Great Group Holdings 2010 Annual Report

Annual Report 2010
TO THE
OUR PASSION TAKES YOU
LIMELIGHT
Contents
01 About Us 08 Financial Highlights 02 Chairmans Message 10 Directors Profile 06 Operations Review 13 Group Structure 12 Key Management 15 Financial Contents 14 Corporate Information
AND
feel fABULOUS
CAPTIVATE Be INfLUENTIAL
GREAT GROUP HOLDINGS LIMITED Annual Report 2010
US
About
Corporate Profile Based in Quanzhou City, Fujian Province, Great Group Holdings Limited (Great Group or the Group) is an established undergarment manufacturer in the PRC. The Group is principally engaged in the design, manufacture, distribution and sales of mens and womens undergarments. The Group also manufactures and sells childrens and infants apparel. Great Group designs, manufactures and sells mens undergarments, and to a lesser extent, womens undergarments, under its proprietary GRAT.UNIC () brand in the PRC. Sold across 16 provinces/municipalities/autonomous regions in the PRC, the Groups GRAT.UNIC () can be found at 125 points of sales as at 31 December 2010. These comprise specialty stores or dedicated shelf-spaces located strategically in shopping malls, departmental stores and commercial areas of major cities in the PRC. GRAT.UNIC () 20101231GRAT.UNIC () 16125
MESSAGE
CHAIRMANS
Dear Shareholders, On behalf of the Board of Directors, it is my pleasure to present to you our Annual Report for the financial year ended 31 December 2010 (FY2010). In FY2010, the Group achieved 21.2% growth in total revenue. The growth in total revenue was mainly attributable to 21.6% growth in contract manufacturing segment and 19.9% growth in GRAT.UNIC segment. We are honoured to share with you that the Group is ranked 125th on the list of Chinas Top 200 Potential Enterprises by Forbes China in February 2011.
Contract Manufacturing Segment

In FY2010, the Group has been more aggressive in participating in exhibitions as part of its business development efforts. The Group participated in overseas exhibitions and fairs such as Dubai and the United States of America in addition to numerous exhibitions and fairs in China and Hong Kong. The Group strives to widen its customer base as the Group has the capability to offer better trading platform upon completion of its new production facility.
GRAT.UNIC Segment
In FY2010, the Group commenced its plan to develop and expand its own brand GRAT.UNIC. As part of this initiative, the Group has set up a company in Shanghai, Great Fashion Trading (Shanghai) Limited, which will focus on the development and marketing of GRAT.UNIC brand. The establishment of an operation centre in Shanghai marks the Groups effort in expanding the GRAT.UNIC brand in Chinas market by bringing together a more professional brand management team which will enhance market share and visibility of GRAT.UNIC brand.
Mr Weng Wenwei
Chairman and CEO
In FY2010, the Group achieved 21.2% growth in total revenue. The growth in total revenue was mainly attributable to 21.6% growth in contract manufacturing segment and 19.9% growth i n G R AT. U N I C s e g m e n t . 2010 21.2% 21.6% 19.9%
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Construction of New Production Facility

The first phase of construction of the new facilities, comprising three factory buildings and two staff dormitories, which commenced in December 2009 is almost completed. The first phase of the new production facility is approximately 60,000 square meters of the total planned construction area of approximately 80,000 square meters. The new production
facility is expected to start operation in the second or third quarter of 2011. This will enhance the Groups production capacity and overall competitiveness.
Future Development
The Group will continue to improve its two main business segments in FY2011 to offer better products and services. For GRAT.UNIC segment, with the establishment of the Shanghai operations, the Group will identify the better quality brand distributors from its existing pool so as to nurture them into another level of professionalism. These teams will help to increase the brands market share and brand awareness through intensified product development, distribution and marketing. The Group also plans to expand its operations in Hong Kong by working closely together with the Groups China operation. The Group aims to penetrate into the Southeast Asian market through Hong Kong. This may also create an opportunity for the Group to cooperate with international brands. The Group plans to expand its current business model by setting up domestic and international trading companies which will assist overseas customers in identifying and fully integrating a number of manufacturers to provide a more indepth cooperation in expanding the product chain.
Upgrade of Operational Capacity and Human Resource Development

The Group will further improve the efficiency of its existing operations and cost management, and strive continuously to strengthen the internal controls of the Group. The Group seeks to attract talents from all aspects to support and strengthen the Groups management team.
Acknowledgements
Finally on behalf of the Board of Directors, we wish to take this opportunity to record our sincere thanks and appreciation to all our stakeholders from shareholders, customers, business partners to our staff. Your loyal support and invaluable contribution is the cornerstone of our growth and achievement in FY2010. We look forward to your continued support so that together we can achieve a better set of results in FY2011.
MESSAGE
CHAIRMANS
20101231 201021.2% 21.6%19.9% 2011125 2011
2011
2010
2010 GRAT.UNIC
200912
2011
feel fREE feel GREAT

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REVIEW
REVIEW OF FINANCIAL PERFORMANCE
Statement of Comprehensive Income
The Groups revenue increased by 21.2% from approximately RMB516.3 million for financial year ended 31 December 2009 (FY2009) to approximately RMB625.8 million for financial year ended 31 December 2010 (FY2010). The increase was mainly attributable to sale of products with higher average selling prices and higher sales volume. In tandem with the increase in the Groups revenue, gross profit has increased by 11.9% from approximately RMB97.9 million in FY2009 to approximately RMB109.6 million in FY2010. However, the increase in prices for raw materials due to shortage of raw materials, coupled with the increase in labour cost has resulted in higher increase in the cost of sales which led to a decrease of 1.5 percentage point in the overall gross profit margin from 19.0% in FY2009 to 17.5% in FY2010. Despite the higher operating expenses due to provision of withholding tax, additional running costs for new subsidiary and higher staff costs arising from additional management staff, higher professional and corporate expenses and investors relation activities, operating profit increased slightly by approximately RMB0.03 million to approximately RMB75.1 million.
OPERATIONS
Statement of Financial Position

The Groups total assets as at 31 December 2010 increased by approximately RMB157.4 million as compared to 31 December 2009. The increase was mainly due to the increase in advances to suppliers and construction-inprogress of the new production facilities at Jiangnan HighTech Information Industrial Zone. Higher advances are paid to suppliers to secure supply of raw materials and to meet the raw materials requirements of new orders received at secured prices, as prices of raw materials are expected to increase in FY2011. The Groups total liabilities increased by approximately RMB97.4 million which is mainly due to higher borrowings to fund the construction of the new production facilities and for working capital purposes.
Statement of Cashflows
Cash and bank balances increased by approximately RMB11.4 million or 11.2% to approximately RMB113.0 million
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Total Revenue by Business Segment

as at 31 December 2010 from approximately RMB101.6 million as at 31 December 2009. The Groups cash inflow is mainly generated from operating activities. The Group continued to generate positive net cash flow from operations of approximately RMB45.8 million in FY2010. In relation to net cash used in investing activities, the Group also incurred capital expenditure of approximately RMB60.2 million in new machineries, computer software and construction of the new production facilities at Jiangnan High-Tech Information Industrial Zone. With the payment of the final dividend for FY2009 amounting to approximately RMB15.0 million and net proceeds from borrowings of approximately RMB49.1 million in FY2010, the Group recorded net cash outflow of RMB 25.8 million for its financing activities. (RMBmil)
11.53% 0.17%
FY2010
Contract Manufacturing GRAT. UNIC Superman
88.30%
11.65%
0.35%
OPERATIONS REVIEW
Revenue by Business Segments
Contract manufacturing remained as the largest business segment which contributed to 88.3% of the Groups revenue or approximately RMB552.6 million. The increase in revenue from contract manufacturing segment was contributed by sale of products with higher average selling prices and higher sales volume. GRAT.UNIC and Superman contributed 11.5% and 0.2% respectively to the Groups revenue. The revenue contribution by each segment was similar to FY2009. Revenue from GRAT.UNIC has increased by approximately RMB12.0 million. The Group has ceased production and sale of the Superman brand following the expiry of the licensing arrangement with Warner Bros. Consumer Products Inc. for the use of the Superman trademark on 31 May 2010.
FY2009
Contract Manufacturing GRAT. UNIC Superman
88.00%
Total Revenue by Geographical Region

(RMBmil)
9.89%
14.31% 3.59%
Asia Europe North America
FY2010
26.52% 45.69%
South America Others
Revenue by Geographical Regions

Although Europe posted the highest revenue contribution of 45.7% or approximately RMB285.9 million to the Group, revenue from North America showed the highest revenue growth. Revenue from North America increased significantly by 131.4% to approximately RMB61.9 million in FY2010 from approximately RMB26.8 million in FY2009. Revenue from Europe showed a growth of 29.0% and South America posted growth of 96.2% while revenue from Asia declined by 16.7%. The increase in revenue was due to sale of products with higher average selling prices and higher demand from existing and new customers.
5.18% 8.84% 4.46%
Asia
FY2009
42.95% 38.56%
Europe North America South America Others
HIGHLIGHTS
Summarised Income Statement (RMBmil)
For Financial Year Ended 31 December Revenue ract Manufacturing - Contract Manufacturing - GRAT.UNICerman - Superman TOTAL Gross Profit Profit Before Interest & Tax (PBIT) Interest Income Income Finance Expenses Profit Before Income Tax (PBT) Income Tax Net Profit (NP) Selling & Distribution expenses as a % over revenue Administrative expenses as a % over revenue FY2010 552.6 72.2 1.0 625.8 109.6 85.1 0.2 (2.5) 82.8 (7.7) 75.1 1.4% 2.6% FY2009 454.3 60.2 1.8 516.3 97.9 85.3 0.3 (1.9) 83.7 (8.7) 75.0 1.3% 2.3% FY2008 351.1 48.7 1.0 400.8 104.3 88.9 0.4 (1.9) 87.4 (16.6) 70.8 2.0% 1.6% FY2007 242.4 19.9 262.3 71.0 61.2 0.2 (0.7) 60.7 (4.2) 56.5 1.8% 1.3% FY2006 144.0 2.4 146.4 31.1 24.7 0.3 (0.3) 24.7 (2.4) 22.2 2.6% 1.3%
fINANCIAL
Summarised Balance Sheet (RMBmil)

As At 31 December Cash and cash equivalents Inventories Property, plant and equipment Current Assets Non-current Assets Current Liabilities Equity FY2010 125.1 25.3 73.2 436.5 93.8 157.1 373.2 FY2009 107.9 30.4 19.4 336.8 36.0 59.7 313.1 FY2008 33.1 34.0 17.4 201.3 21.6 67.5 155.4 FY2007 9.0 27.7 11.3 118.8 15.7 49.9 84.6 FY2006 6.4 6.8 10.6 72.5 12.0 34.8 49.7
Financial Indicators/Ratios
For Financial Year Ended 31 December PBIT Margin PBT Margin NP Margin Earnings Per Share (RMB cents) Return on Equity (ROE) (%) Return on Assets (ROA) (%) Current Ratio (times) Gearing Ratio (times) Liquidity Ratio Net Asset Value (NAV) Per Share (RMB cents) Number of Ordinary Shares Issued (million)* Average Trade Receivables Turnover (Days) Average Trade and Bills Payables Turnover (Days) Average Inventory Turnover (Days)
*Prior to FY2009 were based on pre-invitational shares of 200,000,000
FY2010 13.6% 13.2% 12.0% 28.32 20.11 14.15 2.78 0.42 2.62 140.83 265 84 24 20
FY2009 16.5% 16.2% 14.5% 34.71 23.96 20.12 5.64 0.19 5.13 118.15 265 75 14 28
FY2008 22.2% 21.8% 17.7% 35.40 45.56 31.77 2.98 0.43 2.48 77.71 200 63 25 38
FY2007 23.3% 23.1% 21.5% 28.23 66.73 41.98 2.38 0.59 1.83 42.30 200 53 40 33
FY2006 16.8% 16.8% 15.2% 11.12 44.76 26.32 2.08 0.70 1.89 24.83 200 37 36 18
Group Revenue
(RMBmil)
700.0 600.0 500.0 400.0 300.0 200.0 100.0 0.0 FY2006 FY2007 FY2008 FY2009 FY2010
CAGR 43.8%
Net Profit Attributable to Equity Holders

(RMBmil)
80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 FY2006 FY2007 FY2008 FY2009 FY2010
Operating Cash Flow

(RMBmil)
50 40 30 20 10 0 -10 FY2006 FY2007 FY2008 FY2009 FY2010
Overall Profit Margin

(RMBmil)
30.0% 25.0% 20.0%
EXPRESS
15.0% 10.0% 5.0% 0.0% FY2006 FY2007 FY2008 FY2009 FY2010 Gross Profit Margin Net Profit Margin
Yourself
PROfILE
Weng Wenwei () is the Executive Chairman and CEO of our Company. He was appointed to our Board on 29 February 2008 and is responsible for the overall strategic and business management of our Group. He will be retiring and seeking re-election at the Companys coming Annual General Meeting in April 2011. Weng Wenwei has over 16 years of business and management experience in the textile industry. In May 2005, he founded Fujian Great and was appointed as its general manager responsible for its business strategies and development. In July 2000, he was appointed as the general manager of Quanzhou Great where he was responsible for its business operations and management. In January 1997, he founded Dachuan Textile Factory () in Licheng District, Quanzhou City. Dachuan Textile Factory was engaged in the manufacture of undergarments for export to its overseas customers and as the director and head of the factory, Weng Wenwei was responsible for its management and business operations from January 1997 to April 2003. From February 1993 to December 1996, he was the head of Hesheng Apparel Factory in Yonghe town (), a small workshop that manufactured clothing for clients. He graduated from the Zimao Vocational High School () in Jinjiang City, Fujian Province in 1988 with a high school graduation certification. He has been the vice president of the Industry and Commerce Association (Chamber of Commerce) of Licheng District (()) since 2007.
DIRECTORS
Weng Wenju () is the Executive Director and Procurement Manager of our Company. He was appointed to our Board on 23 December 2008 and is responsible for the sourcing and procurement of raw materials and accessories used in our production process. He has been our procurement manager since August 2005. In August 2004, he joined our Group as assistant to the general manager, responsible for assisting the general manager in the daily operation and management of Quanzhou Great. He started his career in April 2004 as a technician in Quanzhou Jitong Computer Company ( ) in charge of computer technical maintenance, until July 2004 before joining our Group. He graduated from Quanzhou Business and Trade School () with a graduation certification in Computer and Application in 2004.
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Teoh Teik Kee is our Lead Independent Director. He was appointed to our Board on 18 June 2009 and was last re-elected at the Companys Annual General Meeting in April 2010. Mr Teoh is a Chartered Accountant by training, and has worked with KPMG Peat Marwick McLintock in London and PricewaterhouseCoopers in Singapore. He also has extensive experience in investment banking and stock broking when he was with the DBS Group from 1993 to 2001. Mr Teoh graduated from Aston University, Birmingham, United Kingdom with a Bachelor of Science (Honours) degree in Managerial and Administrative Studies, and is a member of The Institute of Chartered Accountants in England and Wales. He also has a diploma in Corporate Treasury Management awarded by The Association of Corporate Treasurers in the United Kingdom. He also serves as an independent director on the board of Singapore listed company, Luzhou Bio-Chem Technology Limited and Hong Kong listed company, City e-Solutions Ltd. Lee Kim Lian, Juliana is our Independent Director. She was appointed to our Board on 18 June 2009 and was last re-elected at the Companys Annual General Meeting in April 2010, Ms. Lee holds a Bachelor of Law (Honours) degree from the National University of Singapore and is a member of the Singapore Institute of Directors. She has more than 19 years of experience in legal practice and is currently a director of Aptus Law Corporation, heading its corporate practice. Her main areas of practice are corporate law, corporate finance, mergers and acquisitions and venture capital. Ms. Lee also serves on the boards of listed companies, Lee Metal Group Ltd and Nordic Group Limited. Lim Yeow Hua @ Lim You Qin is our Independent Director. He was appointed to our Board on 18 June 2009 and will be retiring and seeking re-election at the Companys coming Annual General Meeting in April 2011. He is currently the managing director of Asia Pacific Business Consultants Pte. Ltd., a Singapore company providing tax and business consultancy services. Mr Lim has more than 20 years of experience in the tax, financial services and investment banking industries. Prior to founding Asia Pacific Business Consultants Pte. Ltd., he has held several management positions in various organizations including senior regional tax manager with British Petroleum (BP), director (Structured Finance) at UOB Asia Ltd, senior tax manager at KPMG, senior vice president (Structured Finance) at Macquarie Investment Pte Ltd., senior tax manager at Price Waterhouse and deputy director at the Inland Revenue Authority of Singapore. Mr Lim holds a Bachelors Degree in Accountancy and a Masters Degree in Business Administration from the National University of Singapore. He is a fellow member of the Institute of Certified Public Accountants of Singapore (ICPAS) and a full member of the Singapore Institute of Directors. He also serves as an independent director on the board of Singapore listed companies: Advanced Integrated Manufacturing Corp Limited, China Minzhong Food Corporation Limited, Eratat Lifestyle Limited, KSH Holdings Limited and KTL Global Limited.
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MANAGEMENT
Cai Ane () has been our General Manager (Production) since May 2000 and is responsible for overseeing the production process and day-to-day management of our Groups Production Department. Cai Ane has more than 10 years of experience in the textile industry. Between January 1997 and April 2003, she was assisting the head of Dachuan Textile Factory ( ) in managing its operations. Between February 1993 and December 1996, she was an assistant to the head of Hesheng Apparel Factory in Yonghe town () and was assisting in the management of its production of clothing for clients. Prior to that, she worked as an apprentice for various garment manufacturing factories in the PRC to gain experience in the garment manufacturing business from September 1983 to February 1993. Ms Cai is the wife of our Executive Chairman and CEO, Weng Wenwei. Wang Jianxin () has been our Deputy Production Manager since January 2006 and is responsible for assisting our General Manager (Production) in overseeing the production process of our Group and management of our Production Department. He joined our Group in September 2002 as the factory head of production, in charge of managing the production department. He was subsequently promoted as the deputy production manager in January 2006. Prior to that, he joined Zhengli Garment-making (Xiamen) Co., Ltd. ( ) in March 1996 as a tailor and as its typesetting operator in July 1997. In August 1998, he was promoted as its supervisor and in October 1999, was promoted to assistant manager cum production supervisor, assisting the manager in production operation until August 2000. He started his career in February 1994 as weaving worker at Hangzhou Chunan First Silk Factory () till November 1995. He graduated from Jiangjiaqu Adult Science and Technology School () with a high school graduation certification in 1991. Wei Xuefen () has been our Sales Manager since February 2003 and is responsible for product sales and marketing activities, such as developing sales and marketing strategies, maintaining customer relationships, securing new customers, monitoring market trend and providing customers with after-sales service. Prior to joining our Group in February 2003, she worked in Quanzhou Licheng Dachuan Textile Factory () in March 2000 where she was responsible for following up with customers on trade receivables. In March 1999, she joined Quanzhou Green Garments Co., Ltd. () as a procurement staff and left in March 2000. Between September 1993 and September 1998, she worked at Shishi Huasheng Computer Printing Co., Ltd. () as sales manager in 1993. She started her career in July 1992 as a secretary to the general manager in Shishi Lihui Computer Printing Co., Ltd. () and left in September 1993. She obtained a graduation certification (Business Administration) from Continuing Education School of Huaqiao University () in 1992. Zhang Shiwu () is our Chief Financial Officer and has been with our Group since May 2007. He is responsible for the financial, accounting and taxation matters of our Group. From December 2003 to April 2007, he was the chief financial officer of Labixiaoxin (Fujian) Food Industry Co., Ltd. ( () ) and was in charge of its financial management. In November 2002, he joined Guilin Seamild Biology Technology Development Co., Ltd. () as the manager of its auditing department and was in charge of its finance and auditing affairs until December 2003. Prior to that, he was the manager of the auditing department of Dongguan Hsu Fu Chi Food Co., Ltd. ( ) from March 1999 to November 2002. From January 1998 to December 1998, he was the general manager at Wanxi Shule Sanitary Articles Co., Ltd. ( ). Between August 1990 and December 1997, he was the finance manager at Anhui Jinzhai County Silk Group (). He graduated from Anhui Agricultural College () with a Bachelor in Finance and Accountancy in July 1990 and he was conferred the title of accountant by the Ministry of Personnel, the PRC in July 1994. He was accredited as senior accountant in December 1996. 12
KEY
STRUCTURE
GROUP
Great Group Holdings Limited
Fujian Great Fashion Industry Co., Ltd
Quanzhou Great Garments Co., Ltd
Great Worldwide (Tradings) Limited
* Grixpro International Trading Limited
Great Holding Limited
Great Fashion Trading (Shanghai) Limited
* Great Brand Management Limited
* Incorporated in 2011
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INfORMATION
BOARD OF DIRECTORS Weng Wenwei () (Executive Chairman and CEO) Weng Wenju () (Executive Director) Teoh Teik Kee (Lead Independent Director) Lee Kim Lian, Juliana (Independent Director) Lim Yeow Hua @ Lim You Qin (Independent Director) AUDIT COMMITTEE Teoh Teik Kee (Chairman) Lee Kim Lian, Juliana Lim Yeow Hua @ Lim You Qin REMUNERATION COMMITTEE Lim Yeow Hua @ Lim You Qin (Chairman) Teoh Teik Kee Lee Kim Lian, Juliana NOMINATION COMMITTEE Lee Kim Lian, Juliana (Chairman) Teoh Teik Kee Lim Yeow Hua @ Lim You Qin Weng Wenwei () REGISTERED OFFICE 36 Carpenter Street, Singapore 059915 PRINCIPAL OFFICE AND CONTACT DETAILS Linjiang Industrial Zone, Nanhuan Road, Licheng District, Quanzhou City, Fujian Province, the PRC COMPANY SECRETARY Ong Wei Jin, LL.B. (Hons) Goh Wei Lin, LL.B. (Hons) SHARE REGISTRAR AND SHARE TRANSFER AGENT Boardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01 Singapore Land Tower Singapore 048623 INDEPENDENT AUDITORS Nexia TS Public Accounting Corporation 5 Shenton Way UIC Building #16-00 Singapore 068808 Partner-in-charge: Henry SK Tan FCPA Singapore, ACA INTERNAL AUDITORS BDO LLP 19 Keppel Road #02-01, Jit Poh Building Singapore 089058 PRINCIPAL BANKERS Bank of China, Quanzhou Branch () Bank of China Building, Fengze Street, Quanzhou City, Fujian Province, the PRC Industrial Bank Co., Ltd., Quanzhou Branch () Industrial Bank Building, Fengze Street, Quanzhou City, Fujian Province, the PRC China Construction Bank, Quanzhou Licheng Sub-branch () Wenling Street Zhongduan, Quanzhou City, Fujian Province, the PRC Industrial and Commercial Bank of China, Quanzhou Licheng Sub-branch () Wenling Street Zhongduan, Quanzhou City, Fujian Province, the PRC Huaxia Bank, Quanzhou Branch () 81, Wenling Street, Licheng District, Quanzhou City, Fujian Province, the PRC HSBC (Hong Kong) G/F, 82-84 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong Bank of Quanzhou Kaiyuan Sub-branch () 48, East Street, Licheng District, Quanzhou City, Fujian Province, the PRC Shanghai Pudong Development Bank, Quanzhou Branch () 29, Fengze Street, Fengze District, Quanzhou City, Fujian Province, the PRC Xiamen International Bank () International Bank Building, #08-10, Lujiang Street, Xiamen City, Fujian Province, the PRC China Merchant Bank, Quanzhou Jiangnan Sub-branch () Troop 73141 Apartment, Xingxian Street, Licheng District, Quanzhou City, Fujian Province, the PRC China Everbright Bank, Quanzhou Licheng Sub-branch, () Youth Building, #288, Tianan Street, Fengzhe District, Quanzhou City, Fujian Province, the PRC China Construction Bank Corporation, Singapore Branch 9 Raffles Place #33-01/02 Republic Plaza Singapore 048619 OCBC Bank 65 Chulia Street #01-00 OCBC Centre Singapore 049513
CORPORATE
14
CONTENTS
FINANCIAL
16 Corporate Governance Report 29 Independent Auditors Report 31 Balance Sheets Cash Flow Statement
25 Directors Report
28 Statement by Directors 33 Consolidated
30 Consolidated Statement of Comprehensive Income 65 Statistics of Shareholdings
32 Consolidated Statement of Changes In Equity 34 Notes to the Financial Statements 67 Notice of Annual General Meeting | Proxy Form
Corporate Governance Report

For the financial year ended 31 December 2010
Great Group Holdings Limited (the Company) recognises the importance of a high standard of corporate governance within the Companys group of companies (the Group) and is committed to maintaining it. Good corporate governance establishes and maintains a legal and ethical environment, which strives to preserve and enhance the interests of all shareholders. The Company adopts practices based on the Singapore Code of Corporate Governance 2005 (the Code) and the Best Practice Guide issued by the Singapore Exchange Securities Trading Limited (the SGX-ST). The board of directors of the Company (the Board) is pleased to report on the compliance of the Company with the Code except where otherwise stated and such compliance is regularly reviewed to ensure transparency and accountability. (A) BOARD MATTERS Principle 1: The Boards conduct of its affairs The Boards primary role is to provide protection and enhancement of shareholders long-term value. The principal functions of the Board include: supervises the management of the businesses and affairs of the Group reviews and approves the Groups strategic plans, key operational initiatives, major funding and investment proposals identifies principal risks of the Groups businesses and ensures the appropriate systems are in place to manage these risks reviews the financial performance of the Group evaluates the performance and compensation of senior management personnel; and assumes responsibility for corporate governance practices.
To further assist in the execution of its responsibilities, the Board has established a number of Board committees which include an Audit Committee (AC), a Nominating Committee (NC) and a Remuneration Committee (RC) (collectively, the Board Committees). These committees function within clearly defined terms of references and operating procedures, which are reviewed on a regular basis. The effectiveness of each committee is also constantly monitored. The Board meets on a quarterly basis and whenever necessary to discharge their duties. The number of meetings held by the Board and Board Committees and attendance for the financial year 31 December 2010 (FY2010) up to the date of this Report are summarized in the table below: Board Number of meetings held Directors Name of Director Weng Wenwei Weng Wenju Teoh Teik Kee Lee Kim Lian, Juliana Lim Yeow Hua @ Lim You Qin Notes: 1. Attendance by invitation. 4 1 4 4 4 4(1) 1(1) 5 5 5 1(1) 1(1) 1 1 1 1 1(1) 1 1 1 4 AC 5 RC 1 NC 1
No. of meetings attended
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Principle 2: Board Composition and Balance The Board currently has five members, comprising two (2) executive directors and three (3) independent directors, all of whom have the relevant core competence and diversity of experience to enable them to contribute effectively to the Group. Brief profiles of each Director in office at the date of this Report are set out in pages 10 to 11 of this Annual Report. As at the date of this report, the Board comprises the following members: Weng Wenwei Weng Wenju Teoh Teik Kee Lee Kim Lian, Juliana Lim Yeow Hua @ Lim You Qin Executive Chairman and Chief Executive Officer (CEO) Director Lead Independent Director Independent Director Independent Director
The Board constantly examines its size and, with a view to determining the impact of the number upon effectiveness, decides on what it considers an appropriate size for itself. The composition of the Board will be reviewed on an annual basis by the NC to ensure that the Board has the appropriate mix of expertise and experience, adequate for the scale of operations of the Company. In determining the size and composition of the Board, the Board ensures that at least one-third are independent non-executive Directors and that each Director should submit him-/herself for re-nomination and re-election at regular intervals of at least once every three years. The NC had reviewed the independence of the Directors for FY2010 in accordance with the Codes criteria of independence and is of the view that the three non-executive Directors, namely Teoh Teik Kee, Lee Kim Lian, Juliana and Lim Yeow Hua @ Lim You Qin, are independent directors within the meaning of the Code. Principle 3: Chairman and CEO Weng Wenwei is the Executive Chairman and CEO. He is responsible for the day-to-day running of the Group as well as the exercise of control of the quality, quantity and timeliness of information flow between the Board and management. The functions of the Chairman and CEO are not separated given the strong element of independence presence on the Board and the scope and nature of the operations of the Group. However, as good corporate governance practice and to ensure that there is no concentration of power and authority vested in one individual, the Group has appointed Teoh Teik Kee as the Lead Independent Director. The Lead Independent Director will be available to the shareholders where they have concerns which cannot be resolved through the normal channels of the Chairman or CEO, or where such contact is not possible or inappropriate. Hence, the Board is of the opinion that sufficient checks and safeguards are in place to ensure that the process of decision making is independent and based on collective decisions without individual exercising any considerable power or influence. As Chairman of the Board, Weng Wenwei bears responsibility for the effective working of the Board. He is responsible for, amongst others, ensuring that Board meetings are held when necessary, setting the Board meeting agenda in consultation Chief Financial Officer, assisting in ensuring compliance with the Groups guidelines on corporate governance, acting as facilitator at Board meetings and maintaining regular dialogue with the management on all operational matters. The Directors have separate and independent access to the Company Secretary, whose duties include ensuring the Board procedures are followed and that applicable rules and regulations are complied with. The Company Secretary also attends all meetings of the Board and Board Committees. In addition, there is constant communication between Board members and key decisions require approval from all Directors prior to implementation. Besides giving guidance on the corporate direction of the Group, the role of the Chairman includes the scheduling and chairing of Board meetings and controlling of the quality, quantity and timeliness of information supplied to the Board. Weng Wenwei also sets the business strategies and directions for the Group and manages the business operations of the Group.
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Principle 4: Board Membership The NC comprises Lee Kim Lian, Juliana Teoh Teik Kee, Lim Yeow Hua @ Lim You Qin and Weng Wenwei, the majority of whom are independent. The NC is chaired by Lee Kim Lian, Juliana. The Board has approved the written terms of reference of the NC. The NC performs the following functions: (a) To make recommendations to the Board of the appointment of new executive and non-executive directors, including making recommendations on the composition of the Board generally and the balance between executive and non-executive Directors appointed to the Board. To regularly review the Board structure, size and composition and make recommendations to the Board with regards to any adjustments that are deemed necessary. To determine the process for search, nomination, selection and appointment of new board members and be responsible for assessing nominees or candidates for appointment or election to the Board, determining whether or not such nominee has the requisite qualifications and whether or not he/she is independent. To determine annually whether or not a director is independent. To recommend Directors who are retiring by rotation to be put forward for re-election. To decide whether or not a director is able to and has been adequately carrying out his/her duties as a Director of the Company, particularly when he/she has multiple board representations. The NC shall recommend to the Board internal guidelines to address the competing time commitments faced by directors who serve on multiple boards. (g) To decide how the Boards performance may be evaluated and propose objective performance criteria, as approved by the Board that allows comparison with its industry peers, and address how the Board has enhanced long term shareholders value. To be responsible for assessing the effectiveness of the Board as a whole and for assessing the effective contribution and commitment of each individual Director to the effectiveness of the Board. The results of the performance evaluation will be reviewed by the Chairman and the assessment shall be disclosed annually.
(b) (c)
(d) (e) (f)
(h)
The directors submit themselves for re-nomination and re-election at regular intervals of at least once every three years. The Companys Articles and Association provides that one third of the Board, or the number nearest to one third is to retire by rotation at every Annual General Meeting (AGM). In addition, the Companys Articles of Association also provides that newly appointed directors are required to submit themselves for re-nomination and re-election at the next AGM of the Company. The NC had recommended the re-appointment of the following Directors who will be retiring at the forthcoming AGM: i. ii. Mr Weng Wenwei Mr Lim Yeow Hua @ Lim You Qin
The Board had accepted the NCs recommendation and accordingly, the abovementioned Directors will be offering themselves for re-election. In considering the nomination, the NC has taken into account of the contribution of the Directors with reference to their attendance and participation at Board and Board Committee meetings as well as the proficiency with which they have discharged their responsibilities.
18

The dates of appointment and last re-election of each director are set out below. Directors Weng Wenwei Weng Wenju Teoh Teik Kee Lee Kim Lian, Juliana Lim Yeow Hua @ Lim You Qin Designation Executive Chairman & CEO Executive Director Lead Independent Director Independent Director Independent Director Date of Initial Appointment 29 February 2008 23 December 2008 18 June 2009 18 June 2009 18 June 2009 Date of last Re-election 24 September 2009 24 September 2009 23 April 2010 23 April 2010 Not Applicable
Principle 5: Board Performance The NC has established a process for assessing the effectiveness of the Board as a whole and for assessing the contribution of each individual director. The performance criteria for the Board evaluation include an evaluation of the size and composition of the Board, the Boards access to information, accountability, Board processes. Board performance in relation to discharging its principal responsibilities in terms of the financial indicators as set out in the Code. The Board and the NC have endeavored to ensure that each Director appointed to the Board possesses the experience, knowledge and skills critical to the Groups business, so as to enable the Board to make sound and well-considered decisions. Principle 6: Access to information To assist the Board in fulfilling its responsibilities, the management provides the Board with a management report containing complete, adequate and timely information prior to the Board meetings. All Directors have separate and independent access to executives officers of the Company (Executive Officers), including the Company Secretary at all times. The Company Secretary and/or his nominee attend all Board and Board Committee meetings and ensure that Board procedures and all other rules and regulations applicable to the Company are complied with. The Directors and the chairman of the respective Board Committees, whether as a group or individually are able to seek independent professional advice as and when necessary in furtherance of their duties at the cost of the Company. (B) REMUNERATION MATTERS Principle 7: Procedures for Developing Remuneration Policies The RC comprises Lim Yeow Hua @ Lim You Qin (chairman of the RC), Lee Kim Lian, Juliana and Teoh Teik Kee. All members of the RC including the chairman are Independent Directors. The RC is regulated by a set of written terms of reference approved by the Board and has access to independent professional advice, if necessary. The RC recommends to the Board, a framework of remuneration and to determine the specific remuneration packages and terms of employment for each of the Directors and executive officers of the Group as well as those employees related to the executive directors and controlling shareholders of the Group, such recommendation should cover all aspects of remuneration, including but not limited to directors fees, salaries, allowances, bonuses, options and benefits-in-kind. Each member of the Remuneration Committee shall abstain from voting on any resolutions in respect of his remuneration package.
19

Principle 8: Level and Mix of Remuneration In setting remuneration packages, the Company takes into account pay and employment conditions within the same industry and in comparable companies, as well as the Groups relative performance and the performance of individual Directors. The remuneration of the Executive Chairman and CEO, with the Company as disclosed in the Companys Prospectus dated 16 September 2009. The service agreement is for an initial period of three (3) years, with effect from 25 September 2009. Our Group has also previously entered into various letters of employment with all of the Executive Officers. Such letters typically provide for the salaries payable to the Executive Officers, their working hours, medical benefits, grounds of termination and certain restrictive covenants. Details of the employee share plan adopted by the Company are set out in the directors report section. Principle 9: Disclosure on Remuneration The breakdown of remuneration of the Directors and Executive Officers for FY2010 is set out below. Salary and other benefits
Remuneration Band and Name Directors Below S$250,000 Weng Wenwei Weng Wenju Teoh Teik Kee Lim Yeow Hua @ Lim You Qin Lee Kim Lian, Juliana Key Executives Below S$250,000 Cai Ane Wang Jianxin Wei Xuefen Zhang Shiwu Voon Choon Nie
Director Fees
Bonus
Total
100% 100% 100%
94% 99% -
6% 1% -
100% 100% 100% 100% 100%
94% 93% 94% 94% 100%
6% 7% 6% 6% -
100% 100% 100% 100% 100%
The Company does not have any employees who are immediate family members of a Director, the CEO or substantial shareholder, whose remuneration have exceeded S$150,000 during the financial year ended 31 December 2010. Directors fees are approved by shareholders at every Annual General Meeting of the Company.
20

(C) ACCOUNTABILITY AND AUDIT Principle 10: Accountability The Board and the management of the Group always strive to conduct themselves in ways that deliver maximum sustainable value to our shareholders. The Board, through its announcements of results, aims to provide the shareholders with a balanced and understandable assessment of the Company and the Groups performance, position and prospects. Prompt fulfillment of statutory reporting requirements is but one way to maintain our shareholders confidence and trust in the Board and the managements capability and integrity. As part of building and maintaining shareholders confidence, reporting of consolidated financial results, via SGXNET, was made well within the time-frame stipulated in the SGX Listing Manual. The management currently provides the Board with appropriately detailed management accounts of the Groups financial performance, position and prospects on a regular basis. Principle 11: Audit Committee The AC comprises Teoh Teik Kee (chairman of the AC), Lee Kim Lian, Juliana and Lim Yeow Hua @ Lim You Qin. All members of the AC, including the chairman, are Independent Directors. The AC will assist the Board in discharging their responsibility to safeguard the assets, maintain adequate accounting records, and develop and maintain effective systems of internal control, with the overall objective of ensuring that management creates and maintains an effective control environment in the Company. The AC will provide a channel of communication between the Board of Directors, the management and the independent auditors of the Company on matters relating to audit. The Audit Committee shall meet quarterly to perform the following functions: (a) To review with the independent auditors, their independence and objectivity annually; the audit plan, including the nature and scope of the audit and its cost effectiveness before the audit commences; their evaluation of the system of internal accounting controls; their audit report; their management letter and managements response; and any significant financial reporting issues and judgments so as to ensure integrity of the financial statements of the Company and any formal announcements relating to the Companys financial performance. To review the quarterly, half-yearly and full year financial results before submission to the Board for approval. To review the assistance and co-operation given by the management and the officers of the Group to the auditors. Where applicable, to review the internal audit programme and ensure co-ordination between the internal and independent auditors and management. To review the scope and results of the internal audit procedures and the internal auditors to report their findings directly to the AC. To discuss problems and concerns, if any, arising from audits, and any matters which the auditors may wish to discuss (in the absence of management, where necessary). To report to the Board its findings from time to time on matters arising and requiring the attention of AC. To review interested person transaction (if any) falling within the scope of Chapter 9 of the SGX Listing Manual, and to ensure that they are carried out on normal commercial terms and in accordance with the internal control procedures. To approve the internal control procedures and arrangements for all current and future related party transactions to ensure that they are carried out on arms length basis and on normal commercial terms which will not be prejudicial to the interests of the Company and shareholders.
(b) (c) (d) (e) (f) (g) (h)
(i)
21

(j) (k) (l) (m) (n) (o) To review potential conflicts of interests, if any. To review all non-audit services provided by the auditors to ensure that they would not, in the ACs opinion, affect the independence of the auditors. To undertake such other reviews and projects as may be requested by the Board. To undertake such other functions and duties as may be required by statute or the Listing Manual, and by such amendments made thereto from time to time. To make recommendations to the Board on the appointment, re-appointment and removal of the independent auditors, and approving the remuneration and terms of engagement of the independent auditors. To review the adequacy of the Companys internal financial controls, operational and compliance controls, and risk management policies and systems established by the management.
Pursuant to the above, it is the opinion of the AC that the Company complies with the Codes guidelines on Audit Committees. In addition, the AC has explicit authority to investigate any matter within its terms of reference, full access to and cooperation of the Groups management, as well as reasonable resources to enable it to discharge its function properly. The AC has full discretion to invite any Director or management personnel to attend its meetings. No non-audit services were provided by the independent auditors during FY2010. The AC had recommended the reappointment of Nexia TS Public Accounting Cooperation as independent auditors at the forthcoming AGM. Principle 12: Internal Controls The Board acknowledges that it is responsible for the overall internal control framework, but recognises that the system of internal controls maintained by the management and in place throughout this financial year provides reasonable but not absolute assurance against any material financial mis-statement or loss. The Board notes that the system of internal controls is designed to manage rather than eliminate the risk of failure to achieve business objectives. The Board believes that in the absence of any evidence to the contrary, the system of internal control that has been maintained by the Groups management throughout the financial year up to the date of this Report is adequate to meet the needs of the Group in its current business environment. Principle 13: Internal Audit The Group outsources its internal audit function to BDO Consultants Pte Ltd, a member firm of BDO International. TheInternal auditor reports directly to the Audit Committee on audit matters and performs its works in line withthe Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors. The Audit Committee reviews and approves the annual internal audit plan as well as the internal audit reports and activities. The Audit Committee is of the view that the internal auditor has adequate resources to perform its functions and has, to the best of its ability, maintained its independence from the activities that it audits.
22

(D) COMMUNICATION WITH SHAREHOLDERS Principle 14: Communication with Shareholders In line with continuous disclosure obligations of the Company, pursuant to the SGX-STs Listing Rules and the Singapore Companies Act, the Boards policy is that shareholders are informed of all major developments that impact the Group regularly and on a timely basis. Pertinent information is communicated to shareholders on a regular and timely basis through the following means: Results and annual reports are announced or issued within the mandatory period Material information are disclosed in a comprehensive, accurate and timely manner via SGXNET and the press Companys annual general meetings
All shareholders of the Company receive annual reports and are informed of shareholders meetings through notices published in the newspapers and reports or circulars sent to all shareholders. Shareholders are invited at such meetings to put forth any questions they may have on the motions to be debated and decided upon. If any shareholder is unable to attend, he is allowed to appoint up to two proxies to vote on his behalf at the meeting through proxy forms sent in advance. At shareholders meetings, each distinct issue is proposed as a separate resolution. Principle 15: Greater Shareholder Participation In addition, shareholders are encouraged to attend the AGM to ensure a high level of accountability and to stay informed of the Groups strategy and goals. The Directors regard AGMs as an opportunity to communicate directly with shareholders and encourage greater shareholder participation. The notice of the AGM is dispatched to shareholders, together with explanatory notes or a circular on items of special business, at least 14 days before the meeting. The Board welcomes questions from shareholders who have an opportunity to raise issues either informally or formally before or at the AGM. The Chairpersons of the AC, RC and NC are normally available at the meeting to answer those questions relating to the work of these committees. The Companys independent auditors will also be present to assist the Directors in addressing queries by shareholders. (E) MATERIAL CONTRACTS Save as disclosed in the financial statement, there were no material contracts entered into by the Company or its subsidiaries involving the interests of the CEO, directors or controlling shareholders. (F) DEALINGS IN SECURITIES The Company has adopted internal codes in relation to dealings in the Companys securities pursuant to the SGX-ST Best Practices Guide that are applicable to all its officers. The Directors and officers are prohibited to trade in the Companys securities, during the period beginning one (1) month and two (2) weeks before the date of the announcement of the full year and quarterly results respectively and ending on the date of the announcement of the relevant results. In addition, the officers of the Company are advised not to deal with the Companys securities for a short term considerations and are expected to observe the insider trading laws at all times even when dealing in securities within the permitted trading periods.
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(G) INTERESTED PARTY TRANSACTIONS The Group has established procedures to ensure that all transactions with interested persons are reported in a timely manner to the Audit Committee and that transactions are conducted on an arms length basis that are not prejudicial to the interests of the shareholders. When a potential conflict of interest occurs, the Director concerned will be excluded from discussions and refrain from exercising any influence over other members of the Board. There were no interested person transactions during the financial year ended 31 December 2010. (H) RISK MANAGEMENT The Company does not have a Risk Management Committee. The executive directors and senior management assume the responsibilities of the risk management function. They regularly assess and review the Groups business and operational environment in order to identify areas of significant business and financial risks, such as credit risks, foreign exchange risks, liquidity risks and interest rates risks, as well as appropriate measures to control and mitigate these risks. (I) USE OF IPO PROCEEDS The Net IPO proceeds (after deducting estimated expenses for professional fees, underwriting and placement commissions and other transaction expenses related to the IPO) are approximately S$15.8 million. As at the date of this report, the net IPO proceeds have been utilized as follows: Amount utilised as at the date of this Report (S$000) (B)
Balance amount (S$000) (A) (B)
Intended use as per Prospectus Construction of new premises at the Jiangnan High-Tech Information Industrial Zone, Quanzhou City, Fujian Province Expansion of production capacity and facilities Promoting GRAT.UNIC and increasing marketing effort Enhancing research and development capabilities General working capital requirements Total (J) BEST PRACTICES GUIDE
Amount allocated (S$000) (A)
8,000 3,000 3,000 1,000 844 15,844
8,000 374 1,192 10 844 10,420
2,626 1,808 990 5,424
The Company has complied materially with the Best Practices Guide issued by SGX-ST.
24
Directors Report
The directors present their report to the members together with the audited financial statements of the Group for the financial year ended 31 December 2010 and the balance sheet of the Company as at 31 December 2010. Directors The directors of the Company in office at the date of this report are as follows: Mr Weng Wenwei Mr Weng Wenju Mr Teoh Teik Kee Mr Lim Yeow Hua @ Lim You Qin Ms Lee Kim Lian, Juliana Arrangements to enable directors to acquire shares and debentures Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. Directors interests in shares or debentures According to the register of directors shareholdings, none of the directors holding office at the end of the financial year had any interest in the shares or debentures of the Company or its related corporations, except as follows: Holdings registered in name of director or nominee At At 31.12.2010 1.1.2010 Company (No. of ordinary shares) Mr Weng Wenwei Mr Weng Wenju Ultimate Holding Corporation - G & W Investment Management Co., Ltd (No. of ordinary shares of US$1 each) Mr Weng Wenwei Holdings in which director is deemed to have an interest At At 31.12.2010 1.1.2010
1,960,000
181,500,000 -
181,500,000 -
By virtue of section 7 of the Singapore Companies Act Cap. 50, Mr. Weng Wenwei is deemed to have interest in the shares of the subsidiaries held by the Company. The directors interests in the ordinary shares of the Company as at 21 January 2011 were the same as those as at 31 December 2010. Directors contractual benefits Since the end of the previous financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member or with a company in which he has a substantial financial interest, except as disclosed in the accompanying financial statements and in this report.
25
Directors Report
Share Options Great Group Performance Share Scheme The Great Group Performance Share Scheme (the PSS) for Executive Directors, Non-Executive Directors (including Independent Directors), and employees of the Group was approved by members of the Company at an Extraordinary General Meeting on 18 June 2009. The PSS is administered by the Remuneration Committee of the Company, comprising the independent directors of the Company, namely, Lim Yeow Hua @ Lee You Qin, Lim Kim Lian, Juliana and Teoh Teik Kee. The purpose of the PSS is to provide an opportunity for Directors (including Non-Executive Directors) and employees of the Group, who have met performance targets, to be remunerated not just through cash bonuses but also by an equity stake in the Company so as to motivate them to greater dedication, loyalty and higher standards of performance, and to give recognition to those who have contributed to success and development of the Company and of the Group. Under the PSS, a participant will be awarded the right to receive fully paid shares free of charge (the Awards), upon the participant achieving prescribed performance targets. Awards may only be vested, and consequently any shares comprised in such Awards shall only be delivered, upon the committee being satisfied that the prescribed performance targets have been achieved. There are no vesting periods beyond the performance achievement periods. The selection of participant and the number of shares which are the subject of each Award to be granted to a participant in accordance with the PSS shall be determined at the absolute discretion of the committee, which shall take into account criteria such as rank, job performance, years of service and potential for future development, contribution to the success and development of the Group and the extent of effort required to achieve the performance target within the performance period. The committee shall decide, in relation to each Award to be granted to a participant; (a) the date on which the Award is to be vested; (b) the number of shares which are the subject of the Award; (c) prescribed performance targets; (d) the performance period during which the prescribed performance targets are to be satisfied; and (e) the extent to which the Companys shares under that award shall be released on the prescribed performance targets being satisfied. Awards may be granted at any time in the course of a financial year. The total number of new shares which may be issued pursuant to awards granted under the PSS shall not exceed 15% of the issued share capital of the Company on the day preceding the relevant date of award. Subject to such adjustment as may be made to the PSS as a result of any variation in the capital structure of the Company, no more than 25% of the total number of shares in respect of which the Company may grant Award under the PSS may be offered in aggregate to the Associates of Controlling Shareholders (as defined in the PSS) and the total number of Shares to be offered to each of its Associates must not exceed 10% of the total number of shares in respect of which the Company may grant Award in the future. There were no Awards granted during the financial year. There were no options granted during the financial year to subscribe for unissued shares of the Company or its subsidiaries. No shares were issued during the year by virtue of the exercise of options to take up unissued shares of the Company or its subsidiaries. There were no unissued shares of the Company or its subsidiaries under option at the end of the financial year. Audit Committee The members of the Audit Committee at the end of the financial year were as follows: Mr Teoh Teik Kee (Chairman) Ms Lee Kim Lian, Juliana Mr Lim Yeow Hua @ Lim You Qin All members of the Audit Committee were non-executive directors. All members were independent.
26
Directors Report
The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, SGX Listing Manual and the Code of Corporate Governance including the following: r eviewed the audit plan and results of the internal auditors examination and evaluation of the Groups systems of internal accounting controls; r eviewed the assistance given by the Companys management to the independent auditor; r eviewed the balance sheet of the Company and the consolidated financial statements of the Group for the financial year ended 31 December 2010 before their submission to the Board of Directors, as well as the independent auditors report on the balance sheet of the Company and the consolidated financial statements of the Group; r eviewed the quarterly and annual announcements as well as the related press releases on the results and financial position of the Company and the Group; m et with the independent auditor, other committees, and management in separate executive sessions to discuss any matters that these groups believe should be discussed privately with the AC; Evaluated the quality of works performed by the independent auditor of the Group; reviewed the re-appointment of the independent auditor of the Group; and reviewed interested person transactions (as defined in Chapter 9 of the SGX listing manual).
The Audit Committee has full access to and has the co-operation of the management and has been given the resources required for it to discharge its function properly. It also has full authority and the discretion to invite any director and executive officer to attend its meetings. The external and internal auditors have unrestricted access to the Audit Committee. The Audit Committee is satisfied with the independence and objectivity of the independent auditors and has recommended to the Board of Directors that the independent auditor, Nexia TS Public Accounting Corporation, be nominated for re-appointment at the forthcoming Annual General Meeting of the Company. Independent Auditor The independent auditor, Nexia TS Public Accounting Corporation, has expressed its willingness to accept reappointment. On behalf of the directors
Weng Wenwei Director
Weng Wenju Director 31 March 2011
27
Statement by Directors
In the opinion of the directors, (a) the balance sheet of the Company and the consolidated financial statements of the Group as set out on pages 30 to 64 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2010 and of the results of the business, changes in equity and cash flows of the Group for the financial year then ended; and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.
(b)
The directors have, on the date of this statement, authorised these financial statements for issue.
On behalf of the directors
Weng Wenwei Director
Weng Wenju Director 31 March 2011
28
Independent Auditors Report

to the Members of Great Group Holdings Limited
Report on the Financial Statements We have audited the accompanying financial statements of Great Group Holdings Limited (the Company) and its subsidiaries (the Group) set out on pages 30 to 64, which comprise the balance sheet of the Group and the balance sheet of the Company as at 31 December 2010, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement of the Group for the financial year then ended, and a summary of significant accounting policies and other explanatory information. Managements Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the provisions of the Singapore Companies Act (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; that transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. 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 are free from material misstatement. An audit involves performing procedures to obtain evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement, 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 controls relevant to the entitys preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by 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. Opinion In our opinion, the consolidated financial statements of the Group and the balance sheet of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010, and the results, changes in equity and cash flows of the Group for the financial year ended on that date. Report on Other Legal and Regulatory Requirements In our opinion, the accounting and other records required by the Act to be kept by the Company, have been properly kept in accordance with the provisions of the Act. Nexia TS Public Accounting Corporation Public Accountants and Certified Public Accountants Director in-charge: Henry SK Tan Appointed since financial year ended 31 December 2008 Singapore 31 March 2011
29
Consolidated Statement of Comprehensive Income

2010 RMB000 625,818 (516,215) 109,603 404 2009 RMB000 516,301 (418,392) 97,909 6,279 Note REVENUE 4 Cost of sales Gross profit Other gains, net Expenses - Selling and distribution - Administrative - Finance Profit before income tax Income tax expense Total comprehensive income, representing net profit, attributable to equity holders of the Company Earnings per share (RMB cents) - Basic 9 5
(8,666) (16,136) (2,485) 82,720 (7,669)
(6,620) (11,910) (1,923) 83,735 (8,710)
75,051
75,025
10
28
35
30
Balance Sheets
As at 31 December 2010
Group 2010 2009 RMB000 RMB000 Company 2010 2009 RMB000 RMB000 Note ASSETS Current assets Cash and cash equivalents Trade and other receivables Inventories Other current assets Derivative financial assets
11 12 13 14 15
125,053 282,493 25,348 2,642 916 436,452
107,863 197,040 30,379 1,555 336,837
1,271 31,315 151 147 32,884
9,617 89 9,706
Non-current assets Investments in subsidiaries Property, plant and equipment Intangible assets Deposit for machinery and equipment Total assets LIABILITIES Current liabilities Trade and other payables Borrowings Current income tax liabilities Derivative financial liabilities Total liabilities NET ASSETS EQUITY Capital and reserves attributable to equity holders of the Company Share capital Restructuring reserve Retained profits/(accumulated losses) Total equity
16 17 18
73,213 17,619 3,010 93,842 530,294
19,357 16,692 36,049 372,886
209,967 8 209,975 242,859
209,967 209,967 219,673
19 20 15
38,407 113,894 3,864 941 157,106 373,188
8,476 46,229 5,039 59,744 313,142
8,992 8,992 233,867
9,101 9,101 210,572
21 22
104,766 114,040 154,382 373,188
104,766 114,040 94,336 313,142
104,766 114,040 15,061 233,867
104,766 114,040 (8,234) 210,572
31
Consolidated Statement of Changes In Equity

Attributable to equity holders of the Company Restructuring Retained reserve profits RMB000 RMB000 114,040 114,040 94,336 (15,005) 75,051 154,382
Note 2010 Beginning of financial year Dividend relating to 2009 paid Total comprehensive income for the financial year End of financial year
Share capital RMB000 104,766 104,766
Total equity RMB000 313,142 (15,005) 75,051 373,188
23
2009 Beginning of financial year Issuance of shares pursuant to IPO Share issue expenses Total comprehensive income for the financial year End of financial year
21 21
22,060 92,462 (9,756) 104,766
114,040 114,040
19,311 75,025 94,336
155,411 92,462 (9,756) 75,025 313,142
32
Consolidated Cash Flow Statement

2010 RMB000 75,051 7,669 2,384 25 2,485 (195) 87,419 Change in working capital - Trade and other receivables - Inventories - Other current assets - Trade and other payables - Bills payables Cash generated from operations Interest received Income tax paid Net cash provided by operating activities Cash flows from investing activities Additions to property, plant and equipment Additions to intangible assets Deposit for machinery and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Interest paid Proceeds from issuance of ordinary shares Short-term bank deposits pledged Dividends paid to equity holders of the Company Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year 11 (85,453) 5,031 (1,087) 29,931 18,575 54,416 195 (8,844) 45,767 2009 RMB000 75,025 8,710 1,918 1,923 (348) 87,228 (65,943) 3,626 1,534 (3,869) (1,550) 21,026 348 (16,827) 4,547 Note Cash flows from operating activities Net profit Adjustments for - Income tax expense - Amortisation and depreciation - Fair value loss on derivative financial instruments - Interest expenses - Interest income
(55,793) (1,374) (3,010) (60,177)
(3,726) (12,620) (16,346)
206,232 (157,142) (2,485) (5,791) (15,005) 25,809 11,399 101,631 113,030
122,466 (116,722) (1,923) 82,706 2,777 89,304 77,505 24,126 101,631
33
Notes to the Financial Statements

These notes form an integral part of and should be read in conjunction with the accompanying financial statements. The financial statements of the Group and the Company for the financial year ended 31 December 2010 were authorised for issue in accordance with a resolution of the directors on 31 March 2011. 1 Corporate information Great Group Holdings Limited (the Company) is listed on the Singapore Exchange and incorporated and domiciled in Singapore. The address of its registered office is 36 Carpenter Street, Singapore 059915. The principal place of business is located at Ruiming Building, Nanhuan Road, Licheng District, Quanzhou, Fujian Province, the Peoples Republic of China (PRC). The principal activities of the Company is investment holding. The principal activities of the subsidiaries are disclosed in Note 16. The Companys holding corporation is G&W Investment Management Co., Ltd, incorporated in the British Virgin Islands. 2 Summary of significant accounting policies 2.1 Basis of preparation The financial statements have been prepared in accordance with the Singapore Financial Reporting Standards (FRS). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below. The financial statements are presented in Chinese Renminbi (RMB) and have been rounded to the nearest thousand, unless otherwise stated. The preparation of financial statements in conformity with FRS requires management to exercise its judgement in the process of applying the Groups accounting policies. It also requires the use of certain critical accounting estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3. Interpretations and amendments to published standards effective in 2010 On 1 January 2010, the Group adopted the new or amended FRS and Interpretations to FRS (INT FRS) that are mandatory for application from that date. Changes to the Groups accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS and INT FRS. The adoption of these new or amended FRS and INT FRS did not result in substantial changes to the Groups and Companys accounting policies and had no material effect on the amounts reported for the current or prior financial years. (a) FRS 27 (revised) Consolidated and Separate Financial Statements (effective for annual periods beginning on or after 1 July 2009) The revisions to FRS 27 principally change the accounting for transactions with non-controlling interests. No adjustments were necessary to any of the amounts previously recognised in the financial statements as there were no non-controlling interests. Accordingly, these changes do not have any impact on the financial statements for the current financial year.
34

2 Summary of significant accounting policies (contd) 2.1 Basis of preparation (contd) Interpretations and amendments to published standards effective in 2010 (contd) (b) Amendment to FRS 7 Cash Flow Statements (effective for annual periods beginning on or after 1 January 2010) Under the amendment, only expenditures that result in a recognised asset in the balance sheet can be classified as investing activities in the cash flow statement. Previously, such expenditure could be classified as investing activities in the cash flow statement. This change has been applied retrospectively. It had no material effect on the amounts presented in the cash flow statement for the current or prior year. 2.2 Group accounting Subsidiaries (i) Consolidation Subsidiaries are entities (including special purpose entities) over which the Group has power to govern the financial and operating policies so as to obtain benefits from its activities, generally accompanied by a shareholding giving rise to a majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases. In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Consolidation of the subsidiaries in the PRC is based on the subsidiaries financial statements prepared in accordance with FRS. Profits reflected in the financial statements prepared in accordance with FRS may differ from those reflected in PRC statutory financial statements of the subsidiaries, prepared for PRC reporting purposes. In accordance with the relevant laws and regulations, profits available for distribution by the PRC subsidiaries are based on the amounts stated in their respective statutory financial statements. (ii) Acquisition of businesses The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.
35

2 Summary of significant accounting policies (contd) 2.2 Group accounting (contd) Subsidiaries (contd) (ii) Acquisition of businesses (contd) Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interests proportionate share of the acquirees net identifiable assets. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill. (iii) Disposal of subsidiaries or businesses When a change in the Companys ownership interest in a subsidiary results in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific Standard. Any retained interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained investment at the date when control is lost and its fair value is recognised in profit or loss. Please refer to the paragraph Investments in subsidiaries for the accounting policy on investments in subsidiaries in the separate financial statements of the Company. 2.3 Revenue recognition Sales comprise the fair value of the consideration received or receivable for the sale of goods and rendering of services in the ordinary course of the Groups activities. Sales are presented, net of value-added tax, rebates and discounts, and after eliminating sales within the Group. The Group recognises revenue when the amount of revenue and related cost can be reliably measured, when it is probable that the collectibility of the related receivables is reasonably assured and when the specific criteria for each of the Groups activities are met as follows: (a) Sale of goods Revenue from sale of goods is recognised when the Group has delivered the products to its customers, the customers have accepted the products and the recoverability of the related receivables is reasonably assured. (b) Interest income Interest income is recognised using the effective interest method. 2 Summary of significant accounting policies (contd)
36

2.4 Property, plant and equipment (a) Measurement Property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses. The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. (b) Depreciation Construction in-progress are not depreciated. Depreciation on other items of property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows: Useful lives 10 years 20 years 5 years 5 years
Machinery and equipment Leasehold buildings and workshops Furniture & fitting and office equipment Motor vehicles
The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are recognised in profit or loss when the changes arise. (c) Subsequent expenditure Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance expenses are recognised in the profit or loss when incurred. (d) Disposal On disposal of an item of property, plant and equipment, the difference between the disposal proceeds and its carrying amount is recognised in profit or loss. 2.5 Intangible assets (a) Land-use rights Land-use rights are initially recognised at cost and are subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised to profit or loss using the straight-line method over 50 years, which is the shorter of the estimated useful lives and periods of contractual rights. (b) Acquired trademark and licenses
Trademarks and licenses acquired are initially recognised at cost and are subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised to profit or loss using the straight-line method over three years, which is the shorter of their estimated useful lives and periods of contractual rights. Summary of significant accounting policies (contd)
37

2.5 Intangible assets (contd) (c) Acquired computer software licenses Acquired computer software licenses are initially capitalised at cost which includes the purchase price (net of any discounts and rebates) and other directly attributable cost of preparing the asset for its intended use. Direct expenditure including employee costs, which enhances or extends the performance of computer software beyond its specifications and which can be reliably measured, is added to the original cost of the software. Costs associated with maintaining the computer software are recognised as an expense when incurred. Computer software licenses are subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised to profit or loss using the straight-line method over their estimated useful lives of five years. The amortisation period and amortisation method of intangible assets are reviewed at least at each balance sheet date. The effects of any revision are recognised in profit or loss when the changes arise. 2.6 Borrowing costs Borrowing costs are recognised in profit or loss using the effective interest method. 2.7 Investments in subsidiaries Investments in subsidiaries are carried at cost less accumulated impairment losses in the Companys balance sheet. On disposal of investments in subsidiaries, the difference between disposal proceeds and the carrying amounts of the investments are recognised in profit or loss. 2.8 Impairment of non-financial assets Property, plant and equipment Intangible assets Investments in subsidiaries Property, plant and equipment, intangible assets and investments in subsidiaries are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the cash-generating-unit (CGU) to which the asset belongs. If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit or loss. An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to determine the assets recoverable amount since the last impairment loss was recognised. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset is recognised in profit or loss.
38

2 Summary of significant accounting policies (contd) 2.9 Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those maturing later than 12 months after the balance sheet date which are presented as non-current assets. Borrowings and receivables are presented as trade and other receivables and cash and cash equivalents on the balance sheet. These financial assets are initially recognised at fair value plus transaction cost and subsequently carried at amortised cost using the effective interest method. The Group assesses at each balance sheet date whether there is objective evidence that these financial assets are impaired and recognises an allowance for impairment when such evidence exists. Allowance for impairment is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. 2.10 Inventories Inventories are carried at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of finished goods comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. 2.11 Trade and other payables Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest method. 2.12 Borrowings Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months after the balance sheet date. Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method. 2.13 Employee compensation Employee benefits are recognised as an expense, unless the cost qualifies to be capitalised as an asset. (a) Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. (b) Pension benefits The Group is required to provide certain staff pension benefits to their employees under existing PRC regulations. Pension contributions are provided at rates stipulated by PRC regulations and are contributed to a pension fund managed by government agencies, which are responsible for administering these amounts for the subsidiaries employees.
39

2 Summary of significant accounting policies (contd) 2.14 Leases When the Group is the lessee: The Group leases factories and offices under the operating leases from non-related parties. Operating leases Leases where substantially all risks and rewards incidental to ownership are retained by the lessors are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the period of the lease. Contingent rents are recognised as an expense in profit or loss when incurred. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the financial year in which termination takes place. 2.15 Income taxes Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised. Deferred income tax is measured: (i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date; and based on the tax consequence that will follow from the manner in which the Group expects, at the balance sheet date, to recover or settle the carrying amounts of its assets and liabilities.
(ii)
Current and deferred income taxes are recognised as income or expense in profit or loss. 2.16 Provisions for other liabilities and charges Provisions for other liabilities and charges are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses.
40

2 Summary of significant accounting policies (contd) 2.17 Currency translation (a) Functional and presentation currency Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (functional currency). (b) Transactions and balances Transactions in a currency other than the functional currency (foreign currency) are translated into the functional currency using the exchange rates at the dates of the transactions. Currency translation differences from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are recognised in profit or loss. Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined. (c) Translation of Group entities financial statements The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (i) (ii) Assets and liabilities are translated at the closing exchange rates at the reporting date; Income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and All resulting currency translation differences are recognised in the currency translation reserve.
(iii) 2.18
Cash and cash equivalents For the purpose of presentation in the consolidated cash flow statement, cash and cash equivalents include cash on hand and deposits with financial institutions which are subject to an insignificant risk of change in value.
2.19
Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account.
2.20
Dividends to Companys shareholders Dividends to the Companys shareholders are recognised when the dividends are approved for payment.
41

2 Summary of significant accounting policies (contd) 2.21 Government grants Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance that the grant will be received and the Group will comply with all the attached conditions. Government grants receivable are recognised as income over the periods necessary to match them with the related costs which they are intended to compensate, on a systematic basis. Government grants relating to expenses are shown separately as other income. Government grants relating to assets are deducted against the carrying amount of the assets. 2.22 Fair value estimation The fair values of current financial assets and liabilities carried at amortised cost approximate their carrying amounts. The fair values of currency forwards are determined using actively quoted forward exchange rates. 2.23 Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Executive Chairman and Chief Executive Officer (CEO) who makes strategic decisions. 2.24 Derivative financial instruments A financial derivative contract is initially recognised at the fair value on the date the derivative contract is entered into and is subsequently carried at its fair value. Fair value changes on financial derivative instruments are recognised in profit or loss when the changes arise. The Group uses derivative financial instruments such as currency forward contracts to hedge its exposure to currency risk arising from sales denominated in United States dollar. Derivative financial instruments are classified as financial assets or liabilities at fair value through profit or loss and are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value at each balance sheet date. The fair values of currency forward contracts are determined using actively quoted forward prices at the balance sheet date. 3 Critical accounting estimates, assumptions and judgements Estimates, assumptions and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Areas involving a higher degree of judgement or complexity, or area where estimates and assumptions are significant to the financial statements are disclosed below.
42

3 Critical accounting estimates, assumptions and judgements (contd) (a) Impairment of loans and receivables Management reviews its loans and receivables for objective evidence of impairment at least annually. Significant financial difficulties of the debtor, the probability that the debtor will enter bankruptcy, and default or significant delay in payments are considered objective evidence that a receivable is impaired. In determining this, management makes judgements as to whether there is observable date indicating that there has been a significant change in the payment ability of the debtor, or whether there have been significant changes with adverse effect in the market, economic or legal environment in which the debtor operates in. Where there is objective evidence of impairment, management makes judgements as to whether an impairment loss should be recognised in profit or loss. The carrying amounts of trade and other receivables at the balance sheet date are disclosed in Note 12. (b) Income taxes The Group is subject to income tax in the PRC and significant judgement is required in determining the provision for tax. There are transactions and calculations for which the ultimate tax determination is uncertain. The Group recognises provisions for tax based on estimates of the taxes that are likely to become due. Where the final tax outcome is different from the amounts that were initially recorded, such differences will impact the current income tax in the period in which such determination is made. 4 Revenue
Group 2010 2009 RMB000 RMB000 552,610 72,164 1,044 625,818 454,327 60,174 1,800 516,301
Contract manufacturing GRAT.UNIC Superman
Other gains, net Group 2010 2009 RMB000 RMB000 Interest income Government grants Fair value loss on derivative financial instruments Foreign exchange loss, net Others 195 3,798 (25) (3,604) 40 404 348 5,942 (11) 6,279
43

6 Expenses by nature Group 2010 2009 RMB000 RMB000 Purchases of inventories Amortisation of intangible assets [Note 18 (d)] Depreciation of property, plant and equipment (Note 17) Total amortisation and depreciation Bank charges and related expenses Courier, freight, custom and port charges Directors fees Employee compensation (Note 7) Entertainment and travelling IPO related expenses Professional fees Marketing, advertising and exhibition Rental expenses on operating leases Stamp duties and other taxes Utilities Other expenses Changes in inventories Total cost of sales, selling and distribution and administrative expenses 469,224 447 1,937 2,384 1,187 4,331 771 44,749 1,220 1,956 705 1,583 3,255 1,833 2,788 5,031 541,017 377,525 194 1,724 1,918 2,689 2,302 317 36,789 930 4,789 704 1,454 480 870 1,538 991 3,626 436,922
Employee compensation Group 2010 2009 RMB000 RMB000 Wages and salaries Employers contribution to defined contribution plans, including Central Provident Fund (CPF) Other short-term benefits 40,915 1,818 2,016 44,749 35,163 1,017 609 36,789
Finance expenses
Group
2010 RMB000 Interest expense Bank borrowings Trade receivables factoring 1,455 1,030 2,485
2009 RMB000 1,042 881 1,923
44

9 Income taxes
Group 2010 2009 RMB000 RMB000 Tax expense attributable to profit is made up of: Current income tax PRC Under-provision of current income tax in prior financial years 7,077 592 7,669 8,315 395 8,710
All the PRC subsidiaries were incorporated as wholly-owned foreign enterprises. The subsidiaries are established in the Linjiang economic open zones and subject to state income tax rate of 25% for financial year 2009 and 2010 in accordance with the New Income Tax Law which was effective from 1 January 2008. Based on the Income Tax Law of the PRC for Enterprises with Foreign Investments and Foreign Enterprises, the subsidiaries are entitled to full exemption from the income tax for the first two profitable years and a 50% reduction in the income tax for the next three years. The subsidiaries are also exempted from local tax rate of 3%. Quanzhou Great Garments Co., Ltd elected the financial year ended 2003 as the first profitable year for the purpose of determining the tax exemption period. With effect from 1 January 2008, Quanzhou Great Garments Co., Ltd is taxed at the new tax regime of 25%. Fujian Great Fashion Industry Co., Ltd elected the financial year ended 2006 as the first profitable year for the purpose of determining the tax exemption period. Fujian Great Fashion Industry Co., Ltd was exempted from tax in financial years 2006 and 2007 and was taxed at 12.5% of state income tax from 1 January 2008. The preferential tax treatment of Fujian Great expired in financial year 2010. The tax expense on profit differs from the amount that would arise using PRCs statutory rate of income tax as explained below:
Group 2010 2009 RMB000 RMB000 Profit before income tax Tax calculated at tax rate of 25% (2009: 25%) Effects of Different tax rates in other countries Tax incentive Expenses not deductible for tax purpose Income not subject to tax Deferred income tax not recognised Other 82,720 20,680 (10,973) (5,228) 1,021 (2) 1,493 86 7,077 83,735 20,934 (7,732) (5,905) (2) 1,087 (67) 8,315
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10 Earnings per share Basic earnings per share is calculated by dividing the net profit attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year.
Group 2010 Net profit attributable to equity holders of the Company (RMB000) Weighted average number of ordinary shares outstanding for basic earnings per share (000) Basic earnings per share (RMB cents)
There is no dilutive potential ordinary shares during the financial years. 11 Cash and cash equivalents
2009 75,025
75,051
265,000 28
216,250 35
Group 2010 2009 RMB000 RMB000 Cash at bank and on hand Short-term bank deposits 113,030 12,023 125,053 101,631 6,232 107,863
Company 2010 2009 RMB000 RMB000 1,271 1,271 9,617 9,617
For the purpose of presenting the consolidated cash flow statement, the consolidated cash and cash equivalents comprise the following:
Group 2010 2009 RMB000 RMB000 Cash and bank balances (as above) Less: Bank deposits pledged Cash and cash equivalents per consolidated cash flow statement 125,053 (12,023) 113,030 107,863 (6,232) 101,631
Short-term bank deposits relate to bank balances that the Group has to maintain with the banks for obtaining shortterm bank facilities for letters of credit relating to the purchase of raw materials of approximately RMB30,785,000 (2009: RMB12,210,000) (Note 20). 12 Trade and other receivables
Group 2010 2009 RMB000 RMB000 Trade receivables Non-related parties Advances to suppliers Other receivables 155,013 125,069 2,411 282,493 132,402 64,638 197,040
Company 2010 2009 RMB000 RMB000 31,315 31,315 -
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12 Trade and other receivables (contd) The Group factored trade receivables with carrying amounts of RMB37,509,000 (2009: RMB13,319,000) to banks in exchange for cash during the financial year ended 31 December 2010. The transaction has been accounted for as collateralised borrowing as the bank has full recourse to the Group in the event of default by the debtors (Note 20). 13 Inventories Group 2010 2009 RMB000 RMB000 Raw materials Work-in-progress Finished goods 7,946 9,581 7,821 25,348 18,777 7,273 4,329 30,379 Company 2010 2009 RMB000 RMB000 -
The cost of inventories recognised as an expense and included in cost of sales amounts to RMB474,255,000 (2009: RMB381,151,000). 14 Other current assets Group 2010 2009 RMB000 RMB000 Refundable deposits Prepayments 2,642 2,642 38 1,517 1,555 Company 2010 2009 RMB000 RMB000 151 151 89 89
15
Derivative financial instruments Group Contract Notional Amount RMB000 2010 Non-hedging instruments - Currency forwards 2009 Non-hedging instruments - Currency forwards Currency forwards The Group enters into currency forwards to reduce the impact of changes in the exchange rate of highly probable forecast transactions denominated in foreign currency. While the currency forwards provide hedging effects as required by the Groups risk management policy, the derivatives do not meet the criteria for hedge accounting under the specific rules in FRS 39 Financial Instruments: Recognition and Measurement. Fair Value Asset Liability RMB000 RMB000 Contract Notional Amount RMB000 Company Fair Value Asset Liability RMB000 RMB000
139,623
916
(941)
6,724
147
47

16 Investments in subsidiaries Company 2010 2009 RMB000 RMB000 Equity investments at cost: Beginning of financial year Additional investment in a subsidiary Incorporation of a new subsidiary End of financial year Details of subsidiaries are as follows: Country of Business/ Incorporation 209,967 209,967 136,100 73,858 9 209,967
Name of companies
Principal Activities
Equity holding 2010 2009 % % 100 100
Held by the Company Quanzhou Great Garments Co., Ltd (a)
Producing garments, weaving, The Peoples ribbon, printing, shoes, hats and Republic of China bags (exporting the commodity which is not related with the management of the export permit quota) Producing garments, apparel products and weaving Sale and distribution of garments and apparel production The Peoples Republic of China The British Virgin Islands
Fujian Great Fashion Industry Co., Ltd (a) Great Worldwide (Tradings) Limited (b)
100
100
100
100
Great Holding Limited (c) Sale and distribution of garments and apparel production Held by Great Holding Limited Great Fashion Trading (Shanghai) Limited (d)
(a)
Hong Kong
100
100
Trading of clothes, import and export activities
The Peoples Republic of China
100
Audited by Quanzhou LianCheng Certified Public Accountants for local statutory purposes. For the purpose of preparing the consolidated financial statements, these financial statements have been audited by Nexia TS Public Accounting Corporation, Singapore. Not required to be audited under the laws of the country of incorporation. For the purpose of preparing the consolidated financial statements, these financial statements have been audited by Nexia TS Public Accounting Corporation, Singapore. Audited by Charles H.C. Cheung & CPA Limited for local statutory purposes. For the purpose of preparing the consolidated financial statements, these financial statements have been audited by Nexia TS Public Accounting Corporation, Singapore. Audited by Shanghai LangTeng Certified Public Accountants for local statutory purposes. For the purpose of preparing the consolidated financial statements, these financial statements have been audited by Nexia TS Public Accounting Corporation, Singapore.
(b)
(c)
(d)
48

17 Property, plant and equipment Machinery and equipment RMB000 2010 Group Cost Beginning of financial year Additions End of financial year Accumulated depreciation Beginning of financial year Depreciation charge (Note 6) End of financial year Net book value End of financial year Company Cost Additions and balance at end of financial year Accumulated depreciation Depreciation charge and balance at end of financial year Net book value End of financial year Leasehold buildings and workshops RMB000 Furniture & fitting and office equipment RMB000
Motor vehicles RMB000
Construction in-progress RMB000
Total RMB000
13,016 1,842 14,858
4,173 4,173
1,464 1,401 2,865
1,699 1,184 2,883
6,616 51,366 57,982
26,968 55,793 82,761
4,282 1,237 5,519
1,263 188 1,451
837 283 1,120
1,229 229 1,458
7,611 1,937 9,548
9,339
2,722
1,745
1,425
57,982
73,213
11
11
Leasehold buildings and workshops RMB000
8 Furniture & fitting and office equipment RMB000
Machinery and equipment RMB000 2009 Group Cost Beginning of financial year Additions End of financial year Accumulated depreciation Beginning of financial year Depreciation charge (Note 6) End of financial year Net book value End of financial year
Motor vehicles RMB000
Construction in-progress RMB000
Total RMB000
12,610 406 13,016
4,173 4,173
1,316 148 1,464
1,699 1,699
3,444 3,172 6,616
23,242 3,726 26,968
3,135 1,147 4,282
1,075 188 1,263
649 188 837
1,028 201 1,229
5,887 1,724 7,611
8,734
2,910
627
470
6,616
19,357
Bank borrowings of the Group are secured by the leasehold buildings and workshops of the Group with carrying amounts of approximately RMB2,722,000 (2008: RMB2,910,000) (Note 20).
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18 Intangible assets Group 2010 2009 RMB000 RMB000 Composition: Land-use rights Trademark and licenses Computer software licenses 17,120 499 17,619 16,546 55 91 16,692 Company 2010 2009 RMB000 RMB000 -
(a)
Land-use rights Group 2010 2009 RMB000 RMB000 Cost Beginning of financial year Additions End of financial year Accumulated amortisation Beginning of financial year Amortisation charge End of financial year Net book value 16,712 919 17,631 1,462 15,250 16,712 Company 2010 2009 RMB000 RMB000 -
166 345 511 17,120
136 30 166 16,546
The land-use rights represent medium-term land-use rights for plots of land situated in the PRC. On 11 March 2009, the Group entered into an Agreement for Transfer of Land-Use Rights of State-owned Land with the National Land and Resource Administration Bureau of Quanzhou City, Fujian Province, the PRC for the acquisition of the land-use right for a plot of stated-owned land located at the Jiangnan HighTech Information Industrial Zone, Quanzhou City, Fujian Province for a period of 50 years. Bank borrowings of the Group are secured by the land-use right of the Group with carrying amounts of approximately RMB1,257,000 (2009: RMB1,297,000) (Note 20).
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18 Intangible assets (contd) (b) Trademark and licences Group 2010 2009 RMB000 RMB000 Cost Beginning of financial year Write-off End of financial year Accumulated amortisation Beginning of financial year Amortisation charge Write-off End of financial year Net book value 394 (394) 394 394 Company 2010 2009 RMB000 RMB000 -
339 55 (394) -
208 131 339 55
The Groups licence from Warner Bros. Consumer Products Inc. for the use of the "Superman" trademark expired on 31 May 2010. (c) Computer software licenses Group 2010 2009 RMB000 RMB000 Cost Beginning of financial year Additions End of financial year Accumulated amortisation Beginning of financial year Amortisation charge End of financial year Net book value (d) 156 455 611 156 156 Company 2010 2009 RMB000 RMB000 -
65 47 112 499
32 33 65 91
Amortisation expense included in the statement of comprehensive income is analysed as follows: Group 2010 2009 RMB000 RMB000 Cost of sales Administrative expenses Total (Note 6) 85 362 447 161 33 194
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19 Trade and other payables Group 2010 2009 RMB000 RMB000 Trade payables Non-related parties Accrued operating expenses Advances from customers Non-related parties Non-trade amounts due to subsidiaries Other payables 20,827 6,652 4,074 6,854 38,407 2,668 3,366 1,478 964 8,476 Company 2010 2009 RMB000 RMB000 554 7,922 516 8,992 1,179 7,922 9,101
The non-trade amounts due to subsidiaries are unsecured, interest-free and are repayable on demand. 20 Borrowings Group 2010 2009 RMB000 RMB000 Current Bank borrowings Bills payables Trade receivables factoring Total borrowings 45,600 30,785 37,509 113,894 20,700 12,210 13,319 46,229 Company 2010 2009 RMB000 RMB000 -
The exposure of the above borrowings of the Group to interest rate changes and the contractual repricing dates at the balance sheet dates are as follows: Group 2010 2009 RMB000 RMB000 6 months or less 6 12 months 84,994 28,900 113,894 46,229 46,229 Company 2010 2009 RMB000 RMB000 -
Bank borrowings of the Group are secured over leasehold buildings and workshops (Note 17) and land-use right (Note 18) of the Group and joint and several guarantee from the shareholder and its related parties. Bills payable of the Group are secured by certain short-term bank deposits of the Group (Note 11) and corporate guarantee. Trade receivables factoring of the Group are secured by certain trade receivables (Note 12) and joint and several guarantee from the shareholder and its related parties.
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21 Share capital No of ordinary shares Group and Company 2010 Beginning and end of financial year 2009 Beginning of financial year Share split After share split Issuance of shares pursuant to initial public offering Share issue expenses End of financial year Amount RMB000
265,000,000
104,766
10,000 199,990,000 200,000,000 65,000,000 265,000,000
22,060 22,060 92,462 (9,756) 104,766
All issued ordinary shares are fully paid. There is no par value for these ordinary shares. Fully paid ordinary shares carry one vote per share and carry a right to dividends as and when declared by the Company. At an Extraordinary General Meeting held on 14 September 2009, the shareholder approved, inter alia, the subdivision of the entire share capital of the Company into 20,000 ordinary shares for every one existing ordinary shares. Pursuant to the initial public offering, the Company issued 65,000,000 ordinary shares for a total consideration of approximately S$15,844,000 (approximately RMB82,706,000) for cash. The newly issued shares rank pari passu in all respects with the previously issued shares. 22 Restructuring reserve Business combination involving entities under common control are accounted for under the pooling-of-interest method. The acquisitions of the subsidiaries by the Company were pursuant to the Restructuring Exercise in connection with the listing of the Company on the SGX-ST. The assets and liabilities of the combining entities are reflected at their carrying amounts reported in the consolidated financial statements. Any difference between the amount recorded as share capital issued and the amount recorded for the share capital acquired is adjusted against equity as restructuring reserve. 23 Dividends Group and Company 2010 2009 RMB000 RMB000 Ordinary dividend paid Final dividend paid in respect of the previous financial year of RMB0.0566 (2009:Nil) per share
15,005
At the Annual General Meeting on 25 April 2011, a final dividend of RMB0.0566 per share amounting to a total of RMB15,005,000 will be recommended. These financial statements do not reflect this dividend, which will be accounted for in shareholders equity as an appropriation of retained profits in the financial year ending 31 December 2011.
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24 Commitments (a) Capital commitments Capital expenditures contracted for at the balance sheet date but not recognised in the financial statements are as follows: Group 2010 2009 RMB000 RMB000 Property, plant and equipment (b) Operating lease commitments where the Group is a lessee The Group leases factories and warehouses from non-related parties under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights. The future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as liabilities, are as follows: Group 2010 2009 RMB000 RMB000 Not later than one year Between one and five years 838 1,118 1,956 437 437 30,000 75,980
25
Related party transactions In addition to the related party information disclosed elsewhere in the consolidated financial statements, the following related party transactions took place between the Group and related parties at terms agreed between the parties: Key management personnel compensation (representing compensation to directors and executive officers of the Group) is as follows: Group 2010 2009 RMB000 RMB000 Wages and salaries Directors fees Employers contribution to defined contribution plans including CPF Other short-tem benefits 1,978 771 123 109 2,981 1,120 317 91 109 1,637
Included in the above is total compensation to directors of the Company amounting to RMB1,844,000 (2009: RMB836,000).
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26 Financial risk management Financial risk factors The Groups activities expose it to market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The Groups overall risk management strategy seeks to minimise adverse effects from the unpredictability of financial markets on the Groups financial performance. The Board of Directors is responsible for setting the objectives and underlying principles of financial risk management for the Group. This includes establishing policies such as authority levels, oversight responsibilities, risk identification and measurement and exposure limits. (a) Market risk (i) Currency risk The Group operates in the Peoples Republic of China with most of the transactions settled in RMB. However, the Group sells to overseas customers in United States Dollars (USD) and is therefore exposed to currency risk. To manage the currency risk, the Group enters into currency forwards with local banks. The Groups risk management policy is to hedge between 30% to 50% of highly probable forecast transactions (mainly export sales) in the next three to twelve months. The management monitors the requirement to enter into currency forward agreements based on the current exchange rates between USD and RMB by considering the quotation from local banks, past trends and anticipated fluctuation in the exchange rates and current PRC and world market conditions. The Groups currency exposure based on the information provided to key management is as follows: RMB RMB000 Group At 31 December 2010 Financial assets Cash and cash equivalents Trade and other receivables Derivative financial assets Financial liabilities Borrowings Other financial liabilities Derivative financial liabilities USD RMB000 Other RMB000 Total RMB000
70,281 179,243 249,524 92,655 35,563 128,218
47,806 103,250 916 151,972 21,239 1,762 941 23,942 128,030 128,030
6,966 6,966 1,082 1,082 5,884 161 6,045
125,053 282,493 916 408,462 113,894 38,407 941 153,242 255,220 117,968 373,188
Net financial assets Add: Net non-financial assets Currency profile including nonfinancial assets and liabilities Currency exposure of financial assets, net of those denominated in the respective entities functional currencies
121,306 117,807 239,113
128,030
6,045
134,075
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26 Financial risk management (contd) Financial risk factors (contd) (a) Market risk (contd) (i) Currency risk (contd) RMB RMB000 Group At 31 December 2009 Financial assets Cash and cash equivalents Trade and other receivables Other current assets Financial liabilities Borrowings Other financial liabilities USD RMB000 Other RMB000 Total RMB000
81,759 78,084 38 159,881 35,510 6,786 42,296 117,585 62,828 180,413
15,003 118,956 133,959 10,719 511 11,230 122,729 122,729
11,101 11,101 1,179 1,179 9,922 78 10,000
107,863 197,040 38 304,941 46,229 8,476 54,705 250,236 62,906 313,142
Net financial assets Add: Net non-financial assets Currency profile including nonfinancial assets and liabilities Currency exposure of financial assets, net of those denominated in the respective entities functional currencies .
122,729
10,000
132,729
The Companys currency exposure based on the information provided to key management is as follows: RMB RMB000 Company At 31 December 2010 Financial assets Cash and cash equivalents Other receivables Derivative financial assets Financial liabilities Other financial liabilities Net financial assets Add: Net non-financial assets Currency profile including nonfinancial assets and liabilities Currency exposure of financial assets, net of those denominated in the respective entities functional currencies USD RMB000 Other RMB000 Total RMB000
26,539 26,539 7,922 18,617 209,967 228,584
485 147 632 632 632
786 4,776 5,562 1,070 4,492 159 4,651
1,271 31,315 147 32,733 8,992 23,741 210,126 233,867
632
4,651
5,283
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26 Financial risk management (contd) Financial risk factors (contd) (a) Market risk (contd) (i) Currency risk (contd) RMB RMB000 Company At 31 December 2009 Financial assets Cash and cash equivalents Financial liabilities Other financial liabilities Net financial assets Add: Net non-financial assets Currency profile including nonfinancial assets and liabilities Currency exposure of financial assets, net of those denominated in the respective entities functional currencies USD RMB000 Other RMB000 Total RMB000
9,617
9,617
7,922 (7,922) 209,967 202,045
1,179 8,438 89 8,527
9,101 516 210,056 210,572
8,527
8,527
If the USD changes against the RMB by 3% (2009: 6%) with all other variables including tax rate being held constant, the effects arising from the net financial liability/asset position to the net profit and equity of the Group and the Company will be as follows: Group 2010 2009 RMB000 RMB000 USD against RMB Weakened Strengthened (3,841) 3,841 (7,364) 7,364 Company 2010 2009 RMB000 RMB000 (19) 19 -
If other foreign currency changes against the RMB by 2% (2009: 2%) with all other variable including tax rate being held constant, the effects arising from the net financial liability/asset position to the net profit and equity of the Group and the Company will not be significant (ii) Cash flow and fair value interest rate risks Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The Groups interest rate risk mainly arises from bank loans at fixed interest rates. The Group manages its interest rate risk by keeping bank loans to the minimum required to sustain the operations of the Group. If the interest rates increase/decrease by 1% (2009: 1%) with all other variables including tax rate being held constant, the impact to the net profit as a result of higher/lower interest expense on these borrowings is assessed as being not material.
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26 Financial risk management (contd) Financial risk factors (contd) (b) Credit risk Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. For trade receivables, the Group adopts the policy of dealing only with customers of appropriate credit history, and obtaining cash deposits where appropriate to mitigate credit risk. For other financial assets, the Group adopts the policy of dealing only with high credit quality counterparties. Credit exposure to an individual counterparty is restricted by credit limits and terms that are approved by the Chief Executive Officer (CEO). In assessing the credit limits and terms granted, the Group considers the nature of the contract, creditworthiness, payment history and the relationship with the customers. In order to manage the credit risk, the Group purchase insurance from reputable insurance company in the PRC. As the Group does not hold any collateral, the maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented on the balance sheet. The Groups major classes of financial assets are trade receivables, advances to suppliers and cash and cash equivalents. The trade receivables of the Group comprise 3 debtors (2009: 3 debtors) that individually represented 1035% of trade receivables. The credit risk for trade receivables based on the information provided to key management is as follows: Group 2010 2009 RMB000 RMB000 By geographical areas Asia Europe North America South America Other 61,698 52,890 12,797 20,711 6,917 155,013 44,849 46,576 11,965 15,813 13,199 132,402 Company 2010 2009 RMB000 RMB000 -
By types of customers Non-related parties Multi-national companies Other companies
100,291 54,722 155,013
75,150 57,252 132,402
(i)
Financial assets that are neither past due nor impaired Bank deposits that are neither past due nor impaired are mainly deposits with banks with high credit-ratings assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired are substantially companies with a good collection track record with the Group. The Group has no trade receivables past due or impaired that were re-negotiated during the financial year.
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26 Financial risk management (contd) Financial risk factors (contd) (b) Credit risk (contd) (ii) Financial assets that are past due and/or impaired There is no other class of financial assets that is past due and/or impaired except for trade receivables. The age analysis of trade receivables past due but not impaired is as follows: Group 2010 2009 RMB000 RMB000 Past due 0 to 3 months Past due 3 to 6 months Past due over 6 months 5,858 257 338 6,453 1,115 407 1,522 Company 2010 2009 RMB000 RMB000 -
There are no trade receivables individually determined to be impaired. (c) Liquidity risk The table below analyses the maturity profile of the Groups and Companys financial liabilities (including derivative financial liabilities) based on contractual undiscounted cash flows. Group 2010 2009 RMB000 RMB000 Less than one year Trade and other payables Borrowings Derivative financial liabilities 38,407 113,894 941 153,242 8,476 46,229 54,705 Company 2010 2009 RMB000 RMB000 8,992 8,992 9,101 9,101
The Group manages the liquidity risk by maintaining sufficient cash and cash equivalents to enable them to meet their normal operating commitments and having an adequate amount of committed credit facilities. (d) Capital risk The Groups objectives when managing capital are to safeguard the Groups ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings. Management monitors capital based on a gearing ratio. The Group and the Company are not required by the banks to maintain financial ratios. The Group and the Company target to maintain gearing ratios within 20% to 45% respectively. The gearing ratio is calculated as net debt divided by total capital. Net debt is calculated as borrowings plus trade and other payables less cash and cash equivalents. Total capital is calculated as equity plus net debt.
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26 Financial risk management (contd) Financial risk factors (contd) (d) Capital risk (contd) Group 2010 2009 RMB000 RMB000 Net debt Total equity Total capital Gearing ratio 27,248 373,188 400,436 7% 313,142 313,142 Company 2010 2009 RMB000 RMB000 7,721 233,867 241,588 3% 210,572 210,572 -
The Group has no externally imposed capital requirements for the financial years ended 31 December 2010 and 31 December 2009. (e) Fair value measurements The following table presents assets and liabilities measured at fair value and classified by level of the following fair value measurement hierarchy: (a) (b) (c) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (is as prices) or indirectly (i.e. derived from prices) (Level 2); and Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
The fair value of forward foreign exchange contracts is determined using quoted forward currency rates at the balance sheet date. This investment is classified as Level 2. The fair values of current financial assets and liabilities carried at amortised cost approximate their carrying amounts. The carrying amount of financial instruments is as disclosed on the balance sheet and Note 15 to the financial statements.
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27 Segment information Management has determined the operating segments based on the reports reviewed by the Executive Chairman and CEO that are used to make strategic decisions. The Executive Chairman and CEO consider the business from both geographical and business segment perspectives. Geographically, management manages and monitors the business in the four primary geographic areas: Asia, Europe, North America and South America. Contract manufacturing revenue are from all geographic locations while GRAT.UNIC and Superman revenue are derived from Asia only. The segment information provided to the Executive Chairman and CEO for the reportable segments for the financial years ended 31 December 2010 and 2009 are as follows: For the financial year ended 31 December 2010 Contract Manufacturing GRAT.UNIC RMB000 RMB000 Sales Total segment sales - sales to external parties Gross profit Other gains, net Unallocated costs Finance expense Profit before income tax Income tax expense Net profit Net profit includes: - Depreciation - Amortisation Segment assets Segment assets includes: Additions to property, plant and equipment Additions to intangible assets Deposit for property, plant and equipment Segment liabilities Superman RMB000 All other Segments RMB000 Total RMB000
552,610 91,848
72,164 17,447
1,044 308
625,818 109,603 404 (24,802) (2,485) 82,720 (7,669) 75,051 1,937 447 530,294
729 30 244,603
685 71,982
10 55 -
513 362 213,709
839 2,758 42,513
1,003 252 11
53,951 1,374 114,582
55,793 1,374 3,010 157,106
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27 Segment information (contd) For the financial year ended 31 December 2009 Contract Manufacturing GRAT.UNIC RMB000 RMB000 Sales Total segment sales - sales to external parties Gross profit Other gains, net Unallocated costs Finance expense Profit before income tax Income tax expense Net profit Net profit includes: - Depreciation - Amortisation Segment assets Segment assets includes: Additions to property, plant and equipment Additions to intangible assets Segment liabilities Superman RMB000 All other Segments RMB000 Total RMB000
454,327 82,805
60,174 14,563
1,800 541
516,301 97,909 6,279 (18,530) (1,923) 83,735 (8,710) 75,025 1,724 194 372,886
712 30 189,360
605 35,220
18 131 864
389 33 147,442
406 14,781
16
3,320 15,250 44,947
3,726 15,250 59,744
The revenue from external parties reported to the Executive Chairman and CEO is measured in a manner consistent with that in the statement of comprehensive income. The Executive Chairman and CEO assesses the performance of the operating segments based on gross profit. Segment results represent the profit earned by each segment without allocation of selling and distribution expenses, administration expenses, other gains, finance expenses and income tax expense. This is the measure reported to the Executive Chairman and CEO for the purposes of resource allocation and assessment of segment performance. Reportable segments assets are reconciled to total assets as follows: The amounts provided to the Executive Chairman and CEO with respect to total assets are measured in a manner consistent with that of the financial statements. For the purposes of monitoring segment performance and allocating resources between segments, the Executive Chairman and CEO monitors the property, plant and equipment, intangible assets, inventories and receivables attributable to each segment. All assets are allocated to reportable segments other than common property, plant and equipment that are being used in the production of contract manufacturing, GRAT.UNIC and Superman, hence cannot be identified specifically to each segment, intangible assets, cash and cash equivalents, other receivables and other current assets.
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27 Segment information (contd) Reportable segments assets are reconciled to total assets as follows: (contd) Group 2010 2009 RMB000 RMB000 Segment assets Unallocated Cash and cash equivalents Other receivables Other current assets Property, plant and equipment Intangible assets 316,585 125,053 2,411 2,642 67,251 16,352 530,294 Reportable segments liabilities are reconciled to total liabilities as follows: The amounts provided to the Executive Chairman and CEO with respect to total liabilities are measured in a manner consistent with that of the financial statements. These liabilities are allocated based on the operations of the segments. All liabilities are allocated to the reportable segments other than trade and other payables, borrowings and current income tax liabilities. Group 2010 2009 RMB000 RMB000 Segment liabilities Unallocated Trade and other payables Borrowings Current income tax liabilities 42,524 34,333 76,385 3,864 157,106 Revenue from major products Revenues from external customers are derived mainly from the sale of contract manufacturing, GRAT.UNIC and Superman products (Note 4). The Groups three business segments generated its revenue from these five main geographical areas based on customers locations: 2010 RMB000 Asia Europe North America South America Other 165,960 285,926 61,905 89,572 22,455 625,818 All non-current assets of the Group are located in the PRC. 2009 RMB000 199,106 221,745 26,759 45,652 23,039 516,301 14,797 6,998 32,910 5,039 59,744 225,444 107,863 9,178 1,555 13,505 15,341 372,886
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28 New or revised accounting standards and interpretations Below are the mandatory standards, amendments and interpretations to existing standards that have been published, and are relevant for the Groups accounting periods beginning on or after 1 January 2011 or later periods and which the Group has not early adopted: A mendments to FRS 24 Related party disclosures (effective for annual periods beginning on or after 1 January 2011) I NT FRS 119 Extinguishing financial liabilities with equity instruments (effective for annual periods commencing on or after 1 July 2010)
The management anticipates that the adoption of the above FRSs, INT FRSs and amendments to FRS in the future periods will not have a material impact on the financial statements of the Group and of the Company in the period of their initial adoption, except for the amendments to FRS 24 Related party disclosures. The amendment removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities. It also clarifies and simplifies the definition of a related party. However, the revised definition of a related party will also mean that some entities will have more related parties and will be required to make additional disclosures. Management is currently considering the revised definition to determine whether any additional disclosures will be required and has yet to put systems in place to capture the necessary information. It is therefore not possible to disclose the financial impact, if any, of the amendment on the related party disclosures. 29 Events occurring after balance sheet date On 25 January 2011, the Group through its wholly-owned subsidiary, Great Holding Limited incorporated a new subsidiary, Great Brand Management Limited, in British Virgin Islands with a share capital of US$50,000 (approximately RMB 329,000). The principal activity of Great Brand Management Limited is brand management and operation. On 17 February 2011, the Group incorporated a wholly-owned subsidiary, Grixpro International Trading Limited, in Hong Kong with a share capital of HK$10,000 (approximately RMB8,000). The principal activity of Grixpro International Trading Limited is trading.
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Statistics of Shareholdings
As at 7 March 2011
No. of Shares issued Class of Shares Voting rights : : : 265,000,000 Ordinary shares One vote per share
DISTRIBUTION OF SHAREHOLDINGS No. of Shareholders 172 333 18 523
Size of Shareholdings 1,000 - 10,000 10,001 - 1,000,000 1,000,001 and above Total
% 32.89 63.67 3.44 100.00
No. of Shares 1,195,000 27,127,000 236,678,000 265,000,000
% 0.45 10.24 89.31 100.00
TWENTY LARGEST SHAREHOLDERS No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Total Name DBS Vickers Securities (S) Pte Ltd United Overseas Bank Nominees Pte Ltd UOB Kay Hian Pte Ltd OCBC Securities Private Ltd Kim Eng Securities Pte. Ltd. Hong Leong Finance Nominees Pte Ltd Sze Sau King Citibank Nominees Singapore Pte Ltd Lau Siu Fung Raffles Nominees (Pte) Ltd Weng Wenju Weng Jindao Lim Chiew Hock (Lin Qiufu) Neo Cheng Soon Kwek Swee Heng Wong Tew Hong CIMB Securities (Singapore) Pte Ltd Daniel Tan Poon Kuan Charles Patrick Soh Hock Leong No. of Shares 72,212,000 50,430,000 40,565,000 21,959,000 20,940,000 4,980,000 4,648,000 3,650,000 2,236,000 2,100,000 1,960,000 1,910,000 1,895,000 1,816,000 1,650,000 1,421,000 1,156,000 1,150,000 1,000,000 1,000,000 238,678,000 % 27.25 19.03 15.31 8.29 7.90 1.88 1.75 1.38 0.84 0.79 0.74 0.72 0.72 0.69 0.62 0.54 0.44 0.43 0.38 0.38 90.08
65
Statistics of Shareholdings
As at 7 March 2011
SUBSTANTIAL SHAREHOLDERS Substantial Shareholders of the Company (as recorded in the Register of Substantial Shareholders) as at 7 March 2011. No. of Ordinary shares % Indirect Interest 68.49 181,500,000
Name G&W Investment Management Co., Ltd. (1) Weng Wenwei (2) Note: (1)
Direct Interest 181,500,000 -
% 68.49
Registered in the name of nominee DBS Vickers Securities (S) Pte Ltd (71,500,000 shares), United Overseas Bank Nominees Pte Ltd (50,000,000 shares), UOB Kay Hian Pte Ltd (20,000,000 shares), OCBC Securities Private Ltd (20,000,000 shares) and Kim Eng Securities Pte. Ltd (20,000,000 shares). Mr Weng Wenwei is deemed to be interested in the 181,500,000 shares held by G&W Investment Management Co., Ltd. by virtue of his shareholdings of 100% in G&W Investment Management Co., Ltd..
(2)
FREE FLOAT As at 7 March 2011, approximately 30.77% of the issued ordinary shares of the Company was held in the hands of the public (on the basis of information available to the Company). Accordingly, the Company has complied with Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited.
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Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Annual General Meeting of Great Group Holdings Limited will be held at No. 1 Kallang Way 2A, #08-00, Singapore 347495 on the 25th day of April 2011 at 10.00 a.m. for the following purposes:AS ORDINARY BUSINESS 1. 2. 3. 4. 5. 6. 7. To receive and, if approved, to adopt the Audited Accounts for the financial year ended 31 December 2010 together with the Directors Report and Auditors Report thereon. Resolution 1 To declare a first and final dividend of RMB5.66 cents per ordinary share, for the financial year ended 31 December 2010, as recommended by the Directors. Resolution 2 To approve Directors fees of S$270,000 for the financial year ending 31 December 2011 to be paid on quarterly basis in arrears (2010: S$155,000). Resolution 3 To re-elect Mr Weng Wenwei who is retiring under Article 107 of the Articles of Association. Resolution 4
To re-elect Mr Lim Yeow Hua @ Lim You Qin who is retiring under Article 107 of the Articles of Association. Resolution 5 To re-appoint Messrs Nexia TS Public Accounting Corporation, as the Companys Auditors and to authorise the Directors to fix their remuneration. Resolution 6 To transact any other ordinary business which may be properly transacted at an Annual General Meeting.
AS SPECIAL BUSINESS To consider and, if thought fit, to pass the following resolution (with or without amendments) as Ordinary Resolution:8. That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited (SGX-ST), the Directors of the Company be authorised and empowered to: (a) (i) (ii) issue shares in the capital of the Company (shares) whether by way of rights, bonus or otherwise; and/or make or grant offers, agreements or options (collectively, Instruments) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares, at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and
(b)
(notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,
provided that: (1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50 per cent of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 20 per cent of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with paragraph (2) below);
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(2) (subject to such manner of calculation and adjustments as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of shares that may be issued under paragraph (1) above, the percentage of issued shares shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Resolution is passed, after adjusting for: (i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and any subsequent bonus issue, consolidation or subdivision of shares;
(ii) (3)
in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier. Resolution 7
(4)
BY ORDER OF THE BOARD ONG WEI JIN COMPANY SECRETARY 6 April 2011 SINGAPORE
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Notes:(i) A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his stead. A member of the Company, which is a corporation, is entitled to appoint its authorised representative or proxy to vote on its behalf. A proxy need not be a member of the Company. The instrument appointing a proxy must be deposited at the Companys registered office at 36 Carpenter Street Singapore 059915 at least 48 hours before the time of the Meeting. (ii) (iii) If re-elected under Resolution 4, Mr Weng Wenwei will remain as Executive Chairman of the Board and a member of the Nominating Committee. If re-elected under Resolution 5, Mr Lim Yeow Hua @ Lim You Qin will remain as the chairman of the Remuneration Committee and a member of the Nominating Committee and Audit Committee, and will be considered an Independence Director of the Company. Resolution 7, if passed, will empower the Directors of the Company to issue shares and convertible securities in the Company up to a maximum of fifty per cent (50%) of the issued share capital of the Company (of which the aggregate number of shares and convertible securities to be issued other than on a pro rata basis to existing shareholders shall not exceed twenty per cent (20%) of the issued share capital of the Company) for such purposes as they consider would be in the interests of the Company. This authority will continue in force until the next Annual General Meeting of the Company or the expiration of the period within which the next Annual General Meeting is required by law to be held, whichever is the earlier, unless the authority is previously revoked or varied at a general meeting.
(iv)
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PROXY FORM
(Please see notes overleaf before completing this Form)
IMPORTANT: 1. For investors who have used their CPF monies to buy Great Group Holdings Limiteds shares, this Annual Report is forwarded to them at their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY. This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them. CPF investors who wish to attend the Meeting as an observer must submit their requests through their CPF Approved Nominees within the time frame specified. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specified to enable them to vote on their behalf.
GREAT GROUP HOLDINGS LIMITED

(Incorporated in the Republic of Singapore)
2.
3.
I/We of
(Name)
NRIC/Passport No. (Address)
being a member/members of the above-mentioned Company, hereby appoint:Name Address and/or (delete as appropriate) Name Address NRIC/Passport No. Proportion of Shareholdings No. of Shares % NRIC/Passport No. Proportion of Shareholdings No. of Shares %
or failing him/her/them, the Chairman of the Meeting as my/our proxy/proxies to attend and to vote for me/us on my/our behalf at the Annual General Meeting (the Meeting) of the Company to be held at No. 1 Kallang Way 2A, #08-00, Singapore 347495 on the 25th day of April 2010 at 10.00 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll. (Please indicate your vote For or Against with a tick [ X ] within the box provided) No. Resolutions relating to: Ordinary Business 1. Audited Accounts, Directors Report and Auditors Report for the year ended 31 December 2010 2. Declaration of a first and final Dividend of RMB5.66 cents per ordinary share 3. Approval of Directors Fees 4. Re-election of Mr Weng Wenwei as a Director under Article 107 5. Re-election of Mr Lim Yeow Hua @ Lim You Qin as a Director under Article 107 6. Re-appointment of Nexia TS Public Accounting Corporation as Auditors Special Business 7. Authority to Directors to allot and issue new shares pursuant to Section 161 of the Companies Act, Cap. 50 Dated this ................................ day of ..................................................... 2011. Total number of Shares in: (a) CDP Register (b) Register of Members ....................................................................... Signature(s) of Shareholder(s) or, Common Seal of Corporate Shareholder GREAT GROUP HOLDINGS LIMITED No. of Shares For Against
Notes: 1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50), you should insert that number of shares. If you have shares registered in your name in the Register of Members, you should insert that number of shares. If you have shares entered against your name in the Depository Register and shares registered in your name in the Register of Members, you should insert the aggregate number of shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the shares held by you. A member of the Company entitled to attend and vote at the Meeting of the Company is entitled to appoint not more than two proxies to attend and vote in his/her stead. Where a member appoints two proxies, he shall specify the percentage of his shares to be represented by each proxy and if no percentage is specified, the first named proxy shall be deemed to represent 100 per cent of his shareholding and the second named proxy shall be deemed to be an alternate to the first named. A proxy need not be a member of the Company. The instrument appointing a proxy or proxies together with the letter of power of attorney, if any, under which it is signed or a duly certified copy thereof, must be deposited at the registered office of the Company at 36 Carpenter Street Singapore 059915, not less than 48 hours before the time appointed for the Meeting. A corporation which is a member may authorise by resolution of its directors or other governing body such a person as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50. Please indicate with an X in the spaces provided whether you wish your vote(s) to be for or against the Resolutions as set out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Meeting. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In the case of a member whose shares are entered against his name in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.
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Great Group HoldinGS limited Annual Report 2010
Linjiang Industrial Area Nanhuan Road, Licheng District Quanzhou Fujian 362000
www.greatgroup.com.sg

Great Group Holdings 2010 Annual Report

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Great Group Holdings 2010 Annual Report

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Annual Report 2010

OUR PASSION TAKES YOU

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

Contract Manufacturing Segment

Construction of New Production Facility

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

Upgrade of Operational Capacity and Human Resource Development

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

20101231 201021.2% 21.6%19.9% 2011125 2011

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

feel fREE feel GREAT

Statement of Financial Position

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

Total Revenue by Business Segment

Contract Manufacturing GRAT. UNIC Superman

Contract Manufacturing GRAT. UNIC Superman

Total Revenue by Geographical Region

Asia Europe North America

South America Others

Revenue by Geographical Regions

5.18% 8.84% 4.46%

Europe North America South America Others

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

Summarised Balance Sheet (RMBmil)

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

Net Profit Attributable to Equity Holders

Operating Cash Flow

Overall Profit Margin

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

Great Group Holdings Limited

Fujian Great Fashion Industry Co., Ltd

Quanzhou Great Garments Co., Ltd

Great Worldwide (Tradings) Limited

* Grixpro International Trading Limited

Great Holding Limited

Great Fashion Trading (Shanghai) Limited

* Great Brand Management Limited

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

28 Statement by Directors 33 Consolidated

30 Consolidated Statement of Comprehensive Income 65 Statistics of Shareholdings

Corporate Governance Report

No. of meetings attended

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

Corporate Governance Report

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

Corporate Governance Report

(d) (e) (f)

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

Corporate Governance Report

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

Corporate Governance Report

100% 100% 100%

100% 100% 100% 100% 100%

94% 93% 94% 94% 100%

100% 100% 100% 100% 100%

GREAT GROUP HOLDINGS LIMITED Annual Report 2010

Corporate Governance Report

(b) (c) (d) (e) (f) (g) (h)