Great Group Holdings 2010 Annual Report

Annual Report 2010

OUR PASSIONTAKES YOU

TO THE LIMELIGHT

Contents01 About Us 02 Chairman’s Message 06 Operations Review

08 Financial Highlights 10 Director’s Profile 12 Key Management 13 Group Structure

14 Corporate Information 15 Financial Contents

CAPTIVATEBe INfLUENTIAL

AND feel fABULOUSGREAT GROUP HOLDINGS LIMITED Annual Report 2010

About

USCorporate 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 men’s and women’s undergarments. The Group also manufactures and sells children’s and infants’ apparel.

Great Group designs, manufactures and sells men’s undergarments, and to a lesser extent, women’s undergarments, under its proprietary “GRAT.UNIC (格来德)” brand in the PRC. Sold across 16 provinces/municipalities/autonomous regions in the PRC, the Group’s “GRAT.UNIC (格来德)” 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.

集团简介

格来德集团控股有限公司（以下简称为“格来德集团”）是一家生产基地位于福建省泉州市的中国领先的内衣生产商。集团主要从事男女士内衣的设计、生产和销售。集团也从事童装及婴儿服饰的生产和销售。

集团在中国设计、生产和销售自主的“GRAT.UNIC (格来德)”品牌的男士内衣及少量的女士内衣。截止2010年12月31日，我们的“GRAT.UNIC (格来德)”品牌已在16个省、自治区和直辖市进行了销售，在全中国拥有125个销售点，这些销售点大部分位于中国大都市的购物中心、百货商场和商业区的专卖店或专柜。

GREAT GROUP HOLDINGS LIMITED Annual Report 2010 1

Mr Weng WenweiChairman and CEO

CHAIRMAN’SMESSAGE

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 “China’s Top 200 Potential Enterprises” by Forbes China in February 2011.

Contract Manufacturing SegmentIn 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 SegmentIn 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 Group’s effort in expanding the GRAT.UNIC brand in China’s market by bringing together a more professional brand management team which will enhance market share and visibility of “GRAT.UNIC’ brand.

Construction of New Production FacilityThe 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

“ In FY2010, the Group ach ieved 21 .2% growth in to ta l revenue. The growth in to ta l revenue was ma in ly a t t r ibutab le to 21 .6% growth in cont ract manufactur ing segment and 19 .9% growth in GRAT.UNIC segment . ”

“ 集团的营业额在 2 0 1 0 年取得了 2 1 . 2 % 增长。这一年业绩的增长主要归功于合同生产和格来德品牌，其分别增长了约 2 1 . 6 % 和19.9%。”

GREAT GROUP HOLDINGS LIMITED Annual Report 20102

facility is expected to start operation in the second or third quarter of 2011. This will enhance the Group’s 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 brand’s 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 Group’s 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 in-depth 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 Group’s management team.

AcknowledgementsFinally 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.

GREAT GROUP HOLDINGS LIMITED Annual Report 2010 3GREAT GROUP HOLDINGS LIMITED Annual Report 2010

尊敬的股东们：

我谨代表董事会在此向您呈上截至2010年12月31日的财政年度报告。

集团的营业额在2010年取得了21.2%增长。这一年业绩的增长主要归功于合同生产和格来德品牌，其分别增长了约21.6%和19.9%。

我们荣幸地和您分享，集团被福布斯中文网评为上榜企业，2011福布斯中国潜力企业榜第125名。

合同生产在2010年我们加大了参展及开发力度，除了参加原来中国的广交会及香港的展会外，我们参加了迪拜及美国的展会，不断地拓展直接客户，寻求更优质客户。并加大贸易专业化平台建设，以适应集团业余发展需要及更好的整合外部生产能力。

格来德品牌2010年是集团跨区域发展战略及品牌战略实施的第一年，集团在上海市成立了品牌运营中心––格来德服饰贸易（上海）有限公司，专业负责品牌在中国市场的运营。上海品牌运营中心的设立，标志着集团在GRAT.UNIC品牌及中国市场的战略决策，建立更专业化的品牌运营团队，提高品牌的市场占有率及知名度。

新生产基地建设位于泉州市江南高新技术产业园区的福建格来德新工业园，在2009年12月动工建设，总规划建筑面积约八万平方米，首期近六万平方米的新生产基地建设已经临近尾声，共有三栋工厂和两栋员工宿舍。新生产基地预期将于

2011年第二季度或是第三季度正式投产，这将提高集团的生产能力及综合竞争力。

未来发展集团将在2011财政年度继续深化提升两大业务，使其更专业化。

首先，在品牌原有经销商的基础上，筛选培育出优质经销商，使其做大区域市场，推动品牌市场占有率，加大产品研发及物流配送的投入，并进行区域性品牌推广，提高品牌知名度及销售额。

正式开始拓展香港市场，与中国市场配合联动，从而辐射东南亚市场，为未来发展打下基础，并寻求国际化的品牌合作。

其次，继续加大贸易专业化平台建设，拟设立国内外专业化的贸易公司，拓展与国际化的品牌合作，充分整合各种生产厂商，向更纵深的产业链进行合作提升。

优化运营能力，发展人力资源我们将进一步提高现有业务的效率和成本控制，建立完善管理控制系统。发展吸引各个方面的人才，来支持加强我们的管理团队。

鸣谢我们籍此机会衷心感谢我们所有的合作伙伴、客户和员工。诚谢大家的不懈支持、辛勤努力和坚定信心！是大家不弃不离地伴着我们，扶持我们的成长。我们有信心在2011年迈向更高的巅峰！

CHAIRMAN’SMESSAGE


feel fREEfeel GREAT


OPERATIONSREVIEWREVIEW OF FINANCIAL PERFORMANCE

Statement of Comprehensive IncomeThe Group’s 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 Group’s 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.

Statement of Financial PositionThe Group’s 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-in-progress of the new production facilities at Jiangnan High-Tech 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 Group’s 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


as at 31 December 2010 from approximately RMB101.6 million as at 31 December 2009. The Group’s 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.

OPERATIONS REVIEW

Revenue by Business SegmentsContract manufacturing remained as the largest business segment which contributed to 88.3% of the Group’s 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 Group’s 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.

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.

FY2010

FY2009

Total Revenue by Geographical Region (RMB’mil)

Total Revenue by Business Segment (RMB’mil)

Asia

Europe

North America

South America

Others

Contract Manufacturing

GRAT. UNIC

Superman

Contract Manufacturing

GRAT. UNIC

Superman

Asia

Europe

North America

South America

Others

FY2010

FY2009

9.89%

88.00%

88.30%

5.18%

14.31%

8.84%

26.52%

38.56%

45.69%

42.95%

3.59%

4.46%

11.65%

11.53%

0.35%

0.17%


fINANCIALHIGHLIGHTSSummarised Income Statement (RMB’mil)For Financial Year Ended 31 December FY2010 FY2009 FY2008 FY2007 FY2006

Revenue ract Manufacturing- Contract Manufacturing 552.6 454.3 351.1 242.4 144.0

- GRAT.UNICerman 72.2 60.2 48.7 19.9 2.4

- Superman 1.0 1.8 1.0 - - TOTAL 625.8 516.3 400.8 262.3 146.4

Gross Profit 109.6 97.9 104.3 71.0 31.1

Profit Before Interest & Tax (“PBIT”) 85.1 85.3 88.9 61.2 24.7

Interest Income Income 0.2 0.3 0.4 0.2 0.3

Finance Expenses (2.5) (1.9) (1.9) (0.7) (0.3)

Profit Before Income Tax (“PBT”) 82.8 83.7 87.4 60.7 24.7

Income Tax (7.7) (8.7) (16.6) (4.2) (2.4)Net Profit (“NP”) 75.1 75.0 70.8 56.5 22.2

Selling & Distribution expenses as a % over revenue 1.4% 1.3% 2.0% 1.8% 2.6%Administrative expenses as a % over revenue 2.6% 2.3% 1.6% 1.3% 1.3%

Summarised Balance Sheet (RMB’mil)As At 31 December FY2010 FY2009 FY2008 FY2007 FY2006

Cash and cash equivalents 125.1 107.9 33.1 9.0 6.4

Inventories 25.3 30.4 34.0 27.7 6.8

Property, plant and equipment 73.2 19.4 17.4 11.3 10.6

Current Assets 436.5 336.8 201.3 118.8 72.5

Non-current Assets 93.8 36.0 21.6 15.7 12.0

Current Liabilities 157.1 59.7 67.5 49.9 34.8 Equity 373.2 313.1 155.4 84.6 49.7

Financial Indicators/RatiosFor Financial Year Ended 31 December FY2010 FY2009 FY2008 FY2007 FY2006

PBIT Margin 13.6% 16.5% 22.2% 23.3% 16.8%

PBT Margin 13.2% 16.2% 21.8% 23.1% 16.8%

NP Margin 12.0% 14.5% 17.7% 21.5% 15.2%Earnings Per Share (RMB cents) 28.32 34.71 35.40 28.23 11.12

Return on Equity (ROE) (%) 20.11 23.96 45.56 66.73 44.76

Return on Assets (ROA) (%) 14.15 20.12 31.77 41.98 26.32

Current Ratio (times) 2.78 5.64 2.98 2.38 2.08

Gearing Ratio (times) 0.42 0.19 0.43 0.59 0.70

Liquidity Ratio 2.62 5.13 2.48 1.83 1.89

Net Asset Value (NAV) Per Share (RMB cents) 140.83 118.15 77.71 42.30 24.83

Number of Ordinary Shares Issued (million)* 265 265 200 200 200

Average Trade Receivables Turnover (Days) 84 75 63 53 37

Average Trade and Bills Payables Turnover (Days) 24 14 25 40 36 Average Inventory Turnover (Days) 20 28 38 33 18

*Prior to FY2009 were based on pre-invitational shares of 200,000,000


EXPRESSYourself

Group Revenue(RMB’mil)

700.0

600.0

500.0

400.0

300.0

200.0

100.0

0.0FY2006 FY2007 FY2008 FY2009 FY2010

Net Profit Attributable to Equity Holders(RMB’mil)

80.0

70.0

60.0

50.0

40.0

30.0

20.0

10.0

0.0FY2006 FY2007 FY2008 FY2009 FY2010

Operating Cash Flow(RMB’mil)

50

40

30

20

10

0

-10FY2006 FY2007 FY2008 FY2009 FY2010

Overall Profit Margin(RMB’mil)

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%FY2006 FY2007 FY2008 FY2009 FY2010

Gross Profit Margin Net Profit Margin

CAGR43.8%


Weng Wenwei (翁文伟) 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 Company’s 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 (大川织造厂) 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

(永和镇和盛服装厂), a small workshop that manufactured clothing for clients.

He graduated from the Zimao Vocational High School (晋江市紫帽职业中学) 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 (鲤城区工商业联合会(总商会)) since 2007.

Weng Wenju (翁文具) 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 (泉州吉通电脑公司) in charge of computer technical maintenance, until July 2004 before joining

our Group.

He graduated from Quanzhou Business and Trade School (泉州商贸学校) with a

graduation certification in Computer and Application in 2004.

DIRECTOR’SPROfILE


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 Company’s 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 Company’s 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 Company’s

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 Bachelor’s Degree in Accountancy and a Master’s 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.


Cai An’e (蔡安娥) has been our General Manager (Production) since May 2000 and is responsible for overseeing the production process and day-to-day management of our Group’s Production Department. Cai An’e 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 (大川织造厂) in managing its operations. Between February 1993 and December 1996, she was an assistant to the head of Hesheng Apparel Factory in Yonghe town (永和镇和盛服装厂) 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 (汪建新) 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. (政力制衣厦门有限公司) 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 Chun’an First Silk Factory (杭州淳安第一丝织厂) till November 1995.

He graduated from Jiangjiaqu Adult Science and Technology School (姜家区成人科技学校) with a high school graduation certification in 1991.

Wei Xuefen (魏雪芬) 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 (泉州鲤城大川织造厂) 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. (泉州格林服装公司) as a procurement staff and left in March 2000. Between September 1993 and September 1998, she worked at Shishi Huasheng Computer Printing Co., Ltd. (石狮华盛电脑印花有限公司) 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. (石狮丽辉电脑印花有限公司) and left in September 1993.

She obtained a graduation certification (Business Administration) from Continuing Education School of Huaqiao University (华侨大学进修学院) in 1992.

Zhang Shiwu (张诗武) 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. (蜡笔小新 (福建) 食品工业有限公司) and was in charge of its financial management. In November 2002, he joined Guilin Seamild Biology Technology Development Co., Ltd. (桂林西麦生物技术发展有限公司) 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. (东莞徐福记食品有限公司) from March 1999 to November 2002. From January 1998 to December 1998, he was the general manager at Wanxi Shule Sanitary Articles Co., Ltd. (皖西舒乐卫生用品有限公司). Between August 1990 and December 1997, he was the finance manager at Anhui Jinzhai County Silk Group (安徽金寨县丝绸集团).

He graduated from Anhui Agricultural College (安徽农学院) 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.

KEYMANAGEMENT


格来德集团控股有限公司Great Group Holdings Limited

福建格来德服饰实业有限公司

Fujian Great Fashion Industry

Co., Ltd

格来德国际贸易有限公司

Great Worldwide (Tradings) Limited

*致普国际贸易有限公司

Grixpro International

Trading Limited

格来德国际有限公司

Great Holding Limited

格来德服饰贸易（上海）有限公司

Great Fashion Trading

(Shanghai) Limited

*格来德品牌管理有限公司

Great Brand Management

Limited

泉州鸿豪服装有限公司

Quanzhou Great Garments Co., Ltd

GROUPSTRUCTURE

* Incorporated in 2011


BOARD OF DIRECTORSWeng Wenwei (翁文伟) (Executive Chairman and CEO)Weng Wenju (翁文具) (Executive Director)Teoh Teik Kee (Lead Independent Director)Lee Kim Lian, Juliana (Independent Director)Lim Yeow Hua @ Lim You Qin (Independent Director)

AUDIT COMMITTEETeoh Teik Kee (Chairman)Lee Kim Lian, JulianaLim Yeow Hua @ Lim You Qin

REMUNERATION COMMITTEELim Yeow Hua @ Lim You Qin (Chairman)Teoh Teik Kee Lee Kim Lian, Juliana

NOMINATION COMMITTEELee Kim Lian, Juliana (Chairman)Teoh Teik Kee Lim Yeow Hua @ Lim You Qin Weng Wenwei (翁文伟)

REGISTERED OFFICE 36 Carpenter Street, Singapore 059915

PRINCIPAL OFFICE AND CONTACT DETAILSLinjiang Industrial Zone, Nanhuan Road, Licheng District, Quanzhou City, Fujian Province, the PRC中国福建省泉州市鲤城区南环路临江工业区

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 TowerSingapore 048623

INDEPENDENT AUDITORS Nexia TS Public Accounting Corporation5 Shenton WayUIC Building #16-00Singapore 068808

Partner-in-charge: Henry SK TanFCPA Singapore, ACA

INTERNAL AUDITORSBDO LLP19 Keppel Road#02-01, Jit Poh BuildingSingapore 089058

PRINCIPAL BANKERS Bank of China, Quanzhou Branch(中国银行泉州分行)Bank of China Building, Fengze Street, Quanzhou City, Fujian Province, the PRC

Industrial Bank Co., Ltd., Quanzhou Branch(兴业银行泉州分行)Industrial Bank Building, Fengze Street, Quanzhou City, Fujian Province, the PRC

China Construction Bank, Quanzhou Licheng Sub-branch(中国建设银行泉州鲤城支行)Wenling Street Zhongduan, Quanzhou City, Fujian Province, the PRC

Industrial and Commercial Bank of China, Quanzhou Licheng Sub-branch(中国工商银行泉州鲤城支行)Wenling Street Zhongduan, Quanzhou City, Fujian Province, the PRC

Huaxia Bank, Quanzhou Branch(华夏银行泉州分行营业部)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(泉州银行股份有限公司开元支行)48, East Street, Licheng District, Quanzhou City, Fujian Province, the PRC

Shanghai Pudong Development Bank, Quanzhou Branch(上海浦东发展银行泉州分行)29, Fengze Street, Fengze District, Quanzhou City, Fujian Province, the PRC

Xiamen International Bank(厦门国际银行)International Bank Building, #08-10, Lujiang Street, Xiamen City, Fujian Province, the PRC

China Merchant Bank, Quanzhou Jiangnan Sub-branch(招商银行股份有限公司泉州江南支行)Troop 73141 Apartment, Xingxian Street, Licheng District, Quanzhou City, Fujian Province, the PRC

China Everbright Bank, Quanzhou Licheng Sub-branch,(中国光大银行泉州分行营业部)Youth Building, #288, Tianan Street, Fengzhe District, Quanzhou City, Fujian Province, the PRC

China Construction Bank Corporation, Singapore Branch9 Raffles Place #33-01/02 Republic Plaza Singapore 048619

OCBC Bank 65 Chulia Street#01-00OCBC CentreSingapore 049513

CORPORATEINfORMATION


16 Corporate Governance Report 25 Director’s Report 28 Statement by Directors

29 Independent Auditor’s Report 30 Consolidated Statement of Comprehensive Income

31 Balance Sheets 32 Consolidated Statement of Changes In Equity 33 Consolidated

Cash Flow Statement 34 Notes to the Financial Statements 65 Statistics of Shareholdings

67 Notice of Annual General Meeting | Proxy Form

FINANCIAL

CONTENTS


Corporate Governance ReportFor 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 Company’s 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 Board’s conduct of its affairs

The Board’s 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 Group’s strategic plans, key operational initiatives, major funding and investment proposals

• identifies principal risks of the Group’s 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 AC RC NC

Number of meetings held 4 5 1 1

Directors No. of meetings attended

Name of Director

Weng Wenwei 4 4(1) 1(1) 1Weng Wenju 1 1(1) 1(1) 1(1)

Teoh Teik Kee 4 5 1 1Lee Kim Lian, Juliana 4 5 1 1Lim Yeow Hua @ Lim You Qin 4 5 1 1

Notes:1. Attendance by invitation.



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 Executive Chairman and Chief Executive Officer (“CEO”)Weng Wenju DirectorTeoh Teik Kee Lead Independent DirectorLee Kim Lian, Juliana Independent Director Lim Yeow Hua @ Lim You Qin 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 Code’s 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 Group’s 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.


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.

(b) To regularly review the Board structure, size and composition and make recommendations to the Board with regards to any adjustments that are deemed necessary.

(c) 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.

(d) To determine annually whether or not a director is independent.

(e) To recommend Directors who are retiring by rotation to be put forward for re-election.

(f) 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 Board’s 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.

(h) 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.

The directors submit themselves for re-nomination and re-election at regular intervals of at least once every three years. The Company’s 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 Company’s 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. Mr Weng Wenwei

ii. Mr Lim Yeow Hua @ Lim You Qin

The Board had accepted the NC’s 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.




The dates of appointment and last re-election of each director are set out below.

Directors Designation Date of Initial Appointment

Date of last Re-election

Weng Wenwei Executive Chairman & CEO 29 February 2008 24 September 2009Weng Wenju Executive Director 23 December 2008 24 September 2009Teoh Teik Kee Lead Independent Director 18 June 2009 23 April 2010Lee Kim Lian, Juliana Independent Director 18 June 2009 23 April 2010Lim Yeow Hua @ Lim You Qin Independent Director 18 June 2009 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 Board’s 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 Group’s 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 director’s 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.


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 Group’s relative performance and the performance of individual Directors.

The remuneration of the Executive Chairman and CEO, with the Company as disclosed in the Company’s 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.

Remuneration Band and NameDirector

Fees

Salary and other benefits Bonus Total

DirectorsBelow S$250,000

Weng Wenwei - 94% 6% 100%Weng Wenju - 99% 1% 100%Teoh Teik Kee 100% - - 100%Lim Yeow Hua @ Lim You Qin 100% - - 100%Lee Kim Lian, Juliana 100% - - 100%

Key ExecutivesBelow S$250,000Cai An’e - 94% 6% 100%Wang Jianxin - 93% 7% 100%Wei Xuefen - 94% 6% 100%Zhang Shiwu - 94% 6% 100%Voon Choon Nie - 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.



(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 Group’s 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 management’s 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 Group’s 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 management’s 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 Company’s financial performance.

(b) To review the quarterly, half-yearly and full year financial results before submission to the Board for approval.

(c) To review the assistance and co-operation given by the management and the officers of the Group to the auditors.

(d) Where applicable, to review the internal audit programme and ensure co-ordination between the internal and independent auditors and management.

(e) To review the scope and results of the internal audit procedures and the internal auditors to report their findings

directly to the AC.

(f) 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).

(g) To report to the Board its findings from time to time on matters arising and requiring the attention of AC.

(h) 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.

(i) To approve the internal control procedures and arrangements for all current and future related party transactions to ensure that they are carried out on arm’s length basis and on normal commercial terms which will not be prejudicial to the interests of the Company and shareholders.



(j) To review potential conflicts of interests, if any.

(k) To review all non-audit services provided by the auditors to ensure that they would not, in the AC’s opinion, affect the independence of the auditors.

(l) To undertake such other reviews and projects as may be requested by the Board.

(m) 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.

(n) 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.

(o) To review the adequacy of the Company’s 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 Code’s guidelines on Audit Committees.

In addition, the AC has explicit authority to investigate any matter within its terms of reference, full access to and co-operation of the Group’s 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 re-appointment 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 Group’s 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. The Internal auditor reports directly to the Audit Committee on audit matters and performs its works in line with the 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.



(D) COMMUNICATION WITH SHAREHOLDERS

Principle 14: Communication with Shareholders

In line with continuous disclosure obligations of the Company, pursuant to the SGX-ST’s Listing Rules and the Singapore Companies Act, the Board’s 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

- Company’s 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 Group’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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.



(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 arm’s 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 Group’s 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:

Intended use as per Prospectus

Amount allocated(S$’000)

(A)

Amount utilised as at the date of this

Report(S$’000)

(B)

Balance amount

(S$’000)(A) – (B)

Construction of new premises at the Jiangnan High-Tech Information Industrial Zone, Quanzhou City, Fujian Province 8,000 8,000 -

Expansion of production capacity and facilities 3,000 374 2,626

Promoting “GRAT.UNIC” and increasing marketing effort 3,000 1,192 1,808

Enhancing research and development capabilities 1,000 10 990

General working capital requirements 844 844 -

Total 15,844 10,420 5,424

(J) BEST PRACTICES GUIDE

The Company has complied materially with the Best Practices Guide issued by SGX-ST.



Directors’ ReportFor the financial year ended 31 December 2010

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 WenweiMr Weng WenjuMr Teoh Teik KeeMr Lim Yeow Hua @ Lim You QinMs 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

Holdings in which director is deemed to have an interest

At31.12.2010

At1.1.2010

At31.12.2010

At1.1.2010

Company(No. of ordinary shares)Mr Weng Wenwei - - 181,500,000 181,500,000Mr Weng Wenju 1,960,000 - - -

Ultimate Holding Corporation - G & W Investment Management Co., Ltd(No. of ordinary shares of US$1 each)Mr Weng Wenwei 1 1 - -

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.


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 Company’s 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, JulianaMr Lim Yeow Hua @ Lim You Qin

All members of the Audit Committee were non-executive directors. All members were independent.



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:

− reviewed the audit plan and results of the internal auditors’ examination and evaluation of the Group’s systems of internal accounting controls;

− reviewed the assistance given by the Company’s management to the independent auditor;

− reviewed 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 auditor’s report on the balance sheet of the Company and the consolidated financial statements of the Group;

− reviewed the quarterly and annual announcements as well as the related press releases on the results and financial position of the Company and the Group;

− met 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 re-appointment.

On behalf of the directors

Weng WenweiDirector

Weng WenjuDirector

31 March 2011



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

(b) 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.

The directors have, on the date of this statement, authorised these financial statements for issue.

On behalf of the directors

Weng WenweiDirector

Weng WenjuDirector

31 March 2011

Statement by DirectorsFor the financial year ended 31 December 2010


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.

Management’s 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.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with 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 auditor’s 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 entity’s 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 entity’s 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 CorporationPublic Accountants and Certified Public Accountants

Director in-charge: Henry SK TanAppointed since financial year ended 31 December 2008

Singapore31 March 2011

Independent Auditor’s Reportto the Members of Great Group Holdings Limited


2010 2009Note RMB’000 RMB’000

REVENUE4 625,818 516,301

Cost of sales (516,215) (418,392)Gross profit 109,603 97,909

Other gains, net 5 404 6,279

Expenses- Selling and distribution (8,666) (6,620)- Administrative (16,136) (11,910)- Finance 8 (2,485) (1,923)

Profit before income tax 82,720 83,735

Income tax expense 9 (7,669) (8,710)

Total comprehensive income, representing net profit, attributable to equity holders of the Company 75,051 75,025

Earnings per share (RMB cents)- Basic 10 28 35

Consolidated Statement of Comprehensive IncomeFor the financial year ended 31 December 2010


Group Company2010 2009 2010 2009

Note RMB’000 RMB’000 RMB’000 RMB’000ASSETSCurrent assetsCash and cash equivalents 11 125,053 107,863 1,271 9,617Trade and other receivables 12 282,493 197,040 31,315 -Inventories 13 25,348 30,379 - -Other current assets 14 2,642 1,555 151 89Derivative financial assets 15 916 - 147 -

436,452 336,837 32,884 9,706

Non-current assetsInvestments in subsidiaries 16 - - 209,967 209,967Property, plant and equipment 17 73,213 19,357 8 -Intangible assets 18 17,619 16,692 - -Deposit for machinery and equipment 3,010 - - -

93,842 36,049 209,975 209,967

Total assets 530,294 372,886 242,859 219,673

LIABILITIESCurrent liabilitiesTrade and other payables 19 38,407 8,476 8,992 9,101Borrowings 20 113,894 46,229 - -Current income tax liabilities 3,864 5,039 - -Derivative financial liabilities 15 941 - - -

Total liabilities 157,106 59,744 8,992 9,101

NET ASSETS 373,188 313,142 233,867 210,572

EQUITYCapital and reserves attributable to

equity holders of the CompanyShare capital 21 104,766 104,766 104,766 104,766Restructuring reserve 22 114,040 114,040 114,040 114,040Retained profits/(accumulated losses) 154,382 94,336 15,061 (8,234)

Total equity 373,188 313,142 233,867 210,572

Balance SheetsAs at 31 December 2010


Attributable to equity holders of the Company

Share capitalRestructuring

reserveRetained

profitsTotal

equityNote RMB’000 RMB’000 RMB’000 RMB’000

2010Beginning of financial year 104,766 114,040 94,336 313,142Dividend relating to 2009 paid 23 - - (15,005) (15,005)Total comprehensive income for the

financial year - - 75,051 75,051

End of financial year 104,766 114,040 154,382 373,188

2009Beginning of financial year 22,060 114,040 19,311 155,411Issuance of shares pursuant to IPO 21 92,462 - - 92,462Share issue expenses 21 (9,756) - - (9,756)Total comprehensive income for the

financial year - - 75,025 75,025

End of financial year 104,766 114,040 94,336 313,142

Consolidated Statement of Changes In EquityFor the financial year ended 31 December 2010


2010 2009Note RMB’000 RMB’000

Cash flows from operating activitiesNet profit 75,051 75,025Adjustments for- Income tax expense 7,669 8,710- Amortisation and depreciation 2,384 1,918- Fair value loss on derivative financial instruments 25 -- Interest expenses 2,485 1,923- Interest income (195) (348)

87,419 87,228Change in working capital- Trade and other receivables (85,453) (65,943)- Inventories 5,031 3,626- Other current assets (1,087) 1,534- Trade and other payables 29,931 (3,869)- Bills payables 18,575 (1,550)

Cash generated from operations 54,416 21,026Interest received 195 348Income tax paid (8,844) (16,827)

Net cash provided by operating activities 45,767 4,547

Cash flows from investing activitiesAdditions to property, plant and equipment (55,793) (3,726)Additions to intangible assets (1,374) (12,620)Deposit for machinery and equipment (3,010) -

Net cash used in investing activities (60,177) (16,346)

Cash flows from financing activitiesProceeds from borrowings 206,232 122,466Repayment of borrowings (157,142) (116,722)Interest paid (2,485) (1,923)Proceeds from issuance of ordinary shares - 82,706Short-term bank deposits pledged (5,791) 2,777Dividends paid to equity holders of the Company (15,005) -

Net cash provided by financing activities 25,809 89,304

Net increase in cash and cash equivalents 11,399 77,505Cash and cash equivalents at beginning of financial year 101,631 24,126

Cash and cash equivalents at end of financial year 11 113,030 101,631

Consolidated Cash Flow StatementFor the financial year ended 31 December 2010


Notes to the Financial StatementsFor the financial year ended 31 December 2010

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 People’s 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 Company’s 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 Group’s 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 Group’s 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 Group’s and Company’s 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.



2 Summary of significant accounting policies (cont’d)

2.1 Basis of preparation (cont’d)

Interpretations and amendments to published standards effective in 2010 (cont’d)

(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.




2.2 Group accounting (cont’d)

Subsidiaries (cont’d)

(ii) Acquisition of businesses (cont’d)

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 interest’s proportionate share of the acquiree’s 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 Company’s 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 Group’s 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 Group’s 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.




2.4 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 livesMachinery and equipment 10 yearsLeasehold buildings and workshops 20 yearsFurniture & fitting and office equipment 5 yearsMotor vehicles 5 years

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.




2.5 Intangible assets (cont’d)

(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 Company’s 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 asset’s 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.




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.




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

(ii) 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.

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.




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) Assets and liabilities are translated at the closing exchange rates at the reporting date;

(ii) 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

(iii) All resulting currency translation differences are recognised in the currency translation reserve.

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 Company’s shareholders Dividends to the Company’s shareholders are recognised when the dividends are approved for payment.




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.



3 Critical accounting estimates, assumptions and judgements (cont’d)

(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 RevenueGroup

2010 2009RMB’000 RMB’000

Contract manufacturing 552,610 454,327GRAT.UNIC 72,164 60,174Superman 1,044 1,800

625,818 516,301

5 Other gains, net

Group2010 2009

RMB’000 RMB’000

Interest income 195 348Government grants 3,798 5,942Fair value loss on derivative financial instruments (25) -Foreign exchange loss, net (3,604) (11)Others 40 -

404 6,279



6 Expenses by nature

Group2010 2009

RMB’000 RMB’000

Purchases of inventories 469,224 377,525

Amortisation of intangible assets [Note 18 (d)] 447 194Depreciation of property, plant and equipment (Note 17) 1,937 1,724

Total amortisation and depreciation 2,384 1,918Bank charges and related expenses 1,187 2,689Courier, freight, custom and port charges 4,331 2,302Directors’ fees 771 317Employee compensation (Note 7) 44,749 36,789Entertainment and travelling 1,220 930IPO related expenses - 4,789Professional fees 1,956 704Marketing, advertising and exhibition 705 1,454Rental expenses on operating leases 1,583 480Stamp duties and other taxes 3,255 870Utilities 1,833 1,538Other expenses 2,788 991

Changes in inventories 5,031 3,626

Total cost of sales, selling and distribution and administrative expenses 541,017 436,922

7 Employee compensation

Group2010 2009

RMB’000 RMB’000

Wages and salaries 40,915 35,163Employer’s contribution to defined contribution plans, including Central

Provident Fund (“CPF”) 1,818 1,017Other short-term benefits 2,016 609

44,749 36,789

8 Finance expensesGroup

2010 2009RMB’000 RMB’000

Interest expense– Bank borrowings 1,455 1,042– Trade receivables factoring 1,030 881

2,485 1,923



9 Income taxes

Group2010 2009

RMB’000 RMB’000Tax expense attributable to profit is made up of:– Current income tax – PRC 7,077 8,315– Under-provision of current income tax in prior financial years 592 395

7,669 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 PRC’s statutory rate of income tax as explained below:

Group 2010 2009

RMB’000 RMB’000

Profit before income tax 82,720 83,735Tax calculated at tax rate of 25% (2009: 25%) 20,680 20,934Effects of– Different tax rates in other countries (10,973) (7,732)– Tax incentive (5,228) (5,905)– Expenses not deductible for tax purpose 1,021 -– Income not subject to tax (2) (2)– Deferred income tax not recognised 1,493 1,087– Other 86 (67)

7,077 8,315



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 2009

Net profit attributable to equity holders of the Company (RMB’000) 75,051 75,025

Weighted average number of ordinary shares outstanding for basic earnings per share (’000) 265,000 216,250

Basic earnings per share (RMB cents) 28 35

There is no dilutive potential ordinary shares during the financial years.

11 Cash and cash equivalents

Group Company2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000

Cash at bank and on hand 113,030 101,631 1,271 9,617Short-term bank deposits 12,023 6,232 - -

125,053 107,863 1,271 9,617

For the purpose of presenting the consolidated cash flow statement, the consolidated cash and cash equivalents comprise the following:

Group 2010 2009

RMB’000 RMB’000

Cash and bank balances (as above) 125,053 107,863Less: Bank deposits pledged (12,023) (6,232)Cash and cash equivalents per consolidated cash flow statement 113,030 101,631

Short-term bank deposits relate to bank balances that the Group has to maintain with the banks for obtaining short-term 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 Company 2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000

Trade receivables – Non-related parties 155,013 132,402 - -Advances to suppliers 125,069 64,638 - -Other receivables 2,411 - 31,315 -

282,493 197,040 31,315 -



12 Trade and other receivables (cont’d)

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 Company 2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000

Raw materials 7,946 18,777 - -Work-in-progress 9,581 7,273 - -Finished goods 7,821 4,329 - -

25,348 30,379 - -

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 Company2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000

Refundable deposits - 38 - -Prepayments 2,642 1,517 151 89

2,642 1,555 151 89

15 Derivative financial instruments

Group CompanyContractNotional Fair Value

ContractNotional Fair Value

Amount Asset Liability Amount Asset LiabilityRMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

2010Non-hedging instruments- Currency forwards 139,623 916 (941) 6,724 147 -

2009Non-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 Group’s 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.



16 Investments in subsidiaries

Company2010 2009

RMB’000 RMB’000Equity investments at cost:Beginning of financial year 209,967 136,100Additional investment in a subsidiary - 73,858Incorporation of a new subsidiary - 9

End of financial year 209,967 209,967

Details of subsidiaries are as follows:

Name of companies Principal ActivitiesCountry of Business/ Incorporation Equity holding

2010%

2009%

Held by the CompanyQuanzhou Great Garments Co., Ltd (a)

Producing garments, weaving, ribbon, printing, shoes, hats and bags (exporting the commodity which is not related with the management of the export permit quota)

The People’s Republic of China

100 100

Fujian Great Fashion Industry Co., Ltd (a)

Producing garments, apparel products and weaving


100 100

Great Worldwide (Tradings) Limited (b)

Sale and distribution of garments and apparel production

The British Virgin Islands 100 100

Great Holding Limited (c) Sale and distribution of garments and apparel production

Hong Kong 100 100

Held by Great Holding LimitedGreat Fashion Trading (Shanghai) Limited (d)

Trading of clothes, import and export activities


100 -

(a) 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.

(b) 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.

(c) 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.

(d) 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.



17 Property, plant and equipment

Machinery and

equipmentRMB’000

Leasehold buildings

and workshops

RMB’000

Furniture & fitting

and office equipment

RMB’000

Motorvehicles

RMB’000

Construction in-progress

RMB’000Total

RMB’0002010 GroupCostBeginning of financial year 13,016 4,173 1,464 1,699 6,616 26,968Additions 1,842 - 1,401 1,184 51,366 55,793End of financial year 14,858 4,173 2,865 2,883 57,982 82,761

Accumulated depreciationBeginning of financial year 4,282 1,263 837 1,229 - 7,611Depreciation charge (Note 6) 1,237 188 283 229 - 1,937End of financial year 5,519 1,451 1,120 1,458 - 9,548

Net book valueEnd of financial year 9,339 2,722 1,745 1,425 57,982 73,213

CompanyCostAdditions and balance at end

of financial year - - 11 - - 11

Accumulated depreciationDepreciation charge and

balance at end of financial year - - 3 - - 3

Net book valueEnd of financial year - - 8 - - 8

Machinery and

equipmentRMB’000

Leasehold buildings

and workshops

RMB’000

Furniture & fitting

and office equipment

RMB’000

Motorvehicles

RMB’000

Construction in-progress

RMB’000Total

RMB’0002009 GroupCostBeginning of financial year 12,610 4,173 1,316 1,699 3,444 23,242Additions 406 - 148 - 3,172 3,726End of financial year 13,016 4,173 1,464 1,699 6,616 26,968

Accumulated depreciationBeginning of financial year 3,135 1,075 649 1,028 - 5,887Depreciation charge (Note 6) 1,147 188 188 201 - 1,724End of financial year 4,282 1,263 837 1,229 - 7,611

Net book valueEnd of financial year 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).



18 Intangible assets

Group Company2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000Composition:Land-use rights 17,120 16,546 - -Trademark and licenses - 55 - -Computer software licenses 499 91 - -

17,619 16,692 - -

(a) Land-use rights

Group Company2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000CostBeginning of financial year 16,712 1,462 - -Additions 919 15,250 - -End of financial year 17,631 16,712 - -

Accumulated amortisationBeginning of financial year 166 136 - -Amortisation charge 345 30 - -

End of financial year 511 166 - -

Net book value 17,120 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 High-Tech 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).



18 Intangible assets (cont’d)

(b) Trademark and licences

Group Company2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000CostBeginning of financial year 394 394 - -Write-off (394) - - -End of financial year - 394 - -

Accumulated amortisationBeginning of financial year 339 208 - -Amortisation charge 55 131 - -Write-off (394) - - -End of financial year - 339 - -

Net book value - 55 - -

The Group’s licence from Warner Bros. Consumer Products Inc. for the use of the "Superman" trademark expired on 31 May 2010.

(c) Computer software licenses

Group Company 2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000CostBeginning of financial year 156 156 - -Additions 455 - - -End of financial year 611 156 - -

Accumulated amortisationBeginning of financial year 65 32 - -Amortisation charge 47 33 - -End of financial year 112 65 - -

Net book value 499 91 - -

(d) Amortisation expense included in the statement of comprehensive income is analysed as follows:

Group2010 2009

RMB’000 RMB’000

Cost of sales 85 161Administrative expenses 362 33Total (Note 6) 447 194



19 Trade and other payables

Group Company2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000

Trade payables – Non-related parties 20,827 2,668 - -Accrued operating expenses 6,652 3,366 554 1,179Advances from customers – Non-related parties 4,074 1,478 - -Non-trade amounts due to subsidiaries - - 7,922 7,922

Other payables 6,854 964 516 -38,407 8,476 8,992 9,101

The non-trade amounts due to subsidiaries are unsecured, interest-free and are repayable on demand.

20 Borrowings

Group Company 2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000CurrentBank borrowings 45,600 20,700 - -Bills payables 30,785 12,210 - -Trade receivables factoring 37,509 13,319 - -Total borrowings 113,894 46,229 - -

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 Company 2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000

6 months or less 84,994 46,229 - -6 – 12 months 28,900 - - -

113,894 46,229

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.



21 Share capital

No of ordinary Amount

shares RMB’000Group and Company2010Beginning and end of financial year 265,000,000 104,766

2009Beginning of financial year 10,000 22,060Share split 199,990,000 -After share split 200,000,000 22,060Issuance of shares pursuant to initial public offering 65,000,000 92,462Share issue expenses - (9,756)End of financial year 265,000,000 104,766

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 sub-division 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 Company2010 2009

RMB’000 RMB’000

Ordinary dividend paidFinal 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.



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

RMB’000 RMB’000

Property, plant and equipment 30,000 75,980

(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

RMB’000 RMB’000

Not later than one year 838 437Between one and five years 1,118 -

1,956 437

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:

Group2010 2009

RMB’000 RMB’000

Wages and salaries 1,978 1,120Directors’ fees 771 317Employer’s contribution to defined contribution plans including CPF 123 91Other short-tem benefits 109 109

2,981 1,637

Included in the above is total compensation to directors of the Company amounting to RMB1,844,000 (2009:

RMB836,000).



26 Financial risk management

Financial risk factors The Group’s activities expose it to market risk (including currency risk, interest rate risk and price risk), credit

risk and liquidity risk. The Group’s overall risk management strategy seeks to minimise adverse effects from the unpredictability of financial markets on the Group’s 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 People’s 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 Group’s 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 Group’s currency exposure based on the information provided to key management is as follows:

RMB USD Other TotalRMB’000 RMB’000 RMB’000 RMB’000

GroupAt 31 December 2010Financial assetsCash and cash equivalents 70,281 47,806 6,966 125,053Trade and other receivables 179,243 103,250 - 282,493Derivative financial assets - 916 - 916

249,524 151,972 6,966 408,462Financial liabilitiesBorrowings 92,655 21,239 - 113,894Other financial liabilities 35,563 1,762 1,082 38,407Derivative financial liabilities - 941 - 941

128,218 23,942 1,082 153,242

Net financial assets 121,306 128,030 5,884 255,220Add: Net non-financial assets 117,807 - 161 117,968

Currency profile including non-financial assets and liabilities 239,113 128,030 6,045 373,188

Currency exposure of financial assets, net of those denominated in the respective entities functional currencies - 128,030 6,045 134,075



26 Financial risk management (cont’d)

Financial risk factors (cont’d)

(a) Market risk (cont’d) (i) Currency risk (cont’d)


GroupAt 31 December 2009Financial assetsCash and cash equivalents 81,759 15,003 11,101 107,863Trade and other receivables 78,084 118,956 - 197,040Other current assets 38 - - 38

159,881 133,959 11,101 304,941Financial liabilitiesBorrowings 35,510 10,719 - 46,229Other financial liabilities 6,786 511 1,179 8,476

42,296 11,230 1,179 54,705

Net financial assets 117,585 122,729 9,922 250,236Add: Net non-financial assets 62,828 - 78 62,906Currency profile including non-

financial assets and liabilities 180,413 122,729 10,000 313,142

Currency exposure of financial assets, net of those denominated in the respective entities functional currencies - 122,729 10,000 132,729

. The Company’s currency exposure based on the information provided to key management is as

follows:


CompanyAt 31 December 2010Financial assetsCash and cash equivalents - 485 786 1,271Other receivables 26,539 - 4,776 31,315Derivative financial assets - 147 - 147

26,539 632 5,562 32,733Financial liabilitiesOther financial liabilities 7,922 - 1,070 8,992

Net financial assets 18,617 632 4,492 23,741Add: Net non-financial assets 209,967 - 159 210,126Currency profile including non-

financial assets and liabilities 228,584 632 4,651 233,867

Currency exposure of financial assets, net of those denominated in the respective entities functional currencies - 632 4,651 5,283





(a) Market risk (cont’d) (i) Currency risk (cont’d)


CompanyAt 31 December 2009Financial assetsCash and cash equivalents - - 9,617 9,617

Financial liabilitiesOther financial liabilities 7,922 - 1,179 9,101

Net financial assets (7,922) - 8,438 516Add: Net non-financial assets 209,967 - 89 210,056Currency profile including non-

financial assets and liabilities 202,045 - 8,527 210,572

Currency exposure of financial assets, net of those denominated in the respective entities functional currencies - - 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 Company 2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000USD against RMB– Weakened (3,841) (7,364) (19) -– Strengthened 3,841 7,364 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 Group’s 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.





(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 Group’s 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 10–35% of trade receivables.

The credit risk for trade receivables based on the information provided to key management is as follows:

Group Company 2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000By geographical areasAsia 61,698 44,849 - -Europe 52,890 46,576 - -North America 12,797 11,965 - -South America 20,711 15,813 - -Other 6,917 13,199 - -

155,013 132,402 - -

By types of customersNon-related parties– Multi-national companies 100,291 75,150 - -– Other companies 54,722 57,252 - -

155,013 132,402 - -

(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.





(b) Credit risk (cont’d)

(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 Company 2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000

Past due 0 to 3 months 5,858 1,115 - -Past due 3 to 6 months 257 407 - -Past due over 6 months 338 - - -

6,453 1,522 - -

There are no trade receivables individually determined to be impaired.

(c) Liquidity risk

The table below analyses the maturity profile of the Group’s and Company’s financial liabilities (including derivative financial liabilities) based on contractual undiscounted cash flows.

Group Company 2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000Less than one yearTrade and other payables 38,407 8,476 8,992 9,101Borrowings 113,894 46,229 - -Derivative financial liabilities 941 - - -

153,242 54,705 8,992 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 Group’s objectives when managing capital are to safeguard the Group’s 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.





(d) Capital risk (cont’d)

Group Company2010 2009 2010 2009

RMB’000 RMB’000 RMB’000 RMB’000

Net debt 27,248 - 7,721 -Total equity 373,188 313,142 233,867 210,572

Total capital 400,436 313,142 241,588 210,572

Gearing ratio 7% - 3% -

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) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);

(b) 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

(c) 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.



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 All otherManufacturing GRAT.UNIC Superman Segments Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000SalesTotal segment sales - sales to

external parties 552,610 72,164 1,044 - 625,818

Gross profit 91,848 17,447 308 - 109,603Other gains, net 404Unallocated costs (24,802)Finance expense (2,485)Profit before income tax 82,720Income tax expense (7,669)Net profit 75,051

Net profit includes: - Depreciation 729 685 10 513 1,937 - Amortisation 30 - 55 362 447

Segment assets 244,603 71,982 - 213,709 530,294

Segment assets includes:Additions to property, plant and

equipment 839 1,003 - 53,951 55,793Additions to intangible assets - - - 1,374 1,374Deposit for property, plant and

equipment 2,758 252 - - 3,010

Segment liabilities 42,513 11 - 114,582 157,106



27 Segment information (cont’d)

For the financial year ended 31 December 2009

Contract All otherManufacturing GRAT.UNIC Superman Segments Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000SalesTotal segment sales - sales to

external parties 454,327 60,174 1,800 - 516,301

Gross profit 82,805 14,563 541 - 97,909Other gains, net 6,279Unallocated costs (18,530)Finance expense (1,923)Profit before income tax 83,735Income tax expense (8,710)Net profit 75,025

Net profit includes: - Depreciation 712 605 18 389 1,724 - Amortisation 30 - 131 33 194

Segment assets 189,360 35,220 864 147,442 372,886

Segment assets includes:Additions to property, plant and

equipment 406 - - 3,320 3,726Additions to intangible assets - - - 15,250 15,250

Segment liabilities 14,781 16 - 44,947 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.



27 Segment information (cont’d)

Reportable segments’ assets are reconciled to total assets as follows: (cont’d)

Group2010 2009

RMB’000 RMB’000

Segment assets 316,585 225,444Unallocated– Cash and cash equivalents 125,053 107,863– Other receivables 2,411 9,178– Other current assets 2,642 1,555– Property, plant and equipment 67,251 13,505– Intangible assets 16,352 15,341

530,294 372,886

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.

Group2010 2009

RMB’000 RMB’000

Segment liabilities 42,524 14,797Unallocated– Trade and other payables 34,333 6,998– Borrowings 76,385 32,910– Current income tax liabilities 3,864 5,039

157,106 59,744

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 Group’s three business segments generated its revenue from these five main geographical areas based on customers’ locations:

2010 2009

RMB’000 RMB’000

Asia 165,960 199,106 Europe 285,926 221,745 North America 61,905 26,759 South America 89,572 45,652 Other 22,455 23,039

625,818 516,301

All non-current assets of the Group are located in the PRC.



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 Group’s accounting periods beginning on or after 1 January 2011 or later periods and which the Group has not early adopted:

• Amendments to FRS 24 – Related party disclosures (effective for annual periods beginning on or after 1 January 2011)

• INT 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.


Statistics of ShareholdingsAs at 7 March 2011

No. of Shares issued : 265,000,000Class of Shares : Ordinary sharesVoting rights : One vote per share

DISTRIBUTION OF SHAREHOLDINGS

No. of Size of Shareholdings Shareholders % No. of Shares %1,000 - 10,000 172 32.89 1,195,000 0.4510,001 - 1,000,000 333 63.67 27,127,000 10.241,000,001 and above 18 3.44 236,678,000 89.31

Total 523 100.00 265,000,000 100.00

TWENTY LARGEST SHAREHOLDERS

No. Name No. of Shares %

1 DBS Vickers Securities (S) Pte Ltd 72,212,000 27.252 United Overseas Bank Nominees Pte Ltd 50,430,000 19.033 UOB Kay Hian Pte Ltd 40,565,000 15.314 OCBC Securities Private Ltd 21,959,000 8.295 Kim Eng Securities Pte. Ltd. 20,940,000 7.906 Hong Leong Finance Nominees Pte Ltd 4,980,000 1.887 Sze Sau King 4,648,000 1.758 Citibank Nominees Singapore Pte Ltd 3,650,000 1.389 Lau Siu Fung 2,236,000 0.84

10 Raffles Nominees (Pte) Ltd 2,100,000 0.7911 Weng Wenju 1,960,000 0.7412 Weng Jindao 1,910,000 0.7213 Lim Chiew Hock (Lin Qiufu) 1,895,000 0.7214 Neo Cheng Soon 1,816,000 0.6915 Kwek Swee Heng 1,650,000 0.6216 Wong Tew Hong 1,421,000 0.5417 CIMB Securities (Singapore) Pte Ltd 1,156,000 0.4418 Daniel Tan Poon Kuan 1,150,000 0.4319 Charles Patrick 1,000,000 0.3820 Soh Hock Leong 1,000,000 0.38

Total 238,678,000 90.08


Statistics of ShareholdingsAs 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 sharesName Direct Interest % Indirect Interest %

G&W Investment Management Co., Ltd. (1) 181,500,000 68.49 - -Weng Wenwei (2) - - 181,500,000 68.49

Note:

(1) 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).

(2) 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..

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.


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. 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

2. 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

3. 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

4. To re-elect Mr Weng Wenwei who is retiring under Article 107 of the Articles of Association. Resolution 4

5. To re-elect Mr Lim Yeow Hua @ Lim You Qin who is retiring under Article 107 of the Articles of Association. Resolution 5

6. To re-appoint Messrs Nexia TS Public Accounting Corporation, as the Company’s Auditors and to authorise the Directors to fix their remuneration. Resolution 6

7. 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) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or

(ii) 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);


(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

(ii) any subsequent bonus issue, consolidation or subdivision of shares;

(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

(4) (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

BY ORDER OF THE BOARD

ONG WEI JINCOMPANY SECRETARY

6 April 2011SINGAPORE



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 Company’s registered office at 36 Carpenter Street Singapore 059915 at least 48 hours before the time of the Meeting.

(ii) If re-elected under Resolution 4, Mr Weng Wenwei will remain as Executive Chairman of the Board and a member of the Nominating Committee.

(iii) 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.

(iv) 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.



This page has been intentionally left blank.

I/We (Name) NRIC/Passport No.

of (Address)

being a member/members of the above-mentioned Company, hereby appoint:-

Name NRIC/Passport No. Proportion of ShareholdingsNo. of Shares %

Address

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of ShareholdingsNo. of Shares %

Address

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: For AgainstOrdinary 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’ Fees4. Re-election of Mr Weng Wenwei as a Director under Article 1075. Re-election of Mr Lim Yeow Hua @ Lim You Qin as a Director under Article 1076. Re-appointment of Nexia TS Public Accounting Corporation as Auditors

Special Business7. 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: No. of Shares

(a) CDP Register

(b) Register of Members

.......................................................................Signature(s) of Shareholder(s) or, Common Seal of Corporate Shareholder

GREAT GROUP HOLDINGS LIMITED

IMPORTANT:

1. For investors who have used their CPF monies to buy Great Group Holdings Limited’s shares, this Annual Report is forwarded to them at their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. 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.

3. 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.

PROXY FORM(Please see notes overleaf before completing this Form)

GREAT GROUP HOLDINGS LIMITED(Incorporated in the Republic of Singapore)

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.

2. 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.

3. 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.

4. A proxy need not be a member of the Company.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.





Annual Report 2010

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Annual R

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Documents

Great Group Holdings 2010 Annual Report