Shenzhen Textile (Group) Limited By Share Ltd Announcement

Code: 000045, 200045 securities referred to: Shenzhen textile A, Shenzhen textile B announcement number: 2012-31

Shenzhen textile (Group) Limited by Share Ltd announcement on regulatory measures and rectification of securities regulatory authorities and exchanges in recent five years

All members of the company and the board of directors guarantee the authenticity, accuracy and completeness of the information disclosure, without any false record, misleading statement or major omission.

Since its listing in 1994, the Shenzhen textile (Group) Limited by Share Ltd (hereinafter referred to as the "company") has been able to strictly follow the relevant provisions and requirements of the company law, the securities law, the guidelines for the standardized operation of the main board of the stock exchange of Shenzhen, and the regulatory authorities of the China Securities Regulatory Commission, etc., and is committed to improving the corporate governance structure, standardizing the operation of the company, and promoting the continuous and standardized development of the company.

In accordance with the regulatory requirements of the issuance, the company's regulatory measures and rectification measures taken by the securities regulatory authorities and exchanges in the past five years are announced as follows:

The Shenzhen Securities Regulatory Commission of the China Securities Regulatory Commission (hereinafter referred to as the "Shenzhen Securities Regulatory Commission") has conducted on-site inspections since August 25, 2009. The main contents of the inspection are the company's corporate governance, information disclosure, financial management and accounting calculation since 2006. In December 22, 2009, it issued the "supervision opinions on the on-site inspection of the Shenzhen textile (Group) Limited by Share Ltd" (Shenzhen Bureau's word [2009] 90, hereinafter referred to as "regulatory opinion").

In accordance with the problems and rectification requirements pointed out in the regulatory opinions, the company made a check by item and made corresponding rectification measures. In January 21, 2010, the fourth session of the board of directors held a special meeting on the rectification measures for the spot inspection of the Shenzhen securities regulatory bureau, and deliberated the adoption of the rectification measures on the spot inspection of Shenzhen securities regulatory bureau. In March 26, 2010, the twenty-eighth session of the Fourth Board of directors was held, and the adoption of the rectification summary on the spot inspection of the Shenzhen securities regulatory bureau was deliberated and adopted.

First, the main problems of corporate governance.

(1) lack of independence of the company

[PROBLEMS]

The chairman and general manager of the company are not held in the controlling shareholder. However, the controlling shareholder, Shenzhen investment and control company, carries out an assessment according to the implementation measures of the annual performance appraisal of the Shenzhen Investment Holdings Company Limited executives, and determines its annual salary and annual salary.

The Remuneration Committee of the board of directors does not participate in the formulation and assessment of the remuneration package of the chairman and general manager.

The above situation does not conform to the provisions of the twenty-third article of the "guidelines for the governance of listed companies" that the personnel of listed companies should be independent of the controlling shareholders and the seventh articles of the company's remuneration assessment committee's work regulations.

[rectification and implementation]

The company held the twenty-fifth meeting of the Fourth Board of directors in December 11, 2009, and deliberated the adoption of the "executive compensation management measures" of the Remuneration Committee, and the administrative measures for the management of senior managers. The remuneration standards, assessment basis and assessment methods of executives, such as board chairman and general manager, were clarified. In December 29, 2009, the second provisional shareholders meeting was held in 2009.

The establishment and implementation of the above system has standardized and perfected the company's remuneration and management for directors and senior managers.

(two) there are problems in the operation of the "three sessions".

1. The board of directors audit committee has not fully performed its duties.

[PROBLEMS]

The audit committee of the board of directors of the company has not reviewed and supervised the internal auditing system, the internal control system and its implementation. The head of the internal audit has not reported the internal audit work to the board of audit committee, such as the internal audit plan, audit report and tracking inspection, and so on, which does not conform to the fifty-fourth article of the "guidelines for the governance of listed companies". The audit committee is responsible for reviewing, supervising the internal audit system, the internal control system and its implementation responsibilities, and the provisions of the eighth Audit Committee on the duties of the board of directors of the company.

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[rectification and implementation]

In November 2, 2009, the company held the twenty-four session of the four session of the board of directors, and deliberated the adoption of the motion to adjust the company's departmental setup. The audit team was set up from the financial audit section, and the audit department was set up separately. In December 11, 2009, the twenty-five session of the four session of the board of directors was held. The motion on the appointment of the head of the audit department was deliberated and the internal audit system of the company was perfected.

Through the above rectification, the information communication and execution channels necessary for the audit committee to perform its duties are implemented from the institutional setup and the responsible personnel. The audit department has carried out work under the direct guidance of the audit committee to ensure effective communication between the audit department and the audit committee.

At present, the audit committee strictly carries out its duties in strict accordance with the requirements of the "work of the board of Directors Committee", and puts emphasis on monitoring the company's internal control system construction, annual report audit, key investment projects tracking audit and special audit of raised funds, and puts forward professional opinions.

2, the chairman's salary has not fulfilled the approval procedure.

[PROBLEMS]

The annual salary of the company's annual shareholders' meeting approved in 2004 was 120 thousand yuan, which has increased to 240 thousand yuan since 2008. The company failed to perform the examination and approval procedures of the shareholders' meeting on the matter of the compensation change. It does not comply with the thirty-eighth articles of the company law and 100th provisions on Directors' remuneration for the shareholders' meeting.

[rectification and implementation]

The company held the twenty-fifth meeting of the Fourth Board of directors in December 11, 2009, and deliberated the adoption of the "Directors' salary management measures". It was clear that the chairman's basic annual salary standard was 240 thousand yuan, and was approved by the company's second provisional shareholders' meeting in 2009.

3. Sub company's major investment matters implementation procedures are not standardized.

[PROBLEMS]

As of June 30, 2008, the company held 47.95% stake in Shenzhen Shenzhen Textile Co., Ltd. (now known as Shenzhen Shengbo Photoelectric Technology Co., Ltd., hereinafter referred to as "deep spinning lucky"), the company incorporated it as a subsidiary company in the scope of consolidated statements.

In May 2008, the Shenzhen Textile Group held a two phase expansion project with a total investment of about 76 million yuan, and the investment amount exceeded 10% of the total assets of the company audited in 2007. The company did not submit the important matters of the above subsidiary companies to the board of directors for consideration. Nor did it fulfill the obligations of the interim announcement. The company did not comply with the 116th articles of the articles of association on the authority of the board of directors, the provisions of article 7.8 of the Shenzhen Stock Exchange Listing Rules and the provisions of article 9.2 on interim information disclosure.

[rectification and implementation]

In 2008, when the shareholders' meeting of Shenzhen textile group discussed the two expansion project, the lucky group held 52.05% stake in Shenzhen Textile Co., and the company only held 47.95% stake in Shenzhen Textile Co., Ltd.

Due to the deviation in understanding the relevant laws and regulations, the company multiplied the investment by the shareholding ratio to determine that the investment behavior does not need to be submitted to the issuer's board of directors for consideration.

In June 2009, after the acquisition of the remaining 52.05% shares of Shenzhen Textile Co., Shenzhen Textile Co., Ltd. became a wholly-owned subsidiary of the company.

In September 2009, the strategic planning committee of the board of directors seriously studied the specific situation of the two phase of the expansion project. In October 22nd, the revised project plan was submitted to the four session of the board of directors for consideration at the twenty-three session, forming a resolution on the adjustment plan for the two phase extension and extension project of Shenzhen textile, and the board of directors of the board of directors has fulfilled the decision-making process of the board of directors according to the latest situation.

(three) sending undisclosed information to the controlling shareholders

[existing problems]

The company carries out undisclosed financial information, such as the monthly major financial indicators, the implementation summary of the cost budget, the summary of the cash flow, the summary of non operational profit and loss and other undisclosed financial information to the deep investment control, which violates the provisions of the second articles on the disclosure of information disclosure of the listed companies on the disclosure of information to all investors at the same time.

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[rectification and implementation]

The problem is due to the relevant provisions of the company's execution of state assets management.

In this regard, the company not only strictly controls the scope of insider information, standardizing the process of information pmission, and establishes insider information archive, but also has obtained the letter of "strengthening uncommitted information management commitment" issued by controlling shareholders.

In order to further strengthen the management of non-public information, the fourth meeting of the twenty-third board of directors was held in October 22, 2009, and the insider information registration system was adopted.

At the same time, according to the principle of fair information disclosure, the company also reports annual performance bulletin to major shareholders every year, while disclosing the annual performance bulletin.

(four) the internal audit is imperfect.

1, internal auditors lack independence.

[PROBLEMS]

The company has not set up an internal audit department, and the internal audit work is undertaken by the finance department. Two persons engaged in the internal audit work undertake other financial work at the same time, and do not comply with the provisions of the 190th articles of the articles of Association regarding the company's internal audit should be equipped with full-time auditors.

[rectification and implementation]

The internal audit work of the company was originally established by the audit working group of the Ministry of Finance and auditing. After deliberating the four twenty-four session of the board of directors in November 2, 2009, the company adopted the motion on adjusting the company's departmental establishment and established the audit department. In July 12, 2010, it was deliberated by the five session of the three session of the board of directors and passed the motion on the appointment of the manager of the audit department.

At present, the company has established an independent and full-time internal audit department, and has appointed the manager of the audit department, equipped with 3 full-time auditors.

2, the scope of internal audit is not comprehensive.

[PROBLEMS]

The company's internal audit matters mainly focus on the departure audit and asset liability audit of the subsidiaries, and basically does not involve the internal control system and its implementation. It does not meet the relevant provisions of the tenth internal audit work system of the company, including the internal audit responsibilities, including the establishment, improvement and Implementation of the company's internal control system.

[rectification and implementation]

Under the supervision of the audit committee, the company audit department made the internal audit plan at the beginning of each year, made clear the contents, time and responsible persons of the internal audit in the plan, submitted the internal audit report to the audit committee at the end of each year, supervised and implemented by the audit committee, and comprehensively implemented the internal audit system of the company.

At present, the audit department strictly follows the requirements of the internal audit work system, and the main performance duties are as follows:

(1) construction of internal control: according to the internal control of enterprises

In accordance with the requirements of the application guidelines for enterprise internal control, the internal control system was comprehensively promoted in the company's headquarters and 6 affiliated enterprises. By strengthening business process management, highlighting major business risk prevention and control, the risk control oriented internal control system, internal control system, and internal control system based on the system was established. In September 30, 2011, the internal control manual (trial run version) was officially released, and it was put into operation in October 1st.

(2) internal audit work: A. follow-up audit for key projects.

Through continuous project tracking audit on polarizing film projects for TFT-LCD, the audit scope covers the use of fund-raising funds, bidding for projects and equipment, approval procedures for engineering changes, payment according to the contract, and so on. TFT-LCD project tracking inspection report is formed to avoid risks in the operation of the project. B. completes economic responsibility audit.

By finding out the problems of subsidiary economic responsibility audit and continuing to follow up inspections, the operation and management of enterprises should be further standardized; C. should raise funds for special audit.

According to the regulations of the company's fund raising management system, special audits on the use of the raised funds are carried out quarterly, and a special report on the collection and actual use of the company's raised funds is formed.

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3. Internal audit opinion tracking is not in place.

[PROBLEMS]

The company has not formed a perfect mechanism to conduct follow-up checks on the rectification of internal audit opinions, and the implementation of the rectification is not in place.

[rectification and implementation]

In December 11, 2009, the company held the twenty-five session of the four session of the board of directors, and deliberated the adoption of the motion to amend the internal audit system to increase the follow-up procedures for auditing opinions, that is, the written report of the problems found in the audit by the auditing department to the managers, and the management departments to instruct the relevant departments of the management department, the finance department and other relevant departments to carry out the rectification and rectification of the auditing enterprises. After rectification, the enterprises form a rectification report submitted to the company's management level for approval, and submit it to the Audit Committee for record verification.

Two, the main problems of financial management and accounting.

(1) some accounting policies and accounting estimates are inconsistent with the implementation.

[PROBLEMS]

The subsidiary company Shenzhen Textile Co., Ltd. has depreciated the buildings and buildings in accordance with the 25 years plan, but the annual report of the company disclosed that the production and non production buildings were depreciated separately in 35 years or 40 years, and the accounting estimates were not accurate.

The company's annual report 2007 disclosed that the accounting policy for accounts receivable provision for bad debts was a separate impairment test for a single large amount of accounts receivable.

According to the aging analysis method, but the subsidiary company of Anhui Huaping Textile Co., Ltd. in 2007 accounts receivable account for bad debts preparation did not correspond to the accounts receivable according to whether the major items were classified. Instead, it accounted for 0.5% of all accounts receivable according to the balance, which did not conform to the company's accounting policy.

[rectification and implementation]

The subsidiary's deep spinning Le Kai was incorporated into the consolidated statement in June 2009. The problem of inconsistency in accounting estimates has been corrected in the annual report of 2009. Anhui hupeng Textile Co., Ltd. has been contracted out by another East since 2008. It is accounted for by the cost method and no longer incorporated into the consolidated statement.

At present, the company has strictly handled the accounting practice according to the disclosed accounting policy.

(two) cost accounting does not match the matching principle.

[PROBLEMS]

The property management and rental income of the company are the main business revenue of the company, but the cost of the shop floor of the industrial production enterprise is only included in the main business cost. Other costs related to property management and leasing, such as depreciation and maintenance cost of the investment real estate, are included in the period cost instead of the main business cost, which does not conform to the principle of income cost matching.

[rectification and implementation]

The company has now calculated the depreciation and maintenance cost of the investment real estate into the main business cost according to the cost matching principle.

(three) the provision for bad debt provision for accounts receivable does not meet the requirements.

[PROBLEMS]

As of September 30, 2009, the company had received 14 million 389 thousand yuan from Jiangxi gorgeous line Co., Ltd. (hereinafter referred to as "Jiangxi brilliant"), and the company made a bad debt account of 3 million 91 thousand and 600 yuan at the end of 2008.

Jiangxi flowery was originally held by 63.87% of the company, and its net assets were -62 yuan at the end of 2008, with a loss of 5 million 550 thousand yuan. In June 2009, the company pferred all the shares of Jiangxi with 20 thousand yuan.

The company did not carry out the impairment test on the accounts receivable in the three quarter of 2009. It does not comply with the relevant provisions of the accounting standards for Enterprises No. twenty-second - Financial Instruments Recognition and measurement.

[rectification and implementation]

In December 2009, the company carried out the impairment test on Jiangxi's splendid receivables.

On the basis of the estimated recoverable amount, the motion on the provision for impairment of the receivable assets of the gorgeous company was deliberated at the twenty-fifth meeting of the Fourth Board of directors of the company. According to the judgement of the recoverable amount of the gorgeous receivables in Jiangxi, the company made a provision of $3 million 90 thousand for bad debts in 2008, and the total provision for impairment of assets was 9 million 860 thousand yuan.

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(four) there are defects in the management and control of subsidiaries.

[PROBLEMS]

There are some defects in the internal control and management of the purchase, sale, production and other aspects of the company's Shenzhen Mei Bai year Clothing Co., Ltd. (hereinafter referred to as "America hundred years").

For example, there is no full-time administrator and inventory receipt and record in the storehouse, the raw materials are sent to each workshop in the workshop, unable to accurately calculate the product cost, but confirm the cost according to a certain proportion of the price, and incomplete raw data such as the relevant contract and ledger.

Since the establishment of the US centenary problem has existed since 2002, the company did not gradually identify the new financial leaders appointed by the US in the past 100 years until the internal audit found these problems in May 2009.

There are defects in the management and control of subsidiaries.

[rectification and implementation]

Aiming at the problems in the past hundred years, the following rectification measures have been carried out: improving the internal control of procurement, sales, production, etc., equipped with full-time inventory managers and recording the receipt and receipt of inventory, receiving and sending raw materials in the physical warehouse, improving the management of the measurement and acceptance and the original records, collecting the production cost according to actual consumption and reasonably apportionment, and accurately calculating the product cost.

At the same time, the company combed the management and control of the two level enterprises, and urged the two level enterprises to improve the internal control of procurement, production and sales, so as to improve the management level of enterprises.

The company has taken the following measures to strengthen the management of the two level enterprises:

1, further strengthen the implementation of the "two level enterprise manager reporting system" and "enterprise information reporting management system", through the implementation of these two systems, ensure that the operation of enterprises is always grasped, and business problems are found in time, and effective supervision of subordinate subsidiaries is achieved.

2, to the joint venture company, through the foreign manager to monitor the operation and management of the enterprise in time, and ask the expatriate manager to give a monthly report on the current business situation of the enterprise, predict the future business situation, and give hints to the operation risk.

Through timely understanding of the operating conditions of enterprises, the supervision and management of joint ventures will be realized.

3, regular and irregular in-depth enterprise research, according to the feedback information, found the existing problems, timely remind, put forward rectification requirements.

Three, the main problems in the basic work of financial accounting

(1) the basic accounting work is not standardized.

[PROBLEMS]

The management of the accounting foundation work of the subsidiary is not in place, and the basic accounting work of the subsidiary is weak, and there are many irregular situations.

For example, the construction project did not carry forward fixed assets in time; some of the company's accounting vouchers were unchecked or no signatures were rechecked; some important original vouchers were not attached to the bookkeeping vouchers, and no index was established between the accounts receipts. Some of the original vouchers were not uniformly managed by the financial department in accordance with the custody requirements of the accounting archives; some of the relevant personnel were not fully signed on the part of the inventory, the inventory check list and the payment payment approval form; some of the subsidiaries were not registered with the bills, the cashiers had not recorded the bank accounts, the bank accounts were not timely recorded, the bank balance adjustment was made and the cash inventory was not standardized.

[rectification and implementation]

The company attaches great importance to the problems of accounting basic work, and has already requested the subsidiary company to strictly handle the accounting practice according to the requirements of the Ministry of finance's "accounting basic work standard". In accordance with the requirements of the special meeting of the Shenzhen Shenzhen Securities Regulatory Commission on the basis of the basic accounting work of the listed companies in 2009, we should strengthen the management, training and examination of the financial personnel, conduct a comprehensive check on the basic accounting work of the subsidiary companies, immediately reorganize the non-standard situations, urge the enterprises to do well the accounting work according to the requirements of the "accounting basic work standard", and take the management of the basic accounting work as the daily financial accounting management content, so as to improve the standardization level of the accounting basic work.

(two) financial information system management and control are not in place.

[PROBLEMS]

The company and its subsidiaries do not have professional information system administrators who are independent of the finance department. Instead, they are operated by an accountant as an information system administrator. One person owns all the information system privileges and does not meet the basic requirements of internal control.

There are no written examination and approval documents for the company's financial information system to increase or decrease users, or to modify user rights.

The company did not backup the database data such as the operation log of the information system, and the use of the information system lacked the necessary monitoring.

[rectification and implementation]

The company set up a system administrator who is independent of the finance department. The administrator of the company is the administrator of the company's computer. The administrator increases or decreases the users according to the approved written application, modifies the user's right to enhance the monitoring of the financial information system, and makes timely backup of the information database of the information system operation log.

The company has established ERP system, increased the financial management module, realized the parent subsidiary company networking, and improved the company's financial information level.

In August 2009, the Shenzhen Securities Regulatory Commission put forward supervision opinions on the company's on-site inspection. The company had completed the rectification in March 2010.

After rectification, the actual situation of corporate governance is basically consistent with the requirements issued by the China Securities Regulatory Commission on the regulatory documents of listed companies.

In addition to the above problems, the company has not been supervised by securities regulatory authorities and exchanges in the past five years.

Notice hereby.

City Textile (Group) Limited by Share Ltd

Board of directors

Two July 20th one or two