheng
8. Statement of change inowner‘s Equity of the Parent Company
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
Amount in this period
Unit：RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount in this period||||||||
||||Less:|Specializ||Common||Total of|
|Items|Share|Capital|||Surplus||Attributa||
||||Shares in|ed||risk||owners‘|
||Capital|reserves|||reserves||ble profit||
||||stock|reserves||provision||equity|
||169,142,35|31,606,598|||26,309,287||-93,361,49|133,696,74|
|I.Balance at the end of last year|||||||||
||6.00|.00|||.00||7.00|4.00|
|Add: Change of accounting|||||||||
|policy|||||||||
|Correcting of previous errors|||||||||
|Other|||||||||
|II.Balance at the beginning of|169,142,35|31,606,598|||26,309,287||-93,361,49|133,696,74|
|current year|6.00|.00|||.00||7.00|4.00|
||||||||-2,537,404.|-2,537,404.|
|III.Changed in the current year|||||||||
||||||||00|00|
||||||||-2,537,404.|-2,537,404.|
|（I） Net profit|||||||||
||||||||00|00|
|（II）Other misc.income|||||||||
||||||||-2,537,404.|-2,537,404.|
|Subtotal of (I) and (II)|||||||||
||||||||00|00|
|(III) Investment or decreasing 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．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||||||
|（VII）Other||||||
|IV. Balance at the end of this|169,142,35|31,606,598|26,309,287|-95,898,90|131,159,340.00|
|term|6.00|.00|.00|1.00||

 Amount in last year
Unit：RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount in last year||||||||
||||Less:|Specializ||Common||Total of|
|Items|Share|Capital|||Surplus||Attributa||
||||Shares in|ed||risk||owners‘|
||Capital|reserves|||reserves||ble profit||
||||stock|reserve||provision||equity|
||169,142,35|31,606,598|||26,309,287||-90,792,58|136,265,65|
|I.Balance at the end of last year|||||||||
||6.00|.00|||.00||3.00|8.00|
|Add: Change of accounting|||||||||
|policy|||||||||
|Correcting of previous errors|||||||||
|Other|||||||||
|II.Balance at the beginning of|169,142,35|31,606,598|||26,309,287||-90,792,58|136,265,65|
|current year|6.00|.00|||.00||3.00|8.00|
||||||||-2,568,914.|-2,568,914.|
|III.Changed in the current year|||||||||
||||||||00|00|
||||||||-2,566,647.|-2,566,647.|
|（I） Net profit|||||||||
||||||||00|00|
|（II）Other misc.income|||||||-2,267.00|-2,267.00|
||||||||-2,568,914.|-2,568,914.|
|Subtotal of (I) and (II)|||||||||
||||||||00|00|
|(III) Investment or decreasing 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．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||||||
|（VII）Other||||||
|IV. Balance at the end of this|169,142,35|31,606,598|26,309,287|-93,361,49|133,696,74|
|term|6.00|.00|.00|7.00|4.00|

 Legal representative：Hu Yongfengn
Person-in-charge of the accountingwork：Zhang Jinliang
Person-in -charge of the accountingorgan：Ren Changzheng
III.Basic Information of the Company
1. History
Shenzhen Victor Onward Textile Industrial Co., Ltd. (hereinafter referred to as "the Company"), grew out of the Xingnan Printing Factory Co., Ltd, founded in 1980, was the first wholly foreign-owned enterprise in Shenzhen. In April 1984, Xingnan Printing Factory Co., Ltd was changed into foreign joint venture, and was renamed Shenzhen Victor Onward Textile Industrial Co., Ltd. . On
November 19, 1991, the Company was reorganized into a joint stock limited company and renamed Shenzhen Victor Onward Textile
Industrial Co., Ltd. pursuant to the approval of Shenzhen Municipal Government.
2.The domestically listed RMB ordinary shares ("A shares, Stock code: 000018" ) and domestically listed foreign investment shares
("B shares ,stock code: 200018") issued by the Company were listed on Shenzhen Stock Exchange in 1992.
By December 31, 2013, the total share capital was 169,142,356 million shares, of which circulating A-share 99,720,453 shares, circulating B-share 69,421,903. of which Union Holdings Co., Ltd. (hereinafter referred to Union Holdings ) holding limit-sale A-shares 43,141,032 shares, accounting for25.51% of the total equity, is the controlling shareholder of the company, Union Development Group Co., Ltd. (hereinafter referred to Union Group)holding circulating A–share 5,681,089 shares, accounting for3.36% of the total equity, Union Group holds31.32% of equity of Union Holdings and has the right to control Union Holdings, thus Union Group is the actual controller of the Company.
By December 31, 2013, Victor Onward printing and dyeing (Hong Kong) Co., Ltd. (hereinafter referred to as "Hong Kong Victor Onward"), Shengzhong Industrial Co., Ltd. (hereinafter referred to as "Shengzhong") ,Shenzhen East Asia Victor onward Holding (hereinafter referred to as―East Asia Company), Shenzhen Nanhua Printing and Dyeing (hereinafter refered to as―NanhuaCompany‖) as well as its wholly-funded subsidiary Nanhua Xingye Co., Ltd (hereinafter referred to as "Nanhua Xingye") are all subsidiaries of the Company.
Registered address: 26 Kuipeng Road, Kuiyong Town, Longgang District, Shenzhen
Legal Representative: Hu Yongfeng
2.Business nature
The Company engages in textile printing& Dyeing industry .
3.Business scope:
The production and processing (printing and dyeing) and sales of various high-grade fabrics of pure cotton, pure linen, polyester-mixed cotton, linen cotton and mixed fiber and finished garments.
IV.Principal accounting policies, accounting estimates and early errors
1.Basis for the preparation of financial statements
The preparation of financial statements of the company based on continuous operation. Base on actual transactions and events occurring, according to the ministry of finance issued―Accounting Standards for Enterprises - BasicStandards‖ on 15th February 2006 and 38 items of specific accounting standards, application guidelines of accounting standards which was promulgated after, accounting standards interpretation and other requirements (hereafter named―Enterprise AccountingStandard‖), General Provisions of FinancialStatements，NO.15 rules of the editing and reporting regarding information disclosure for companies publicly issuing securities by China Securities RegulatoryCommission（2010revised）hasconfirmed，the financial report was based on it. (2). Statement on the Accounting Standard Followed by the Company
The financial statements prepared by the Company comply with the requirements of corporate accounting standards. They truly and completely reflect the financial situations, operating results, equity changes and cash flow, and other relevant information of the company.
(3)Fiscal Year
The Company adopts the Gregorian calendar year commencing on January 1 and ending on December 31 as the fiscal year.
（4）Standard currency for bookkeeping
The Company takes RMB as the standard currency for bookkeeping.
Its overseas subsidiaries choose the currency of the primary economic environment in which the subsidiary operates as the functional currency. However, the financial statements should be translated into RMB.
(5).The accounting solution of business combinations under the same and different control
(1)Corporate merger under same control
1. Realize all the terms and conditions of transactions in the process of enterprise acquisition step by step, and adopt the accounting method to conduct a package deal for the multiple transactions if the following items appear for the economic impact:
2. These deals are simultaneously entered into effect or under the consideration of mutual influence;
3. These transactions must be as a whole to achieve a complete business performance;
4. The occurrence of one deal is depended on that of other transactions;
5. Single transaction maybe is uneconomical, but it is economical when it is considered together with other transactions.
6.Corporate merger under same control
1) The Individual Financial Statements
If the consideration of the merging enterprise is that the company makes payment in cash, transfers non-cash assets or bears its debts, and issues equity bonds, it shall, at the date of merger, regard the share of the book value of the owner's equity of the merged party as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital reserve.
All the direct costs paid by the company for the conduct of business combination, including audit fees, appraisal fees, legal services fee, etc., should be accounted into current profit and loss at the time incurred. If there is the consolidated financial statements for the merged party, the initial cost of the long-term equity investment is determined based on the owner's equity of the merged party at the date of merger.
2) The Consolidated Financial Statements
The acquired assets and liabilities by the merged parties through business combination are measured at their book value with the merged parties on the date of merger. If the accounting policies adopted by the merged parties are inconsistent with those of the company, the company can make adjustment in accordance with its accounting policies on the date of combination, and confirm them in accordance with the provisions of the Accounting Standards for Enterprises.
(2). Corporate merger under different controls
With the merger under the different control, the merger cost is the assets to pay, liabilities incurred or taken and the fair value of the issued equity securities which a buyer gains the control from the acquiree on the purchase date. In case of any future events defined in merger contract whose predictable occurrence could influence the merger cost and the related amount could be reliably calculated at merger date, such amount should also be included in merger cost. All the intermediary fees, such as audit fees, legal services fees, appraisal and consultation fees, and other related management expenses paid by the company for the conduct of business combination should be accounted into current profit and loss at the time incurred; the transaction charge of equity or debt bonds issued by the company for the consideration of the merging enterprise are accounted into initial recognized value of the equity or debt bonds.
The company recognizes as goodwill for the difference of the combination costs more than the fair value of the identifiable net assets obtained from the merged parties, and accounts into current profit and loss for the difference of the combination costs less than the fair value of the identifiable net assets obtained from the merged parties after checked.
If the enterprise achieves the business merger not under same control through multi-step implementation of
transactions, it shall distinguish the individual financial statements and the incorporated financial statements to conduct the related process of accounting treatment:
1. In the individual financial statements, the sum of the book value of equity investment of acquiree held before the date of purchase and the new investment cost added at the date of acquisition shall be made as the initial investment cost of this investment project; If the holdingacquiree‘s equity before the date of purchase is involved with other composite income, the other related composite incomes shall be transferred into the investment income of current period in the disposal of the investment project (such as, the change of fair value of the salable financial asset shall be attributed to capital reserves, hereinafter the same).
2. In the consolidation financial statements, the holdingacquiree‘s equity prior to the date of purchase shall be measured again with the fair value of equity at the date of acquisition, and the difference between the fair value and the book value is attributed to the investment income of current period; If the holdingacquiree‘s equity prior to the date of purchase involved with other composite income, the other related composite incomes shall be transferred into the investment income of current period at the date of purchase. (6)The method of drawing up the Consolidation financial statements
(1) The method of drawing up the Consolidation financial statements
The company has real control to the subsidiary and special purpose entity which are included in the scope of Consolidation financial statements.
The accounting policies& accounting periods adopted by all the subsidiaries that have been included into the scope of the consolidated financial statements should be consistent with those adopted by the company. If the accounting policies& accounting periods adopted by the subsidiaries are different from those adopted by the company, the company shall make necessary adjustments according to the accounting policies& accounting periods it adopts when preparing the consolidated financial statements.
After adjusting the long-term equity investments on its subsidiaries according to the equity method, the company shall prepare the consolidated financial statements based on the financial statements of the company& its subsidiaries, and other related documents.
The influences of the internal transactions between the company& its subsidiaries, and its subsidiaries themselves on the consolidated balance sheet, consolidated profit statement, consolidated cash flow statement& consolidated statement of changes inowner‘s equity will be counteracted at the preparation of the consolidated financial statements.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary exceeds the minorityshareholders‘ portion of the opening balance ofowners‘ equity of the subsidiary, the excess amount should be still allocated against minority interest.
In the report period, If the subsidiary is added through the business combination under the same control, the beginning balance of the consolidated balance sheet shall be adjusted. The incomes, expenses& profits of the subsidiary incurred from the beginning of the current period to the end of the reporting period shall be included into the consolidated profit statement. The cash flow from the beginning of the current period to the end of the reporting period shall be included into the consolidated cash flow statement.
In the report period, If the subsidiary is added through the business combination not under the same control, the beginning balance of the consolidated balance sheet shall not be adjusted. The incomes, expenses& profits of the subsidiary incurred from the acquisition date to the end of the reporting period shall be included into the consolidated profit statement. The cash flow from the acquisition date to the end of the reporting period shall be included into the consolidated cash flow statement.
In the report period, If the company disposes its subsidiary, the incomes, expenses& profits incurred from the beginning of the subsidiary to the disposal date shall be included into the consolidated profit statement. The cash flow from the beginning of the subsidiary to the disposal date shall be included into the consolidated cash flow statement.
If an enterprise loses control over a subsidiary company it originally services due to the disposal of some equity investment or for any other reasons, in consolidated financial statements, the remaining equity shall be re-measured as per the fair value at the date of the control lost. The difference between the sum of the consideration received on the disposal of equities and the fair value of remaining equities, and the net assets share
continually calculated by the original subsidiary company since the merger date on the basis of the original stock proportion shall be accounted for as investment income for the period in which control was lost. Other comprehensive income related to the equity investment that the subsidiary company originally owned shall be included in current investment income at the date of the control lost.
（7） Recognition Standard of Cash& Cash Equivalents
The company recognizes its cash in vault& the deposits that are ready for payment at any time as cash when preparing the cash flow statement.which are featured with short term (expire within 3 months since purchased), high liquidity, easy to convert to know cash, low in risk of value change, could be recognized as cash equivalents.(8）Foreign Currency Transaction
（1）The foreign currency translation services
The foreign currency transaction uses the spot rate at the time of the transaction as the exchange rate to convert the currency into CNY for keeping account.
The balances of the foreign currency monetary items shall be converted according to the spot rate on the balance sheet date. Except that the exchange balances on the foreign currency borrowings for expenses on the assets eligible for capitalization shall be dealt according to the principle of loan expense capitalization, all the other exchange balances shall be included into the profits& losses at the current period. The foreign currency non-monetary items measured in historical costs shall still be converted according to the spot rate at the time of the transaction. Their account standard money amounts shall not be changed. The foreign currency non-monetary items measured in fair values shall be converted according to the spot rate on the recognition date of the fair values. The exchange balances incurred accordingly shall be recorded into the profits& losses at the current period or the additional paid-in capital.
（2）The foreign currency financial statements
The assets in the balance sheet and liabilities items, by using the spot exchange rate on the balance sheet date, all equity projects except the item of―UndistributedProfits‖, other items were calculated by the spot exchange rate. With the income and expense items, it was determined by a systematic and rational approach, and calculated by the approximate exchange rate of the spot exchange rate to convert on the transaction date. The converting differences generated by the foreign currency financial statements, and all equity items in the balance sheet are listed separately.
On disposal of overseas operations, the corresponding difference of foreign currency translation related to the overseas operations and listed in theowner‘s equity in Balance Sheet should be moved fromowners‘ equity to current profits and losses. On partial disposal of overseas operations, the partial proportion of difference should also be converted into current profits and losses.Partial disposal of a foreign operation, is calculated portion of the foreign currency earnings disposal(9).
(9) Financial Instruments
Financial instruments consist of financial assets, financial liabilities and equity instruments.
（1）Classification of financial tools
The Company divides the financial assets into four categories: financial assets measured at fair value and their variations are recognized as current gain/loss, including trade financial assets or financial liabilities and recognized directly as financial assets measured at fair value and their variations are recognized as current gain/loss; Investment hold till expiration; loans and account receivable; saleable financial assets .The company divides the financial liabilities into two categories: financial liabilities measured at fair value and their variations are recognized as current gain/loss; other financial liabilities.
(2) Recognition and measurement of financial tools
(1) Financial assets and liabilities measured at fair value and their variations are recognized as current gain/loss The fair value (after deducting of announced but not distributed cash dividend or due but not obtained bond interests) is recognized as initial amount when obtained.
Interests or cash dividends during the period of holding are recognized as investment gains. The fair value will be adjusted and accounted as current gain/loss.
When disposed, the differences between fair value and initial amount are recognized as investment gains, and thus adjust the gain/loss of fair value.
(2) Investment hold till expiration
The fair value (after deducting of due but not obtained bond interests) plus the related trade expenses is recognized as initial amount when obtained.
Interest gains will be calculated at amortizing of costs and actual interest rate (the face rate is adopted when the difference between the actual rate and face rate is minor) during the period of holding, and accounted as investment gains. Actual rate is recognized when obtained, and is not changed in the predictable holding period or applicable shorter period.
When disposed, the difference between the obtained price and book value is accounted as investment gains. (3) Account receivable
The receivable debts of selling goods or providing services, and the credits of other company hold by the company not including the debt which has price in active market, including accounts receivable, notes receivable, prepaid accounts, other receivables, long-term receivables, etc. The contract or agreement price charging from purchaser should be taken as the initial confirmation amount; if it has the nature of financing, it should be confirmed according its current value.
When retrieved or disposed of, the difference between the actual received amount and the book value is accounted as current gain/loss.
(4) Saleable financial assets
The fair value (after deducting of announced but not distributed cash dividend or due but not obtained bond interests) plus the related trade expenses is recognized as initial amount when obtained.
Interest or cash dividend occurred during the period of holding is recognized as investment gains. Change of fair value is accounted as capital reserves (other capital reserves) at the end of term.
When disposed, the difference between the obtained price and book value is accounted as investment gains. Meanwhile, the corresponding part of accumulated change of fair value accounted asowners‘ equity is transferred into investment gain/loss.
(5) Other financial liabilities
Other financial liabilities are recognized initially at the sum of fair value and related trade expenses. Successive measurement will be on the basis of amortized costs.
(3). Recognition and measurement basis of financial asset transposition
When financial asset transposition occurred, the recognition of this particular financial asset is terminated if almost all risks and rewards attached to the asset have been transferred to the acceptor. If retain all the risks and rewards of ownership of financial assets, the financial assets can be confirmed.
When determine whether the transfer of financial assets meet the conditions of confirmation of the above financial assets, the principle of substance being more important than form should be adopted. The transfer of financial assets can be divided into overall transfer and part transfer of financial assets. If the transfer of financial assets meet the conditions of terminating confirmation, the following the difference of the two amounts will be included in the current profit and loss:
(1) Book value of the financial asset to be transposed;
(2) The sum of price received due to the transposition, and the accumulation of change in fair value originally accounted asowners‘ equity (when the asset to be transposed is saleable financial asset).
If part transfer of financial assets meet the conditions of terminating confirmation, the book value of the transferred financial assts, the difference between the confirmed part and the unconfirmed part (in this case, the service assets retained should be deemed as the part of unconfirmed financial assets), should be amortized in accordance with their relative fair value, and the difference between the following two amount should be included current profit and loss:
① Book value of the confirmed part;
②All fair values of financial assets and financial liabilities are recognized with reference to the price in the active market.
If the transfer of financial assets does not meet the conditions of terminating confirmation, the financial
assets should be confirmed again, the prices received will recognized as financial liabilities.
(4).The conditions to stopping the financial liabilities
The obligation of financial liabilities are already cancelled which should be stopped confirming the financial liability or the part of it. Our company could stop confirming the currently financial liability and begin to confirm the newly financial liability if the loaner made an agreement that they would assume the new way of financial liability which replace the current one, and make sure the newly financial liability is totally different from the old one in contract with our company.
Stop admitting the financial liability or a part of it, and at mean time we could admit the newly financial liability which is in new insertions of contract as the newly financial liability if the current financial liability has been revised.
Stop admitting the balance of value of financial liability and consideration (Including the roll-out of non-cash assets or financial liabilities) which could be consider as current profits and losses.
Stop and continue admitting a part of value, and distribute the value of financial liability, if our company repurchased the part of financial liability. And the balance of value of which distributed to the part of stopping admitting and paid (Including the roll-out of non-cash assets or financial liabilities) which could be consider as current profits and losses.
(5).Recognition basis of financial assets and financial liabilities
The company has adopted financial assets and financial liabilities measured with the fair value to activate financial assets or financial liabilities of the market, and determined its fair value based on the quotation in an active market; if there no exists financial assets or financial liabilities to activate the market, the valuation techniques (including the price made in the market transactions which is recently conducted by each party with willing action and acquaintance of situation, the current fair value, discounted cash flow analysis and equity option pricing models, etc. of other financial instruments which is substantially similar with the reference) shall be used to determine its fair value; for the initial or original financial assets or the liabilities assumed, its fair value shall be determined on the basis of the transaction price of market.
（6）Providing of impairment provision on financial assets (exclude receivable accounts)
On the balance sheet date, the company performs inspection on the book value of financial assets apart from those which are calculated at fair value and the changes of which are taken into the current profit and loss account. Depreciation provision is required for the circumstance where objective evidences indicate that depreciation occurs to the financial assets.
Objective evidences for depreciation include (but not limited to) the following:
1. the issuer or the debtor suffers serious financial difficulty;
2. the debtor has breached the contract, such as failure or delay thereof in repayment of interests or the principal; 3. the debtee compromises to the debtor in consideration of the economic or legal aspect;
4. the debtor is very likely to be in bankruptcy or other financial reorganization;
5. the issuer suffers serious financial difficulty, which results in failure of financial assets to trade in the active market;
6. observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including: adverse changes in the payment status of borrowers in the group; an increase in the unemployment which appears in thedebtor‘s country or region; a decrease in property prices for mortgages in the relevant area, or adverse changes in industry conditions that affect the borrowers in the group;
7. any significant change with an adverse effect that has taken place in the technological, market, economic or legal environment in which the issuer of equity instruments operates, and indicates that the cost of investments in equity instruments may not be recovered; or
8. the fair value of the equity instrument investment suffers serious or non-temporary drop.
The special depreciation method of financial assets is as follows:
(1) Depreciation Provision of Financial Assets Available for Sale:
The individual identification method is adopted to evaluate the depreciation losses for the financial assets available for sale. Of which, the objective evidence that indicates the depreciation of equity instrument investment available for sale includes the fair value of the equity instrument investment suffering serious or non-temporary drop, and the specific quantitative criteria:
The company shall conduct a separate check to all equity instrument investment available for sale at the balance sheet date, if fair value of the equity instrument investment at the balance sheet date is less than its initial investment cost beyond50% (including50%) or over one year of duration (including one year), the depreciation occurs; if fair value of the equity instrument investment at the balance sheet date is less than its initial investment cost beyond20% (including20%) but not up to50%, the company shall take into account of other relevant factors, such as price fluctuation rate, etc., to judge if there is depreciation of the equity instrument investment.
When the financial assets available for sale (namely, AFS financial assets) are impaired, the company shall reverse and charge the accumulated losses due to decreases in fair value previously recognized directly in capital to profit or loss for the current period, even if the financial assets are not derecognized. The reversed accumulated losses are theasset‘s initial acquisition costs after deducting amounts recovered and amortized, current fair value and impairment losses previously recognized in profit or loss.
If, in a subsequent period, the carrying amount of AFS debt instruments investment increases and the increase can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment losses are reversed. The reversal shall be recognized in profit or loss for the current period. The reversal of impairment losses of AFS equity instruments is recognized in capital reserve. But, impairment losses incurred by investments in an unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of investments in equity instruments are not reversed.
(2) Depreciation Reserves of Held-to-Maturity Investments
If there is objective evidence of depreciation for held-to-maturity investments, the difference between the carrying amount and the present value of estimated future cash flows is recognized as impairment loss. If there is evidence that its value has recovered after accrued, the previously recognized impairment loss shall be reversed. The amount of the reversal shall be recognized in profit or loss for the current period. The reversal shall not result in a carrying amount of the financial asset that exceeds what the amortized cost would have been had the impairment not been recognized at the date the impairment is reversed.
All Recognition Standards of Depreciation of Financial Assets Available for Sale
（7）If investment held to mature is recztegorized to sellable financial assets, please state the intention or evidence of change incapability .
(10). Recognition standard and providing basis of bad debt provision on receivable accounts
（1）Accounts receivable with material specific amount and specific provisioned bad debt preparation.
|||
|-|-|
|Judgment criteria or amount standard of material specific amount or|Account receivable with special account receivable|

|||
|-|-|
|amount criteria|exceeding RMB 1 million is viewed as material accounts|
||receivable.|
||Conduct the devalue test separately. Set up the bad|
||debt reserve according to the shortfall of the present|
||value of expected future cash flows against its|
|Provision method with material specific amount and||
||carrying amount and record it into the profits &|
|provision of specific bad debt preparation||
||losses at the current period. Allot those assessed|
||individually but no impairment for receivables into|
||the bad debt reserves on a collective basis.|

(2)The accounts receivable of bad debt provisions made by Group
||||
|-|-|-|
||Method for recognition of||
|Name|impairment allowances by|Basis of determination of groups|
||group||
|||The group is classified by the credit risk features basised on the|
|Group of account age|The age analysis||
|||account age of receivables|
|||The Group is classified by the credit risk features based on the|
|Group of Related party|Other||
|||relations of account receivables and transaction objects|
|||The Group is classified by the credit risk features basised on the|
|Deposit group|Other||
|||account age of receivables .|

Accounts on age basis in theportfolio：
√applicable□ not applicable
||||
|-|-|-|
|Age|Rate for receivables(%)|Rate for other receivables(%)|
|Within 1 year（Included 1 year）|3%|3%|
|1－2 years|10%|10%|
|2－3 years|50%|50%|
|Over 3 years|100%|100%|

 Accounts on percentage basis ingroup：
□ applicable√not applicable
Accounts on other basis ingroup：
√applicable□ not applicable
|||
|-|-|
|Name|Notes|
||Special relationship between the related party and the Group (such as joint|
|Related party Group|ventures, associates, etc.), there is a little balance between the predicted|
||future cash flow and the carrying amount.|
||Including the rent deposit, purchase deposit and reserve deposit, etc., but|
|Deposit group||
||without great individual amount and the bad debt reserves withdrawn by|

||
|-|
|combination are difficult to reflect the accounts receivable of risk features.|

 (3)Account receivable with non-material specific amount but specific bad debt preparation
|||
|-|-|
||Accounts receivable with non-material specific amount and being not able to relent|
|Reason of specific bad debt preparation||
||its risk character by provisioning bad debt preparation in accordance with portfolio|
|provision：||
||Bad debt preparation will be provisioned in accordance with the difference of|
|Provision method of bad debt preparation||
||present value of its future cash flow below its book value.|

(11)Inventory
（1）Inventory classification
Inventory refers to various assets that are held for sale, the work in process or consumptions during the process of the production for the company in the daily of business, mainly including raw materials, packaging material, low value consumables, in-process products, inventory, etc.
（2）Pricing method of stock delivered
Stock delivered is measured according to weighted average method.
The inventories are initially calculated and accounted in accordance with the actual cost, and the inventory cost includes the purchase cost, processing cost and the other cost.
（3）Confirmation basis of stock net realizable value and withdrawal method of inventory falling price reserves. Recognition Basis ofInventories‘ Net Realizable Values and Counting& Drawing Method of Obsolete Inventory Reserves:After taking stock at the end of the period,
In the process of normal operation, the realizable value of goods inventories such as completed products, commodities and tradable materials etc. is recognized by its estimated selling pricing deducting estimated selling expenses and related taxes and expenses. The realizable net value of material inventories for processing is recognized by the estimated selling price of the finished products deducting estimated cost and selling price and related taxes. The realizable net value of inventories held for execution of sales contracts or labor contracts is calculated on the basis of contract price. In case inventories exceed contracted amount, the exceeded part is based on the general selling price.
At end of period, depreciation reserve is made for every individual inventory item. For inventories in large variety with low unit price, depreciation reserve is made by categories. For inventories related to products series produced and sold within the same region, having the same or similar end-use purpose, and hard to be differentiated from other items, combined depreciation reserve is made.
When factors that caused deduction of prior inventory value disappear, the deducted amount shall be resumed, and originally accrued depreciation provision shall be returned. The amount returned is booked into current income statement.
（4）Inventory system
Inventory system adopts the perpetual inventory method.
（5）Amortization method of consumption goods with low value and wrap page
Consumption goods with low value: Consumption goods with low value adopt one time amortization method when used. Packing:
Wrap page: Wrap page adopts one time amortization when used.
(12)Long-term equity investment
（1）Investment cost confirmation
(1) For the long term equity investment from enterprise merger, the detailed accounting policy, please refer to the accounting method of merger of enterprises under or not under the same controller in Note II / (V). While, the long term equity investment acquired through liability reorganization is booked on the basis of fairvalue.（2) Long-term equity investment obtained by other ways.Long-term equity investment obtained by cash payment is recognized for initial investment cost according to the price practically paid.Long-term equity investment obtained by placing of equity stocks is recognized for initial investment cost at the fair value of the
stock.Long-term equity investment input by investors is recognized for initial investment cost according to the investment contract or agreement (less the cash dividend or profit announced but not distributed). However when the value in the contract or agreement is not fair value is not adopted. The non-monetary asset exchange for a commercial real income and assets or the fair value other assets can be reliably measured, the initial investment cost should be determined according to long-term equity investment exchanged through the non-monetary asset exchange, unless there is evidence showing that for the fair value of assets is more reliable; the non-monetary asset exchange which does not meet the above premises, the book value of the exchanged assets to and the relevant fees and taxes to be paid should be the initial investment cost of the long-term equity investment. The initial investment cost of the long-term equity investments obtained through debt restructuring should be
determined in accordance with fair value.
(2)Follow-up Measurements& Recognitions of Profits or Losses
Cost basis is adopted in accounting of long-term equity investment without joint control or major influence, and with no quotation in an active market, thus the fair value is not able to be reliably measured. Equity basis will be adopted for the long-term equity investment with joint control or major influence.The long-term equity investment that has joint control or significant influences over the invested entity shall be measured by employing the equity method. If the initial cost is more than the investing enterprise' attributable share of the fair value of the invested entity's identifiable net assets for the investment, the initial cost of the long-term equity investment may not be adjusted. If the initial cost is less than the investing enterprise' attributable share of the fair value of the invested entity's identifiable net assets for the investment, the difference shall be recorded into the profits& losses at the current period.The treatment for the other changes ofowner‘s equity besides net loss and profit of the unit being invested: for the other changes ofowners‘ equity besides net profit and loss of the unit being invested, when shareholding ratio remains unchanged, the part shared or undertaken according to share ratio, the book value of long-term equity investment should be adjusted, and at the same time, the capital surplus (other capital surplus).（2）Recognition of Profits or Losses.Employing the cost method, besides acquiring the actual payment for investing or the dividends / profits which have already been declared but not distributed yet, the company shall recognize its current investment income by enjoying the dividends / profits declared to be distributed by the invested entity.
The investment income Recognition by cost method is only limited to distribution of accumulated net profit after
the unit being invested receives investment, the part of profit and cash dividends more than the amount will be regarded as initial investment cost recovery. The loss which should be confirmed to the unit being invested under equity method should be treated in accordance with the following orders: First of all, deduct the book value of long-term equity investment. Second, if the book value of long-term equity investment can not be deducted, the long-term equity value of the net value of the unit being invested should be further confirmed as investment loss and used to deduct the book value of long-term receivables. Finally, after the above treatment, the additional liabilities to be undertaken according to investment contract or agreement should be confirmed as expected liability according to the expected liability and be concluded in the current investment loss. If the unit being invested achieves profit in the following period, after deducting the unconfirmed liabilities, it should be treated according to the adverse order as described above, the book value of the confirmed expected liabilities should be deducted, the book value of the long-term equity investment and long-term equity of net assets of the unit being invested should also be resumed, and at the same time, the investment income should be confirmed.
（3） Confirm the basis that has common control and major infection upon invested unit.
Joint control refers to the control that common control on some economic activities according to contract. The references for the determination of common control are the business activities which any operating party can not be controlled independently; the decisions relating to basic operating activities of the joint venture enterprise are to be agreed by all joint parties. Significant impact refers to having the right to participate in decision making on financial and operating policies of the units being invested but can not control or jointly control the making of these policies. The determining reference of significant impact is to own20% (inclusive) or more but less than50% of the voting shares directly owned by the Group or owned through subsidiaries, unless there is clear evidence that under that circumstance the production operating decision can not be participated and no major influence will formed.
（4）Depreciation testing method and depreciation reserve withdrawal method.
On the balance sheet date, if the long-term equity investment shows impairment due to the decreasing market price or the deteriorating business operation of the invested entity, the recoverable amount of the long-term equity investment should be determined on the basis of the net amount from the fair value of the individual long-term equity investment less the disposal expenses, or the present worth of the estimated future cash flow of the long-term equity investment, whichever is higher. When the recoverable amount of the long-term equity investment is less than the book value, the book value of assets should be written down to the recoverable amount, and the amount written down is recognized as the asset impairment loss, which should be included in the current profits and losses; meanwhile, the corresponding asset impairment provision should be counted and drawn. As to a long-term equity investment with no significant influence, if there is no offer in the active market for it and its fair value cannot be reliably measured, its impairment loss shall be recognized according to the difference between its carrying amount& the current value recognized by discounting the future cash flow according to the current market return similar to the financial asset. Besides the business reputation formed by the business combination, where the measurement results of the removable amounts show that the receivable amount of any other long-term equity investment is lower than its carrying value, the difference shall be recognized as the impairment loss.No matter whether there is any sign of possible assets impairment, the business reputation formed by the business combination shall be subject to impairment test every year.Once any loss of the long-term equity investment impairment is recognized, it shall not be switched back any more.
(13). Investment real estate
The term―Investment realestates‖ refers to the real estates held for generating rentand/orcapital appreciation, including the right to use any land which has already been rented, the right to use any land which is held and prepared for transfer after appreciation& the right to use any building which has already been rented.
The investment real estates are accounted by the cost, the purchased investment real estates include the cost of the purchase price, related taxes and fees and other expenses which can be directly attributable to the assets; the costs of investment real estate self constructed include the necessary expenses to construct the asset to reach the predicted use state.
The Group adopts the cost method to conduct follow-up measurement on investment real estates are accounted devaluations and amortized. The expected service life, net residual rate and value depreciation rates of investment real estate are as follows:
||||
|-|-|-|
|Type|Expected usefullife（Year）|Estimated residualvalue rate|
|Real estate inHongkong|20-50|0%|
|Real estate inChina|20-30|10%|

If the investment real estate is changed to self use, since the date of change, investment real estate shall be converted into fixed assets or intangible assets. The function of self-use real estate is to earn rent or capital appreciation, then since the date of change, the fixed assets or intangible assets shall be converted into investment real estate. When the conversion happens, the book value before the conversion will be the book value after the conversion.
The company shall estimate the recoverable amount for any impairment, and then determine the corresponding impairment loss if the recoverable amount less than its book value.
Once the impairment loss of the real estate investment is recognized, it will not be reversed in the future.
When the investment real estate is disposed of, or permanently terminates its use and no economic benefits are expected from its disposal, terminate the confirmation of the investment real estate. Disposal income of investment property for sale, transfer, disposal of scrap or being destroyed is charged to current profit or loss after deducting its book value and related taxes.
(14) Fixed assets
（1）Confirmation conditions of fixed assets
Fixed assets refer to physical assets owned for purpose of production, service providing, leasing or management, and operation with service life of more than one year. Fixed assets are recognized when all of the following conditions aresatisfied：Financial benefits attached to the fixed asset is possibly inflowing to the Company;(2)
The cost of the fixed asset can be reliable measured.
（2）Cognizance evidence and pricing method of financial leasing fixed assets
The fixed assets acquired by the company in line with the following one or several criteria shall be recognized as the fixed assets acquired under finance leases: (1) at the expiration of the lease, the ownership of the leased assets shall be transferred to the company. (2) the company has the option to purchase the leased assets, the purchase price is expected be far lower than the fair value of the leased assets under the implementation of option right, so that it can be reasonably determined that the company shall exercise the option on the acquisition date. (3) the lease term is the majority for the leased assets even if the ownership no transferred. (4) the present value of the minimum lease payments of the company almost is equal to the fair value of the leased assets on the acquisition date. (5) For the special nature of the leased assets, only the company can use if no major modification made. For the fixed assets acquired under finance leases, the company takes less of the fair value of the leased asset on the acquisition date and the present value of the minimum lease payments as recorded value. Also, the minimum lease payments are accounted as the recorded value for the long-term payables, and the difference are as the unconfirmed financing fees. The initial direct expenses, such as commission charge, attorney fees, travel expenses and stamp duty attributable to the lease item occurred in the process of the lease negotiation and the signature of lease contract, shall be recorded into the leased assets value. The unrecognized financing charges in each period during the lease term are amortized by effective interest method. The company shall adopt the depreciation policy in line with its own fixed assets to count and draw the depreciation of fixed assets acquired under finance leases. If the ownership of lease assets acquired at the expiration of lease can be reasonably confirmed, the depreciation will be recognized in the use life of lease assets. Ifcan‘t be confirmed, the shorter period between the lease term and the use life of lease assets will be recognized as the depreciation.
（3）Fixed assets depreciation method
Except for the fixed assets that continually used after the depreciation counted and drawn fully, the depreciation of fixed assets is made by average year method. Rate is based on category, expected years of use and expected net residual ratio.
For the fixed assets acquired under finance leases, if the ownership of lease assets acquired at the expiration of lease will be reasonably confirmed, the depreciation will be recognized in the remaining use life of lease assets. Ifcan‘t be confirmed, the shorter period between the lease term and the remaining use life of lease assets will be recognized as the depreciation.
For the fixed assets formed by using the special reserve expenditure, the special reserve is offset against the cost of fixed assets and the same amount of accumulated depreciation is recognized. Also, the depreciation for the fixed assets are no longer counted and drawn in the future period.
The company shall confirm the useful life and estimated residual value rate for the fixed assets according to the nature and the use status of the fixed assets. At the end of the year, the service life, estimated residual value and depreciation method for the fixed assets are reviewed, and the adjustment will be accordingly if there is difference with the previous estimated count.
Classified depreciation years and depreciation rates are as follows:
|||||
|-|-|-|-|
|Type|Evpected useful|Estinated residual value rate|Annual depreciation rate（%）|
||life（Year）|||
|House and building|20-50|0%-10%|2%-5%|
|Machinery and equipment|5-14|10%|6%-18%|

|||||
|-|-|-|-|
|Electric Equipment|5|10%|18%|
|Transportation equipment|4-5|10%|18%-22.5%|

(4). Test Method for Fixed Asset Impairment and Counting& Drawing Method for Fixed Asset Impairment Reserves
The company shall, at the end of each period, make a judgment on whether there is any sign of possible fixed assets impairment.
Where any evidence shows that there is possible fixed assets impairment, the recoverable amount of the fixed assets shall be estimated. The recoverable amount shall be determined in light of the higher one of the net amount of the fair value of the fixed assets minus the disposal expenses& the current value of the expected future cash flow of the fixed assets.
Where a fixed asset's recoverable amount is lower than its carrying value, the carrying value of the fixed asset shall be recorded down to the recoverable amount, and the reduced amount shall be recognized as the loss of the fixed asset impairment and be recorded into the profits& losses at the current period. Simultaneously, the fixed asset impairment reserve shall be made accordingly.
After the loss of the fixed asset impairment has been recognized, the depreciation expense of the impaired fixed asset shall be adjusted accordingly in the future period so as to amortize the post-adjustment carrying value of the fixed asset systematically (deducting the expected net salvage value) within the residual service life of the fixed asset.
When there are signs showing that a fixed asset will devaluate, the enterprise estimates its collectable amount based on the individual fixed asset. If it is difficult to make estimation of the collectable amount for the individual fixed asset, the enterprise will recognize its collectable amount on the basis of the asset group that the fixed asset belongs to.
(15). Projects under construction
（1）Categories of projects under construction
The company shall measure the self-constructed constructions in progress at the actual cost, which comprises those expenditures necessarily incurred for bringing the asset to working condition for its intended use, including materials costs, labor costs, relevant taxes paid, capitalized loans, indirect expense for apportion, etc.. The constructions in progress of the company should be accounted by the project classification.
（2）Standard and timing for transferring of projects under construction to fixed assets
All the expenditures that bring the construction in process to the expected condition for use shall be the credit value of the fixed asset. If the fixed asset construction in process has already reached the expected condition for use, buthasn‘t been made the final account; it shall be carried forward to a fixed asset according to its estimated value based on the budget, cost or actual cost of the construction starting from the date when it reaches the expected condition for use, and the fixed asset shall be depreciated according to thecompany‘s depreciation policy for fixed assets. After the final account has been made, the original provisional estimated value shall be adjusted according to the actual cost, but the depreciation which has originally been counted& drawn shall not be
adjusted.
(3) Test Method for Construction-in-Process Impairment and Counting& Drawing Method
The company shall, at the end of each period, make a judgment on whether there is any sign of possible
constructions-in-process impairment.
Where any evidence shows that there is possible constructions-in-process impairment, the recoverable amount of the constructions-in-process shall be estimated. The recoverable amount shall be determined in light of the higher one of the net amount of the fair value of the constructions-in-process minus the disposal expenses& the current value of the expected future cash flow of the constructions-in-process.
Where a construction-in-process's recoverable amount is lower than its carrying value, the carrying value of the construction-in-process shall be recorded down to the recoverable amount, and the reduced amount shall be recognized as the loss of the construction-in-process impairment and be recorded into the profits& losses at the current period. Simultaneously, the construction-in-process impairment reserve shall be made accordingly. Once any loss of the construction-in-process impairment is recognized, it shall not be switched back in the future accounting periods.
When there are signs showing that constructions in progress will devaluate, the enterprise estimates its collectable amount based on the individual construction in progress. If it is difficult to make estimation of the collectable amount for the individual construction in progress, the enterprise will recognize its collectable amount on the basis of the asset group that the construction in progress belongs to.
（16）Loan expenses
1. Recognition principles for capitalizing of loan expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or production of asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset. Other borrowing expenses are recognized as expenses according to the occurred amount, and accounted into gain/loss of current term.
The assets meeting capital conditions refer to the fixed assets, investment real estates and inventories which are constructed or produced in a long time to reach the predicted use or sale state.
When a loan expense satisfies all of the following conditions, it is capitalized:
1. Expenditures on assets have taken place, asset expenditures include the assets used to construct or produce the assets which meet the capitalization conditions, and expend by cash or transferring non-cash assets or bearing interest debt;
2. Loan costs have taken place;
3. The construction or production activities to make assets to reach the intended use or sale of state have begun. 2. Duration of capitalization of Loan costs
The capitalization period refers to the period from starting capitalization of loan costs to the stop of capitalization, the period of the break of capitalization of Loan costs is not included.
When the construction or production meets the intended use or sale of state of capitalization conditions, the Loan costs should stop capitalization.
When the construction or production meets the conditions of capitalization and can be used individually, the capitalization of the loan costs of the assets should be stopped.
Where each part of a asset under acquisition and construction or production is completed separately and is ready for use or sale during the continuing construction of other parts, but it can not be used or sold until the asset is
entirely completed, the capitalization of the borrowing costs shall be ceased when the asset is completed entirely. .3 Capitalization Suspension Period
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. If the interruption is a necessary step for making the qualified asset under acquisition and construction or production ready for the intended use or sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred during such period shall be recorded into the profits& losses at the current period, till the acquisition and construction or production of the asset restarts.
4. Calculation of the amount of capitalization of Loan costs
Interest expense due to specialized Loan and its auxiliary expenses shall be capitalized before the asset which satisfies the capitalizing conditions reaches its useable or saleable status.
Interest amount of common Loan to be capitalized equals to accumulated asset expense less weighted average of specialized loan part of asset expense multiplies capitalizing rate of common Loan occupied. Capitalizing rate is determined according to weighted average interest of common Loan.
If the Loan has discount or premium, the discount or premium amount should be determined according to actual interests in each accounting period. The interest amount should be adjusted in each period.
(17).Intangible assets
1. The valuation methods of intangible assets
(1)The initial measurement is conducted according to the actual cost when the intangible assets are acquired
The cost of the purchased intangible assets includes its buying price, relevant tax and the othe expenses that are directly attributed to this assets meeting its predetermined objective and other expenses that occur. The buying price of intangible assets is over the deferred payment under normal credit conditions, which has the nature of financing materially, the cost of intangible assets is determined on the basis of the present value of its buying price.
We acquire the mortgaged intangible assets from debtors through debt restructuring and determine the entry value on the basis of the fair value of the intangible assets,we have the balance between the book value of debt restructuring and the fair value of intangible assets used for mortgage charged to the current profit and loss. The entry value of the non-monetary assets exchanged into by the non-monetary assets are determined on the basis of the fair value of the assets exchanged out if the exchange of non-monetary assets has commercial nature and the assets exchanged into or out can be reliably measured, unless there is authentic evidence indicating that the fair value of assets exchanged into are more reliable; if the non-monetary assets that cannot meet the above prerequisite use the book value of the assets exchanged out and relevant taxes payable as the cost of the non-monetary assets, the profit and loss is not confirmed.
The entry value of the intangible assets acquired by the absorption merger under the control of one company is determined by the book value of the merged party;the entry value of the intangible assets acquired by the absorption merger that is not under the control of one company is determined by the fair value.
The cost of the intangible assets developed internally includes the materials consumed in developing the assets, cost of service, registration fees, other patent used in developing, amortization of concession and interest charges meeting the capitalization conditions and othe direct costs that occur before the intangible assets
meeting the predetermined objective.
（2）Subsequent measurement
The Company analyses and makes judgment of its serviceable life when acquiring the intangible assets. The intangible assets that have limited serviceable life are amortized by the straight-line method during the period when the assets can bring about economic interests;The intangible assets are deemed as uncertain serviceable life and are not amortized if it is impossible to expect the period when the assets could bring about economic interests.
（3）Estimation of service life of intangible assets with limited service life
The land use right shall be amortized on average according to the year limit of transfer from the date of transferring; proprietary technology, non-proprietary technology and other intangible assets shall be amortized on average by installment in accordance with the shortest one among the three including estimated durable years, beneficial years specified in contract and valid years stipulated by law. The amortization amount is accounted for as the related asset costs and current profit and loss according to the beneficiaries.
At the end of each period, the review is made for service life and amortization method of the intangible assets which have limited service life.
After review, there is no difference for the service life and amortization method of intangible assets at the end of this period.
||||
|-|-|-|
|Item|Amortisation periods|Basis|

（3）The judgment basis of the intangible assets with indefinite life
At the end of each period, the review is made for service life of the intangible assets which have unrecognized service life.
After review, if there is evidence indicating the service life of intangible assets is finite, its service life should be estimated.
（4）Provision for impairment of investment assets
The intangible assets that have certain serviceable life are conducted at the ending with the test of depreciation of value if the assets indicate obviously that those are depreciating
For conducting a test of depreciation of value of the intangible assets, it needs to estimate the recoverable amount of the assets. The recoverable amount is determined by the higher between the net amount obtained through the fair value of intangible assets minus settlement changes and the present value of the future cash flow expected by the intangible assets.
When the recoverable amount of intangible assets is below their book value, the book value of intangible assets is written down to the recoverable amount and the amount written down is confirmed as the loss of depreciation of value of intangible assets and is charged to the current profit and loss, while the corresponding provision for the depreciation of value of intangible assets is made.
The depletion of the depreciation of value of intangible assets or the amortization charge in the future period
will be adjusted accordingly after confirmation of the loss of the depreciation of value of intangible assets so that
it can systematically allocate the book value of intangible assets adjusted in the residual serviceable life of
intangible assets(deduction of anticipated net value).
Upon confirmation of the loss of the depreciation of value of intangible assets, the loss will not be reversed in the subsequent accounting period any longer.
When there are signs showing one intangible asset will devaluate, the enterprise estimates its collectable amount based on the individual intangible asset. If it is difficult to make estimation of the collectable amount for the individual intangible asset, the enterprise will recognize its collectable amount on the basis of the asset group that the intangible asset belongs to.
（18）Long-term amortizable expenses
Long-term deferred charge will be averagely amortized in the benefited period.
（19）.Predicted liabilities
（1）Recognition of Predicted liabilities
The liabilities related to contingencies and meeting the following conditions are reflected as estimated liabilities:
The liabilities that are present liabilities assumed by the company;
The fulfillment of the liabilities may cause outflow of economic interests from the company; The amount of the liabilities can be reliably measured.
（2）Accounting of Predicted liabilities
Predicted liabilities shall be conducted initial measurement according to the best estimates of related existing liabilities, When the company recognizes the optimum estimation, it shall be in overall consideration of risks, uncertainty and time value of currency and other factors related to contingent matters. When the influence of time value of money is significant, the optimum estimates shall be determined by discounting relevant future cash outflow The optimum estimates are conducted as follows:
If there is a continuous range (or area) for the necessary expenses and the same result possibility within the range, the optimum estimate is recognized according to the middle value, namely the average of upper limit and lower limit of amount within the range.
If there no exits a continuous range (or area) for the necessary expenses or the different result possibility within the range even if there is a continuous range, and if there are contingent matters related to individual item, the optimum estimate is recognized according to the amount that has most possibility to occur. If there are contingent matters involving multiple items, the optimum estimate is counted and confirmed as per all the possible results and associated probabilities.
（20）Revenues
（1）Recognition time for sales of goods
When the Group had transferred the ownership of the risks and rewards of the commodities to the buyer, the Group does not keep the management right relating to ownership and does not implement effective control on the commodities sold out, the income amount can be reliably measured, and the related economic benefit will
possibly flow into the enterprise, and when the related costs may happen or had happened can be measured reliably, the realization of the commodity sold out should be confirmed.
（2）Incomes from transferring asset use right
The economic benefits related to the transactions are likely to flow into the enterprise, if the revenue amount can be reliably measured, the revenue amount of transferring assets use right can be recognized as following:
(1) the interest income amount will be measured according to time and actual interest rates of the currency funds used by others.
(2) the income amount of usage charges will be measured according to the charge time and method determined in the relevant contract or agreement.
（21）Governmental subsidy
（1）Categories
Government Grant refers to monetary or non-monetary assets acquired without consideration from government, except for the capital invested in by the government as business owner. According to relevant grant objects prescribed in the government documents, the government grants are classified as the government grants related to assets and the income-related government grants. The government grants related to assets refer to the grants of long-term assets acquired by the company, used for purchase and construction or formed by other methods, and the income-related government grants refer to all the government grants except for those pertinent to assets. (2) Accounting Policy
1. Recognition of Government Grant
If the government grant is the monetary asset, it shall be measured in the light of the received or receivable amount. If the government grant is the no-monetary asset, it shall be measured at its fair value. If its fair value cannot be obtained in a reliable way, it shall be measured at its nominal amount (RMB 1). The government grants measured at their nominal amounts shall e directly included in the current profits and losses.
2. Accounting Method
The government grants pertinent to assets shall be recognized as deferred income, and it will be accounted to as the non-operating income amortized by installment according to the service life of assets constructed or purchased. If it is necessary to refund any government grant which has been recognized, and there is the deferred income concerned, the book balance of the deferred income shall be offset against, but the excessive part shall be included in the current profits and losses. If there is no deferred income concerned to the government grant, it shall be directly included in the current profits and losses.
（22）. Deferred income tax assets/Deferred income tax liability
1. References for confirmation of deferred income tax assets
The company is likely to determine the deferred income tax assets produced from deductible temporary
differences with the limit of offsetting the taxable income of temporary difference.
2.The confirmation basis of deferred income tax liabilities
The Company confirms the temporary differences of the taxable that is not paid in the current and prior periods as
the deferred income tax liabilities. However, the goodwill, the transactions formed from non-business merger and those will affect either accounting profit or the temporary differences of the taxable income when the transactions occur are not included in the deferred income tax liabilities.
（23）Operational leasing and Financing leasing
（1）Accounting of operational leasing
(1) The leasing fees paid for the leased assets by the company shall be recorded as the current expense according to the straight-line method in the whole lease term not excluding the rent free period. The initially direct expense related to the lease transactions paid by the company shall be recognized as the current expense.
When the assets lessor has assumed the lease-related expenses which should be borne by the company, the company shall deduct these expenses from the total amount of rent, amortize in the lease term according to the rents after deducted and record as the current expenses.
(2) The leasing fees received for the leased assets by the company shall be recognized as the lease income according to the straight-line method in the whole lease term not excluding the rent free period. The initially direct expense related to the lease transactions paid by the company shall be recognized as the current expense. For a large of amount, it will be capitalized and recorded as the current revenue based on the same confirmation of lease income during the whole lease period.
When the company has assumed the lease-related expenses which should be borne by the lessee, the company shall deduct these expenses from the total amount of rent and amortize in the lease term according to the rents after deducted.
(2) Accounting Method for Financing Leases
(1) The assets acquired under financing leases: the lower value between the fair value of leased assets and the present value of the minimum lease payments is recognized as the recorded value, the minimum lease payments are recognized as the recorded value of long-term payables, and the difference is recognized as unrecognized finance expense at the inception of the lease.
The company shall adopt the effective interest method to amortize and record as the financial costs during the assets lease term.
（24）Change of main accounting policies and estimations
Is there any material change of accounting policies occurred in the year
□ Yes√ No
N/A
（1）Change of accounting policies
Is there any change in accounting policies in the report period
□ Yes√ No
（2）Change of accounting estimations
Is there any change in accounting estimations in the report period
□ Yes√ No.
（25）Correction of accounting errors in previous period
Is there any accounting error with previous period found in the report period
□ Yes√ No
（1）Change of accounting policies
Is there any change in accounting policies in the report period
□ Yes√ No
（2）Change of accounting estimations
Is there any change in accounting estimations in the report period
□ Yes√ No.
V.Taxation
1.Main categories and rates of taxes
||||
|-|-|-|
|Taxes|Tax references|Applicable tax rates|
|Business tax|Business income|5%|
|Urban Construction Tax and Educational|||
||Turnover tax|7%|
|Surtax|||
|Enterprise income tax|Amount of income taxable|25%|
|Education surtax|Turnover tax|3%|
|Local surcharge for Education|Turnover tax|2%|

Income tax rate applicable to branches and factories.
1.Enterprise income tax
The interest rate of corporate income tax of the company and subsidiaries in China mainland is25%, the interest rate of the income from Hong Kong of the subsidiaries in Hong Kong is16.5%.
2.VAT。
The output tax ratio of domestic sales revenue and processing income of printing and dyeing products for the company and its subsidiaries established in Mainland China is17%, and the export sales is subject to the
―exemption, compensation andrefund‖ methods. Thecompany‘s input tax for purchasing raw materials offsets
the output tax with ratio of17%. Of which, the input tax paid for export products can be applied for refunds. The
company‘s VAT payable is the balance after offset between currentperiod‘s input and output taxes.
The subsidiaries of the company in Hong Kong do not need to pay the VAT.
3. Business tax
Business tax applied to revenues of the company and South China Dyeing and Printing Co., Ltd. from the housing rental, rate being5%.It‘s unnecessary for the subsidiary in Hong Kong to pay the business tax.
(IV) Urban Construction Tax and Educational Surtax
Thecompany‘s urban construction tax and education surtax are based on payable VAT and business tax, tax rate being7% and3%. Since January 1, 2011,2% of VAT and business tax actually paid by taxpayer are as the local education surtax.It‘s unnecessary for the subsidiary in Hong Kong to pay the urban construction tax and the education surtax.
(V) Property Tax
The tax of property with own use for the company and its subsidiaries established in Mainland China is based on70% of original value of the property, tax rate being1.2%, and the tax of leased property is based on the rental income, tax rate being12%.It‘s unnecessary for the subsidiary in Hong Kong to pay the property tax.
VI. Enterprise consolidation and combined financial statements
1. Subsidiary
（1）Subsidiary obtained through establishment or investment
Unit：RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||||After|
||||||||||||||wrote|
||||||||||||||down|
||||||||||||||current|
||||||||||||||period|
||||||||||||||loss of|
|||||||||||||Amount||
||||||||Other||||||minority|
|||||||||||||used to||
||||||||projects||||||sharehol|
|||||||||||||write||
||||||||balance||||||ders|
|||||||Actual|||Proporti|Whether|Interest|down||
|Full|||||||essential|Holding|||||over|
|||Registra||Register||capital|||on of|consolid|of|lost||
|name of|Subsidia||Busines||Busines||ly from|proporti|||||equity|
|||tion||ed||amounts|||voting|ation of|minority|included||
|subsidia|ry type||s||s scope||net|on|||||beginni|
|||place||capital||of|||rights(%|report|sharehol|in||
|ry|||||||investm|(%)|||||ng share|
|||||||the end|||)|form|der|minority||
||||||||ent to||||||of|
|||||||||||||sharehol||
||||||||subsidia||||||minority|
|||||||||||||der||
||||||||ry||||||sharehol|
|||||||||||||interest||
||||||||||||||ders in|
||||||||||||||the|
||||||||||||||subsidia|
||||||||||||||ry from|
||||||||||||||the|
||||||||||||||parent|

||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||compan|
|||||||||||||y‘s|
|||||||||||||share ,B|
|||||||||||||alance|
|||||||||||||of|
|||||||||||||Owner's|
|||||||||||||equity|
||||||Purchase||||||||
||||||of raw||||||||
||||||materials,||||||||
||||||marketin||||||||
|Hong|||||||||||||
|||||2,400,0|g of||||||||
|Kong|Limited||||||||||||
|||Hong||02|printed||||||||
|Victor|Compan||Trade||and dyed||100%|100%|Yes|0.00|0.00|0.00|
|||Kong||（HKD|||||||||
|Onward|y||||woven||||||||
|||||）f|abrics,||||||||
|Co.Ltd|||||||||||||
|||||i|nvestme||||||||
||||||nt and||||||||
||||||holding||||||||
||||||business||||||||
||||||Sales of||||||||
|Shenzho||||1,000,0|Corduroy||||||||
||Limited||||||||||||
|ng||Hong||00 ,|dyed||||||||
||Compan||Trade||||100%|100%|Yes|0.00|0.00|0.00|
|Compan||Kong||（HKD|cloth and||||||||
||y||||||||||||
|y||||）|printed||||||||
||||||cloth||||||||
||||||Productio||||||||
||||||n and||||||||
|||||85,494,|||||||||
|Nanhua|Limited||||sales of||||||||
|||Shenzhe|Product|700|||||||||
|Compan|Compan||||printed||69.44%|69.44%|Yes|0.00|0.00|0.00|
|||n|ion|（HKD|||||||||
|y|y||||cloth and||||||||
|||||）|||||||||
||||||dyed||||||||
||||||cloth||||||||
||||||Sales of||||||||
|Xinye|Limited|||10,000|printed||||||||
|||Hong|||||||||||
|Compan|Compan||Trade|（HKD|cloth and||100%|100%|Yes|0.00|0.00|0.00|
|||Kong|||||||||||
|y|y|||）|dyed||||||||
||||||cloth||||||||
|||||r|Textilet,P||||||||
||||||inting||||||||
|Shenzh|||||||||||||
||Limited||||and||||||||
|en East||Shenzhe|Trade|3,000,0||3,000,0||||-1,738,4|||
||Compan||||dyeing||51%|51%|Yes||0.00|0.00|
|Asia||n||00i||00.00||||20.00|||
||y||||ndustry||||||||
|Co|||||||||||||
||||||and||||||||
||||||Raw||||||||

|||
|-|-|
|,retof|materials|
||Machine|
||y|
||quipmen|
||and|
||ther|
||abrics|

Other statements on Subsidiaries obtained through incorporation orinvestment：
1.The Company invested HKD 2,400,002 in 1984 to establish Hongkong Victor Onward Company In Hongkong.
2.Shenghong Company Was established in November 9, 1993, registered capital 1 million HKD, Hongkong Victor Onward Holding100% equity.
3.Nanhua Company was established in July 21 1988, registered capital 85.49 million HKD, By December 31, 2013 the shareholding structure as follows:
|||||
|-|-|-|-|
|Name of investor|Year-beginningamount|Proportion%|Year-end amount|
|The Compoany|46,868,194.54|54.82%|46,868,194.54|
|Shenye Union (Hongkong)Co.,Ltd.|26,127,180.32|30.56%|26,127,180.32|
|The Company|12,499,325.14|14.62%|12,499,325.14|
|Hong Kong Victor OnwardCompany|85,494,700.00|100.00%|85,494,700.00|
|Total||||

4.Xingye Company invested HKD 10,000 to establish industry Company in Hongkong in December 1996. Nanhua Companyholding‘s100% of the equity.
5.Shenzhen East Asia Company was established in February 28, 2007, registered capital 3 million yuan, the company invested 1.53 million yuan , holding51% equity , Nanjiang East ASIA Textile Co., Ltd. Invested 1.47 million yuan , holding49% equity.
2. Changes of combination scope at current period
Notes
□Applicable√Not applicable
3. Exchange rate of main accounts of overseas businesses
The spot exchange rate of HKD to RMB WAS 0.81090 at year beginning , and the spot exchange rate at year endwas0.78623 the approximate exchange rate of the sot exchange rate uses the current average exchange rate 0.798573.
Except the company, its subsidiaries South China Dyeing and Printing Co., Ltd. and Shenzhen Southeast Asia Co., Ltd. choose RMB as the functional currency, other subsidiaries choose HK dollar. However, the financial
statements should be translated into RMB. For the translation method of the financial statements for foreign
currency, please refer to the Note II.
VII. Notes to the major items of consolidated financial statement
1.Monetary Capital
Unit：RMB
||||||||
|-|-|-|-|-|-|-|
||Year-end balance|||Year-beginning balance|||
|Items||Exchange|||Exchange||
||Foreign currency||RMB|Foreign currency||RMB|
|||rate|||rate||
|Cash|--|--|41,613.00|--|--|66,684.00|
|RMB|--|--|37,065.00|--|--|62,790.00|
|HKD|5,785.00|0.78623|4,548.00|4,802.00|0.8109|3,894.00|
|ank deposit|--|--|62,791,183.00|--|--|51,492,804.00|
|RMB|--|--|22,172,845.00|--|--|25,739,776.00|
|HKD|50,311,621.00|0.78623|39,556,478.00|30,435,747.00|0.8109|24,680,347.00|
|USD|174,164.00|6.09690|1,061,860.00|170,660.00|6.2855|1,072,681.00|
|Other monetary capital|--|--|670,114.00|--|--|667,774.00|
|RMB|--|--|670,114.00|--|--|667,774.00|
|Total|--|--|63,502,910.00|--|--|52,227,262.00|

 Notes of Monetary fund has not these conditions such as usage limitation for mortgage, pledge or frozen fund, stored overseas, with potential recovery risk.
Other monetary funds mainly are the capital that deposited in the securities company and used to purchase and draw the new bond, and there are not the restricted monetary funds at the end of period.
2.Bill receivable
（1）Classification bill receivable
Unit：RMB
||||
|-|-|-|
|Classification|Year-end balance|Year-beginning balance|
|Bank acceptance|1,500,000.00|1,500,000.00|
|Total|1,500,000.00|1,500,000.00|

 3. Interest receivable
（1）Interest receivable
Unit :RMB
||||||
|-|-|-|-|-|
|Items|Beginning of term|Increased this term|Decreased this term|End of term|
|Fixed deposit interest|38,414.00|159,969.00|119,043.00|79,340.00|
|Total|38,414.00|159,969.00|119,043.00|79,340.00|

 (2)Statement on interest receivable
The interests receivable was the ones for the subsidiary of the company Hong Kong Victor OnwardBank‘s deposits, with principal about HKD 20 million and RMB 14 million.
4. Account receivable
(1).Classification account receivables.
Unit :RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount in year-end||||Amount in year- begin||||
||Book Balance||Bad debt provision||Book Balance||Bad debt provision||
|Classification|||||||||
||Amount|Proportion(|Amount|Proportion(|Amount|Proportion(|Amount|Proportion(%|
|||%)||%)||%)||)|
|Receivables with major|||||||||
|individual amount and bad|||||||||
|debt provision provided|||||||||
|individually receivables|3,960,436.0||3,960,436.0||3,715,397||||
|||31.46%||100%||29.48%|2,970,685.00|79.96%|
|with major individual|0||0||.00||||
|amount and bad debt|||||||||
|provision provided|||||||||
|individually|||||||||
|Receivables provided bad debt provision in groups|||||||||
|Account receivable with|||||||||
|minor individual amount|8,626,416.0||8,626,416.0||8,888,114||||
|||68.54%||100%||70.52%|8,888,114.00|100%|
|but bad debt provision is|0||0||.00||||
|provided|||||||||
||12,586,852.||12,586,852.||12,603,51||11,858,799.0||
|Total||--||--||--||--|
||00||00||1.00||0||

Category explanation of accounts receivable:
Particulars about the receivable accounts due from shareholders with5%(5%)or over of theCompany‘s shares Receivable accounts with large amount individually and bad debt provisions were provided
√ Applicable□ not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|Description|Book balance|Bad debt provision|Rate(%)|Reason to provide|

||||||
|-|-|-|-|-|
|Hong Kong Victor Onward Co., Ltd.|1,851,841.00|1,851,841.00|100%|Aging long|
|Carnival Index International Ltd.|1,098,549.00|1,098,549.00|100%|Aging long|
|TAI YANG ENTERPRISE CO.,Ltd.|1,010,046.00|1,010,046.00|100%|Aging long|
|Total|3,960,436.00|3,960,436.00|--|--|

Account reveivable on which bad debt proisions are provided on age basis in the group
□Applicable√Not applicable
Receivable accounts on which had debt provisions are provided on percentage analyze basis in a portfolio□Applicable√Not applicable
Receivable accounts on which had debt provisions are provided by other ways in the portfolio
□Applicable√Not applicable
Receivable accounts with minor amount but on which had debt provisions are provided individually at end of period
√Applicable□Not applicable
Unit:RMB
||||||
|-|-|-|-|-|
|Description Of other|||||
||Book balance|Amount of bad debt|Rate|reason|
|receivables|||||
|VEGA CARMENT CO.|||||
||768,189.00|768,189.00|100%|Aging long|
|Ltd|||||
|Fly Dragon International|573,536.00|573,536.00|100%|Aging long|
|Grateful Textiles Co.,Ltd|566,661.00|566,661.00|100%|Aging long|
|Shenzhen Fangzhou|||||
||468,502.00|468,502.00|100%|Aging long|
|Textiles Co., Ltd.|||||
|World Fabrica (Int'l) Ltd|465,126.00|465,126.00|100%|Aging long|
|Ezhou Xiangya Clothing|||||
||368,943.00|368,943.00|100%|Aging long|
|Co., Ltd.|||||
|Tak Shing Buying Office|||||
||333,502.00|333,502.00|100%|Aging long|
|Led|||||
|Shenye Union （HK）|||||
||299,354.00|299,354.00|100%|Aging long|
|Co.., Ltd.|||||
|Panther Fabric Ltd.|295,088.00|295,088.00|100%|Aging long|
|Changshu Zhongjiang|||||
|Clothing Import &|283,539.00|283,539.00|100%|Aging long|
|Export Co., Ltd.|||||
|Starline Textile CO.Ltd.|282,234.00|282,234.00|100%|Aging long|
|Nissho Iwai HK Corp|||||
||215,229.00|215,229.00|100%|Aging long|
|Ltd.|||||
|Unimix Ltd.|192,891.00|192,891.00|100%|Aging long|

||||||
|-|-|-|-|-|
|Tai Hing Linings Co Ltd|191,295.00|191,295.00|100%|Aging long|
|Human Changpuan|||||
||185,981.00|185,981.00|100%|Aging long|
|Garment|||||
|Ningbo Youngor Fuchun|||||
||181,490.00|181,490.00|100%|Aging long|
|Uniforms Co., Ltd.|||||
|Win favour development|||||
||146,600.00|146,600.00|100%|Aging long|
|ltd|||||
|Speedy Textiles Co|146,502.00|146,502.00|100%|Aging long|
|Lin Feng Textile Co.|135,686.00|135,686.00|100%|Aging long|
|Jicheng Cotton Co., Ltd.|131,954.00|131,954.00|100%|Aging long|
|Millionaire(HK)Weaving|||||
||124,249.00|124,249.00|100%|Aging long|
|Ltd.|||||
|Leader Day Ltd.|121,930.00|121,930.00|100%|Aging long|
|Tex Mate Fabrics (HK)|110,024.00|110,024.00|100%|Aging long|
|New Design Textiles Ltd.|109,178.00|109,178.00|100%|Aging long|
|Deep Success Industrial|||||
||102,606.00|102,606.00|100%|Aging long|
|Ltd|||||
|Wynvaye Industrial Co|101,030.00|101,030.00|100%|Aging long|
|ACTSUN LTD.|89,613.00|89,613.00|100%|Aging long|
|Tamurakoma Co Ltd.|77,828.00|77,828.00|100%|Aging long|
|International Textiles Co|65,461.00|65,461.00|100%|Aging long|
|Shenzhen Hongtian|||||
||59,380.00|59,380.00|100%|Aging long|
|Cloth Trade Co., Ltd.|||||
|Ho Cheong Textiles Ltd|54,607.00|54,607.00|100%|Aging long|
|Origin Textiles Co Ltd.|54,156.00|54,156.00|100%|Aging long|
|Wing Fook Piecegoods|||||
||50,389.00|50,389.00|100%|Aging long|
|Co.,Ltd|||||
|Wing Shum Pieces goods|||||
||49,905.00|49,905.00|100%|Aging long|
|Co Ltd.|||||
|Gold Eagle Textiles|||||
||47,588.00|47,588.00|100%|Aging long|
|Limited|||||
|Tangshan Lifeng|||||
||45,761.00|45,761.00|100%|Aging long|
|Garment Co., Ltd.|||||
|Charman Trading Co|43,852.00|43,852.00|100%|Aging long|
|Atex Trading Co|43,847.00|43,847.00|100%|Aging long|
|Gloden Glory Textiles|||||
||40,322.00|40,322.00|100%|Aging long|
|Ltd|||||

||||||
|-|-|-|-|-|
|Yu Fat Piecegoods|||||
||39,603.00|39,603.00|100%|Aging long|
|Co.,Ltd|||||
|Fuji Industrial Co|39,152.00|39,152.00|100%|Aging long|
|Other|923,633.00|923,633.00|100%|Aging long|
|Total|8,626,416.00|8,626,416.00|--|--|

（2）Particulars about the receivable accounts due from shareholders with5% or over of theCompany‘s shares in the report period.
Unit：RMB
||||||
|-|-|-|-|-|
||Year-end balance||Year-beginning balance||
|Name|||||
||Book Balance|Amount|Book Balance|Amount|
|Note|||||

（3）The front 5units‘ information of account receivable
Unit：RMB
||||||
|-|-|-|-|-|
||Relation with the|||Portion in total|
|Name||Amount|Ages||
||Company|||receivables (%)|
|Victor Onward|||||
||Non- related parties|1,851,841.00|Over 3 years|14.71%|
|Textile(HK)Co., Ltd.|||||
|Carnival Index|||||
||Non- related parties|1,098,549.00|Over 3 years|8.73%|
|International Ltd|||||
|TAI YANG|||||
||Non- related parties|1,010,046.00|Over 3 years|8.02%|
|ENTERPRISE CO.,LTD.|||||
|VEGA CARMENT CO.|||||
||Non- related parties|768,189.00|Over 3 years|6.1%|
|Ltd|||||
|Fly Dragon International|Non- related parties|573,536.00|Over 3 years|4.56%|
|Total|--|5,302,161.00|--|42.12%|

（4）Account receivable from Related parties
Unit：RMB
|||||
|-|-|-|-|
||||Portion in total receivables|
|Name|Relation with the company|Amount||
||||account(%)|
|Shenye Union（HK）Co.,|The related parties controlled|||
|||299,354.00|2.38%|
|Ltd.|the same Actual controller|||

|||||
|-|-|-|-|
|Total|--|299,354.00|2.38%|

 5.. Other receivable
1.Type analyses:
Unit：RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount in year-end||||Amount in year-begin||||
||Book Balance||Bad debt provision||Book Balance||Bad debt provision||
|Type|||||||||
||Amount|Proportio|Amount|Proportio|Amount|Proportion(|Amount|Proportio|
|||n(%)||n(%)||%)||n(%)|
|Other receivables with|||||||||
|major individual amount|||||||||
||3,368,370.00|72.15%|3,368,370.00|100%|3,368,370.00|72.62%|3,368,370.00|100%|
|and had debt provision|||||||||
|provided individually|||||||||
|Other receivables provided bad debt provision in groups|||||||||
|Account age group|311,279.00|6.67%|||260,005.00|5.61%|||
|Subtotal of group|311,279.00|6.67%|||260,005.00|5.61%|||
|Other account receivable|||||||||
|with minor individual|||||||||
||988,643.00|21.18%|988,643.00|100%|1,010,019.00|21.78%|1,010,019.00|100%|
|amount but bad debt|||||||||
|provision is provided|||||||||
|Total|4,668,292.00|--|4,357,013.00|--|4,638,394.00|--|4,378,389.00|--|

 Category explanation of other accounts receivable:
Other receivable accounts with large amount and were provided had debt provisions individually at end of period.√ Applicable□ Not applicable
Unit：RMB
||||||
|-|-|-|-|-|
|Description|Book balance|Amount of bad debts|Rate（%）|Reason|
|Nanjing East Asia|1,313,370.00|1,313,370.00|100%|Aging long|
|CCB.Guangdong Shunde|||||
||1,080,000.00|1,080,000.00|100%|Aging long|
|Branch|||||
|Changzhou Dongfeng|||||
|Textile Printing & dyeing|975,000.00|975,000.00|100%|Aging long|
|Equipment Co., Ltd.|||||
|Total|3,368,370.00|3,368,370.00|--|--|

Other receivable accounts in Group on which bad debt provisions were provided on age analyzebasis：
□Applicable√Not applicable
Other receivable account in Group on which bad debt provisions were provided on percentagebasis：
□Applicable√Not applicable
Other Receivable accounts on which bad debt provisions are provided by other ways in theportfolio：
□Applicable√Not applicable
Other receivable accounts with minor amount but were provided had debt provisions individually at end of period.√Applicable□Not applicable
Unit：RMB
||||||
|-|-|-|-|-|
|Content|Book balance|Bad debt Provision|Rate（%）|Reason|
|HongKong Victor|||||
||673,005.00|673,005.00|100%|Aging long|
|Onward|||||
|Shanghai Huayinke|||||
||180,000.00|180,000.00|100%|Aging long|
|Trade Industry Co., Ltd.|||||
|Shenzhen Environmental||||Aging long|
|Management System|35,000.00|35,000.00|100%||
|Certification Center|||||
|Shenzhen Design|||||
|Institute of Ministry of|||||
||30,000.00|30,000.00|100%|Aging long|
|Machinery Industry|||||
|Shanghai Branch|||||
|Other|70,638.00|70,638.00|100%|Aging long|
|Total|988,643.00|988,643.00|--|--|

（2）Particulars about the other receivable accounts due from shareholders with5% or over of theCompany‘s shares in the report period.
Unit：RMB
||||||
|-|-|-|-|-|
||Balance at the period end||Balance in year-begin||
|Name||Amount of bad debt||Amount of bad debt|
||Book amount||Book amount||
|||provision||provision|
|None|||||

（3）The front 5units‘ information of other account receivable
Unit：RMB
||||||
|-|-|-|-|-|
||Relation with the|||Portion in total other|
|Name||Amount|Ages||
||company|||receivables(%)|
|CCB.Guangdong Shunde|||||
||Non-Related parties|1,080,000.00|Over 3 years|23.13%|
|Branch|||||
|Nanjing East Asia|Non-Related parties|1,313,370.00|Over 3 years|28.13%|
|Changzhou Dongfeng|||||
||Non-Related parties|975,000.00|Over 3 years|20.89%|
|Textile Printing & dyeing|||||

||||||
|-|-|-|-|-|
|Equipment Co., Ltd.|||||
|HongKong Victor|||||
||Non-Related parties|673,005.00|Over 3 years|14.42%|
|Onward|||||
|Shanghai Huayinke|||||
||Non-Related parties|180,000.00|Over 3 years|3.86%|
|Trade Industry Co., Ltd.|||||
|Total|--|4,221,375.00|--|90.43%|

 6.Prepayments
（1）Prepayments age :
Unit:RMB
||||||
|-|-|-|-|-|
||End of term||Beginning of term||
|Age||Proportion||Proportion|
||Amount||Amount||
|||（%）||（%）|
|Within 1 year|25,192.00|100%|175,734.00|99.6%|
|1-2 years|||442.00|0.25%|
|2-3 years|||267.00|0.15%|
|Total|25,192.00|--|176,443.00|--|

 Notes to age of payment in advance:
（2） The front 5units‘ information of Prepayments
Unit：RMB
||||||
|-|-|-|-|-|
||Relation with the||||
|Unit name||Amount|Time|Reason of not clearing|
||company||||
|Insurance|Non-Related parties|19,869.00|Within 1 year|Not settlement|
|Vehicle license fees|Non-Related parties|2,804.00|Within 1 year|Not settlement|
|Registered fees|Non-Related parties|1,831.00|Within 1 year|Not settlement|
|Repair fee|Non-Related parties|688.00|Within 1 year|Not settlement|
|Total|--|25,192.00|--|--|

Notes
Prepayment received by shareholding parties holding5% or above of theCompany‘s shares in the report period.（4）Statements on prepayments
Prepayment of Foreingn currency Banlance
|||||||
|-|-|-|-|-|-|
|Name|Amount at period-end|||||
||Formercurrency|Convertingrate|RMB|Formercurrency|Converting rate|
|HKD|32,041|0.78623|25,192|217,589.00|0.8109|
|Total|||25,192|||

7．Inventory
（1）Inventory types
Unit：RMB
||||||||
|-|-|-|-|-|-|-|
||Year-end balance|||Year-beginning balance|||
|Items|||||||
||Book balance|Provision for|Book value|Book balance|Provision for bad|Book value|
|||bad debts|||debts||
|Raw materials|460,344.00|460,344.00||2,030,715.00|1,929,179.00|101,536.00|
|Stock goods||||635,960.00|635,960.00||
|Total|460,344.00|460,344.00||2,666,675.00|2,565,139.00|101,536.00|

（2）Inventory Impairment provision
Unit：RMB
|||||||
|-|-|-|-|-|-|
||Book balance at year|Amount accounted in|Amount Decreased in current period|||
||||||Book balance at period|
|Type||||||
||beginning|current period|Transferred back|Reselling|end|
|Raw materials|1,929,179.00|||1,468,835.00|460,344.00|
|Stock goods|635,960.00|||635,960.00||
|Total|2,565,139.00|||2,104,795.00|460,344.00|

 8. Disposable financial asset
（1）Sellable financial assets
Unit：RMB
||||
|-|-|-|
|Items|Fair value at end of term|Fair value at beginning of term|
|Available-for-sale equity instruments|582,942.00|751,542.00|
|Total|582,942.00|751,542.00|

 The amount of investment held to mature categorized to sellable financial assets was RMB 0 , Account for0% of total investment held to mature.
Statement on sellable financial assets:
9.Long-term equity investment
（1）Details of long-term equity investment
Unit：RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Explanati||||
|||||||||on of||||
|||||||||difference||||
|||||||||between||||
|||||||Sharehold|Voting|sharehold||||
||Accounti|Initial||||ing|right|ing||||
||||Original||Ending|||||Current|Cash|
|Name|ng|investmen||change||proportio|proportio|proportio|Devalue|||
||||balance||Balance|||||devalue|bonus|
||method|t cost||||n in the|n in the|n and||||
|||||||investee|investee|voting||||
|||||||||right||||
|||||||||proportio||||
|||||||||n in||||
|||||||||investee||||
|Zhejiang||||||||||||
|Union||||||||||||
|Hangzho|Equity|58,588,40|65,784,31|1,147,373|66,931,68|||||||
|||||||25%|25%||0.00|0.00|0.00|
|u Bay|method|3.00|2.00|.00|5.00|||||||
|Chuangye||||||||||||
|Co., Ltd.||||||||||||
|||58,588,40|65,784,31|1,147,373|66,931,68|||||||
|Total|--|||||--|--|--|0.00|0.00|0.00|
|||3.00|2.00|.00|5.00|||||||

10.Investment real estate
（1）Measured by the cost of investment in real estate
Unit：RMB
||||||
|-|-|-|-|-|
|Items|Book amount at year|Increase at this period|Decrease at this period|Book balance in year -end|

||||||
|-|-|-|-|-|
||beginning||||
|1. Total original price|||||
||96,920,525.00|226,557.00|9,728,173.00|87,418,909.00|
|1.House, Building|||||
||96,920,525.00|226,557.00|9,728,173.00|87,418,909.00|
|II.Total accumulated|||||
|depreciation|||||
||65,879,041.00|3,946,511.00|5,864,796.00|63,960,756.00|
|accumulated|||||
|amortization|||||
|1.House, Building|||||
||65,879,041.00|3,946,511.00|5,864,796.00|63,960,756.00|
|III. Total book value|||||
|of investment real|||||
||31,041,484.00|-3,719,954.00|3,863,377.00|23,458,153.00|
|estate|||||
|1.House, Building|||||
||31,041,484.00|-3,719,954.00|3,863,377.00|23,458,153.00|
|V. Total book value of|||||
||31,041,484.00|-3,719,954.00|3,863,377.00|23,458,153.00|
|investment real estate|||||
|1.House, Building|31,041,484.00|-3,719,954.00|3,863,377.00|23,458,153.00|

Unit：RMB
|||
|-|-|
||This period|
|Current amount of depreciation and amortization|3,946,511.00|
|Accrual amount of impairment provision for investment properties of||
||0.00|
|thecurrent period||

11. Fixed assets
（1）Fixed assets
Unit：RMB
||||||
|-|-|-|-|-|
|Items|Book amount at|Increase at this period|Decrease at this|Book balance in|
||year beginning||period|year -end|
|1.Total of Original price of|||||
||161,276,810.00|35,849.00|100,470,285.00|60,842,374.00|
|fixed assets|||||
|Including ：House and|47,973,327.00||-110,551.00|48,083,878.00|

|||||||
|-|-|-|-|-|-|
|building||||||
|Machine equipment|99,308,680.00|||98,987,159.00|321,521.00|
|Transpiration Equipment|4,870,110.00|||848,573.00|4,021,537.00|
|Office Equipment and other|9,124,693.00|35,849.00||745,104.00|8,415,438.00|
||Book balance at|Current term|Current term|Decrease at this|Book balance in|
|--||||||
||year beginning|new extra|provision|period|year -end|
|II. Total of Accumulated||||||
||111,245,417.00||394,626.00|76,196,563.00|35,443,480.00|
|depreciation||||||
|Including ：House and||||||
||26,436,963.00||108,507.00|-19,401.00|26,564,871.00|
|building||||||
|Machine equipment|75,000,283.00|||74,710,846.00|289,437.00|
|Transpiration Equipment|3,864,419.00||89,729.00|720,762.00|3,233,386.00|
|Office Equipment and other|5,943,752.00||196,390.00|784,356.00|5,355,786.00|
||Book balance in||||Balance in|
|--||--||||
||year-begin||||year-end|
|III. Total book value of||||||
||50,031,393.00|--|||25,398,894.00|
|Fixed assets||||||
|Including ：House and||||||
||21,536,364.00|--|||21,519,007.00|
|building||||||
|Machine equipment|24,308,397.00|--|||32,084.00|
|Transpiration Equipment|1,005,691.00|--|||788,151.00|
|Office Equipment and other|3,180,941.00|--|||3,059,652.00|
|IV. Total of Devalued||||||
||37,614,934.00|--|||18,207,689.00|
|Provision||||||
|Including ：House and||||||
||15,466,004.00|--|||15,466,004.00|
|building||||||
|Machine equipment|19,407,245.00|--||||
|Transpiration Equipment|50,276.00|--|||50,276.00|
|Office Equipment and other|2,691,409.00|--|||2,691,409.00|
|V. Total book value of Fixed|12,416,459.00||||7,191,205.00|
|||--||||
|assets||||||
|Including ：House and||||||
||6,070,360.00|--|||6,053,003.00|
|building||||||
|Machine equipment|4,901,152.00|--|||32,084.00|
|Transpiration Equipment|955,415.00|--|||737,875.00|
|Office Equipment and other|489,532.00|--|||368,243.00|

Current depreciation is RMB 394,626.00 . The issue of fixed assets transferred from construction in progress original price is RMB 0. 12. Intangible assets
（1） Intangible assets
Unit：RMB
||||||
|-|-|-|-|-|
|Items|Book Balance in|||Book Balance in|
|||Increase at this period|Decrease at this period||
||year-begin|||year-end|
|1. Total original price|||||
||13,023,720.00|||13,023,720.00|
|Land Use right|||||
||12,356,137.00|||12,356,137.00|
|Software|667,583.00|||667,583.00|
|II. Total amount of|||||
||10,935,796.00|40,305.00||10,976,101.00|
|accumulated|||||
|Land Use right|||||
||10,495,373.00|40,305.00||10,535,678.00|
|Software|440,423.00|||440,423.00|
|III. Book value of intangible|||||
||2,087,924.00|-40,305.00||2,047,619.00|
|assets|||||
|Land Use right|||||
||1,860,764.00|-40,305.00||1,820,459.00|
|Software|227,160.00|||227,160.00|
|IV.Total value of provision|||||
||227,160.00|||227,160.00|
|for impairment|||||
|Land Use right|||||
|Software|227,160.00|||227,160.00|
|V. Total Book value of|1,860,764.00|||1,820,459.00|
|||-40,305.00|||
|intangible assets|||||
|Land Use right|||||
||1,860,764.00|-40,305.00||1,820,459.00|
|Software|||||

The amortization amount is 0.
13.Goodwill
Unit：RMB
|||||||
|-|-|-|-|-|-|
|Name of the investee or the|Balance in|Increase at this|Decrease at this|Balance in|Ending devalue|
|matter of forming Goodwill|year-begin|period|period|year-end|provision|

||||
|-|-|-|
|For the goodwill formed|||
|from holding shares of|5,099,624.00|5,099,624.00|
|Nanhua Company,|||
|Total|5,099,624.00|5,099,624.00|

Statement of basis for impairment testing and provision ofgoodwill：
14. Deferred income tax assets and deferred income tax liability
1. Confirmed the deferred income tax assets and deferred income tax liability
Recognized deferred income tax assets and deferred income tax liabilities
Unit:RMB
||||
|-|-|-|
|Items|Year-end balance|Year-beginning balance|
|Deferred income tax assets:|||
|Deferred income tax liability：|||
|Assessed tax-free periods of time caused by|||
||702,735.00|766,660.00|
|differences in income|||
|Subtotal|702,735.00|766,660.00|

 Details of the un-recognized deferred income tax assets
Unit：RMB
||||
|-|-|-|
|Items|At end of term|At beginning of term|

Deductible losses of the un-recognized deferred income tax asset will expire in the following years
Unit:RMB
|||||
|-|-|-|-|
|Year|At end of term|At beginning of term|Notes|

Details of taxable differences and deductible differences
Unit:RMB
||||
|-|-|-|
||Amount of temporary differences||
|Items|||
||At end of term|At beginning of term|
|Differences in taxable items|||
|Revaluation of assets|4,259,000.00|4,646,424.00|
|Subtotal|4,259,000.00|4,646,424.00|
|Deductible difference project|||

（2）Deferred income tax assets and liabilities are presented as net amount after neutralization
Statement on deferred income tax assets andliabilities：
Unit：RMB
||||||
|-|-|-|-|-|
|Items|Deferred Income Tax|Temporarily|Deferred Income Tax|Temporarily|

||||||
|-|-|-|-|-|
||Assets or Liabilities|Deductable or|Assets or Liabilities|Deductable or|
||at the End of Report|Taxable Difference at|at the Beginning of|Taxable Difference at|
||Period|the End of Report|Report Period|the Beginning of|
|||Period||Report Period|
|Deferred income tax liability：|702,735.00||766,660.00||

Details of taxable differences and deductible differences
Unit：RMB
|||
|-|-|
|Items|Offsetting Amounts of This Period|

Details of taxable differences and deductible differences
The company is reorganized into the shares company after approved byPeople‘s Bank of China. The increase value of assets revaluation for its subsidiary of Hong Kong Zhongguan Companycan‘t be accounted into the book value according to the provisions of accounting rules. Also, itcan‘t be conducted pre-tax profits deducted, resulting in the difference between the fixed net assets and tax basis.
15. Provision for depreciation of assets
Unit：RMB
|||||||
|-|-|-|-|-|-|
||||Decreased in this period|||
||Book balance at the|Increase in this|||Balance in|
|Items||||Switch||
||beginning of term|period|Switch back||year-end|
|||||cancellation||
|I.Provision for bad debts|16,237,188.00|744,711.00||38,034.00|16,943,865.00|
|2 Inventory impairment|2,565,139.00|||2,104,795.00|460,344.00|
|provision||||||
|5. Long-term equity||0.00|||0.00|
|investment impairment||||||
|provision||||||
|7.Fixed asset impairment|37,614,934.00||||18,207,689.00|
|||||19,407,245.00||
|provision||||||
|12. Intangible asset|227,160.00||||227,160.00|
|impairment provision||||||
|Total|56,644,421.00|744,711.00||21,550,074.00|35,839,058.00|

 Notes
16. Account payable
（1）Account payable
Unit：RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|Over 1 year|3,186,939.00|3,239,571.00|
|Total|3,186,939.00|3,239,571.00|

(2)There was account payable due from shareholders with more than5% (including5%) of the voting shares of the company
Unit：RMB
||||
|-|-|-|
|Name|Balance in year-end|Balance in year-begin|
|None|||

(3)The description of large-sum accounts payable with the age over 1 year:
1.Accounts payable with age over one year included a number of accounts, without single significant amount of accounts payable.
2. Particulars about the receivable accounts due from shareholders with5%(5%)or over of theCompany‘s shares
3.Account payables of foreign currency balances
|||||||
|-|-|-|-|-|-|
|Name|Amount at period-end|||||
||Former currency|Convertingrate|RMB|Formercurrency|Convertingrate|
|HKD|324,942|0.78623|255,479|324,942|0.81090|
|Total|||255,479|||

17. Advance account
1. Advance account
Unit：RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|Over 1 year|1,076,531.00|2,778,488.00|
|Total|1,076,531.00|2,778,488.00|

（2）There was Advance account due from shareholders with More than5% (including5%) of the voting shares of the company.Unit：RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|None|||

（3）The description of large-sum accounts payable with the age over 1 year:
1.Particulars about the receivable accounts due from shareholders with5%(5%)or over of theCompany‘s shares
2. Advance account of foreign currency balances
|||||||
|-|-|-|-|-|-|
|Name|Amount at period-end|||||
||Formercurrency|Converting rate|RMB|Formercurrency|Converting rate|

|||||||
|-|-|-|-|-|-|
|USD|96,411|6.09690|587,808|96,411|6.2855|
|Total|||587,808|||

18. Payable Employee wage
Unit：RMB
||||||
|-|-|-|-|-|
|Items|Balance in year-begin|Increase in this period|Payable in this period|Balance in year-end|
|1.Wages, bonuses,|||||
|allowances and|618,756.00|2,213,791.00|2,213,791.00|618,756.00|
|subsidies|||||
|2.Employee welfare||105,967.00|105,967.00||
|3. Social insurance|||||
|||416,199.00|409,807.00|6,392.00|
|premiums|||||
|Basic old-age|||||
|insurance||336,261.00|336,261.00||
|premiums|||||
|Supplementary|||||
|||79,938.00|73,546.00|6,392.00|
|pension insurance|||||
|IV. Public reserves|||||
|||66,887.00|66,887.00||
|for housing|||||
|VI.Other|147,924.00|631,577.00|295,297.00|484,204.00|
|Including:|||||
|Union funds and|||||
||40,813.00|481,577.00|145,297.00|377,093.00|
|staff education|||||
|fee|||||
|Total|766,680.00|3,434,421.00|3,091,749.00|1,109,352.00|

 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 RMB377,093.00, the amounts of non-monetary benefits are RMB 0.00, and the compensations for the lifting of labor relations is RMB268,335.86.
The expected release time and amount of staff salary and welfare payable are arranged in the beginning of next year.
19. Tax Payable
Unit：RMB
||||
|-|-|-|
|Items|At end of term|At beginning of term|
|VAT|-137,711.00|-139,455.00|
|Business Tax|205,449.00|147,341.00|
|Enterprise Income tax|3,590,695.00|1,204,210.00|
|City Construction tax|17,697.00||

||||
|-|-|-|
|House property Tax|7,584.00||
|Local education surcharges|5,056.00||
|House property Tax|187,320.00|187,320.00|
|Land use tax|144,957.00||
|Stamp Tax|229,144.00|222,658.00|
|Total|4,250,191.00|1,622,074.00|

 Statement on tax payable: Please provide the calculating processes then taxable income is balanced between branch companies or factories as approved by the tax bureau.
* Increase of the current corporate income tax mainly due to the profit tax generated from the disposalofreal estate in Hongkong.
20.Dividend payable
Unit：RMB
|||||
|-|-|-|-|
|Name|At end of term|At beginning of term|Reason of overdue for one year|
|State Development & Investment||||
||243,189.00|243,189.00|Capital tense*1|
|Co., Ltd*2||||
|CITIC Group*2|243,189.00|243,189.00|Capital tense*1|
|Shenzhen Nanyou (Group)||||
||121,595.00|121,595.00|Capital tense*1|
|Company*2||||
|Shenye Union（Hongkong）Co., Ltd.|121,595.00|121,595.00|Capital tense*1|
|HongKong Victor Onward|486,378.00|486,378.00|Capital tense*1|
|Total|1,215,946.00|1,215,946.00|--|

Notes
*1 The above payable dividends were the payable dividends of Nanhua Company, a subsidiary of the company, the change in balance mainly due to the change of exchange rate. Because NanhuanCompany‘s capital was more tension and the shareholders did not ask for the fund, the payable dividends have not been paid.
*2 The above three companies are the former shareholders of Nanhuan Company, the subsidiary of the company. 21. Other payable
（1）Other payable
Unit：RMB
||||
|-|-|-|
||Balance in year-end|Balance in year-begin|
|Name|||
|Thereinto :Over 1 year|22,663,345.00|30,737,132.00|
|Within 1 year||1,490,185.00|
|Total|22,663,345.00|32,227,317.00|

(2)There were other receivable from the main shareholders of the Company holding more than5% (including5%) of the total shares of the Company.
Unit：RMB
||||
|-|-|-|
|Name|Balance in year-end|Balance in year-begin|
|None|||

（3）Statement on large amount other payable accounts due for over one year
Other payables which are longer than one year mainly were the loans borrowed by Nanhuan Company the subsidiary of the company from related companies, which have not been paid because of capital tension.
（4）Statement on large amount other payable accounts
1.Large amount of closing payables
||||
|-|-|-|
|Items|Amount|Age|
|Union Development Group|15,303,141|Over 3 years|
|State Development & Investment Co., Ltd|3,000,000|Over 3 years|
|Jinrongyuan Company|1,289,760|Over 3 years|
|Shenzhen Union Property Group Co., Ltd.|700,734|Over 3 years|
|Property Deposit|154,101|Over 3 years|
|Total|20,447,736||

2.Other payables of foreign currency balances
|||||||
|-|-|-|-|-|-|
|Name|Amount at period-end|||||
||Formercurrency|Convertingrate|RMB|Formercurrency|Convertingrate|
|HKD|868,734|0.78623|683,025|868,734|0.81090|
|Total|||683,025|||

22.Other current liabilities
Unit：RMB
||||
|-|-|-|
|Items|Year-end balance|Year-Beginning balance|
|Audit fees|1,395,917.00|1,395,917.00|
|Securities Management|746.00|746.00|
|Sewage charges|62,600.00|62,600.00|
|Land use fees|88,000.00|88,000.00|

||||
|-|-|-|
|Total|1,547,263.00|1,547,263.00|

 Statement of other currentliabilities：
23. Long-term loan
（1）Long-term loans classifications
Unit：RMB
||||
|-|-|-|
|Items|Year-end balance|Year-Beginning balance|
|Loan by pledge|1,101,349.00|1,033,936.00|
|Total|1,101,349.00|1,033,936.00|

 Statement on long-term borrowings.
The borrowing was the installment payment for the bousing in Hongkong bought by the subsidiary of the Company Xingye Company , the mortgage article was the house purchased. The installment payment was HKD 2, 366,000, Which paid in 240 month, from March, 2004. Mortgage rates fall 2.65 percent compared to HK mortgage bank prime rate. On December 31, 2013, the principal amount of HK$ 1,400,796 (equivalent to RMB 1,101,349 Yuan) was unpaid.
24.Long-term payable
（1）Top 5 long-term payable
Unit：RMB
||||||||
|-|-|-|-|-|-|-|
|Name|Term|Initial amount|Interest rate（%）|Interest payable|End balance|Condition|
|Assess the|Unlimited||||||
|||8,488,953.00|||8,230,694.00||
|value of assets|duration||||||

（2）Details of finance leasing payments in long-term payable
Unit :RMB
||||||
|-|-|-|-|-|
||End of term||Beginning of term||
|Name|||||
||Foreign currency|RMB|Foreign currency|RMB|

 Guarantee provided by the
3rd
party for the leasing finance is amounted to RMB0.
Statement on long-termpayables：
When the Company was reorganized into a joint stock company, it obtained the special approval of People's Bank of China for vesting the appraisal increment from the revaluation of the assets of Hong Kong Victor Onward in the original shareholders of the Company before reorganization. Such assets were appraised on January 31, 1992. increment of around HKD 14,754,000 was generated from the assets appraisal and entered the long-term account
payable. Part of it has been used to set off the bad debts of around HKD 4,285,000 incurred before listing. The
original shareholders of the Company before the reorganization agreed not to require reimbursement of such
increment in cash. It will be used to set off the price at which they will subscribe for shares of the Company in the
future. The increase of long-term accounts payable in the report year was caused by change in exchange rate. 25.Other Non-current liabilities
Unit：RMB
||||
|-|-|-|
|Items|Year-end balance|Year-beginning balance|
|ERP Information construction|228,216.00|228,216.00|
|Technology subsidies|608,576.00|608,576.00|
|Total|836,792.00|836,792.00|

 Statement on other non-current liabilities, including asset-related and income-related government subsidy and closing balances:
The above funds were the special subsidies received from Shenzhen Department of Finance in 2004 for the digital jet printing projects and for the construction of enterprise information. The deal must be accepted by the Financial Bureau before accounting, so it was suspended. The reduction was due to the change in exchange rates.
Liabilities related to government grants
Unit：RMB
||||||||
|-|-|-|-|-|-|-|
||||The||||
||Balance at the|New grants|||Balance at||
||||non-operating|Other||Income related to|
|Liabilities|beginning of|amount of|||the end of||
||||revenue amount|changes||assets|
||period|this period|||period||
||||of this period||||

26. Stock capital
Unit：RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase/decrease this time (+ , - )||||||
||Balance|||||||
||||||||Balance|
|||Issuing of new||Transferred||||
||Year-beginning||||||year-end|
||||Bonus shares||Other|Subtotal||
|||share||from reserves||||
|Total of capital|169,142,356.00||||||169,142,356.00|
|shares||||||||

Statement of change in capital shares. Name of CPA and number of verification report shall be provided if capital increasing or decreasing occurred in the report period; as for shareholding limited companies incorporated for less than three years, only net assets is required for the years prior to incorporation; for shareholding limited
companies reformed from limited companies shall provide the capital verification at incorporation.
27. Capital reserves
Unit：RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning balance|Increase in the current|Decrease in the current|Year-end balance|
|||period|period||
|Share premium|29,718,829.00|||29,718,829.00|

|||||
|-|-|-|-|
|Other|10,071,955.00|145,736.00|9,926,219.00|
|Total|39,790,784.00|145,736.00|39,645,048.00|

 Statement on capitalreserves：
The capital surplus change this year refers to the change of fair value for the financial assets available to sale this year.
28. Surplus reserve
Unit：RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning balance|Increase in the current|Decrease in the current|Year-end balance|
|||period|period||
|Statutory surplus reserve|26,704,791.00|||26,704,791.00|
|Total|26,704,791.00|||26,704,791.00|

 Statement on surplus reserves. Please state the related resolutions of the Board on capitalizing of reserves, making up losses, anddividends：
29. Retained profits
Unit：RMB
||||
|-|-|-|
|||Extraction or distribution of|
|Items|Amount||
|||the proportion|
|After adjustments: Retained profits at the period|-116,273,941.00||
|||--|
|beginning|||
|Add：Net profit belonging to the owner of the|||
||8,214,810.00|--|
|parent company|||
|Retained profits at the period end|-108,059,131.00|--|

As regards the details of adjusted the beginning undistributed profits
(1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected beginning undistributed profits are RMB 0.00.
(2) As the change of the accounting policy, the affected beginning undistributed profits are RMB 0.00.
(3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0.00 . (4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits
are RMB 0.00.
(5) Other adjustment of the total affected beginning undistributed profits are RMB 0.00 .
Statement on retained profit: for companies issued their securities for the first time, if the accumulated profit before the issuing is shared by the new and existing shareholders as approved by theshareholders‘ meeting, shall be described particularly; if the accumulated profit before the issuing is shared only by existing shareholders as approved by theshareholders‘ meeting, the Company shall provide the details of dividend payable to the existing shareholders as audited by CPA.
30. Business income, Business cost
（1）Business income, Business cost
Unit：RMB
||||
|-|-|-|
|Items|Amount of current period|Amount of previous period|
|Income from Business income|26,998,990.00|11,095,669.00|
|Business cost|9,461,003.00|5,413,356.00|

（2）Mainbusiness（Industry）
Unit：RMB
||||||
|-|-|-|-|-|
||Amount of current period||Amount of previous period||
|Name|||||
||Business income|Business cost|Business income|Business cost|
|Textile Industry|1,292,308.00|1,282,051.00|1,266,777.00|1,248,550.00|
|Rent|10,094,737.00|4,602,706.00|9,828,892.00|4,164,806.00|
|Real estate|15,611,945.00|3,576,246.00|||
|Total|26,998,990.00|9,461,003.00|11,095,669.00|5,413,356.00|

（3）Mainbusiness（Production）
Unit：RMB
||||||
|-|-|-|-|-|
||Amount of current period||Amount of previous period||
|Name|||||
||Business income|Business cost|Business income|Business cost|
|Sale of viscose staple fiber|1,292,308.00|1,282,051.00|1,266,777.00|1,248,550.00|
|Rent|10,094,737.00|4,602,706.00|9,828,892.00|4,164,806.00|
|Disposal of real estate investment|15,611,945.00|3,576,246.00|||
|Total|26,998,990.00|9,461,003.00|11,095,669.00|5,413,356.00|

（4）MainBusiness（Area）
Unit：RMB
||||||
|-|-|-|-|-|
||Amount of current period||Amount of previous period||
|Name|||||
||Business income|Business cost|Business income|Business cost|
|Domestic|9,553,683.00|4,151,650.00|9,482,107.00|4,261,720.00|
|Hong Kong|17,445,307.00|5,309,353.00|1,613,562.00|1,151,636.00|
|Total|26,998,990.00|9,461,003.00|11,095,669.00|5,413,356.00|

（5）Total income and the ratio of operating income from top five clients
Unit：RMB
||||
|-|-|-|
|Name|Business Income|Proportion(%)|
|China Real Estate (HK)Group|||
||15,611,945.00|57.82%|
|Co.,Ltd|||
|Shenzhen Jinrongyuan|||
||5,851,500.00|21.67%|
|Development Co., Ltd.|||
|Zhejiang Helan Industry Co., Ltd.|1,292,308.00|4.79%|
|SCS Express International Limited|910,364.00|3.37%|
|Shenzhen Hebainian Investment|||
||600,000.00|2.22%|
|Development Co., Ltd.|||
|Total|24,266,117.00|89.87%|

 Notes
31. Business tax and subjoin
Unit：RMB
|||||
|-|-|-|-|
|Items||Same period of the|Standard|
||Report period|previous year||
|Business tax|512,843.00|434,822.00|5%|
|Urban construction tax|49,528.00|30,438.00|7%|
|Education surcharge|21,227.00|13,045.00|3%|
|Local Education surcharge|14,151.00|8,695.00|2%|
|Total|597,749.00|487,000.00|--|

Notes
32.Sales expenses
Unit：RMB
||||
|-|-|-|
|Items|Amount of current period|Amount of previous period|

||||
|-|-|-|
|Wage|238,372.00|242,024.00|
|Commission payment|19,964.00|12,162.00|
|Tel and fax|11,177.00|11,011.00|
|Transportion fees|9,798.00|8,436.00|
|Travel expenses|6,788.00|7,579.00|
|ETC|6,613.00|6,460.00|
|Welfare expenses|4,875.00|3,649.00|
|Traffic subsidy|2,226.00|3,143.00|
|Office expenses|315.00|1,214.00|
|Total|300,128.00|295,678.00|

 33.Administrative expenses
Unit:RMB
||||
|-|-|-|
|Items|Amount of current period|Amount of previous period|
|Wage|2,411,395.00|2,502,121.00|
|Tax|802,317.00|698,420.00|
|Water and electricity|614,773.00|631,337.00|
|Social security|414,936.00|511,603.00|
|Repair fee|151,694.00|335,545.00|
|Auto expenses|206,145.00|282,292.00|
|Social intercourse|329,711.00|258,190.00|
|Securities management|450,632.00|203,032.00|
|Board of Director|277,331.00|433,572.00|
|Office expense|172,844.00|157,858.00|
|Agency fee|597,195.00|585,032.00|
|Depreciation fee|249,241.00|131,077.00|
|Insurance fee|103,905.00|125,319.00|
|Welfare expense|107,467.00|103,134.00|
|Lease fee|114,382.00|102,933.00|
|Property Management|113,322.00|82,266.00|
|Tel|21,566.00|60,543.00|
|House fee|71,883.00|58,474.00|
|Amortization of intangible assets|40,305.00|40,305.00|
|Union funds|80,116.00|35,181.00|

||||
|-|-|-|
|Travel Expenses|83,666.00|10,235.00|
|Other|658,453.00|219,451.00|
|Total|8,073,279.00|7,567,920.00|

 34. Financial Expenses
Unit：RMB
||||
|-|-|-|
|Items|Amount of current period|Amount of previous period|
|Interest expenses|||
||779,588.00|963,506.00|
|Interest income|||
||-692,072.00|-454,970.00|
|Exchange loss|152,276.00|-962,762.00|
|Other|7,663.00|10,052.00|
|Total|247,455.00|-444,174.00|

 35. Income from fair value fluctuation
Unit：RMB
||||
|-|-|-|
|Sources|Report period|Same period of the previous year|
|Transactional financial assets||-25,480.00|
|Total||-25,480.00|

 Notes
36. Investment income
（1）Investment income
Unit：RMB
||||
|-|-|-|
|Items|Amount of current period|Amount of previous period|
|Incomes from disposal of long-term equity|||
||849,782.00|2,576,108.00|
|investment|||
|Investment income from disposal financial assets||6,045.00|
|Total|849,782.00|2,582,153.00|

（2）long-term equity investment incomes confirmed by equity method include:
Unit：RMB
|||||
|-|-|-|-|
||Amount of current period|Amount of previous||
|Name|||Reason to increase or decrease|
|||period||

|||||
|-|-|-|-|
|Hangzhou Bay Company|849,782.00|2,576,108.00|Changes in annual revenue|
|Total|849,782.00|2,576,108.00|--|

Statement on investment gains, please state whether or not there are material constrains on retrieving of
investment gains.
37. Loss of assets impairment
Unit：RMB
||||
|-|-|-|
||Amount of current period|Amount of previous period|
|Items|||
|I.Loss for bad debts|723,554.00|7,424.00|
|2．Loss for falling price of Inventory||60,921.00|
|Total|723,554.00|68,345.00|

 38. Non-operating income
（1）Non-operating income
Unit：RMB
|||||
|-|-|-|-|
||Amount of current period|Amount of previous period|The amount of|
|Items||||
||||non-operating gains & losses|
|Total income from liquidation of||||
||1,903,272.00|5,174.00|1,903,272.00|
|non-current assets||||
|Including：Income from liquidation of||||
||1,903,272.00|5,174.00|1,903,272.00|
|fixed asset||||
|Other|19,833.00|24,324.00|19,833.00|
|Total|1,923,105.00|29,498.00|11,532,984.00|

 Notes
The fixed assets disposal mainly refers to the disposal of idle machinery originally intended to invest into Nanjing East South Asia Dyeing& Printing Co., Ltd.
39. Non-Operation expense
Unit：RMB
|||||
|-|-|-|-|
||Amount of current period|Amount of previous|The amount of|
|Items|||non-operating gains &|
|||period||
||||lossed|
|Total Disposal of loss of non-current assets|32,666.00||32,666.00|
|Including: Disposal of net loss of fixed assets|32,666.00||32,666.00|
|Raw material disentangle|101,556.00||101,556.00|
|Fine expenses||1,500.00||

|||||
|-|-|-|-|
|Lawsuit expenses||581,415.00||
|Total|134,222.00|582,915.00|134,222.00|

 Notes
40. Income tax expenses
Unit：RMB
||||
|-|-|-|
||Amount of current period|Amount of previous period|
|Items|||
|Adjustment of Deferred income tax|-41,238.00|-41,869.00|
|Income tax for the yea-Hongkong profit tax|2,425,821.00||
|Total|2,384,583.00|-41,869.00|

 41. Calculation of Basic earnings per share and Diluted earnings per share
||||
|-|-|-|
|Items|No|Current term|
|Net profit attributable to shareholders of parentcompany|1|8,214,810|
|Non-recurring gain/loss attributable of the parentcompany|2|13,926,118|
|Net profit attributable to common share holdersof the Company after deducting of non-recurringgain/loss|3=1-2|-5,711,308|
|Total shares at the beginning of the year|4|169,142,356|
|Additional share capital transferred from publicreserve or additional shares from shares dividenddistribution（Ⅰ）|5|——|
|Additional shares from issuing new shares ordebt-converted shares（Ⅱ）|6|——|
|Accumulative months of the additional sharecommencing from the next moth till the end ofthe year|7|——|
|Decreased shares due to repurchase|8|——|
|The number of months since the next month ofshare decreasing to the end of report term|9|——|
|Amount of shares reduced|10|——|
|Number of months in the report term|11|——|
|Weighted average of common shares issuedoutside|12=4+5+6×7÷11-8×9÷11-10|169,142,356|
|Basic earning pershare（Ⅰ）|13=1÷12|0.0486|
|Basic earning pershare（Ⅰ）（Ⅱ）|14=3÷12|-0.0338|
|Diluting potential common share interestsrecognized as expenses|15|——|

||||
|-|-|-|
|Transformation fees|16|——|
|Income tax rate|17|25%|
|Amount of shares increased by transforming orexercising of company bond, subscriptioncertificate, or share option|18|——|
|Diluted earning per share（Ⅰ）|19=[1+(15-16)×(1-17)]÷(12+18)|0.0486|
|Diluted earning per share（Ⅱ）|19=[3+(15-16)×(1-17)]÷(12+18)|-0.0338|

42. Other comprehensive income
Unit：RMB
||||
|-|-|-|
|Items|Amount of current period|Amount of previous period|
|1.Loss amount produced by sellable financial assets|-145,736.00|48,311.00|
|Subtotal|-145,736.00|48,311.00|
|4. Translating difference in foreign currency financial reports|-601,393.00|4,315.00|
|Subtotal|-601,393.00|4,315.00|
|Total|-747,129.00|52,626.00|

 Notes
43. Notes Cash flow statement
1. Other cash received from business operation
Unit：RMB
|||
|-|-|
|Items|Amount|
|Deposit|406,300.00|
|Cash of interest and charged fee|656,891.00|
|Total|1,063,191.00|

 Notes
2. Other cash paid for business activities
Unit：RMB
|||
|-|-|
|Items|Amount|
|Water and electricity|614,773.00|
|Audit expense|526,258.00|
|Rent fee|114,382.00|

|||
|-|-|
|Lawyer and legal cost|70,727.00|
|Social intercourse|327,292.00|
|Auto fee|206,145.00|
|Repair fee|151,694.00|
|Securities management|450,632.00|
|Office expenses|278,277.00|
|Board of director|173,454.00|
|Insurance expenses|103,905.00|
|Property management|101,362.00|
|Tel|21,566.00|
|Deposit|100,280.00|
|Travel fee|83,666.00|
|Other|442,444.00|
|Total|3,766,857.00|

 Notes
44. Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
Unit :RMB
||||
|-|-|-|
|Supplement Information|Amount of current period|Amount of previous period|
|I. Adjusting net profit to cash flow from operating activities|||
||--|--|
|Net profit|7,849,904.00|-247,331.00|
|Add: Impairment loss provision of assets|723,554.00|68,345.00|
|Depreciation of fixed assets, oil and gas assets and|||
||4,341,137.00|3,514,391.00|
|consumable biological assets|||
|Amortization of intangible assets|40,305.00|40,305.00|
|Loss on disposal of fixed assets, intangible assets and other|||
||-13,906,305.00|-5,174.00|
|long-term deferred assets|||
|Loss of fair value fluctuation on assets||25,480.00|
|Financial cost|||
||779,588.00|-317,831.00|
|Loss on investment|-849,782.00|-2,582,153.00|
|Increased of deferred income tax liabilities|-63,925.00|-41,675.00|

||||
|-|-|-|
|Decrease of inventories|101,536.00||
|Decease of operating receivables|803,763.00|-1,455,914.00|
|Increased of operating Payable|1,888,833.00|617,139.00|
|Net cash flows arising from operating activities|1,708,608.00|-384,418.00|
|II. Significant investment and financing activities that|||
||--|--|
|without cash flows:|||
|III. Net increase of cash and cash equivalents|--|--|
|Ending balance of cash|||
||63,502,910.00|52,227,262.00|
|Less: Beginning balance of cash|||
||52,227,262.00|53,399,316.00|
|Net increase of cash and cash equivalents|11,275,648.00|-1,172,054.00|

（2）Composition of cash and cash equivalents
Unit：RMB
||||
|-|-|-|
|Items|Amount of current period|Amount of previous period|
|I. Cash|63,502,910.00|52,227,262.00|
|Of which: Cash in stock|||
||41,614.00|66,684.00|
|Bank savings could be used at any time|62,791,182.00|51,492,804.00|
|Other monetary capital could be used at any time|670,114.00|667,774.00|
|III. Balance of cash and cash equivalents at the period end|63,502,910.00|52,227,262.00|

 Notes
VIII. Related parties and related-party transactions
1. Parent company information of the enterprise
Unit：RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||The parent||The||
|||||||||The parentcompanyof theCompany‘s vote ratio|||
||||||||company||ultimate||
|||||Legal||Regis||||Organizati|
||Related||Registered||||of the||controlling||
|Name||Type||representat|Nature|rated||||on Code|
||parties||address||||Company's||party of||
|||||ive||capital|||||
||||||||shareholdi||the||
||||||||ng ratio||Company||
|Union|Controllin I|ssue|11/F,Union|Dong|Production|1,123,887,|||Union|19247150-|
||||||||25.51%|25.51%|||
|Holdings|g|company|Bulding,|Binggena|nd sale|712|||Group|0|

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Shareholde||Shennan|oaae|fclothing|,l|||||
||r||Zhong||nd textiles||||||
||||Road,Shen||nd rea||||||
||||zhen||state||||||
||||||Developin||||||
|||||Ieb―|mport &||||||
||||||xport||||||
||||||usiness||||||
||||Union||processing||||||
|||Limited|Bulding,She||with||||||
|Union|Actual|||Dong|||||Union|19033795-|
|||iability|nnan Zhong||materials‖|90,606,000|3.36%|3.36%|||
|Group|lcontroller|||Bingen|||||Group|7|
|||Company|Road,||nd||||||
|||||api|||||||
||||Shenzhen||rocessing||||||
||||||with||||||
||||||mported||||||
||||||materials||||||

Notes
The registered capital of the parent company and its changes
|||||
|-|-|-|-|
|Parent Company|Amount at yearbeginning|Increase in thecurrent period|Decrease inthe currentperiod|
|Union Group|90,606,000|——|——|
|Union Holding|1,123,887,712|——|——|

2. Shares or equity held by the parent company and changes
|||||
|-|-|-|-|
|Parent Company|Held share amount|||
||Amount at yearend|Amount at yearbeginning|Proportion atyear end %|
|Union Group|5,681,089|5,821,089|3.36|
|Union Holding|43,141,032|43,141,032|25.51|

Notes
Union Group holds31.32% of equity capital of Union Holdings, it controls Union Holdings, and Union Holdings is a controlling
shareholder of the company, thus Union Group is the actual controller of the company
2.Particulars of the subsidiaries
Unit :RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||||The|||
|||||||||The||
||||||||subsidiaries|||
|||||Legal||||subsidiaries|Organizatio|
||Related||Registered|||Registrated|of the|||
|Name||Type||representati|Nature|||of the|n Code|
||parties||address|||capital|Company's|||
|||||ve||||Company‘s||
||||||||shareholdin|||
|||||||||vote ratio||
||||||||g ratio|||
|HongKong|Controlled|Limited||||||||
|||||||2,400,002||||
|Victor|subsidiarie|Liability|Hongkong||Trade||100%|100%||
|||||||（HKD）||||
|Onward|s|Company||||||||
|||Limited||||||||
|Nanhua|Controlled|||Hu||85,494,700||||
|||Liability|Shenzhen||Product||69.44%|69.44%|618836600|
|Company|subsidiaries|||Yongfeng||（HKD）||||
|||Company||||||||
|Shenzhen|Controlled|Limited||||||||
|East Asia|subsidiarie|Liability|Shenzhen|Sun Zhiping|Trade|3,000,000|51%|51%|799228355|
|Company|s|Company||||||||
|||Limited||||||||
|Shengzhong|Controlled|||||1,000,000||||
|||Liability|Hongkong||Trade||100%|100%||
|Co., Ltd.|subsidiaries|||||（HKD）||||
|||Company||||||||
|||Limited||||||||
|Xingye|Controlled|||||10,000||||
|||Liability|Hongkong||Trade||100%|100%||
|Company|subsidiaries|||||（HKD）||||
|||Company||||||||

3. Information of Joint venture and Affiliated company
Unit：RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||Regis rated|||||
||||Legal|||Held Share|Voting|||
|||Regis rated|||capital|||Related|Orgabuzatui|
|Name|Type||representati|Nature||proportion(|proportion(|||
|||address|||（RMB‘00|||parties|b code|
||||ve|||%)|%)|||
||||||00）|||||
|I.Joint enterprise||||||||||
|II. Affiliated enterprise||||||||||
|Zhejiang|Limited|Hanghou|Dong|Real estate|247,476,832|25%|25%|Affiliated|757230553|

|||||||
|-|-|-|-|-|-|
|Union|Liability|Binggen|Exploiters,|.6|enterprise|
|Hangzhou|Company||Basis|||
|Bay|||constructio|||
||||n|||
||||Manageme|||
||||nt and|||
||||Property|||
||||Manageme|||
||||nt|||

4. Other Related parties information of the enterprise
||||
|-|-|-|
|Other Related parties name|Relation of other Related parties with the||
|||Organization code|
||company||
||The related parties controlled the same||
|Shenye Union（HK）Co., Ltd.|||
||Actual controller||
||The related parties controlled the same||
|Shenzhen Union Property Group Co., Ltd.||192199105|
||Actual controller||
||The related parties controlled the same||
|China Real Estate (HK)Group Co., Ltd.|||
||Actual controller||

Notes
5. Related transactions.
（1）Related leasing
The Company is the lender
Unit：RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Rental|
|Name of the|Name of the|Category of asset|||||
||||Starting date|Stop date|Pricing basis|recognized in the|
|owner|tenant|for rent|||||
|||||||period|

 The Company is the undertaker
Unit：RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Rental|
|Name of the|Name of the|Category of asset|||||
||||Starting date|Stop date|Pricing basis|recognized in the|
|owner|tenant|for rent|||||
|||||||period|
|Union|Shenzhen Victor|Real estate|November 1,|October 31, 2014|Agreement|83,520.00|

||||
|-|-|-|
|Development|Onward|2012|
|Group|||

Notes
In the report year, the Company leased Room 1307 and 1308 of Union Building owned by Union Group. In November 2012, The term of tenancy is from November 1, 2012 to October 31, 2014. The monthly rent is RMB 6,960. The rent was determined according to market price.
（2）The information of asset transfer, debt restructured of the related parties
Unit：RMB
|||||||||
|-|-|-|-|-|-|-|-|
||||Pricing principle|Amount in current period||Amount in last period||
|||Content of related||||||
|Related parties|Type||of related|||||
||||||Proportio||Proportio|
|||transaction||||||
|||||Amount||Amount||
||||transactions||n（%）||n（%）|
|China RealEstate(HK)Group Co.,Ltd.|AssetsTransfter|Sales House|Esaluate|||||

6. Payables and receivables of the related party
Listed company related party fund
Unit：RMB
|||||||
|-|-|-|-|-|-|
|||Amount at year end||Amount at year beginning||
|Name|Related party|||||
|||Balance of Book|Bad debt Provision|Balance of Book|Bad debt Provision|
||Shenye Union（HK）|||||
|Account receivable||299,354.00|299,354.00|299,428.00|299,428.00|
||Co., Ltd.|||||

The listed company Payables of the related party
Unit：RMB
|||||
|-|-|-|-|
|Name|Related party|Amount at year end|Amount at year beginning|
|Other payable|Union Development Group|15,303,141.00|24,748,412.00|
||Shenzhen Union Property|||
|Other payable||700,734.00|700,734.00|
||Group Co., Ltd.|||

IX. Subsequent events
1. Liabilities formed from pending lawsuit and mediation and its financial impact
On June 4, 2012, The company has instituted court action against below three companies at Jiangsu Province Higher People's Court, and asked to terminate the contracts and agreements signed with Nanjing East Asia Textile Printing& Dyeing Co., Ltd., Nanjing East Asia Investment& Development Group Limited and Hong Kong Yiuchun Limited, who shall pay RMB47,922,9023 to the company for the pecuniary loss of implicative compensation and undertake the costs of litigation. As of December 31, 2013, Jiangsu Higher People's Court did not give a judgement.
X. Commitment events.
1.Importance commitment events
1.The external investment contracts and the related financial expenditures which have signed or not yet completely fulfilled.
By December 31, 2013,The Group still has the major external investments RMB 30 million which have signed but still not paid, as follows:
||||||
|-|-|-|-|-|
|Name of investment projects|Contractualinvestmentamount|Prepaidinvestmentamount|Unpaid investmentamount|Expectedinvestmentperiod|
|Invest Nanjing East AsiaTextile Co., Ltd withmachinery and equipments|RMB 30 million|——|RMB 30 million|Unsureness|

2.The big contract which has been signed or is ready to be carried out
By December 31, 2013, The Group still has big contract which has been signed but not paid, a total of RMB 1.71 million, as follows:
||||||
|-|-|-|-|-|
|Name ofinvestment projects|Contractualinvestment amount|Prepaidinvestmentamount|Unpaidinvestmentamount|Expected investmentperiod|
|location ofproductionequipments as awhole|1,710,000|855,000|855,000|Unsureness|

3.Except for the events described above, As of December 31, 2013, the Group has no other significant commitment events.
2. Information guaranteed at the former period.
The company has no commitment information guaranteed at the former period.
XI. Post-balance-sheet events
1. Statement on material post-balance-sheet events
Unit：RMB
|||||
|-|-|-|-|
|||Amount of effect on the||
||||Reasons that the amount of the|
|Items|Content|financial status and operating||
||||effect can not be estimated|
|||outcomes||
|N/A||||

XII.Other Important events
1. Leasing
Operation lease assets
|||
|-|-|
|Type|Year-end balance|
|Cost|87,418,909|
|House, Building|87,418,909|
|Accumulated amortization|63,960,756|
|House, Building|63,960,756|
|Impairment provision||
|House, Building|——|
|Book value|23,458,153|
|House, Building|23,458,153|

2.Items related to measurement of fair value
Unit:RMB
|||||||
|-|-|-|-|-|-|
|||Gains and losses|Accumulative|||
|||||Provision for||
||Amount at the|from change of fair|change of fair value||Aamount at the end|
|Items||||impairment made in||
||beginning of period|value in current|accounted for as||of period|
|||||current period||
|||period|rights and interests|||
|Financial assets||||||

|||||
|-|-|-|-|
|3.Trading financial assets|751,542.00|-168,600.00|582,942.00|
|Subtotal|751,542.00|-168,600.00|582,942.00|
|Total|751,542.00|-168,600.00|582,942.00|
|Financial liability|0.00||0.00|

 3.Foreign financial assets and foreign financial liability
Unit:RMB
|||||||
|-|-|-|-|-|-|
|||Gains and losses|Accumulative|||
|||||Provision for||
||Amount at the|from change of fair|change of fair value||Amount at the end|
|Items||||impairment made in||
||beginning of period|value in current|eccounted for as||of period|
|||||current period||
|||period|right and interests|||
|Finanical assets||||||
|4.Trading financial assets|751,542.00||-168,600.00||582,942.00|
|Subtotal of financial||||||
||751,542.00||-168,600.00||582,942.00|
|assets||||||
|Financial liability|0.00||||0.00|

 4.Other
Description of continuousviability：
Except that Shenzhen East Asia Victor Onward Textile Printing and Dyeing Co., Ltd. is still operating normally.
Except that Shenzhen East Asia Victor Onward Textile Printing and Dyeing Co., Ltd. is still operating normally, other 5 subsidiaries controlled by the Company have stopped operation or are maintaining daily operation by house property lease. It plans to invest in Nanjing East Asia Textile Printing and Dyeing Co., Ltd. with part of machinery and equipment in 2007, Due to the reason on the side of the other party of joint venture and change of industry prospect. This investment plan is being discontinued at present.
Up to the present, the project has been delayed for 6 years. The difficulties for joint venture projects have constantly increased. To solve the problem of idling of equipment, invigorate relevant assets and facilitate the Company's subsequentdevelopment，On June 4, 2012, The company has instituted court action against below three companies at Jiangsu Province Higher People's Court, and asked to terminate the contracts and agreements signed with Nanjing East Asia Textile Printing& Dyeing Co., Ltd., Nanjing East Asia Investment& Development Group Co., Ltd. and Hong Kong Yaojunxing Co., Ltd., who shall pay RMB47,922,902.92 to the company for the pecuniary loss of implicative compensation and undertake the costs of litigation. As of June 30,2013, Jiangsu Higher
People's Court did not give a judgement.
The Company developed measures to improve the continous viability as thefollowing：
Controlling shareholder of the Company and the management of the company attaches greatimportance to thecompany‘s continued operational problems, through a wariety of ways, including saling the assets and business of the company or its subsidiaries, joint venture or expand an existing business, aiming to improve the company asset quality, iprofitability, and enhance capacity for sustainable development .
XIII.Notes s of main items in financial reports of parent company
1.Account receivable
（1）Account receivable
Unit:RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Year-end balance||||Year-beginning balance||||
||Book Balance||Provision for bad debts||Book Balance||Provision for bad debts||
|Type|||||||||
|||Propo|||||||
|||rtion||Proporti||Proporti||Proporti|
||Amount|%|Amount|on%|Amount|on%|Amount|on%|
|Account receivable with|||||||||
|significant specific|||||||||
|||30.27|||||||
|amount that were|3,461,028.00||3,461,028.00|100%|3,504,328.00|30.52%|3,504,328.00|100%|
|||%|||||||
|provisioned had debt|||||||||
|preparation separately|||||||||
|Receivables provided bad debt provision in groups|||||||||
|Account receivable with|||||||||
|minor individual amount||69.73|||||||
||7,974,647.00||7,974,647.00|100%|7,976,100.00|69.48%|7,976,100.00|100%|
|but bad debt provision is||%|||||||
|provided|||||||||
|Total|11,435,675.00|--|11,435,675.00|--|11,480,428.00|--|11,480,428.00|--|

 Remarks on categories of receivableaccounts：
Receivable accounts with large amount individually and bad debt provisions were provided
√Applicable□ Not applicable
Unit：RMB
||||||
|-|-|-|-|-|
|Description of receivable accounts|Book balance|Bad debt provision|Proportion|Reason|
|Shengzhong Company|1,352,433.00|1,352,433.00|100%|Aging long|
|Carnival Index International Ltd|1,098,549.00|1,098,549.00|100%|Aging long|
|||||The company insol|
|TAI YANG ENTERPRISE CO.,LTD.|1,010,046.00|1,010,046.00|100%|vent, to be cance|
|||||led|

||||||
|-|-|-|-|-|
|Total|3,461,028.00|3,461,028.00|--|--|

Using age methods to provision for bad debts of account receivable ingroup：
□Applicable√not Applicable
Using percentage balance method of provision for bad debts of account receivable ingroup：
□Applicable√not Applicable
Using other methods to provision for bad debts of account receivable ingroup：
□Applicable√not Applicable
Receivable accounts with minor amount but on which bad debt provisions are provided individually at end of period
√Applicable□not Applicable
Unit： RMB
||||||
|-|-|-|-|-|
|Name|Book balance|Bad debts|Provision proportion%|Reason of provision|
|Fly Dragon International|573,536.00|573,536.00|100%|Aging long|
|Grateful Textiles Co.,Ltd|566,661.00|566,661.00|100%|Aging long|
|Shenzhen Ffangzhou||||Aging long|
||468,502.00|468,502.00|100%||
|Textiles Co.,Ltd|||||
|World Fabrica (Int'l) Ltd|465,126.00|465,126.00|100%|Aging long|
|Ezhou Xiangya||||Aging long|
||368,943.00|368,943.00|100%||
|Garments Co., Ltd.|||||
|Tak Shing Buying Office||||Aging long|
||333,502.00|333,502.00|100%||
|Led|||||
|Shenye Union（HK）||||Aging long|
||299,354.00|299,354.00|100%||
|Co.,Ltd.|||||
|Panther Fabric Ltd.|295,088.00|295,088.00|100%|Aging long|
|Changshu Zhongjiang||||Aging long|
|Garments Import &|283,539.00|283,539.00|100%||
|Export Co., Ltd.|||||
|Starline Textile CO.Ltd.|282,234.00|282,234.00|100%|Aging long|
|Nissho Iwai HK Corp||||Aging long|
||215,229.00|215,229.00|100%||
|Ltd.|||||
|Unimix Ltd.|192,891.00|192,891.00|100%|Aging long|
|Tai Hing Linings Co Ltd|191,295.00|191,295.00|100%|Aging long|
|Human Changpuan||||Aging long|
||185,981.00|185,981.00|100%||
|Garment|||||
|Ningbo Youngor||||Aging long|
||181,490.00|181,490.00|100%||
|Fukurmura Uniforms|||||

||||||
|-|-|-|-|-|
|Win favour development||||Aging long|
||146,600.00|146,600.00|100%||
|ltd|||||
|Speedy Textiles Co|146,502.00|146,502.00|100%|Aging long|
|Lin Feng Textile Co.|135,686.00|135,686.00|100%|Aging long|
|Jicheng General Co., Ltd.|131,954.00|131,954.00|100%|Aging long|
|Millionaire(HK)Weaving||||Aging long|
||124,249.00|124,249.00|100%||
|Ltd.|||||
|Leader Day Ltd.|121,930.00|121,930.00|100%|Aging long|
|Tex Mate Fabrics (HK)|110,024.00|110,024.00|100%|Aging long|
|New Design Textiles Ltd.|109,178.00|109,178.00|100%|Aging long|
|Deep Success Industrial||||Aging long|
||102,606.00|102,606.00|100%||
|Ltd|||||
|Wynvaye Industrial Co|101,030.00|101,030.00|100%|Aging long|
|Other|1,841,517.00|1,841,517.00|100%|Aging long|
|Total|7,974,647.00|7,974,647.00|--|--|

（2）Particulars about the receivable accounts due from shareholders with5% or over of theCompany‘s shares in the report period
Unit：RMB
||||||
|-|-|-|-|-|
||Amount in year end||Amount in year-beginning||
|Name|||||
||Book balance|Bad debt provision|Book balance|Bad debt provision|
|None|||||

（3） The front 5units‘ information of the account receivable
Unit：RMB
||||||
|-|-|-|-|-|
||Relation with the|||Portion in total other|
|Name||Amount|Ages||
||Company|||receivables (%)|
|Shengzhong Company|Subsidiary|1,352,433.00|Over 3 years|11.83%|
|Carnival Index|||||
||Non-related parties|1,098,549.00|Over 3 years|9.61%|
|International Ltd|||||
|TAI YANG|||||
||Non-related parties|1,010,046.00|Over 3 years|8.83%|
|ENTERPRISE CO.,LTD.|||||
|Fly Dragon International|Non-related parties|573,536.00|Over 3 years|5.02%|
|Grateful Textiles Co.,Ltd|Non-related parties|566,661.00|Over 3 years|4.96%|
|Total|--|4,601,225.00|--|40.25%|

（4）Account receivable from Related parties
Unit：RMB
|||||
|-|-|-|-|
|Unit name|Relation with the company|Amount|Percentage of account receivable|
|Shengzhong Company|Subsidiary|1,352,433.00|11.83%|
|Shenzhen East Asia|Subsidiary|63,982.00|0.56%|
||The related parties controlled.the same Actual controller|||
|Shenye Union（HK）Co., Ltd||299,353.00|2.62%|
|Total|--|1,715,768.00|15.01%|

 2.Other receivable
（1）Other receivable
Unit：RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Year-end balance||||Year-beginning||||
||||||||Provision for bad||
||Book balance||Provision for bad debts||Book balance||||
||||||||debts||
|Classification|||||||||
|||Propo||Propo||Propo||Propo|
||Amount|rtion(|Amount|rtion(|Amount|rtion(|Amount|rtion(|
|||%)||%)||%)||%)|
|Other Receivables withmajor individual amount andbad debt provision providedindividually|||||||||
|||98.78||||98.64|||
||84,734,453.00||3,881,909.00|4.58%|76,596,952.00||3,881,950.00|5.07%|
|||%||||%|||
|Other Receivables provided bad debt provision in groups|||||||||
|Deposit group|114,832.00|0.13%|||103,784.00|0.13%|||
|Subtotal of group|114,832.00|0.13%|||103,784.00|0.13%|||
|Other Account receivablewith minor individualamount but bad debtprovision is provided|||||||||
||928,995.00|1.08%|928,995.00|100%|950,112.00|1.23%|950,112.00|100%|
|Total|85,778,280.00|--|4,810,904.00|--|77,650,848.00|--|4,832,062.00|--|

 Statement on Other receivable:
Other Receivable accounts with large amount individually and bad debt provisions were provided
√Applicable□not Applicable
Unit：RMB
||||||
|-|-|-|-|-|
|Description of other|||||
||Book balance|Bad debt provision|Proportion|Reason|
|receivable accounts|||||
|Victor Onward|||||
||57,901,294.00|||---|
|Textile(HK)Co., Ltd.|||||
|Nanhua Company|22,951,250.00|||---|
|||||The company|
|Shenzhen East Asia|513,539.00|513,539.00|100%|insolvent, to be|
|||||canceled|
|CCB.Guangdong Shunde|||||
||1,080,000.00|1,080,000.00|100%|Aging long|
|branch|||||
|Changzhou Dongfeng||||Aging long|
|Textile Printing & dyeing|975,000.00|975,000.00|100%||
|Equipment Co., Ltd.|||||
|Nanjing East Asia|1,313,370.00|1,313,370.00|100%|Aging long|
|Total|84,734,453.00|3,881,909.00|--|--|

Using age methods to provision for bad debts of other account receivable ingroup：
□Applicable√not Applicable
Using percentage balance method of provision for bad debts of account receivable ingroup：
□Applicable√not Applicable
Using other methods to provision for bad debts of account receivable ingroup：
□Applicable√not Applicable
Receivable accounts with minor amount but on which bad debt provisions are provided individually at end of period
√Applicable□not Applicable
Unit：RMB
||||||
|-|-|-|-|-|
|Name|Book balance|Bad debts|Provision proportion%|Reason of provision|
|Victor Onward|||||
|Textile(HK)Co.,|673,005.00|673,005.00|100%|Aging long|
|Ltd.|||||
|Shanghai Huayinke|||||
|Trade Industry Co.,|||||
||180,000.00|180,000.00|100%|Aging long|
|Ltd.|||||
|Shenzhen|||||
|Environmental|||||
||35,000.00|35,000.00|100%|Aging long|
|Management System|||||
|Certification Center|||||

||||||
|-|-|-|-|-|
|Shenzhen Design|||||
|Institute of Ministry|||||
|of Machinery|30,000.00|30,000.00|100%|Aging long|
|Industry Shanghai|||||
|Branch|||||
|Other|10,990.00|10,990.00|100%|Aging long|
|Total|928,995.00|928,995.00|--|--|

（2）Particulars about the other receivable accounts due from shareholders with5% or over of theCompany‘s shares in the report period
Unit:RMB
||||||
|-|-|-|-|-|
||Balance at the period end||Balance in year-begin||
|Name|||||
||Book balance|Amount of bad debts|Book balance|Amount of bad debts|
|None|||||

（3） The front 5units‘ information of Other account receivable
Unit：RMB
||||||
|-|-|-|-|-|
||Relation with the|||Portion in total other|
|Name||Amount|Ages||
||Company|||receivables (%)|
|Victor Onward|Subsidiary||||
|||57,901,294.00|Over 3 years|67.5%|
|Textile(HK)Co., Ltd.|||||
|Nanhua Company|Subsidiary|22,951,250.00|Over 3 years|26.76%|
|Nanjing East Asia|Non-Related parties|1,313,370.00|Over 3 years|1.53%|
|CCB.Guangdong Shunde|||||
||Non-Related parties|1,080,000.00|Over 3 years|1.26%|
|Branch|||||
|Changzhou Dongfeng|||||
|Textile Printing & dyeing|Non-Related parties|975,000.00|Over 3 years|1.14%|
|Equipment Co., Ltd.|||||
|Total|--|84,220,914.00|--|98.19%|

 (4)The Other accounts receivable from the Related parties
Unit：RMB
|||||
|-|-|-|-|
|Name|Relation with the Company|Amount|Proportion(%)|
|Victor Onward||||
||Subsidiary|57,901,294.00|67.5%|
|Textile(HK)Co., Ltd.||||
|Nanhua Company|Subsidiary|22,951,250.00|26.76%|
|Shenzhen East Asia|Subsidiary|513,539.00|0.6%|
|Total|--|81,366,083.00|94.86%|

3. .Long–term stocks equity investment
Unit：RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Explanati||||
|||||||||on of||||
|||||||||diffidence||||
|||||||||between||||
|||||||Sharehold|Voting|sharehold||||
||Accounti|Initial||||ing|right|ing||||
||||Original||Ending|||||Current|Cash|
|Name|ng|investmen||change||proportio|proportio|proportio|Devalue|||
||||balance||Balance|||||devalue|bonus|
||method|t cost||||n in the|n in the|n and||||
|||||||investee|investee|voting||||
|||||||||right||||
|||||||||proportio||||
|||||||||n in||||
|||||||||investee||||
|Victor||||||||||||
|Onward||||||||||||
||Cost|2,411,282|21,214,21||21,214,21|||||||
|Textile(H||||||100%|100%||0.00|0.00|0.00|
||method|.00|2.00||2.00|||||||
|K)Co.,||||||||||||
|Ltd.||||||||||||
|Nanhua|Cost|23,082,83|15,574,74||15,574,74|||||||
|||||||54.82%|54.82%||0.00|0.00|0.00|
|Company|method|1.00|1.00||1.00|||||||
|Shenzhen|Cost|1,530,000|1,252,900||1,252,900||||1,252,900|||
|||||||51%|51%|||0.00|0.00|
|East Asia|method|.00|.00||.00||||.00|||
|||27,024,11|38,041,85||38,041,85||||1,252,900|||
|Total|--|||0.00||--|--|--||0.00|0.00|
|||3.00|3.00||3.00||||.00|||

Notes
4. Business income and Business cost
（1）Business income and business cost
Unit：RMB
||||
|-|-|-|
|Items|Amount of current period|Amount of previous period|
|Income from Business income|3,067,093.00|2,834,664.00|
|Total|3,067,093.00|2,834,664.00|
|Business cost|1,619,224.00|1,585,723.00|

（2）Mainbusiness（Production）
Unit：RMB
||||||
|-|-|-|-|-|
||Amount of current period||Amount of previous period||
|Name|||||
||Business income|Business cost|Business income|Business cost|
|Sales adhesive short fiber|1,292,308.00|1,282,051.00|1,266,777.00|1,248,550.00|
|Rent|1,774,785.00|337,173.00|1,567,887.00|337,173.00|
|Total|3,067,093.00|1,619,224.00|2,834,664.00|1,585,723.00|

（3）Total income and the ratio of operating income from top five clients
Unit:RMB
||||
|-|-|-|
|Name|Business Income|Proportion(%)|
|Zhejiang Helan Industry Co., Ltd.|1,292,308.00|42.14%|
|Liang Lingcheng|529,200.00|17.25%|
|Jishunda Automobile drier training Company|132,000.00|4.3%|
|Zhong Laikun|120,000.00|3.91%|
|Chen Shen|115,160.00|3.76%|
|Total|2,188,668.00|71.36%|

 Notes
5. Investment income
（1）Income from investment
Unit：RMB
||||
|-|-|-|
|Items|Amount of current period|Amount of previous period|
|Hold the investment income during from|||
|||6,045.00|
|available-for-sale financial assets|||
|Total||6,045.00|

 6. Supplement information of Consolidated Flow Statement
Unit：RMB
||||
|-|-|-|
|Items|Amount of current||
|||Amount of previous period|
||period||
|1. Adjusting net profit to net cash flow in operating activities:|--|--|
|Net profit|-2,537,404.00|-2,566,647.00|
|Add： Provision for impairment of assets|-21,157.00|61,132.00|
|Depreciation of fixed assets, oil and gas assets and consumable|||
||337,173.00|337,173.00|
|biological assets|||

||||
|-|-|-|
|Amortization of intangible assets|40,305.00|40,305.00|
|The losses on the disposal of fixed assets, intangible assets and other|||
||-1,896,345.00|-5,174.00|
|long-term assets|||
|Loss of fair value fluctuation on assets||25,480.00|
|Financial cost|||
||1,889,326.00|-2,253,351.00|
|Loss on investment|||
|||-6,045.00|
|Decrease of inventories|101,536.00||
|Decrease of operating receivable|-9,820,188.00|-1,455,914.00|
|Increase of operating receivables|19,271.00|1,603,383.00|
|Net cash flows arising from operating activities|-11,887,483.00|-4,219,658.00|
|II. Significant investment and financing activities that without cash|||
||--|--|
|flows|||
|III. Net increase of cash and cash equivalents|--|--|
|Ending balance of cash|10,557,501.00|17,293,509.00|
|Less: Beginning balance of cash equivalents|17,293,509.00|21,483,163.00|
|Net increase of cash and cash equivalents|-6,736,008.00|-4,189,654.00|

 XIV. Supplement information
1. Particulars about current non-recurring gains and loss
Unit:RMB
||||
|-|-|-|
|Items|Amount|Notes|
|Non-current asset disposal gain/loss(including the|||
|write-off part for which assets impairment provision is|13,906,305.00||
|made)|||
|Other non-operating income and expenditure beside for the above|||
||19,813.00||
|items|||
|Total|13,926,118.00|--|

The government grants recognized as the current profits and losses are the regular projects of profits and losses, which should be explained and disclosed the identification reasons one by one.
□ Applicable√ Not applicable
2 Return on net assets and earnings per share
Unit :RMB
|||||
|-|-|-|-|
|||Earnings per share（RMB）||
||Return on net assets .|||
|Profit of the report period||||
|||Basic earnings per share|Diluted gains per share|
||Weighted（%）|||
|Net profit attributable to the Common stock||||
||6.70%|0.0486|0.0486|
|shareholders of Company.||||
|Net profit attributable to the Common stock||||
|shareholders of Company after deducting of|-4.66%|-0.0338|-0.0338|
|non-recurring gain/loss.||||

3. Abnormal items of main financial statements and reasons for abnormality
1.The items in year-end consolidated balance sheet which change greatly over the beginning of year are listed as follows:
|||||
|-|-|-|-|
|Items|Amount at theperiod end|Amount inyear-begin|Chaged（%）|
|Prepayments|25,192|176,443|(85.72)tfr|
|Interests receivable|79,340|38,414|106.54 Iid|
|Inventories|---|101,536|(100) Is|
|Fixed assets|7,191,205|12,416,459|(42.08)iy|
|Advance receipts|1,076,531|2,778,488|(61.25)afi|
|Remuneration payableto staff and workers|1,109,352|766,680|44.70rdy|
|Taxes and leviespayable|4,250,191|1,622,074|162.02p|

The items in consolidated profit statement for the report year which change greatly over the previous year are listed as follows:
|||||
|-|-|-|-|
|Items|Amount at theperiod end|Amount inyear-begin|Chaged（%）|
|Operating income|26,998,990|11,095,669|143.33|
|Operating cost|9,461,003|5,413,356|74.77|
|Financial cost|247,455|(444,174)|155.71|
|Assets impairmentloss|723,554|68,345|958.68|
|Investment income|849,782|2,582,153|(67.09)|
|Non-operatingincome|1,923,105|29,498|6419.44|
|Non-operatingexpenses|134,222|582,915|(76.97)|
|Income taxexpenses|2,384,583|(41,869)|5795.34|

X1. Documents available for inspection
1.The Annual report 2013;
2. Accounting statements with signatures and seals of the legal representative and financial principal and chief of accounting Dept;
3.Originals of all documents and manuscripts of public Notices of the Company Disclosed in public in the newspapers as designated by China Securities Regulatory Commission;
4. The articles of Association.
This Report has been prepared in both Chinese and English. In case of any discrepancy, the Chinese version shall prevail. Please pay attention.
The Board of Directors of Shenzhen Victor Onward Textile Industrial Co., Ltd.
February 26, 2014