Anhui Huamao Announcement On Daily Related Transactions In 2011

　 Securities short: Huamao Stock Code: 000850 announcement number: 2011-007

　　 Anhui Huamao Textile Co., Ltd. Limited company Daily related transactions announcement 2011

All members of the company and the board of directors guarantee that the contents of the information disclosure are true, accurate and complete, without false records, misleading statements or major omissions.

I. The basic situation of expected daily related party transactions throughout the year

Related transaction category

Related party

Related transaction content

The estimated total amount of 2011 yuan (10000 yuan) is the same.

Proportion of class transactions

Total amount in 2010

(10000 yuan)

Procurement of raw materials Anhui hupeng Textile Co., Ltd. total line 10000

615005.41% 7918.58

Anqing Textile & Packaging Co., Ltd. excipients 15000.81% 1416.32

Anhui Huamao Huayang River Agricultural Limited by Share Ltd

cotton

Two thousand

1.08%

Four hundred and ten point nine three

Anhui Huamao import and Export Co., Ltd. yarn, line 60003.24% 5393.81

Xinjiang Korla Lihua Cotton Industry Co., Ltd.

cotton

Forty-two thousand

22.70%

Zero

Sales of products or commodities Anhui Huamao import and Export Co., Ltd. yarn, thread, cloth

15000 total

Twenty-nine thousand

5.77%

Eleven thousand seven hundred and forty-nine point eight zero

Anhui hupeng Textile Co., Ltd. yarn, line 140005.38% 11997.32

Other related transactions, Anhui Huamao Group Co., Ltd. land lease 321.76

Total

Nine hundred and seventy-one point seven six

100% 321.76

Anhui Huamao Group Co., Ltd. integrated services 650587.88

Two. Introduction and correlation of related parties

1, the basic situation of related parties

(1) related party with control relationship

Company name statutory

Representative person

Registered address

registered capital

Main business and our company's

Association 2011 projected correlation

Total transaction volume

Anhui Huamao collection

Group Limited

Zhan Lingzhi, Anqing, Anhui

No. 80 South Textile Road

112 million 930 thousand yuan

Property management of enterprise legal person

parent company

9 million 717 thousand and 600 yuan

(2) there is no associated party with control relationship.

Legal representative of company name

Registered address

registered capital

Relationship between main business and our company: total expected transactions in 2011

Anhui Huamao import and export

Company with limited liability

Wang Weiguo, Anqing, Anhui

No. 80 Textile Road 20 million yuan self agency and agent import and export

Business with parent company

control

210 million yuan

Anqing textile run packaging Co., Ltd.

Chi Yi Chun

The middle part of ten Wei Road, Anqing, Anhui

1 million 500 thousand yuan needle textile, paper

Products, plastic products, purchase, processing and sales of native and sideline products.

Controlled by parent company

15 million yuan

Anhui hupeng Textile Co., Ltd.

Limited company

Hua Guan Xiong Anqing loess pits

Production and bleaching of 50 million yuan yarn at No. 30 East Road.

Joint ventures such as printing, dyeing, processing and marketing

240 million yuan

Anhui Huamao Huayang River Agricultural Limited by Share Ltd

Tang Bangshui, Susong Fuxing Town, Anhui Province, Hua Yanghe

Inside farm

20 million yuan cotton acquisition, processing and marketing

Joint venture

20 million yuan

Xinjiang Korla Lihua Cotton Industry Co., Ltd.

Zhao Qingcai, Xinjiang Korla unity South Road West cotton and Flax Company Office

floor

50 million yuan cottonseed purchase, processing, leather

Joint ventures such as cotton and cotton by-products sales

420 million yuan {page_break}

2, the ability of related parties to perform contracts

Associated company name 2010 revenue

Total assets (up to 2010)

December 31st) (10000 yuan) net assets (as of 2010 12)

June 31) (10000 yuan)

Anhui Huamao Group Co., Ltd. 369578.36 777084.23 433769.24

Anhui Huamao import and Export Co., Ltd. 40722.17 14814.31 3625.37

Anqing Textile & Packaging Co., Ltd. 1556.34 1022.37 462.30

Anhui hupeng Textile Co., Ltd. 14532.43 5926.99 5521.38

Anhui Huamao Huayang River Agricultural Limited by Share Ltd 1113.05 2979.56 1901.55

Xinjiang Korla Lihua Cotton Industry Co., Ltd. 123928.08 74397.81 7873.88

The credit, financial and economic benefits of the above-mentioned persons are in good condition.

The parties concerned can abide by the agreement of the contract and the agreement, and the quality of the products can meet the needs of the company, fulfill their promises in good faith, and pay the related transactions in time to the listed companies in a timely manner, and the possibility of forming bad debts is less likely.

Three, pricing policy and pricing are based on the principles of fairness, impartiality and voluntariness of the company and those concerned.

Negotiate pricing in accordance with fair market principles. Four, the purpose of transaction and the impact of transaction on listed companies.

1. The related transactions in purchasing raw materials and auxiliary materials are mainly due to the fact that the company's products cannot meet their own needs.

Production needs, and product sales of the company require a large number of packaging products. Based on this, the company needs to purchase raw materials and auxiliary materials necessary for production and sale to the related parties to ensure the normal and stable production and operation of the company.

2, the related transactions on sales products are mainly made by our company to make full use of the market resources of related parties, so as to expand the sales and market impact of our products, and satisfy the related party's demand for high-grade yarn of our company.

3. In terms of receiving services and other related transactions, the market and service of controlling shareholders and related parties are mainly used.

Use resources to ensure the normal operation of the company and achieve complementary advantages, so as to reduce the company's operating costs and improve our company.

Work and management efficiency. To sum up, the above related transactions of the company are necessary and continuous for the company's daily production and operation.

The main business development, future financial situation and business results have positive and supportive functions. The pricing and settlement methods of all related transactions are based on the fair price of the market, which embodies the principle of consensus, fair trade and mutual benefit. There is no damage to the interests of the company and shareholders. The company and the relevant parties strictly carry out business contacts in accordance with the relevant laws and regulations.

Due to the small amount of transactions with the affiliated parties, the independence of the company will not be affected, and the relationship between the purchase and sale and service between the company and the affiliated party will not be controlled.

Five. Deliberation procedure

1, the five two session of the board of directors held by the company in January 18, 2011 considered and passed the related transactions. The board of directors should reach 9 directors, to 9, and 2 directors to avoid voting due to their relationship. Therefore, the number of directors who actually have the right to vote is 7, and the number of votes for the votes is 7, of which 7 are in favour, no against and abstain.

2, 4 independent directors of the company have examined the related transactions before the board of directors convened. They agreed to submit the motion to the board of directors for deliberation, and issued the following independent opinions: the voting procedure and agreement of the related party transactions comply with the relevant provisions of the company law, the Securities Law, the articles of association, and so on, and have followed the principle of voluntariness, compensation and integrity. The affiliated transaction belongs to normal business contacts in daily production and operation, which is conducive to the development of the main business of the company; the transaction mode is in line with the market rules, and the transaction price is fair, and there is no damage to the interests of the company and its shareholders, especially the minority shareholders. Agree to the related transactions.

3, the board of supervisors of the company considered and adopted the above related transactions in the two session of the five session held in January 18, 2011. The board of supervisors should be sent to 4 supervisors, reaching 4, of whom 4 agreed, no objection and abstention.

4, in the company's daily related transactions in 2011, the bill relating to "purchasing raw materials", "selling products or commodities" and "other related transactions" must be approved by the shareholders' meeting of the company, and the interested shareholders who are interested in the transaction will give up the right to vote on the relevant motions at the shareholders' meeting.

Six, the signing of related transaction agreements.

1, in January 10, 2010, the company signed the agreement on purchase and sale and the Agency (commission processing) agreement with Anhui Hupang Textile Co., Ltd., Anqing textile and packaging Co., Ltd. and Anhui Huamao import and Export Co., Ltd., and signed the "cooperation agreement" with Anhui Huamao River Agricultural Limited by Share Ltd in 2009. As the daily transactions between the company and the associated parties continue to occur every month, the amount of each business is uncertain and business transactions are conducted according to the actual demand of the market. Therefore, the company has reasonably predicted the possible transaction volume with the related parties in the current year. The specific amount, amount and settlement method need to be clarified in the contract according to the agreement signed by both parties when the transaction actually occurs.

2, in August 18, 2008, the company signed the "comprehensive service agreement" with the controlling shareholder Anhui Huamao Group Co., Ltd. The validity period of the agreement is effective from July 10, 2008. The validity period is three years. The main contents include:

(1) according to the number of employees in the company, the company extracts 70% of the staff and workers' benefits every year as payment for Huamao Group's staff and workers.

The service fee (deducting the medical insurance co ordinating fee paid by the company itself) (estimated at more than 600 yuan) will be settled at the end of the year.

2. The company has paid the use of Huamao Group's office facilities, and is leased from Huamao Group by the company. The rental area is 1830 square meters. Combined with the local market price and the cost factors in Anqing, the total annual rent is determined to be 317102.4 yuan, which will be paid at the end of the year.

3. Huamao Group pays for the use of the company's comprehensive service facilities (estimated at more than 30 yuan). Water and electricity charges: market price + average loss; cold and hot gas charging standard: cost price; domestic water and electricity charges standard: market price. The cost of water, electricity and gas will be settled once a month.

3, in view of the further expansion of the company's production scale and the increase of the land price, the company signed the lease agreement on land use rights with the controlling shareholder of Anhui Huamao Group Co., Ltd. in January 10, 2010. The main contents include: the leasing company of Anhui Huamao Group Limited company has a land area of 432792.83 square meters and the annual rent is 32 billion 176 million 33 thousand and 300 yuan. The company should pay all the land rent to Anhui Huamao Group Co., Ltd. once a year before December 31st, and this agreement will be effective from January 1, 2010, and it will be valid for three years.

4, in January 7, 2011, the company signed the agreement on the purchase and sale of raw cotton with the Xinjiang Korla Lihua Cotton Industry Co., Ltd. The daily transactions of raw cotton purchase continue to happen every month, and business transactions are uncertain according to the actual demand of the market. Therefore, the agreement on the purchase and sale of raw cotton is a framework agreement, and the specific amount, amount and settlement method need to be clarified in the contract according to the agreement signed by both parties when the transaction actually occurs.

Seven, other related instructions (the catalogue of future documents)

1. Resolution of the second session of the Fifth Board of directors of the company;

2. The opinions of the independent directors of the company on matters relating to the related transactions in 2011.

3, the fifth session of the fifth meeting of the board of supervisors resolution;

4. The comprehensive service agreement signed by our company and the group company.

5. The lease agreement on land use rights signed by our company and the group company.

6, agreement with relevant parties on product purchase and sale, material purchase, agent import and export, entrusted transportation and so on. Notice hereby.

Anhui Huamao textile Limited by Share Ltd board of directors

January 18, 2011