Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 August 2013 1 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 I. Important Notice, Table of Contents and Definitions The Board of Directors,the Supervisory Committee, the directors, the supervisors, and expecutives of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report. Directors other than the followings presented the Board Meeting at which this report was examined : Reason for not presenting the Name of the director absented Position Name of consignee meeting None The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. Mr.Wang Bin, The Company leader, Mr. Jin Zhenyuan, Chief financial officer and the Mr.Liu Yi, the person in charge of the accounting department (the person in charge of the accounting )hereby confirm the authenticity and completeness of the financial report enclosed in thel report. 2 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Table of Contents 2013 Semi- Annual Report I.Important Notice, Table of contents and Definitions II. Basic Information of the Company III. Summary of Accounting Highlights and Business Highlights IV. Report of the Board of Directors V. Important Events VI. Change of share capital and shareholding of Principal Shareholders VII. Information about Directors, Supervisors and Senior Executives VIII. Financial Report IX. Documents available for inspection 3 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Definition Terms to be defined Refers to Definition Refers Company/The Company/ Shen Textile Shenzhen Textile (Holdings) Co., Ltd to Refers Articles of Association of Shenzhen Textile (Holdings) Co., Articles of Association to Ltd Actual controller / National Assets Refers National Assets Regulatory Commission of Shenzhen Regulatory Commission of Shenzhen to Municipal People's Government Municipal People's Government The Controlling shareholder/ Shenzhen Refers Shenzhen Investment Holdings Co., Ltd. Investment Holdings Co., Ltd. to Refers Shenchao Technology Shenzhen Shenchao Technology Investment Co., Ltd. to Refers Shengbo Optoelectronic Shenzhen Shengbo Optoelectronic Technology Co., Ltd. to Refers CSOT Shenzhen China Star Optoelectronic Technology Co., Ltd. to Refers “CSRC” China Securities Regulatory Commission to Refers Company Law Company Law of the People’s Republic of China to Refers Securities Law Securities Law of the People’s Republic of China to Refers The Report 2013 Semi-Annual Report to 4 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 II. Basic Information of the Company 1. Company Information Stock abbreviation Shen Textile A ,Shen Textile B Stock code: 000045、200045 Modified stock ID(if any) None Stock exchange for Shenzhen Stock Exchange listing: Name in Chinese 深圳市纺织(集团)股份有限公司 English name (If any) SHENZHEN TEXTILE (HOLDINGS) CO.,LTD. English abbreviation (If STHC any) Legal Representative Wang Bin 2. Contact person and contact manner Board secretary Securities affairs Representative Name Chao Jin Jiang Peng 6/F, Shenfang Building, No.3 6/F, Shenfang Building, No.3 Contact address Huaqiang North Road, Futian Huaqiang North Road, Futian District, Shenzhen District, Shenzhen Tel 0755-83776043 0755-83776043 Fax 0755-83776139 0755-83776139 E-mail chaoj@chinasthc.com jiangp@chinasthc.com 3.Other 1.Way to contact the Company Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not □ Applicable √ Not Applicable Registrations address, offices address and codes as well as website and email of the Company hasnochange in reporting period, found mor details in Annual Report 2012. 2. About information disclosure and where this report is placed Did any change occur to information disclosure media and where this report is placed during the reporting period? □ Applicable √ Not applicable The newspapers designated by the Company for information disclosure, the website designated by CSRC for 5 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 disclosing this report and the location where this report is placed did not change during the reporting period. The said information can be found in the 2012 Annual Report. 3.Change of the registered information Did any change occur to the registered information during the reporting period? √ Applicable □Not Applicable Number of Date of Authority Business License Taxation Organization Registration Registered with of Enterprise as Registration No.: Code Legal Person Registration at the end of the April 9, 2013 Shenzhen 440301105031014 440301192173749 192173749 reporting period The company administrated capital changed from RMB 336,521,849 to RMB 506,521,849 on 9th April 2013. 4.Other relevant information Whether other relevant information has changed in reporting period or not □ Applicable √ Not applicable III. Summary of Accounting data and Financial index 1.Major accounting data and /Financial indexs May the Company make retroactive adjustment or restatement of the accounting data of the previous years due to change of the accounting policy and correction of accounting errors. □ Yes √ No Increase/decrease over the Reporting period Same period of last year same period of last year(%) Operating income(RMB) 576,348,010.06 375,432,991.91 53.52% Net profit attributable to the shareholders -3,642,102.17 -18,736,243.07 80.56% of the listed company(RMB) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of -24,203,781.00 -25,242,008.05 4.11% listed company(RMB) Cash flow generated by business operation, -57,514,854.53 -16,058,109.71 -258.17% net(RMB) Basic earning per share(RMB/Share) -0.01 -0.06 -83.33% Diluted gains per -0.01 -0.06 -83.33% 6 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 share(RMB/Share)(RMB/Share) Weighted average income/asset ratio(%) -1.57% -1.37% Decreaed by 0.2% As at the end of the Changed (%)over end of As at the end of last year reporting period prev. year Gross assets(RMB) 2,808,457,777.29 1,880,660,667.21 49.33% Shareholders’ equity attributable to 2,259,589,492.24 1,303,011,954.39 73.41% shareholders of the listed company(RMB) (II)The differences between domestic and international accounting standards 1.Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed in the financial reports of differences in net income and net assets. Unit:RMB Net profit attributable to the shareholders Net Assets attributable to the of the listed company shareholders of the listed company Amount in the Amount in the End of the reporting Beginning of the reporting period previous period period reporting period According to CAS -3,642,102.17 -18,736,243.07 2,259,589,492.24 1,303,011,954.39 Items and amount adjusted according to IAS 2. Difference in Net profit and net Assets in the Financial Report as Disclosed Respectively according to the Accounting standards Outside Mainland China and the Chinese Accounting Standards. Unit:RMB Net profit attributable to the shareholders Net Assets attributable to the of the listed company shareholders of the listed company Amount in the Amount in the End of the reporting Beginning of the reporting period previous period period reporting period According to CAS -3,642,102.17 -18,736,243.07 2,259,589,492.24 1,303,011,954.39 Items and amount adjusted according to IAS 3.Note to the Difference in the Accounting Data based on the Accounting Standards of CAS and IAS. No difference. (III)Items and amount of non-current gains and losses Unit:RMB 7 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Amount Notes Mainly including the amortized governmental R&D subsidy of RMB3,954,990.00,High-tech industrialization demonstration project matching funds amortization was RMB 100,000.00, new flat panel display industry of special projects amortization was RMB 500,000 state grant funds, the Shenzhen Municipal Finance Committee allocated a loan Govemment subsidy recognized in currentgain and loss(excluding discount amortization of RMB those closely related to the Company’s business and granted 5,645,436.24 96,822.24, TFT-LCD polarizing under the state’s policies) film industry projects grant funds amortization was RMB 600,000.00, Futian District, Shenzhen industry development funds grants was RMB 101,400.00, the Shenzhen Municipal Committee of emerging industries of strategic financial subsidies was RMB 240,000.00, Shenzhen SME development, Booth subsidy was RMB 52,224.00. Gain/loss from change of fair value of transactional financial Investment income obtained asset and liabilities, and investment gains from disposal of through the secondary transactional financial assets and liabilities and sellable financial 19,468,746.45 market to sell the *ST Shen assets other than valid period value instruments related to the Victor Onward A Company’s common businesses. Other non-business income and expenditures other than the above 319,182.75 Amount of influence of income tax 4,871,686.61 Total 20,561,678.83 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Compaines Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason. □ Applicable√ Not applicable 8 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 IV. Report of the Board of Directors I. General In the first half of 2013, macroeconomy was continuously depressed due to the slowdown of economic growth rate at home and abroad. The Company timely adjusted operation strategy according to market change, actively dealt with various difficulties, made all-out effort to accelerate the construction progress of the project of polarizer for TFT-LCD, improved the earnings of property enterprises, increased cash flow and actively adjusted asset structure so as to continue to keep steady development. 1. In the report period, the Company completed private issue of shares for the phase-II project of polarizer for TFT-LCD. Additional 170,000,000 shares were listed on March 26, 2013. The net amount of raised proceeds is RMB 961.75 million. The capital structure and financial structure of the Company were improved and financial risks were lowered, which laid solid foundation for its strategic transformation and development; 2. In the report period, As a key project for the strategic transformation of the Company, phase-I project of polarizer for TFT-LCD made smooth progress. Line 4 and Line 5 were in normal production run and market reaction was good. The customers for whom products passed certification include Optoelectronic, Longteng Optoelectronic, Shenchao Optoelectronic, Zhonghang Optoelectronic, etc. Line 4 completed the development and sampling of polarizer for new type of machines to match the product adjustment of Huaxing Optoelectronic. While keeping normal production, Line 5 actively developed and introduced new products including the ones of dye kind and IPS thin polarizers. During the construction of the phase-II project of polarizer for TFT-LCD, the Company strictly standardized the open tender for project construction while conducting extensive technical exchange. 6For line 6, the technical exchange for main unit has been basically completed; 3. In the report period, The textile subsidiaries of the Company were affected by underwear export market. The orders from Japanese customers decreased. Through developing business and tapping internal resources, the Company became customer-oriented and order-oriented, grasped the latest demands of domestic consumers, actively improved R&D and design capability and quickened the development of domestic market. Meanwhile, it innovated marketing mode and strengthened the promotion of its own brands through three channels, i.e., e-business and direct sales, distributorship & agencies and online sales; 4. In the report period, The property subsidiaries of the Company tapped potential and enhanced efficiency, strengthened management, actively took actions to deal with market change and comprehensively enhanced the overall level and quality of property management. As a result, the income from property lease increased by 8.06% year on year; 5. In the report period, The Company unceasingly strengthened the construction of internal control system strictly according to the requirements of regulatory authority. According to relevant provisions of Fundamental Norms of Internal Control of Enterprises, Supporting Guidelines for Internal Control of Enterprises and Articles of Association of the Company, it perfected and revised its internal control systems and key business flows, further strengthened the implementation of internal norms, unceasingly improved its internal control and mangement based on strengthening daily supervision and special inspection and effectively prevented operation risks so as to ensure its healthy development; 6. In the report period, According to relevant work requirements of 100-day Campaign for Production Safety, the Company conducted much work about safety inspection and timely issued rectification notice and supervised and urged the completion of rectification after finding problems and potential safety hazards. As a result, it fulfilled the work target of no serious safety-related accidents in the first half year. 9 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 2.Main business analysis I. General 1. Scope of main operation At present, the Company is mainly engaged in high-tech industry focusing on R&D, production and marketing of polarizers for liquid crystal display, management of properties in bustling business districts of Shenzhen and reserved high-class textile and garment business. 2. Analysis of change in main financial data (1) The operating income in current period increased by RMB 200.9150 million and 53.52% year on year mainly due to the increase of sales of polarizer; (2) The operating cost in current period increased by RMB 191.3372 million and 56.85% year on year mainly due to the increase of sales cost caused by the growth of polarizer business volume; (3) The financial expenses in current period decreased by RMB 14.9997 million and 1401.29% year on year mainly due to the generation of exchange gains from payable liabilities in yen after depreciation of Japanese Yen by big margin; (4) The assets impairment loss in current period increased by RMB 4.1733 million and 173.01% year on year mainly due to the increase of provision for bad debts and provision for diminution in value of inventories of polarizer; (5) The investment income in current period increased by RMB 17.3845 million and 384.29% year on year mainly due to the investment income obtained from additional sales of financial assets available for sale; (6) The other composite income in current period decreased by RMB 10.7916 million year on year because the Company sold financial assets available for sale and transferred out the gains of the preivous period from other composite income; (7) The net cash flows from operating activities decreased by RMB 41.4567 million and 258.17% year on year mainly due to the increase of purchase of raw materials necessary for polarizers; (8) The net cash flows from investing activities decreased by RMB 258.3587 million and 268.17% year on year mainly due to the redeposit of RMB 300 million as structural deposit in current period; (9) The net cash flows from financing activities increased by 925.646 million and 76,499.67% mainly because the Company privately issued 170,000,000 ordinary RMB shares (par value per share: RMB 1.00) and raised net proceeds of RMB 961,751,000.85 according to the Approval of Private Issue of Shares by Shenzhen Textile (Holding) Co., Ltd. (CSRC Permit (2013) No. 2 Document) issued by China Securities Regulatory Commission. Year-on-year changes in major financial statistics Unit:RMB This report period Same period last year YOY change(%) Cause change Mainly due to the Operating income 576,348,010.06 375,432,991.91 53.52% increase of sales of polarizer; Mainly due to the increase of sales cost Operating cost 527,913,970.56 336,576,764.17 56.85% caused by the growth of polarizer business 10 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 volume Sale expenses 4,096,726.20 3,823,373.24 7.15% Mainly due to Administrative 75,713,852.63 52,925,299.50 43.06% increase of expenses expenses of polarizer R&D Due to exchange gains from depreciation of Financial expenses -13,929,247.57 1,070,421.02 -1,401.29% Japanese Yen as a result of increase of purchase of materials and commodities Income tax expenses 2,920,726.11 2,685,013.34 8.78% Due to increase of R&D investment 45,107,185.59 22,133,249.02 103.8% R&D investment Mainly due to the increase of purchase Net cash flows from -57,514,854.53 -16,058,109.71 -258.17% of raw materials operating activities necessary for polarizers; Mainly due to the redeposit of RMB Net cash flows from -354,699,383.79 -96,340,650.17 -268.17% 300 million as investing activities structural deposit in current period Mainly because the Company privately issued 170,000,000 ordinary RMB shares (par value per share: RMB 1.00) and raised net proceeds of RMB 961,751,000.85 Net cash flows from 924,435,962.69 -1,210,000.00 76,499.7% according to the financing activities Approval of Private Issue of Shares by Shenzhen Textile (Holding) Co., Ltd. (CSRC Permit (2013) No. 2 Document) issued by China Securities Regulatory 11 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Commission. Net increase in cash 512,091,863.52 -113,877,854.90 549.69% Ditto and cash equivalents Major changes in profit composition or cources during the report period □ Applicable √ Not applicable The profit composition or sources of the Company have remained largely unchanged during the report period. Delay of future development and plan disclosed in Company’s IPO prospectus, fund raising prospectus and capital reorganization report into this report period.\ □ Applicable √ Not applicable No future development and plan disclosed in Company’s IPO prospectus, fund raising prospectus and capital reorganization report into this report period.\ Implementation of business plans disclosed in previous periods in this period. In the report period, Facing adverse factors including rise in cost and fiercer market competition, the Company actively dealt with difficult market situation, made adequate preparation, made overall arrangement in advance, adopted the operation policy of "refined management, intensive operation, satisfactory development of phase-II project and increase of vitality", strengthened refined management, improved its capability of risk control technological innovation, actively developed markets, quickened the construction of the polarizer project by centralizing advantageous resources and accelerated its strategic transformation in the report period. It mainly completed the following work: 1. Reasonably allocating resources, making all-out efforts to accelerate the construction of the project of polarizer for TFT-LCD and ensuring project progress as scheduled; 2. Increasing continuous investment in R&D, satisfactorily developing new technologies and new products, actively quickening technological innovation and completing the development of ultrathin polarizer of brightening type for TFT of medium and small sizes on the strength of Line 5; 3. Seizing critical market opportunities, optimizing product structure, properly conducting market development and actively increasing market share; 4. Carrying out thorough construction of internal control system and strengthening enterprise risk management; 5. Consolidating advantageous markets and making efforts to enhance property occupancy rate and rent recovery rate; 6. Establishing internal training and lecturer management system and improving existing training system, officially starting the running of Shengbo Online College, establishing Online College Management and Appraisal System, making additional scheme for appraising logistics personnel and clerks and improving appraisal mechanism; 7. Strengthening refined management, optimized management processes and improving all systems; 8. Actively carrying out safety inspection and safety training and earnestly strengthening safety in production and quality management, completing all kinds of special safety inspection in the report period, timely issuing rectification notice and supervised and urged the completion of rectification after finding problems and potential safety hazards and fulfilling the work target of no serious safety-related accidents in the first half year. 3. Business composition Unit:RMB 12 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Increase/decrease Increase/decrease Increase/decrease of rincipal of reverue in the of gross profit Gross profit business cost over Turnover Operation cost same period of rate over the same rate(%) the same period the previous period of the of previous year year(%) previous year (%) (%) Industry Domestic and 231,978,740.01 230,103,752.45 0.81% 8.65% 8.33% 55.74% foreign trade Manufacturing 300,083,729.57 284,719,485.05 5.12% 148.69% 156.96% -37.35% Lease and Management of 42,456,703.52 11,261,896.10 73.47% 8.06% -1.23% 3.52% Property Product Income from Lease and 42,456,703.52 11,261,896.10 73.47% 8.06% -1.23% 3.52% Management of Property Income from 10,150,142.39 8,055,670.24 20.63% -54.22% -54.68% 4.07% textile Income from 289,933,587.18 276,663,814.81 4.58% 194.36% 197.39% -17.51% Polarizer sheet Income from 231,978,740.01 230,103,752.45 0.81% 8.65% 8.33% 55.74% Trading Area Domestic 153,551,297.76 106,912,591.58 30.37% 25.08% 16.31% 20.9% Overseas 420,967,875.34 419,172,542.02 0.43% 67.91% 72.71% -86.66% 4. Analysis On core Competitiveness 1. It owns excellent management team and core technical personnel. Having been engaged in the field of polarizer for liquid crystal display for years, the Company boasts R&D and production experience of more than ten years and a management team and a core technician team with strong technological capability, good teamwork, rich experience, international horizon and cutting-edge conceptions about polarizer technology. Meanwhile, the Company has always fully realized the value of qualified personnel in respect of selection and appointment, performance appraisal, wage and benefits and training development, stimulated them to make more contribution, formed an atmosphere of hard work for success, further improved performance appraisal system, made efforts to improve the enthusiasm, initiative, sense of responsibility and sense of belonging of core tehnical personnel, formed reasonable talent team and let every individual give full play to his talent; 2. It owns advanced manufacturing technologies and rich technology accumulation. In the field of polarizer business at home, the Company has had accmulated advantages in respect of brand, technology and operation 13 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 management experience and formed complete set of unique proprietary technologies that match the characteristics of its equipment and processes and suit all kinds of products. It now has all kinds of polarizer products including TN, HTN, STN - LCD, half-transparent polarizers, polaroid glasses and polarizer for TFT-LCD. In the report period, the Company smoothly completed equipment optimization, production capacity expansion and product adjustment. On the strength of Line 5, the Company completed the development of ultrathin brightening-type polarizer of medium and small size for TFT, which has passed internal test. Samples have been sent to relevant clients for certification. It also completed the batch trial use of Damei PE protective film and Huaxiang release film and on-line formula adjustment and sampling of Hanke S-804 glue. The performance indicators of many kinds of the Company's products have reached the level of similar products in international market; 3. It has strong technology R&D capability. The Company has attached great importance to investment in technology R&D. To ensure the constant improvement of innovation ability and normal proceeding of technology R&D projects, R&D investment in the report period increased by 103.8% year on year. Meanwhile, it actively carried out communication and cooperation and accelerated the construction of R&D platform. The Company owns an engineering laboratory and municipal-level R&D center for polarization materials and technologies in Shenzhen and a special R&D team and R&D instruments and equipment for the R&D of core production technologies of polarizer for LCD, development of new products including polarizer for OLED, relevant industrialization and manufacturing localization of raw materials for production of polarizer. Through comprehensive cooperation in respect of production, study and research, the Company is sure to own continuous and rapid R&D and innovation ability to adapt to the rapid-updating characteristics of polarizer industry and meet its demand of large-scale development; 4. It has good and stable customer resources. The Company owns good customer groups both at home and abroad and keeps long-term technical exchange and cooperation relationship with some famous enterprises in respect of polarizer application. It is able to give full play to advantages of localization, adopt "prescription-type" customer development strategy, prodvide one-to-one supporting services, jointly develop customized products, shorten supply period, provide rapid and high-quality after-sales services and supply competitive products with high performance-price ratio to customers; 5. Informatization development has been strengthened. In the report period,the Company continued to perfect ERP information management system. Through deep development and extensive utilization of information resources, the efficiency of management measures has been sharply enhanced and the Company's management level has been further enhanced. Meanwhile, the timeliness, comprehensiveness and accuracy of production and operation information transmission and use has been ensured while the Company's resource allocation and operation efficiency has been enhanced and its response speed has been effectively quickened; 6. It has the policy environment for rapid development. The state activley suppots the manufacturing localization of upstream raw materials for TFT-LCD to realize co-development of complete industrial chains. Of the upstream raw materials for TFT - LCD, manufacturing localization of very few kinds of materials including polarizer can be realized. National support has provided opportunities for the Company's development. Shengbo Optoelectronic was included in the list of the first group of colored light filter coating and polarizer enterprises enjoying tax preference for new-type display device industry and the preferential policy of exemption from import tariff for the import of raw materials for production and consumables that can not be produced domestically, which, as a result, further reduced its production cost and enhanced its product competitiveness. Shengbo Optoelectronic was certified by State Development and Reform Commission as an "industrialization unit for polarizer for TFT-LCD" and certified by Ministry of Science and Technology as "executive entity for engineering technological development project for polarizer for TFT-LCD in National High Technology Research and Development Program (863 Program). 14 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 5. Analysis on investment Status 1. External Equity investment (1)External investment None (2)Holding of the equipty in financial enterprises None (3)Investment in Securities Number Sharehold Number of shares Sharehold Book ing of shares Initial held at ing balance at Gain.loss proportio held at Short investmen the proportio the end of of the Security Security n at the the end of Accounti Sauce of form of t beginning n at the the reporting category code beginning the ng items the shares security cost(RM of the end of the reporting period of the reporting B) reporting reporting period (RMB) reporting period period(sh period(%) (RMB) period(%) (shares) ares) Financial * ST 11,356,63 61,441,31 19,468,74 assets Legal Stock 000018 victor 9,233,394 5.46% 6,958,246 4.11% 8.86 2.18 6.45 available shares onward for sale Debt restructur Financial ing 9,847,598 5,490,532 assets Stock 000030 ST Fawer 985,733 0.34% 985,733 0.34% 0 repaymen .31 .81 available t of share for sale s 21,204,23 10,219,12 66,931,84 19,468,74 Total -- 7,943,979 -- -- -- 7.17 7 4.99 6.45 Disclosure date of the board announcement on approval of January 2, 2013 the securities investment 15 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 2.Entrusted Financing , investment in derivative products and entrusted loan (1)Entrusted Financing UUnit:RMB Amount Amount Amount Amount of of gains of money of Name of Related Mode of principle and losses Relations Product entrusted Starting Ending provision Estimated the transactio remunerat actually realized hip type for date date for profit trustee n or not ion recovered in the managem impairme in current report ent nt (if any) period period Industrial Bank 6-month Break-eve Shenzhen April 26, October N/A No structural 10,000 n floated 0 0 75.94 0 Huafu 2013 23, 2013 deposit income Sub-bran ch China Merchant s 3-month Break-eve Bank.She April 26, July 25, N/A No structural 5,000 n floated 0 0 29.38 0 nzhen .Sh 2013 2013 deposit income enfang Bub-bran ch China Merchant s 6-month Break-eve Bank.She April 26, October N/A No structural 15,000 n floated 0 0 92.22 0 nzhen .Sh 2013 25, 2013 deposit income enfang Bub-bran ch Total 30,000 -- -- -- 0 0 197.54 0 Fund source Idle funds raised in 2013 Overdue principal unrecovered and 0 cumulative amount of income Lawsuit involved (if applicable) Not Applicable Date of disclosure of announcement of the board of directors after examination and April 16, 2013 approval of entrusted money management 16 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (if any) (2)Investment in dervatives None (3)Entrusted Borrower None 3.Application of the Raised capital (1)General application of the raised capital Unit:RMB’0000 Total amount of the raised capital 179,051.90 Total raised capital invested in the report period 953.26 Total accumulative raised capital invested 84,491.75 Amount of raised capital of which the purpose was 0 changed in the report period Accumulative amount of raised capital of which the 0 purpose has been changed Proportion of raised capital of which the purpose has 0% been changed (%) Notes to use of raised capital In the report period, the proceeds raised through private issue in 2010 and 2013 were used. Refer to the Company's Special Report on Deposit and Actual Condition of Raised Proceeds in the First Half of 2013 published on www.cninfo.com.cn on August 24, 2013 for details. (2)Promised projects of raised capital Unit:RMB’0000 Accumul Investme Date when Total ated nt Benefit Has any Project Total Amount the project raised amount progress realized Has the material changed(i investme inested in has reached Committed investment capital invested ended the in the predicted change ncluding nt after the the projects and investment invested at the end reporting reportin result be taken partial adjustme reporting predicted as of the period(% g realized place in change) nt (1) period applicable commited reporting )(3)=(2)( period feasibility status period(2) 1) 17 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Committed investment projects Phase-II project of December polarizer sheet for No 82,876.8 82,876.8 661.9 84,200.39 101.6% Notes 2 Notes3 No 31, 2012 TFT-LCD Phase-I project of December polarizer sheet for No 96,175.1 291.36 291.36 0.03% 31, 2014 TFT-LCD Subtotal of committeed -- 179,051.9 953.26 84,491.75 -- -- -- -- investment projects Investment of excessive raised capital No Total -- 179,051.9 82,876.8 953.26 84,491.75 -- -- 0 -- -- Reason or situation thatnot on No schedule(on specific project) Notes to major changesin project No feasibility Amount, purpose anduse of excessive Not applicable raised capital Changes in implementation place Not applicable of investment funded by raised capital Adjustment of the implementation way of Not applicable investment funded by raised capital Initial use of raised fund in projects and Not applicable replacement Applicable On March 28, 2013, the 32nd meeting of the fifth board of directors examined and adopted the Proposal Idle raised capital for Supplementing Working Capital with Part of Idle Raised Proceeds. The Company planned to usedas working supplement its working capital with temporarily idle raised proceeds of RMB 300 million for the period of capital no more than 12 months from the day of adoption by the shareholders' general meeting(Refer to No. 2013-15 Announcement for details). This proposal was examined and approved by 2012 shareholders' general meeting on April 22, 2013. 18 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Surplus of investment Not applicable and cause As of June 30, 2013, unused raised proceeds of RMB 300 million were used to temporarily supplement the Use plan of retained Company's working capital and RMB 300 million was used for cash management (Refer to No. 2013-23 fund from financing and No. 2013-28 Announcement for details). All the remaining proceeds were deposited in a special account for raised proceeds, which will all be used for promised investment projects. Problem or situation inusing of raised N/A capital and disclosing Notes: 1. The balance amount of fundraising special amount is RMB 828.7680 million , it will be fully used in committed investment phase-I project of polarizer sheet for TFT-LCD project. The total investment of the project is RMB 849.37 million and the adjusted investment amounted is RMB 926.40 million, the company will pay the balance by fundraising 2. TFT-LCD with a Polaroid projects phase-I include a wide production line (Line 4) and narrow production line (Line 5)., The first half of 2013, Phase-I project of polarizer sheet for TFT-LCD project achieved the sales margin of RMB -10.7148 million. 3. Wide production line (Line 4) has complete mass production in December, 2012, narrow production line (Line 5) has complete mass production in the end of December, 2012. As of June 30, 2013, Phase-I project of polarizer sheet for TFT-LCD project operating time is short, it is difficult to determine whether the investment projects to reach the entire operation period of the anticipated revenue. (3)Change of the Projects invested with the Raised Capital None (4)Information about projects using raised proceeds Summary of projects using raised proceeds Disclosure date Disclosure index Particulars about phase-1 project of No. 2013-18 Announcement on March 20, 2013 polarizer for TFL-LCD www.cninfo.com.cn 4.Analysis on principal subsidiaries and Mutual Shareholding Companies Particulars about the principal subsidiaries and Mutual shareholding companies Unit:RMB Leading Total Operating Company Company Sectors Registered Net assets Tumover Net Profit products assets(RMB profit Name type engaged in capital (RMB) (RMB) (RMB) and services ) (RMB) 19 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Fabrics, Shenzhen bedding, Jinlan clothing, Decorative Textile textiles raw 4,000,000.0 14,889,457. 9,408,933.6 1,246,629.1 1,221,399.6 Subsidiary 983,111.07 Articles Industry materials 0 00 2 7 5 Industrial processing Co., Ltd. manufacturi ng, Shenzhen Property Lisi 2,360,000.0 32,980,428. 15,284,523. 2,839,009.5 2,059,725.1 1,880,391.3 Subsidiary Lease managemen Industrial 0 47 57 6 5 5 t Co., Ltd. Accommod Shenzhen Hotel ation, 10,005,300. 23,533,508. 17,593,131. 4,895,891.0 2,120,439.7 1,873,763.7 Huaqiang Subsidiary services business 00 25 67 0 5 0 Hotel center; Property managemen t and as the Shenfang Property agent of the Property 1,600,000.0 8,869,998.4 1,856,377.3 5,026,689.5 Subsidiary managemen Department 172,561.95 121,921.47 Managemen 0 7 6 6 t of property t Co., Ltd. managemen t services company Production of Shenzhen fully Beauty Textile electronic 25,000,000. 47,444,453. 34,319,463. 11,650,059. Century Subsidiary -165,882.78 -111,658.78 industry jacquard 00 87 37 51 Garment knitting whole Co., Ltd. shape Shenzhen Operating Shenfang Textile import and 5,000,000.0 74,877,055. 12,799,999. 231,978,740 1,957,463.7 1,498,097.8 Import & Subsidiary trade export 0 26 19 .01 5 1 export Co., business Ltd. Shenzhen Shengbo Production Ophotoelect 300,000,000 2,052,446,0 1,636,058,4 289,933,587 -41,393,388 -29,881,664 Subsidiary Flat display and sales of ric .00 19.87 23.41 .18 .07 .69 polarizer Technology Co., Ltd 20 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Shengtou Sales of HKD10,000 69,247,978. 100,347,370 2,085,188.5 2,085,188.5 (HK)Co., Subsidiary Flat display 132,450.98 polarizer .00 40 .93 3 3 Ltd. 5.Projects invested with the non-raised capital None 6. Performance Forecast for January to September 2013 Alert of loss or significant change in net profit from the beginning of year to the end of next report period or comparing with the same period of last year, and statement of causations. □ Applicable √ Not applicable 7. Statement of the Board on the “ Non-standard auditors’ report” issued by the CPA on thecurrent report period. □ Applicable √ Not applicable 8.Statement of the Board on Non-standard auditors’ Report Issued in the previous Year □Applicable √ Not applicable 9. Implementation of Profit Distribution of the Company in the repport Period. Profit distribution plans implemented during the report period, especially cashdividend and reserve capitalization plans □Applicable √ Not applicable 10. The Company has profit Distribution or Reserve Capitalization plan in the report Period □Applicable √ Not applicable 11.. Statement of such activities as reception, research, communication, interview in the reporting period Discussion topics and provision Reception time Reception place Way of reception Types of visitors Vistors received of materials Fortune SG , The meeting Nuoan Fund, Boshi The production of phase-I projec Onsite January 15, 2013 Roomof Shengbo Organization Fund, Huaxia Fund t of polarizer sheet for TFT-LCD investigatio Company and Pingan Secutities The meeting Onsite The production of phase-I projec January 16, 2013 Organization Guosen Securities room of the investigatio t of polarizer sheet for TFT-LCD 21 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 company China InvestmentSecurit ies, Central China Securities, Guosen The situation of the company Securities, Gangfa The meeting and Onsite Securities, January 18, 2013 room of the Organization the production of phase-I project investigatio Shenzhen Taihe company of polarizer sheet for TFT-LCD Kunde Investment Co., Ltd., Shenzhen Yintai Investment Co., Ltd. The situation of the company Jiangxi Ruitou and Onsite February 20, 2013 Organization Investment the production of phase-I project investigatio Company of polarizer sheet for TFT-LCD ICBCCS, CCB the production of phase-I project The meeting room Onsite February 26, 2013 Organization Fund, Taida Hongli of polarizer sheet for TFT-LCD of the company investigatio Fund Production and management co The meeting room Onsite April 22, 2013 Individual Individual Investor mpany of the company investigatio V. Important Events I. Administrative position According to the requirements of relevant laws and regulations and regulatory documents including the Company Law, the Securities Law, Guidelines for Governance of Listed Companies and Guidelines of Shenzhen Stock Exchange for Standardized Operation of Listed Companies in Main Market, the Company constantly improved its corporate governance structure, strengthened information disclosure management, standardized operation and made great efforts to establish modern enterprise system. In the report period, according to the requirements of "the working meeting for preventing and controlling insider dealings in listed companies in Shenzhen" held by Shenzhen Securities Regulatory Bureau, the Company carried out publicity work about preventing and controlling insider information through a wide variety of channels and provided special training to all directors, supervisors and senior executives and other working personnel on key posts who may have access to insider information group by group and level by level. Through training, all personnel understood the harmfulness of insider dealing and sharpened their awareness about prevention of insider dealings, standardization of insider 22 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 information management, abidance by laws and regulations, good faith and self discipline. Meanwhile, the Company unceasingly improved the construction of internal control system, timely revised relevant systems in the light of its actual conditions and ensured its standardized operation and steady development. At present, all governance systems of the Compay are basically perfect and its operation is standardized while its corporate governance structure is sound, which meets the requirements of the regulatory documents promulgated by CSRC about the governance of listed companies. As Shenzhen Investment Holding Co., Ltd., the controlling shareholder of the Company, is an enterprise directly under Shenzhen State-owned Assets Commission, the Company implements relevant regulations of the controlling shareholder on management of state-owned assets. The non-open information reported to the controlling shareholders mainly includes: monthly flash report of financial indicators, expense budget implementation status and cash flow statement, quarterly bank deposit and loan statement, detailed statement of financial assets available for sale, detailed statement of real estate for investment and summary statement of non-operating gains and losses. To strengthen the management of non-open information, the Company strictly controlled the scope of persons, standardized the process of information transmission and strictly implemented the Regulations on Insider Management. Except this, there was no difference between the actual conditions of corporate governance and the requirements of the Company Law and relevant regulations of CSRC. II. Major lawsuits and Arbitration affairs The Company has no major lawsuit or arbitration in the report period. III. Query form media In the reporting year, the Company had no query from media IV. Bankruptcy or Reorganization Related Events □ Applicable √ Not applicable V. Assets Transactions 1. Acquisition of Assets None 2. Sales of Assets None 3. Enterprise Consolidation In the reporting year, the Company had no Enterprise Consolidation 23 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 VI. Implementation of the Company’s quity Incentive plan and its influences □ Applicable √ Not applicable VII. Material related transactions Related transactions in connection with daily operation Amount Proportio Principle Descripti of the n in the of picing Price of Type of on of related amount of Related Relations of the related Mode of Market Disclosur Disclosur related related transactio the parties hip related transactio settlement price e date e index parties transactio n similar transactio ns ns (RMB’00 transactio n 00) n (%) www.cnin The aver fo.com.cn Sales of Shenzhen Related Daily Agreeme age pric January (2Announ polarizer 13,241.72 45.67% CSOT Legal operation nt price e of ma 22, 2013 cement sheet rket No. 2013-05) Total -- -- 13,241.72 -- -- -- -- -- Details of return of sales in significant Not appliable amount Shenzhen Shengbo Optoelectronic Technology Co., Ltd. a wholly-owned subsidiary of For those predicted daily related the Company, sells polarizer products to Shenzhen Huaxing Optoelectronic Technology transaction by category, actual Co., Ltd. The total sales amount for 2013 is expected to be no more than RMB 400 implementation in reporting period(if any) million. Refer to No. 2013-05 announcement of the Company for details. Reason of major difference between trading price and market reference Not appliable pricde(if any) 2.Related transactions conceming assets acquisition/sales □ Applicable √ Not applicable 3.Important related transitions with joint investment Pricing Principal Registered Total assets Net assets of Net profit of Joint Name of the Relationship principle for business of capital of the of the the investee the investee investors investee the joint the investee investee investee (RMB) (RMB) 24 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 investment (RMB’0000) None 4.Current Associated rights of credit and liabilities Did there exist any non-operational related rights of credit and liabilities vYes □ No Whether there Balance at the Amount in Type of Balance at the Association Reason for is the use of beginning of this Associated party claims and end of period relationship formation non-operating period period(RMB’ debts (RMB’0000) capitals (RMB’0000) 0000) Related party Related Legal Account ShenzhenCSOT debt No 4,727.35 670.82 5,398.17 person receivable receivable Shenzhen Tianma Related party Related Legal Account Microelectronics Co., debt No 123.44 -31.46 91.98 person receivable Ltd. receivable Related party Shenhen Dailisi Sharing Current amou debt No 26.55 -41 -14.45 Underwear Co., Ltd. company nt receivable Related party Hanhui Huapeng Current amou Subsidiay debt No 180 90 270 Textile Co., Ltd. nt receivable Shenzhen Xinfang Sharing Related party Current amou No 21.68 0 21.68 Knitting Co., Ltd. company debt payable nt Shenzhen Xiangjiang Sharing Related party Current amou No 38 0 38 Trade Co., Ltd company debt payable nt Shenzhen Changlianfa Sharing Related party Current amou Printing & dyeing No 72.72 -0.25 70.2 company debt payable nt Co., Ltd. Shenzhen Hengsheng Sharing Related party Current amou No 136.79 0 136.79 Investment Co., Ltd. company debt payable nt Shenzhen Haohao Sharing Related party Current amou Property Leasing Co., No 352.89 25 377.89 company debt payable nt Ltd Shenzhen Shenchao Related Legal Related party Interests Technology No 1,504.87 444.89 1,949.76 personS debt payable payable Investment Co., Ltd. 25 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 5.Other material related transactions Entrusted loans of related parties: For the construction of the project of polarizer for TFT-LCD, the Company signed Entrusted Loan Contract with Shenzhen Shenchao Technology Investment Co., Ltd. and Shenzhen Jiangsu Building Sub-branch of Shenzhen Development Bank Co., Ltd. in 2010. According to the contract, Shenzhen Shenchao Technology Investment Co., Ltd. entrusted Shenzhen Jiangsu Building Sub-branch of Shenzhen Development Bank Co., Ltd. to extend a loan of RMB 200 million to the Company. The term of the loan is 108 months from the day when the first installment of entrusted loan is transferred to the account of the Company. The interest rate of the entrusted loan is the rate of commercial loans with a term of 5 years quoted by People's Bank of China minus 2%. In case of adjustment of such commercial loan rate, the rate of commercial loans with a term of 5 years after adjustment minus 2% shall apply as interest rate of entrusted loan from the first day of the next month after the adjustment of basic interest rate. As of June 30, 2013,The Company actually received a loan of RMB 200 million. Relevant inquity with the internet website for disclosing provisional report on material related transactions Date of disclosing provisional Description of the website for disclosing Description of provisional announcement announcement provisional announcements Announcement of resolutions of the 30th January 22, 2013 (http://www.cninfo.com.cn) meeting of the Fifth Board of Directors Announcement of the estimated amount of January 22, 2013 (http://www.cninfo.com.cn) daily related transactions in 2013. VIII. Important contracts and implementation 1. Custody, contacting and leases (1)Custody Description of custodies Not applicable Projects that have brought about gains/losses to the company taking over 10% of the Company’s total profit in the reporting period. □ Applicable√ Not applicable (2)Contracts Description of contracts Not applicable Projects that have brought about gains/losses to the Company taking over 10% of the Company’s total profit in the reporting period □ Applicable√ Not applicable 26 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (3)Leases Description of leases Not applicable Projects that have brought about gains/losses to the company taking over 10% of the Company’s total profit in the reporting period □ Applicable√ Not applicable 2.Guarantees Unit:RMB’0000 External Guarantee (Exclude controlled subsidiaries) Guarante Relevant e Date of disclosure Complete for happening Actual Name of the date/No. of Amount of Guarantee Guarantee implemen associate (Date of mount of Company the Guarantee type term tation d signing guarantee guaranteed or not parties agreement) amount (Yes or no) Total of external guarantee Total of actual external 0 0 approved in Period(A1) guarantee in Period(A2) Total balance of actual Total of external guarantee 0 external guarantee at 0 approved at Period-end(A3) Period-end(A4) Guarantee of the Company for the controlling subsidiaries Guarante Relevant e Date of Complete disclosure for Name of the Amount happening Actual implemen date/No. of Guarantee Guarantee associate Company of (Date o mount of tation the type term d guaranteed guarantee signing guarantee or guaranteed parties agreement) not amount (Yes or no) Shenzhen Shengbo The joint June 19, October 23, Optoelectronic 11,500 liability 12 months No Yes 2012 2012 Technology Co., Ltd. guaranty Shenzhen Shengbo The joint June 19, August 27, Optoelectronic 20,000 0 liability 12 months No Yes 2012 2012 Technology Co., Ltd guaranty 27 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Total of actual guarantee Total of guarantee for subsidiaries 0 for subsidiaries in the 0 approved in the Period (B1) Period (B2) Total of actual guarantee Total of guarantee for subsidiaries 0 for subsidiaries at 0 approved at Period-end (B3) Period-end (B4) Total of Company’s guarantee(namely total of the large two aforementioned) Total of actual guarantee in Total of guarantee in the Period 0 the Period 0 (A1+B1) (A2+B2) Total of actual guarantee at Total of guarantee at Period-end 0 Period-end 0 (A3+B3) (A4+B4) The proportion of the total amount of actually guarantee in the net assets of the Company(that is A4+ 0% B4)(%) Including: Amount of guarantee for shareholders, actual controller and its 0 associated parties(C) The debts guarantee amount provided for the Guaranteed parties whose assets-liability ratio exceed 0 70% directly or indirectly(D) Explanations on possibly bearing joint and several liquidating Not applicable responsibilities for undue guarantees(if any) Remarks on illegal providing of external guarantee(if any) Not applicable 3.Other material contracts None 4.Other major transction None IX. The commitments of the Company and its shareholders holding over 5% of the Company’s total shares in the report year of extending to the report year from previous year. Commitment Time of making Peiod of Commitment Contents Fulfillment maker commitment commitment 28 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 As Shenzhen Investment Holdings Co., Ltd., the controlling shareholder of the company, committed when the restricted-for-sal e shares from the shares restructuring were listed for circulation in the market: i. if they plan to sell the shares through the securities exchange Shenzhen system in the Investment future, and the Sustained and Under Commitment on share reform Holdings Co., decrease of the effective Fulfillment Ltd. shares they hold reaches 5% within 6 months after the first decrease, they will disclose an announcement indicating the sale through the company within two trading days before the first decrease; ii. They shall strictly observe the “Guidelines on Transfer of Restricted-for-sa le Original Shares of Listed Companies” and 29 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 the provisions of the relevant business principles of Shenzhen Stock Exchange. Commitment in the acquisition report or the report on equity changes Commitment made upon the assets replacement Shenzhen Investment Holdings Co., Ltd. signed a “Letter of Commitment and Statement on Horizontal Competition Avoidance” when the company issued non-public stocks in 2009. Pursuant to the Shenzhen Letter of Investment Sustained and Under Commitments made upon issuance Commitment Holdings Co., effective Fulfillment and Statement, Ltd. Shenzhen Investment Holdings Co., Ltd. and its wholly owned subsidiary, subsidiaries under control or any other companies that have actual control of it shall not be involved in the business the 30 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 same as or similar to those Shenzhen Textile currently or will run in the future, or any businesses or activities that may constitute direct or indirect competition with Shenzhen Textile; if the operations of Shenzhen Investment Holdings Co., Ltd. and its wholly owned subsidiaries, subsidiaries under control or other companies that have actual control of it compete with Shenzhen Textile in the same industry or contradict the interest of the issuer in the future, Shenzhen Investment Holdings Co., Ltd. shall urge such companies to sell the equity, assets or business to Shenzhen Textile or a third party; when the horizontal 31 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 competition may occur due to the business expansion concurrently necessary for Shenzhen Investment Holdings Co., Ltd. and its wholly owned subsidiaries, subsidiaries under control or other companies that have actual control of it and Shenzhen Textile, Shenzhen Textile shall have priority. The commitments during the period non-public issuance in 2012: 1. Shenzhen Investment Holdings, as the controlling shareholder of Shenzhen Textile, currently hasn't the production and business activities of inter-industry competition with Shenzhen Textile or its 32 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 share-holding subsidiary. 2. Shenzhen Investment Holdings and its share-holding subsidiaries or other enterprises owned the actual control rights can't be directly and indirectly on behalf of any person, company or unit to engage in the same or similar business in any districts in the future by the form of share-holding, equity participation, joint venture, cooperation, partnership, contract, lease, etc., and ensure not to use the controlling shareholder's status to damage the legitimate rights and interests of Shenzhen Textile and other shareholders, or to gain the additional benefits. 3. If there will be the 33 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 situation of inter-industry competition with Shenzhen Textile for Shenzhen Investment Holdings and its share-holding subsidiaries or other enterprises owned the actual control rights in the future, Shenzhen Investment Holdings will promote the related enterprises to avoid the inter-industry competition through the transfer of equity, assets, business and other ways. 4. Above commitments will be continuously effective and irrevocable during Shenzhen Investment Holdings as the controlling shareholder of Shenzhen Textile or indirectly controlling Shenzhen 34 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Textile Refer to the Announcement of Approval of Application for Private Issue of Shenzhen Shares that 36 months from Investment issued by the the listing day of Under March 25, 2013 Holdings Co., Board of new shares, i.e., Fulfillment Ltd. Directors of March 26, 2013 Shenzhen Textile (Holdings) Co., Ltd. (No.:2013-12) Refer to the Announcement of Approval of Application for Other objects of Private Issue of issue including Shares that 12 months from Tibet Ruihua issued by the the listing day of Under March 25, 2013 Investment Board of new shares, i.e., Fulfillment Development Directors of March 26, 2013 Co., Ltd. Shenzhen Textile (Holdings) Co., Ltd. (No.:2013-12) Other commitments made to minority shareholders Executed timely or not? Yes Detailed person for failing to execute and Not applicable the next plan X. Appointment and non-reappointment (dismissal)of CPA. Whether financial report of this Semi-annual report is audited or not □ Yes √ No XI. Penalyty and rectification □ Applicable √ Not applicable 35 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 XII. Explanation on other significant events (I) Particulars of private issue of shares On January 2013 , Approved by China Securities Regulatory Commission with Zheng Jian Xu Ke (2013) No. 2 Document, the Company privately issued 170,000,000 RMB ordinary shares to specific investors at the price of RMB 5.83 per share. The total amount of the proceeds raised through private issue of shares is RMB 991,100,000.00. With the issuance cost of RMB 29,348,999.15 being deducted, the net amount of raised proceeds is RMB 961,751,000.85. The said raised proceeds were examined and verified by Peking Certified Public Accountants Co., Ltd. with Qin Xin Yan Zi (2013) No. 6 Capital Verification Report issued on March 8, 2013. All proceeds raised through private issue of shares will be invested in phase-II project of polarizer sheet for TFT-LCD. On March 26, 2013, RMB 170,000,000 ordinary shares privately issued have been listed at Shenzhen Stock Exchange. Refer to Report on Private Issue of A Shares and Announcement of Listing of Shares of Shenzhen Textile (Holding) Co., Ltd. published on http: / / www.cninfo.com.cn on March 26, 2013 for details. (II)Status of internal control: In the report period, In accordance with Standards of Internal Control of Enterprises, the Company solved the problems existing during the implementation of Internal Control Manual (2012) and correspondingly revised internal control documents including risk control document. According to the requirements of Internal Control Manual (2012 Edition), the Company continuously sorted, supplemented and perfected the existing systems and processes, conducted semiannual self-evaluation of key subsidiaries in respect of internal control and actively supervised and urged rectification to deal with the problems found in semiannual self evaluation of internal control. (III)Disposal of equity of Union Group The 31st meeting of the fifth board of directors and 2012 annual shareholders' general meeting of the Company respectively held on January 28, 2013 and April 22, 2013 examined and adopted the Proposal for Assigning the Equity of Union Developing Group Co., Ltd. At the price of not lower than the appraised value, i.e., RMB 99.42 million, the Company planned to assign 2.8694% equity of Union Developing Group Co., Ltd. held by it at Shenzhen United Equity Exchange in the mode of open tendering. This matter was put on record with state asset management department on April 26, 2013. On May 23, the equity of Union Group was publicly listed at Shenzhen United Equity Exchange for assignment. On July 5, the Company received the Notes to Purchase Request from Shenzhen United Equity Exchange. During the period from May 23, 2013 to July 4, 2013, the Company publicly listed 2.8694% equity of Union Developing Group Co., Ltd. for assignment at Shenzhen United Equity Exchange. Upon the expiration of listing period, no party submitted an application for acquisition to Shenzhen United Equity Exchange. 36 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 VI. Change of share capital and shareholding of Principal Shareholders (I).Changes in share capital Before the change Increase/decrease(+,-) After the Change Amount Proporti Capitali on zation Share Bonus of Proportio Other Subtotal Quantity allotment shares common n reserve fund I.Shares with conditional 53,838,478 16% 170,000,000 170,000,000 223,838,478 44.19% subscription 1.State-owned legal person 53,763,440 15.98% 51,457,976 51,457,976 105,221,416 20.77% shares 2.Other domestic shares 118,542,024 118,542,024 118,542,024 23.4% Incl:Non-state owned domestic legal person 118,542,024 118,542,024 118,542,024 23.4% shares 3. .Executive shares 75,038 0.02% 75,038 0.01% II. Shares with 282,683,371 84% 282,683,371 55.81% unconditional subscription 1.Common shares in RMB 233,258,409 69.31% 233,258,409 46.05% 2.Foreign shares in 49,424,962 14.69% 49,424,962 9.76% domestic market III. Total of capital shares 336,521,849 100% 170,000,000 170,000,000 506,521,849 100% Reasons for share changed In March 2013, 170 million new shares privately issued by the Company were registered in account. On March 26, 2013, the shares were listed and traded at Shenzhen Stock Exchange. Approval of share changed On December 7, 2012, Issue Examination Committee of CSRC examined and approved the Company's application for private issue. On January 7, 2013, the Company received the Approval of Private Issue of Shares by Shenzhen Textile (Holding) Co., Ltd. (Zhen Jian Permit (2013) No. 2 Document) issued by China Securities Regulatory Commission and was approved to privately issue no more than 170 million new shares. Ownership transfer for shares changed The Company submitted relevant registration materials to Shenzhen Branch of China Securities Registration & Settlement Co., Ltd. in respect of the shares privately issued on March 11, 2013 and received the Letter of Confirmation of Pre-registration of Securities on March 12, 2013. On March 25, 2013, the shares privately issued were finally registered in account. The shareholders holding such shares were officially included in the register of shareholders of the Company. Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets pershare attributable to 37 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 common shareholders of Company in latest year and period. √ Applicable □Not applicable Items 2013-3-31 2012-12-31 Net assets per share (RMB) 4.49 3.87 Items January –March 2013 2012 Basic EPS(RMB) -0.01 -0.24 Diluted EPS(RMB) -0.01 -0.24 This issue of shares made the Company's net assets per share increased by 16.02% from RMB 3.87 on December 31, 2012 to RMB 4.49 on March 31, 2013. Other information necessary to disclose for the Company or need to disclosed under refquirement from security regulators. □ Applicable √ Not applicable Changes of total shares and shareholders structure as well as explanation on changes of assetsand liability structure. (1) Effect on company capital shares Items Before public issue Public issue this After this public issue time (February 28, 2013) Amount(Shares ) Proportion Amount(Shares )Amount(Shares ) Proportion 1.Shares with conditional subscription 53,838,478 16.00% 170,000,000 223,838,478 44.19% 1. State-owned shares - - - - - 2. Staee-owned legal person shares 53,763,440 15.98% 51,457,976 105,221,416 20.77% 3. Other domestic shares - - 118,542,024 118,542,024 23.40% Of which:Domestic legal person shares - - 118,542,024 118,542,024 23.40% 4. Executive shares 75,038 0.02% - 75,038 0.01% II.Shares with unconditional 282,683,371 84.00% - 282,683,371 55.81% subscription 1. Common shares in RMB 233,258,409 69.31% - 233,258,409 46.05% 2. Foreign shares in domestic market 49,424,962 14.69% - 49,424,962 9.76% III. Total of capital shares 336,521,849 100% 170,000,000 506,521,849 100% (II) Influence on the Company's asset structure The investors for this private issue subscribed for the issued shares with cash. After the registration of new shares, the total assets and net assets of the Company will increase and its assets-liabilities ratio will decrease while its capital structure and financial structure will improve and financial risks will lower, which will lay a solid foundation for the further development of the Company. 38 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (III)Influence on main financial indicators On December 31, 2012,The Company's (consolidated) assets-liabilities ratio was 30.72%. After this issue, the assets-liabilities ratio as of June 30, 2013 was 19.53%, which sharply lowered by 11.19% over the end of 2012. The earnings per share and net assets per share of the Company for the previous year and previous period before the completion of this issue: Items 2012-12-31 2011-12-31 Net assets per share (RMB) 3.87 4.07 Items 2012 2011 Basic EPS(RMB) -0.24 0.15 Diluted EPS(RMB) -0.24 0.15 (IV)Influence on the Company's business structure All the proceeds raised through this private issue will be used to increase the capital of Shenzhen Shengbo Optoelectronic Technology Co., Ltd. to construct the phase-II project of polarizer for TFT-LCD. TThe construction of the phase-II project of polarizer for TFT-LCD will further increase market competitiveness and market share of the Company in respect of polarizer for LCD and relevant products, enhance the proportion of polarizer business and contribute to improving its overall profitability. II. Shareholders and actual controlling shareholder Unit:shares Total shareholders at period-end 17,114 Shares held by 5% shareholders Increase/ Pledging or freeing Quantity at Number of Number of Share decrease Properties of the end of the the Shareholder name proportio in the Status of the shareholder the reporting restricted non-restricted Quantity n(%) reportin shares period shares held shres held g period Shenzhen Investment State-owned legal 46.21% 234,069,436 89,092,384 144,977,052 Holdings Co., person Ltd. Tibet Ruihua Domestic non Investment State-owned 4.17% 21,108,061 21,108,061 Development Legal person Co., Ltd. National Social Security Fund Other 3.45% 17,500,000 17,500,000 portfolio 501 39 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Pingan Dahua Fund Company- Pingan Bank- Pingan Intrust Other 3.39% 17,156,003 17,156,003 PinganWealth* trust fund plan of Chuangying stage 1 No. 13 Domestic non CITIC Securities State-owned 3.39% 17,152,992 17,152,659 Co., Ltd. Legal person Pingan Dahua Fund Company- Other 3.39% 17,152,659 17,152,659 Pingan Bank- Wang Fang Huaan Fund Company-ICBC -Huarong IntrustEquity Other 3.39% 17,152,658 17,152,658 investment trust fund plan of Huaan Fund NO.2 Shenzhen Shenchao State-owned Technology 3.18% 16,129,032 16,129,032 Legal person Investment Co., Ltd. ICBC-Nuoan Securities Other 0.89% 4,500,000 4,500,000 Investment Fund ICBC-Nuoan Value grow Other 0.49% 2,500,000 2,500,000 Securities Investment Fund 8 shareholders including Tibet Ruihua Investment Development Co., Ltd., National Social Security Fund No. 501 Portfolio, Ping An Building Fund Company-Ping An Bank - Strategy investors or general legal Ping An Trust Ping An Wealth * No.13.Phase-I Chuangying Collective Fund Trust person becomes top 10 shareholders Program,CITIC Securities Co., Ltd., Ping An Dahua Fund Company - Ping An Bank-Wang due to rights issued (if applicable) Fang, Huaan Fund Company-ICBC-Huarong Trust - Hua'an Fund No.2 Equity Investment Collective Fund Trust Program ,ICBC-Nuo’an Secutities Investment Fund, and ICBC- Nuo'an Value Growth Stock Investment Fund subscribed for the shares privately issued by the 40 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Company in March 2013 and joined the top 10 shareholders. Shenzhen Investment Holding Co., Ltd. subscribed for 51,457,976 shares. The period of sale restriction is 36 months. The expected time of listing of such shares is March 26, 2016. The period of sale restriction of the shares issued to the other 8 shareholders is 12 months. The expected time of listing of such shares is March 26, 2014. Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned subsidiary of Shenzhen Investment Holdings Co., Ltd. and a person taking concerted action. Except this, Explanation on associated the Company did not whether there is relationship between the top ten shareholders holding relationship among the aforesaid non-restricted negotiable shares and between the top ten shareholders holding non-restricted shareholders negotiable shares and the top 10 shareholders or whether they are persons taking concerted action defined in Regulations on Disclosure of Information about Shareholding of Shareholders of Listed Companies. Shareholding of top 10 shareholders of unrestricted shares Quantity of unrestricted shares held at the end of the Share type Name of the shareholder reporting period (Note 4) Share type Quantity Shenzhen Investment Holdings Co., RMB Common 144,977,052 144,977,052 Ltd. shares Foreign shares NATWEST SECURITIES HONG placed in 1,276,967 1,276,967 KONG LIMITED domestic exchange Foreign shares placed in Zheng Bangsheng 1,203,800 1,203,800 domestic exchange RMB Common Mao Yong 1,030,000 1,030,000 shares RMB Common Man Zhiyong 875,507 875,507 shares RMB Common Fang Minjun 857,000 857,000 shares Foreign shares placed in Xu Ruijiang 791,688 791,688 domestic exchange RMB Common Cai Zhihao 738,800 738,800 shares RMB Common Huang Mianshi 696,360 696,360 shares Pan Xinlin 668,670 Foreign shares 668,670 41 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 placed in domestic exchange Explanation on associated Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned subsidiary of relationship or consistent action Shenzhen Investment Holdings Co., Ltd. and a person taking concerted action. Except this, among the top 10 shareholders of the Company did not whether there is relationship between the top ten shareholders holding non-restricted negotiable shares and non-restricted negotiable shares and between the top ten shareholders holding non-restricted that between the top 10 shareholders negotiable shares and the top 10 shareholders or whether they are persons taking concerted of non-restricted negotiable shares action defined in Regulations on Disclosure of Information about Shareholding of and top 10 shareholders Shareholders of Listed Companies. 1. Pan Zhiyong held 875,507 shares in the stock account opened at CITIC Securities Co., Explanation on shareholders Ltd. On basis credit Transaction and guarantee. participating in the margin trading 2. Cai Zhihao held 733,800 shares in the stock account opened at Zheshang Securities Co., business(if any )(see note 4) Ltd. On basis of credit transaction and guarantee. He also holds another 5000 shares through ordinary stock accounts. Thus he actually holds 738,800 shares in total. Did any shareholder of the Company carry out an agreed buy-back in the reorting period? □ Yes √ No III. Change of the controlling shareholder or the actual controller Change of the controlling shareholder in the reporting period □ Applicable √ Not Applicable Change of the actual controller in the reporting period □ Applicable √ Not Applicable 42 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 VII. Information about Directors, Supervisors and Senior Executives I. Change in shares held by directors, supervisors and senior executives Shareholdings of directors, supervisors and senior management staff did not change in the reporting period. For details, see the 2012 annual report. I. Post –leaving and dismissals for directors, supervisors , supervisors and senior executives None 43 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 VIII. Financial Report 1. Audit report Has this semi-annual report been audited? □ Yes √ No The semi-annual financial report has not been audited. II. Financial statements Currency unit for the statements in the notes to these financial statements:RMB 1. Consolidated balance sheet Prepared by : Shenzhen Textile (Holdings) Co., Ltd. Unit:RMB Items Year-end balance Year-beginning balance Current asset: Monetary fund 744,612,055.76 232,417,736.06 Settlement provision Outgoing call loan Trading financial assets Bill receivable 12,254,516.72 20,139,334.03 Account receivable 151,410,803.63 100,941,342.96 Prepayments 33,190,113.44 12,711,147.09 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable 1,741,666.67 Dividend receivable Other account receivable 38,914,270.79 51,069,068.33 Repurchasing of financial assets Inventories 211,837,744.55 143,258,151.49 Non-current asset due in 1 year Other current asset 300,000,000.00 44 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Total of current assets 1,493,961,171.56 560,536,779.96 Non-current assets: Loans and payment on other’s behalf disbursed Disposable financial asset 66,931,844.99 70,159,993.69 Expired investment in possess Long-term receivable Long term share equity 48,516,219.43 48,094,489.26 investment Property investment 152,214,234.38 154,761,895.71 Fixed assets 913,830,813.14 949,164,677.21 Construction in progress 42,517,763.75 11,576,523.39 Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 45,020,266.53 46,162,461.69 R & D petrol Goodwill 9,614,758.55 9,614,758.55 Long-germ expenses to be 843,602.65 1,005,588.08 amortized Differed income tax asset 35,007,102.31 29,583,499.67 Other non-current asset Total of non-current assets 1,314,496,605.73 1,320,123,887.25 Total of assets 2,808,457,777.29 1,880,660,667.21 Current liabilities Short-term loans 40,153,434.48 Loan from Central Bank Deposit received and hold for others Call loan received Trade off financial liabilities Bill payable Account payable 142,265,560.86 101,232,698.62 Advance payment 47,077,960.48 25,663,352.59 45 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 19,742,831.64 25,914,720.85 Tax payable -68,551,969.89 -67,845,188.78 Interest payable 19,497,570.19 15,091,123.12 Dividend payable Other account payable 122,905,075.38 168,127,716.36 Reinsurance fee payable Insurance contract provision Entrusted trading of securities Entrusted selling of securities Non-current liability due in 1 year Other current liability Total of current liability 282,937,028.66 308,337,857.24 Non-current liabilities: Long-term loan 200,000,000.00 200,000,000.00 Bond payable Long-term payable Special payable Expected liabilities Differed income tax liability 13,485,046.18 12,596,833.13 Other non-current liabilities 52,446,210.21 56,714,022.45 Total of non-current liabilities 265,931,256.39 269,310,855.58 Total of liability 548,868,285.05 577,648,712.82 Owners’ equity Share capital 506,521,849.00 336,521,849.00 Capital reserves 1,619,132,777.69 828,913,137.67 Less:Shares in stock Special reserves Surplus reserves 36,607,659.49 36,607,659.49 Common risk provision Undistributed profit 97,327,206.06 100,969,308.23 Different of foreign currency translation 46 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Total of owner’s equity belong to 2,259,589,492.24 1,303,011,954.39 the parent company Minority shareholders’ equity Total of owners’ equity 2,259,589,492.24 1,303,011,954.39 Total of liabilities and owners’ 2,808,457,777.29 1,880,660,667.21 equity 2. Balance sheet of Parent Company Prepared by : Shenzhen Textile (Holdings) Co., Ltd. Unit:RMB Items Year-end balance Year-beginning balance Current asset: Monetary fund 269,387,555.45 33,906,151.53 Trading financial assets Bill receivable Account receivable 131,006.37 1,520.00 Prepayments Interest receivable 1,741,666.67 Dividend receivable 22,735,950.89 Other account receivable 11,045,371.39 18,611,433.26 Inventories Non-current asset due in 1 year Other current asset Total of current assets 305,041,550.77 52,519,104.79 Non-current assets: Disposable financial asset 66,931,844.99 70,159,993.69 Expired investment in possess Long-term receivable Long term share equity 1,825,156,337.23 1,064,734,607.06 investment Property investment 142,658,500.89 145,306,758.35 Fixed assets 30,741,023.51 31,796,996.71 Construction in progress 16,561,099.19 9,416,319.19 Engineering material Fixed asset disposal 47 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Production physical assets Gas & petrol Intangible assets 2,350,818.80 2,651,093.96 R & D petrol Goodwill Long-germ expenses to be amortized Differed income tax asset 5,441,865.95 5,539,715.63 Other non-current asset Total of non-current assets 2,089,841,490.56 1,329,605,484.59 Total of assets 2,394,883,041.33 1,382,124,589.38 Current liabilities Short-term loans Trade off financial liabilities Bill payable Account payable 411,743.57 411,743.57 Advance payment 639,024.58 639,024.58 Employees’ wage payable 3,972,611.77 5,899,315.45 Tax payable 7,292,735.78 1,608,258.72 Interest payable Dividend payable Other account payable 76,801,004.77 74,456,509.51 Non-current liability due in 1 year Other current liability Total of current liability 89,117,120.47 83,014,851.83 Non-current liabilities: Long-term loan Bond payable Long-term payable Special payable Expected liabilities Differed income tax liability 13,446,127.18 12,557,914.13 Other non-current liabilities Total of Non-current liabilities 13,446,127.18 12,557,914.13 48 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Total of liability 102,563,247.65 95,572,765.96 Owners’ equity Share capital 506,521,849.00 336,521,849.00 Capital reserves 1,610,549,795.90 820,330,155.88 Less:Shares in stock Special reserves Surplus reserves 36,607,659.49 36,607,659.49 Provision of general risk Undistributed profit 138,640,489.29 93,092,159.05 Different of foreign currency translation Total of owners’ equity 2,292,319,793.68 1,286,551,823.42 Total of liabilities and owners’ 2,394,883,041.33 1,382,124,589.38 equity 3.Consolidated Profit Statement Prepared by : Shenzhen Textile (Holdings) Co., Ltd. Unit:RMB Items Amount in this period Amount in last period I. Income from the key business 576,348,010.06 375,432,991.91 Incl:Business income 576,348,010.06 375,432,991.91 Interest income Insurance fee earned Fee and commission received II. Total business cost 604,944,312.58 400,741,324.31 Incl:Business cost 527,913,970.56 336,576,764.17 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Insurance policy dividend paid Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 4,563,456.68 3,933,220.40 Sales expense 4,096,726.20 3,823,373.24 49 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Administrative expense 75,713,852.63 52,925,299.50 Financial expenses -13,929,247.57 1,070,421.02 Asset impairment loss 6,585,554.08 2,412,245.98 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 21,908,307.47 4,523,812.58 Incl: investment gains from 421,730.17 299,087.54 affiliates Gains from currency exchange (“-”for loss) III. Operational profit(“-”for loss -6,687,995.05 -20,784,519.82 Add:Non-business income 5,976,618.99 4,743,336.68 Less:Non business expenses 10,000.00 10,046.59 Incl:Loss from disposal of 9,996.59 non-current assets IV.Total profit(“-”for loss) -721,376.06 -16,051,229.73 Less:Income tax expenses 2,920,726.11 2,685,013.34 V. Net profit(“-”for net loss) -3,642,102.17 -18,736,243.07 Including: Net profit realized by the entity taken over before the takover Net profit attributable to the -3,642,102.17 -18,736,243.07 owners of parent company Minority shareholders’ equity VI. Earnings per share: -- -- (I)Basic earnings per share -0.01 -0.06 (II)Diluted earnings per share -0.01 -0.06 VII. Other comprehensive income -1,531,360.83 9,260,263.28 VIII. Total comprehensive income -5,173,463.00 -9,475,979.79 Total comprehensive income attributable to the owner of the -5,173,463.00 -9,475,979.79 parent company Total comprehensive income attributable minority shareholders 50 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 4. Profit statement of the Parent Company Prepared by : Shenzhen Textile (Holdings) Co., Ltd. Unit:RMB Items Amount in this period Amount in last period I. Income from the key business 30,483,599.05 28,206,871.07 Lessl:Business cost 6,096,505.49 6,458,435.54 Business tax and surcharge 3,226,976.57 2,483,215.30 Sales expense Administrative expense 15,558,850.89 15,163,331.76 Financial expenses -2,964,454.33 -295,713.66 Asset impairment loss -391,398.70 -342,179.97 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 44,006,427.51 3,980,880.01 Incl: investment gains from 421,730.17 299,087.54 affiliates II. Operational profit(“-”for loss) 52,963,546.64 8,720,662.11 Add:Non-business income Less:Non- business expenses Incl:Loss from disposal of non-current assets III.Total profit(“-”for loss) 52,963,546.64 8,720,662.11 Less:Income tax expenses 7,415,216.40 1,779,143.64 IV. Net profit(“-”for net loss) 45,548,330.24 6,941,518.47 V. Earnings per share: -- -- (I)Basic earnings per share 0.11 0.02 (II)Diluted earnings per share 0.11 0.02 VI. Other comprehensive income -1,531,360.83 9,260,263.28 VII. Total comprehensive income 44,016,969.41 16,201,781.75 5. Consolidated Cash flow statement Prepared by : Shenzhen Textile (Holdings) Co., Ltd. Unit:RMB 51 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Items Amount in this period Amount in last period I.Cash flows from operating activities Cash received from sales of goods 553,459,222.12 319,936,145.69 or rending of services Net increase of customer deposits and capital kept for brother company Net increase of loans from central bank Net increase of inter-bank loans from other financial bodies Cash received against original insurance contract Net cash received from reinsurance business Net increase of client deposit and investment Net increase of trade financial asset disposal Cash received as interest, processing fee and commission Net increase of inter-bank fund received Net increase of repurchasing business Tax returned 53,614,798.93 24,564,034.80 Other cash received from business 12,957,008.71 19,524,512.16 operation Sub-total of cash inflow 620,031,029.76 364,024,692.65 Cash paid for purchasing of 598,394,828.97 297,282,377.33 merchandise and services Net increase of client trade and advance Net increase of savings n central bank and brother company Cash paid for original contract claim 52 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Cash paid for interest, processing fee and commission Cash paid for policy dividend Cash paid to staffs or paid for 55,204,135.27 36,873,269.19 staffs Taxes paid 11,956,318.69 20,257,096.42 Other cash paid for business 11,990,601.36 25,670,059.42 activities Sub-total of cash outflow from 677,545,884.29 380,082,802.36 business activities Cash flow generated by business -57,514,854.53 -16,058,109.71 operation, net II.Cash flow generated by investing Cash received from investment 22,053,747.37 3,640,792.47 retrieving Cash received as investment gains 1,519,830.85 1,210,300.00 Net cash retrieved from disposal of fixed assets, intangible assets, 541,400.00 and other long-term assets Net cash received from disposal of subsidiaries or other operational units Net cash received from disposal of subsidiaries or other operational units Sub-total of cash inflow due to 23,573,578.22 5,392,492.47 investment activities Cash paid for construction of fixed assets, intangible assets and 78,272,962.01 101,715,739.19 other long-term assets Cash paid as investment Net increase of loan against pledge Net cash received from subsidiaries and other operational units Other cash paid for investment 300,000,000.00 17,403.45 activities 53 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Sub-total of cash outflow due to 378,272,962.01 101,733,142.64 investment activities Net cash flow generated by -354,699,383.79 -96,340,650.17 investment III.Cash flow generated by financing Cash received as investment 965,380,350.00 Incl: Cash received as investment from minor shareholders Cash received as loans 32,644,068.61 Cash received from bond placing Other financing –related ash 563,172.00 received Sub-total of cash inflow from 998,587,590.61 financing activities Cash to repay debts 72,797,503.09 Cash paid as dividend, profit, or 579,124.83 interests Incl: Dividend and profit paid by subsidiaries to minor shareholders Other cash paid for financing 775,000.00 1,210,000.00 activities Sub-total of cash outflow due to 74,151,627.92 1,210,000.00 financing activities Net cash flow generated by 924,435,962.69 -1,210,000.00 financing IV. Influence of exchange rate alternation on cash and cash -129,860.85 -269,095.02 equivalents V.Net increase of cash and cash 512,091,863.52 -113,877,854.90 equivalents Add: balance of cash and cash equivalents at the beginning of 227,189,754.43 463,817,642.79 term VI.Balance of cash and cash 739,281,617.95 349,939,787.89 equivalents at the end of term 54 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 6. Cash flow statement of the Parent Company Prepared by : Shenzhen Textile (Holdings) Co., Ltd. Unit:RMB Items Amount in this period Amount in last period I.Cash flows from operating activities Cash received from sales of goods 30,339,632.40 28,451,115.08 or rending of services Tax returned Other cash received from business 29,955,548.56 2,142,574.86 operation Sub-total of cash inflow 60,295,180.96 30,593,689.94 Cash paid for purchasing of 2,720,194.83 2,077,898.30 merchandise and services Cash paid to staffs or paid for 9,995,476.97 8,729,530.72 staffs Taxes paid 6,239,542.61 7,448,140.69 Other cash paid for business 26,260,639.00 6,603,913.22 activities Sub-total of cash outflow from 45,215,853.41 24,859,482.93 business activities Cash flow generated by business 15,079,327.55 5,734,207.01 operation, net II.Cash flow generated by investing Cash received from investment 22,053,747.37 3,640,792.47 retrieving Cash received as investment gains 882,000.00 1,210,300.00 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other cash receivable for investment activities 55 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Sub-total of cash inflow due to 22,935,747.37 4,851,092.47 investment activities Cash paid for construction of fixed assets, intangible assets and 7,702,193.00 3,371,159.00 other long-term assets Cash paid as investment 760,000,000.00 108,163,070.03 Net cash received from subsidiaries and other operational units Other cash paid for investment activities Sub-total of cash outflow due to 767,702,193.00 111,534,229.03 investment activities Net cash flow generated by -744,766,445.63 -106,683,136.56 investment III.Cash flow generated by financing Cash received from absorbing 965,380,350.00 investment Cash received as loans Cash received from bond placing Other financing –related ash 563,172.00 received Sub-total of cash inflow from 965,943,522.00 financing activities Cash to repay debts Cash paid as dividend, profit, or interests Other cash paid for financing 775,000.00 1,210,000.00 activities Sub-total of cash outflow due to 775,000.00 1,210,000.00 financing activities Net cash flow generated by 965,168,522.00 -1,210,000.00 financing IV. Influence of exchange rate alternation on cash and cash equivalents V.Net increase of cash and cash 235,481,403.92 -102,158,929.55 56 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 equivalents Add: balance of cash and cash equivalents at the beginning of 33,906,151.53 133,011,826.29 term VI.Balance of cash and cash 269,387,555.45 30,852,896.74 equivalents at the end of term 7. Consolidated Statement on Change in Owners’ Equity Prepared by : Shenzhen Textile (Holdings) Co., Ltd. Amount in this period Unit:RMB Amount in this period Owner’s equity Attributable to the Parent Company Min Co Less or Speci mm Items : share Total of Capital alize on Share Shar Surplus Attributabl Ot hold owners’ reserve d risk Capital es in reserves e profit her ers’ equity s reser pro stoc equit ve visi k y on 336,521,84 828,913, 100,969,308 1,303,011,954. I.Balance at the end of last year 36,607,659.49 9.00 137.67 .23 39 Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning of 336,521,84 828,913, 100,969,308 1,303,011,954. 36,607,659.49 current year 9.00 137.67 .23 39 170,000,00 790,219, -3,642,102.1 III.Changed in the current year 956,577,537.85 0.00 640.02 7 -3,642,102.1 (I) Net profit -3,642,102.17 7 -1,531,3 (II)Other misc.income -1,531,360.83 60.83 -1,531,3 -3,642,102.1 Total of (I) and (II) -5,173,463.00 60.83 7 (III) Investment or decreasing 170,000,00 791,751, 961,751,000.85 of capital by owners 0.00 000.85 57 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 170,000,00 791,751, 1. Capital inputted by owners 961,751,000.85 0.00 000.85 2.Amount of shares paid and accounted as owners’ equity 3. Other (IV)Profit allotment 1.Providing of surplus reserves 2.Providing of common risk provisions 3.Allotment to the owners (or shareholders) 4.Other (V) Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (VI) Special reserves 1. Provided this year 2.Used this term (VII)Other IV. Balance at the end of this 506,521,84 1,619,13 97,327,206. 2,259,589,492. 36,607,659.49 term 9.00 2,777.69 06 24 Amount in last year Unit:RMB Amount in last year Owner’s equity Attributable to the Parent Company Commo Minor Total of Items Less: Speciali Attribut Share Capital Surplus n risk sharehold owners’ Shares zed able Other Capital reserves reserves provisio ers’ equity equity in stock reserve profit n I.Balance at the end of last year 336,521 814,540, 35,912, 182,653, 1,369,628, 58 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 ,849.00 889.30 706.22 149.09 593.61 Add:Retrospective adjustment caused by merger of entities under common control Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning of 336,521 814,540, 35,912, 182,653, 1,369,628, current year ,849.00 889.30 706.22 149.09 593.61 \ III.Changed in the current 14,372,2 694,953 -81,683, -66,616,63 year 48.37 .27 840.86 9.22 -80,988, -80,988,88 (I) Net profit 887.59 7.59 14,372,2 14,372,248 (II)Other misc.income 48.37 .37 14,372,2 -80,988, -66,616,63 Total of (I) and (II) 48.37 887.59 9.22 (III) Investment or decreasing of capital by owners 1. Capital inputted by owners 2.Amount of shares paid and accounted as owners’ equity 3. Other 694,953 -694,95 (IV)Profit allotment .27 3.27 694,953 -694,95 1.Providing of surplus reserves .27 3.27 2.Providing of common risk provisions 3.Allotment to the owners (or shareholders) 4.Other (V) Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus 59 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (VI) Special reserves 1. Provided this year 2.Used this term (VII)Other IV. Balance at the end of this 336,521 828,913, 36,607, 100,969, 1,303,011, term ,849.00 137.67 659.49 308.23 954.39 8. Statement of change in owner’s Equity of the Parent Company Prepared by : Shenzhen Textile (Holdings) Co., Ltd. Amount in this period Unit:RMB Amount in this period Less: Common Total of Items Share Capital Specialized Surplus Attributabl Shares in risk owners’ Capital reserves reserves reserves e profit stock provision equity 336,521,84 820,330,15 36,607,659 93,092,159 1,286,551, I.Balance at the end of last year 9.00 5.88 .49 .05 823.42 Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning of 336,521,84 820,330,15 36,607,659 93,092,159 1,286,551, current year 9.00 5.88 .49 .05 823.42 170,000,00 790,219,64 45,548,330 1,005,767, III.Changed in the current year 0.00 0.02 .24 970.26 45,548,330 45,548,330 (I) Net profit .24 .24 -1,531,360. -1,531,360. (II)Other misc.income 83 83 -1,531,360. 45,548,330 44,016,969 Subtotal of (I) and (II) 83 .24 .41 (III) Investment or decreasing of 170,000,00 791,751,00 961,751,00 60 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 capital by owners 0.00 0.85 0.85 170,000,00 791,751,00 961,751,00 1. Capital inputted by owners 0.00 0.85 0.85 2.Amount of shares paid and accounted as owners’ equity 3. Other (IV)Profit allotment 1.Providing of surplus reserves 2.Providing of common risk provisions 3.Allotment to the owners (or shareholders) 4.Other (V) Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (VI) Special reserves 1. Provided this year 2.Used this term (VII)Other IV. Balance at the end of this 506,521,84 1,610,549, 36,607,659 138,640,48 2,292,319, term 9.00 795.90 .49 9.29 793.68 Amount in last year Unit:RMB Amount in last year Less: Common Total of Items Share Capital Specialize Surplus Attributabl Shares in risk owners’ Capital reserves d reserve reserves e profit stock provision equity 336,521,84 805,957,90 35,912,706 86,837,579 1,265,230, I.Balance at the end of last year 9.00 7.51 .22 .61 042.34 61 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning of 336,521,84 805,957,90 35,912,706 86,837,579 1,265,230, current year 9.00 7.51 .22 .61 042.34 14,372,248 6,254,579. 21,321,781 III.Changed in the current year 694,953.27 .37 44 .08 6,949,532. 6,949,532. (I) Net profit 71 71 14,372,248 14,372,248 (II)Other misc.income .37 .37 14,372,248 6,949,532. 21,321,781 Subtotal of (I) and (II) .37 71 .08 (III) Investment or decreasing of capital by owners 1. Capital inputted by owners 2.Amount of shares paid and accounted as owners’ equity 3. Other -694,953.2 (IV)Profit allotment 694,953.27 7 -694,953.2 1.Providing of surplus reserves 694,953.27 7 2.Providing of common risk provisions 3.Allotment to the owners (or shareholders) 4.Other (V) Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other 62 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (VI) Special reserves 1. Provided this year 2.Used this term (VII)Other IV. Balance at the end of this 336,521,84 820,330,15 36,607,659 93,092,159 1,286,551, term 9.00 5.88 .49 .05 823.42 (III)Basic Information of the Company 1. Enterprise registration address, organization mode and headquarter address. The company was previously the Shenzhen Textile Industry Company, on April 13, 1994, approved by the Letter(1994)No.15 issued by Shenzhen Municipal People's Government, the Company was restructured and named as Shenzhen Municipal Textile (Group) Co., Ltd. In the same year, approved by the (1994) No.19 file of Shenzhenshi, the shares of the company were listed in Shenzhen Stock Exchange. The Company has got the corporate business certification of Shensizi No. 440301105031014, Registration address and headquarter address are 6/F,Shenfang Building, Huaqiang Road. North, Futian District, Shenzhen. 2.Enterprise’s business nature and major business operation. At present, the Company is mainly engaged in high-tech industry focusing on R&D, production and marketing of polarizers for liquid crystal display, management of properties in bustling business districts of Shenzhen and reserved high-class textile and garment business. 3. Names of parent company and group parent company. The company’s parent company is Shenzhen Investment Holdings Co.,Ltd. 4. The reporting person of the approval of financial statements and the reporting date of the approval of financial statements. The reporting person of the approval of financial statements of the company: Board of Directors of the Company The reporting date of the approval of financial statements of the Company:August 22, 2013 (IV)Principal accounting policies, accounting estimates and early errors 1.Basis for the preparation of financial statements On the basis of continuous operation, in accordance with actual transactions and events, the company carried out confirmation and measurement in accordance with "Accounting Standards for Business Enterprises - Basic Standards" issued by the Ministry of Finance and other various accounting standards, on the basis of it, the Company prepared the financial statements. 63 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 2. Statement on complying with corporate accounting standards Based on the requirement that the financial reports edited according to above-mentioned editing conditions is accordance with enterprise accounting standards, the company reflected its financial condition on June 30, 2013 truly and completely and business result in the first half of 2013. and cash flow information, etc. 3. Fiscal year A calendar year, that is, from January 1 to December 31 is a fiscal year. 4. Accounting standard money Accounting standard money is RMB. Referring to notes to unless separately stated. Currency:RMB 5. Accounting process method of enterprise consolidation under same and different controlling. (1)Enterprise merger under same control: For the enterprise merger under same control, the assets and liabilities obtained by the merging party from enterprise merger was measured according to book value of the merged party on the merger date. The capital reserve was adjusted according to the deference between the book value of net assets obtained by the merging party and the book value of merger price paid (or the total book value of shares issued); if capital surplus was not big for the offset, the retained earnings should be adjusted. Amalgamating parties reckon every direct relate expenses produced in enterprise consolidation including auditing expense, valuation expense and legal service expense paid on enterprise consolidation to current profit and loss when those expenses produced. On parent subsidiary relationship formed via enterprise consolidation , parent company is responsible of editing amalgamation property balance sheet, amalgamation profit statement and amalgamation cash flow meter of amalgamation date. In amalgamation property balance sheet, every asset and liability of amalgamated parties is measured according to its book value. For the accounting policy adopted by the amalgamated parties is not accordance with amalgamating party, and it is adjusted according to criterions, the book value after adjusted is measured. The amalgamating profit chart contains income, expenses and profit happened from the beginning of amalgamation and amalgamating date. The realized net profit before amalgamation from the amalgamated party shall be reflected on the amalgamating profit chart. Amalgamation cash flow meter contains the cash flow of every party in amalgation from the beginning of amalgamation and amalgamating date. (2)Enterprise merger under different control: For the enterprise merger under same control, the merger cost was the assets for the obtaining the control right of the party being purchased on the purchase date, the liabilities happened or undertook and the fair value of the equity securities. For the enterprise merger realized through a number of transactions, the merger cost was the sum of all individual transaction. All the direct costs and related costs for the enterprise merger were included in the cost of enterprise merger. The purchase date referred to date that the company had the control right of the party being purchased. The difference between merger cost over the fair value of identifiable net value obtained from the merger should be confirmed as goodwill. The difference between the identifiable net assets of the party being purchased obtained in the merger and the amount of identifiable net assets of the party being purch ased obtained in the merger should be included in the loss and gain of the current period. On parent subsidiary relationship formed via enterprise consolidation , parent company is responsible of editing amalgamation property balance sheet on amalgamation date; the acquired every identified asset, liability acquired from enterprise consolidation is listed via fair value. 64 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 6. The compiling method of combined financial statement (1)The compiling method of combined financial statement (1)Combined financial statements has financial statements and other related material of every subsidiary company within combined financial statements as combination basis, adjust long-term equity investment of subsidiary company according to equity method, compensate investment, trade activities of the company and every subsidiary company within the combined financial statements, calculate few shareholder profit and loss and few shareholder rights and interests. Then compile the financial statements after those activities. (2)In compiling, if the accounting policy of any subsidiary company within the combination scope is not accordance with it of the company, adjust it according to the accounting policy of the company, then combine. ( 3 ) On the subsidiary company acquired from enterprise consolidation under same controlling, treat amalgamation produced at the beginning, bring its assets, liabilities, business result and cash flow into financial statements at the beginning of the amalgamation. (4)On the enterprise consolidation under same controlling, the net income and loss of the amalgamated parties is reckoned into nonrecurring profit and loss before amalgamation and separately listed in submitting financial statement. (5)Recombination belongs to enterprise non-combination issue under same company controller, when the combined parties combine the assets amount of last account year end, business income of last accounting year or total profit of last accounting year, if it reaches or excesses 20% of relative item of the company, compile income statements at the beginning of the combination period. (6)For the subsidiary company acquired from enterprise consolidation under non-same controlling, in compiling combination statements, adjust individual financial statements based on fair value of identified net assets at the purchasing date. (2)Accounting treatment when the share equity of the same subsidiary is purchased and sold, or sold andsurchased in successively two years. 7. Recognition Standard of Cash & Cash Equivalents Cash means the cash on hand and deposit for payment at any moment. Cash equivalent refers to the investment with few value alteration risks that the company holds the cash with the characters of short term (generally means 3 months from the purchasing date), strong fluidity, easy transferring to known amount. 8.Foreign Currency Transaction (1)Foreign currency operations The foreign currency operation is translated into recording currency according to approximate exchange rate at sight of business happening date. The approximate exchange rate at sight refers to the exchange rate at the beginning of the business happening month. On balance sheet date, dispose foreign currency monetary item and foreign currency non-monetary item according to the following regulations: A.Foreign currency monetary item is translated adopting exchange rate at sight of balance sheet date. The balance of exchange produced from the difference between exchange rate at sight at balance sheet date and initial confirmation or exchange rate at sight at former balance sheet date shall be reckoned into profit and loss at current 65 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 period. B. Foreign currency non-monetary item measured with historic cost, adopt exchange rate at sight on business happening date and not to change recording currency (amount). C. Foreign currency non-monetary item measured by fair value adopts exchange rate at sight of fair value confirmation date. The difference between recording currency after translating and the original recording currency is disposed as fair value alteration and reckoned into profit and loss at current period. (2) Conversion for foreign financial statement The subsidiaries of the company whose standard currency was foreign currency, all asset and liability items should be converted into the standard money of parent company according to the spot rate on the balance sheet date, and all the owners’ equity items, accept for "retained profits", should be converted into the standard money of parent company according to the spot rate on the balance sheet date. The income and cost items in the profit statement should be converted into the standard money of parent company according to the spot rate during the period of consolidating financial statements. The conversion differences due to different exchange rate, should be reflected by opening the "foreign currency conversion difference statements" in RMB. And open the "foreign currency statements conversion differences" in cash flow statement in RMB. 9. Financial instruments (1) Classification of financial instruments: Financial assets can be divided into: the financial assets which measured by fair value and its changes are included in the current loss and gain (including transactional financial assets and the financial assets which measured by fair value and its changes are included in the current loss and gain), the expired investments, loans and receivables held, and financial assets to be sold, the four categories; (2) Measurement of financial instruments A. The initial recognition financial assets are accounted in accordance with fair values. For the financial assets which measured by fair value and its changes are included in the current loss and gain, the relevant transactional costs should be included in the current loss and gain; for other financial assets, the relevant transactional costs should be included in the initial recognition amount. B. The Company makes follow-up measurement on financial assets according to fair value, the transactional cost to deal with the financial assets which may happen in the future will not be deducted. But, except the following situations: (a). The expired investments and loans held, should be measured according to amortized costs by the actual interest method. Accounts receivable, in accordance with the purchase contract or agreement price receivable amount as initial confirmation, when recovery or disposal the account receivable, the price difference between the carrying amount of the receivable included in the current profits and losses (b) The equity tool investments which do not have quotation in market and their fair value can not be reliably measured, and the derivative financial assets which are related to the equity tool and are to be delivered to the equity tool to account, should be measured according to costs. (3)Recognition basis and measurement for transferred financial assets The company will transfer almost all risk and earnings into the transferred parties on the ownership of financial assets or when the controlling on financial assets is given up, it will expire confirming the financial assets. (4)The conditions to stopping the financial liabilities 66 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (5)Recognition basis of financial assets and financial liabilities Determination of fair value of financial assets: A, The financial assets which exist in the market, the quotation in the market will be determined as fair value; B, The financial assets which do not exist in the market, adopt valuation techniques to determine the fair value. The results by the valuation techniques show the transaction prices which may be used in fair transactions on the valuation day. (6)Providing of impairment provision on financial assets (exclude receivable accounts) On the balance sheet date, carry out inspection on the book value of financial assets which are not included in the financial assets measured according to fair value and its changes are include in the current loss and gain. If there are objective evidence showing that the financial assets have impairment, the provision for impairment should be accounted. The objective evidences which show the impairment of financial assets include the following items: A. The issuing party or the debtor had serious financial difficulties; B. The debtor violated the terms in the contract, such as the payment of interest or principal had default or delayed; C. For the consideration in economy and law, the Company made concessions to the debtor in difficulties; D. The debtor was likely to collapse or carry out other financial restructuring; E. The issuing party had major financial difficulties, and the financial assets can not be traded in market; F. The debtor had major adverse changes in technology, market, economic and legal environment, and the Company was may not be able to recover the investment costs; G. The fair values of the equity tool investments had serious and non-temporary decline; H. Other objective evidences which show the impairment of financial asset (6)Measurement of impairment losses of financial assets: A.The financial assets measured according to fair value and its changes are include in the current loss and gain require no test of impairment; B.The measurement of impairment loss of expired investments: Account provision for impairment according to the difference of the value of future cash flow lower than the book value; C. Judgment of impairment of available-for-sale financial assets: if there is a significant decline in the fair value of available-for-sale financial assets, more than 30%of its cost of ownership, expect this downward trend is temporary (duration more than 12 months), depends on the estimated balance of the book value and the present value of future cash flows to decide the provision for impairment. 67 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (7)If investment held to mature is recztegorized to sellable financial assets, please state the intention or evidence of change incapability . 10. Recognition standard and providing basis of bad debt provision on receivable accounts If the amount of a single item is big, impairment test shall be conducted separately. Impairment loss shall be recognized and provision for bad debts shall be made according to the difference between its present value of its future cash flow and its book value. If the amount of single item is not big and conclusive evidences show apparent difference in respect of recoverability of accounts receivable, test shall be conducted and provision for bad debts shall be made separately. For the accounts receivable proved to be not impaired after separate test, aging analysis shall be adopted and impairment loss shall be recognized according to the age of accounts receivable and specified proportion. (1)Bad debt provision on receivable accounts with major amount individually The Client Identifies single amount of accounts receivable that is not less than RMB 1 million as account receivable that are individually significant in amount. The Client Identifies Criteria and norm of individual significance single amount of accounts receivable that is not less than RMB 0.5 million as account receivable that are individually significant in amount. If it is objectively evidential that a receivable of individual Measurement of impairment allowances for receivables of individual significance has impaired, the impairment loss shall be significance recognized based on the difference of the book values higher than the present value of future cash flows. (2)Accounts receivable belong to recognition of impairment allowances by group: Method for recognition of Name impairment allowances by Basis of determination of group group The classified according shall be recognized based on the Account’s age group The age analysis method: accounts’ age In Group, the adopting aging analysis method √Applicable□Not applicable Age % for accounts receivable % for other receivables 68 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Within 1 year(incl: 1 year) 5% 5% 1-2 years 10% 10% 2-3 years 30% 30% Over 3 years 50% 50% Accounts on percentage basis in group: □ applicable √not applicable Accounts on other basis in group: □ applicable √not applicable (3)Accounts receivable belong to individual insignificant but individually assessed for impairment: The reason for individually assessed for There is evidence that differences in the receivable are apparently . impairment A receivable which is individually insignificant but the credit risk is high, should be Method for recognition of impairment individual it assessed for impairment, the impairment loss shall be recognized based allowances on the difference of the book values higher than the present value of future cash flows. 11.Inventory (1)Inventory classification Inventory can be divided into five categories: raw materials, materials commissioned to process, products, finished products, working materials; (2)Pricing method of stock delivered Stock delivered is measured according to weighted average method. (3)Confirmation basis of stock net realizable value and withdrawal method of inventory falling price reserves. Inventory net realizable value is the integrant value that estimated sales price deducting estimated work completing cost and integrant estimated cost according to the normal business process. Withdrawal method of inventory falling price reserves: with the basis that the company making complete inventory taking at the end of medium term and end of year, on the inventory that suffered loss, entire or partial old and outdated or sale price lower than sales price, according to inventory cost and net realizable value (lower is preferred), the company measure it and reckoned it according to the difference of net realizable value of single inventory item upon similar inventory items lower than inventory cost as withdrawal inventory falling price reserves to profit and loss at current period. In confirming net realizable value, the infection upon future item shall be considered beside the price and cost fluctuation of the inventory at balance sheet date. (4)Inventory system Inventory system adopts the perpetual inventory method. (5)Amortization method of consumption goods with low value and wrap page Consumption goods with low value: Consumption goods with low value adopt one time amortization method 69 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 when used. Packing: Wrap page: Wrap page adopts one time amortization when used. 12.Long-term equity investment (1)Investment cost confirmation A. The long-term equity investment formed via enterprise consolidation confirm its initial investment cost according to the following criterions: a. On enterprise consolidation under same controlling, amalgamating parties, managing payment cash, transferring non-cash assets or undertaking liability style as amalgamation consideration, treat the acquired equity book value share from amalgamated parties on amalgamation date as the initial investment cost of long-term equity investment. The difference between long-term equity investment initial investment cost and the paid cash transferred non-cash assets and undertook liability book value is adjusted to be capital reserves; if capital reserves are not sufficient to be deducted, which shall be adjusted to be retained earnings. When the amalgamating parties via issuing equity securities as amalgamation consideration, treat the acquired equity book value share from amalgamated parties on amalgamation date as the initial investment cost of long-term equity investment. Treat the book value amount of the issued shares as capital stock, the difference between the initial investment cost of long-term equity investment and book value amount of stock issued as capital stock is adjusted to be capital reserves; if capital reserves is not sufficient to be deducted, which shall be adjusted to be retained earnings. b. On enterprise consolidation under different controlling, the confirmed amalgamation cost according to the following criterions is as initial investment cost of long-term equity investment: 1/ On enterprise consolidation realized from one time exchanging deal, the amalgamation cost is the paid assets, reliabilities happened or undertook, and the fair value of issued equity securities from purchasing parties on purchasing date for the purpose of acquiring the controlling right upon the purchased parties. 2/ On the enterprise amalgation realized step by step by several times exchanging deal, the amalgamation cost is the summation of every deal cost. 3/ Every direct associated expense produced from purchasing parties for enterprise consolidation is reckoned to enterprise consolidation cost. 4/ If the future issues that possibly affect amalgamation cost in amalgamation contract or agreement is promised, on purchasing date, if the future issues that possibly happen and affect amalgamation cost can be reliably measured, purchasing parties shall reckon it to be amalgamation cost. B、Except the long-term equity investment formed via enterprise consolidation , the long-term equity investment acquired through other methods is confirmed to be its initial investment cost according to the following regulations: a. The long-term equity investment acquired via cash payment is treated as initial investment cost according actually paid purchase price. The initial investment cost contains the expense, tax and other necessary payout that directly associated to long-term equity investment. B.The acquired long-term equity investment via issuing equity securities is as initial investment cost according to the fair value of equity securities. c. The long-term equity investment input by investor is as initial investment cost according to the value stipulated in investment contract or agreement, while the unfair value stipulated in contract or agreement is excluded. d.The long-term equity investment acquired via non-monetary assets exchange, e. g. if non-monetary assets 70 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 exchange has commercial nature, then the long-term equity investment took in exchange is as initial investment cost according to fair value and payable relative taxation; if non-monetary assets exchange has no commercial nature, then the long-term equity investment in took in exchange has the book value of out took asset in exchange and payable relative taxation as initial investment cost. e. On the acquired long-term equity investment via liability recombination, its initial investment cost is confirmed by fair value and payable relative taxation. (2)Rear measuring and profit and loss confirmation method A. According to infection degree of investing enterprise against the invested unit , enlivening market or not, fair value reliably received or not, separately adopts cost method or equity method to measure. B. The confirmation of investment profit and loss Long-term equity investment reckoned via equity method, shall be adjusted in considering the infection of the following factors under the basis of book net profit of invested unit in confirming the net profit or net deficit enjoyed or undertook by invested unit. a. If the accounting policy adopted by invested unit is not accordance with investing unit, adjust according to accounting policy of investing enterprise and financial reports of invested unit to confirm the profit and loss of invested unit under the basis. b. With the fair value of fixed assets, intangible assets of invested unit as basis, the withdrawn depreciation amount or amortization amount and assets depreciation reserves produced infection upon the invested unit net profit. c. The unrealized profit and loss produced from the investing unit and its affiliated enterprise and joint enterprise shall be compensated. Namely the unrealized profit and loss between investing enterprise and affiliated enterprise and joint enterprise is calculated and attributes to investing enterprise according to no.8 share ratio, which will be compensated and investment benefit and loss shall be confirmed under the basis. The trade loss between investing enterprise and invested unit, attributing to assets depreciation loss, is completely confirmed. (3) Confirm the basis that has common control and major infection upon invested unit. A. Common controlling basis: a. Any join enterprise can not individually control production and operating activities of joint enterprise; b. The decision making related to basic business operations of joint enterprise shall be agreed by both parties; c. Every joint-venture enterprises nominate one joint enterprise according to contract or protocol to manage daily activities of joint-venture enterprise; it must implement management right within the wholly agreed financial and business policy scope. B. Major infection basis: a. Appoint represent in the board of invested unit or similar capability mechanism, enjoy relative actual participation decision making right, investing enterprise can participate in the constitution of business policy of the invested unit and realize implementing major infection upon the invested unit. b. Participate in the policy making of the invested unit including the making of dividend allotment policy. Under the circumstance, the represent can bring forward suggestion or idea for its own interest and bring large infection upon the invested unit. c. Realize important trade with the invested unit. Relative trade affects production operations decision-making of invested unit at certain degree. d. Appoint administrative person to the invested unit. Under the condition, appoint administrative person to the invested unit, the person has right and is responsible for the financial and business activities of the invested 71 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 unit, so as to implement import infection on the invested unit. e. Offer key technical documents to the invested unit. Production operations of the invested unit relies upon the technique or technical document of the investing enterprise, which indicate investing enterprise has major infection upon the invested unit. To confirm investing unit has major infection upon the invested unit, one side, consider the voting power share that investing unit directly or indirectly hold from the invested unit, one other side, consider the infection produced by enterprise and other parties holding executable potential voting power presumably transferring into stock right of invested unit, such as the issued current transferable subscription warrant, stock option and transferable corporate bond, etc. If these transferred into stock right of invested unit, which can increase the voting power rate of investing enterprise or decrease the voting power rate of other investors in invested unit, so as to make investing enterprise joining in the financial and business policy-making of the invested unit, and consider investing enterprise have large infection upon the invested unit. (4)Depreciation testing method and depreciation reserve withdrawal method. On balance sheet date, inspect long-term equity investment, judge long term equity investment has the depreciation evidence or not. If the depreciation evidence of the operation state of invested unit appears, estimate its recoverable fund. The measured value of recoverable fund indicates the recoverable fund of long term equity investment is lower than its book value; deduct the book value of long term equity investment into recoverable fund. The deducted fund is confirmed to be the loss of assets depreciation and reckoned into benefit and loss at current period, meanwhile withdrawal relative long term investment depreciation deserve. Once the long term investment depreciation loss is confirmed, which will not be transferred in the later accounting period. 13. Investment property (1). Scope of investment real estate: refers to the real estate for rent or for capital appreciation or for both of them, including the rented land use rights, the land use rights held and to transferred, and the leased building; (2). Initial measurement of investment real estate: conduct initial measurement in accordance with the cost to obtain it; (3)Follow-up measurement of investment real estate: the Company conducts follow-up measurement on the investment real estate by cost model; the follow-up expenditure relating to investment real estate, if the related profit is likely to flow into the company and can be measured, then it should be included in the cost of the investment real estate, other follow-up expenditures should be recognized as the current loss and gain; (4) The classification, depreciation and amortization policies of real estate investments and the depreciation and amortization policies of fixed assets and intangible assets should be coherent. Provision for impairment of investment real estate should be treated according for asset impairment. 14.Fixed assets (1)Confirmation conditions of fixed assets The tangible assets held for producing goods, providing services, rent or operation, and the service time is longer than one fiscal year. (2)Cognizance evidence and pricing method of financial leasing fixed assets 72 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 If all risk and reward associated to certain hired fixed asset actually have transferred, the company confirms it to be financial leasing. Financial leased fixed assets should take the lower one of fair value of leased assets at leasing date and lowest leasing payment, added with the initial direct expenses directly belonging to leasing item, will be book value of leased assets. Taking the lowest leasing amount as the book value of long term account payable, its difference will be unconfirmed financial charges. The unconfirmed financial charges will adopt actual interest rate method to allocate within leasing period. The leased fixed assets ensure depreciation (3)Fixed assets depreciation method Classification of fixed asset Depreciable life(Year) Residual rate(%) Depreciation rate(%) House and Building 35-40 years 4% 2.74%-2.40% Machinery and equipment 10-14 years 4% 9.60%-6.86% Electronic Equipment 8 years 4% 12.00% Transportation equipment 8 years 4% 12.00% Other equipment 8 years 4% 12.00% (4)Depreciation measuring method and depreciation reserves withdrawn method of fixed assets Judge fixed assets appearing the depreciation evidence or not at balance sheet date. If assets market value continuously decreases, or technology is old, damaged or long-term left un-used, draw back amount. The measured result of recoverable amount indicates the recoverable amount of fixed assets is lower than its book value; deduct the book value of fixed assets into recoverable amount. The deducted amount is confirmed to be assets depreciation loss and is reckoned into benefit and loss at current period; meanwhile withdraw relative fixed assets depreciation reserve. Once fixed assets depreciation loss is confirmed, which will not be transferred at the later accounting period. 15. Projects under construction (1)Categories of projects under construction The projects under construction include pre-construction preparations, the building projects under construction, installation projects, technical transformation projects and overhaul works, etc. (2)Standard and timing for transferring of projects under construction to fixed assets The projects under construction should be accounted according to actual expenditures by items, and should be converted to fixed assets when the projects reached the predicted use state. The costs for borrowing relating to projects under construction (including loan interests, excess discount amortization, exchange gains and losses, etc.), which should be included in the cost before the related projects reach the predicted use state, and included in the current financial cost after the related projects reach the predicted use state; (3)Impairment text and providing of impairment provisions on projects under construction Make complete inspection on construction in progress on the date of balance sheet, judge fixed assets occurring possible depreciation evidence or not. If yes: (1) project in progress without construction for long 73 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 time is estimated not to start working again in future 3 years, (2) project in progress has evidence that its character and technology have fallen behind and the economic benefit brought has great uncertainty and other depreciation evidence, which shall be estimated its recoverable amount. The result of recoverable amount shows the recoverable amount of project in progress is loss than its book value, write-down its book value of project in progress into recoverable amount. The written down amount is confirmed to be assets depreciation loss and is reckoned into current period profit and loss, meanwhile withdraw relative depreciation reserve of project in progress. Once depreciation loss of project in progress is confirmed, which will not be transferred. 16.Borrowing cost (1)Principle of the recognition of capitalized borrowing costs The borrowing expenses, if they comply with the capitalization conditions, should be capitalized and included in the cost of relevant assets; other borrowing expenses, should be determined according to the amount occurred and be included in the current loss and gain. (2)Capitalizing period of borrowing expenses If the borrowing expenses meet the following conditions at the same time, they should be capitalized: A. Capital expenditures have already occurred, capital expenditures include the expenditures paid by cash, transferring non-cash assets or by bearing interest-debt; B. The borrowing costs have occurred; C. The construction to make the asset to reach the intended use state or sale state, or the production activities have already begun. (3)Temporarily suspension of capitalizing period When the assets which meet the capitalization condition reach the intended use or sale state, the capitalization of the borrowing expenses should be stopped. The borrowing expenses for the assets which meet the capitalization conditions and reach the intended use or sale state, the expenses should be confirmed according to the amount occurred, and be included in the current loss and gain. (4)Calculation of the amount of capitalization of Loan costs 17. Biological assets (1)Simultaneously, biological assets that meets the following conditions will be confirmed: A. For the past trade or issues, the company possesses or controls biological assets; B. The economic interest associated with the biological assets may flow into the company; C. The biological assets cost can be reliably measured. (2)Biological assets is divided into consumable biological assets, manufacturing biological assets and public welfare biological assets. (3)Biological assets is initially measured according to cost. 74 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (4)On the date of balance sheet, check consumable biological assets, if there are specific evidences showing the reasons like natural disasters, plant diseases and insect pests, animal epidemic situation attack or market requirements, make the net realizable value of consumable biological assets or recoverable amount of manufacturing biological assets are lower than their book value, according to the difference between net realizable value or recoverable amount and their book value, withdraw biological assets depreciation preparation or value decreasing preparation and reckon it to current profit and loss. If the contributing factor of consumable biological assets value decreasing has already disappeared, the deducted amount will be resumed and is transferred within the original withdrawn price decreasing standard and transferred amount is reckoned into current profit and loss. 18. Oil gas assets None 19. .Intangible assets (1)Pricing of intangible assets Intangible assets refer to recognizable non-monetary assets without physical form that are owned or controlled by an enterprise, including proprietary technology, land use right, etc. Intangible assets shall be accounted for at historical cost at the time of acquisition. (2)Estimation of service life of intangible assets with limited service life For the intangible assets with definite service life, since the availability of the intangible assets, they should be amortized by straight-line method within the service life, and included in the current loss and gain. 3)Intangible assets without certain useful life The intangible assets with no definite service life will not be amortized; the company should conduct review on the service life and amortization methods of the intangible assets at the end of the year, if the service life and amortization methods are inconsistent with what estimated previously, then the amortization period and amortization methods should be changed. (4)Provision for impairment of investment assets 75 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Inspect the ability of every intangible assets bring to future economic benefit to the company, when any one of the following exists: (1) certain intangible assets has been replaced by other new technology, which make its ability bringing benefit to enterprise seriously affected; (2) the market price of certain intangible assets greatly fall at the current period and will not resume within the left amortization period; (3) certain intangible assets has overpasses legal protection period, but it still has the depreciation evidence with partial usage value, then valuate its recoverable amount. The measuring result of recoverable amount shows if the recoverable amount is less than its book value, then write-down its book value into its recoverable amount, the written down amount is confirmed to be assets depreciation loss and reckoned into to current profit and loss, meanwhile withdraw corresponding intangible assets depreciation reserve; (4) For other conditions that fully prove certain intangible assets substantially produced depreciation reserve, withdraw intangible assets depreciation reserve according to the difference between recoverable amount and book value. Once intangible assets depreciation loss is confirmed, which will not be written back in the later accounting period. 20.Long-term amortization expenses (1)Long-term prepaid expenses refer to that enterprises have already spent, and amortization periods of all expenses are more than one year (excluding 1 year), they should be amortized in the regulated years. (2)Long-term deferred expense is valuated according to actual cost, the installation cost should be equally amortized during two major overhauls or the contract period (depends on which is shorter), other long-term deferred expenses should be equally amortized according to the benefit period of the project. For the long-term deferred expenses which can not bring predicted profit in the future accounting period, all the unamortized value should be converted to the current loss and gain. 21.Asset transferring with repurchasing terms None 22.Predicted liabilities (1)Recognition of Predicted liabilities The liabilities which are relevant to contingent events and meet the following conditions at the same time, the Company recognizes it as predicted liabilities: the liability is the current obligation the company undertakes; the performance of the liability may result in the outflow of economic interests; the amount of the liability can be reliably measured; (2)Accounting of Predicted liabilities If the predicted liability to be fully or partly paid by the company and be compensated by the third party, the compensation amount can be recognized as assets individually only when it can be basically recovered, at the same time, the compensation on the asset should not be more than the corresponding book amount of the predicted liability. 76 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 23.Share payment and equity instrument Not applicable 24.Repurchasing of the Company’s shares Not applicable 25. Revenues (1)Recognition time for sales of goods After the risks and rewards of the goods are transferred to the buyer, the company will no longer conduct the management right and the actual control right, and the relevant incomes have been received or the documents of receiving have been obtained, and the cost of the goods can be reliably measured, the realization of the revenue should be confirmed. The time confirmation of specific sales of main trade styles: A. FOB is the trade style of goods exportation, means that the seller delivers when the goods pass the ship’s rail at the named port of shipment in contract; B. CIF is the trade style of goods exportation, means that the seller delivers when the goods pass the ship's rail in the destination port ; C. Domestic sales time confirmation means the time of commodities ownership evidence transfer or physical goods delivery. (2)Incomes from transferring asset use right Incomes from transferring asset use right include interest income and income from use payment; The amount of interest income, is determined in accordance with the time and actual interest rate; the income from use payment is determined according to the time and method of relevant contract and agreement. (3)Confirm the eveidence to provide labor income In the same fiscal year and the service has been completed, the income should be confirmed upon the completion of the service; If the starting and completion of the service belong to different fiscal year, then when the service can be reliably measured, the service income should be confirmed at the period end according to the percentage of the service not completed. 77 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 ( 4 ) Deciding of completion percentage when percentage basis is adopted to recognize income from serviceproviding or construction contracts 26. Governmental subsidy (1)Categories It contains financial appropriations, financial discount, taxation return and transfer non-monitory assets free of charge. (2)Accounting treatment The governmental subsidy associated to assets, the company confirms it to be deferral benefit. When relative assets reach to scheduled usage condition, reckon it to be benefit and loss of every period at average within the usage lifetime of the assets. If relative assets is sold, transferred, scrapped or damaged before lifetime expiration, transfer the deferral benefit balance into current period benefit and loss of assets disposal. The received governmental subsidy associated to benefit is confirmed to be deferral benefit if used for the remedy of relative expense or loss of later period; and it is reckoned into benefit and loss at current period during relative expense confirmation; for those used for compensation of relative expense or loss happened, which will be reckoned directly into benefit and loss at current period 27. Deferred income tax assets/Deferred income tax liability (1)Confirmation of deferred income tax assets A.Limited by the company possibly acquired taxability amount for deducting temporary difference, confirm the deductible difference deferred income tax assets produced from temporary difference. But the deferred income tax assets produced from the initial confirmation of assets or liability in trade with the following characters are not confirmed: a. The trade is not enterprise consolidation ; b. When trade happens, which will neither affect accounting benefit nor affect taxability amount of income (or deduct loss). B. The company, on the deductible temporary difference associated to investment of subsidiary company, affiliated company and partnership business simultaneously meet the following conditions, confirms relative deferred income tax assets: a. Temporary difference most likely is transferred in the foresight future. b. Taxability amount of income that most likely used to deduct temporary difference in future. C. The company confirms relative deferred income tax assets for transferable later annual deductible loss and taxation decreasing with future taxability amount of income for deducting deductible loss and taxation decreasing as limitation. (2) The confirmation of deferred income tax liability Besides the deferred income tax liability produced under the following conditions, the company confirms all deferred income tax liability produced by all taxability temporary difference: 78 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 A. The initial confirmation of business Goodwill; B. Simultaneously meeting the initial confirmation of assets or liability produced in trade with the characters of following characters: a. The trade is not enterprise consolidation; b. Trade occurrence affects neither accounting benefit nor taxability amount of income (or the deductible loss). C. When the company has relative taxability temporary difference with its subsidiary company, affiliated company and partnership business, and simultaneously meets the following conditions: a. Investment enterprise can control the transferring time of temporary difference; b. Temporary difference may possibly not transfer in the foreseeable future. rage raw material and raw material purchasing order appointed to be headged object that make company facing fair value alteration risk. 28. Operating and finance leases Not applicable 29. Sellable assets in possession Not applicable 30.Securitilization of assets Not applicable 31.Hedging instruments (1) The hedged item of the company refers to storage raw material and raw material purchasing order appointed to be headed object that make company facing fair value alteration risk. (2) Hedging instruments of the company refers to the transferring instrument that is appointed and its fair value alteration can eliminate the fair value alteration of hedged items-----forward contract. (3) If fair value hedging simultaneously meet the following conditions, the company only can use hedging accounting method to dispose: A. When hedging begins, the company has official appointment on hedging relation (namely the relation between hedging instrument and hedging items), and prepares the official written file about hedging period risk, risk management target and hedging policy. B. The estimated highness of the hedging period is effective, and meets the risk management policy confirmed originally by the company for the hedging relation. C. Hedging effectiveness can be reliably measured. D. The company continuously makes evaluation on the effectiveness of hedging period and confirms that the hedging period is highly effective during the accounting period appointed in hedging relations. (4)For fair value hedging that meeting above-mentioned conditions, implement accounting disposal according to the following regulations: 79 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 A. The benefit or loss produced from alteration of fair value hedging is reckoned into benefit and loss at current period. B. The benefit or loss formed via risk in hedged period on hedged item is reckoned into benefit and loss at current period; meanwhile adjust the book value of the hedged item. C. Any one of the following conditions is satisfied in hedged period, the company will expire using faire value hedging account: a. Hedging instruments have expired, been sold, contract expire or come into practice. b. The hedging will not satisfy the conditions that using hedging c. Enterprise cancels the appointment of hedging relation. 32.Change of main accounting policies and estimations None (1)Change of accounting policies None (2)Change of accounting estimations None 33.Correction of accounting errors in previous period None (1)Retrospective restatement Is there any retrospective restatement on the accounting error with previous periods done in the report term □ Yes √ No (2)Future adoption method Is there any future adoption method apply able to accounting errors with previous period, found in the report period. □ Yes √ No 34.Other principal accounting policies, estimations and preparation method of financial statements None 80 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (V).Taxes of the Company 1. Main taxes categories and tax rate Taxes Tax references Applicable tax rates VAT Incomes from product sales 17.00% Providing labor services, real estate Business tax. 5.00% sales, the transfer of intangible assets City construction tax VAT, sales tax, turnover tax, etc 7.00% Business income tax Taxable income 25.00%、15.00% 2. Tax preference and approval file (1))Shenzhen Shengbo Optoelectronic Technology CO., Ltd., the subsidiary company of our company, has been qualified as national high-tech enterprise since 2010 ,High-tech and enterprise certificate No.: GR201044200171 ,The certificate is valid for three years, The enterprise income tax rate of this year is 15%. (2)Awin accordance with relevant provisions of the Notice of Ministry of Finance, General Administration of Customs and State Taxation Administration Regarding Tax Preference Policies for Further Supporting the Development of New-type Display Device Industry (Cai Guan Shui (2012) No. 16), the enterprises manufacturing key materials and parts for the upstream industry of new-type display devices including colorful light filter coating and polarizer sheet that comply with the planning for independent development of domestic industries may enjoy the preferential policies of exemption from import tarriff for the import of raw materials and consumables for the purpose of self use and production that can not be produced domestically and levy of import-related value added tax according to relevant regulations in the period from June 1, 2012 and December 31, 2015. For the concrete regulations on tax exemption, the Provisional Regulations on Taxation Policies for Imported Materials of Enterprises Manufacturing New-type Display Device Panels (the appendix of Cai Guan Shui (2012) No. 16 Document) shall prevail. According to the Notice of Printing and Issuing the Scope of Imported Materials of Enterprises Manufacturing Colorful Light Filtering Coating and Polarizer Sheets and the List of the First Group of Enterprises Enjoying Preferential Policies (Cai Guan Shui (2012) No. 53), Shenzhen Shengbo Optoelectronic Technology Co., Ltd. was included in the list of the first group of enterprises enjoying the above-mentioned policies. (VI) Enterprise consolidation and combined financial statements 1. Subsidiary (1)Subsidiary obtained through establishment or investment Unit:RMB Full Registra Register Actual Other Holding Proporti Whether Interest Amount After Subsidia Busines Busines name of tion ed capital projects proporti on of consolid of used to wrote ry type s s scope subsidia place capital amounts balance on voting ation of minority write down 81 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 ry of essential (%) rights(% report sharehol down current the end ly from ) form der lost period net included loss of investm in minority ent to minority sharehol subsidia sharehol ders ry der over interest equity beginni ng share of minority sharehol ders in the subsidia ry from the parent compan y’s share ,B alance of Owner's equity Shenzhe Fabrics, n bedding, clothing Shenzhe , textiles n Jinlan raw Fabrics, Decorati Wholly- material bedding, ve owned 4,000,0 s 4,000,0 clothing 90% 100% Yes Articles subsidia 00.00 processi 00.00 nabyfact Industri ry ng ubg al Co., manufac Ltd. turing, wholesa le and retail. Shenzhe Wholly- Shenzhe Domesti Domesti n Lisi owned n c 2,360,0 c 2,360,0 90.68% 100% Yes Industri subsidia commer 00.00 commer 00.00 al Co., ce, ce, 82 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Ltd ry material material s supply s supply and and sales sales Shenzhe Wholly- Shenzhe n owned n Accom Huaqian subsidia modatio g Hotel ry n, restaura nts, business center; ticket consign Accom ment; modatio Property n, Manage 10,005, 10,005, restaura ment 95% 100% Yes 300.00 300.00 nts, (require business d to center obtain the relevant qualific ation certifica te for their operatio ns) Shenzhe Wholly- Shenzhe n owned n The Shenfan subsidia Compan g ry Property 1,600,0 y 1,600,0 Property manage 93.75% 100% Yes 00.00 property 00.00 Manage ment manage ment ment Co., Ltd. Shenzhe Wholly- Shenzhe Producti Producti 25,000, 25,000, n owned n on of on of 100% 100% Yes 000.00 000.00 Beauty subsidia fully fully 83 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Century ry electron electron Garmen ic ic t Co., jacquard jacquard Ltd. knitting knitting whole whole shape shape (without restricti ons on the project); clothing , textiles and related accessor ies for buying and selling (excludi ng franchis e, special control, propriet ary products ); operatin g import and export business (by "Import and Export Enterpri se Qualific ation Certific 84 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 ate" deep free trade Certific ate Zi No. 2002-33 9 tube business ); industri al projects (the specific items to be declared separate ly). Shenzhe Wholly- Shenzhe Operati n owned n ng Shenfan subsidia import g Import ry and & export Export business Operati Co., (the ng Ltd. specific import 5,000,0 5,000,0 approva 100% 100% Yes and 00.00 00.00 l by the export relevant business import and export business handled ) Shengtou Wholly-o Hongkon Polaroid HKD10 (HK) Co., wned g Sales 100% 100% Yes 000 Ltd. subsidiary Note: The shareholding proportion of consolidated subsidiaries is inconsistent with the vote right proportion, which is through the way of getting the cross-shareholdings among subsidiaries to make the parent company 85 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 actually control 100%; (2)The company has no subsidiary company acquired via enterprise consolidation under same controlling. Unit:RMB After wrote down current period loss of minority sharehold Other Amount ers over projects used to equity Actual balance write Full name Proportio Whether Interest of beginning capital essentiall Holding consolidat down lost of Subsidiar Registrati Business Registrati Scope of proportio n of ion of minority share of amounts y from n included subsidiary y tyle on Place character on capital business voting report sharehold minority of the net (%) in company rights(%) form er sharehold end investmen minority ers in the t to sharehold subsidiary subsidiary er interest from the parent company’ s share ,Bal ance of Owner's equity Notes None (3)The company has no subsidiary company acquired via enterprise consolidation under same controlling. Unit:RMB Other Amount After Actual Whether Full name projects Holding Proportio Interest of used to wrote capital consolidat of Subsidiar Registrati Business Registrati Scope of balance proportio n of minority write down amounts ion of subsidiary y tyle on Place character on capital business essentiall n voting sharehold down lost current of the report company y from (%) rights(%) er included period end form net in loss of 86 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 investmen minority minority t to sharehold sharehold subsidiary er interest ers over equity beginning share of minority sharehold ers in the subsidiary from the parent company’ s share ,Bal ance of Owner's equity Wholes ale, manufac turing and process various specific ations material Shenzhen s and Shengbo Productio apparatu Optoelect Limited RMB Shenzhe n and s of 300,000 ronic Liability 300 100% 100% Yes n sales of polarize ,000.00 Technolo Company million polarizer r, LCD; gy Co., import Ltd and export business (except projects inhibite d by law, administ rative 87 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 regulati on, State Depart ment), the limited projects shall be manage d with the permissi on Notes 2. Entities with special purposes or entities on which the Company has controlling power through entrusted operation or leasing None 3. Changes of combination scope at current period None 4. Entities that are newly included in the scope of consolidation in current reporting period None 5. Business combinations involving entities under common control that happened in current reporting period None 6. Business combinations involving entities under common control that happened in current reporting period None 7.Sell stock right losing controlling right to decrease subsidiary company. None 8.Reverse acquisition occurred in the report period None 88 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 9.Takeover occurred in the report period. None 10.Exchange rate of main accounts of overseas businesses None VII. Notes to the major items of consolidated financial statement (I)Monetary Capital Unit:RMB Year-end balance Year-beginning balance Items Exchange Exchange Foreign currency RMB Foreign currency RMB rate rate Cash: -- -- 104,026.78 -- -- 105,473.78 RMB -- -- 39,234.86 -- -- 59,331.88 HKD 31,512.94 0.80 25,097.64 4,226.94 0.81 3,427.39 USD 6,284.10 6.14 38,827.57 6,784.10 6.29 42,641.46 JPY 14,000.00 0.06 866.71 1,000.00 0.07 73.05 Bank deposit: -- -- 744,480,412.47 -- -- 210,503,784.94 RMB -- -- 704,283,696.84 -- -- 194,980,561.64 HKD 2,350,144.69 0.80 1,868,966.19 3,032,356.82 0.81 2,458,698.80 USD 6,240,828.26 6.14 38,303,707.53 2,073,931.29 6.29 13,035,695.12 JPY 388,349.00 0.06 24,041.91 394,658.00 0.07 28,829.38 Other Capital -- -- 27,616.51 -- -- 21,808,477.34 RMB -- -- 27,378.22 -- -- 20,779,057.48 USD JPY 14,088,785.00 0.07 1,029,171.66 EUR 29.84 7.99 238.29 29.84 8.32 248.20 Total -- -- 744,612,055.76 -- -- 232,417,736.06 Notes of Monetary fund has not these conditions such as usage limitation for mortgage, pledge or frozen fund, stored overseas, with potential recovery risk. (1)As of June 30, 2013,Monetary fund has not these conditions such as usage limitation for mortgage, pledge or frozen fund, stored overseas, with potential recovery risk. (2)As of June 30, 2013,The fixed-term deposit balance of money fund is RMB 5,330,437.81, this part will not 89 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 be treated as closing cash or closing cash equivalent in preparing cash flow statement. 2.Transactional financial assets None 3. Bill receivable (1)Classification Bill receivable Unit RMB Classification Year-end balance Year-beginning balance Bank acceptance 12,254,516.72 20,139,334.03 Total 12,254,516.72 20,139,334.03 (2)Bill receivable under pledge Unit:RMB Issuer Date of issue Expired on Amount Remark None (3)Bill transferred to account receivable for the issuer is not able to execute the liability , and notes endorsed to other parties but are not mature yet at the end of period. Bill transferred to account receivable for the issuer is not able to execute the liability Unit:RMB Issuer Date of issue Expired on Amount Remark Shantou Ultrasonic March 20, 2013 September 20, 2013 724,250.00 Electric Co., Ltd. Shenzhen Jingxu Electric April 2, 2013 July 2, 2013 615,233.45 Co., Ltd. Jurong Juncheng March 28, 2013 September 28, 2013 514,308.68 Electroc Co., Ltd. Hebei Jinya Electric March 29, 2013 September 29, 2013 504,550.00 Co.,Ltd. Jurong Juncheng Electric April 19, 2013 October 19, 2013 500,000.00 Co., Ltd. Total -- -- 2,858,342.13 -- 4. Dividends receivable 90 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 None 5. Interest receivable (1)Interest receivable Unit:RMB Amount at year Items Increase at this period Decrease at this period Amount at period end beginning 1,741,666.67 1,741,666.67 Total 1,741,666.67 1,741,666.67 (2)Overdue interests N/A (3)Notes None 6. Account receivable 1.Classification accojunt receivables. Unit :RMB Amount in year-end Amount in year- begin Book Balance Bad debt provision Book Balance Bad debt provision Classification Amount Proportion( Amount Proportion( Amount Proportion( Amount Proportion(% %) %) %) ) Receivables with major individual amount and bad debt provision provided individually receivables 1,807,687.3 1,807,687.3 1,807,687 1.09% 100% 1.61% 1,807,687.37 100% with major individual 7 7 .37 amount and bad debt provision provided individually Receivables provided bad debt provision in groups 159,586,67 8,175,874.9 106,479,2 Age of group 96.33% 5.12% 94.83% 5,537,931.64 5.2% 8.58 5 74.60 159,586,67 8,175,874.9 106,479,2 Subtotal of group 96.33% 5.12% 94.83% 5,537,931.64 5.2% 8.58 5 74.60 Account receivable with 4,273,339.4 2.58% 4,273,339.4 100% 4,003,127 3.56% 4,003,127.89 100% 91 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 minor individual amount 8 8 .89 but bad debt provision is provided 165,667,70 14,256,901. 112,290,0 11,348,746.9 Total -- -- -- -- 5.43 80 89.86 0 Category explanation of accounts receivable: Receivables with significant individual amount and provision made for individual item refers to customer accounts receivable with single amount more than 1 million, its provision for impairment will be made based on specific identification method. For receivables without significant individual amount, after deducting those parts which had conducted individual impairment test for its obvious difference in collectability with concrete evidence, making group by aging with character of credit risks and making provision for impairment based on aging analysis method. The receivables made provision for impairment without significant individual amount refers to those receivables which has obvious difference in collectability with concrete evidence, its provision will be made based on specific identification method. Receivable accounts with large amount individually and bad debt provisions were provided √ Applicable □ not applicable Unit:RMB Description Book balance Bad debt provision Rate(%) Reason to provide Dongguan Feier LCD Co., Ltd. 1,807,687.37 1,807,687.37 100% Unable to recover Total 1,807,687.37 1,807,687.37 -- -- Account reveivable on which bad debt proisions are provided on age basis in the group √ Applicable □ not applicable Unit:RMB Balance in year-end Balance in year-begin Balance of book Balance of book Age Bad debt Bad debt Propertion( Propertion( Amount provision Amount provision %) %) Within 1 year Including: -- -- -- -- -- -- 158,719,524.14 99.46% 7,904,613.25 105,490,691.55 99.07% 5,274,534.58 Subtotal of within 158,719,524.14 99.46% 7,904,613.25 105,490,691.55 99.07% 5,274,534.58 1 year 1-2 years 144,570.00 0.09% 14,457.00 288,946.25 0.27% 28,894.62 2-3 years 522,437.64 0.33% 156,731.29 576,579.80 0.54% 172,973.94 Over 3 years 200,146.80 0.12% 100,073.40 123,057.00 0.12% 61,528.50 92 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 3-4 years 200,146.80 0.12% 100,073.40 123,057.00 0.12% 61,528.50 Total 159,586,678.58 -- 8,175,874.95 106,479,274.60 -- 5,537,931.64 Receivable accounts on which had debt provisions are provided on percentage analyze basis in a portfolio □Applicable √Not applicable Receivable accounts on which had debt provisions are provided by other ways in the portfolio □Applicable √Not applicable Receivable accounts with minor amount but on which had debt provisions are provided individually at end of period √Applicable □Not applicable Unit:RMB Description Of other Book balance Amount of bad debt Rate reason receivables Receivable accounts with no large amount 4,273,339.48 4,273,339.48 100% Unable to recover individually Total 4,273,339.48 4,273,339.48 -- -- (2)Receivable accounts written back or retrieved in the report period Unit:RMB Bad debt provision Reason to write back Basis of original bad Amount written back or Description of receivables provided before writing or retrieve debt provision retried back or retrieving In the end report peiod, separate amount is not large , the account receivable with big combination risk after combined via risk character Unit:RMB Name Book balance Amount of bad debt Proportion(%) Reason Receivable accounts with 1,807,687.37 1,807,687.37 100% Unable to recover large amount individually Receivable accounts with no large amount 4,273,339.48 4,273,339.48 100% Unable to recover individually Total 6,081,026.85 6,081,026.85 -- -- Notes (3)Receivable accounts actually written off in the report period None 93 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (4)Particulars about the receivable accounts due from shareholders with 5% or over of the Company’s shares Unit:RMB Year-end balance Year-beginning balance Name Book Balance Amount Book Balance Amount None (5)The front 5 units’ information of account receivable Unit :RMB Relation with the Portion in total Name Amount Ages Company receivables (%) Shenzhen China Star Optoelectroincs Client, related parties 53,981,726.39 Within 1 year 32.58% Technology Co., Ltd. Kunshan Longteng Client 14,217,400.25 Within 1 year 8.58% Optoelectronics Co., Ltd. Shenchao Optoelectronics(Shenzhe Client 11,211,891.49 Within 1 year 6.77% n ) Co., Ltd. Fuhaipeng Electroinc Client 9,818,302.16 Within 1 year 5.93% Technology Co., Ltd. Guangdong Ruili Baolai Client 8,632,887.47 Within 1 year 5.21% Technology Co., Ltd. Total -- 97,862,207.76 -- 59.07% (6)Account receivable from Related parties Unit:RMB Portion in total receivables Name Relation with the company Amount account(%) Shenzhen China Star Optoelectroincs Technology Client, related parties 53,981,726.39 32.58% Co., Ltd. Shenzhen Tianma Client, related parties 919,802.90 0.56% Microelectronics Co., Ltd. 94 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Total -- 54,901,529.29 33.14% (7)Termination of receivable accounts Unit:RMB Items Derecognised amount Gains/losses associated with the derecognition None (8)For securitization on receivable accounts, please provide the amount of asset and liability formed bycontinuous involving Unit:RMB Items Year-end balance Assets: None Liability: None 7. Other receivable 1.Type analyses: Unit:RMB Amount in year-end Amount in year-begin Book Balance Bad debt provision Book Balance Bad debt provision Type Amount Proportio Amount Proportio Amount Proportion( Amount Proportio n(%) n(%) %) n(%) Other receivables with major individual amount 12,075,436.4 12,075,436.4 12,075,436.4 22.12% 100% 17.93% 12,075,436.43 100% and had debt provision 3 3 3 provided individuarlly Other receivables provided bad debt provision in groups 41,754,822.4 54,519,378.9 Account age group 76.48% 2,840,551.62 5.08% 80.93% 3,450,310.58 6.33% 1 1 41,754,822.4 54,519,378.9 Subtotal of group 76.48% 2,840,551.62 5.08% 80.93% 3,450,310.58 6.33% 1 1 Other account receivablewith minor 766,081.15 1.4% 766,081.15 100% 766,081.15 1.14% 766,081.15 100% individual amount but bad debt provision is 95 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 provided 54,596,339.9 15,682,069.2 67,360,896.4 Total -- -- -- 16,291,828.16 -- 9 0 9 Category explanation of other accounts receivable: Receivables with significant individual amount and provision made for individual item refers to customer accounts receivable with single amount more than 0.5 million, its provision for impairment will be made based on specific identification method. For receivables without significant individual amount, after deducting those parts which had conducted individual impairment test for its obvious difference in collectability with concrete evidence, making group by aging with character of credit risks and making provision for impairment based on aging analysis method. The receivables made provision for impairment without significant individual amount refers to those receivables which has obvious difference in collectability with concrete evidence, its provision will be made based on specific identification method. Other receivable accounts with large amount and were provided had debt provisions individually at end of period. √ Applicable □ Not applicable Unit:RMB Decription Book balance Amount of bad debts Rate(%) Reason Jiangxi Xuanli String 11,389,044.60 11,389,044.60 100% Estimated uncollectible Co., Ltd. Shenzhen Tianlong Industry & trade Co., 686,391.83 686,391.83 100% Estimated uncollectible Ltd. Total 12,075,436.43 12,075,436.43 -- -- Other receivable accounts in Group on which bad debt provisions were provided on age analyze basis: √ Applicable □ Not applicable Unit:RMB At end of term At beginning of term Book balance Book balance Age Proporti Bad debt provision Proporti Bad debt provision Amount Amount on(%) on(%) Within 1 year Including : 37,357,858.30 89.47% 1,899,354.34 50,412,655.15 92.47% 2,520,627.76 Subtotal of within 1 year 37,357,858.30 89.47% 1,899,354.34 50,412,655.15 92.47% 2,520,627.76 1-2 years 2,492,243.39 5.97% 249,224.34 2,103,003.04 3.86% 210,300.30 2-3 years 1,301,937.10 3.12% 390,581.13 1,412,389.24 2.59% 423,716.77 Over 3 years 602,783.62 1.44% 301,391.81 591,331.48 1.08% 295,665.75 96 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 3-4 years 592,783.62 1.42% 296,391.81 581,331.48 1.07% 290,665.75 Over 5 years 10,000.00 0.02% 5,000.00 10,000.00 0.01% 5,000.00 Total 41,754,822.41 -- 2,840,551.62 54,519,378.91 -- 3,450,310.58 Other receivable account in Group on which bad debt provisions were provided on percentage basis □ Applicable √ not applicable Receivable account on which bad debt provisions are provided by other ways in the portfolio □ Applicable √ not applicable Other receivable accounts with minor amount but were provided had debt provisions individually at end of period √Applicable□ not applicable Unit:RMB Content Book balance Bad debt Provision Rate(%) Reason Other Receivable accounts with no large 766,081.15 766,081.15 100% Estimated uncollectible amount individually Total 766,081.15 766,081.15 -- -- (2)Other receivable accounts written back or retrieved in the report period Unit:RMB Accumulatively Accruing Cause of written back Content Determine the Basis of Allowances for Bad Debt Amount of Reversal or oor retrieved Bad Debt Provision before Reversal or Recovery Recovery Separate amount is big at end of the period or not big but other account receivable and doubtful reserves shall be withdrawn Unit:RMB Description Book balance Amount of bad debts Rate(%) Reason Other Receivable accounts with large 12,075,436.43 12,075,436.43 100% Estimated uncollectible amount individually Other Receivable accounts with no large 766,081.15 766,081.15 100% Estimated uncollectible amount individually Total 12,841,517.58 12,841,517.58 -- -- Notes 97 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (3)Other receivable accounts actually written off in the report period None (4)Particulars about the other receivable accounts due from shareholders with 5% or over of the Company’s shares in the report period Unit:RMB Balance at the period end Balance in year-begin Name Amount of bad debt Amount of bad debt Book amount Book amount provision provision None (5)Natures or contents of other receivable accounts with large amount None (6)The front 5 units’ information of other account receivable Unit:RMB Relation with the Portion in total other Name Amount Ages company receivables(%) Export tax rebates Non-related parties 30,280,979.11 Within 1 year 55.46% Jiangxi Xuanli String Non-related parties 11,389,044.60 3-4 years 20.86% Co., Ltd. Anhui Huapeng Textile Sharing Company 2,700,000.00 Within 1 year 4.94% Co., Ltd. Shenzhen Finance Non-related parties 1,047,437.10 2-3 years 1.92% Committee Shenzhen Tianlong Industry & trade Co., Non-related parties 686,391.83 3-4 years 1.26% Ltd. Total -- 46,103,852.64 -- 84.44% (7)Account receivable from Related parties Unit: RMB Name Relation with the company Amount Portion in total other 98 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 receivables(%) Anhui Huapeng Textile Co., Sharing Company 2,700,000.00 4.94% Ltd. Total -- 2,700,000.00 4.94% (8)Termination of other receivable accounts Unit:RMB Items Derecognised amount Gains/losses associated with the derecognition None (9)For securitization on other receivable accounts, please provide the amount of account of asset and liability formed by continous involving Unit:RMB Items Amount in year-end Assets: None Liability : None 8.Payment in advance (1)Age analysis Unit:RMB Balance in year-end Balance in year-begin Age Proportion Proportion Amount Amount (%) (%) Within 1 year 33,190,113.44 100% 12,711,147.09 100% Total 33,190,113.44 -- 12,711,147.09 -- Notes to age of payment in advance: (2) The front 5 units’ information of Payment in advance Unit:RMB 99 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Relation with the Name Amount Time Reason of not clearing company Hanning Shangpin Supplier 4,763,592.55 Within 1 year Not available Textiles Co., Ltd. Jiangsu Black Swans International Trade Co., Supplier 4,049,582.24 Within 1 year Not available Ltd. Zhangjiagang Fumao Supplier 3,949,446.01 Within 1 year Not available Textiles Co., Ltd. Jiangyin Hupao Textiles Printing & Dyeing Supplier 3,781,680.26 Within 1 year Not available Co., Ltd. Rudong Dongmeng Textiles Printing & Supplier 3,410,321.43 Within 1 year Not available Dyeing Co., Ltd. Total -- 19,954,622.49 -- -- Notes (3)Prepayment received by shareholding parties holding 5% or above of the Company’s shares in the report period. Unit:RMB Balance in year-end Balance in year-begin Name Amount of Bad debt Amount of Bad debt Book Balance Book Balance provision provision (4)Statements on prepayments As of June 30, 2013, There was no Prepayment due from shareholders with nore than 5% (including 5%) of the voting shares of the company. 9.Inventory (1)Inventory types Unit:RMB Items Year-end balance Year-beginning balance 100 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Book balance Provision for Book value Book balance Provision for bad Book value bad debts debts Raw materials 126,680,927.84 5,151,399.63 121,529,528.21 98,017,177.01 4,589,447.60 93,427,729.41 Processing 44,956,754.31 2,773,084.10 42,183,670.21 21,914,860.08 2,773,084.10 19,141,775.98 products Stock goods 55,150,016.72 7,158,573.31 47,991,443.41 34,004,107.39 3,434,000.51 30,570,106.88 Turnover materials 133,102.72 133,102.72 118,539.22 118,539.22 Commissioned 1,598,561.17 1,598,561.17 1,598,561.17 1,598,561.17 goods Total 228,519,362.76 16,681,618.21 211,837,744.55 155,653,244.87 12,395,093.38 143,258,151.49 (2)Inventory Impairment provision Unit:RMB Book balance at year Amount accounted in Amount Decreased in current period Book balance at period Type beginning current period Transferred back Reselling end Raw materials 4,589,447.60 572,537.11 10,585.08 5,151,399.63 Processing products 2,773,084.10 2,773,084.10 Stock goods 3,434,000.51 3,753,525.09 28,318.99 633.30 7,158,573.31 Commissioned 1,598,561.17 1,598,561.17 goods Total 12,395,093.38 4,326,062.20 38,904.07 633.30 16,681,618.21 (3)Condition of inventory value decline Items Base of stock value decline Reason of issuing back to stock Proportion of issuing back value decline plan of this period amount to the stock balance at this period Net realisable value is lower tha Raw materials n the corresponding cost Net realisable value is lower tha Stock goods n the corresponding cost Net realisable value is lower tha Processing products n the corresponding cost Net realisable value is lower tha Tumover materials n the corresponding cost 101 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 10.Other current assets Unit:RMB Items End of term Beginning of term Structural Deposit 300,000,000.00 Total 300,000,000.00 Notes Amount Amount Amount Amount of of gains of money of Name of Related Mode of principle and losses Relations Product entrusted Starting Ending provision Estimated the transactio remunerat actually realized hip type for date date for profit trustee n or not ion recovered in the managem impairme in current report ent nt (if any) period period Industrial Bank 6-month Break-eve Shenzhen April 26, October N/A No structural 10,000 n floated 0 0 75.94 0 Huafu 2013 23, 2013 deposit income Sub-bran ch China Merchant s 3-month Break-eve April 26, July 25, Shenzhen N/A No structural 5,000 n floated 0 0 29.38 0 2013 2013 Shenfang deposit income -Sub-bran ch China Merchant s 6-month Break-eve April 26, October Shenzhen N/A No structural 15,000 n floated 0 0 92.22 0 2013 25, 2013 Shenfang deposit income -Sub-bran ch Total 30,000 -- -- -- 0 197.54 0 11.Disposable financial assets (1)Sellable financial assets Unit:RMB 102 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Items Fair value at end of term Fair value at beginning of term Available-for-sale equity instruments 66,931,844.99 70,159,993.69 Total 66,931,844.99 70,159,993.69 This issue will be re-held-to-maturity investments classified as available for sale financial assets, the current re-classification of the amount of RMB 0.00 . Explanation of financial assets available for sale: The amount of available for sale assets are held by Shenzhen Victor Onward Textile Industrial Co., Ltd. shares, *ST Shen Victor Onward A of the company holds a total of 6,958,246 shares of the outstanding shares of the highest A share price of 8.83 yuan in June 30, 2013, ST Fawer of the company holds a total of985,733 shares of the outstanding shares of the highest A share price of 5.57 yuan in June 30, 2013, . (2)Long-term liability investment in the sellable financial assets None 12.Investment held to mature (1)Investment held to mature None (2)Investment hold to mature disposed in the report period hefore mature None 13.Long-term receivables None 14.Investment to joint venture and affiliated Enterprises Unit:RMB Voting End total End total net Total current Name Proportion (%) End total assets Net profit proportion(%) liablilities assets revenues I. Joint venture Shenzhen Haohao 50% 50% 7,528,329.98 492,566.54 7,035,763.44 907,944.00 556,513.36 Property Leasing Co., 103 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Ltd. Shenzhen Xieli Automobile 50% 50% 8,144,436.32 2,362,706.36 5,781,729.96 842,900.00 312,655.46 Co., Ltd. II. Affiliated enterprise Shenzhen Changlianfa Printing & 40.25% 40.25% 5,386,790.18 1,118,142.56 4,268,647.62 110,000.00 -84,670.55 dyeing Company Jordan Garment 35% 35% 11,942,558.43 4,551,029.13 7,391,529.30 10,252,054.47 352,202.53 Factory Hengshun (Saipan) 35% 35% Industry Co., Ltd. There is no significant difference among the significant accounting policy of joint venture and Affiliated enterprise , the accounting estimate and the company accounting policy, the accounting estimate. 15. Long term share equity investment. (1) Long-term equity investments Unit:RMB Explainatio n of diffirence Shareholdin between Voting right Initial g shareholdin Accounting Original Ending proportion Current Cash Name investment change proportion g Devalue method balance Balance in the devalue bonus cost in the proportion investee investee and voting right proportion in investee Shenzhen Jintian Cost 14,831,68 14,831,68 14,831,68 14,831,68 Industry 3.68% 3.68% method 1.50 1.50 1.50 1.50 (Group) Co., Ltd. Shenzhen Equity 2,040,102 3,665,118 275,108.0 3,940,226 50% 50% 104 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Haohao method .73 .59 9 .68 Property Leasing Co., Ltd. Shenzhen Xieli Equity 1,529,483 2,976,192 181,327.7 3,157,519 266,654.9 Automobi 50% 50% method .67 .28 0 .98 9 le Co., Ltd. Shenzhen Changlia nfa Equity 2,524,500 1,752,210 -34,079.8 1,718,130 40.25% 40.25% Printing method .00 .56 9 .67 & dyeing Company Jordan Equity 7,240,625 2,587,660 2,587,035 Garment -625.73 35% 35% method .00 .99 .26 Factory Hengshun (Saipan Equity 8,228,350 35% )Industry method .00 Co., Ltd. Shenzhen Tianlong It is cance Industrial Equity 685,000.0 lled in Ap 50% & method 0 ril 24, Trading 2013 Co., Ltd Shenzhen Jiafeng Cost 16,800,00 16,800,00 16,800,00 16,800,00 10.8% 10.8% Textile method 0.00 0.00 0.00 0.00 Co., ltd. Shenzhen Guanhua Cost 5,491,288 5,491,288 5,491,288 5,058,307 Prnting & 45% 45% method .71 .71 .71 .01 dyeing Co., Ltd. Shenzhen Union Cost 2,600,000 2,600,000 2,600,000 Develop 2.87% 2.87% method .00 .00 .00 ment Group 105 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Co., Ltd Shenzhen Xiangjian Cost 160,000.0 160,000.0 160,000.0 20% 20% g Trade method 0 0 0 Co., Ltd. Shenzhen Xinfang Cost 524,000.0 524,000.0 524,000.0 20% 20% 80,000.00 Knitting method 0 0 0 Co., Ltd. Hongkon g Yehui Cost 2,392,914 2,392,914 2,392,914 Internatio 17.85% 17.85% method .37 .37 .37 nal Co., Ltd. Operate Shenzhen and Dailisi Cost 532,062.5 2,559,856 2,559,856 contracte 802,000.0 30% Knitting method 0 .26 .26 d by the 0 Co., Ltd. third party Operate Anhui and Huapeng Cost 25,000,00 25,410,20 25,410,20 contracte 50% Textile method 0.00 9.50 9.50 d by the Co., Ltd. third party Shenzhen South Cost 1,500,000 1,500,000 1,500,000 9.84% 9.84% Textile method .00 .00 .00 Co., Ltd. Shenzhen Tongyi Cost 1,800,000 1,800,000 1,800,000 18% 18% Silk Co., method .00 .00 .00 Ltd. Shenzhen Zhongxin g Fibre It is cance Folds Cost 1,460,000 1,460,000 1,460,000 lled in Jan 1,460,000 100% Cotton method .00 .00 .00 uary 4, .00 Clothing 2013 Ornament Co., Ltd. 106 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 95,340,00 86,511,13 421,730.1 86,932,86 38,416,64 882,000.0 Total -- -- -- -- 8.48 2.76 7 2.93 3.50 0 (2)Constrains on the ability to transfer capital to invested entities During the reporting period, the company is not limited to transfer funds to the Investment Company limited circumstances. 16.Investment real estate (1)Measured by the cost of investment in real estate Unit:RMB Items Book amount at year Increase at this period Decrease at this period Book balance in year -end beginning 1. Total original price 258,462,134.46 884,537.00 259,346,671.46 1.House, Building 258,462,134.46 884,537.00 259,346,671.46 II.Total accumulated depreciation 103,700,238.75 3,432,198.33 107,132,437.08 accumulated amortization 1.House, Building 103,700,238.75 3,432,198.33 107,132,437.08 III. Total book value of investment real 154,761,895.71 -2,547,661.33 152,214,234.38 estate 1.House, Building 154,761,895.71 -2,547,661.33 152,214,234.38 V. Total book value of 154,761,895.71 -2,547,661.33 152,214,234.38 investment real estate 1.House, Building 154,761,895.71 -2,547,661.33 152,214,234.38 Unit:RMB This period Current amount of depreciation and amortization 3,432,198.33 Accrual amount of impairment provision for investment properties of 0.00 thecurrent period (2)Investment property on fair value basis. 107 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 As of June 30, 2013,The company has no fair value measurement of investment real estate. 17. Fixed assets (1)Fixed assets Unit:RMB Items Book amount at Increase at this period Decrease at this Book balance in year beginning period year -end 1.Total of Original price of 1,118,064,106.42 737,897.44 1,118,802,003.86 fixed assets Including :House and 461,341,626.31 10,670.00 461,352,296.31 building Machine equipment 636,247,943.27 174,772.73 636,422,716.00 Transporation Equipment 3,788,554.03 3,788,554.03 Electricity equipment and 16,685,982.81 552,454.71 17,238,437.52 other Book balance at Current term new Current term Decrease at this Book balance in -- year beginning extra provision period year -end II. Total of Accumulated 168,664,195.59 36,071,761.51 204,735,957.10 depreciation Including :House and 50,729,300.80 6,565,079.24 57,294,380.04 building Machine equipment 107,161,319.14 28,475,925.56 135,637,244.70 Transporation Equipment 1,689,900.95 210,071.40 1,899,972.35 Electricity equipment and 9,083,674.70 820,685.31 9,904,360.01 other Book balance in Balance in -- -- year-begin year-end III. Total book value of 949,399,910.83 -- 914,066,046.76 Fixed assets Including :House and 410,612,325.51 -- 404,057,916.27 building Machine equipment 529,086,624.13 -- 500,785,471.30 Transporation Equipment 2,098,653.08 -- 1,888,581.68 Electricity equipment and 7,602,308.11 -- 7,334,077.51 other IV. Total of Devalued 235,233.62 -- 235,233.62 108 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Provision Transporation Equipment 235,233.62 -- 235,233.62 Electricity equipment and -- other V. Total book value of Fixed 949,164,677.21 -- 913,830,813.14 assets Including :House and 410,612,325.51 -- 404,057,916.27 building Machine equipment 529,086,624.13 -- 500,785,471.30 Transporation Equipment 1,863,419.46 -- 1,653,348.06 Electricity equipment and 7,602,308.11 -- 7,334,077.51 other (2) Current depreciation is RMB 36,071,761.5 . The issue of fixed assets transferred from construction in progress original price is RMB0.00. (2)Fixed assets temporarily in idle status None (3)Fixed assets leased by finance None (4)Fixed assets leased out on finance None (5)Fixed assets held for sale at end of period None (6)Fixed asset not licensed yet (1)As of June 30, 2013,The company has no temporary situation of idle fixed assets. (2)As of June 30, 2013,The company has no lease by financing the fixed assets of the situation. (3)As of June 30, 2013,The fixed assets leased through operating leases. (4) As of June 30, 2013, The company has no fixed asset for sale. (5)The TFT-LCD polarizing film project the carry-over of buildings and structures in fixed assets ,the company has not yet completed the property certificate,In 2014 is expected to go through. 18.Project under construction (1)Project under construction 109 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Unit:RMB Year-end balance Year-beginning balance Items Book Provision for Book Net value Book Provision for Book Net value balance devaluation balance devaluation TFT-LCD polarizing film II project 25,956,664.56 25,956,664.56 2,160,204.20 2,160,204.20 Guanhua Building project 16,561,099.19 16,561,099.19 9,416,319.19 9,416,319.19 Total 42,517,763.75 42,517,763.75 11,576,523.39 11,576,523.39 2. The variation in constructing the engineering project Unit:RMB Includin Capitalis g: Amount Transferr ation of Current Capitalis Increase Balance at year ed to Other Proportio Progress interest amount ation of Source Name Budget at this in beginnin fixed decrease n(%) of work accumul of interest of funds period year-end g assets ated capitaliz ratio(%) balance ation of interest TFT-LCD polarizing 1,470,00 2,160,20 23,796,4 Collect 25,956,6 1.77% 2% film II 0,000.00 4.20 60.36 and Self- 64.56 project 1,470,00 2,160,20 23,796,4 25,956,6 Total -- -- -- -- 0,000.00 4.20 60.36 64.56 (3)Impairment Provisions of Construction in progress Unit:RMB Balance in Increase at this Decreae at this Items Balance in year-end Reason year-begin period period None (4)Major projects under construction Items Progress work Remark TFT-LCD polarizing film II project 2% 110 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (5)Statement on projects under construction None 19. Engineering Material None 20.Liquidation of fixed assets None 21. Production biological assets (1)On costs Unit:RMB Book balance in Book balance in Items Increase at this period Decrease at this period year-begin year-end 1.Planting industry 2.Animal husbandry and aquaculture 3. Forestry 4.Aquaculture industry (2)On fair value Unit :RMB Book balance in Book balance in Items Increase at this period Decrease at this period year-begin year-end 1.Planting industry 2.Animal husbandry and aquaculture 3. Forestry 4.Aquaculture industry Notes 111 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 22. Petrolum assets None 23. Intangible assets (1) Intangible assets Unit :RMB Items Book Balance in Book Balance in Increase at this period Decrease at this period year-begin year-end 1. Total original price 62,275,410.50 62,275,410.50 Land Use right 48,765,130.50 48,765,130.50 Proprietary technology 11,825,200.00 11,825,200.00 Software 1,685,080.00 1,685,080.00 II. Total amount of 16,112,948.81 1,142,195.16 17,255,143.97 accumulated Land Use right 5,846,995.89 642,677.64 6,489,673.53 Proprietary technology 10,248,400.00 394,200.00 10,642,600.00 Software 17,552.92 105,317.52 122,870.44 III. Book value of intangible 46,162,461.69 -1,142,195.16 45,020,266.53 assets Land Use right 42,918,134.61 -642,677.64 42,275,456.97 Proprietary technology 1,576,800.00 -394,200.00 1,182,600.00 Software 1,667,527.08 -105,317.52 1,562,209.56 Land Use right Proprietary technology Software V. Total Book value of 46,162,461.69 -1,142,195.16 45,020,266.53 intangible assets Land Use right 42,918,134.61 -642,677.64 42,275,456.97 Proprietary technology 1,576,800.00 -394,200.00 1,182,600.00 Software 1,667,527.08 -105,317.52 1,562,209.56 The amortization amount is 0 . 112 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (2)The current expenditure on development projects Unit:RMB Decrease at this period Balance in Increase at this Accounted into Items Recognized as Balance in year-end year-begin period current income intangible assets account None R & D expenses of the current period accounted for % of the total coast of R&D. Intangible asset formed by internal R&D of the period accounted for % of the total book value of intangible assets Statement on R&D projects, including single account over RMB 1 million basing on evaluation results. Please provide the evaluation body and basis of evaluation. The current expenditure on non-development projects 24. Goodwill Unit: RMB Name of the investee or the Balance in Increase at this Decrease at this Book Balance in Ending devalue matter of forming Goodwill year-begin period period year-end provision Shenzhen Beauty Century 2,167,431.21 2,167,431.21 2,167,431.21 Garment Co., Ltd. Shenzhen Shenfang Import and 82,156.61 82,156.61 82,156.61 Export Co., Ltd. Shenzhen Shengbo Ophotoelectric Technology Co., 9,614,758.55 9,614,758.55 Ltd Total 11,864,346.37 11,864,346.37 2,249,587.82 Description of the impairment of business reputation impairment testing methods and provisioning methods: goodwill related to the asset group or a combination of asset group signs of impairment exists, according to the following steps to deal with: first, do not include business reputation asset group or a Group portfolio of assets impairment testing, calculate recoverable amount, and with the relevant book value compared to the corresponding recognized devalue losses; and then again with the goodwill asset group or a group of portfolio asset impairment testing, compare the related assets group or groups of assets portfolio book value (including the share of the book value of business reputation in part) to its recoverable amount. 25. Long-term amortization expenses Unit :RMB 113 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Items Amount of Other Decrease Balance in year Other Balance in Increase at amortization at end year-begin this period current period Renovation costs 793,628.08 143,160.00 255,514.63 500,536.64 Other 211,960.00 49,630.80 343,066.01 Total 1,005,588.08 143,160.00 305,145.43 843,602.65 -- 26. Deferred income tax assets/Deferred income tax liabilities (1)Recognized deferred income tax assets and deferred income tax liabilities Recognized deferred income tax assets and deferred income tax liabilities Unit:RMB Items Year-end balance Year-beginning balance Deferred income tax assets Assets depreciation reserves 9,897,444.54 8,968,381.60 Deductible loss 24,643,956.82 20,143,883.87 Unattained internal sales profits 465,700.95 471,234.20 Subtotal 35,007,102.31 29,583,499.67 Deferred income tax liability Increase and decrease of fair value of 13,446,127.18 12,557,914.13 available-for-sale financial assets Assessed tax-free periods of time caused by 38,919.00 38,919.00 differences in income Subtotal 13,485,046.18 12,596,833.13 Details of taxable differences and deductible differences Unit:RMB Amount of temporary differences Items At end of term At beginning of term Differences in taxable items Increase and decrease of fair value of 49,588,508.74 50,231,656.52 available-for-sale financial assets Assessed tax-free periods of time caused by 155,676.00 155,676.00 differences in income Subtotal 49,744,184.74 50,387,332.52 114 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Neutralizable different items Provision for bad debts 29,938,971.00 27,640,575.06 Provision for falling price of inventory 16,681,618.21 12,395,093.38 Impairment of long-term equity investments 5,227,896.65 5,227,896.65 Provision for devaluation of fixed assets 235,233.62 235,233.62 Unattained internal sales profits 3,104,672.96 3,141,561.31 Deductible loss 164,293,045.50 134,292,559.16 Subtotal 219,481,437.94 182,932,919.18 (2)Deferred income tax assets and liabilities are presented as net amount after neutralization Statement on deferred income tax assets and liabilities: Unit:RMB Temporarily Temporarily Deferred Income Tax Deferred Income Tax Deductable or Deductable or Assets or Liabilities Assets or Liabilities Items Taxable Difference at Taxable Difference at at the End of Report at the Beginning of the End of Report the Beginning of Period Report Period Period Report Period Deferred income tax assets: 35,007,102.31 29,583,499.67 Deferred income tax liability: 13,485,046.18 12,596,833.13 27. Provision for depreciation of assets Unit :RMB Decreased in this period Book balance at the Increase in this Balance in Items Switch beginning of term period Switch back year-end cancellation I.Provision for bad debts 27,640,575.06 2,298,395.94 29,938,971.00 2 Inventory impairment 12,395,093.38 4,326,062.20 38,904.07 633.30 16,681,618.21 provision 5. Long-term equity investment impairment 38,416,643.50 38,416,643.50 provision 7.Fixed asset impairment 235,233.62 235,233.62 provision 13. Goodwill impairment 2,249,587.82 2,249,587.82 provision 115 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Total 80,937,133.38 6,624,458.14 38,904.07 633.30 87,522,054.15 Notes 28. Other non-current assets None 29. Short-term loan (1)Categories of short-term loans Unit:RMB Items Balance in year-end Balance in year-Beinning Guaranteed loan 32,153,434.48 Credit loan 8,000,000.00 Total 40,153,434.48 Description of short-term loans classifications: The short-term loans are classified by loans. (2)Short-term loans expired but not repaid There are no expired outstanding short-term borrowings at the end of the reporting period. 30.Transactional financial liabilities None 31. .Bills payable None 32. Account payable (1)Account payable Unit :RMB Items Balance in year-end Balance in year-begin Within 1 year 136,332,976.84 94,601,675.99 1-2 years 734.87 192,982.78 116 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 2-3 years 198,927.77 248,999.59 3-4 years 4,951,911.88 5,410,281.92 4-5 years 296,197.01 293,945.85 Over 5 years 484,812.49 484,812.49 Total 142,265,560.86 101,232,698.62 (2)There was account payable due from shareholders with more than 5% (including 5%) of the voting shares of the company Unit :RMB Name Balance in year-end Balance in year-begin None (3)The description of large-sum accounts payable with the age over 1 year: None 33. Advance account (1). Advance account Unit:RMB Items Balance in year-end Balance in year-begin Within 1 year 46,408,919.57 24,962,860.59 1-2 years 29,040.53 58,114.06 2-3 years 975.80 1,836.56 3-4 years 1,516.80 4-5 years 639,024.58 639,024.58 Over 5 years Total 47,077,960.48 25,663,352.59 (2)There was Advance account due from shareholders with More than 5% (including 5%) of the voting shares of the company. Unit:RMB Items Balance in year-end Balance in year-begin None (3)The description of large-sum accounts payable with the age over 1 year: The receipts in advance with the age more than 1 year in the company’s advance receipts is the unsettled 117 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 sporadic balance with the clients, so there is no large-sum advance receipts. 34. Payable Employee wage Unit:RMB Items Balance in year-begin Increase in this period Payable in this period Balance in year-end I.Wages, bonuses, allowances and 24,690,993.56 39,585,775.38 46,387,066.02 17,889,702.92 subsidies II..Employee welfare 4,239,710.50 3,605,709.00 634,001.50 III. Social insurance 4,698,433.39 4,698,433.39 premiums Including:Medical 431,382.70 431,382.70 insurance Basic old-age 3,275,189.00 3,275,189.00 insurance premiums Pension Payment 731,280.63 731,280.63 Unemployment 149,690.08 149,690.08 insurance Work injury 42,938.58 42,938.58 insurance Maternity insurance 67,952.40 67,952.40 Personal accident insurance IV. Public reserves 26,376.00 2,005,465.86 2,150,599.46 -118,757.60 for housing V.Other 1,197,351.29 1,419,708.96 1,279,175.43 1,337,884.82 Including: Union funds and staff 1,041,508.99 974,118.96 868,755.13 1,146,892.82 education fee Total 25,914,720.85 51,949,094.09 58,120,983.30 19,742,831.64 The amounts of arrears of staff salary and welfare payable are RMB 0 00. The amounts of trade union funds and staff education expenses are RMB1,041,508.99, the amounts of non-monetary benefits are RMB 0.00, and the compensations for the lifting of labor relations is 0 The expected release time and amount of staff salary and welfare payable are arranged in the beginning of next year. 118 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 35. Tax Payable Unit:RMB Items At end of term At beginning of term VAT -76,948,664.23 -69,531,255.75 Business Tax 480,502.68 451,878.76 Enterprise Income tax 7,197,665.18 -50,931.40 Individual Income tax 279,496.69 310,104.13 City Construction tax 83,860.92 83,954.40 House property Tax 178,699.66 726,735.66 Education subjoin 133,990.51 134,057.30 Other 42,478.70 30,268.12 Total -68,551,969.89 -67,845,188.78 Statement on tax payable: Please provide the calculating processes then taxable income is balanced between branch companies or factories as approved by the tax bureau. The subsidiary and branch of the company have no taxable income transfers of each other. 36. Interest Payable Unit:RMB Items Year-end balance Year-beginning balance Long-term loans interest of installment and interest 19,497,570.19 15,048,681.30 charge Short term loan interest payable 42,441.82 Total 19,497,570.19 15,091,123.12 Notes 37. Dividend payable None 38. Other payable (1)Other payable Unit:RMB Name Balance in year-end Balance in year-begin 119 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Within 1 year 20,129,310.54 56,678,024.44 1-2 years 62,205,159.55 75,534,500.84 2-3 years 3,980,634.02 3,427,991.22 3-4 years 7,707,463.68 2,390,213.29 4-5 years 4,142,968.28 4,839,692.30 Over 5 years 24,739,539.31 25,257,294.27 Total 122,905,075.38 168,127,716.36 (2)There were other receivable from the main shareholders of the Company holding nore than 5% (including 5%) of the total shares of the Company. Unit :RMB Name Balance in year-end Balance in year-begin None (3)Statement on large amount other payable accounts due for over one year Among the payables, large amounts of the other payables are mainly for TFT-LCD polarizer phase I project and e quipment funds due for over one year. (4)Statement on large amount other payable accounts Among the payables, large amounts of the payables are mainly for TFT-LCD polarizer phase I project and equipm ent funds. 120 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 39.Estimated liabilities None 40. Non-current liabilities due within one year None 41.Other current liabilities None 42. Long-term loan (1)Long-term loans classifications Unit:RMB Items Year-end balance Year-Beginning balance Credit Loan 200,000,000.00 200,000,000.00 Total 200,000,000.00 200,000,000.00 As regards long-term loans classifications: Long-term loans are classified by loans.。The long-term loans at the end of period are the loans enxtended to the Company by Shenzhen Development Bank Co., Ltd. entrusted by Shenzhen Shenchao Technology Investment Co., Ltd.. No long-term loans were formed due to the extension of overdue loans. (2)The top five of long-term loans Unit:RMB Year-end balance Year-beginning balance Loans Loans ending Interest rate Amount of Amount of Amount of Amount of Loan unit Currency starting date date (%) Foreign RMB Foreign RMB currency currency Shenzhen November 3, January 24, 40,000,000.0 40,000,000.0 Development CNY 4.4% 2011 2018 0 0 Bank Shenzhen November 3, January 24, 40,000,000.0 40,000,000.0 Development CNY 4.4% 2011 2018 0 0 Bank Shenzhen November 3, January 24, 23,280,991.7 23,280,991.7 Development CNY 4.4% 2011 2018 0 0 Bank 121 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Shenzhen November 21,225,294.0 21,225,294.0 Development June 24, 2015 CNY 4.4% 25,2010 0 0 Bank Shenzhen 21,047,897.9 21,047,897.9 Development July 14,2010 June 24,2015 CNY 4.4% 6 6 Bank 145,554,183. 145,554,183. Total -- -- -- -- -- -- 66 66 43.Bond payable None 44.Long-term payable None 45.Special payable None 46.Other Non-current liabilities Unit: RMB Items Year-end Book balance Year-beginning Book balance Deferred profits 52,446,210.21 56,714,022.45 Total 52,446,210.21 56,714,022.45 Statement on other non-current liabilities, including asset-related and income-related government subsidy and closing balances: (1)According to the "Notice on National Development and Reform Commission to the General Office of the textile project management of the special funds" (Faigaiban [2006]2841), on December 22, 2006, the Company received "Textile special" funds RMB 2,000,000.00 from Shenzhen Finance Bureau. The company will use 14 years as asset depreciation period for amortization with the corresponding equipment in current period.The amortization in accordance with the corresponding equipment, The non-operating income in current period is RMB142,857.14, the ending balance of uncompleted amortization is RMB 1,428,571.44 ; (2) According to the document of Shenzhen Municipal Development and Reform Commission 【2009】 No. 416 that "The Notice On issued the Governmental Investment Plan in 2009 on Zhong Ke New Industrial Internet Security Audit System and Other High-tech Industrialization Demonstration Project and the Public Testing and 122 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Consultation Service of Information Security Industry and other National High-tech Industrial Base Platform Projects”, on May 26, 2009, the company received the Shenzhen Municipal Development and Reform Commission high-tech industrialization demonstration project supporting Capital RMB 2 million allocated by Shenzhen City Bureau of Finance for the construction of “The Project of the Construction Line of Polaripiece for TFT-LCD”.Our company will use 10 years as asset depreciation period for amortization in current period. The non-operating income in current period is RMB 100,000.00 and the balance amount of unfinished final amortization is RMB 1,300,000.00; (3) According to the document of the Office of the State Development and Reform Commission on "The Office of the State Development and Reform Commission on the Reply of New Flat-Panel Display Industrialization Special Project” (Development and Reform Office High-Tech【2008】No. 2104), the company obtained the state subsidies RMB 10 million yuan from the State Development and Reform Commission New Flat-Panel Display Industrialization Special Project for the construction of “The Project of Polaripiece Industrialization for TFT-LCD”. On June 29, 2009, the company received the special subsidies of State Development and Reform Commission RMB 5 million yuan allocated by Shenzhen City Bureau of Finance. On December 25, 2009, the company received the special subsidies of State Development and Reform Commission RMB 3.5 million allocated by Shenzhen City Bureau of Finance. On April 2010, the company received the special subsidies of State Development and Reform Commission RMB 1.5 million yuan allocated by Shenzhen City Bureau of Finance. Our company will use 10 years as asset depreciation period for amortization in current period.The non-operating income in current period is RMB500,000.00 and the balance amount of unfinished final amortization is RMB6,500,000.00; (4)On December 23, 2009 and June 3, 2011, the Company received a loan discount RMB 992,000.00 and RMB 850,000.00 allocated by Shenzhen Bureau of Finance for phase-2 alteration project. Our company will use 10 years as asset depreciation period for amortization in current period.The non-operating income in current period is RMB 96,822.24 and the balance amount of unfinished final amortization is RMB 1,258,688.77; (5)The Company received R&D subsidy of RMB 39.5499 million from the government according to Shen Cai Jian (2010) No. 101 Document - Circular of Plan for Use of Special Funds for the 14th Group of Significant High-tech Projects in 2010. The Company plans to invest these funds in R&D in five years from 2011. The non-operating income in current period is RMB 3,954,990.00 and the balance amount of unfinished final amortization is RMB 19,7774,950.00; (6)According to Contract for Using Technological Development Funds of Futian District Appropriated for Projects in Advance, the Company obtained funds of RMB 600,000.00 appropriated by General Chamber of Commerce of Shenzhen Futian District for the project of "3D polarizer sheet industrialization" on December 26, 2011. The project has not been checked and accepted; (7)In accordance with the Notice of Forwarding the Reply of General Office of State Development and Reform Commission Regarding Special Plan for Strategic Transformation and Industrialization of Color TV Industry issued by Shenzhen Development and Reform Commission (Shen Fa Gai (2011) No. 823), State Development and Reform Commission approved including the project of industrialization of polarizer sheet for TFT-LCD of Shengbo Optoelectronic Company into the special plan for strategic transformation and industrialization of color TV industry in 2010 and appropriated national aid of RMB 10,000,000.00 to Shengbo Optoelectronic Company for the research and development in the process of the project of industrialization and the purchase of required software and hardware equipment. As of December 31, 2012, RMB 9,000,000.00 was actually received. According to the Notice of Issuing the Governmental Investment Plan for 2011 Regarding Demonstration Project of High-tech Industrialization Including Specialized Services Such As Disaster Recovery 123 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 of Financial Information System issued by Shenzhen Development and Reform Commission (Shen Fa Gai (2012) No. 3), the Company received subsidy of RMB 3,000,000.00 for the project of industrialization of polarizer sheet for TFT-LCD. Our company will use 10 years as asset depreciation period for amortization in current period.The non-operating income in current period is RMB600, 000.00 and the balance amount of unfinished final amortization is RMB10,600,000.00; (8)According to the Notice about the Plan for Supporting the Second Group of Enterprises in Biological, Internet, New Energy and New Material Industries with Special Development Funds (Shen Fa Gai (2011) No. 1782), the Company received subsidy of RMB 5,000,000.00 for the narrow-width line (line 5) of phase-I project of polarizer sheet for TFT-LCD on February 15, 2012. The Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets; (9)According to the Approval of Application of Shenzhen Shengbo Optoelectronic Technology Co., Ltd. for Project Funds for Shenzhen Polarization Material and Technology Engineering Laboratory (Shen Fa Gai (2012) No. 1385), Shenzhen Polarization Material and Technology Engineering Laboratory was approved to be established on the strength of Shengbo Optoelectronic with total project investment of RMB 24,390,000.00. As approved by Shenzhen Municipal People's Government, this project was included in the plan for supporting the fourth group of enterprises with special fund for the development of strategic new industries in Shenzhen in 2012 (new material industry). According to the Notice of Issuing the Plan for Supporting the Fourth Group of Enterprises with Special Fund for Development of Strategic New Industries in Shenzhen in 2012 (Shen Fa Gai (2012) No. 1241), the Company received subsidy of RMB 5,000,000.00 on December 4, 2012 for purchasing instruments and equipment and improving existing technological equipment and test conditions. The fund gap will be filled by the Company through raising funds by itself. The subsidy will be amortized over the depreciation period from the day when relevant assets get ready for intended use; (10) On February 4, 2013, the Company received Shenzhen Futian District special industry development fund and high technology R&D project fund of RMB 421,000; (11) On February 7, 2013, the Company received the third installment of discount of RMB 483,000 as industrial technological progress prize for 2011 from Shenzhen Finance Commission; (12) On May 27, 2013, the Company received financial appropriation of RMB 80,000 from Shenzhen Branch of State Vault. 47. Stocks capital Unit:RMB Changed(+,-) Balance in Capitalization Balance in Issuance of year-begin Bonus shares of public Other Subtotal year-end new share reserve Total of capital 336,521,849.00 170,000,000.00 170,000,000.00 506,521,849.00 shares Statement of change in capital shares. Name of CPA and number of verification report shall be provided if capital 124 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 increasing or decreasing occurred in the report period; as for shareholding limited companies incorporated for less than three years, only net assetis is required for the years prior to incorporation; for shareholding limited companies reformed from limited companies shall provide the capital verification at incorporation. As approved by the Approval of Private Issue of Shares by Shenzhen Textile (Holding) Co., Ltd. (Zhen Jian Permit (2013) No. 2 Document) issued by China Securities Regulatory Commission, the Company privately issued 170 million RMB ordinary shares (par value per share: RMB 1.00). After change, the registered capital and share capital of the Company are both RMB 506,521,849.00. 48.Stock shares Not applicable 49.Special reserves Not applicable 50. Capital reserves Unit:RMB Items Year-beginning balance Increase in the current Decrease in the current Year-end balance period period Share premium 782,656,413.49 791,751,000.85 1,574,407,414.34 Other 46,256,724.18 11,376,780.42 12,908,141.25 44,725,363.35 Total 828,913,137.67 803,127,781.27 12,908,141.25 1,619,132,777.69 Statement on capital reserves: (1) According to the Approval of Private Issue of Shares by Shenzhen Textile (Holding) Co., Ltd. (Zhen Jian Permit (2013) No. 2 Document) issued by China Securities Regulatory Commission, registered capital (share capital) was increased by RMB 170,000,000.00 RMB and capital surplus was increased by RMB 791,751,000.85. (2) The increase of other capital surplus is the net amount of change of fair value of financial assets available for sale held by the Company in the report year after deduction of recognized deferred income tax liabilities. The decrease of other capital surplus is due to the outward transfer of the change of fair value originally accounted for as capital surplus after sales of financial assets available for sale. 51. Surplus reserve Unit :RMB Items Year-beginning balance Increase in the current Decrease in the current Year-end balance period period Statutory surplus reserve 36,607,659.49 36,607,659.49 Total 36,607,659.49 36,607,659.49 125 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Statement on surplus reserves. Please state the related resolutions of the Board on capitalizing of reserves, making up losses, and dividends: 52.Commonly risk reserves Not applicable 53. Retained profits Unit:RMB Extraction or distribution of Items Amount the proportion Before adjustments: Retained profits at the 100,969,308.23 -- period end After adjustments: Retained profits at the period 100,969,308.23 -- beginning Add:Net profit belonging to the owner of the -3,642,102.17 -- parent company Retained profits at the period end 97,327,206.06 -- As regards the details of adjusted the beginning undistributed profits (1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected beginning undistributed profits are RMB 0.00. (2) As the change of the accounting policy, the affected beginning undistributed profits are RMB 0.00. (3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0.00 . (4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits are RMB 0.00. (5) Other adjustment of the total affected beginning undistributed profits are RMB 0.00 . Statement on retained profit: for companies issued their securities for the first time, if the accumulated profit before the issuing is shared by the new and existing shareholders as approved by the shareholders’ meeting, shall be described particularly; if the accumulated profit before the issuing is shared only by existing shareholders as approved by the shareholders’ meeting, the Company shall provide the details of dividend payable to the existing shareholders as audited by CPA. 54. Business income, Business cost (1)Business income, Business cost Unit:RMB 126 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Items Amount of current period Amount of previous period Income from Business income 574,519,173.10 373,473,854.27 Other Business income 1,828,836.96 1,959,137.64 Total 527,913,970.56 336,576,764.17 (2)Main business(Industry) Unit:RMB Amount of current period Amount of previous period Name Business income Business cost Business income Business cost Domestic and foreign trade 231,978,740.01 230,103,752.45 213,519,544.58 212,411,433.49 Manufacturing 300,083,729.57 284,719,485.05 120,665,885.03 110,805,119.98 Property management, leasing 42,456,703.52 11,261,896.10 39,288,424.66 11,402,312.40 Total 574,519,173.10 526,085,133.60 373,473,854.27 334,618,865.87 (3)Main business(Production) Unit :RMB Amount of current period Amount of previous period Name Business income Business cost Business income Business cost Property and rental income 42,456,703.52 11,261,896.10 39,288,424.66 11,402,312.40 Textile income 10,150,142.39 8,055,670.24 22,170,267.10 17,774,189.92 Polaroid income 289,933,587.18 276,663,814.81 98,495,617.93 93,030,930.06 Trade income 231,978,740.01 230,103,752.45 213,519,544.58 212,411,433.49 Total 574,519,173.10 526,085,133.60 373,473,854.27 334,618,865.87 (4)Main Business(Area) Unit :RMB Amount of current period Amount of previous period Name Business income Business cost Business income Business cost Domestic 153,551,297.76 106,912,591.58 122,758,230.83 91,917,341.83 Oversea 420,967,875.34 419,172,542.02 250,715,623.44 242,701,524.04 Total 574,519,173.10 526,085,133.60 373,473,854.27 334,618,865.87 (5)Operating income from top five clients 127 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Unit :RMB Name Business Income Proportion(%) Shenzhen Chuangying Textiles 230,476,913.27 39.99% Co., Ltd. Shenzhen CSOT 132,417,211.99 22.98% Fuhaipeng Electronic Technology 17,247,968.58 2.99% Co., Ltd. Longteng Optoelectrnoics 13,804,161.56 2.39% Shenchao Optoelectrnoics 12,971,646.68 2.25% (Shenzhen) Co., Ltd. Total 406,917,902.08 70.6% Notes 55.Contract revenue None 56. Business tax and subjoin Unit :RMB Items Same period of the Standard Report period previous year Business tax 2,415,244.05 2,068,217.07 Urban construction tax 207,575.29 412,291.09 Education surcharge 201,206.64 298,031.61 House tax 1,467,127.34 865,569.69 Other 272,303.36 289,110.94 Total 4,563,456.68 3,933,220.40 -- Notes 57. Sales expenses Unit:RMB Items Amount of current period Amount of previous period Wage 1,088,745.06 1,144,200.08 Welfare 49,887.42 6,527.10 Exhibition fee 81,001.00 231,090.90 128 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Office expenses 12,788.40 12,139.60 Travel expenses 179,468.78 252,076.74 Business entertainment 364,060.13 250,181.78 Automobile fee 57,093.35 72,545.90 Transportation changes 1,193,012.10 1,095,897.30 Sales expenses 802,280.38 450,927.98 Other 268,389.58 307,785.86 Total 4,096,726.20 3,823,373.24 58. Administrative expenses Unit:RMB Items Amount of current period Amount of previous period Wage 11,281,015.87 12,749,046.13 Welfare 1,309,770.93 1,058,182.92 Union funds 330,465.48 319,021.36 Employee education expenses 181,390.76 255,066.16 Housing fund 1,015,456.05 965,662.52 Social security 1,903,677.54 1,499,375.77 Labor protection costs 149,772.70 525,663.30 Tax 606,701.71 472,143.07 Insurance expenses 222,968.86 211,463.69 Depreciation of fixed assets 2,540,541.61 2,509,566.70 Amortization of intangible assets 1,142,195.16 1,036,877.64 Amortization of long-term deferred 34,490.82 expenses Traffic fee 569,461.95 763,235.04 Office expenses 1,220,878.19 1,077,727.94 Postal fees 331,497.44 216,691.30 R& D costs 45,107,185.59 22,133,249.02 Repairs fees 334,968.20 163,515.65 Water and electricity 354,467.97 271,636.45 Auto expenses 416,861.90 265,215.72 Travel Expenses 439,430.63 561,408.35 129 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Agency expenses 2,107,024.15 1,075,320.00 Entertainment expenses 966,110.60 762,922.50 Low consumables amortization 97,252.30 229,573.00 Transport fees 373,783.60 410,585.24 Other 2,676,482.62 3,392,150.03 Total 75,713,852.63 52,925,299.50 59. Financial Expenses Unit :RMB Items Amount of current period Amount of previous period Interest expenses 5,172,249.94 4,954,444.45 Interest income -7,399,019.07 -3,604,062.09 Exchange loss -12,010,728.31 -603,089.11 Fees and other 308,249.87 323,127.77 Total -13,929,247.57 1,070,421.02 60.Gains from changes in fair value Notes 61. Investment income (1)Investment income Unit:RMB Items Amount of current period Amount of previous period Incomes from disposal of Long-term cost 2,017,830.85 1,847,932.57 investment Incomes from disposal of long-term equity 421,730.17 299,087.54 investment Investment income from financial assets sales 19,468,746.45 2,376,792.47 Total 21,908,307.47 4,523,812.58 (2)Long-term equity investment income by costing Unit:RMB Amount of current period Amount of previous Name Reason to increase or decrease period Shenzhen Dailishi Underwear Co., Ltd. 400,000.00 405,000.00 Anhui Huapeng Textile Co., Ltd. 900,000.00 900,000.00 130 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Shenzhen Xinfang Knitting Co., Ltd. 80,000.00 Shenzhen Tongyi Silk Co., Ltd. 637,830.85 542,932.57 Total 2,017,830.85 1,847,932.57 -- (3)Long term equity investment confirmed by equity ethod include: Unit:RMB Name Amount of current period Amount of previous Reason to increase or decrease period Shenzhen Haohao Property Leasing 275,108.09 259,352.31 Co., Ltd. Shenzhen Xieli Automobile Co., Ltd. 181,327.70 107,335.05 Shenzhen Changlianfa Printing and -34,079.89 -11,049.10 dyeing Company Jordan Garment Factory -625.73 -56,550.72 Total 421,730.17 299,087.54 -- Statement on investment gains, please state whether or not there are material constrains on retrieving of investment gains. In the report period, the company has no big restriction on the investment earning repatriation. 62. Loss of assets impairment Unit :RMB Items Amount of current period Amount of previous period I .Losses for bad debts 2,280,892.48 2,322,618.17 II. Losses for falling price of inventory 4,304,661.60 89,627.81 Total 6,585,554.08 2,412,245.98 63. Non-operating income (1)Non-operating income Unit :RMB Amount of current period Amount of previous period The amount of Items non-operating gains & lossed Total income from liquidation of 41,000.00 non-current assets Including:Income from liquidation of fixed 41,000.00 asset Government Subsidy 5,645,436.24 4,692,336.68 131 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Other income 331,182.75 10,000.00 Total 5,976,618.99 4,743,336.68 (2)Governmental subsidy details Unit:RMB Amount of current period Amount of previous Items Notes period Subsidy for implementation of standardization strategy from 40,000.00 Shenzhen Market Administration Subsidy for purchasing special equipment for environmental 524.44 protection in Longgang District, Shenzhen Amortization of governmental 3,954,990.00 3,954,990.00 subsidy for R&D Amortization of funds supporting demonstration projects of high 100,000.00 100,000.00 technology industrialization Amortization of national aid for special new-type panel display 500,000.00 500,000.00 industrialization project Amortization of loan discount appropriated by Shenzhen Treasury 96,822.24 96,822.24 Board Special subsidy for industrial development of Futian District, 101,400.00 Shenzhen Subsidy for strategic emerging industries from Shenzhen Finance 240,000.00 Commission Special subsidy and booth subsidy for the development of small and 52,224.00 medium enterprises in Shenzhen Amortization of subsidy for the industrialization project of polarizer 600,000.00 for TFT-LCD Total 5,645,436.24 4,692,336.68 -- Notes 132 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 64. Non-Operation expense Unit:RMB Amount of current period Amount of previous The amount of Items period non-operating gains & lossed Total of non-current asset Disposition loss 9,996.59 Including: Disposition loss of Fixed assets 9,996.59 Donation expenses 10,000.00 Fine Expenses 50.00 Total 10,000.00 10,046.59 Notes 65. Income tax expenses Unit:RMB Items Amount of current period Amount of previous period The current income tax calculated by the tax law and the 4,357,673.11 2,862,552.42 relevant regulations Adjustment of Deferred income tax -1,436,947.00 -177,539.08 Total 2,920,726.11 2,685,013.34 66. Calculation of Basic earnings per share and Diluted earnings per share (1)Calculating formula of income per share: Basic earnings per share=P/(S0+S1+Si×Mi÷M0– Sj×Mj÷M0-Sk) Dilute earning per share=P1/(S0+S1+Si×Mi÷M0–Sj×Mj÷M0–Sk+ common stock weighted average of subscription warrant, stock option, transferable bond)) (2)Calculating process of income per share Basic earnings per share belonging to common stock shareholder in the first half of 2013=-3,642,102.17/ (336,521,849+170,000,000*3/6) = -0.01 RMB/Share Basic earnings per share belonging to common stock shareholder deducted non-recurring gains and losses in the first half of 2013=-24,203,781.00/(336,521,849+170,000,000*3/6) = -0.06 RMB/Share Dilute earning per share belonging to common stock shareholder in the first half of 2013=-3,642,102.17/ (336,521,849+170,000,000*3/6) = -0.01 RMB/Share Dilute earning per share belonging to common stock shareholder deducted non-recurring gains and losses in the first half of 2013=-24,203,781.00/(336,521,849+170,000,000*3/6) = -0.06 RMB/Share 67. Other comprehensive income Unit:RMB Items Amount of current period Amount of previous period 133 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 1.Loss amount produced by sellable financial assets 13,078,555.91 13,462,017.70 Less:Deduct: income tax infection produced by sellable 5,190,926.80 3,506,504.42 financial assets Net amount transferred into profit and loss at current period that reckoned into other comprehensive income at former 9,418,989.94 695,250.00 period Subtotal -1,531,360.83 9,260,263.28 Total -1,531,360.83 9,260,263.28 Notes 68. Notes Cash flow statement 1. Other cash received from business operation Unit:RMB Items Amount Government Subsidy 1,619,624.00 The customs returned to the customs deposit 1,426,828.04 Bank deposit interest income and other 9,661,150.07 Total 12,957,008.71 Notes (2)Other cash paid for business activities Unit:RMB Items Amount Research & development expenses 2,108,814.14 Office expenses 1,228,066.59 Business hospitality 1,330,170.73 Transportation expnses 615,366.85 Travel fee 618,899.41 Transporation expenses 1,566,795.70 Agency Fee 2,107,024.15 Post and Communication fee 337,097.44 Insurance premium 222,968.86 Water and electricity fee 364,025.63 Repair fee 335,118.20 134 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Other 1,156,253.66 Total 11,990,601.36 Notes (3)Cash received related to other investment activities None (4)Cash paid related to other investment activities Unit:RMB Items Amount Stucture deposit 300,000,000.00 Total 300,000,000.00 Notes (5)Cash received related to financing activities Unit: RMB Items Amount Deposited in the fixed deposit account 563,172.00 Total 563,172.00 Notes (6)Cash paid related to financing activities Unit :RMB Items Amount Non-public issuing expenses 775,000.00 Total 775,000.00 Notes 69. Supplement Information for cash flow statement (1)Supplement Information for cash flow statement Unit:RMB Supplement Information Amount of current period Amount of previous period I. Adjusting net profit to cash flow from operating activities -- -- Net profit -3,642,102.17 -18,736,243.07 135 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Add: Impairment loss provision of assets 6,585,554.08 2,412,245.98 Depreciation of fixed assets, oil and gas assets and 38,988,535.82 22,603,708.56 consumable biological assets Amortization of intangible assets 1,167,317.88 1,062,000.36 Amortization of Long-term deferred expenses 255,514.63 280,408.62 Loss on disposal of fixed assets, intangible assets and other -41,000.00 long-term deferred assets Loss from Fixed assets Discard 3,125.23 Financial cost 5,172,249.94 1,596,608.65 Loss on investment -21,908,307.47 -4,523,812.58 Decrease of deferred income tax assets -5,423,602.64 -177,539.08 Increased of deferred income tax liabilities 888,213.05 Decrease of inventories -68,579,593.06 -7,623,989.90 Decease of operating receivables -61,865,097.34 -22,975,805.51 Increased of operating Payable 50,846,462.75 10,062,183.03 Net cash flows arising from operating activities -57,514,854.53 -16,058,109.71 II. Significant investment and financing activities that -- -- without cash flows: III. Net increase of cash and cash equivalents -- -- Ending balance of cash 739,281,617.95 349,939,787.89 Less: Beginning balance of cash equivalents 227,189,754.43 463,817,642.79 Net increase of cash and cash equivalents 512,091,863.52 -113,877,854.90 (2)There is no information on acquiring or disposing subsidiary company and other business unit at this period. None (3)Composition of cash and cash equivalents Unit:RMB Items Year-end balance Year-beginning balance I. Cash 739,281,617.95 227,189,754.43 Of which: Cash in stock 104,026.78 105,473.78 Bank savings could be used at any time 739,149,974.66 205,275,803.31 Other monetary capital could be used at any time 27,616.51 21,808,477.34 III. Balance of cash and cash equivalents at the period end 739,281,617.95 227,189,754.43 Statement on supplementary information of cash flow Statements 136 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (1)Relavant Situation without the acquistition disposal of subsidiaries and other business units. (2)Cash and cash equivalents do not include the cash and cash equivalents whose use by the parent company or subsidiaries of the Group is restricted. 70. .Notes to statement of change in owners’ equity None VIII. Accounting treatment of asset securitization 1 On the principal of asset securitization transactions and its accounting, bankruptcy, isolation provisions In the reporting period, the company has no asset securitization service. 2. The Company does not have controlled over but in fact assume the risk situation of special-purpose body Notes (IX) Related parties and related-party transactions 1. Parent company information of the enterprise The parent The The parent company ultimate Legal company Organizati Related Registered Registered of the controlling Name Type representat Nature of the on Code parties address capital Company's party of ive Company’ shareholdi the s vote ratio ng ratio Company State-owne Shenzhen State-owne d d Assets enterprise Supervisio Shenzhen Controling n and Investment Fan 5600 76756642- shareholde Investment 46.21% 49.39% Administra Holdings Mingchun million 1 r tion Co.,Ltd. Commissi on of Shenzhen Parent company information of the company The company is authorized and approved to be state-owned independent company by Shenzhen Government, and it Executes financial contributor function on state-owned enterprise within authorization scope. 2.Particulars of the subsidiaries Related Registered Legal Registered The The Organizatio Name Type Nature parties address representati capital subsidiaries subsidiaries n Code 137 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 ve of the of the Company's Company’s shareholdin vote ratio g ratio Fabrics, bedding, Shenzhen clothing, Jinlan textiles raw wholly Limited Decorative Zhang materials 4,000,000.0 owned Liability Shenzhen 90% 100% 192172332 Articles Hong processing 0 subsidiary Company Industrial manufacturi Co., Ltd. ng, wholesale and retail. Domestic Shenzhen wholly Limited commerce, Lisi 2,360,000.0 owned Liability Shenzhen Zhu Jun materials 90.68% 100% 192180180 Industrial 0 subsidiary Company supply and Co., Ltd. sales Accommod Shenzhen wholly Limited ation, 10,005,300. Huaqiang owned Liability Shenzhen Zhu Jun restaurants, 95% 100% 19223330X 00 Hotel subsidiary Company business center; Shenfang wholly Limited Property Property 1,600,000.0 owned Liability Shenzhen Gao Goushi 93.75% 100% 192225051 Managemen Managemen 0 subsidiary Company t Co., Ltd. t Production Shenzhen of fully Beauty wholly Limited Zhang electronic 25,000,000. Century owned Liability Shenzhen 100% 100% 741231236 Hong jacquard 00 Garment subsidiary Company knitting Co., Ltd. whole shape Shenzhen Shenfang wholly Limited Operating Zhang 5,000,000.0 Import & owned Liability Shenhen import and 100% 100% 728563236 Hong 0 export Co., subsidiary Company export Ltd. business Shenzhen wholly Limited Operating 300,000,000 Shengbo owned Liability Shenzhen Zhu Jun import and 100% 100% 618877007 .00 Ophotoelect subsidiary Company export 138 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 ric business Technology Co., Ltd Shengtou wholly Zhu Production HKD10,000 (HK)Co., owned HK Meizhu, Liu and sales of 100% 100% --- .00 Ltd. subsidiary Honglei polarizer 3. Joint-venture and affiliated enterprises information of the company Legal Share Invested Enterprise Registration Business Registered vote right Affiliation Organizatio representati holding unit name type Place character capital ratio(%) relation n code ve ratio(%) I. Joint enterprise Shenzhen Haohao HKD10 Joint Property Shenzhen Feng Junbin Service 50% 50% 61881295-9 million enterprise Leasing Limited Co., Ltd. Company Shenzhen Xieli Manufacturi Joint Shenzhen Ye Yongling 3.12 million 50% 50% 618801838 Automobile Limited ng enterprise Co., Ltd Company II. Affiliated enterprise Shenzhen Changlianfa Affiliated Printing and Shenzhen Zhu Meizhu Serivice 6.47 million 40.25% 40.25% 618865073 enterprise dyeing Co., Limited Ltd. Company Jordan Jordan Chen Manufacturi USD1 Affiliated Garment Limited 35% 35% Wenxian ng million enterprise Factory Company Hengshun Saipan (Saipan) Manufacturi USD6.96 Affiliated --- 35% 35% Industry Limited ng million enterprise Co., Ltd. Company 4.Other Related parties information of the enterprise Other Related parties name Relation of other Related parties with the Organization code company 139 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Shenzhen Shenchao Technology Subject to the same party controls 733069849 Investment Co., Ltd. The parent company's chairman is the vice Shenzhen CSOT chairman of the company 697136927 Shenzhen Tianma Microelectronics Co., The Company director and general 19218344-5 Ltd. manager is the company director Shenzhen Xiangjiang Trade Co., Ltd. Sharing Company 591877516 Shenzhen Xinfang Knitting Co., Ltd. Sharing Company 618811673 Shenzhen Dailishi Underwear Co., Ltd. Sharing Company 618811358 Anhui Huapeng Textile Co., Ltd. Sharing Company 73731461-0 5. Related transactions. (1)Related transactions on sale goods and receiving services Unit:RMB Amount in current period Amount in last period Content of related Pricing principle of Related parties Proportio Proportio transaction related transactions Amount Amount n(%) n(%) Shenzhen CSOT Sales polarizer sheet Agreement price 132,417,211.99 45.67% Shenzhen Tianma Microelectronics Sales polarizer sheet Agreement price 2,065,075.16 0.71% 2,488,495.31 Co., Ltd. Shenzhen Investment Holdings Sales textiles Market price 48,000.00 0.35% Co.,Ltd. (2)Associated trusteeship. In the report period,The company has no associated trusteeship. (3)Leaseing In the report period,The company has no associated lease. (4)Associated guarantee The report period, The company has no associated guarantee (5)Associated contracting. None 140 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (6)Related transference and liabilities recombination of related parties . None (7)Other related transfernce For the construction of the project of polarizer for TFT-LCD, the Company signed Entrusted Loan Contract with Shenzhen Shenchao Technology Investment Co., Ltd. and Shenzhen Jiangsu Building Sub-branch of Shenzhen Development Bank Co., Ltd. in 2010. According to the contract, Shenzhen Shenchao Technology Investment Co., Ltd. entrusted Shenzhen Jiangsu Building Sub-branch of Shenzhen Development Bank Co., Ltd. to extend a loan of RMB 200 million to the Company. The term of the loan is 108 months from the day when the first installment of entrusted loan is transferred to the account of the Company. The interest rate of the entrusted loan is the rate of commercial loans with a term of 5 years quoted by People's Bank of China minus 2%. In case of adjustment of such commercial loan rate, the rate of commercial loans with a term of 5 years after adjustment minus 2% shall apply as interest rate of entrusted loan from the first day of the next month after the adjustment of basic interest rate. As of June 30, 2013, The Company actually received a loan of RMB 200 million. 6. Payables and receivables of the related party Listed company related party fund Unit:RMB Amount at year end Amount at year beginning Name Related party Balance of Book Bad debt Provision Balance of Book Bad debt Provision Account receivable Shenzhen CSOT 53,981,726.39 2,699,086.32 47,273,531.25 2,363,676.56 Account receivable Shenzhen Tianma Microelectronics Co., 919,802.90 45,990.15 1,234,396.37 61,719.82 Ltd. Anhui Huapeng Other Account receivable 2,700,000.00 135,000.00 1,800,000.00 90,000.00 Textile Company The listed company Payables of the related party Unit :RMB Name Related party Amount at year end Amount at year beginning Shenzhen Dailishi Underwear Other payable 144,506.80 Co., Ltd. Shenzhen Xinfang Knitting Other payable 216,789.85 216,789.85 Co., Ltd. Shenzhen Xiangjiang Trade Other payable 380,000.00 380,000.00 Co., Ltd. Shenzhen Changlianfa Other payable 701,964.46 727,224.46 Printing and dyeing Co., Ltd. Shenzhen Hengsheng Other payable 1,367,940.67 1,367,940.67 Investment Co., Ltd. 141 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Shenzhen Haohao Property Other payable 3,778,868.07 3,528,868.07 Leasing Co., Ltd. Shenzhen Shenchao Interest payable Technology Investment Co., 19,497,570.19 15,048,681.30 Ltd. (X). Share payment Not applicable。 (XI). Subsequent events None (XII). . Commitment events. 1.Important commitment events As of June 30, 2013,the Company has no important commitment events. 2. Commitment information guaranteed at the former period As of June 30, 2013, the company has no commitment information guaranteed at the former period. (XIII). Post-balance-sheet events None (XIV). Other Important events 1. Asset and liability related to measurement of fair value Unit:RMB Gains and losses Accumulative Provision for Amount at the from change of fair change of fair value Amount at the end Items impairment made in beginning of period value in current accounted for as of period current period period rights and interests Financial assets 3.Trading financial assets 70,159,993.69 -3,228,148.70 66,931,844.99 Subtotal of Financial 70,159,993.69 -3,228,148.70 66,931,844.99 assets Total 70,159,993.69 -3,228,148.70 66,931,844.99 Financial liability 0.00 0.00 142 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 XV. Notes s of main items in financial reports of parent company 1.Account receivable (1)Account receivable Unit:RMB Year-end balance Year-beginning balance Book Balance Provision for bad debts Book Balance Provision for bad debts Type Propo rtion Proporti Proporti Proporti Amount % Amount on% Amount on% Amount on% Receivables provided bad debt provision in group Account age group 137,901.45 100% 6,895.08 5% 1,600.00 100% 80.00 5% Subtotal of group 137,901.45 100% 6,895.08 5% 1,600.00 100% 80.00 5% Total 137,901.45 -- 6,895.08 -- 1,600.00 -- 80.00 -- Remarks on categories of receivable account Receivable accounts with large amount individually and bad debt provisions were provided at end of period □ Applicable √ Not Applicable Using age methods to provision for bad debts of account receivable in group: √Applicable □Not Applicable Unit:RMB Year-end balance Year-beginning balance Book Balance Book Balance Age Provision for bad Provision for bad Proporti Proporti debts debts Amount on% Amount on% Within 1 year Including: -- -- -- -- -- -- 137,901.45 100% 6,895.08 1,600.00 100% 80.00 Total 137,901.45 -- 6,895.08 1,600.00 -- 80.00 Using percentage balance method of provision for bad debts of account receivable in group: □Applicable √not Applicable Using other methods to provision for bad debts of account receivable in group: □Applicable √not Applicable Receivable accounts with minor amount but on which bad debt provisions are provided individually at end of period □Applicable √not Applicable 143 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (2)Switch back or regain of the account receivable in the reporting period None (3) Account receivable that needed to actually cancelled after verification at this reporting period N/A 2. Other receivables (1)Other receivables Unit:RMB Year-end balance Year-beginning Provision for bad Book balance Provision for bad debts Book balance debts Classification Propo Propo Propo Proport Amount Amount rtion( Amount rtion( Amount rtion( ion(%) %) %) %) Other Receivables with major individual amount and 33.97 12,075,436.43 43.79% 12,075,436.43 100% 12,075,436.43 12,075,436.43 100% bad debt provision provided % individually Other Receivables provided bad debt provision in groups 55.08 27.29 65.15 19.62 Account age group 15,191,120.70 4,145,749.31 23,155,396.35 4,543,963.09 % % % % 55.08 27.29 65.15 19.62 Subtotal of group 15,191,120.70 4,145,749.31 23,155,396.35 4,543,963.09 % % % % Other Account receivable with minor individual 311,486.35 1.13% 311,486.35 100% 311,486.35 0.88% 311,486.35 100% amount but bad debt provision is provided Total 27,578,043.48 -- 16,532,672.09 -- 35,542,319.13 -- 16,930,885.87 -- Category explanation of other accounts receivable: Receivables with significant individual amount and provision made for individual item refers to customer accounts receivable with single amount more than 0.5 million, its provision for impairment will be made based on specific identification method. For receivables without significant individual amount, after deducting those parts which had conducted individual impairment test for its obvious difference in collectability with concrete evidence, making group by aging with character of credit risks and making provision for impairment based on aging analysis method. The receivables made provision for impairment without significant individual amount refers to those receivables which has obvious difference in collectability with concrete evidence, its provision will be made 144 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 based on specific identification method. Other receivable accounts with major amount but on which bad debt provisions are provided individually at end of period √Applicable □not Applicable Unit:RMB Name Book balance Bad debts Provision proportion% Reason of provision Jiangxi Xuanli String 11,389,044.60 11,389,044.60 100% Unable to recover Co., Ltd. Shenzhen Tianlong Industry and trading Co., 686,391.83 686,391.83 100% Unable to recover Ltd. Total 12,075,436.43 12,075,436.43 -- -- Using age methods to provision for bad debts of account receivable in group: √Applicable □not Applicable Unit:RMB Year-end balance Year-beginning balance Book Balance Book Balance Age Provision for bad Provision for bad Proporti Proporti debts debts Amount on% Amount on% Within 1 year Including: -- -- -- -- -- -- 7,619,691.20 429,034.56 15,438,966.85 66.68% 771,948.34 Subtotal of 7,619,691.20 429,034.56 15,438,966.85 66.68% 771,948.34 Withn 1 year 1-2 years 160,600.00 16,060.00 160,600.00 0.69% 16,060.00 2-3 years 23,800.00 7,140.00 109,800.00 0.47% 32,940.00 Over 3 years 7,387,029.50 3,693,514.75 7,446,029.50 32.16% 3,723,014.75 3-4 years 7,377,029.50 3,688,514.75 7,436,029.50 3,718,014.75 Over 5 years 10,000.00 5,000.00 10,000.00 5,000.00 Total 15,191,120.70 -- 4,145,749.31 23,155,396.35 -- 4,543,963.09 Using percentage balance method of provision for bad debts of other account receivable in group: □Applicable√ Not applicable Using other methods to provision for bad debts of other account receivable in group: 145 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 □Applicable√ Not applicable Separate amount is not large, the account receivable with big combination risk after combined via risk character: √Applicable□ Not applicable Unit :RMB Content Book balance Provision for bad debts Allotment rate Reason Shenzhen Textile Industry and Trading Co., 116,285.83 116,285.83 100% Unable to recover Ltd. Shenmo Company 23,462.57 23,462.57 100% Unable to recover Ronghui Company 7,037.95 7,037.95 100% Unable to recover Municipal Road 42,000.00 42,000.00 100% Unable to recover Company Dadi Property 57,700.00 57,700.00 100% Unable to recover Management Office Xing Zhenhua 65,000.00 65,000.00 100% Unable to recover Total 311,486.35 311,486.35 -- -- (2)Switch back or regain of the other account receivable in the reporting period Receivable accounts with mojor or amount but on which bad debt provisions are provided individually at end of period Unit:RMB Content Book balance Provision for bad debts Allotment rate Reason Separate amount is large 12,075,436.43 12,075,436.43 100% Unable to recover Separate amount is No 311,486.35 311,486.35 100% Unable to recover large Total 12,386,922.78 12,386,922.78 -- -- (3)The front 5 units’ information of Other account receivable Unit:RMB Relation with the Portion in total other Name Amount Ages Company receivables (%) Jiangxi Xuanli String Non-related parties 11,389,044.60 3-4 years 41.3% Co., Ltd. Shenfang Imports & Subsidiary 7,168,680.72 3-4 years 25.99% exports Co., Ltd. 146 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Shenzhen Beauty Century Garment Co., Subsidiary 5,075,600.00 1-2 years 18.41% Ltd. Anhui Huapeng Textile Sharing Company 2,700,000.00 Within 1 year 9.79% Co., Ltd. Shenzhen Tianlong Industry and Trade Co., Non-related parties 686,391.83 3-4 years 2.49% Ltd. Total -- 27,019,717.15 -- 97.98% (4)Other Account receivable from Related affiliated parties Unit:RMB Unit name Relation with the company Amount Percentage of account receivable Shenfang Imports & exports Subsidiary 7,168,680.72 25.99% Co., Ltd. Shenzhen Beauty Century Subsidiary 5,075,600.00 18.41% Garment Co., Ltd. Anhui Huapeng Textile Co., Sharing Company 2,700,000.00 9.79% Ltd. 合计 -- 14,944,280.72 54.19% (5)Other receivables subject to asset securitization , needed to briefly describe the arrangements related to transactions. There is not such arrangements related to transactions Other receivables subject to asset securitization , 3. .Long –term stocks equity investment Unit :RMB Explanati on of diffidence between Sharehold Voting sharehold Accounti Initial ing right Original Ending ing Current Cash Name ng investmen change proportio proportio Devalue balance Balance proportio devalue bonus method t cost n in the n in the n and investee investee voting right proportio n in 147 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 investee Shenzhen Jintian 14,831,68 14,831,68 14,831,68 14,831,68 Industry 3.68% 3.68% 1.50 1.50 1.50 1.50 (Group)C Equity o., Ltd. method Shenzhen Haohao 2,040,102 3,665,118 275,108.0 3,940,226 Property 50% 50% .73 .59 9 .68 Leasing Equity Co., Ltd. method Shenzhen Xieli Equity 1,529,483 2,976,192 181,327.7 3,157,519 266,654.9 Autornob 50% 50% method .67 .27 0 .97 9 ile Co., Ltd. Shenzhen Changlia nfa 2,524,500 1,752,210 -34,079.8 1,718,130 Printing 40.25% 40.25% .00 .56 9 .67 and dyeing Equity Company method Jordan 7,240,625 2,587,660 2,587,035 Garnent Equity -625.73 35% 35% .00 .99 .26 Factory method Shenzhen Tianglong 685,000.0 Industry 0.00 50% Notes2 0 and trade Equity Co., Ltd. method Hengshun (Saipan 8,228,350 0.00 35% 35% )Industry Equity .00 Co., Ltd. method Shenzhen Shengbo optoelectro 40,500,00 956,663,0 760,000,0 1,716,663 100% 100% nic 0.00 70.03 00.00 ,070.03 Technology Cost Co., Ltd. method 148 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Shenzhen Jinlan Decorativ 5,470,000 5,470,000 5,470,000 90% 100% Notes1 e Articles .00 .00 .00 Industrial Cost Co., Ltd. method Shenzhen Lisi 6,666,132 6,666,132 6,666,132 90.68% 100% Notes 1 Industrial Cost .60 .60 .60 Co., Ltd. method Shenzhen Beauty 30,867,40 30,867,40 30,867,40 2,167,431 Centruty 100% 100% 0.00 0.00 0.00 .21 Garment Cost Co., Ltd. method Shenzhen Shenfang 6,299,700 6,299,700 6,299,700 Import & 100% 100% 82,156.61 .00 .00 .00 Export Cost Co., Ltd. method Shenzhe n 14,623,00 14,623,00 14,623,00 95% 100% Notes 1 Huaqian Cost 3.00 3.00 3.00 g Hotal method Shenfang Property 1,600,400 1,600,400 1,600,400 Managem 93.75% 100% Notes1 .00 .00 .00 ent Co., Cost Ltd. method Zhenzhen Zhongxin g Fibre folds 1,260,000 1,260,000 1,260,000 1,260,000 75% Notes2 cotton .00 .00 .00 .00 Clothing ornament Cost Co., Ltd. method Shenzhen Jiafeng 16,800,00 16,800,00 16,800,00 16,800,00 10.8% 10.8% Textile Cost 0.00 0.00 0.00 0.00 Co., Ltd. method Shenzhen Cost 5,491,288 5,491,288 5,491,288 45% 45% 5,058,307 149 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Guanhua method .71 .71 .71 .01 Pruting and dyeing Co., Ltd. Union Develop 2,600,000 2,600,000 2,600,000 ment 2.87% 2.87% .00 .00 .00 Group Cost Co., Ltd. method Shenzhen Xiangjian 160,000.0 160,000.0 160,000.0 20% 20% g Trade Cost 0 0 0 Co., Ltd. method Shenzhen Xinfang 524,000.0 524,000.0 524,000.0 20% 20% 80,000.00 Knitting Cost 0 0 0 Co., Ltd. method Hongkon g Yehui 2,392,914 2,392,914 2,392,914 Internatio 17.85% 17.85% .37 .37 .37 nal Co., Cost Ltd. method Shenzhen Dailishi 532,062.5 2,559,856 2,559,856 802,000.0 Underwe 30% Notes3 0 .26 .26 0 ar Co., Cost Ltd. method Anhu Huapeng 25,000,00 25,410,20 25,410,20 50% Notes3 Textile Cost 0.00 9.50 9.50 Co., Ltd. method 197,866,6 1,105,200 760,421,7 1,865,622 40,466,23 882,000.0 Total -- -- -- -- 44.08 ,838.38 30.17 ,568.55 1.32 0 Notes : 1.Share holding ratio is not accord with voting power ratio in amalgamated subsidiary company. That is interlocking shareholding style of every subsidiary company making parent company actual share control being 100%. 2. The Cancellation date of Shenzhen Tianlong Industry & Trading Co., Ltd.is April 24, 2014,The Cancellation date of Zhongxing Fiber Wimple Cotton Raiment Co., Ltd. Is January 4, 2013. 3. Shenzhen Dailisi Underwear Co., Ltd.and Anhui Huapeng Textile Co., Ltd. Had adopted outsourcing for contractual operation. 150 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 4. Business income, Business cost (1)Business income Unit:RMB Items Amount of current period Amount of previous period Income from Main business 28,654,762.09 26,248,972.75 Other Business income 1,828,836.96 1,957,898.32 Total 30,483,599.05 28,206,871.07 Business cost 6,096,505.49 6,458,435.54 (2)Main business(Industry) Unit:RMB Amount of current period Amount of previous period Name Business income Business cost Business income Business cost Rental 28,654,762.09 4,267,668.53 26,248,972.75 4,500,537.24 Total 28,654,762.09 4,267,668.53 26,248,972.75 4,500,537.24 (3)Main business(Production) Unit:RMB Amount of current period Amount of previous period Name Business income Business cost Business income Business cost Rental income 28,654,762.09 4,267,668.53 26,248,972.75 4,500,537.24 Total 28,654,762.09 4,267,668.53 26,248,972.75 4,500,537.24 (4)Main Business(Area) Unit:RMB Amount of current period Amount of previous period Name Business income Business cost Business income Business cost Shenzhen 28,654,762.09 4,267,668.53 26,248,972.75 4,500,537.24 Total 28,654,762.09 4,267,668.53 26,248,972.75 4,500,537.24 (5)Total income and the ratio of operating income from top five clients Unit:RMB 151 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Name Business Income Proportion(%) Jinsitai Investment Development Co., Ltd. 12,167,837.50 39.92% Shenzhen Shixingkai Beauty Co., Ltd. 529,533.84 1.74% China merchants Bank, Shenfang Sub- Branch 466,845.72 1.53% China Ping An Life Insurance ,Shenzhen Branch 394,320.00 1.29% Shenzhen City Zhongbai Computer technology Inc 339,091.08 1.11% Total 13,897,628.14 45.59% Notes 5. Investment income (1)Income from investment Unit:RMB Items Amount of current period Amount of previous period Income from long-term equity investment measured by 24,115,950.89 1,305,000.00 adopting the cost method Income from long-term equity investment measured by 421,730.17 299,087.54 adopting the Equity method Hold the investment income which gained from the 19,468,746.45 2,376,792.47 transactional financial assets Total 44,006,427.51 3,980,880.01 (2)Long term equity investment calculated to cost method: Unit:RMB Name Amount of current Amount of previous Cbange cause period period Shenfang Property Management Co., Ltd. 676,276.28 Subsidiary Profit distribution Shenzhen Huaqiang Hotal 5,096,339.42 Subsidiary Profit distribution Shenzhen Lisi Industrial Co., Ltd. 11,028,068.57 Subsidiary Profit distribution Shenzhen Jinlan Decorative Articles 5,935,266.62 Subsidiary Profit distribution Industrial Co., Ltd. Anhu Huapeng Textile Co., Ltd. 900,000.00 900,000.00 Shenzhen Dailishi Underwear Co., Ltd. 400,000.00 405,000.00 Shenzhen Xinfang Knitting Co., Ltd. 80,000.00 Total 24,115,950.89 1,305,000.00 -- 152 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 (3)Long term equity investment calculated via equity method Unit :RMB Name Amount of current Amount of previous Cbange cause period period Shenzhen Haohao Property Leasing Co., 275,108.09 259,352.31 Ltd. Shenzhen Xieli Automobile Co., Ltd. 181,327.70 107,335.05 Shenzhen Changlianfa Printing & dyeing Company -34,079.89 -11,049.10 Jordan Garment Factory -625.73 -56,550.72 Total 421,730.17 299,087.54 -- Notes The company has no big restriction on the investment earning repatriation. 6. Supplement information of cash Flow Statement Unit:RMB Amount of current Supplement information Amount of previous period period 1. Adjusting net profit to net cash flow in operating activities: -- -- Net profit 45,548,330.24 6,941,518.47 Add: Provision for impairment of assets -456,398.70 -342,179.97 The losses on the disposal of fixed assets, intangible assets and other 4,261,643.66 4,258,006.69 long-term assets Amortization of intangible assets 300,275.16 194,957.64 Investment losses -44,006,427.51 -3,980,880.01 Decrease of deferred income tax asset 97,849.68 85,544.99 Increase of deferred income tax liability 888,213.05 Decrease in operating receivable 7,436,575.50 1,800,750.56 Increase in operating payables 1,897,479.52 -3,223,511.36 Other -888,213.05 Net cash flows from operating activities 15,079,327.55 5,734,207.01 2.Investing and financing activities that do not involve cash receipts -- -- and payments 3.Net increase in cash and cash equivalents -- -- Cash at the end of the period 269,387,555.45 30,852,896.74 Less:Cash at the beginning of the period 33,906,151.53 133,011,826.29 153 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Net increase in cash and cash equivalents 235,481,403.92 -102,158,929.55 7.Reverse purchasing of assets and liabilities bocked at evaluated value Reverse purchasing of the following assets and liabilities at fair value Unit:RMB To determine the fair Fair value calculation Items Fair value Original book value value method process None Long-term equity investment amount from reveres purchase Unit:RMB Long-term equity investment amount from Long-term equity investment Fair value Items reveres purchase calculation process N/A (XVI)Supplement information 1. Details of non-recuring gain/loss of the term Unit:RMB Items Amount Remarks Mainly including the amortized governmental R&D subsidy of RMB 3,954,990.00, High-tech industrialization demonstration project matching funds amortization was RMB 100,000.00, new flat panel display industry of special projects amortization was RMB Govemment subsidy recognized in currentgain and loss(excluding 500,000 state grant funds, the those closely related to the Company’s business and granted 5,645,436.24 Shenzhen Municipal Finance under the state’s policies) Committee allocated a loan discount amortization of RMB 96,822.24, TFT-LCD polarizing film industry projects grant funds amortization was RMB 600,000.00, Futian District, Shenzhen industry development funds grants was RMB 101,400.00, the Shenzhen 154 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 Municipal Committee of emerging industries of strategic financial subsidies was RMB 240,000.00, Shenzhen SME development, Booth subsidy was RMB 52,224.00. Gain/loss from change of fair value of transactional financial Investment income obtained asset and liabilities, and investment gains from disposal of through the secondary transactional financial assets and liabilities and sellable financial 19,468,746.45 market to sell the *ST Shen assets other than valid period value instruments related to the Victor Onward A Company’s common businesses. Other non-business income and expenditures other than the above 319,182.75 Amount of influence of income tax 4,871,686.61 Total 20,561,678.83 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Compaines Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason. □ Applicable√ Not applicable (II)The differences between domestic and international accounting standards 1.Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed in the financial reports of differences in net income and net assets. Unit:RMB Net profit attributable to the shareholders Net Assets attributable to the of the listed company shareholders of the listed company Amount in the Amount in the End of the reporting Beginning of the reporting period previous period period reporting period According to CAS -3,642,102.17 -18,736,243.07 2,259,589,492.24 1,303,011,954.39 Items and amount adjusted according to IAS 2. Difference in Net profit and net Assets in the Financial Report as Disclosed Respectively according to the Accounting standards Outside Mainland China and the Chinese Accounting Standards. Unit:RMB Net profit attributable to the shareholders Net Assets attributable to the of the listed company shareholders of the listed company Amount in the Amount in the End of the reporting Beginning of the 155 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 reporting period previous period period reporting period According to CAS -3,642,102.17 -18,736,243.07 2,259,589,492.24 1,303,011,954.39 Items and amount adjusted according to IAS 3.Note to the Difference in the Accounting Data based on the Accounting Standards of CAS and IAS. N/A (III) Return on net assets and earnings per share Unit:RMB Earnings per share(RMB) Return on net assets . Profit of the report period Weighted(%) Basic earnings per share Diluted gains per share Net profit attributable to the Common stock -0.24% -0.01 -0.01 shareholders of Company. Net profit attributable to the Common stock shareholders of Company after deducting of -1.57% -0.06 -0.06 non-recurring gain/loss. (IV) The explanation of abnormal circumstance and reasons of items in major accounting statement. (1)The ending balance of monetary capital increased by RMB 512.1943 million and 220.38% over beginning of period mainly because the Company privately issued RMB ordinary shares according to the Approval of Private Issue of Shares of Shenzhen Textile (Holding) Co., Ltd. (Zheng Jian Permit [2013] No. 2 Document) issued by China Securities Regulatory Commission and the funds thus raised have not been completely used. (2) The ending balance of bills receivable decreased by RMB 7.8848 million and 39.15% over beginning of period mainly due to endorsed assignment. (3) The ending balance of accounts receivable increased by RMB 50.4695 million and 50% over beginning of period mainly due to the increase of trade account receivable in credit period. (4) The ending balance of payment in advance increased by RMB 20.479 million and 161.11% over beginning of period mainly due to the increase of export orders near the end of current period. (5) The ending balance of inventories increased by RMB 68.5796 million and 47.87% over beginning of period mainly due to the increase of raw materials necessary for production of polarizer. (6) The ending balance of other current assets increased by RMB 300 million and 100% over beginning of period mainly due to the increase of structural deposit of RMB 300 million. (7) The ending balance of construction in progress increased by RMB 30.9412 million and 267.28% over 156 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 beginning of period. These funds were mainly invested in the phase-II project of polarizer for TFT-LCD. (8) The ending balance of short-term loan decreased by RMB 40.1534 million and 100% over beginning of period due to the decrease of working capital loan in current period. (9) The ending balance of accounts payable increased by RMB 41.0329 million and 40.53% over beginning of period mainly due to increase of purchase of raw materials necessary for production of polarizer and increase of accounts payable for outsourced products. (10) The ending balance of advance collections increased by RMB 21.4146 million and 83.44% over beginning of period mainly due to increase of advances on sales for export trade near the end of period. (11) The paid-in capital increased by RMB 170 million because the Company privately issued 170,000,000 RMB ordinary shares (par value per share: RMB 1.00) according to the Approval of Private Issue of Shares of Shenzhen Textile (Holding) Co., Ltd. (Zheng Jian Permit [2013] No.2 Document) issued by China Securities Regulatory Commission. (12) The ending balance of capital surplus increased by RMB 790.2196 million over beginning of period mainly because the premium of private issue of RMB ordinary shares was accounted for as capital surplus so that capital surplus increased by RMB 791,751,008.85. (13)The operating income in current period increased by RMB 200.9150 million and 53.52% year on year mainly due to the increase of sales of polarizer; (14)The operating cost in current period increased by RMB 191.3372 million and 56.85% year on year mainly due to the increase of sales cost caused by the growth of polarizer business volume; (15)The financial expenses in current period decreased by RMB 14.9997 million and 1401.29% year on year mainly due to the generation of exchange gains from payable liabilities in yen after depreciation of Japanese Yen by big margin; (16)The assets impairment loss in current period increased by RMB 4.1733 million and 173.01% year on year mainly due to the increase of provision for bad debts and provision for diminution in value of inventories of polarizer; (17)The investment income in current period increased by RMB 17.3845 million and 384.29% year on year mainly due to the investment income obtained from additional sales of financial assets available for sale; (18)The other composite income in current period decreased by RMB 10.7916 million and 116.54% year on year because the Company sold financial assets available for sale and transferred out the gains of the preivous period from other composite income; (19)The net cash flows from operating activities decreased by RMB 41.4567 million and 258.17% year on year mainly due to the increase of purchase of raw materials necessary for polarizers; (20)The net cash flows from investing activities decreased by RMB 258.3587 million and 268.17% year on year mainly due to the redeposit of RMB 300 million as structural deposit in current period; (21) The net cash flows from financing activities increased by 925.646 million and 76,499.67% mainly because the Company privately issued 170,000,000 ordinary RMB shares (par value per share: RMB 1.00) and raised net proceeds of RMB 961,751,000.85 according to the Approval of Private Issue of Shares by Shenzhen Textile (Holding) Co., Ltd. (CSRC Permit (2013) No. 2 Document) issued by China Securities Regulatory Commission. 157 Shenzhen Textile (Holdings) Co., Ltd. The Semi-Annual Report 2013 IX.Documents Available for Inspection 1. Accounting statements bearing the seal and signature of legal representative, General Manger and Financial Controller; 2. The originals of all the Company’s documents and the original manuscripts of announcements publicly disclosed on the newspapers designated by China Securities Regulatory Commission in the report period; The above documents were completely placed at the office of the Company. This report has been prepared in both Chinese and English. In case of any discrepancy, the Chinese version shall prevail. The Board of Directors of Shenzhen Textile (Holdings) Co., Ltd. August 24, 2013 158