深紡織Ｂ：審計(jì)報(bào)告（英文版）

1、shenzhen textile (holdings) co., ltd. december 31, 2011 financial statement (2) design, implementation and maintenance of internal control related to the preparation of financial statements so that financial statements are free from material misstatement caused by fraudulent practices or errors. ii.

2、 respondibility of certified public accountants we are responsible for expressing opinions on financial statements based on our audit. we conducted audit in accordance with the audit criteria for chinese certified public accountants. the audit criteria for chinese certified public accountants requir

3、e us to abide by professional ethics, plan and conduct audit to obtain reasonable assurance as to whether financial statements are free from material misstatement. audit involves carrying out audit procedure to obtain the audit evidences about the amounts and disclosure of financial statements. the

4、selected audit procedure relies on the judgment of certified public accountants, including the appraisal of risk of material misstatement of financial statements aused by fraudulent practices or errors. while appraising risks, we considered the internal control related to the preparation of financia

5、l statements to design proper audit procedure but the purpose is not to express an opinion on the effectiveness of internal control. the audit also includes the appraisal of suitability of accounting policies selected by the management, the reasonableness of accounting estimate and the overall prese

6、ntation of financial statements. we believe that the audit evidences obtained by us are full and appropriate and provide a basis for expressing audit opinion. iii.audit opinion in our opinion, the financial statements of the company have been prepared in accordance with th e provisions of accounting

7、 standards for business enterprises and give a fair view, in all material aspects, of the financial position of the company and the consolidated and parent company profit statement, statements as of december 31, 2011 and its operating results and cash flow statement f or the year then ended. peking

8、certified public accountants chinese c.p.a. beijing. china march 23,2012 chinese c.p.a. 3 4 5 6 7 8 9 10 11 12 13 14 15 shenzhen textile (holdings) co., ltd. notes to financial statements year 2011 i.basic information of the company 1. enterprise registration address, organization mode and headquart

9、er address. the company was previously the shenzhen textile industry company, on april 13, 1994, approved by the letter(1994)no.15 issued by shenzhen municipal peoples government, the company was restructured and named as shenzhen municipal textile (group) co., ltd. in the same year, approved by the

10、 (1994) no.19 file of shenzhenshi, the shares of the company were listed in shenzhen stock exchange. the company has got the corporate business certification of shensizi no. 440301105031014, registration address and headquarter address are 6/f,shenfang building, huaqiang road. north, futian district

11、, shenzhen. 2. enterprises business nature and major business operation. majored in manufacturing and im-exporting trade on textile, polarizer, clothes and associated products, concurrently managing property leasing, storage, real estate development and hotel business, etc. 3. names of parent compan

12、y and group parent company. the companys parent company is shenzhen investment management co., ltd. 4. the reporting person of the approval of financial statements and the reporting date of the approval of financial statements. the reporting person of the approval of financial statements of the comp

13、any: board of directors of the company the reporting date of the approval of financial statements of the company:march 23, 2012 ii. principal accounting policies, accounting estimates and early errors 1.basis for the preparation of financial statements on the basis of continuous operation, in accord

14、ance with actual transactions and events, the company carried out confirmation and measurement in accordance with accounting standards for business enterprises - basic standards issued by the ministry of finance and other various accounting standards, on the basis of it, the company prepared the fin

15、ancial statements. 2. statement on complying with corporate accounting standards based on the requirement that the financial reports edited according to above-mentioned editing conditions is accordance with enterprise accounting standards, the company reflected its financial condition on december 31

16、, 2011 truly and completely and business result in 2011 and cash flow information, etc. 3. fiscal year a calendar year, that is, from january 1 to december 31 is a fiscal year. 4. accounting standard money accounting standard money is rmb. referring to notes to unless separately stated. currency:rmb

17、 5. accounting process method of enterprise consolidation under same and different controlling. （1）enterprise merger under same control：for the enterprise merger under same control, the assets and liabilities obtained by the merging party from enterprise merger was measured according to book value o

18、f the merged party on the merger date. the capital reserve was adjusted according to the deference between the book value of net assets obtained by the merging party and the book value of merger price paid (or the total book value of shares issued); if capital surplus was not big for the offset, the

19、 retained earnings should be adjusted. amalgamating parties reckon every direct relate expenses produced in enterprise consolidation including auditing expense, valuation expense and legal service expense paid on enterprise consolidation to current profit and loss when 15 those expenses produced. on

20、 parent subsidiary relationship formed via enterprise consolidation , parent company is responsible of editing amalgamation property balance sheet, amalgamation profit statement and amalgamation cash flow meter of amalgamation date. in amalgamation property balance sheet, every asset and liability o

21、f amalgamated parties is measured according to its book value. for the accounting policy adopted by the amalgamated parties is not accordance with amalgamating party, and it is adjusted according to criterions, the book value after adjusted is measured. the amalgamating profit chart contains income,

22、 expenses and profit happened from the beginning of amalgamation and amalgamating date. the realized net profit before amalgamation from the amalgamated party shall be reflected on the amalgamating profit chart. amalgamation cash flow meter contains the cash flow of every party in amalgation from th

23、e beginning of amalgamation and amalgamating date. （2）enterprise merger under different control：for the enterprise merger under same control, the merger cost was the assets for the obtaining the control right of the party being purchased on the purchase date, the liabilities happened or undertook an

24、d the fair value of the equity securities. for the enterprise merger realized through a number of transactions, the merger cost was the sum of all individual transaction. all the direct costs and related costs for the enterprise merger were included in the cost of enterprise merger. the purchase dat

25、e referred to date that the company had the control right of the party being purchased. the difference between merger cost over the fair value of identifiable net value obtained from the merger should be confirmed as goodwill. the difference between the identifiable net assets of the party being pur

26、chased obtained in the merger and the amount of identifiable net assets of the party being purch ased obtained in the merger should be included in the loss and gain of the current period. on parent subsidiary relationship formed via enterprise consolidation , parent company is responsible of editing

27、 amalgamation property balance sheet on amalgamation date; the acquired every identified asset, liability acquired from enterprise consolidation is listed via fair value. 6. the compiling method of combined financial statement （1）combined financial statements has financial statements and other relat

28、ed material of every subsidiary company within combined financial statements as combination basis, adjust long-term equity investment of subsidiary company according to equity method, compensate investment, trade activities of the company and every subsidiary company within the combined financial st

29、atements, calculate few shareholder profit and loss and few shareholder rights and interests. then compile the financial statements after those activities. （2）in compiling, if the accounting policy of any subsidiary company within the combination scope is not accordance with it of the company, adjus

30、t it according to the accounting policy of the company, then combine. （3）on the subsidiary company acquired from enterprise consolidation under same controlling, treat amalgamation produced at the beginning, bring its assets, liabilities, business result and cash flow into financial statements at th

31、e beginning of the amalgamation. （4）on the enterprise consolidation under same controlling, the net income and loss of the amalgamated parties is reckoned into nonrecurring profit and loss before amalgamation and separately listed in submitting financial statement. （5）recombination belongs to enterp

32、rise non-combination issue under same company controller, when the combined parties combine the assets amount of last account year end, business income of last accounting year or total profit of last accounting year, if it reaches or excesses 20% of relative item of the company, compile income state

33、ments at the beginning of the combination period. （6）for the subsidiary company acquired from enterprise consolidation under non-same controlling, in compiling combination statements, adjust individual financial statements based on fair value of identified net assets at the purchasing date. 7.confir

34、mation standard of cash and cash equivalent cash means the cash on hand and deposit for payment at any moment. cash equivalent refers to the investment with few value alteration risks that the company holds the cash with the characters of short term (generally means 3 months from the purchasing date

35、), strong fluidity, easy transferring to known amount. 16 8 . translating of foreign currency operations and foreign currency report form （1）accounting method of foreign currency operations the foreign currency operation is translated into recording currency according to approximate exchange rate at

36、 sight of business happening date. the approximate exchange rate at sight refers to the exchange rate at the beginning of the business happening month. on balance sheet date, dispose foreign currency monetary item and foreign currency non-monetary item according to the following regulations: a. fore

37、ign currency monetary item is translated adopting exchange rate at sight of balance sheet date. the balance of exchange produced from the difference between exchange rate at sight at balance sheet date and initial confirmation or exchange rate at sight at former balance sheet date shall be reckoned

38、into profit and loss at current period. b. foreign currency non-monetary item measured with historic cost, adopt exchange rate at sight on business happening date and not to change recording currency (amount). c. foreign currency non-monetary item measured by fair value adopts exchange rate at sight

39、 of fair value confirmation date. the difference between recording currency after translating and the original recording currency is disposed as fair value alteration and reckoned into profit and loss at current period. （2） method for foreign currency accounting the subsidiaries of the company whose

40、 standard currency was foreign currency, all asset and liability items should be converted into the standard money of parent company according to the spot rate on the balance sheet date, and all the owners equity items, accept for retained profits, should be converted into the standard money of pare

41、nt company according to the spot rate on the balance sheet date. the income and cost items in the profit statement should be converted into the standard money of parent company according to the spot rate during the period of consolidating financial statements. the conversion differences due to diffe

42、rent exchange rate, should be reflected by opening the foreign currency conversion difference statements in rmb. and open the foreign currency statements conversion differences in cash flow statement in rmb. 9. financial instruments (1) classification of financial assets: financial assets can be div

43、ided into: the financial assets which measured by fair value and its changes are included in the current loss and gain (including transactional financial assets and the financial assets which measured by fair value and its changes are included in the current loss and gain), the expired investments,

44、loans and receivables held, and financial assets to be sold, the four categories; (2) measurement of financial assets a. the initial recognition financial assets are accounted in accordance with fair values. for the financial assets which measured by fair value and its changes are included in the cu

45、rrent loss and gain, the relevant transactional costs should be included in the current loss and gain; for other financial assets, the relevant transactional costs should be included in the initial recognition amount. b. the company makes follow-up measurement on financial assets according to fair v

46、alue, the transactional cost to deal with the financial assets which may happen in the future will not be deducted. but, except the following situations: (a). the expired investments and loans held, should be measured according to amortized costs by the actual interest method. accounts receivable, i

47、n accordance with the purchase contract or agreement price receivable amount as initial confirmation, when recovery or disposal the account receivable, the price difference between the carrying amount of the receivable included in the current profits and losses (b). the equity tool investments which

48、 do not have quotation in market and their fair value can not be reliably measured, and the derivative financial assets which are related to the equity tool and are to be delivered to the equity tool to account, should be measured according to costs. (3) determination of fair value of financial asse

49、ts: a, the financial assets which exist in the market, the quotation in the market will be determined as fair value; 17 age b, the financial assets which do not exist in the market, adopt valuation techniques to determine the fair value. the results by the valuation techniques show the transaction p

50、rices which may be used in fair transactions on the valuation day. （4）financial assets transfer the company will transfer almost all risk and earnings into the transferred parties on the ownership of financial assets or when the controlling on financial assets is given up, it will expire confirming

51、the financial assets. (5). impairment of financial assets: on the balance sheet date, carry out inspection on the book value of financial assets which are not included in the financial assets measured according to fair value and its changes are include in the current loss and gain. if there are obje

52、ctive evidence showing that the financial assets have impairment, the provision for impairment should be accounted. the objective evidences which show the impairment of financial assets include the following items: a. the issuing party or the debtor had serious financial difficulties; b. the debtor

53、violated the terms in the contract, such as the payment of interest or principal had default or delayed; c. for the consideration in economy and law, the company made concessions to the debtor in difficulties; d. the debtor was likely to collapse or carry out other financial restructuring; e. the is

54、suing party had major financial difficulties, and the financial assets can not be traded in market; f. the debtor had major adverse changes in technology, market, economic and legal environment, and the company was may not be able to recover the investment costs; g. the fair values of the equity too

55、l investments had serious and non-temporary decline; h. other objective evidences which show the impairment of financial asse. 10. account receivable 1.accounts receivables confirmation standard and withdrawal method of doubtful accounts upon much single accounts （1）account receivable belong t indiv

56、idual significance and individually assessed for impairment： the client identifies single amount of accounts receivable that is not less less criteria and norm of individual significance thanrmb 1 million as account receivable that are individually significant in amount.the client identifies single

57、amount of accounts receivable that is not less less thanrmb 0.5 million as account receivable that are individually significant in amount. measurementof if it is objectively evidential that a receivable of individual significance has impairment allowances impaired, the impairment loss shall be recog

58、nized based on the difference of the forreceivablesof book values higher than the present value of future cash flows. individual significance （2）accounts receivable belong to recognition of impairment allowances by group： basis of determination of group accounts age groupthe classified according sha

59、ll be recognized based on the accountsage method for recognition of impairment allowances by group accounts age group the age analysis method： adopt the age analysis method. % for accounts receivable% for other receivables within 1 year（incl.1 year） 12 years 23 years over 3 years 5% 10.00% 30.00% 50

60、.00% 5% 10.00% 30.00% 50.00% （3）accounts receivable belong to individuall insignificant but individually assessed for impairment： the reason for individually assessed for impairment method for recognitionof impairment allowances there is evidence that differences in the receivable are apparently . a