Shenzhen Textile (Holdings) Co., Ltd.
Financial Statements and Auditor’s Report
For the year ended December 31, 2022
Shenzhen Textile (Holdings) Co., Ltd.
Financial Statements and Auditor’s Report
For the year ended December 31, 2022
Auditor’ s Report
Consolidated and Company Balance sheet
Consolidated and Company Income statement
Consolidated and company Cash flow statement
Consolidated and company Statement on Change in Owners’Equity
Notes to financial statements
Auditor’ s Report
DeShiReport(Shen)Zi(23)No. P03516
To all shareholders of Shenzhen Textile (Holdings) Co., Ltd.：
I. Opinion
We have audited the financial statements of Shenzhen Textile (Holdings) Co., Ltd . (hereinafter referred to as "the Company"),
which comprise the balance sheet as at December 31, 2022, and the income statement, the statement of cash flows and the statement
of changes in owners' equity for the year then ended and notes to the financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance with Accounting Standards
for Business Enterprises and present fairly the financial position of the Company as at December 31, 2022 and its operating results and
cash flows for the year then ended.
II. Basis for Our Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants in China. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements
section of our report. According to the Code of Ethics for Chinese CPA, we are independent of the Company in accordance with the
Code of Ethics for Chinese CPA and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not provide a separate opinion on these matters.
1. Recognition of polarizer sales revenue
As mentioned in Note (VII) 39 to the financial statement, in 2022the operating income reported in the consolidated financial
statement of Shenzhen Textile Group was RMB 2,837,988,264.36, of which the sales revenue of polarizers was RMB
2,693,787,636.62, accounting for 94.92% of the total operating income. The sales revenue of Shenzhen Textile Group's polarizer is
recognized when the customer obtains control of the relevant goods. Due to the importance of polarizer sales revenue to the
consolidated financial statement as a whole, and the revenue is one of the key performance indicators of Shenzhen Textile Group,
there is an inherent risk that management will manipulate revenue recognition in order to achieve specific objectives or expectations,
therefore, we have identified the recognition of polarizer sales revenue as a key audit matter for the audit of the consolidated financial
statement.
In response to the above key audit matter, the audit procedures we implement mainly include:
Understand and evaluate the internal control of the revenue-related business of Shenzhen Textile Group, understand and
evaluate the design and implementation of relevant internal control activities by questioning relevant business personnel, observing
business processes, obtaining and checking documents, etc., and conduct the operation effectiveness test of internal control activities.
Examine sales contracts with key customers, identify contractual terms and conditions related to the transfer of control of goods,
and assess whether the accounting policies for revenue recognition comply with the requirements of accounting standards for business
enterprises
In response to the above key audit matter, the audit procedures we implement mainly include:
Perform revenue analysis procedures by production line, product type and customer, and analyze the rationality of revenue
changes based on market and other factors.
2
Evaluate whether revenue recognition meets the requirements of accounting standards for enterprises;
Samples are taken to perform detailed tests on sales revenue, check supporting documents such as invoices, outbound delivery
orders, and receipts related to revenue recognition, and verify the sales of major customers by letter of confirmation and evaluate the
authenticity of polarizer sales revenue recognition.
Select samples of sales transactions before and after the balance sheet date, check the supporting documents such as invoices,
outbound delivery orders, and receipts, and evaluate whether the revenue is recorded in the appropriate accounting period.
2. Impairment of polarizer inventory
As mentioned in Note (VII) 8 to the financial statement, as of December 31, 2022, the inventory book balance reported in the
consolidated financial statement of Shenzhen Textile Group was RMB741,464,422.61, of which the book balance of polarizer
inventory was RMB721,282,838.15, accounting for 97.12% of the total inventory, and the corresponding inventory decline reserve
was RMB180,886,720.53. In accordance with the Group's accounting policy, inventories are measured at the lower of cost or net
realizable value at the end of the year, and when the net realizable value of inventories is lower than cost, a provision is made for
inventory price declines. As the provision for inventory declines involves significant management estimates, we have identified the
impairment of polarizer inventories as a key audit matter in the audit of the consolidated financial statement.
In response to the above key audit matter, the audit procedures we implement mainly include:
Understand and evaluate the design and implementation of internal controls related to inventory impairment;
Understand and evaluate the appropriateness of accounting policies related to inventory price declines provision;
Implement inventory on-site monitoring procedures, check the check-count quantity ofinventory on a sampling basis, and
observe the status of inventory to evaluate the inventory quantity and condition at the balance sheet date;
Evaluate the reasonableness of management's methodology for accruing provisions for inventory declines and the important
assumptions and parameters used to calculate net realizable value;
Evaluate whether there are signs of management bias by selecting samples of data used to determine the net realizable value of
inventories with comparing to the actual cost of completion and actual selling price of the product that has actually been incurred in
the mostrecent.
IV. Other information
The management of the Company is responsible for the other information. The other information comprises information of the
Company's annual report in 2022, but excludes the financial statements and our auditor's report.
Our opinion on the financial statements does not cover the other information and we do not and will not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report
in this regard
V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
3
The Company's management is responsible for preparing the financial statements in accordance with the requirements of
Accounting Standards for Business Enterprises to achieve a fair presentation, and for designing, implementing and maintaining internal
control that is necessary to ensure that the financial statements are free from material misstatements, whether due to frauds or errors.
In preparing the financial statements, management of the Company is responsible for assessing the Company's ability to continue
as a going concern, disclosing matters related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with the audit standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout
the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management of the Company.
(4) Conclude on the appropriateness of using the going concern assumption by the management of the Company, and conclude,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Company to express an opinion on the financial statements and bear all liability for the opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit matters, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the financial statements of the current period and are therefore the key audit matters.
4
We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Deloitte Touche Tohmatsu CPA Ltd.(special general partnership) Chinese C.P.A.
（Project Partner)
Shanghai China
Chinese C.P.A.
5
II. Financial Statements
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated balance sheet
Prepared by: Shenzhen Textile (Holdings) Co., Ltd.
Dec 31,2022
In RMB
Items Note December 31,2022 December 31,2021
Current asset：
Monetary fund (VII) 1 991,789,968.19 302,472,828.60
Transactional financial assets (VII) 2 319,605,448.44 617,191,678.56
Note receivable (VII) 3 74,619,100.26 149,942,880.28
Account receivable (VII) 4 636,583,469.93 479,998,708.57
Financing of receivables (VII) 5 54,413,796.91 21,474,101.07
Prepayments (VII) 6 18,391,444.67 15,406,619.53
Other account receivable (VII) 7 10,585,975.38 140,185,750.40
Inventories (VII) 8 558,447,648.77 743,401,857.74
Other current asset (VII) 9 69,535,531.24 29,503,352.42
Total of current assets 2,733,972,383.79 2,499,577,777.17
Non-current assets：
Long term share equity investment (VII) 10 134,481,835.74 133,022,325.77
Other equity instruments investment (VII) 11 167,678,283.27 186,033,829.72
Real estate investment (VII) 12 126,315,834.76 125,251,851.43
Fixed assets (VII) 13 2,240,221,656.36 2,396,658,988.81
Construction in progress (VII) 14 38,061,619.60 71,482,031.08
Use right assets (VII) 15 15,365,393.88 9,221,189.37
Intangible assets (VII) 16 44,192,571.95 48,635,160.00
Goodwill (VII) 17 - -
Long-germ expenses to be amortized (VII) 18 4,470,957.79 5,387,295.94
Deferred income tax asset (VII) 19 69,823,814.29 3,708,596.78
Other non-current asset (VII) 20 42,553,016.47 84,560,280.09
Total of non-current assets 2,883,164,984.11 3,063,961,548.99
Total of assets 5,617,137,367.90 5,563,539,326.16
Current liabilities
Short-term loans (VII) 21 7,000,000.000 37,575,113.83
Notes payable (VII) 22 - 16,682,324.12
Account payable (VII) 23 327,049,873.70 359,584,252.94
Advance receipts (VII) 24 1,393,344.99 1,805,311.57
Contract liabilities (VII) 25 4,274,109.40 68,955.21
Employees’ wage payable (VII) 26 61,166,444.90 59,719,860.24
Tax payable (VII) 27 8,897,312.51 9,200,627.09
Other account payable (VII) 28 197,345,455.37 201,317,421.35
Non-current liability due within 1 year (VII) 29 104,183,438.22 5,175,393.52
Other current liability (VII) 30 92,945,741.78 58,264,958.58
Total of current liability 804,255,720.87 749,394,218.45
Non-current liabilities：
Long-term loan (VII) 31 607,421,585.00 683,016,243.25
Lease liability (VII) 32 8,628,672.71 4,243,855.71
Deferred income (VII) 33 117,814,796.10 110,461,293.15
Deferred income tax liability (VII)19 47,974,267.80 61,642,660.91
Total non-current liabilities 781,839,321.61 859,364,053.02
Total of liability 1,586,095,042.48 1,608,758,271.47
Owners’ equity
Share capital (VII) 34 506,521,849.00 506,521,849.00
Capital reserves (VII) 35 1,961,599,824.63 1,961,599,824.63
Other comprehensive income (VII) 36 109,596,609.31 119,682,119.05
6
Special reserve (VII) 37 100,909,661.32 98,245,845.47
Retained profit (VII) 38 170,636,610.95 125,317,336.31
Total of owner’s equity belong to the parent company 2,849,264,555.21 2,811,366,974.46
Minority shareholders’ equity 1,181,777,770.21 1,143,414,080.23
Total of owners’ equity 4,031,042,325.42 3,954,781,054.69
Total of liabilities and owners’ equity 5,617,137,367.90 5,563,539,326.16
Legal Representative: Yin Kefei
Person-in-charge of the accounting work：He Fei
Person-in -charge of the accounting organ：Zhu Jingjing
2.Parent Company Balance Sheet
In RMB
Items Note December 31,2022 December 31,2021
Current asset：
Monetary fund
Transactional financial assets 426,042,455.28 130,270,313.58
Account receivable (XVI) 1 319,605,448.44 586,540,735.16
Other account receivable (XVI) 2 15,643,024.11 7,935,911.24
Inventories 14,132,756.62 14,383,631.68
Total of current assets 26,237.85 39,131.60
Non-current assets： 775,449,922.30 739,169,723.26
Long term share equity investment (XVI) 3
Other equity instruments investment 2,092,431,333.83 2,089,070,531.86
Real estate investment 151,618,842.39 169,974,388.84
Fixed assets 101,190,712.85 98,174,132.57
Intangible assets 11,346,585.35 20,255,108.56
Deferred income tax asset 308,243.90 454,036.00
Other non-current asset - 3,672,545.57
Total of non-current assets 25,997,082.15 55,790,497.23
Total of assets 2,382,892,800.47 2,437,391,240.63
Current liabilities 3,158,342,722.77 3,176,560,963.89
Account payable
Advance receipts 411,743.57 411,743.57
Employees’ wage payable 691,160.58 639,024.58
Tax payable 18,510,589.33 16,712,946.96
Other account payable 7,121,466.14 1,943,470.48
Total of current liability 113,736,371.24 116,648,650.39
Non-current liabilities： 140,471,330.86 136,355,835.98
Deferred income
Deferred income tax liability 300,000.00 400,000.00
Total non-current liabilities 44,363,868.30 58,002,800.69
Total of liability 44,663,868.30 58,402,800.69
Owners’ equity 185,135,199.16 194,758,636.67
Share capital
Capital reserves 506,521,849.00 506,521,849.00
Less：Shares in stock 1,577,392,975.96 1,577,392,975.96
Other comprehensive income 98,855,668.75 108,762,538.39
Special reserve 100,909,661.32 98,245,845.47
Retained profit 689,527,368.58 690,879,118.40
Total of owners’ equity 2,973,207,523.61 2,981,802,327.22
Total of liabilities and owners’ equity 3,158,342,722.77 3,176,560,963.89
3.Consolidated Income statement
In RMB
Note Year 2022 Year 2021
1. Operation revenue (VII) 39 2,837,988,264.36 2,330,061,681.00
Less：Business cost (VII) 39 2,374,005,896.43 1,906,993,663.75
7
Business tax and surcharge (VII) 40 7,907,126.91 10,523,548.09
Sales expense (VII) 41 35,962,529.35 37,973,336.39
Administrative expense (VII) 42 128,388,940.29 122,088,830.15
R & D costs (VII) 43 80,520,155.54 103,508,764.53
Financial expenses (VII) 44 12,943,606.57 (130,344.09)
Including：Interest expense 31,131,112.38 14,306,275.13
Interest income 8,327,248.75 1,655,853.59
Add: Other income (VII) 45 26,350,210.89 19,643,379.33
Investment gain (VII) 46 19,383,351.87 22,663,013.06
Incl: investment gains from affiliates 1,307,639.15 33,984.66
Financial assets measured at amortized cost cease to be recognized as
- -
income
Changing income of fair value (VII) 47 - 2,150,943.40
Credit impairment loss (VII) 48 (4,618,553.09) (4,981,560.53)
Impairment loss of assets (VII) 49 (202,573,465.84) (130,396,451.18)
Assets disposal income (VII) 50 31,264.60 (597,458.77)
II. Operational profit 36,832,817.70 57,585,747.49
Add ：Non-operational income (VII) 51 14,993,082.57 21,285,786.64
Less：Income tax expenses (VII) 52 7,477,057.47 1,686,263.35
III. Total profit 44,348,842.80 77,185,270.78
Less：Income tax expenses (VII) 53 (67,443,123.52) 11,118,796.96
IV. Net profit 111,791,966.32 66,066,473.82
(I) Classification by business continuity
1.Net continuing operating profit 111,791,966.32 66,066,473.82
2.Termination of operating net profit - -
(II) Classification by ownership
Including：Net profit attributable to the owners of parent
73,309,182.94 55,733,468.82
company
Minority shareholders’ equity 38,482,783.38 10,333,005.00
V. Net after-tax of other comprehensive income (VII) 36 (10,204,603.14) 4,234,512.42
Net of profit of other comprehensive income attributable to ow
(10,085,509.74) 4,234,512.42
ners of the parent company.
（I）Other comprehensive income items that will not be
reclassified into gains/losses in the subsequent accounting (10,058,739.46)
period 4,433,576.15
1.Re- -
measurement of defined benefit plans of changes in net deb -
t or net assets
2.Other comprehensive income under the equity method in -
-
vestee can not be reclassified into profit or loss.
3. Changes in the fair value of investments in other equity (10,058,739.46)
4,433,576.15
instruments
4. Changes in the fair value of the company’s credit risks - -
（II）
Other comprehensive income that will be reclassified into prof (26,770.28) (199,063.73)
it or loss.
-
1.Other comprehensive income under the equity method investee c -
an be reclassified into profit or loss.
2. Changes in the fair value of investments in other debt (178,640.10)
-
obligations
3. Other comprehensive income arising from the reclassification -
-
of financial assets
4.Allowance for credit impairments in investments in other debt -
-
obligations
5. Reserve for cash flow hedges - -
6.Translation differences in currency financial statements 151,869.82 (199,063.73)
7.Other - -
Net of profit of other comprehensive income attributable to Mi (119,093.40) -
nority shareholders’ equity
VI. Total comprehensive income 101,587,363.18 70,300,986.24
Total comprehensive income attributable to the owner of the
63,223,673.20 59,967,981.24
parent company
Total comprehensive income attributable minority shareholders 38,363,689.98 10,333,005.00
8
VII. Earnings per share
Basic earnings per share 0.14 0.11
The current business combination under common control, the net profits of the combined party before achieved net profit of RMB 0.
00, last period the combined party realized RMB0.00.
Legal Representative: Yin Kefei
Person-in-charge of the accounting work：He Fei
Person-in -charge of the accounting organ：Zhu Jingjing
4. Income statement of the Parent Company
In RMB
Note Year 2022 Year 2021
1. Operation revenue (XVI) 4 56,046,883.88 78,159,686.19
Less：Business cost (XVI) 4 9,544,956.96 11,547,944.88
Business tax and surcharge 2,296,709.15 2,968,080.87
Sales expense 106,542.65 49,682.40
Administrative expense 46,419,746.13 45,821,418.49
Financial expenses (5,381,252.49) 283,692.12
Including：Interest expenses 6,601.33 645,507.87
Interest income 5,369,095.59 359,182.13
Add：Other income 269,698.97 602,709.52
Investment gain (XVI) 5 18,656,000.37 20,409,098.48
Including: investment gains from affiliates 1,307,639.15 33,984.66
Financial assets measured at amortized cost cease to be recognized - -
as income
Credit impairment loss 940,005.04 (710,513.74)
Impairment loss of assets - (32,769.22)
Assets disposal income - (386,933.41)
II. Operational profit 22,925,885.86 37,370,459.06
Add ：Non-operational income 6,004,050.33 283,354.84
Less：Non -operational expenses 100,500.00 -
III. Total profit 28,829,436.19 37,653,813.90
Less：Income tax expenses 2,191,277.71 5,900,206.38
IV. Net profit 26,638,158.48 31,753,607.52
1.Net continuing operating profit 26,638,158.48 31,753,607.52
2.Termination of operating net profit - -
V. Net after-tax of other comprehensive income (9,906,869.64) 2,288,677.33
（I）Other comprehensive income items that will not be 2,487,741.06
(10,058,739.46)
reclassified into gains/losses in the subsequent accounting period
1.Re- - -
measurement of defined benefit plans of changes in net debt or net
assets
2.Other comprehensive income under the equity method investee c - -
an not be reclassified into profit or loss.
3. Changes in the fair value of investments in other equity (10,058,739.46)
2,487,741.06
instruments
4. Changes in the fair value of the company’s credit risks - -
5.Other - -
(II)Other comprehensive income that will be reclassified into profi 151,869.82 (199,063.73)
t or loss
- -
1.Other comprehensive income under the equity method investee c
an be reclassified into profit or loss.
2. Changes in the fair value of investments in other debt - -
obligations
3. Other comprehensive income arising from the reclassification - -
of financial assets
4.Allowance for credit impairments in investments in other debt - -
obligations
5. Reserve for cash flow hedges - -
9
6.Translation differences in currency financial statements 151,869.82 (199,063.73)
7.Other - -
VI. Total comprehensive income 16,731,288.84 34,042,284.85
5. Consolidated Cash flow statement
In RMB
Note Year 2022 Year 2021
I.Cash flows from operating activities
Cash received from sales of goods or rending of services 3,046,091,280.79 2,335,256,168.54
Tax returned 113,982,534.22 9,423,408.29
Other cash received from business operation (VII)54(1) 218,296,299.96 88,625,329.53
Sub-total of cash inflow 3,378,370,114.97 2,433,304,906.36
Cash paid for purchasing of merchandise and services 2,453,492,479.82 1,860,349,920.78
Cash paid to staffs or paid for staffs 253,460,171.00 250,216,599.00
Taxes paid 59,230,421.14 101,786,653.96
Other cash paid for business activities (VII)54(2) 121,948,492.41 225,388,712.97
Sub-total of cash outflow from business activities 2,888,131,564.37 2,437,741,886.71
Net cash generated from /used in operating activities (VII)55(1) 490,238,550.60 (4,436,980.35)
II. Cash flow generated by investing
Cash received from investment retrieving 28,500,000.00 10,817,803.07
Cash received as investment gains 18,075,712.72 14,881,941.03
Net cash retrieved from disposal of fixed assets, intangible assets,
101,301.53 83,520.00
and other long-term assets
Net cash received from disposal of subsidiaries or other
- -
operational units
Other investment-related cash received (VII)54(3) 1,316,000,000.00 1,128,309,484.61
Sub-total of cash inflow due to investment activities 1,362,677,014.25 1,154,092,748.71
Cash paid for construction of fixed assets, intangible assets
123,210,891.17 447,622,193.08
and other long-term assets
Cash paid as investment 1.00 -
Net cash received from subsidiaries and other operational
- -
units
Other cash paid for investment activities (VII)54(4) 1,140,433,371.49 965,000,000.00
Sub-total of cash outflow due to investment activities 1,263,644,263.66 1,412,622,193.08
Net cash flow generated by investment 99,032,750.59 (258,529,444.37)
III.Cash flow generated by financing
Cash received as investment - -
Including: Cash received as investment from minor shareholders - -
Cash received as loans 73,230,492.79 339,219,000.00
Other financing –related cash received - -
Sub-total of cash inflow from financing activities 73,230,492.79 339,219,000.00
Cash to repay debts 26,642,157.50 -
Cash paid as dividend, profit, or interests 56,596,142.54 38,306,691.13
Including: Dividend and profit paid by subsidiaries to minor
- -
shareholders
Other cash paid for financing activities (VII)54(5) 9,144,572.43 12,638,273.00
Sub-total of cash outflow due to financing activities 92,382,872.47 50,944,964.13
Net cash flow generated by financing (19,152,379.68) 288,274,035.87
IV. Influence of exchange rate alternation on cash and cash
1,947,479.23 (1,236,414.38)
equivalents
V.Net increase of cash and cash equivalents 572,066,400.74 24,071,196.77
Add: balance of cash and cash equivalents at the beginning of
(VII)55(2) 302,408,433.72 278,337,236.95
term
VI ..Balance of cash and cash equivalents at the end of term (VII)55(2) 874,474,834.46 302,408,433.72
6. Cash Flow Statement of the Parent Company
In RMB
Note Year 2022 Year 2021
I.Cash flows from operating activities
10
Cash received from sales of goods or rending of services 49,647,323.90 66,467,384.64
Tax returned 600,618.94 -
Other cash received from business operation (VII)、54(1) 7,065,800.34 42,417,781.16
Sub-total of cash inflow 57,313,743.18 108,885,165.80
Cash paid for purchasing of merchandise and services 2,458,133.73 13,344,258.31
Cash paid to staffs or paid for staffs 33,850,730.29 34,360,990.56
Taxes paid 6,260,647.31 23,084,768.18
Other cash paid for business activities (VII)、54(2) 5,334,787.37 10,293,028.68
Sub-total of cash outflow from business activities 47,904,298.70 81,083,045.73
Net cash generated from /used in operating activities (VII)、55(1) 9,409,444.48 27,802,120.07
II. Cash flow generated by investing
Cash received from investment retrieving - 10,817,803.07
Cash received as investment gains 17,348,361.22 11,479,752.94
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 investment-related cash received (VII)、54(3) 1,316,000,000.00 466,820,636.28
Sub-total of cash inflow due to investment activities 1,333,348,361.22 489,118,192.29
Cash paid for construction of fixed assets, intangible assets and
2,586,581.13 2,247,719.06
other long-term assets
Cash paid as investment 1.00 -
Net cash received from subsidiaries and other operational units - -
Other cash paid for investment activities (VII)、54(4) 1,134,754,229.41 475,000,000.00
Sub-total of cash outflow due to investment activities 1,137,340,811.54 477,247,719.06
Net cash flow generated by investment 196,007,549.68 11,870,473.23
III. Cash flow generated by financing
Cash received as investment - -
Cash received as loans - -
Other financing –related ash received - -
Sub-total of cash inflow from financing activities - -
Cash to repay debts - -
Cash paid as dividend, profit, or interests 25,332,693.78 15,176,281.23
Other cash paid for financing activities - 7,820,298.30
Sub-total of cash outflow due to financing activities 25,332,693.78 22,996,579.53
Net cash flow generated by financing (VII)、54(5) (25,332,693.78) (22,996,579.53)
IV. Influence of exchange rate alternation on cash and cash 1,886.83
-
equivalents
V.Net increase of cash and cash equivalents 180,086,187.21 16,676,013.77
Add: balance of cash and cash equivalents at the beginning of 130,236,340.98
113,560,327.21
term
VI ..Balance of cash and cash equivalents at the end of term 310,322,528.19 130,236,340.98
11
7. Consolidated Statement on Change in Owners’ Equity
Amount in this period
In RMB
Year 2022
Owner’s equity Attributable to the Parent Company
Minor
Items Other Total of owners’
shareholders’
Share Capital Capital reserves Comprehensive Surplus reserves Retained profit equity
equity
Income
I .Balance at the end of last year 506,521,849.00 1,961,599,824.63 119,682,119.05 98,245,845.47 125,317,336.31 1,143,414,080.23 3,954,781,054.69
Add: Change of accounting policy - - - - - - -
Correcting of previous errors - - - - - - -
Merger of entities under common control - - - - - - -
Other - - - - - - -
II. Balance at the beginning of current year 506,521,849.00 1,961,599,824.63 119,682,119.05 98,245,845.47 125,317,336.31 1,143,414,080.23 3,954,781,054.69
III .Changed in the current year - - (10,085,509.74) 2,663,815.85 45,319,274.64 38,363,689.98 76,261,270.73
（1）Total comprehensive income - - (10,085,509.74) - 73,309,182.94 38,363,689.98 101,587,363.18
（II）Investment or decreasing of capital by - - - - - - -
owners
1．Ordinary Shares invested by shareholders - - - - - - -
2．Amount of shares paid and accounted as - - - - - - -
owners’ equity
3．Other - - - - - - -
（III）Profit allotment - - - 2,663,815.85 (27,989,908.30) - (25,326,092.45)
1.Providing of surplus reserves - - - 2,663,815.85 (2,663,815.85) - -
2．Allotment to the owners (or shareholders) - - - - (25,326,092.45) - (25,326,092.45)
3．Other - - - - - - -
(IV) 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 comprehensive income carry-over - - - - - - -
retained earnings
5．Other - - - - - - -
(V). Special reserves - - - - - - -
1. Provided this year - - - - - - -
2．Used this term - - - - - - -
（VI）Other - - - - - - -
IV. Balance at the end of this term 506,521,849.00 1,961,599,824.63 109,596,609.31 100,909,661.32 170,636,610.95 1,181,777,770.21 4,031,042,325.42
12
Amount in last year
In RMB
Year 2021
Owner’s equity Attributable to the Parent Company
Minor Total of
Items Other
Capital Less: Shares Surplus Retained shareholders’ owners’
Share Capital Comprehensiv
reserves in stock reserves profit equity equity
e Income
507,772,279.0 1,967,514,358 7,525,438.2 116,605,932.4 94,954,652. 1,133,081,075 3,899,315,249
I .Balance at the end of last year 86,912,390.50
0 .53 0 2 14 .23 .62
Add: Change of accounting policy - - - - - - - -
Correcting of previous errors - - - - - - - -
Merger of entities under common control - - - - - - - -
Other - - - - - - - -
507,772,279.0 1,967,514,358 7,525,438.2 116,605,932.4 94,954,652. 1,133,081,075 3,899,315,249
II. Balance at the beginning of current year 86,912,390.50
0 .53 0 2 14 .23 .62
(1,250,430.00 (5,914,533.90 (7,525,438.2 3,291,193.3
III .Changed in the current year 3,076,186.63 38,404,945.81 10,333,005.00 55,465,805.07
) ) 0) 3
（1）Total comprehensive income - - - 4,234,512.42 - 55,733,468.82 10,333,005.00 70,300,986.24
(1,250,430.00 (5,914,533.90 (7,525,438.2 - -
（II）Investment or decreasing of capital by owners - - 360,474.30
) ) 0)
1．Ordinary Shares invested by shareholders - - - - - - - -
2．Amount of shares paid and accounted as owners’ - - - - - - - -
equity
(1,250,430.00 (5,914,533.90 (7,525,438.2 - - - -
3．Other 360,474.30
) ) 0)
- - - - 3,175,360.7 (18,371,016.2 - (15,195,655.4
（III）Profit allotment
5 2) 7)
- - - - 3,175,360.7 (3,175,360.75 - -
1.Providing of surplus reserves
5 )
- - - - - (15,195,655.4 - (15,195,655.4
2．Allotment to the owners (or shareholders)
7) 7)
3．Other - - - - - - - -
(1,158,325.79 - -
(IV) Internal transferring of owners’ equity - - - 115,832.58 1,042,493.21
)
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 comprehensive income carry-over retained - - - (1,158,325.79 - -
115,832.58 1,042,493.21
earnings )
13
5．Other - - - - - - - -
(V). Special reserves - - - - - - - -
1. Provided this year - - - - - - - -
2．Used this term - - - - - - - -
（VI）Other - - - - - - - -
506,521,849.0 1,961,599,824 119,682,119.0 98,245,845. 125,317,336.3 1,143,414,080 3,954,781,054
IV. Balance at the end of this term -
0 .63 5 47 1 .23 .69
8.Statement of change in owner’s Equity of the Parent Company
Amount in this period
In RMB
Year 2022
Other
Items Total of owners’
Share Capital Capital reserves Comprehensive Surplus reserves Retained profit
equity
Income
I.Balance at the end of last year 506,521,849.00 1,577,392,975.96 108,762,538.39 98,245,845.47 690,879,118.40 2,981,802,327.22
Add: Change of accounting policy - - - - - -
Correcting of previous errors - - - - - -
Other - - - - - -
II. Balance at the beginning of current year 506,521,849.00 1,577,392,975.96 108,762,538.39 98,245,845.47 690,879,118.40 2,981,802,327.22
III .Changed in the current year - - (9,906,869.64) 2,663,815.85 (1,351,749.82) (8,594,803.61)
（I）Total comprehensive income - - (9,906,869.64) - 26,638,158.48 16,731,288.84
(II) Investment or decreasing of capital by owners - - - - - -
1．Ordinary Shares invested by shareholders - - - - - -
2.Amount of shares paid and accounted as owners’ equity - - - - - -
3．Other - - - - - -
（III）Profit allotment - - - 2,663,815.85 (27,989,908.30) (25,326,092.45)
1.Providing of surplus reserves - - - 2,663,815.85 (2,663,815.85) -
2．Allotment to the owners (or shareholders) - - - - (25,326,092.45) (25,326,092.45)
3．Other - - - - - -
(IV) 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 comprehensive income carry-over retained earnings - - - - - -
5．Other - - - - - -
14
(V) Special reserves - - - - - -
1. Provided this year - - - - - -
2．Used this term - - - - - -
（VI）Other - - - - - -
IV. Balance at the end of this term 506,521,849.00 1,577,392,975.96 98,855,668.75 100,909,661.32 689,527,368.58 2,973,207,523.61
Amount in last year
In RMB
Year 2021
Other
Items Less: Shares in Surplus Total of owners’
Share Capital Capital reserves Comprehensive Retained profit
stock reserves equity
Income
I.Balance at the end of last year 507,772,279.00 1,583,307,509.86 7,525,438.20 107,632,186.85 94,954,652.14 676,454,033.89 2,962,595,223.54
Add: Change of accounting policy - - - - - - -
Correcting of previous errors - - - - - - -
Other - - - - - - -
II. Balance at the beginning of current year 507,772,279.00 1,583,307,509.86 7,525,438.20 107,632,186.85 94,954,652.14 676,454,033.89 2,962,595,223.54
III .Changed in the current year (1,250,430.00) (5,914,533.90) (7,525,438.20) 1,130,351.54 3,291,193.33 14,425,084.51 19,207,103.68
（I）Total comprehensive income - - - 2,288,677.33 - 31,753,607.52 34,042,284.85
(II) Investment or decreasing of capital by owners (1,250,430.00) (5,914,533.90) (7,525,438.20) - - - 360,474.30
1．Ordinary Shares invested by shareholder - - - - - - -
s
2.Amount of shares paid and accounted as owners’ - - - - - - -
equity
3．Other (1,250,430.00) (5,914,533.90) (7,525,438.20) - - - 360,474.30
（III）Profit allotment - - - - 3,175,360.75 (18,371,016.22) (15,195,655.47)
1.Providing of surplus reserves - - - - 3,175,360.75 (3,175,360.75) -
2．Allotment to the owners (or shareholders) - - - - - (15,195,655.47) (15,195,655.47)
3．Other - - - - - - -
(IV) Internal transferring of owners’ equity - - - (1,158,325.79) 115,832.58 1,042,493.21 -
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 comprehensive income carry-over retained - - - -
(1,158,325.79) 115,832.58 1,042,493.21
earnings
5．Other - - - - - -
15
(V) Special reserves - - - - - - -
1. Provided this year - - - - - - -
2．Used this term - - - - - - -
（VI）Other - - - - - - -
IV. Balance at the end of this term 506,521,849.00 1,577,392,975.96 - 108,762,538.39 98,245,845.47 690,879,118.40 2,981,802,327.22
16
III. Basic Information of the Company
1.Company overview
Shenzhen Textile (Holdings) Co., Ltd (hereinafter referred to as "the Company") is a company limited by sharesregistered in Guangdong
Province, formerly known as Shenzhen Textile Industry Company and established in 1984. The Company was listed on the Shenzhen Stock
Exchange in August 1994. The Company publicly issued RMB ordinary shares (A shares) and domestic listed foreign capital shares (B shares)
to the domestic and foreign public respectively and listed them for trading.
Headquartered in Shenzhen, Guangdong Province, the main business of the Company and its subsidiaries (hereinafter referred to as "the
Group") includes the research and development, production and marketing of polarizers for liquid crystal display, as well as property
management business mainly located in the prosperous commercial area of Shenzhen and textile and garment business.
2. Scope of consolidated financial statement
The financial statements have been authorized for issuance of Board of Directors of the Company on April 1,2023.
Details of the scope of the consolidated financial statement for the year are set out in the Note (IX) "Interests in other entities". Changes
in the scope of the consolidated financial statement for the year are set out in Note (VIII), "Changes in the Scope of Consolidation".
IV. Basis for the preparation of the financial report
（1）Basis for the preparation
The Group implements the accounting standards for enterprises and related regulations promulgated by the Ministry of Finance. In
addition, the Group also discloses relevant financial information in accordance with the No. 15 Compilation Rules for Disclosure of
Information by Companies ofIssuing Securities to the Public-General Provisions for Financial Reporting (2014 Revision).
(2) Continuous operation
The Group evaluated its ability to continue as a going concern for the 12 months from 31 December 2022 and found no matters or
circumstances that raised significant doubts about its ability to continue as a going concern. Accordingly, the present financial reporthas been
prepared on the basis of going concern assumptions.
(3) Bookkeeping basis and pricing principle
The Group's accounting is based on the accrual basis. Except for certain financial instruments-which are measured at fair value, the
financial reportusesthe historical cost as the measurement basis. If the asset is impaired, the corresponding impairment provision will be made
in accordance with the relevant regulations.
Under historical cost measurement, an asset is measured at the fair value of the amount of cash or cash equivalents paid or the
consideration paidat the time of acquisition. Liabilities are measured by the amount of money or assets actually received as a result of the
present obligation is assumed, or the contractual amount of the present obligation is incurred, or the amount of cash or cash equivalents
expected to be paid in the ordinary course of life to repay the liability.
Fair value is the price that market participants shall have to receive for the sale of an asset or shall to pay for a transfer of a liability in an
orderly transaction that occurs on the measurement date. Whether the fair value is observable or estimated using valuation techniques, the fair
value measured and disclosed in this financial report is determined on that basis.
For financial assets that use the transaction price as the fair value at the time of initial recognition, and a valuation technique involving
unobservable inputs is used in subsequent measures of fair value, the valuation technique is corrected during the valuation process so that the
initial recognition result determined by the valuation technique is equal to the transaction price.
Fair value measurement is divided into three levels as to the observability of fair value inputs, and the importance of such inputs to fair
value measurement as a value inputs, and the importance of such inputs to fair value measurement as a whole:
The first level of input is the unadjusted quotation of the same asset or liability in an active market that can be obtained at the measurement
date.
The second-level input value is the input value that is directly or indirectly observable for the underlying asset or liability in addition to
the first-level input.
The third level input value is the unobservable input value of the underlying asset or liability.
V. Important accounting policies and accounting estimates
Specific accounting policies and accounting estimatestips:
According to the characteristics of its own production and operation, the Company determines the depreciation of fixed assets,
amortization of intangible assets and revenue recognition policies, and the specific accounting policies are shown in notes (V)15, (V) 18 and
(V) 25.
1.Statement of compliance with accounting standards for business enterprises
The financial report prepared by the Company complies with the requirements of the Accounting Standards for Business Enterprises and
truly and completely reflects the consolidated and parent financial position of the Company as of December 31, 2022 and the consolidated and
parent operating results, the consolidated and parent shareholders' equity changes and the consolidated and parent cash flows for 2022.
2. Accounting period
The Group's fiscal year is the Gregorian calendar year, i.e. from January 1 to December 31 of each year.
Business cycle
The business cycle is the period from the time an enterprise purchases an asset for processing to the realization of cash or cash equivalents.
The Company's business cycle is 12 months.
3.Business cycle
The business cycle is the period from the time an enterprise purchases an asset for processing to the realization of cash or cash equivalents.
The Company's business cycle is 12 months.
4. The base currency of account
RMB is the currency in the main economic environment in which the Company and its domestic subsidiaries operate, and the Company
and its domestic subsidiaries use RMB as the base accounting currency. The overseas subsidiaries of the Company determine RMB as their
base accounting currency according to the currency of the main economic environment in which they operate. The currency used by the
Company in the preparation of this financial report is RMB.
5. Accounting treatment of business combinations under the common control and under non-common control
Business combinations are divided into business combinations under common control and business combinations under non-common
control.
5.1 Business combinations under common control
The enterprises participating in the merger are ultimately controlled by the same party or multiple parties before and after the merger, and
the control is not temporary, therefore it is a business combination under the common control.
Assets and liabilities acquired in a business combination are measured at their carrying value on the consolidated party at the date of
consolidation. The difference between the carrying amount of net assets acquired by the merging party and the carrying amount of the merger
consideration paid is adjusted for the equity premium in the capital reserve or for retained earnings if the equity premium is insufficient to be
offset.
Direct carrying value on the consolidated party at the date of consolidation. The difference between the carrying amount of net assets
acquired by the merging party and the carrying amount of the merger consideration paid is adjusted for the equity premium in the capital
reserve or for retained earnings if the equity premium is insufficient to be offset.
Direct expenses incurred in connection with the business combination are recognized in profit or loss for the period when incurred.
5.2 Business combinations and goodwill under non-common control
The enterprises participating in a merger are not ultimately controlled by the same party or multiple parties before and after the merger,
therefore it is a business combination under non-common control.
Consolidation cost is the fair value of assets paid, liabilities incurred or assumed and equity instruments issued to gain control of the
acquired partyby the purchaser. Intermediary fees such as auditing, legal services, valuation consulting and other related management expenses
incurred by the purchaser for the business combination are recognized in the profit or loss of the period when incurred.
The identifiable assets, liabilities and contingent liabilities of the acquiree that are eligible for recognition acquired by the purchaser in
the merger are measured at fair value at the date of purchase.
The cost of the merger is greater than the difference in the fair value share of the acquiree's identifiable net assets acquired in the merger,
which is recognized as goodwill as an asset and initially measured at cost. If the cost of the merger is less than the fair value share of the
acquiree's identifiable net assets acquired in the merger, the fair value of the acquired acquiree's identifiable assets, liabilities and contingent
liabilities and the measurement of the cost of the merger are first reviewed, and if the consolidated cost after review is still less than the fair
value share of the acquiree's identifiable net assets share acquired in the merger, which shall be included in profit or loss for the periodoccurred.
Goodwill resulting from business combinations is presented separately in the consolidated financial statement and measured at cost less
accumulated impairment provisions.
6. Methodology for the preparation of consolidated financial statement
The consolidation scope of the consolidated financial statements is determined on the basis of control. Control refers to the investor
having the power over the invested party, enjoying variable returns through participating in the relevant activities of the invested party, and
having the ability to use the power over the invested party to affect its return amount. Once changes in relevant facts and circumstances lead
to changes in the relevant elements involved in the above control definition, the company will conduct a reassessment.
The merger of a subsidiary begins when the company obtains control of the subsidiary and ends when the company loses control of the
subsidiary.
For subsidiaries disposed of by the Company, the operating results and cash flows prior to the disposal date (the date of loss of control)
have been appropriately included in the consolidated income statement and consolidated cash flow statement.
For subsidiaries obtained through business combinations not under the same control, their operating results and cash flows since the
acquisition date (the date of obtaining control) have been appropriately included in the consolidated income statement and the consolidated
cash flow statement.
For subsidiaries obtained through business combinations under the same control, regardless of whether the business combination occurs
at any point in the reporting period, it is deemed that the subsidiary is included in the consolidation scope of the company from the date it is
under the control of the ultimate controller. Its operating results and cash flows since the beginning of the earliest period in the reporting period
have been appropriately included in the consolidated income statement and consolidated cash flow statement.
The main accounting policies and accounting periods adopted by subsidiaries are determined in accordance with the accounting policies
and accounting periods uniformly stipulated by the company.
The impact of internal transactions between the Company and its subsidiaries and between subsidiaries on the consolidated financial
statements is offset during consolidation.
The shares in the owner's equity of subsidiaries that do not belong to the parent company are treated as minority shareholders' equity and
are listed as "minority shareholders' equity" under the shareholder's equity item in the consolidated balance sheet. The share of minority
shareholders' equity in the current net profit and loss of a subsidiary is listed as "minority shareholders' profit and loss" under the net profit
item in the consolidated income statement.
"If the losses of a subsidiary shared by minority shareholders exceed the minority shareholders' share in the initial owner's equity of the
subsidiary, the balance is still offset against the minority shareholders' equity.".
Transactions that purchase minority equity in a subsidiary or dispose of partial equity investments without losing control over the
subsidiary are accounted for as equity transactions, and the book values of owner's equity and minority shareholders' equity attributable to the
parent company are adjusted to reflect changes in their relevant rights and interests in the subsidiary. The difference between the adjusted
amount of minority shareholders' equity and the fair value of the consideration paid/received is adjusted to the capital reserve. If the capital
reserve is insufficient to offset, the retained earnings are adjusted.
7. Classification of joint venture arrangement classifications and accounting treatment methods for joint operations
Joint arrangements are divided into commonly-operated ventures and jointly-operated ventures, which are determined in accordance with
the rights and obligations of the joint venture parties in the joint venture arrangement by taking into account factors such as the structure, legal
form and contractual terms of the arrangement. Commonly-operated refers to a joint arrangement in which the joint venture parties enjoy the
assets related to the arrangement and bear the liabilities related to the arrangement. The jointly-operated is a joint arrangement in which the
joint venture party has rights only to the net assets of the joint arrangement.
The Group's investments in joint ventures are accounted by using the equity method, please see Note (V) 13.3.2 "Long-term equity
investments accounted by the equity method".
8. Standards for determining cash and cash equivalents
Cash refers to cash on hand and deposits that can be used to pay at any time. Cash equivalents refer to investments held by the Group for
a short period (generally within three months from the date of purchase), highly liquid, easily convertible into a known amount of cash, and
with little risk of change in value.
9.Foreign currency transactions and translation of foreign currency statements
9.1 Foreign Currency Business
Foreign currency transactions are initially recognized at an exchange rate similar to the spot exchange rate on the date of the transaction,
and the exchange rate similar to the spot rate on the date of the transaction is determined in a systematic and reasonable manner.
At the balance sheet date, foreign currency monetary items are converted into RMB using the spot exchange rate on that date, and the
exchange difference arising from the difference between the spot exchange rate on that date and the spot exchange rate at the time of initial
recognition or the day preceding the balance sheet date, except: (1) the exchange difference of foreign currency special borrowings eligible
for capitalization is capitalized during the capitalization period and included in the cost of the underlying asset; (2) The exchange difference
of hedging instruments for hedging in order to avoid foreign exchange risk is treated according to the hedge accounting method; (3) The
exchange difference results from changes in other carrying balances other than amortized cost for monetary items classified as measured at
fair value and changes in which are included in other comprehensive income, it shall be recognized as profit or loss for the period.
Where the preparation of the consolidated financial statement involves overseas operations, if there are foreign currency monetary items
that substantially constitute net investment in overseas operations, the exchange difference arising from exchange rate changes is included in
the "foreign currency statement translation difference" item included in other comprehensive income; When disposing of overseas operations,
it is included in the profit or loss of the period of disposal.
Foreign currency non-monetary items measured at historical cost are still measured at the base currency amount translated at the spot
exchange rate on the date of the transaction. Foreign currency non-monetary items measured at fair value are translated using the spot exchange
rate on the fair value determination date, and the difference between the converted base currency amount and the original accounting currency
amount is treated as a change in fair value (including exchange rate changes) and recognized as profit or loss for the period or recognized as
other comprehensive income.
9.2 Translation of Foreign Currency Financial Statements
For the purpose of preparing consolidated financial statement, foreign currency financial statements for overseas operations are converted
into RMB statements in the following manner: all assets and liabilities in the balance sheet are converted at the spot exchange rate at the
balance sheet date; Shareholders' equity items are converted at the spot exchange rate at the time of incurrence; All items in the income
statement and items reflecting the amount of profit distribution are converted at an exchange rate similar to the spot exchange rate on the date
of the transaction; The difference between the converted asset items and the total of liability items and shareholders' equity items is recognized
as other comprehensive income and included in shareholders' equity.
Foreign currency cash flows and cash flows of overseas subsidiaries are translated using exchange rates similar to the spot exchange rate
on the occurrence date of cash flow, and the impact amount of exchange rate changes on cash and cash equivalents is used as a reconciliation
item and is shown separately in the statement of cash flows as "Impact of exchange rate changes on cash and cash equivalents".
The prior-year year-end amounts and the prior-year actual are presented on the basis of the amounts converted from the prior-year
financial statement.
Where the Group losses control of overseas operations due to disposing of all the ownership interests in overseas operations or the disposal
of part of the equity investment or other reasons, the difference in the translation of the foreign currency statements in the ownership interests
attributable to the parent company related to the overseas operations shown below the items of shareholders' equity in the balance sheet shall
be transferred to the profit or loss of the period of disposal.
Where the proportion of equity interests held in overseas operations decreases due to the disposal of part of the equity investment or other
reasons without lost the control of the overseas operations, the difference in the translation of foreign currency statements related to the disposal
part of the overseas operations shall be attributed to the minority shareholders' interests and shall not be transferred to the profit or loss of the
period. Where disposing of part of the equity of an overseas operation in an associate or a joint venture, the difference in the translation of
foreign currency statements related to the overseas operation shall be transferred to the profit or loss of the period of disposal according to the
proportion of the disposal of the overseas operation.
10.Financial instruments
The Group recognizes a financial asset or financial liability when it becomes a party to a financial instrument contract.
In the case of the purchase or sale of financial assets in the usual manner, it shall recognize the assets to be received and the liabilities to
be incurred on the transaction date, or derecognize the assets sold on the transaction date.
Financial assets and financial liabilities are measured at fair value at initial recognition. For financial assets and financial liabilities
measured at fair value and changes in which are recorded in profit or loss for the period, the related transaction costs are recognized directly
in profit or loss for the period; For other categories of financial assets and financial liabilities, the related transaction costs are included in the
initial recognition amount. Where the Group initially recognizes accounts receivable that do not contain a material financing component or do
not take into account the financing component in a contract not older than one year in accordance with No. 14Accounting Standard for Business
Enterprises-Revenue (the "Revenue Standard"), the initial measurement is made at the transaction price as defined by the revenue standard.
The effective interest rate method refers to the method of calculating the amortized cost of financial assets or financial liabilities and
apportioning interest income or interest expense into each accounting period.
The effective interest rate is the interest rate used to discount the estimated future cash flows of a financial asset or financial liability over
the expected life of the financial asset to the carrying balance of the financial asset or the amortized cost of the financial liability. In determining
the effective interest rate, the expected cash flow is estimated taking into account all contractual terms of the financial asset or financial liability
(such as early repayment, rollover, call option or other similar option, etc.), without taking into account the expected credit loss.
The amortized cost of a financial asset or financial liability is the amount initially recognized less the principal repaid, plus or minus the
accumulated amortization resulting from the amortization of the difference between the initial recognition amount and the amount due date
using the effective interest rate method, and then deduct the accumulated provision for losses (for financial assets only).
10.1 Classification, recognition and measurement of financial assets
After initial recognition, the Group conducts subsequent measurements of different classes of financial assets at amortized cost, measured
at fair value and changes in which are recognized in other comprehensive income, or measured at fair value and changes in which are recorded
in profit or loss for the period.
The contractual clauses of a financial asset provide that the cash flows generated on a given date are only the payment of principal and
interest based on the outstanding principal amount, and the Group's business model is aimed for managing the financial asset is to collect
contractual cash flows, then the Group classifies the financial asset as a financial asset measured at amortized cost. Such financial assets mainly
include monetary funds, notes receivable, accounts receivable and other receivables.
The contractual terms of a financial asset provide that the cash flows generated at a particular date are only the payment of principal and
interest based on the outstanding principal amount, and the Group's business model for managing the financial asset is aimed at both the receipt
of contractual cash flows and the sale of the financial asset, then the financial asset is classified as a financial asset measured at fair value and
the change therein is recognized in other comprehensive income. Such financial assets with a maturity of more than one year from the date of
acquisition are listed as other debt investments, and if they mature within one year (inclusive) from the balance sheet date, they are shown as
non-current assets maturing within one year; Accounts receivable and notes receivable classified as measured at fair value and changes in
which are recognized in other comprehensive income at the time of acquisition are shown in receivables financing, and the other acquired with
a maturity of one year (inclusive) are shown in other current assets.
At initial recognition, the Group may irrevocably designate investments in non-tradable equity instruments other than contingent
consideration recognized in business combinations that are under non-common control as financial assets measured at fair value and changes
in which are recognized in other comprehensive income on a single financial asset basis. Such financial assets are listed as investments in
other equity instruments.
Where a financial asset meets any of the following conditions, it indicates that the Group's purpose in holding the financial asset is
transactional:
The purpose of acquiring the underlying financial asset is primarily for the purpose of the recent sale.
The underlying financial assets were part of a centrally managed portfolio of identifiable financial instruments at the time of initial
recognition and there was objective evidence of an actual pattern of short-term profits in the recent.
The underlying financial asset is a derivative instrument, except for derivatives that meet the definition of a financial guarantee contract
and derivatives that are designated as effective hedging instruments.
Financial assets measured at fair value and changes in which are recorded in profit or loss for the period include financial assets classified
as measured at fair value and changes in which are recorded in profit or loss for the period and financial assets designated as measured at fair
value and changes in which are recorded in profit or loss for the period:
Financial assets that do not qualify as financial assets measured at amortized cost and financial assets measured at fair value and changes
in which are included in other comprehensive income are classified as financial assets measured at fair value and changes in which are recorded
in profit or loss for the period.
At the time of initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Group may irrevocably
designate financial assets as financial assets measured at fair value and changes in which are recorded in profit or loss for the period.
Financial assets measured at fair value and changes in which are recorded in profit or loss for the period are shown in trading financial
assets, and financial assets with maturity of more than one year (or have an indefinite maturity) from the balance sheet date and expected to
be held for more than one year is shown as other non-current financial assets
10.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost are subsequently measured at amortized cost using the effective interest rate method, and the
gains or losses arising from impairment or derecognition are included in profit or loss for the period.
The Group recognizes interest income on financial assets measured at amortized cost in accordance with the effective interest rate method.
For financial assets purchased or derived that have incurred credit impairment, the Group determines interest income based on the amortized
cost of the financial asset and the credit-adjusted effective interest rate from the initial recognition. In addition, the Group determines interest
income based on the carrying balance of financial assets multiplied by the effective interest rate.
10.1.2 Financial assets measured at fair value and changes in which are recorded in other comprehensive income
Impairment losses or gains and interest income calculated using the effective interest rate methodrelated to financial assets classified as
measured at fair value and changes in which are included in other comprehensive income are recognized in profit or loss for the period, and
except that, changes in the fair value of such financial assets are recognized in other comprehensive income. The amount of the financial asset
recognized in profit or loss for each period is equal to the amount that is recognized in profit or loss for each period as if it had been measured
at amortized cost. When the financial asset is derecognized, the accumulated gain or loss previously recognized in other comprehensive income
is transferred from other comprehensive income and recognized in profit or loss for the period.
Changes in fair value in investments in non-traded equity instruments designated as measured at fair value and the change in which are
recognized in other comprehensive income are recognized in other comprehensive income, and when the financial asset is derecognized, the
accumulated gain or loss previously recognized in other comprehensive income is transferred from other comprehensive income to retained
earnings. During the period during which the Group holds the investment in the non-tradable equity instrument, the dividend income is
recognized and recorded in profit or loss for the period when the Group's right to receive dividends has been established, the economic benefits
associated with the dividends are likely to flow into the Group and the amount of the dividends can be reliably measured.
10.1.3 Financial assets measured at fair value and changes in which are recorded in profit or loss for the period
Financial assets measured at fair value and changes in which are recorded in profit or loss for the period are subsequently measured at
fair value, and gains or losses resulting from changes in fair value and dividends and interest income related to the financial asset are recorded
in profit or loss for the period.
10.2 Impairment of Financial Instruments
The Group performs impairment accounting and recognizes loss provisions for financial assets measured at amortized cost, financial
assets classified as measured at fair value and changes in which are recognized in other comprehensive income, and lease receivables based
on expected credit losses.
The Group measures the loss provision at an amount equivalent to the expected credit loss over the life of notes receivable and accounts
receivable formed by transactions regulated by revenue standards that do not contain a material financing element or do not take into account
the financing component of contracts not exceeding one year, as well as operating leases receivable arising from transactions regulated by No.
21Accounting Standard for Business Enterprises -Leases.
For other financial instruments, the Group assesses the change in the credit risk of the relevant financial instruments since initial
recognition at each balance sheet date, except for financial assets purchased or derived that have incurred credit impairment. If the credit risk
of the Financial Instrument has increased significantly since the initial recognition, the Group measures its loss provision by an amount
equivalent to the expected credit loss over the life of the financial instrument; If the credit risk of the financial instrument does not increase
significantly since the initial recognition, the Group measures its loss provision by an amount equivalent to the expected credit loss of the
financial instrument in the next 12 months. Increases or reversals of credit loss provisions are recognized as impairment losses or gains in
profit or loss for the period, except for financial assets classified as measured at fair value and changes in which are recognized in other
comprehensive income. For financial assets classified as measured at fair value and the change thereof is recorded in other comprehensive
income, the Group recognizes a credit loss provision in other comprehensive income and includes impairment losses or gains in profit or loss
for the period without reducing the carrying amount of the financial asset as shown in the balance sheet.
Where the Group has measured a loss provision in the preceding accounting period by an amount equivalent to the expected credit loss
over the life of the financial instrument, butthe financial instrument is no longer subject to a significant increase in credit risk since the initial
recognition at the period balance sheet date, the Group measures the loss provision for the financial instrument at the period balance sheet date
by an amount equivalent to the expected credit loss in the next 12 months, and the resulting reversal amount for loss provision is recognized
as an impairment gain in profit or loss for the period.
10.2.1 Significant increase in credit risk
Using reasonably and evidence-based forward-looking information available, the Group compares the risk of default on financial
instruments at the balance sheet date with the risk of default on the initial recognition date to determine whether the credit risk of financial
instruments has increased significantly since initial recognition.
In assessing whether credit risk has increased significantly, the Group will consider the following factors:
(1) whether the internal price indicators have changed significantly due to changes in credit risk.
(2) whether the interest rate or other terms of an existing financial instrument have changed significantly (e.g., stricter contractual terms,
additional collateral or higher yields) if the existing financial instrument is derived or issued as a new financial instrument at the balance sheet
date.
(3) whether there has been a significant change in the external market indicators of the credit risk of the same financial instrument or
similar financial instruments with the same estimated duration. These indicators include: credit spreads, credit default swap prices for
borrowers, the length and extent to which the fair value of financial assets is less than their amortized cost, and other market information
relevant to borrowers (such as changes in the price of borrowers' debt or equity instruments).
(4) whether there has been a significant change in the external credit rating of the financial instrument in fact or expectation.
(5) whether the actual or expected internal credit rating of the debtor has been downgraded.
(6) whether there has been an adverse change in business, financial or economic circumstances that is expected to result in a significant
change in the debtor's ability to meet its debt servicing obligations.
(7) whether there has been a significant change in the actual or expected operating results of the debtor.
(8) whether the credit risk of other financial instruments issued by the same debtor has increased significantly.
(9) whether there has been a significant adverse change in the regulatory, economic or technical environment in which the debtor is
located.
(10) whether there has been a significant change in the value of the collateral used as collateral for the debt or in the quality of the
guarantee or credit enhancement provided by a third party. These changes are expected to reduce the economic incentive for the debtor to
repay the loan within the term specified in the contract or affect the probability of default.
(11) whether there has been a significant change in the economic incentive expected to reduce the borrower's repayment within the term
agreed in the contract.
(12) whether there has been a change in the expectations of the loan contract, including the waiver or amendment of contractual
obligations that may result from the anticipated breach of the contract, the granting of interest-free periods, interest rate jumps, requests for
additional collateral or guarantees, or other changes to the contractual framework of financial instruments.
(13) whether there has been a significant change in the debtor's expected performance and repayment behavior.
(14) Whether the Group's credit management methods for financial instruments have changed.
Regardless of whether the credit risk has increased significantly after the above assessment, when the payment of a financial instrument
contract has been overdue for more than (inclusive) 30 days, it indicates that the credit risk of the financial instrument has increased
significantly.
At the balance sheet date, if the Group determines that a financial instrument has only a low credit risk, the Group assumes that the
credit risk of the financial instrument has not increased significantly since its initial recognition. A financial instrument is considered to have
a low credit risk if it has a low risk of default, the borrower's ability to meet its contractual cash flow obligations in the short term is strong,
and even if there are adverse changes in the economic situation and operating environment over a longer period of time that do not necessarily
reduce the borrower's performance of its contractual cash obligations.
10.2.2 Financial assets that have undergone credit impairment
Where one or more events occur in which the Group expects to adversely affect the future cash flows of a financial asset, the financial
asset becomes a financial asset that has experienced credit impairment. Evidence that credit impairment of financial assets has occurred
includes the following observable information:
significant financial difficulties of the issuer or debtor;
Breach of contract by the debtor, such as default or delay in payment of interest or principal;
The creditor gives the debtor concessions under economic or contractual considerations relating to the debtor's financial difficulties that
would not have been made under any other circumstances;
The debtor is likely to go bankrupt or undergo other financial restructuring;
The financial difficulties of the issuer or debtor that result in the disappearance of an active market for that financial asset;
Purchase or derive a financial asset at a substantial discount that reflects the fact that a credit loss has occurred.
Based on the Group's internal credit risk management, the Group considers an event of default to have occurred when the internally
advised or externally obtained information indicates that the debtor of the financial instrument cannot fully pay creditors including the Group
(without regard to any security obtained by the Group).
Notwithstanding the above assessment, if a contract payment for a financial instrument is overdue for more than 90 days(inclusive), the
Group presumes that the financial instrument has defaulted.
10.2.3 Determination of Expected Credit Loss
The Group uses an impairment matrix on a portfolio basis on notes receivable, accounts receivable and other receivables to determine
credit losses on relevant financial instruments. The Group classifies financial instruments into different groups based on common risk
characteristics. The common credit risk characteristics adopted by the Group include: type of financial instrument, credit risk rating, type of
collateral, date of initial recognition, industry in which the debtor is in, value of collateral relative to financial assets, etc.
For financial assets and lease receivables, the expected credit loss is the present value of the difference between the contractual cash
flows due to the Group and the cash flows expected to be collected.
The reflection factors of the Group's methodology for measuring expected credit losses on financial instruments include: an unbiased
probability-weighted average amount determined by evaluating a range of possible outcomes; the time value of money; reasonable and well-
founded information about past events, current conditions, and projections of future economic conditions that can be obtained at the balance
sheet date without unnecessary additional costs or efforts.
10.2.4 Write-down of Financial Assets
Where the Group no longer reasonably expects that the contractual cash flows of financial assets will be recovered in whole or in part,
the carrying balance of the financial assets will be written down directly. Such write-downs constitute derecognition of the underlying financial
assets.
10.3 Transfer of Financial Assets
Financial assets that meet one of the following conditions are derecognized: (1) the contractual right to receive cash flows from the
financial asset is terminated; (2) the financial asset has been transferred and substantially all of the risks and rewards in the ownership of the
financial asset have been transferred to the transferring party; (3) the financial asset has been transferred, and although the Group has neither
transferred nor retained substantially all of the risks and rewards in the ownership of the financial asset, it has not retained control over the
financial asset.
Where the Group neither transfers nor retains substantially all of the risks and rewards in ownership of a financial asset, and retains
control of the financial asset, it will continue to recognize the transferred financial asset to the extent that it continues to be involved in the
transferred financial asset and recognize the relevant liabilities accordingly. The Group measures the relevant liabilities as follows:
Where the transferred financial assets are measured at amortized cost, the carrying amount of the relevant liability is equal to the carrying
amount of the financial asset that continues to be involved in the transferred less the amortized cost of the rights retained by the Group (if the
Group retains the relevant rights as a result of the transfer of financial assets) plus the amortized cost of the obligations assumed by the group
(if the group has assumed the relevant obligations as a result of the transfer of financial assets), and the relevant liabilities are not designated
as financial liabilities measured at fair value and changes in which are recorded in profit or loss for the period.
Where the transferred financial assets are measured at fair value, the carrying amount of the relevant liabilities is equal to the carrying
amount of the financial assets that continue to be involved in the transferred financial assets less the fair value of the rights retained by the
Group (if the Group retains the relevant rights as a result of the transfer of financial assets) plus the fair value of the obligations assumed by
the Group (if the Group has assumed such obligations as a result of the transfer of financial assets), the fair value of such rights and obligations
is the fair value when measured on an independent basis.
If the overall transfer of financial assets satisfies the conditions for derecognition, the difference between the carrying amount of the
transferred financial assets at the derecognition date and the consideration received as a result of the transfer of the financial and the sum of
the amount corresponding to the derecognition portion of the accumulated fair value change originally included in other comprehensive income
is included in profit or loss for the period. If the Group transfers financial assets that are investments in non-traded equity instruments
designated as measured at fair value and changes in which are recognized in other comprehensive income, the accrued gains or losses
previously recognized in other comprehensive income are transferred from other comprehensive income and recorded in retained earnings.
If a partial transfer of financial assets satisfies the conditions for derecognition, the carrying amount of the financial assets as a whole
before the transfer is apportioned between the derecognized portion and the continuing recognition portion at the respective relative fair value
on the transfer date, and the difference between the sum of the amount of the consideration received in the derecognized portion and the
amount corresponding to the derecognized portion of the accumulated fair value change originally included in other comprehensive income
and the carrying amount of the derecognized portion at the derecognition date is included in profit or loss for the current period. If the Group
transfers financial assets that are investments in non-traded equity instruments designated as measured at fair value and changes in which are
recognized in other comprehensive income, the accrued gains or losses previously recognized in other comprehensive income are transferred
from other comprehensive income and recorded in retained earnings.
If the conditions for derecognition are not met for the overall transfer of financial assets, the Group continues to recognize the transferred
financial assets as a whole and recognizes the consideration received as a liability.
10.4 Classification of financial liabilities and equity instruments
The Group classifies the financial instruments or their components as financial liabilities or equity instruments at initial recognition
according to the contract terms of the financial instruments issued and their economic essence, not just in legal form, combined with the
definitions of financial liabilities and equity instruments.
10.4.1 Classification, recognition and measurement of financial liabilities
Financial liabilities are divided into financial liabilities measured at fair value and whose changes are included in current profits and
losses at initial recognition and other financial liabilities.
10.4.1.1 Financial liabilities measured at fair value and whose changes are included in the current profits and losses
Financial liabilities measured at fair value and whose changes are included in current profits and losses include transactional financial
liabilities (including derivatives belonging to financial liabilities) and financial liabilities designated as measured at fair value and whose
changes are included in current profits and losses. Except for derivative financial liabilities which are listed separately, financial liabilities
measured at fair value and whose changes are included in current profits and losses are listed as transactional financial liabilities.
Financial liabilities that meet one of the following conditions, indicate that the purpose of the Group's financial liabilities is transactional:
The purpose of undertaking relevant financial liabilities is mainly to repurchase in the near future.
The relevant financial liabilities are part of the identifiable financial instrument portfolio under centralized management at the initial
recognition, and there is objective evidence to show the actual short-term profit model in the near future.
Related financial liabilities are derivatives. Except for derivatives that meet the definition of financial guarantee contract and derivatives
that are designated as effective hedging instruments.
The Group can designate financial liabilities that meet one of the following conditions as financial liabilities measured at fair value and
whose changes are included in current profits and losses at initial recognition: (1) The designation can eliminate or significantly reduce
accounting mismatch; (2) According to the risk management or investment strategy stated in the formal written documents of the Group, the
financial liability portfolio or the portfolio of financial assets and financial liabilities are managed and evaluated on the basis of fair value, and
reported to key management personnel within the Group on this basis; (3) Qualified mixed contracts containing embedded derivatives.
Transactional financial liabilities are subsequently measured at fair value, and gains or losses caused by changes in fair value and
dividends or interest expenses related to these financial liabilities are included in current profits and losses.
For financial liabilities designated as being measured at fair value and whose changes are included in the current profits and losses, the
changes in fair value of the financial liabilities caused by changes in the Group's own credit risk are included in other comprehensive income,
and other changes in fair value are included in the current profits and losses. When the financial liabilities are derecognized, the accumulated
change of its fair value caused by the change of their own credit risk previously included in other comprehensive income is carried forward to
retained income. Dividends or interest expenses related to these financial liabilities are included in the current profits and losses. If the
accounting mismatch in profit and loss will be caused or enlarged by handling the impact of the changes in credit risk of these financial
liabilities in the above way, the Group will include all the gains or losses of the financial liabilities (including the amount affected by the
changes in credit risk) in the current profits and losses.
10.4.1.2 Other financial liabilities
Other financial liabilities, except those caused by the transfer of financial assets that do not meet the conditions for derecognition or
continue to be involved in the transferred financial assets, are classified as financial liabilities measured in amortized cost and subsequently
measured in amortized cost. The gains or losses arising from derecognition or amortization are included in the current profits and losses.
If the modification or renegotiation of the contract between the Group and the counterparty does not result in the termination of the
recognition of the financial liabilities that are subsequently measured according to amortized cost, but the cash flow of the contract changes,
the Group recalculates the book value of the financial liabilities and records the relevant gains or losses into the current profits and losses. The
recalculated book value of such financial liabilities is determined by the Group according to the present value of discounted contract cash flow
that will be renegotiated or modified according to the original actual interest rate of the financial liabilities. For all costs or expenses arising
from the modification or renegotiation of the contract, the Group adjusts the book value of the modified financial liabilities and amortizes
them within the remaining term of the modified financial liabilities.
10.4.2 Derecognition of financial liabilities
If all or part of the current obligations of financial liabilities have been discharged, the recognition of financial liabilities or part thereof
shall be terminated. If the Group (the Borrower) and the Lender will sign an agreement to replace the original financial liabilities by undertaking
new financial liabilities, and the contract terms of the new financial liabilities are substantially different from those of the original financial
liabilities, the Group will derecognize the original financial liabilities and recognize the new financial liabilities at the same time.
If all or part of the financial liabilities are derecognized, the difference between the book value of the derecognized part and the
consideration paid (including the transferred non-cash assets or the new financial liabilities undertaken) will be included in the current profits
and losses.
10.4.3 Equity instruments
Equity instruments refer to contracts that can prove that the Group has residual interests in assets after deducting all liabilities. The
issuance (including refinancing), repurchase, sale or cancellation of equity instruments by the Group are treated as changes in equity. The
Group does not recognize changes in the fair value of equity instruments. Transaction costs related to equity transactions are deducted from
equity.
The distribution of equity instrument holders by the Group is treated as profit distribution, and the stock dividends paid do not affect the
total shareholders' equity.
10.5 Offset of financial assets and financial liabilities
When the Group has the legal right to offset the recognized financial assets and financial liabilities, and this legal right is currently
enforceable, and the Group plans to settle the financial assets on a net basis or realize the financial assets and pay off the financial liabilities
at the same time, the financial assets and financial liabilities are listed in the balance sheet at the amount after offsetting each other. In addition,
financial assets and financial liabilities are listed separately in the balance sheet and do not offset each other.
11. Receivable financing
For notes receivable classified as at fair value and whose changes are included in other comprehensive income, the part with a term of
one year (including one year) from the date of acquisition is listed as receivable financing; the part with a term of more than one year from the
date of acquisition is listed as other creditor's right investment. See Note (3) 10 "Financial Instruments" for relevant accounting policies.
12. Inventory
12.1 Classification of inventory
The Group's inventory mainly includes raw materials, products in process, finished products and materials entrusted for processing.
Inventory is initially measured at cost, which includes purchasing cost, processing cost and other expenses incurred to make inventory reach
the current place and use state.
12.2 Valuation method of issued inventory
When the inventory is issued, the actual cost of the issued inventory is determined by the weighted mean method.
12.3 Determination basis of net realizable value of inventory
On the balance sheet date, inventories are measured according to the lower of cost and net realizable value. When the net realizable value
is lower than the cost, the inventory depreciation provision is withdrawn.
Net realizable value refers to the estimated selling price of inventory minus the estimated cost, estimated sales expenses and related taxes
and fees at the time of completion in daily activities. When determining the net realizable value of inventory, it is based on the conclusive
evidence obtained, and the purpose of holding inventory and the influence of events after the balance sheet date are also considered.
Inventory depreciation provision is drawn according to the difference between the cost of a single inventory item and its net realizable
value.
After the inventory depreciation provision is withdrawn, if the influencing factors of previous write-down of inventory value have
disappeared, resulting in the net realizable value of inventory being higher than its book value, it will be reversed within the original amount
of inventory depreciation provision, and the reversed amount will be included in the current profits and losses.
12.4 Inventory system
The inventory system is perpetual inventory system.
12.5 Amortization method of low-value consumables and packaging materials
Turnover materials and low-value consumables are amortized by straight-line method or one-time write-off method.
13. Long-term equity investment
13.1 Criteria for joint control and important influence
Control means that the investor has the power over the investee, enjoys variable returns by participating in the related activities of the
investee, and has the ability to influence the amount of returns by using the power over the investee. Joint control refers to the common control
of an arrangement according to the relevant agreement, and that the related activities of the arrangement must be unanimously agreed by the
participants who share the control rights before making decisions. Significant influence refers to the power to participate in decision-making
on the financial and operating policies of the investee, but it cannot control or jointly control the formulation of these policies with other parties.
When determining whether the investee can be controlled or exert significant influence, the potential voting rights factors such as convertible
corporate bonds and current executable warrants of the investee held by investors and other parties have been considered.
13.2 Determination of initial investment cost
For the long-term equity investment obtained by business merger under the same control, the initial investment cost of the long-term
equity investment shall be the share of the book value of the owners' equity of the merged party in the consolidated financial statements of the
final controlling party on the merger date. The capital reserve shall be adjusted for the difference between the initial investment cost of long-
term equity investment and the book value of cash paid, non-cash assets transferred and debts undertaken; If the capital reserve is insufficient
to be offset, the retained income shall be adjusted. If equity securities are issued as the merger consideration, the initial investment cost of
long-term equity investment shall be the share of the book value of the owners' equity of the merged party in the consolidated financial
statements of the final controlling party on the merger date, the share capital shall be the total face value of issued shares, and the capital
reserve shall be adjusted according to the difference between the initial investment cost of long-term equity investment and the total face value
of the issued shares; If the capital reserve is insufficient to be offset, the retained income shall be adjusted.
For the long-term equity investment obtained from the business merger not under the same control, the initial investment cost of the long-
term equity investment shall be the merger cost on the purchase date.
Intermediary expenses such as audit, legal services, evaluation and consultation and other related management expenses incurred by the
merging party or the purchaser for business merger are included in the current profits and losses when incurred.
Long-term equity investment obtained by other means except the long-term equity investment formed by business merger shall be initially
measured at cost. If the additional investment can exert a significant influence or implement joint control which however does not constitute
control on the investee, the long-term equity investment cost is the sum of the fair value of the original equity investment determined in
accordance with the Accounting Standards for Business Enterprises No.22-Recognition and Measurement of Financial Instruments plus the
new investment cost.
13.3 Subsequent measurement and profit and loss recognition method
13.3.1Long-term equity investment calculated by cost method
The company's financial statements use the cost method to calculate the long-term equity investment in subsidiaries. Subsidiaries refer to
the invested entities over which the Group can exercise control.
Long-term equity investment accounted by cost method is measured at the initial investment cost. Add or recover investment to adjust
the cost of long-term equity investment. The current investment income is recognized according to the cash dividend or profit declared by the
investee.
13.3.2Long-term equity investment calculated by equity method
The Group's investment in associated enterprises and joint ventures is accounted for by the equity method. An associated enterprise refers
to the investee over which the Group can exert significant influence, and a joint venture refers to a joint venture arrangement in which the
Group has rights only over the net assets of the arrangement.
When accounting by equity method, if the initial investment cost of long-term equity investment is greater than the fair value share of the
identifiable net assets of the investee, the initial investment cost of long-term equity investment will not be adjusted; If the initial investment
cost is less than the fair value share of the identifiable net assets of the investee, the difference shall be included in the current profits and
losses, and the cost of long-term equity investment shall be adjusted.
When accounting by the equity method, the investment income and other comprehensive income are recognized respectively according
to the share of the net profit and loss and other comprehensive income realized by the investee, and the book value of long-term equity
investment is adjusted; The share is calculated according to the profit or cash dividend declared by the investee, and the book value of long-
term equity investment is reduced accordingly; For other changes in the owners' equity of the investee except the net profit and loss, other
comprehensive income and profit distribution, the book value of the long-term equity investment shall be adjusted and included in the capital
reserve. When recognizing the share of the net profit and loss of the investee, the net profit of the investee shall be adjusted and recognized
based on the fair value of the identifiable assets of the investee at the time of investment. If the accounting policies and accounting periods
adopted by the investee are inconsistent with those of the Company, the financial statements of the investee shall be adjusted according to the
accounting policies and accounting periods of the Company, so as to recognize the investment income and other comprehensive income. For
the transactions between the Group and the associated enterprises and joint ventures, if the assets invested or sold do not constitute business,
the unrealized internal transaction gains and losses shall be offset by the portion belonging to the Group according to the proportion enjoyed,
and the investment gains and losses shall be recognized on this basis. However, the unrealized internal transaction losses between the Group
and the investee belong to the impairment losses of the transferred assets and shall not be offset.
When recognizing the share of the net loss of the investee, the book value of the long-term equity investment and other long-term rights
and interests that substantially constitute the net investment of the investee shall be written down to zero. In addition, if the Group is obligated
to bear additional losses to the investee, the estimated liabilities will be recognized according to the expected obligations and included in the
current investment losses. If the investee realizes the net profit in the future, the Group will resume the recognition of the income share after
the income share makes up for the unrecognized loss share.
13.4 Disposal of long-term equity investment
When disposing of long-term equity investment, the difference between its book value and the actual purchase price is included in the
current profits and losses. For the long-term equity investment accounted by the equity method, if the remaining equity after disposal is still
accounted by the equity method, other comprehensive income originally accounted by the equity method shall be accounted for on the same
basis as the direct disposal of related assets or liabilities by the investee; Owners' equity recognized by changes in other owners' equity of the
investee except net profit and loss, other comprehensive income and profit distribution shall be carried forward to current profits and losses in
proportion. If the long-term equity investment accounted for by the cost method is still accounted for by the cost method after disposal, the
other comprehensive income recognized by the equity method accounting or the recognition of financial instruments and accounting standards
before gaining control of the investee shall be accounted for on the same basis as the direct disposal of related assets or liabilities by the
investee; Changes in owners' equity other than net profit and loss, other comprehensive income and profit distribution in the net assets of the
investee recognized by using the equity method are carried forward to the current profits and losses in proportion.
If the Group loses control of the investee due to the disposal of part of its equity investment, if the remaining equity after disposal can
exercise joint control or exert significant influence on the investee in the preparation of individual financial statements, it shall be accounted
for by the equity method instead, and the remaining equity shall be treated as if it were adjusted by the equity method at the time of acquisition;
If the remaining equity after disposal cannot be jointly controlled or exert significant influence on the investee, it shall be accounted for
according to the relevant provisions of the standards for the recognition and measurement of financial instruments, and the difference between
its fair value and book value on the date of control loss shall be included in the current profits and losses. For other comprehensive income
recognized by the Group before it gains control of the investee, when it loses control of the investee, it shall be treated on the same basis as
the direct disposal of related assets or liabilities by the investee. Changes in owners' equity in the net assets of the investee, except net profit
and loss, other comprehensive income and profit distribution, shall be carried forward to current profits and losses when it loses control of the
investee. If the remaining equity after disposal is accounted by the equity method, other comprehensive income and other owners' equity will
be carried forward in proportion; If the remaining equity after disposal is changed to accounting treatment according to the recognition and
measurement standards of financial instruments, all other comprehensive income and other owners' equity will be carried forward.
If the Group loses joint control or significant influence on the investee due to the disposal of some equity investments, the remaining
equity after disposal shall be accounted for according to the recognition and measurement standards of financial instruments, and the difference
between its fair value and book value on the date of joint control loss or significant influence shall be included in the current profits and losses.
Other comprehensive income recognized by the original equity investment due to accounting by the equity method shall be accounted for on
the same basis as the direct disposal of relevant assets or liabilities by the investee when the equity method is terminated. All the owners'
equity recognized by the investee due to changes in other owners' equity except net profit and loss, other comprehensive income and profit
distribution shall be carried forward to the current investment income when the equity method is terminated.
The Group disposes of the equity investment in its subsidiaries step by step through multiple transactions until it loses control. If the
above transactions belong to a package transaction, each transaction will be treated as a transaction that disposes of the equity investment in
its subsidiaries and loses control. Before losing control, the difference between the price of each disposal and the book value of the long-term
equity investment corresponding to the disposed equity will be recognized as other comprehensive income, and then carried forward to the
current profits and losses when it loses control.
14. Investment real estate
Measurement model of investment real estate
Measurement by cost method
Depreciation or amortization method
Investment real estate refers to real estate held to earn rent or capital appreciation, or both, including rented houses and buildings.
Investment real estate is initially measured at cost. Subsequent expenditures related to investment real estate are included in the cost of
investment real estate if the economic benefits related to the asset are likely to flow in and the cost can be measured reliably. Other subsequent
expenditures are included in the current profits and losses when incurred.
The Group adopts the cost model for subsequent measurement of investment real estate, and depreciates or amortizes it according to the
policy consistent with the right to use houses, buildings or land.
When the investment real estate is disposed of, or permanently withdrawn from use, and it is not expected to obtain economic benefits
from its disposal, the recognition of the investment real estate will be terminated.
The difference between the disposal income from the sale, transfer, scrapping or damage of investment real estate after deducting its book
value and related taxes is included in the current profits and losses.
15. Fixed assets
15.1 Recognition conditions
Fixed assets refer to tangible assets held for producing goods, providing services, leasing or management, with a service life of more than
one fiscal year. Fixed assets are recognized only when the economic benefits related to them are likely to flow into the Group and their costs
can be measured reliably. Fixed assets are initially measured at cost.
Subsequent expenditures related to fixed assets shall be included in the cost of fixed assets if the economic benefits related to the fixed
assets are likely to flow in and the cost can be measured reliably, and the book value of the replaced part shall be derecognized. Other
subsequent expenditures are included in the current profits and losses when incurred.
15.2 Depreciation method
Fixed assets shall be depreciated within their service life by using the life-average method from the month following the scheduled
serviceable state. The depreciation methods, service life, estimated net salvage and annual depreciation rate of various fixed assets are as
follows:
Estimated net salvage rate Annual depreciation rate
Category Depreciation life (year)
(%) (%)
Houses and buildings 10-40 0.00-4.00 2.40-10.00
Machinery equipment 10-14 4.00 6.86-9.60
Transportation equipment 8 4.00 12.00
Electronic equipment and others 5 4.00 19.20
Estimated net salvage refers to the amount that the Group currently obtains from the disposal of fixed assets after deducting the estimated
disposal expenses, assuming that the expected service life of the fixed assets has expired and is in the expected state at the end of the service
life.
15.3 Other instructions
When the fixed assets are disposed of or it is expected that no economic benefits can be generated through the use or disposal, the fixed
assets is derecognized. The difference between the disposal income from the sale, transfer, scrapping or damage of fix assets after deducting
its book value and related taxes is included in the current profits and losses.
At least at the end of the year, the Group will review the service life, estimated net salvage and depreciation method of fixed assets, and
if there is any change, it will be treated as a change in accounting estimate.
16. Construction in progress
The construction in progress is measured according to the actual cost, which includes various project expenditures incurred during the
construction period, capitalized borrowing costs before the project reaches the scheduled serviceable state and other related expenses. No
depreciation is allowed for construction in progress. Construction in progress is carried forward to fixed assets after it reaches the scheduled
serviceable state.
17. Borrowing costs
Borrowing costs that can be directly attributed to the purchase, construction or production of assets that meet the capitalization conditions
will be capitalized when the asset expenditure has occurred, the borrowing costs have occurred, and the necessary purchase, construction or
production activities to make the assets reach the predetermined serviceable or saleable state have begun; Capitalization shall stop when the
assets that meet the capitalization conditions purchased, constructed or produced reach the predetermined serviceable state or saleable state.
The remaining borrowing costs are recognized as expenses in the current period.
18. Intangible assets
18.1 Valuation method, service life and impairment test of intangible assets
Intangible assets include land use rights, software and patent rights.
Intangible assets are initially measured at cost. Intangible assets with limited service life shall be amortized by straight-line method in
equal installments within their expected service life from the time they are available for use. Intangible assets with uncertain service life shall
not be amortized. The amortization method, service life and estimated net salvage of various intangible assets are as follows:
Estimated net salvage rate
Category Amortization method Service life (year)
(%)
Land use right Straight-line method 50 -
Software Straight-line method 5 -
Patent Straight-line method 15 -
At the end of the period, the service life and amortization method of intangible assets with limited service life shall be reviewed and
adjusted if necessary.
For the impairment test of intangible assets, please refer to Note (V) 19 "Impairment of Long-term Assets" for details.
18.2 Internal R&D expenditure
Expenditure in the research stage is included in the current profits and losses when incurred.
Expenditures in the development stage are recognized as intangible assets if they meet the following conditions at the same time.
Expenditures in the development stage that cannot meet the following conditions are included in the current profits and losses:
(1) It is technically feasible to complete the intangible assets so that they can be used or sold;
(2) Having the intention to complete the intangible assets and use or sell them;
(3) The ways in which intangible assets generate economic benefits, including the ability to prove that the products produced by using
the intangible assets exist in the market or the intangible assets themselves exist in the market, and the intangible assets will be used internally,
which can prove their usefulness;
(4) Having sufficient technical, financial and other resources to support the development of the intangible assets, and having the ability
to use or sell the intangible assets;
(5) Expenditure attributable to the development stage of the intangible assets can be reliably measured.
If it is impossible to distinguish between research stage expenditure and development stage expenditure, all the R&D expenditures
incurred shall be included in the current profits and losses. The cost of intangible assets formed by internal development activities only includes
the total expenditure from the time when the capitalization conditions are met to the time when the intangible assets reach the intended use,
and the expenditure that has been expensed into profit and loss before the capitalization conditions are met in the development process will
not be adjusted.
19. Long-term asset impairment
On each balance sheet date, the Group checks whether there are signs that long-term equity investment, investment real estate measured
by cost method, fixed assets, construction in progress, right-to-use assets and intangible assets with definite service life may be impaired. If
these assets show signs of impairment, the recoverable amount is estimated. Intangible assets with uncertain service life and intangible assets
that have not yet reached the serviceable state are tested for impairment every year, regardless of whether with signs of impairment.
Estimating the recoverable amount of an asset is based on a single asset. If it is difficult to estimate the recoverable amount of a single
asset, the recoverable amount of the asset group is determined based on the asset group to which the asset belongs. The recoverable amount is
the higher of the net amount of the fair value of the asset or asset group minus the disposal expenses or the present value of its expected future
cash flow.
If the recoverable amount of an asset is lower than its book value, the asset impairment provision shall be accrued according to the
difference and included in the current profits and losses.
Goodwill shall be tested for impairment at least at the end of each year. When testing the impairment of goodwill, it shall be conducted
in combination with the related asset group or asset group portfolio. That is, from the purchase date, the book value of goodwill is allocated to
the asset group or asset group portfolio that can benefit from the synergistic effect of business merger in a reasonable way. If the recoverable
amount of the asset group or asset group portfolio containing the allocated goodwill is lower than its book value, the corresponding impairment
loss will be recognized. The amount of impairment loss will firstly deduct the book value of goodwill allocated to the asset group or asset
group portfolio, and then deduct the book value of other assets according to the proportion of the book value of assets other than goodwill in
the asset group or asset group portfolio.
Once the above-mentioned asset impairment losses are recognized, they will not be reversed in future accounting periods.
20. Long-term deferred expenses
Long-term deferred expenses refer to the expenses that have occurred but should be borne by the current period and subsequent periods
with an amortization period of more than one year. Long-term deferred expenses shall be amortized evenly by stages during the expected
benefit period.
21. Contractual liabilities
Contractual liabilities refer to the obligation of the Group to transfer goods or services to customers for consideration received or
receivable from customers. Contract assets and liabilities under the same contract are listed on a net basis.
22. Employee Remuneration
22.1 Accounting treatment method of short-term Remuneration
During the accounting period when employees provide services for the Group, the Group recognizes the actual short-term remuneration
as a liability, and records it into the current profits and losses or related asset costs. The employee welfare expenses incurred by the Group are
included in the current profits and losses or related asset costs according to the actual amount when actually incurred. If employee welfare
expenses are non-monetary benefits, they shall be measured at fair value.
The social insurance premiums such as medical insurance premium, work injury insurance premium and maternity insurance premium
and housing provident fund paid by the Group for employees, as well as the trade union funds and employee education funds withdrawn by
the Group according to regulations, shall be calculated according to the stipulated accrual basis and accrual ratio during the accounting period
when employees provide services for the Group to determine the employee compensation amount, and recognize the corresponding liabilities,
and be included in the current profits and losses or related asset costs.
22.2 Accounting treatment of post-employment benefits
Post-employment benefits are all defined contribution plans.
During the accounting period when employees provide services for the Group, the amount payable calculated according to the set deposit
plan is recognized as a liability, and included in the current profits and losses or related asset costs.
22.3 Accounting treatment of dismissal benefits
If the Group provides dismissal benefits to employees, the employee compensation liabilities arising from the dismissal benefits shall be
recognized at the earlier of the following two dates, and included in the current profits and losses: when the Group cannot unilaterally withdraw
the dismissal benefits provided by the plan to terminate labor relations or the proposal to cut back; When the Group recognizes the costs or
expenses related to the reorganization involving the payment of dismissal benefits.
23. Estimated liabilities
When the obligation related to contingencies such as customer return are the current obligations undertaken by the Group, and the
fulfillment of this obligation is likely to lead to the outflow of economic benefits, and the amount of this obligation can be measured reliably,
it is recognized as estimated liabilities.
On the balance sheet date, considering the risk, uncertainty and time value of money related to contingencies, the estimated liabilities are
measured according to the best estimate of the expenditure required to fulfill the relevant current obligations. If the time value of money is
significant, the best estimate is determined by the discounted amount of expected future cash outflow.
24. Share-based payment
Share-based payment of the Group is a transaction that grants equity instruments or assumes liabilities determined on the basis of equity
instruments in order to obtain services provided by employees. Share-based payment of the Group is equity-settled share-based payment.
24.1 Equity-settled share-based payment
Equity-settled share-based payment granted to employees
Equity-settled share-based payment in exchange for services provided by employees is measured by the fair value of the equity
instruments granted to employees on the grant date in the Group. During the waiting period, the amount of the fair value is based on the best
estimate of the number of exercisable equity instruments, calculated by the straight-line method and included in the relevant costs or expenses,
and the capital reserve is increased accordingly.
On each balance sheet date during the waiting period, the Group makes the best estimate based on the latest subsequent information such
as changes in the number of employees with vesting rights, and corrects the number of equity instruments with estimated vesting rights. The
impact of the above estimate is included in the relevant costs or expenses of the current period, and the capital reserve is adjusted accordingly.
24.2 Accounting treatment related to implementation, modification and termination of share-based payment plan
When the Group modifies the share-based payment plan, if the modification increases the fair value of the equity instruments granted,
the increase in services obtained will be recognized accordingly; If the modification increases the number of equity instruments granted, the
fair value of the increased equity instruments will be recognized as an increase in service acquisition accordingly. The increase in the fair
value of equity instruments refers to the difference between the fair value of equity instruments before and after modification on the
modification date. If the total fair value of share-based payment is reduced or the terms and conditions of the share-based payment plan are
modified in other ways that are unfavorable to employees, the accounting treatment for the services obtained will continue, as if the change
had never occurred, unless the Group cancels part or all of the equity instruments granted.
During the waiting period, if the granted equity instruments are cancelled, the Group will accelerate the cancellation of the granted equity
instruments, and immediately include the amount to be recognized in the remaining waiting period in the current profits and losses, and at the
same time recognize the capital reserve. If employees or other parties can choose to meet the conditions of unfeasible rights but fail to meet
them within the waiting period, the Group will cancel them as the instrument for granting equity.
25.Revenue
The Company's revenue mainly comes from the following business types:
(1) Polarizer sales business;
(2) Textile sales business;
(3) Property leasing and management business;
(4) Other businesses.
When the company fulfills its contractual obligations, that is, when the customer obtains control of the relevant goods or services, revenue
is recognized based on the transaction price allocated to the performance obligation. The performance obligation refers to the commitment of
the company to transfer goods or services that can be clearly distinguished to customers in the contract. "Transaction price" refers to the
amount of consideration that the Company is expected to be entitled to receive for the transfer of goods or services to customers, but does not
include amounts received on behalf of third parties and amounts that the Company expects to return to customers.
The company evaluates the contract on the contract start date, identifies each individual performance obligation included in the contract,
and determines whether each individual performance obligation is performed within a certain period of time or at a certain point in time. If
one of the following conditions is met, it is a performance obligation performed within a certain period of time, and the company recognizes
revenue over a period of time based on the performance progress: (1) The customer obtains and consumes the economic benefits brought about
while the company performs the contract; (2) The customer can control the goods under construction during the performance of the company's
contract; (3) The goods produced during the performance of the contract by the company have irreplaceable uses, and the company has the
right to receive payments for the part of the performance that has been completed so far accumulated throughout the contract period. Otherwise,
the company recognizes revenue at the time when the customer obtains control of the relevant goods or services.
If a contract contains two or more performance obligations, the company will allocate the transaction price to each individual performance
obligation based on the relative proportion of the individual selling price of the goods or services promised by each individual performance
obligation on the contract commencement date. However, if there is conclusive evidence that the contract discount or variable consideration
is only related to one or more (but not all) performance obligations under the contract, the company will allocate the contract discount or
variable consideration to the relevant one or more performance obligations. "Individual selling price" refers to the price at which the company
separately sells goods or services to customers. If the individual selling price cannot be directly observed, the company comprehensively
considers all relevant information that can be reasonably obtained, and estimates the individual selling price using observable input values to
the maximum extent.
For sales with sales return clauses, when the customer obtains control of the relevant goods, the company recognizes revenue based on
the expected amount of consideration to be charged for transferring the goods to the customer (i.e., excluding the expected amount to be
refunded due to sales return), and recognizes liabilities based on the expected amount to be refunded due to sales return; At the same time,
based on the expected book value of the returned goods at the time of transfer, the balance after deducting the expected costs incurred in
recovering the goods (including the impairment of the value of the returned goods) is recognized as an asset. Based on the book value of the
transferred goods at the time of transfer, the net carrying cost of the above asset costs is deducted.
For sales with quality assurance clauses, if the quality assurance provides a separate service in addition to assuring the customer that the
goods or services sold meet established standards, the quality assurance constitutes a single performance obligation. Otherwise, the Company
will conduct accounting treatment for quality assurance responsibilities in accordance with the Accounting Standards for Business Enterprises
No. 13 - Contingencies.
The Company determines whether it is the primary responsible person or agent when engaging in transactions based on whether it has
control over the goods or services before transferring them to customers. If the company is able to control the goods or services before
transferring them to customers, the company is the main responsible person and recognizes revenue based on the total amount of consideration
received or receivable; Otherwise, the company acts as an agent and recognizes revenue based on the expected amount of commissions or
handling fees that it is entitled to receive. This amount is determined based on the net amount of the total amount of consideration received or
receivable minus the amount payable to other related parties.
Where the Company advances money from customers for the sale of goods or services, the money is first recognized as a liability, and
then converted into income when the relevant performance obligations are fulfilled. When the Company does not need to return the advance
payment and the customer may waive all or part of their contractual rights, if the Company expects to be entitled to receive the amount related
to the contractual rights waived by the customer, the above amount shall be recognized as income on a pro rata basis in accordance with the
mode in which the customer exercises contractual rights; Otherwise, the Company will only convert the relevant balance of the above liabilities
into revenue when the likelihood of the customer requesting fulfillment of the remaining performance obligations is extremely low.
For the accounting policies for recognizing the Company's property lease income, see Note V, 28.2.2.1, "The Company records operating
lease business as a lessor.".
26. Government subsidies
Government subsidies refer to the monetary assets and non-monetary assets obtained by the Group from the government free of charge.
Government subsidies are recognized when they can meet the conditions attached to government subsidies and can be received.
If government subsidies are monetary assets, they shall be measured according to the amount received or receivable.
26.1 Judgment basis and accounting treatment method of government subsidies related to assets
As long-term assets can be formed in the production line subsidies and equipment subsidies of the Group's government subsidies, these
government subsidies are government subsidies related to assets.
Government subsidies related to assets are recognized as deferred income, and are included in the current profits and losses in installments
according to the straight-line method within the service life of the related assets.
26.2 Judgment basis and accounting treatment method of government subsidies related to income
As the Group's government subsidies, such as industry development support funds, enterprise development support funds and tax
subsidies, cannot form long-term assets, these government subsidies are government subsidies related to income.
Government subsidies related to income, if used to compensate related costs and losses in future periods, will be recognized as deferred
income, and are included in the current profits and losses during the period when related costs or expenses are recognized; if used to compensate
the related costs and losses that have occurred, will be directly included in the current profits and losses.
Government subsidies related to the daily activities of the Group are included in other income according to the nature of economic
business. Government subsidies unrelated to the daily activities of the Group are included in non-operating income.
When the confirmed government subsidy needs to be returned, if there is a relevant deferred revenue balance, the relevant deferred income
book balance will be offset, and the excess will be included in the current profits and losses; If there is no relevant deferred income, it will be
directly included in the current profits and losses.
27. Deferred income tax assets/Deferred income tax liabilities
Income tax expenses include current income tax and deferred income tax.
27.1 Current income tax
On the balance sheet date, the current income tax liabilities (or assets) formed in the current and previous periods shall be measured by
the expected income tax payable (or refunded) calculated in accordance with the provisions of the tax law.
27.2 Deferred income tax assets and deferred income tax liabilities
For the difference between the book values of some assets and liabilities and their tax basis, and the temporary difference between the
book values of items that are not recognized as assets and liabilities but can be determined in tax basis according to the provisions of the tax
law and tax basis, the balance sheet liability method is adopted to recognize deferred income tax assets and deferred income tax liabilities.
In general, all temporary differences are recognized as related deferred income tax. However, for deductible temporary differences, the
Group recognizes related deferred income tax assets to the extent that it is likely to obtain taxable income to offset the deductible temporary
differences. In addition, for the temporary differences related to the initial recognition of goodwill and the initial recognition of assets or
liabilities arising from transactions that are neither business merger nor affect accounting profits and taxable income (or deductible losses),
the relevant deferred income tax assets or liabilities are not recognized.
For deductible losses and tax deductions that can be carried forward to future years, the corresponding deferred income tax assets are
recognized to the extent that it is likely to obtain future taxable income for deducting deductible losses and tax deductions.
The Group recognizes deferred income tax liabilities arising from taxable temporary differences related to investments in subsidiaries,
associated enterprises and joint ventures, unless the Group can control the time when the temporary differences are reversed, and the temporary
differences are unlikely to be reversed in the foreseeable future. For deductible temporary differences related to the investments of subsidiaries,
associated enterprises and joint ventures, the Group recognizes the deferred income tax assets only when the temporary differences are likely
to be reversed in the foreseeable future and the taxable income used to offset the deductible temporary differences is likely to be obtained in
the future.
On the balance sheet date, deferred income tax assets and deferred income tax liabilities shall be measured according to the applicable
tax rate during the expected recovery of related assets or settlement of related liabilities.
Except that the current income tax and deferred income tax related to transactions and events directly included in other comprehensive
income or shareholders' equity are included in other comprehensive income or shareholders' equity, and the deferred income tax arising from
business merger adjusts the book value of goodwill, the remaining current income tax and deferred income tax expenses or gains are included
in the current profits and losses.
On the balance sheet date, the book value of deferred income tax assets shall be rechecked. If it is probable that sufficient taxable income
will not be obtained in the future to offset the benefits of deferred income tax assets, the book value of deferred income tax assets shall be
written down. When sufficient taxable income is likely to be obtained, the amount written down will be reversed.
27.3 Offset of income tax
When the Group has the legal right to settle on a net basis and intends to settle on a net basis or acquire assets and pay off liabilities at
the same time, the Group's current income tax assets and current income tax liabilities are presented on an offset net basis.
When the taxpayer has the legal right to settle the current income tax assets and liabilities on a net basis, and the deferred income tax
assets and liabilities are related to the income tax levied by the same tax collection department on the same taxpayer or to different taxpayers,
but in the future, the taxpayers involved intend to settle the current income tax assets and liabilities on a net basis, or acquire assets and pay
off liabilities at the same time, the Group's deferred income tax assets and liabilities are presented on an offset net basis.
28. Lease
"Lease" refers to a contract whereby the lessor transfers the right to use an asset to the lessee for a certain period of time to obtain
consideration.
On the contract start date, the company evaluates whether the contract is a lease or includes a lease. Unless the terms and conditions of
the contract change, the company will not reassess whether the contract is a lease or includes a lease.
28.1 The Company as lessee
28.1.1 Spin-Off of Leases
"If a contract contains one or more lease and non lease parts simultaneously, the company will split the separate lease and non lease
parts and allocate the contract consideration based on the relative proportion of the sum of the individual prices of each lease part and the
individual prices of the non lease part.".
28.1.2 Right to Use Assets
Except for short-term leases, the Company recognizes the right to use assets for leases on the lease beginning date. The lease term start
date refers to the start date on which the lessor provides the leased asset for use by the company. The right to use assets are initially measured
at cost. This cost includes:
The initial measurement amount of the lease liability;
The amount of lease payments paid on or before the start date of the lease term, if there is a lease incentive, shall be deducted from the
relevant amount of the lease incentive enjoyed;
Initial direct expenses incurred by the company;
The estimated costs that the company will incur to dismantle and remove leased assets, restore the site where the leased assets are
located, or restore the leased assets to the state agreed in the lease terms.
The Company refers to the relevant depreciation provisions of the Accounting Standards for Business Enterprises No. 4 - Fixed Assets
to accrue depreciation for the right to use assets. If the company can reasonably determine that it will acquire the ownership of the leased asset
upon the expiration of the lease term, the right to use asset shall be depreciated within the remaining service life of the leased asset. If it is
impossible to reasonably determine that ownership of the leased asset can be obtained upon the expiration of the lease term, depreciation shall
be accrued during the shorter of the lease term or the remaining useful life of the leased asset.
The Company determines whether the right to use assets have been impaired in accordance with the Accounting Standards for Business
Enterprises No. 8 - Asset Impairment, and conducts accounting treatment for the identified impairment losses.
28.1.3 Lease liabilities
Except for short-term leases, the Company initially measures lease liabilities at the beginning of the lease term based on the present
value of the unpaid lease payments on that date. When calculating the present value of lease payments, the company uses the implicit interest
rate of the lease as the discount rate. If the implicit interest rate of the lease cannot be determined, the incremental borrowing rate is used as
the discount rate.
Lease payments refer to the payments made by the company to the lessor related to the right to use the leased asset during the lease
term, including:
Fixed payment amount and substantial fixed payment amount. If there is a lease incentive, the relevant amount of the lease incentive
shall be deducted;
Variable lease payments that depend on an index or ratio;
The Company reasonably determines the exercise price of the purchase option to be exercised;
The lease term reflects the amount to be paid for exercising the option to terminate the lease if the company will exercise the option to
terminate the lease;
The estimated amount payable based on the residual value of the guarantee provided by the company.
After the beginning date of the lease term, the company calculates the interest expense of the lease liability for each period of the lease
term at a fixed periodic interest rate, and includes it in the current profit and loss or related asset costs.
After the beginning date of the lease term, if the following circumstances occur, the company remeasures the lease liability and adjusts
the corresponding right to use assets. If the book value of the right to use assets has been reduced to zero, but the lease liability still needs to
be further reduced, the company will record the difference into the current profit and loss:
If the lease term changes or the evaluation result of the purchase option changes, the company remeasures the lease liability based on
the present value of the changed lease payments and the revised discount rate;
If there is a change in the expected payable amount based on the guarantee residual value or the index or proportion used to determine
the lease payment amount, the company will remeasure the lease liability based on the changed lease payment amount and the present value
calculated at the original discount rate.
28.1.4 Short Term Leases
The Company chooses not to recognize the right to use assets and lease liabilities for short-term leases of some factory buildings and
some leased warehouses. "Short term lease" refers to a lease that has a lease term of no more than 12 months and does not include a purchase
option on the beginning date of the lease term. The Company includes the lease payments for short-term leases in the current profit and loss
or related asset costs using the straight-line method during each period of the lease term.
28.1.5 Lease Changes
If a lease is changed and the following conditions are met simultaneously, the company will treat the lease change as a separate lease
for accounting purposes:
The lease change expands the scope of the lease by increasing the right to use one or more leased assets;
The increased consideration is equivalent to the individual price for the majority of the expansion of the lease scope adjusted according
to the contract situation.
"If a lease change is not accounted for as a separate lease, on the effective date of the lease change, the company will reallocate the
consideration of the changed contract, redefine the lease term, and remeasure the lease liability based on the present value of the changed lease
payment amount and the revised discount rate.".
If the lease change results in a reduction in the lease scope or the lease term, the Company shall reduce the book value of the right to
use asset accordingly, and record the relevant gains or losses from partial or complete termination of the lease into the current profit and loss.
If other lease changes result in the remeasurement of lease liabilities, the Company shall adjust the book value of the right to use assets
accordingly.
28.1.6 Policy related rent concessions
The Group chooses to adopt the simplified method in the relevant treatment regulations for rent concessions such as rent reduction and
deferred payment that are directly caused by policies and are agreed between the Group and the lessor on existing lease contracts, while
meeting the following conditions:
(1) The lease consideration after the concession is reduced or substantially unchanged compared to that before the concession;
(2) After comprehensive consideration of qualitative and quantitative factors, it is determined that there are no significant changes in
other terms and conditions of the lease.
The Company continues to calculate the interest expense of lease liabilities at the same discount rate as before the concession and record
it into the current profit and loss. It continues to accrue depreciation and other subsequent measurements on the right to use assets using the
same method as before the concession. In the event of rent reduction or exemption, the Company will treat the reduced rent as a variable lease
payment amount. When the original rent payment obligation is relieved, such as reaching a concession agreement, the relevant asset costs or
expenses will be offset by the discounted amount at the undiscounted or pre concession discount rate, and the lease liabilities will be adjusted
accordingly; If the rent is deferred, the Company shall offset the lease liabilities recognized in the previous period when actually paying the
rent.
For short-term leases that adopt simplified treatment, the company continues to include the original contract rent in the relevant asset
costs or expenses using the same method as before concession. In the event of rent reduction or exemption, the Company will treat the reduced
rent as a variable lease payment amount to offset the relevant asset costs or expenses during the reduction or exemption period; If the rent
payment is delayed, the Company will recognize the rent payable as payable during the original payment period, and offset the previously
recognized payable when the actual payment is made.
28.2 The Company as lessor
28.2.1 Spin-Off of Leases
If the contract includes both the leased and non leased parts, the company allocates the contract consideration in accordance with the
provisions of the income standards on transaction price allocation, and the basis of allocation is the separate prices of the leased and non leased
parts.
28.2.2 Classification of leases
Leases that substantially transfer almost all the risks and rewards related to the ownership of the leased asset are financial leases. Leases
other than financing leases are operating leases.
28.2.2.1 The company records operating lease business as the lessor
During each period of the lease term, the Company adopts the straight-line method to recognize the lease receipts from operating leases
as rental income. The initial direct expenses incurred by the Company in connection with operating leases are capitalized when incurred,
amortized over the lease term on the same basis as rental income recognition, and included in current profits and losses by stages.
The variable lease receipts obtained by the company related to operating leases that are not included in the lease receipts are included
in the current profit and loss when actually incurred.
28.2.3 Lease Changes
If there is a change in an operating lease, the company will treat it as a new lease for accounting purposes from the effective date of the
change. The amount of advance receipts or receivable lease receipts related to the lease before the change is considered as the amount of
receipts for the new lease.
28.2.4 Policy related rent concessions
The Group chooses to adopt the simplified method in the relevant treatment regulations for rent concessions such as rent reduction,
deferred payment, etc. that are directly caused by policies and are agreed between the lessee and the lessor on existing lease contracts, while
meeting the following conditions:
(1) The lease consideration after the concession is reduced or substantially unchanged compared to that before the concession;
(2) After comprehensive consideration of qualitative and quantitative factors, it is determined that there are no significant changes in
other terms and conditions of the lease.
For operating leases under the Company's own property lease contracts, the Company continues to recognize the original contract rent
as lease income using the same method as before the concession. In the event of rent reduction or exemption, the Company will treat the
reduced rent as a variable lease payment amount and offset the lease income during the reduction or exemption period; If the rent collection
is delayed, the Company recognizes the rent receivable during the original collection period as receivables, and offsets the previously
recognized receivables when actually received.
29. Changes in important accounting policies and accounting estimates, and correction of previous errors
29.1 Significant accounting policy changes
Accounting Standards for Business Enterprises Interpretation No. 15
On December 30, 2021, the Ministry of Finance issued "Interpretation No. 15 of the Accounting Standards for Business Enterprises"
(hereinafter referred to as "Interpretation No. 15"), which regulates the accounting treatment for the external sales of products or by-products
produced by enterprises before their fixed assets reach their intended usable state or during the research and development process.
Interpretation No. 15 stipulates that if an enterprise sells products or by-products produced before the fixed assets reach their intended usable
status or during the research and development process, it should separately account for the revenue and costs related to the trial operation
sales in accordance with the revenue standards, Accounting Standards for Business Enterprises No. 1 - Inventory, and other provisions, and
include them in the current profit and loss, The net amount of trial run sales related revenue after offsetting costs should not be used to offset
fixed asset costs or research and development expenses. At the same time, enterprises should separately disclose relevant information such
as the amount of revenue and cost related to trial run sales, specific reporting items, and important accounting estimates used to determine
the costs related to trial run sales in the notes. This provision shall come into force as of January 1, 2022. Retroactive adjustments shall be
made to trial run sales that occur between the beginning of the earliest period in which financial statements are presented and January 1,
2022.
The Company adopts the retrospective adjustment method for accounting treatment and restates the financial statements of comparable
years.
29.2 Changes in important accounting estimates
Contents and reasons of changes in Time point of
Approval procedure Remark
accounting estimates application
In order to reflect the Group's
financial position and operating
As of December 31, 2022, the
results more objectively and fairly,
change in accounting
the Group changed the accounting
It was reviewed and approved at estimates caused the
estimate of the depreciation period
the 9th meeting (interim accumulated depreciation of
of some fixed assets, changed the
meeting) of the Eighth Board of January 1, 2022 fixed assets to be accrued by
depreciation period of electronic
Directors on December 31, RMB 1,412,095.44, which
equipment and other equipment
2021. caused the net profit of this
from 8 years to 5 years, kept the
year to decrease by RMB
residual value rate unchanged, and
1,412,095.44.
changed the annual depreciation
rate from 12% to 19.2%.
29.3 Correction of previous errors
Shengbo Optoelectronics, a subsidiary of the company, found significant prior period errors in previous years this year. In accordance
with the relevant provisions of "Accounting Standards for Business Enterprises No. 28 - Changes in Accounting Policies, Accounting Estimates,
and Correction of Errors", the Company has corrected relevant errors and restated the 2021 consolidated financial statements. The relevant
corrections are as follows:
(1) Classification of current assets (liabilities) and non current assets (liabilities)
In 2021, an investment in a partnership enterprise will be included in other non current financial assets. After self examination and review,
the investment is an asset that will mature and be recovered within one year. According to the Accounting Standards for Business Enterprises
No. 30 - Presentation of Financial Statements, it will be reclassified from other non current financial assets to trading financial assets.
In 2021, the payable refunds due within one year will be included in the estimated liabilities. After self inspection and review, they will
be reclassified from the estimated liabilities to other current liabilities in accordance with the Accounting Standards for Business Enterprises
No. 30 - Presentation of Financial Statements.
In 2021, a leased property was included in fixed assets. According to the provisions of the Accounting Standards for Business Enterprises
No. 3 - Investment Real Estate, it was reclassified from fixed assets to investment real estate through self inspection and review.
(2) Raw materials in transit are not provisionally recorded
At the end of 2021, the raw materials in transit were not provisionally estimated and recorded in the account. After self inspection and
review, the inventory and accounts payable were increased in accordance with the Accounting Standards for Business Enterprises No. 1 -
Inventory.
(3) Product cost allocation for different grades of the same product
After self inspection and review, there are differences in the cost allocation of different grades of the same product by the Group. In
accordance with relevant regulations such as the Accounting Standards for Business Enterprises No. 1 - Inventories and the Enterprise Product
Cost Accounting System (Trial), the Group recalculates the cost of products of different grades of the same product, adjusts the cost of
inventory sold, and accordingly adjusts the asset impairment losses and operating costs in the 2021 consolidated financial statements.
The main effects of the above change in accounting policy and correction of prior period errors on the consolidated financial statements
for 2021 are as follows:
Unit: RMB
Change in Change in accounting
Amount of change
accounting Amount of correction policy/prior period
Financial Statement Item Name in accounting
policy/prior of prior period errors Amount after
policy
period Amount correction of errors
before correction
of errors
1、 Balance Sheet Items
(1) Assets
Financial assets held for
586,540,735.16 - 30,650,943.40 617,191,678.56
trading
Other non-current financial
30,650,943.40 - (30,650,943.40) -
assets
Inventory 667,461,447.03 - 75,940,410.71 743,401,857.74
Investment properties 106,217,779.76 - 19,034,071.67 125,251,851.43
Fixed Assets 2,424,741,252.86 (9,048,192.38) (19,034,071.67) 2,396,658,988.81
Total Assets 5,496,647,107.83 (9,048,192.38) 75,940,410.71 5,563,539,326.16
(2) Liabilities
Accounts Payable 283,643,842.23 - 75,940,410.71 359,584,252.94
Other current liabilities 27,523,903.58 - 30,741,055.00 58,264,958.58
Projected liabilities 30,741,055.00 - (30,741,055.00) -
Total liabilities 1,532,817,860.76 - 75,940,410.71 1,608,758,271.47
(3) Shareholders' Equity
Undistributed earnings 130,746,251.74 (5,428,915.43) - 125,317,336.31
Total equity attributable to
2,816,795,889.89 (5,428,915.43) - 2,811,366,974.46
owners of the parent company
Minority interests 1,147,033,357.18 (3,619,276.95) - 1,143,414,080.23
Total shareholders' equity 3,963,829,247.07 (9,048,192.38) - 3,954,781,054.69
2、Income Statement Items
Operating income 2,293,747,892.06 36,313,788.94 - 2,330,061,681.00
Operating Costs 1,908,519,413.28 45,361,981.32 (46,887,730.85) 1,906,993,663.75
Impairment gains (losses) on
(83,508,720.33) - (46,887,730.85) (130,396,451.18)
assets
Net Profit 75,114,666.20 (9,048,192.38) - 66,066,473.82
Net profit attributable to
shareholders of the parent 61,162,384.25 (5,428,915.43) - 55,733,468.82
company
Minority interests in profit
13,952,281.95 (3,619,276.95) - 10,333,005.00
or loss
VI. Taxes
1. Main tax categories and tax rates
Tax category Tax basis Tax rate
The output tax for domestic sales is
The balance after deducting the deductible input calculated according to 13%, 9%, 6%
tax from the output tax; The tax calculation and 5% of the sales amount calculated
VAT
method of "exemption, offset and refund" is according to relevant tax regulations, and
applied to sales of export products the tax rebate rate for export products is
13%
Urban maintenance and
Payable turnover tax 7%
construction tax
Business income tax Taxable amount of income 25%,20%,15%,8.25%
Surcharge for education Payable turnover tax 3%
Surcharge for local education Payable turnover tax 2%
Residual value or rental income after deducting
Property tax 30% from the original value of property at one 1.2% or12%
time
The disclosure statement if there are taxpayers with different enterprise income tax rates
Name of taxpayer Income tax rate
The Company 0.25
Shenzhen Shenfang Property Management Co., Ltd. 0.25
Shenzhen Shengjinlian Technology Co., Ltd. 0.25
Shenzhen Beauty Century Garment Co., Ltd. 20%(Note 1)
Shenzhen Lisi Industrial Co., Ltd. 20%(Note 1)
Shenzhen Shenfang Sungang Property Management Co., Ltd. 20%(Note 1)
Shenzhen Huaqiang Hotel 20%(Note 1)
Shengtou（HK）Co., Ltd. 8.25%(Note 2)
Shenzhen SAPO Photoelectric Co., Ltd. 15%(Note 3)
Note 1: See "Tax Preferences" in Notes (VI), 2 (2) for details.
Note 2: According to the Tax Ordinance of Hong Kong, Hong Kong companies applied the two-tier system of profits tax in 2018, and
the first profit of HK$ 2 million will be calculated and paid at 8.25%, and the profits generated thereafter will be calculated at 16.5%.
Note 3: See "Tax Preference" in Notes (VI), 2(1) for details.
2. Tax preference
(1) In 2019 and 2022, SAPO Photoelectric, a subsidiary of the Company, was jointly recognized as a high-tech enterprise by Shenzhen
Science and Technology Innovation Committee, Shenzhen Finance Bureau and Shenzhen Tax Service, State Taxation Administration,
respectively, with a certification period of 3 years, and the certificate numbers of GR201944205666 and GR202244204504 respectively. It
shall apply the preferential tax policies for high-tech enterprises within three years after it is recognized as a high-tech enterprise, and pay
enterprise income tax at the rate of 15% after being filed by the competent tax bureau.
(2) According to the Law of the People's Republic of China on Enterprise Income Tax issued on March 16, 2007 and its revised version,
the subsidiaries of the Company, Shenzhen Meibainian Clothing Co., Ltd., Shenzhen Huaqiang Hotel Clothing Co., Ltd., Shenzhen Lisi
Industrial Development Co., Ltd. and Shenzhen Shenfang Sungang Property Management Co., Ltd., are qualified small and low-profit
enterprises. According to the Notice on Implementing Inclusive Tax Relief Policies for Small and Micro Enterprises (CS [2019] No.13),
Announcement on Implementing Preferential Income Tax Policies for Small and Micro Enterprises and Individual Business (Announcement
No.12 of the Ministry of Finance and the State Taxation Administration in 2021) and Announcement on Further Implementing Preferential
Income Tax Policies for Small and Micro Enterprises (Announcement No.13 of the Ministry of Finance and the State Taxation Administration
in 2022), for the part of the taxable income of small and low-profit enterprises that does not exceed RMB 1 million this year, it will be included
in the taxable income at a reduced rate of 12.5%, and the enterprise income tax will be paid at a rate of 20% (2021: at a reduced rate of 12.5%
and at a tax rate of 20%); For the part of taxable income exceeding RMB 1 million but not exceeding RMB 3 million this year, it will be
included in taxable income at a reduced rate of 25%, and enterprise income tax will be paid at a rate of 20% (2021: at a reduced rate of 50%,
and a tax rate of 20%).
(3) According to the relevant provisions of the Notice of State Taxation Administration of the General Administration of Customs of the
Ministry of Finance on Supporting the Development of New Display Device Industry (CGS [2021] No.19), SAPO Photoelectric, a subsidiary
of the Company, is a manufacturer of key raw materials and components in the upstream of the new display device industry, such as color
filter films and polarizers, which are in line with the independent development plan of the domestic industry. From January 1, 2021 to
December 31, 2030, it enjoys the policy of importing self-used productive raw materials and consumables that cannot be produced in China,
and is exempt from import duties.
VII. Notes of consolidated financial statement
1.Monetary Capital
In RMB
Items Year-end balance Year-beginning balance
Cash at hand 3,980.56 792.64
RMB 3,980.56 792.64
Bank deposit( Note 1) 874,795,302.32 302,472,035.96
RMB 853,053,825.65 279,304,631.88
USD 17,490,003.77 21,657,073.19
Yen 4,200,382.59 851,136.87
HKD 51,090.31 659,194.02
Other monetary capital(Note 2)： 116,990,685.31 -
RMB 116,929,425.84 -
USD 60,972.46 -
Yen 287.01 -
Total 991,789,968.19 302,472,828.60
Including : The total amount of deposit abroad 6,009,898.07
Note 1: Bank deposits include interest on current deposits of RMB 324,448.42.
Note 2: On December 31, 2022, the Company's other monetary funds included the frozen account of RMB 1,270,758.22, and the principal
and interest of time deposit certificates due for more than three months from the date of purchase of RMB 115,719,927.09.
2. Transactional financial assets
In RMB
Balance at the end of this
Items Balance at the end of last year
year
Financial assets measured at fair value and whose changes are
319,605,448.44 617,191,678.56
included in the current profits and losses
Including: money funds and structured deposits 319,605,448.44 617,191,678.56
Partnership Investment - 30,650,943.40
Total 319,605,448.44 617,191,678.56
3. Notes receivable
(1) Notes receivable listed by category
In RMB
Balance at the end of this
Items Balance at the end of last year
year
Bank acceptance 74,619,100.26 77,296,787.26
Commercial acceptance 72,646,093.02
Total 74,619,100.26 149,942,880.28
(2) On December 31, 2022, the Group had no pledged bills receivable.
(3) On December 31, 2022, the notes receivable that have been endorsed or discounted by the Group and have not yet matured on the balance
sheet date.
In RMB
Amount to be derecognized at Amount not derecognized at the end of
Items
the end of this year this year
Bank acceptance - 48,387,401.67
(4) Classified disclosure by credit loss provision accrual method
In RMB
Balance at the end of this year Balance at the end of last year
Credit loss Credit loss
Book balance Book balance
provision provision
Accr Accr
Category Prop ual Book Prop ual
Book value
ortio prop value ortio Amoun prop
Amount Amount Amount
n ortio n t ortio
(%) n (%) n
(%) (%)
Credit loss
provision - - - - - - - - - -
accrued by item
Credit loss
provision 74,619,100. 100. 74,619,10 150,307,93 100. 365,05 149,942,88
- - 0.24
accrued by 26 00 0.26 6.02 00 5.74 0.28
portfolio
Including:
74,619,100. 100. 74,619,10 77,296,787 51.4 77,296,787.
Bank - - - -
26 00 0.26 .26 3 26
acceptance bill
Commer
73,011,148 48.5 365,05 72,646,093.
cial acceptance - - - - - 0.50
.76 7 5.74 02
bill
74,619,100. 100. 74,619,10 150,307,93 100. 365,05 149,942,88
Total - -
26 00 0.26 6.02 00 5.74 0.28
(5) Credit loss provision
In RMB
Balance at Amount of change this year
Balance at the
Category the beginning Recovery or Write-off or Other
Accrual end of this year
of this year reversal cancellation changes
Commercial acceptance 365,055.74 (365,055.74) - - 1,078,834.61
(6) On December 31, 2022, the Group had no bills receivable actually written off.
4. Account receivable
(1)Disclosure by aging
In RMB
Balance at the end of this year Balance at the end of last year
Aging Account Credit loss Proportion(% Account Credit loss
Proportion(%)
receivable provision ) receivable provision
Within 1
670,780,300.16 34,261,574.63 5 502,894,801.73 22,896,093.16 4
year
1-2 years 614,645.76 549,901.36 8 5,702.29 5,702.29 10000
2-3years - - - 676,153.40 676,153.40 10000
3 年以上 12,883,224.42 12,883,224.42 1000 12,532,199.89 12,532,199.89 10000
Total 684,278,170.34 47,694,700.41 516,108,857.31 36,110,148.74
(2) Classified disclosure by credit loss provision accrual method
Credit loss provision by item: if there is evidence that the credit risk of a single receivable is relatively high, credit loss provision shall
be accrued separately for the receivable.
Credit loss provision is made according to the portfolio of credit risk characteristics: except for receivables with credit impairment loss,
the Group uses impairment matrix to evaluate the expected credit loss of accounts receivable formed by operating income on the basis of
portfolio. According to the risk characteristics, the Group divides customers into Portfolio 1 and Portfolio 2, which respectively involve
customers with the same risk characteristics.
On December 31, 2022, the credit risk and credit loss provision of the accounts receivable of the above portfolio were as follows:
In RMB
Balance at the end of this year
Book balance Credit loss provision
Category Proportion Accrual Book value
Amount Amount
(%) proportion (%)
Credit loss provision accrued 38.06
74,770,706.00 10.93 28,457,163.32 46,313,542.68
by item
Credit loss provision accrued 3.16
609,507,464.34 89.07 19,237,537.09 590,269,927.25
by portfolio
Including: Portfolio 1 591,168,603.26 86.39 18,295,605.12 3.10 572,872,998.14
Portfolio 2 18,338,861.08 2.68 941,931.97 5.14 17,396,929.11
Total 684,278,170.34 100.00 47,694,700.41 636,583,469.93
On December 31, 2022, the credit risk and credit loss provision of the accounts receivable of Portfolio 1 were as follows:
In RMB
Balance at the end of this year
Category Expected average loss Credit loss
Book balance Book value
rate (%) provision
During the credit period 2.48 561,796,994.67 13,939,072.37 547,857,922.30
1-30 days overdue 5.77 24,107,786.48 1,390,374.05 22,717,412.43
31-60 days overdue 44.73 4,134,014.59 1,849,280.58 2,284,734.01
61-90 days overdue 96.66 387,551.54 374,622.16 12,929.38
Overdue for more than 90 days 100.00 742,255.98 742,255.98 -
Total 591,168,603.26 18,295,605.14 572,872,998.12
On December 31, 2022, the credit risk and credit loss provision of the accounts receivable of Portfolio 2 were as follows:
In RMB
Balance at the end of this year
Aging Expected average loss Credit loss
Book balance Book value
rate (%) provision
Within 1 year 5.11 18,266,674.08 934,207.96 17,332,466.12
1-2 years 10.70 72,187.00 7,724.01 64,462.99
Total 18,338,861.08 941,931.97 17,396,929.11
(3) Credit loss provision
In RMB
Expected credit loss for the whole duration
Items
Year-beginning balance 36,110,148.74
Accrual this year 11,584,551.67
Reversal this year -
Write-off this year -
Other changes -
Year-end balance 47,694,700.41
There is no important situation in which the amount of credit loss provision is recovered or reversed this year.
(4) No actual write-off of accounts receivable this year
(5) Top 5 of the closing balance of the accounts receivable collected according to the arrears party
Name Balance in year-end Proportion(%) Bad debt provision
Client 1 128,256,413.42 18.74 3,182,244.56
Client 2 77,700,212.51 11.36 2,058,523.74
Client 3 62,781,126.25 9.17 1,557,699.08
Client 4 47,899,911.28 7.00 1,188,472.59
Client 5 47,461,093.38 6.93 1,242,593.02
Total 364,098,756.84 53.21 9,229,532.99
(6) On December 31, 2022, the Group had no accounts receivable that were derecognized due to the transfer of financial assets.
5.Receivable financing
In RMB
Items Balance at the end of this year Balance at the end of last year
Commercial acceptance 54,413,796.91 21,474,101.07
On December 31, 2022, the endorsed or discounted unexpired bank acceptance bills that the Group derecognized amounted to RMB
54,995,349.12. For the bank acceptance bills of large state-owned commercial banks with high credit rating and listed national joint-stock
commercial banks, the Group believes that after the endorsement or discount of such bank acceptance bills, the related main risks and
rewards have been transferred to the counterparty, and such endorsed or discounted unexpired bank acceptance bills should be derecognized.
The Group believes that the acceptance bank credit rating of the bank acceptance bills held by it is high, with no significant credit risk,
therefore no credit loss provision has been made.
6.Prepayments
(1) List by aging analysis:
In RMB
Balance at the end of this year Balance at the end of last year
Aging
Amount Proportion % Amount Proportion %
Within 1 year 16,690,766.68 90.75 15,157,623.27 98.38
1-2 years 1,700,677.99 9.25 248,996.26 1.62
Total 18,391,444.67 100.00 15,406,619.53 100.00
On December 31, 2022, the Group had no prepayments with an age of more than one year and a significant amount.
(2) Prepayments of the top five ending balances by prepayment object
The total amount of the top five year-end balances collected by prepayment objects is RMB 13,880,315.32, accounting for 75.47% of
the total year-end balances of prepayments.
7. Other receivables
7.1 Summary of other receivables
In RMB
Balance at the end of this Balance at the end of last
Items
year year
Other receivable 10,585,975.38 140,185,750.40
7.2 Other receivables
(1) Disclosure by age
In RMB
Balance at the end of this year
Aging
Other receivables Credit loss provision Accrual proportion (%)
Within 1 year 9,677,505.85 494,588.28 5.11
1-2 years 822,689.31 88,027.76 10.70
2-3 years 329,051.11 110,862.33 33.69
Over 3 years 18,154,298.53 17,704,091.05 97.52
Total 28,983,544.80 18,397,569.42
(2) Disclosure by payment nature
In RMB
Book balance at the end Book balance at the end
Payment nature
of this year of last year
Current payment 16,330,801.03 16,402,902.33
Funds subject to freeze 6,559,327.26
Deposit and security deposit 2,801,300.29 144,954,822.31
Export rebate 1,023,715.60 1,698,919.82
Reserve funds and employee loans 580,028.97 293,128.97
Others 1,688,371.65 1,834,489.23
Total 28,983,544.80 165,184,262.66
(3) Accrual of credit loss provision
In RMB
Year-end amount
Stage Expected average loss rate
Book balance Loss provision Book value
(%)
Other receivables for
which credit loss
provision is made
63.48 28,983,544.80 18,397,569.42 10,585,975.38
according to the
combination of credit
risk characteristics
（4）Changes in credit loss provisions for other receivable：
In RMB
Stage 1 Stage 2 Stage 3
Expected credit
Expected credit Expected credit losses for the
Bad Debt Reserves Total
losses over the loss over life (no entire duration
next 12 months credit impairment) (credit impairment
occurred)
Balance as at January 1, 2022 7,795,257.07 - 17,203,255.19 24,998,512.26
Balance as at January 1, 2022in current
——Transfer to stage II (40,256.64) 40,256.64 - -
——Transfer to stage III - - - -
-- Reversal to the II stage - - - -
-- Reversal to the I stage - - - -
Provision in Current Year - 158,633.45 500,835.86 659,469.31
Reversal in Current Year (7,260,412.15) - - (7,260,412.15)
Conversion in Current Year - - - -
Write off in Current Year - - - -
Other change - - - -
Balance as at 31 Dec. 2022 7,795,257.07 - 17,203,255.19 24,998,512.26
(5) No actual write-off of other accounts receivable this year
(6) Top five companies with year-end balance of other receivables collected by the defaulting party
InRMB
Proportion of
total year-end
Year-end balance balance of other Year-end balance of
Other receivables Payment nature Aging
of other payables receivables (%) credit loss provision
Receivable
external
Total other receivables of the Within 1 year,
transactions,
top five balances on 21,866,667.23 more than 3 75.45 14,616,189.97
Funds subject to
December 31, 2022 years
freeze，export
tax rebates, etc
8. Inventories
（1）Category of Inventory
In RMB
Closing book balance Opening book balance
Provision for Provision for
Items
Book balance inventory Book value Book balance inventory Book value
impairment impairment
Raw materials 291,062,812.80 48,809,720.50 242,253,092.30 425,919,281.58 26,335,509.92 399,583,771.66
Processing
258,881,779.59 41,882,202.00 216,999,577.59 281,735,104.85 34,298,745.29 247,436,359.56
products
Semi-finished 183,723,885.96 92,381,073.63 91,342,812.33 172,832,703.08 83,668,700.77 89,164,002.31
Commissioned 7,852,166.55
9,016,668.25 1,164,501.70 7,838,404.74 620,680.53 7,217,724.21
materials
Total 742,685,146.60 184,237,497.83 558,447,648.77 888,325,494.25 144,923,636.51 743,401,857.74
Note: The book balance of polarizer inventory is RMB 721,282,838.15.
（2）Inventory falling price reserves
In RMB
Increased in current period Decreased in current period
Reversed
Items Opening balance or Closing balance
Accrual Write-off Other
collected
amount
Raw 33,104,645.59 - 10,630,435.01 - 48,809,720.50
26,335,509.92
materials
Processing 59,472,861.14 - 51,889,404.43 - 41,882,202.00
34,298,745.29
products
Semi-finished 83,668,700.77 90,584,694.67 - 81,872,321.81 - 92,381,073.63
Commissione 543,821.17 - - - 1,164,501.70
620,680.53
d materials
Total 144,923,636.51 183,706,022.57 - 144,392,161.25 - 184,237,497.83
(3) On December 31, 2022, there was no amount in the inventory balance for guarantee and no amount for capitalization of
borrowing costs.
9. Other current assets
In RMB
Balance at the end of this Balance at the end of last
Items
year year
VAT to be deducted and input tax to be certified 26,077,404.45 860,153.70
Advance payment of income tax 11,654.12 57,448.91
Receivable return cost 43,446,472.67 28,585,749.81
Total 69,535,531.24 29,503,352.42
10. Long-term equity investment
In RMB
Increase /decrease
Profits and Closing
Cash
Addi Decr losses on Withdra balance
bonus
tiona ease investment Other Change wal of of
Opening or Closing
Investees l in s compre s in impair Othe impair
balance profits balance
inves inve Recognize hensive other ment r ment
announ
tmen stme d under the income equity provisio provisi
ced to
t nt equity n on
issue
method
I. Joint ventures
Shenzhen Guanhua - - - - - 129,506,27 -
128,214,22 1,292,045.
Printing & Dyeing 1.00 - 1.76
5.54 22
Co., Ltd.
128,214,22 1,292,045. - - - - - 129,506,27 -
Subtotal 1.00 -
5.54 22 1.76
2. Affiliated
Company
Shenzhen - - 133,593.58 - - - - - 3,105,796.5 -
Changlianfa 2,972,202.9 5
Printing & dyeing 7
Company
- - (117,999.6 151,869 - - - - 1,869,767.4 -
Hongkong Yehui 5) .82 3
1,835,897.2
International Co., 6
Ltd.
4,808,100.2 - - 15,593.93 151,869 - - - - 4,975,563.9 -
Subtotal
3 .82 8
133,022,32 - 1,307,639. 151,869 - - - - 134,481,83 -
Total 1.00
5.77 15 .82 5.74
11. Other equity instruments investment
(1) Investment in other equity instruments
In RMB
Balance at the end of Balance at the end of
Items
this year last year
Financial assets designated as fair value and whose changes are included in
167,678,283.27 186,033,829.72
other comprehensive income
(2) Investment in non-transactional equity instruments
In RMB
Amount
Reasons for
transferred
Dividend Reason designated as transferring
from other
income being measured at fair from other
Cumulative comprehensive
Items recognized value and change comprehensive
gain/loss income to
this year being included in other income to
retained
comprehensive income retained income
income this
this year
year
Union Development Co., Ltd. 208,000.00 123,153,939.39 - 本公司计划长期持有 不适用
Shenzhen Dailishi Underwear
1,037,735.85 21,077,143.74 - 本公司计划长期持有 不适用
Co., Ltd.
Shenzhen South Textile Co.,
1,018,391.82 14,559,440.88 - 本公司计划长期持有 不适用
Ltd.
Shenzhen Xinfang Knitting
354,000.00 1,703,903.00 - 本公司计划长期持有 不适用
Co., Ltd.
Jintian Industry（Group）
- (14,831,681.50) - 本公司计划长期持有 不适用
Co., Ltd.
Total 2,618,127.67 145,662,745.51 -
12. Investment real estate
(1) Investment real estate adopted the cost measurement mode
√Applicable □ Not applicable
In RMB
Items House, Building
I. Original price
1. Balance at period-beginning 297,505,157.93
2.Increase in the current period 30,623,657.48
(1) Transferred from construction in progress 1,689,997.88
(2)Transferred from Fixed assets 28,933,659.60
3.Decreased amount of the period -
（1）Dispose -
（2）Other out -
4. Balance at period-end 328,128,815.41
II.Accumulated amortization
1.Opening balance 172,253,306.50
2.Increased amount of the period 29,559,674.15
(1) Withdrawal 8,861,091.64
(2)Transferred from Fixed assets 20,698,582.51
3.Decreased amount of the period -
（1）Dispose -
（2）Other out -
4. Balance at period-end 201,812,980.65
III. Impairment provision
1. Balance at period-beginning -
2.Increased amount of the period -
(1) Withdrawal -
3.Decreased amount of the period -
（1）Dispose -
4. Balance at period-end -
IV. Book value
1.Book value at period -end 126,315,834.76
2.Book value at period-beginning 125,251,851.43
（2）Investment real estate without certificate of ownership
In RMB
Items Book balance Reason
Unable to apply for warrants due to
Houses and Building 8,400,885.28
historical reasons
13. Fixed assets
In RMB
Items Year-end balance Year-beginning balance
Fixed assets 2,240,221,656.36 2,396,658,988.81
(1) List of fixed assets
In RMB
Houses & Machinery Transportation Other
Items Total
buildings equipment s equipment
I. Original price
1.Opening balance 770,999,905.53 2,541,646,415.51 15,278,991.67 50,152,759.25 3,378,078,071.96
2.Increased amount of the 643,725.43 115,612,867.39 941,176.78 1,264,484.92 118,462,254.52
period
(1) Purchase 643,725.43 38,964,186.86 384,008.63 1,049,993.67 41,041,914.59
(2) Transferred from c - 76,648,680.53 557,168.15 214,491.25 77,420,339.93
onstruction in progress
3.Decreased amount of the 28,933,659.60 1,388,155.99 345,141.19 933,732.47 31,600,689.25
period
（1）Disposal - 1,388,155.99 345,141.19 933,732.47 2,667,029.65
(2)Transferred from 28,933,659.60 - - - 28,933,659.60
Real estate investment
4. Balance at period-end 742,709,971.36 2,655,871,126.91 15,875,027.26 50,483,511.70 3,464,939,637.23
II. Accumulated depreciation
1.Opening balance 168,343,175.56 776,497,359.54 4,361,783.39 25,822,442.07 975,024,760.56
2.Increased amount of the 25,546,276.32 211,016,207.10 1,840,818.70 9,297,706.74 247,701,008.86
period
(1) Withdrawal 25,546,276.32 211,016,207.10 1,840,818.70 9,297,706.74 247,701,008.86
3.Decreased amount of the 20,698,582.51 1,310,146.73 331,335.54 896,720.41 23,236,785.19
period
（1）Disposal - 1,310,146.73 331,335.54 896,720.41 2,538,202.68
(2)Transferred from 20,698,582.51 - - - 20,698,582.51
Real estate investment
4.Closing balance 173,190,869.37 986,203,419.91 5,871,266.55 34,223,428.40 1,199,488,984.23
III. Impairment provision
1.Opening balance - 6,361,553.37 - 32,769.22 6,394,322.59
2.Increase in the reporting - 18,759,054.84 - 108,388.43 18,867,443.27
period
（1）Withdrawal - 18,759,054.84 - 108,388.43 18,867,443.27
3.Decrease in - - - 32,769.22 32,769.22
the reporting period
（1）Disposal - - - 32,769.22 32,769.22
4. Closing balance - 25,120,608.21 - 108,388.43 25,228,996.64
IV. Book value
1.Book value of the period- 569,519,101.99 1,644,547,098.79 10,003,760.71 16,151,694.87 2,240,221,656.36
end
2.Book value of the period-
602,656,729.97 1,758,787,502.60 10,917,208.28 24,297,547.96 2,396,658,988.81
begin
(2) Fixed assets without certificate of title completed
In RMB
Items Book Value Reason
Unable to apply for warrants due to
Houses and Building 11,647,880.88
historical reasons
(3) Mortgaged and secured fixed assets
As of December 31, 2022, the Group's fixed assets mortgaged by bank loans are detailed in Notes (VII), 56 "Assets with restricted
ownership or use right":
14. Construction in progress
In RMB
Items Year-end balance in this year Year-beginning balance in last year
Construction in progress 38,061,619.60 71,482,031.08
(1) List of construction in progress
In RMB
Items Year-end balance Year-beginning balance
Book balance Provision for Book value Book balance Provision for Book value
devaluation devaluation
Installation of
machines and 38,061,619.60 - 38,061,619.60 71,482,031.08 -- 71,482,031.08
equipment
15. Right to use assets
In RMB
Items Houses and Building
I. Original price
1.Opening balance 13,762,176.74
2.Increased amount of the period 15,151,871.09
(1)Newly increased 15,151,871.09
3.Decreased amount of the period -
4. Balance at period-end 28,914,047.83
II. Accumulated depreciation
1.Opening balance 4,540,987.37
2.Increased amount of the period 9,007,666.58
(1) Withdrawal 9,007,666.58
3.Decrease in the reporting period -
4.Closing balance 13,548,653.95
III. Impairment provision
1.Opening balance -
2.Increase in the reporting period -
（1）Withdrawal -
3.Decrease in the reporting period -
4. Closing balance -
IV. Book value
1.Book value of the period-end 15,365,393.88
2.Book value of the period-begin 9,221,189.37
The Group has leased a number of assets, including houses and buildings, with a lease term of 1 to 10 years. The simplified short-term
lease fee included in the current profits and losses this year is RMB 653,461.86. The total cash outflow related to leasing this year is RMB
9,798,034.29.
16. Intangible assets
(1) Information
In RMB
Items Land use right Software Patent right Total
I. Original price
1. Balance at period-beginning 48,258,239.00 21,696,241.02 11,825,200.00 81,779,680.02
2.Increase in the current period - 640,305.31 - 640,305.31
(1) Purchase - 640,305.31 - 640,305.31
3.Decreased amount of the
- - - -
period
4. Balance at period-end 48,258,239.00 22,336,546.33 11,825,200.00 82,419,985.33
II.Accumulated amortization
1. Balance at period-beginning 14,382,583.03 6,936,736.99 11,825,200.00 33,144,520.02
2. Increase in the current period 891,565.32 4,191,328.04 - 5,082,893.36
(1) Withdrawal 891,565.32 4,191,328.04 - 5,082,893.36
3.Decreased amount of the - - -
-
period
4. Balance at period-end 15,274,148.35 11,128,065.03 11,825,200.00 38,227,413.38
III. Impairment provision
1. Balance at period-beginning - - - -
2. Increase in the current period - - - -
3.Decreased amount of the
- - - -
period
4. Balance at period-end - - - -
4. Book value
1.Book value at period -end 32,984,090.65 11,208,481.30 - 44,192,571.95
2.Book value at period-beginning 33,875,655.97 14,759,504.03 - 48,635,160.00
As of December 31, 2022, the Group's intangible assets mortgaged by bank loans are detailed in Notes (VII), 56 "Assets with restricted
ownership or use right".
17. Goodwill
(1) Original book value of goodwill
In RMB
Name of the investee or matters that
Balance at the end Balance at the end
form goodwill Increase this year Decrease this year
of last year of this year
SAPO Photoelectric 9,614,758.55 - - 9,614,758.55
Shenzhen Beauty Century Garment 2,167,341.21
2,167,341.21 - -
Co., Ltd.
Total 11,782,099.76 - - 11,782,099.76
(2) Goodwill impairment provision
InRMB
Name of the investee or matters that
Balance at the end Balance at the end
form goodwill Increase this year Decrease this year
of last year of this year
SAPO Photoelectric 9,614,758.55 - - 9,614,758.55
Shenzhen Beauty Century Garment Co., 2,167,341.21
2,167,341.21 - -
Ltd.
Total 11,782,099.76 - - 11,782,099.76
18. Long-term deferred expenses
In RMB
Balance at the Increased amount Amortized Other reduction Balance at the end
Items
end of last year this year amount this year amount of this year
Decoration and
facilities renovation 5,387,295.94 902,948.37 1,819,286.52 - 4,470,957.79
fee
19. Deferred income tax assets/Deferred income tax liabilities
(1) Uncompensated deferred income tax assets
In RMB
Balance in year-end Balance in year-begin
Items Deductible Deductible
Deferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Credit loss provision 65,076,915.43 11,372,802.27 3,566,672.28 890,165.29
Asset impairment provision 206,115,717.20 30,917,357.58 2,200,110.43 550,027.61
Unrealized profit from internal
2,235,077.97 335,261.70 2,324,192.50 348,628.88
transactions
Employee compensation payable 9,397,730.55 2,143,607.14 7,679,100.00 1,919,775.00
Deferred income 116,768,810.33 17,515,321.55 - -
Deductible loss 90,052,078.73 13,397,964.96 - -
Changes in fair value of investment in
14,831,681.50 3,707,920.38 - -
other equity instruments
Total 504,478,011.71 79,390,235.58 15,770,075.21 3,708,596.78
According to the Group's profit forecast results for the future period, the Group believes that it is likely to obtain sufficient taxable
income in the future period to make use of the above deductible temporary differences and deductible losses, so relevant deferred income tax
assets are recognized.
(2)Details of the un-recognized deferred income tax liabilities
In RMB
Closing balance Opening balance
Deductible Deductible
Items Deferred income Deferred income
temporary temporary
tax liabilities tax liabilities
difference difference
The difference between the initial
recognition cost of long-term equity 62,083,693.36 15,520,923.34 62,083,693.36 15,520,923.34
investment and tax basis
Changes in fair value of investment in
160,494,427.02 40,123,606.76 178,849,973.46 44,712,493.37
other equity instruments
Rent receivable allocation difference 7,584,635.96 1,896,158.99 5,636,976.78 1,409,244.20
Total 230,162,756.34 57,540,689.09 246,570,643.60 61,642,660.91
(3) Deferred income tax assets or liabilities listed by net amount after off-set
In RMB
Trade-off Trade-off between
End balance of Opening balance of
between the the deferred
deferred income tax deferred income tax
Items deferred income income tax assets
assets or liabilities assets or liabilities
tax assets and and liabilities at
after off-set after off-set
liabilities period-begin
Deferred income tax assets (9,566,421.29) 69,823,814.29 - 3,708,596.78
Deferred income tax liabilities (9,566,421.29) 47,974,267.80 - 61,642,660.91
(4)Details of income tax assets not recognized
In RMB
Items Balance in year-end Balance in year-begin
Deductible temporary difference 5,742,636.02 151,027,647.77
Deductible loss 464,226,095.10 736,209,989.47
Total 469,968,731.12 887,237,637.24
(5)Deductible losses of the un-recognized deferred income tax asset will expire in the following years
In RMB
Year Balance in year-end
2024 79,132,962.34
2025 16,680,938.23
2026 128,597,715.91
2027 12,155,889.69
2028 22,463,907.95
2029 129,766,788.98
2030 75,427,892.00
Total 464,226,095.10
20 .Other non-current assets
In RMB
Balance in year-end Balance in year-begin
Book Vale Provision Book value Book balance Provision Book value
Items for for
devaluatio devaluation
n
Prepayment for
engineering and 16,792,930.20 16,792,930.20 28,769,782.86 28,769,782.86
equipment
Time deposit
certificate of more 30,030,410.96 30,030,410.96
than one year
Investment funds to
25,760,086.27 25,760,086.27 25,760,086.27 25,760,086.27
be liquidated
Total 42,553,016.47 42,553,016.47 84,560,280.09 84,560,280.09
21. Short-term borrowings
In RMB
Items Balance in year-end Balance in year-begin
Credit borrowing 7,000,000.00
Bill Discounting - 37,575,113.83
Total 7,000,000.00 37,575,113.83
22.Notes payable
In RMB
Items Balance in year-end Balance in year-begin
Bank acceptance Bill - 16,682,324.12
23. Accounts payable
In RMB
Items Balance in year-end Balance in year-begin
Payment for goods 304,916,368.65 327,118,334.45
Service charge 11,386,158.86 4,930,868.56
Localities 4,609,134.50 -
Subcontracting payment 3,970,214.14 1,183,793.09
Others 2,167,997.55 26,351,256.84
Total 327,049,873.70 359,584,252.94
On December 31, 2022, the Group had no significant accounts payable with an aging of more than one year.
24.Advance account
In RMB
Items Balance in year-end Balance in year-begin
Rent and other 1,393,344.99 1,805,311.57
On December 31, 2022, the Group had no significant accounts payable with an aging of more than one year.
25.Contract liabilities
In RMB
Items Balance in year-end Balance in year-begin
Goods 4,274,109.40 68,955.21
26.Payable Employee wage
(1) List of Payroll payable
In RMB
Balance in year- Increase in this Payable in this period Balance in year-
Items
begin period end
Short-term compensation 59,719,860.24 239,147,775.14 237,927,202.48 60,940,432.90
Post-
employment benefits - defined con - 16,628,824.21 16,628,824.21 -
tribution plans
Dismissal benefits - 754,873.42 528,861.42 226,012.00
Total 59,719,860.24 256,531,472.77 255,084,888.11 61,166,444.90
（2）Short-term remuneration
In RMB
Balance in year- Increase in this Decrease in this Balance in year-
Items
begin period period end
Wages, bonuses, allowances and
57,114,308.02 213,501,823.93 213,143,150.08 57,472,981.87
subsidies
Employee welfare - 8,628,459.80 8,599,274.36 29,185.44
Social insurance premiums - 4,003,804.93 4,003,804.93 -
Including：Medical insurance - 3,409,643.36 3,409,643.36 -
Maternity insurance - 250,609.98 250,609.98 -
Work injury insurance - 343,551.59 343,551.59 -
Public reserves for housing - 7,841,268.71 7,638,877.71 202,391.00
Union funds and staff education fee 2,605,552.22 5,172,417.77 4,542,095.40 3,235,874.59
Total 59,719,860.24 239,147,775.14 237,927,202.48 60,940,432.90
（3）Defined contribution plans listed
In RMB
Items Balance in year-begin Increase in this period Decrease in this period Balance in year-end
Basic old-age - 13,593,639.21 13,593,639.21 -
insurance premiums
Unemployment - 303,261.11 303,261.11 -
insurance
Annuity payment - 2,731,923.89 2,731,923.89 -
Total - 16,628,824.21 16,628,824.21 -
The Company participates in pension insurance and unemployment insurance plans established by government agencies according to
regulations, and according to the plans, the Company pays fees to these plans according to the prescribed standards. In addition to the
monthly deposit fees mentioned above, the company will no longer bear any further payment obligations. The corresponding expenses are
included in the current profit and loss or the cost of related assets when incurred.
The Company shall pay RMB 13593639.21 to the pension insurance plan and RMB 303261.11 to the unemployment insurance plan. As
of December 31, 2022, the company had fully paid the pension and unemployment insurance plan amounts payable during the reporting
period.
27.Tax Payable
In RMB
Items Balance in year-end Balance in year-begin
Enterprise Income tax 4,655,525.64 1,804,277.95
Individual Income tax 1,847,004.45 866,274.38
VAT 1,740,677.77 6,334,093.50
Other 654,104.65 195,981.26
Total 8,897,312.51 9,200,627.09
28.Other payable
(1) Other payables listed according to the payment nature
In RMB
Items Balance in year-end Balance in year-begin
Engineering equipment payment 83,337,092.31 91,213,156.89
Current payment 53,102,831.34 51,681,042.57
Deposit and security deposit 45,628,573.39 43,277,481.38
Others 15,276,958.33 15,145,740.51
Total 197,345,455.37 201,317,421.35
(2) Important other payables with an aging of more than 1 year
In RMB
Balance at the end of
Items Reasons for no payment or carry-over
this year
Beijing CEEDI Engineering & he final payment settlement of the project has not been
16,724,271.45
Technology Co., Ltd. completed
29. Non-current liabilities due within 1 year
In RMB
Items Balance at the end of this year Balance at the end of last year
Long-term loans due within one year 97,182,080.19 -
Lease liabilities due within one year 7,001,358.03 5,175,393.52
Total 104,183,438.22 5,175,393.52
30.Other current liabilities
In RMB
Balance at the end of this Balance at the end of last year
Items
year
Endorsed and unexpired acceptance bill 48,387,401.67 27,523,903.58
Return payable 44,558,340.11 30,741,055.00
Total 92,945,741.78 58,264,958.58
31. Long-term loans
(1) Classification of long-term loans
In RMB
Balance at the end of Interest rate Balance at the end of Interest rate
Items
this year interval last year interval
4
.
704,603,6 683,016,2 4.41
Guaranteed loan (note) 0
65.19 43.25 %
6
%
704,603,6 683,016,2
Subtotal
65.19 43.25
Less: Long-term loans due within 97,182,08
-
one year 0.19
Less: Long-term loans due after one 607,421,5 683,016,2
year 85.00 43.25
Note: SAPO Photoelectric, a subsidiary of the Company, mortgaged its real estate rights such as the factory building, and the Company
and Hangzhou Jinjiang Group Co., Ltd. provided 60% and 40% joint guarantee for the loan respectively.
32. Lease liabilities
In RMB
Balance at the end of this Balance at the end of last
Items
year year
Lease liabilities 15,630,030.74 9,419,249.23
Subtotal 15,630,030.74 9,419,249.23
Less: Lease liabilities due within one year 7,001,358.03 5,175,393.52
Less: Lease liabilities due within one year 8,628,672.71 4,243,855.71
33. Deferred income
In RMB
Balance at the end Balance at the end Reason
Items Increase this year Decrease this year
of last year of this year
110,461,293.15 23,754,725.00 16,401,222.05 117,814,796.10 Received the
Government
government
subsidies
subsidie
Projects involving government subsidies:
In RMB
Amount of
non-
Amount of other Othe
Amount of new operating
Year-beginning income included in r
Items subsidies this income Year-end amount Asset-related/
amount this year chan
year included in Income-related
ges
this year
Production line
67,839,305.45 23,754,725.00 - 10,607,220.14 - 80,986,810.31 Asset-related
subsidy
Equipment subsidy 36,621,987.70 - - 5,794,001.91 - 30,827,985.79 Asset-related
Material subsidy 6,000,000.00 - - - - 6,000,000.00 Income-related
Total 110,461,293.15 23,754,725.00 - 16,401,222.05 - 117,814,796.10
34.Stock capital
In RMB
Changed（+，-）
Year-beginning Capitaliza
Items Issuance of Bonus Balance in year-end
balance tion of Other Subtotal
new share shares
public
reserve
Total of capital
506,521,849.00 - - - - - 506,521,849.00
shares
35. Capital reserves
In RMB
Year-beginning balance Increase in the current Decrease in the current Year-end balance
Items
period period
Share premium 1,826,482,608.54 - - 1,826,482,608.54
Other capital reserves 135,117,216.09 - - 135,117,216.09
Total 1,961,599,824.63 - - 1,961,599,824.63
36. Other comprehensive income
In RMB
Amount of current period
Less:
Includ
ed in
other
compr
ehensi
ve
incom
e in
Year- Amount the
Amount of Amount of Year-end
Items beginning incurred previo Year-end
current current balance
balance before income us balance
period period
tax period
,
transfe
rred to
profit
or loss
in the
curren
t
period
I. Other
comprehensive
118,643,084 (18,355,546.4 (8,296,806.9 (10,058,739.4 108,584,344
income that cannot be - -
reclassified into profit .23 5) 9) 6) .77
or loss
1. Changes in fair
value of investment in 118,643,084 (18,355,546.4 (8,296,806.9 (10,058,739.4 108,584,344
- -
other equity .23 5) 9) 6) .77
instruments
II. Other
comprehensive
1,039,034.8 (119,093.40 1,012,264.5
income to be (145,863.68) - - (26,770.28)
reclassified into profit 2 ) 4
or loss
1. Changes in fair
(119,093.40 (178,640.10
value of receivables - (297,733.50) - - (178,640.10)
financing ) )
2. Translation
difference of foreign 1,039,034.8 1,190,904.6
151,869.82 - - 151,869.82 -
currency financial 2 4
statements
Total of other
119,682,119 (18,501,410.1 (8,296,806.9 (10,085,509.7 (119,093.40 109,596,609
comprehensive -
income .05 3) 9) 4) ) .31
37. Special reserves
In RMB
Year-beginning Increase in the current Decrease in the current Year-end balance
Items
balance period period
Statutory surplus
98,245,845.47 2,663,815.85 100,909,661.32
reserve
38. Retained profits
In RMB
Items current period previous period
Undistributed profit at the end of last year before
125,317,336.31 86,912,390.50
adjustment
Total undistributed profits adjusted at the
- -
beginning of the year
Adjusted undistributed profit at the beginning of
125,317,336.31 86,912,390.50
the year
Add: Net profit attributable to shareholders of
73,309,182.94 55,733,468.82
parent company this year
Other comprehensive income carried
- 1,042,493.21
forward to retained income
Less: Withdrawal of statutory surplus reserve 2,663,815.85 3,175,360.75
Distribution of common stock dividends
25,326,092.45 15,195,655.47
(note)
Year end undistributed profit 170,636,610.95 125,317,336.31
Note: According to the resolution of the General Meeting of Shareholders on May 19, 2022, the Company distributed a cash dividend of
RMB 0.5 (including tax) for every 10 shares, totally RMB 25,326,092.45 (including tax) based on the share capital of 506,521,849 shares as
of December 31, 2021.
39. Operating income and operating cost
(1) Operating income and operating cost
InRMB
Amount incurred this year Amount incurred last year
Items
Income Cost Income Cost
Main business 2,802,203,439.94 2,373,407,000.36 2,302,304,418.84 1,898,721,579.26
Other business 35,784,824.42 598,896.07 27,757,262.16 8,272,084.49
Total 2,837,988,264.36 2,374,005,896.43 2,330,061,681.00 1,906,993,663.75
Note: Please refer to Note (V), 29.1 "Significant changes in accounting policies" for details of the Group's disclosure related to trial
sales.
(2) Main business classified by product
In RMB
Amount incurred this year Amount incurred last year
Product type
Main business income Main business cost Main business income Main business cost
Polarizer sales 2,693,787,636.62 2,317,793,097.44 2,135,803,339.71 1,827,211,496.45
Property leasing and
80,168,785.00 22,508,188.92 111,568,500.55 22,996,155.29
management
Textile sales 28,247,018.32 33,105,714.00 54,932,578.58 48,513,927.52
Subtotal 2,802,203,439.94 2,373,407,000.36 2,302,304,418.84 1,898,721,579.26
(3) Main business classified by region
InRMB
Amount incurred this year Amount incurred last year
Main business region
Main business income Main business cost Main business income Main business cost
Domestic 2,686,847,406.83 2,278,271,215.01 2,048,182,283.94 1,684,438,068.16
Overseas 115,356,033.11 95,135,785.35 254,122,134.90 214,283,511.10
Subtotal 2,802,203,439.94 2,373,407,000.36 2,302,304,418.84 1,898,721,579.26
(4) Description of performance obligations
The Group's goods sales are mainly the production and sales of polarizer and textile-related goods. For goods sold to customers, the
Group recognizes income when the control of the goods is transferred, that is, when the goods are delivered to the designated place of the
other party and signed by the other party. Since the delivery of goods to customers represents the right to unconditionally receive the
contract consideration, the maturity of the money only depends on the passage of time, so the Group recognizes a receivable when the goods
are delivered to professional customers. When the customer prepays the payment, the Group recognizes the transaction amount received as a
contractual liability until the goods are delivered to the customer.
The Group provides property and leasing services to customers, which is a performance obligation to be fulfilled within a certain period
of time. The Group recognizes income in the process of providing property and leasing services.
(5) Description of allocation to remaining performance obligations
On December 31, 2022, the amount of contractual liabilities corresponding to the performance obligations that the Group has signed but
has not yet fulfilled or has not yet fully fulfilled is RMB 4,274,109.40, and the income will be recognized when the customer obtains the
control of the goods.
40. Taxes and surcharges
In RMB
Items Amount incurred this year Amount incurred last year
Property tax 5,213,976.28 5,826,834.91
Urban maintenance and construction tax 366,211.93 1,625,005.70
Surcharge for education 237,396.39 1,169,628.61
Other taxes 2,089,542.31 1,902,078.87
Total 7,907,126.91 10,523,548.09
41. Sales expenses
In RMB
Items Amount incurred this year Amount incurred last year
Employee compensation 18,560,229.96 18,266,837.81
Sales service charge 10,661,049.94 12,684,139.28
Business entertainment 2,214,489.62 1,256,926.46
Others 4,526,759.83 5,765,432.84
Total 35,962,529.35 37,973,336.39
42. Management cost
In RMB
Items Amount incurred this year Amount incurred last year
Employee compensation 83,952,597.31 80,805,949.97
Depreciation cost 12,258,281.68 10,728,532.58
Professional service fee 7,197,534.84 8,120,482.28
Amortization of intangible assets 5,082,893.36 5,030,106.23
Property leasing and utilities 5,252,212.15 3,745,400.74
Business entertainment 1,557,382.87 1,754,789.06
Others 13,088,038.08 11,903,569.29
Total 128,388,940.29 122,088,830.15
43. R&D expenses
In RMB
Items Amount incurred this year Amount incurred last year
Employee compensation 16,349,423.75 15,697,764.59
Material consumption 58,840,560.48 83,197,051.56
Depreciation cost 3,518,432.27 3,326,098.79
Others 1,811,739.04 1,287,849.59
Total 80,520,155.54 103,508,764.53
44. Financial expenses
In RMB
Items Amount incurred this year Amount incurred last year
Interest expense (note) 31,131,112.38 24,113,442.39
Less: capitalized interest expense - 9,807,167.26
Less: interest income 8,327,248.75 1,655,853.59
Exchange difference (14,569,863.53) (20,976,430.83)
Handling fees and others 4,709,606.47 8,195,665.20
Total 12,943,606.57 (130,344.09)
Note: The interest expense on lease liabilities in 2022 is RMB 203482.85.
45. Other income
In RMB
Items Amount incurred in this year Amount incurred in last year
Transfer-in of deferred income 16,401,222.05 13,939,029.06
Industry development support funds
6,384,733.03 380,356.97
(Note 1)
Enterprise development support funds 2,062,888.38 5,272,800.00
(Note 2)
Tax subsidy 1,262,440.33 0.00
Others 238,927.10 51,193.30
Total 26,350,210.89 19,643,379.33
Note 1: Industry development support funds mainly include subsidies for the first batch of key new material insurance
compensation projects of the Bureau of Industry and Information Technology in 2022, incentive projects for industrial enterprises
to expand production capacity in 2022, and subsidies for the 2022 Emerging Industry Support Plan (New Materials) of the Bureau
of Industry and Information Technology.
Note 2: The enterprise development support funds mainly include the incentive funds for enterprises with harmonious labor
relations in Pingshan District in 2020, the subsidy funds for improving the atmospheric environment quality of Shenzhen Municipal
Ecological Environment Bureau, and the "ten items" policy fund subsidies for enterprises with warm hearts in Pingshan District in
2022.
46. Investment income
In RMB
Items Amount incurred this year Amount incurred last year
Long-term equity investment income calculated by
1,307,639.15 33,984.66
equity method
Investment income from disposal of long-term
- 20,779.93
equity investment
Investment income of transactional financial assets
15,457,585.05 17,407,221.99
during the holding period
Dividend income from investment in other equity
2,618,127.67 2,551,896.02
instruments during the holding period
Others - 2,649,130.46
Total 19,383,351.87 22,663,013.06
47. Income from changes in fair value
In RMB
Sources of income from changes in fair Amount incurred this year Amount incurred last year
value
Transactional financial assets - 2,150,943.40
48. Credit impairment gain (loss)
In RMB
Amount incurred this Amount incurred last year
Items
year
Impairment loss of notes receivable 365,055.74 (280,565.00)
Gain (loss) from impairment of accounts receivable (11,584,551.67) 2,500,153.07
Gain (loss) from impairment of other receivables 6,600,942.84 (7,201,148.60)
Total (4,618,553.09) (4,981,560.53)
49. Asset impairment gain (loss)
In RMB
Items Amount incurred this year Amount incurred last year
Inventory depreciation loss (183,706,022.57) (130,363,681.96)
Impairment loss of fixed assets (18,867,443.27) (32,769.22)
Total (202,573,465.84) (130,396,451.18)
50. Asset disposal income
In RMB
Items Amount incurred this year Amount incurred last year
Gains & losses on foreign investment in
31,264.60 (597,458.77)
fixed assets
51. Non-Operation income
In RMB
Items Amount of this year Amount of last year Recorded in the amount of the
non-recurring gains and
losses
Insurance compensation 7,652,845.40 3,477,438.60 7,652,845.40
Payable without payment 6,334,444.97 17,140,459.60 6,334,444.97
Other 1,005,792.20 667,888.44 1,005,792.20
Total 14,993,082.57 21,285,786.64
52.Non-current expenses
In RMB
Amount of this year Amount of last year The amount of non-operating
Items
gains & lossed
Non-current asset Disposition 26,020.82 369,187.12 26,020.82
loss
Compensation expenses 7,248,331.74 - 7,248,331.74
Fine expenses 778.86 1,309,172.27 778.86
Other 201,926.05 7,903.96 201,926.05
Total 7,477,057.47 1,686,263.35 7,477,057.47
53.Income tax expenses
(1)Income tax expenses
In RMB
Items Amount of this year Amount oflast year
Current income tax expense 4,043,680.11 8,174,724.28
Deferred income tax expense (71,486,803.63) 2,944,072.68
Total (67,443,123.52) 11,118,796.96
(2)Reconciliation of account profit and income tax expenses
In RMB
Amount of current Amount of previous
Items
period period
Total profits 44,348,842.80 77,185,270.78
Current income tax expense accounted by tax and relevant
11,087,210.70 19,296,317.70
regulations
Influence of different tax rates applied by some subsidiaries (2,715,451.54) (5,229,585.58)
非应税收入的影响 (2,483,588.11) (53,103.78)
Non-deductible costs, expenses and losses 771,675.89 4,571,839.81
Tax impact by the unrecognized deductible losses and deductible
(66,704,686.87) -
temporary differences in previous years
Profit and loss of joint venture and associated enterprises accounted for by
2,931,982.20 8,059,643.49
equity method
Tax impact of research and development fee plus deduction (10,330,265.79) (15,526,314.68)
Income tax fee (67,443,123.52) 11,118,796.96
54. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities
In RMB
Items Amount of current period Amount of previous period
Letter of Credit Deposit 167,866,753.31 35,875,977.74
Interest income 8,067,195.21 1,655,853.59
Government Subsidy 33,703,713.84 19,363,739.42
Current account 8,658,637.60 31,729,758.78
Total 218,296,299.96 88,625,329.53
(2)Other cash paid related to operating activities
In RMB
Items Amount of current period Amount of previous period
Payment of credit deposit 25,106,708.19 164,509,022.41
Cash 87,642,432.49 48,012,370.68
Current account and other 9,199,351.73 12,867,319.88
Total 121,948,492.41 225,388,712.97
(3)Cash received related to other investment activities
In RMB
Items Amount of current period Amount of previous period
Structured deposits, financial products, 1,316,000,000.00 1,128,309,484.61
principal and income
(4).Cash paid related to other investment activities
In RMB
Items Amount of current period Amount of previous period
Structured deposits, financial products, 1,140,433,371.49 965,000,000.00
（5）Cash paid related with financing activities
In RMB
Items Amount of this year Amount of last year
Restricted stock repurchase 7,820,298.30
Lease payment 9,144,572.43 4,817,974.70
Total 9,144,572.43 12,638,273.00
55. Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
In RMB
Amount of current Amount of previous
Items
period period
I. Adjusting net profit to cash flow from operating activities
Net profit 111,791,966.32 66,066,473.82
Add: asset impairment provision 202,573,465.84 130,396,451.18
Credit loss preparation 4,618,553.09 4,981,560.53
Depreciation of fixed assets and investment property 256,562,100.50 182,116,694.00
Depreciation of right-of-use assets 9,007,666.58 4,540,987.37
Amortization of intangible assets 5,082,893.36 5,030,106.23
Amortization of Long-term deferred expenses 1,819,286.52 1,171,163.32
Loss on disposal of fixed assets, intangible assets and other long-
(31,264.60) 597,458.77
term deferred assets
Fixed assets scrap loss 26,020.82 369,187.12
Loss on fair value changes - (2,150,943.40)
Financial cost 29,183,633.15 14,306,275.13
Loss on investment (19,383,351.87) (22,663,013.06)
Decrease of deferred income tax assets (66,115,217.51) 1,534,828.48
Increased of deferred income tax liabilities (5,371,586.12) 2,500,994.33
Decrease of inventories 1,248,186.40 (270,089,816.70)
Decease of operating receivables (81,468,525.61) (58,547,894.61)
Increased of operating Payable 40,694,723.73 (64,597,492.86)
Net cash flows arising from operating activities 490,238,550.60 (4,436,980.35)
II. Significant investment and financing activities that without cash
flows:
End balance of cash equivalents 874,474,834.46 302,408,433.72
Less: Beginning balance of cash equivalents 302,408,433.72 278,337,236.95
Net increase of cash and cash equivalent 572,066,400.74 24,071,196.77
(2)Component of cash and cash equivalents
In RMB
Items Year-end balance Year-beginning balance
I Cash 874,474,834.46 302,408,433.72
Including: cash on hand 3,980.56 792.64
Bank deposits available for payment at any time 874,470,853.90 302,407,641.08
Other monetary funds available for payment at any time - -
II Cash equivalents - -
III Balance of cash and cash equivalents at the end of the year 874,474,834.46 302,408,433.72
In RMB
56. The assets with the ownership or use right restricted
In RMB
Book value at the end of the
Items Cause of restriction
reporting period
Monetary funds 116,990,685.31 Note(VII),1
Note receivable 48,387,401.67 Note(VII),3.(3)
Other receivables 6,559,327.26 Funds subject to freeze
Fixed assets 470,366,658.55 Mortgage
Intangible assets 32,984,090.65 Pledge
Total 675,288,163.44
57. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
Closing foreign currency Closing convert to RMB
Items Exchange rate
balance balance
Monetary funds 21,802,736.14
Including：USD 2,507,856.21 6.9742 17,490,290.78
Euro 81,323,569.66 0.0524 4,261,355.05
HKD 57,199.18 0.8932 51,090.31
Account receivable 20,886,202.07
Including：USD 2,943,419.82 6.9742 20,527,998.51
Euro 2,092,440.00 0.0524 109,643.86
HKD 278,280.00 0.8932 248,559.70
Other receivable 7,051,194.01
Including：USD 913,364.76 6.9742 6,369,988.52
HKD 762,657.29 0.8932 681,205.49
Account payable 249,984,599.31
Including：USD 6,296,670.99 6.9742 43,914,242.82
Yen 3,932,333,073.99 0.0524 206,054,253.08
HKD 18,028.90 0.8932 16,103.41
Other payable 5,091,286.65
Including：USD 676,686.00 6.9742 4,719,343.50
Yen 3,381,984.00 0.0524 177,215.96
Euro 22,500.00 7.4229 167,015.25
HKD 31,025.46 0.8932 27,711.94
VIII. Change of consolidation scope
In 2022, the scope of consolidation of the Group remained unchanged.
IX. Equity in other subjects
1. Equity in subsidiaries
(1) Composition of the enterprise group
Shareholding
Place of
Main place ratio % Acquisition
Subsidiary name registratio Business nature
of business Indire method
n Direct
ct
Shenzhen Lishi Industry
Shenzhen Shenzhen Property leasing 100.00 - Establishment
Development Co., Ltd
100.00
Shenzhen Huaqiang Hotel Shenzhen Shenzhen Property leasing - Establishment
100.00
Shenzhen Shenfang Real Estate
Shenzhen Shenzhen Property management - Establishment
Management Co., Ltd.
100.00
Shenzhen Beauty Century Textile production and
Shenzhen Shenzhen - Establishment
Garment Co., Ltd. sales
Shenzhen Shenfang Sungang Real 100.00
Shenzhen Shenzhen Property management - Establishment
Estate Management Co., Ltd.
Polarizer production
SAPO Photoelectric Shenzhen Shenzhen 60.00 - Acquisition
and sale
Shengtou (Hongkong) Co.,Ltd. 100.00
Hongkong Hongkong Polarizer sales - Establishment
Shenzhen Shengjinlian Polarizer production 100.00
Shenzhen Shenzhen - Establishment
Technology Co., Ltd. and sale, etc.
(2) Important non-wholly-owned subsidiaries
In RMB
Profit and loss
Dividends declared to Balance of minority
Minority shareholding attributable to minority
Subsidiary name minority shareholders equity at the end of the
ratio shareholders in this
in last year period
year
Shenzhen SAPO
40.00% 38,482,783.38 1,181,777,770.21
Photoelectric Co., Ltd.
(3) Major financial information of important non-wholly-owned subsidiaries
In RMB
SAPO Photoelectric
Items
Year-end balance/Amount incurred this year
Current assets 1,936,541,263.47
Non-current assets 2,419,432,602.01
Total assets 4,355,973,865.48
Current liabilities 674,071,107.48
Non-current liabilities 732,819,068.02
Total liabilities 1,406,890,175.50
Operating income 2,735,055,209.89
Net profit 96,206,958.45
Total comprehensive income 95,909,224.95
Cash flow from operating activities 484,437,283.64
2 Equity in joint venture arrangements or joint ventures
(1) Important joint ventures or associated enterprises
Shareholding ratio Accounting
treatment
Name of joint
method of
venture or Main place of Place of
Business nature investment in
associated business registration Direct Indirect joint ventures
enterprise
or associated
enterprises
Shenzhen
Guanhua
Property
Printing & Shenzhen Shenzhen 50.16% Equity method
leasing
Dyeing Co.,
Ltd. (Note)
Note: According to the articles of association of Shenzhen Guanhua Printing and Dyeing Co., Ltd., the board of directors consists of six
directors, including three directors appointed by the Group and three directors appointed by Qiaohui Industrial Co., Ltd., and the voting at
the board meeting is valid only if it is approved by more than two thirds of all directors. Therefore, the Group cannot control Shenzhen
Guanhua Printing and Dyeing Co., Ltd. and has not included it in the consolidated financial statements of the Group.
(2) Main financial information of important joint venture
In RMB
Items Shenzhen Guanhua Printing & Dyeing Co., Ltd.
Year-end balance/Amount incurred this year
Current assets 47,899,181.48
Non-current assets 217,362,821.36
Total assets 265,262,002.84
Current liabilities 16,619,409.76
Non-current liabilities 33,025,262.69
Total liabilities 49,644,672.45
Owners' equity attributable to the parent company 215,617,330.39
Share of net assets calculated according to shareholding ratio 108,153,652.92
Adjustment matters
-Goodwill 21,595,462.44
-Others (242,843.60)
Book value of equity investment in joint ventures 129,506,271.76
Fair value of equity investment of associated enterprises with open
-
quotation
Operating income 23,195,512.34
Net profit 2,575,847.73
Other comprehensive income -
Total comprehensive income 2,575,847.73
Dividends received from the joint venture this year -
(3) Summary financial information of unimportant joint ventures and associated enterprises
In RMB
Items Year-end balance/Amount incurred this year
Associated enterprise
Total book value of investment 4,975,563.98
Total of the following items calculated by shareholding ratio
-Net profit 15,593.93
-Other comprehensive income 151,869.82
-Total comprehensive income 167,463.75
X. Risks related to financial instruments
The Group's main financial instruments include monetary funds, transactional financial assets, notes receivable, accounts receivable,
accounts receivable financing, other receivables, other equity instruments investment, short-term loans, accounts payable, other payables,
other current liabilities, long-term loans and lease liabilities, etc. At the end of this year, the financial instruments held by the Group are as
follows. See Note (VII) for details. The risks associated with these financial instruments and the risk management policies adopted by the
Group to reduce these risks are as follows. The management of the Group manages and monitors these risk exposures to ensure that the
above risks are controlled within a limited range.
In RMB
Items Balance at the end of this year
Financial assets
Measured at fair value, with its changes included in current profits and
losses
Transactional financial assets 319,605,448.44
Measured at fair value, with its changes included in other
comprehensive income
Receivable financing 54,413,796.91
Investment in other equity instruments 167,678,283.27
Measured in amortized cost
Monetary funds 991,789,968.19
Note receivable 74,619,100.26
Accounts receivable 636,583,469.93
Other receivables 10,288,124.02
Financial liabilities
Measured in amortized cost
Short-term loan 7,000,000.00
Accounts payable 327,049,873.70
Other payables 196,701,468.33
Other current liabilities 92,945,741.78
Long-term loans 704,603,665.19
Lease liabilities 15,630,030.74
The Group uses sensitivity analysis technology to analyze the possible impact of reasonable and possible changes in risk variables on
current profits and losses and shareholders' equity. Because any risk variable rarely changes in isolation, and the correlation between
variables will have a great impact on the final amount of a risk variable change, the following contents are carried out under the assumption
that each variable change is independent.
1. Risk management objectives and policies
The Group's goal in risk management is to strike a proper balance between risks and benefits, reduce the negative impact of risks on the
Group's operating performance to the lowest level, and maximize the interests of shareholders and other equity investors. Based on this risk
management goal, the basic strategy of the Group's risk management is to identify and analyze all kinds of risks faced by the Group,
establish an appropriate risk tolerance bottom line and conduct risk management, and timely and reliably supervise all kinds of risks to
control the risks within a limited range.
1.1 Market risk
1.1.1 Foreign exchange risk
Foreign exchange risk refers to the risk of losses caused by exchange rate changes. The Group's foreign exchange risks are mainly
related to US dollars, Japanese yen, Hong Kong dollars and euros. Except for some import purchases and export sales of the Group's
companies located in Chinese mainland which are mainly settled in US dollars, Japanese yen, Hong Kong dollars and euros, other major
business activities of the Group are settled in RMB.
As of 31 December 2022, the Group's assets and liabilities were all RMB balances, except for the monetary items in foreign currencies
mentioned in Notes (VII), (57). The foreign exchange risks arising from the assets and liabilities with foreign currency balances (converted
into RMB) described in the table below may have an impact on the Group's operating results.
In RMB
Balance at the end of this year
Items
Assets Liabilities
USD 44,388,277.81 48,633,586.32
Yen 4,370,998.91 206,231,469.04
Euro - 167,015.25
HKD 980,855.50 43,815.35
The Group pays close attention to the impact of exchange rate changes on the Group's foreign exchange risk. At present, the Group has
not taken any measures to avoid foreign exchange risks.
Sensitivity analysis of foreign exchange risk
Sensitivity analysis of foreign exchange risk assumes that all net investment hedging and cash flow hedging of overseas operations are
highly effective.
On the basis of the above assumptions, with other variables unchanged, the pre-tax impact of possible reasonable exchange rate changes
on current profits and losses and shareholders' equity is as follows:
In RMB
This year
Items Changes in exchange rate Impact on profits Impact on shareholders' equity
All foreign
Appreciation of RMB by 5% (10,266,787.69) (10,266,787.69)
currencies
All foreign
Depreciation of RMB by 5% 10,266,787.69 10,266,787.69
currencies
1.1.2. Interest rate risk - risk of cash flow change
The Company's risk of cash flow changes of financial instruments caused by interest rate changes is mainly related to bank loans with
floating interest rate. The Group continues to pay close attention to the impact of interest rate changes on the Group's interest rate risk. The
Group's policy is to maintain floating interest rates on these loans, and there is no interest rate swap arrangement at present.
Sensitivity analysis of interest rate risk
With other variables unchanged, the pre-tax impact of possible reasonable interest rate changes on current profits and losses and
shareholders' equity is as follows:
In RMB
This year
Items Interest rate change Impact on profits Impact on shareholders' equity
Floating-rate loan Increase by 1% (7,108,088.43) (7,108,088.43)
Floating-rate loan Decrease by 1% 7,108,088.43 7,108,088.43
1.2. Credit Risk
As of December 31, 2022, the largest credit risk exposure that may cause financial losses to the Company mainly came from the loss of
the Company's financial assets caused by the failure of the other party to perform its obligations, specifically including monetary funds,
transactional financial assets, notes receivable, accounts receivable, accounts receivable financing, and other receivables. On the balance
sheet date, the book value of the Company's financial assets has represented its maximum credit risk exposure.
In order to reduce credit risk, the company arranges specialized personnel to determine the credit limit, conduct credit approval, and
implement other monitoring procedures to ensure that necessary measures are taken to recover overdue debts. In addition, the Company
reviews the recovery of financial assets on each balance sheet date to ensure that adequate provision for credit losses has been made for
relevant financial assets. Therefore, the management of the company believes that the credit risk undertaken by the company has been
greatly reduced.
The Company's monetary funds are deposited in banks with high credit ratings, so monetary funds only have low credit risk.
As of December 31, 2022, the company's balance of accounts receivable from the top five customers was 364098756.84 yuan,
accounting for 53.21% of the company's balance of accounts receivable. In addition, the Company has no other significant credit risk
exposure concentrated in a single financial asset or a combination of financial assets with similar characteristics.
1.3 Liquidity Risk
When managing liquidity risk, the Company maintains and monitors cash and cash equivalents that the management believes are
sufficient to meet the Company's operational needs and reduce the impact of cash flow fluctuations. The management of the company
monitors the use of bank loans and ensures compliance with loan agreements.
As of December 31, 2022, the Company's unused comprehensive bank credit line was RMB 212.1006 million.
The financial liabilities held by the Company are analyzed based on the maturity of undiscounted remaining contractual obligations as
follows:
In RMB
Item Within 1 year 1-5 years Over 5 years Total
Short-term loan 7,179,508.33 - - 7,179,508.33
Accounts payable 327,049,873.70 - - 327,049,873.70
Other payables 196,701,468.33 - - 196,701,468.33
Other current liabilities 92,945,741.78 - - 92,945,741.78
Long-term loans 97,182,080.19 594,693,456.05 150,625,989.54 842,501,525.78
Lease liabilities 7,475,902.01 9,546,024.00 - 17,021,926.01
2. Transfer of financial assets
2.1 Financial assets transferred but not completely derecognized
In the current year, the Group has cumulatively discounted bank acceptance bills of RMB 18071354.97 from large state-owned
commercial banks with higher credit ratings and listed national joint-stock commercial banks, obtaining cash consideration of RMB
17658492.79. There is a possibility that such acceptance bills cannot be honored at maturity. If the acceptance bills cannot be accepted at
maturity, the bank has the right to require the Group to pay off the outstanding balance. As the Group still bears major risks such as credit
risks related to these acceptance bills, the Group continues to fully recognize the carrying amount of notes receivable and recognize the
amounts received as pledged loans due to transfers. On December 31, 2022, the discounted acceptance bills mentioned above have all
expired.
On December 31, 2022, the book value of the bank acceptance bill endorsed by the company to suppliers for settlement of accounts
payable was RMB 48387401.67. The Company believes that almost all risks and rewards related to notes receivable at the time of
endorsement have not been transferred, which does not meet the conditions for derecognition of financial assets. Therefore, the recognition
of relevant notes receivable has not been completely terminated on the endorsement date.
2.2 The recognition has been terminated as a whole, but the transferor continues to be involved in the transferred financial assets
The Company endorses bank acceptance bills held by large state-owned commercial banks with high credit ratings and listed national
joint-stock commercial banks to a third party. As almost all risks and rewards related to these bank acceptance bills, such as interest rate risk,
have been transferred to the bank, the Company terminates the recognition of bank acceptance bills that have been endorsed but not expired.
According to the relevant provisions of the Negotiable Instruments Law of the People's Republic of China, if the bank acceptance bill fails to
be paid and accepted upon maturity, the undertaker has the right to require the company to pay off the outstanding balance, so the company
continues to be involved in the endorsed bank acceptance bill. As of December 31, 2022, the bank acceptance bill that the company has
endorsed but not expired was RMB 54995349.12.
XI. Disclosure of fair value
1. Ending fair value of assets and liabilities measured at fair value
In RMB
Year-end fair value
Fair value Fair value Fair value
Items
measurement of measurement of measurement of Total
Level 1 Level 2 Level 3
Measured at fair value continuously
(I) Transactional financial assets - 319,605,448.44 - 319,605,448.44
(II) Receivable financing - - 54,413,796.91 54,413,796.91
(III) Investment in other equity -
- 167,678,283.27 167,678,283.27
instruments
Total assets continuously measured at fair
- 319,605,448.44 222,092,080.18 541,697,528.62
value
2. For Level 2 items measured at fair value continuously and non-continuously, the valuation techniques and qualitative and
quantitative information of important parameters are adopted
In RMB
Fair value at the end of
this year Valuation
Items Input value
technique
Discounted cash
Transactional financial assets 319,605,448.44 Expected yield
flow technique
3. For Level 3 items measured at fair value continuously and non-continuously, the valuation techniques and qualitative and
quantitative information of important parameters are adopted
Fair value at the end of
this year Valuation
Items Input value
technique
Discounted cash
Receivable financing 54,413,796.91 Discount rate
flow technique
Comparison of P/B ratio of similar listed
listed companies companies
Investment in other equity
167,678,283.27
instruments
Comparable income
Market price
method
4. Fair value of financial assets and financial liabilities not measured at fair value
Financial assets and liabilities not measured at fair value mainly include monetary funds, notes receivable, accounts receivable, other
receivables, short-term loans, accounts payable, other payables, long-term loans and lease liabilities.
The management of the Group believes that the book values of financial assets and financial liabilities measured in amortized cost in the
financial statements are close to their fair values.
XII. Related parties and related party transactions
1. Information about the parent company of the company.
Shareholding ratio Percentage of
Registered of the parent voting rights of the
Name of parent company Place of registration Business nature capital company to the parent company to
(RMB '0,000) Company % the Company %
Equity
18/F, Investment
investment,
Shenzhen Investment Building, Shennan
real estate 2,850,900.00 46.21 46.21
Holdings Co., Ltd Road, Futian
development,
District, Shenzhen
etc
Description of the parent company of the company
The parent company of the Company is a wholly state-owned company approved and authorized by the Shenzhen Municipal
Government, and exercises the investor function for the state-owned enterprises within the authorized scope according to law.
During the reporting period, the changes in the registered capital of the parent company are as follows:
Unit: 10000 yuan
Balance at the end of last
Increase this year Decrease this year Balance at the end of this year
year
2,800,900.00 50,000.00 - 2,850,900.00
2. Information on subsidiaries of the Enterprise
Please refer to Notes (IX), 1 for details of the subsidiaries of the Enterprise.
3. Information on joint ventures and associated enterprises of the Enterprise
See Notes (IX), 2 for details of the important joint ventures or associated enterprises of the Enterprise.
4. Information on other related parties
Names of related parties Relationship between the Enterprise
The Company's shareholding company and the chairman of the
Shenzhen Xinfang Knitting Co., Ltd.
company are the employees of the Group
The Company's shareholding company and the chairman of the
Shenzhen Dailishi Underwear Co., Ltd.
company are the employees of the Group
The former chairman of the Company is the former vice
Shenzhen Tianma Microelectronics Co., Ltd.(Note)
chairman of the Company
Hengmei Photoelectric Technology Co., Ltd. The company's subsidiary, Shengbo Optoelectronics, is a joint
stock company with minority shareholders. The chairman of
the company is held by a former director of Shengbo
Optoelectronics
Note: Hengmei Photoelectric Technology Co., Ltd. will no longer be a related party of the Company in 2022.
5. Related party transactions
(1) Sale of goods
In RMB
Content of related party Amount incurred this
Related party Amount incurred last year
transaction year
Shenzhen Tianma Microelectronics Co.,
Polarizer -
Ltd 1,441,975.42
Shenzhen Guanhua Printing & Dyeing
Textile 8,849.56 -
Co., Ltd.
Shenzhen Investment Holdings Co., Ltd Textile - 48,907.96
Total 8,849.56 1,490,883.38
(2) Lending of related party funds
In RMB
Related party Borrowing amount Start date Due date Description
Lending
Shenzhen Guanhua
The annual lending rate
Printing & Dyeing Co., 3,806,454.17 2019.07.30 2023.07.30
is 0.30%
Ltd.
(3) Rewards for the key management personnel
In RMB
Rewards for the key management Amount of this year Amount of last year
personnel Items
11,966,067.00 11,152,828.00
6. Receivables and payables of related parties
（1）Receivables
In RMB
Amount at year end Amount at year beginning
Name Related party Balance of Balance of Balance of Bad debt
Book Book Book Provision
Account Shenzhen Tianma
receivable Microelectronics Co., Ltd. - - 412,495.18 18,686.03
Account Shenzhen Investment Holdings
- - 55,266.00 2,503.55
receivable Co., Ltd
Other Account Shenzhen Dailishi Underwear
Co., Ltd. 1,100,000.00 58,850.00 1,100,000.00 55,000.00
receivable
（2）Payables
In RMB
Name Related party Amount at year end Amount at year beginning
Hengmei Optoelectronics Co., - 170,977.53
Accounts payable
Ltd
Other payable Yehui International Co.,Ltd. 1,124,656.60 1,124,656.60
Other payable Shenzhen Changlianfa 2,023,699.95 2,023,699.95
Printing & dyeing Co., Ltd.
Other payable Shenzhen Guanhua Printing 3,806,454.17 3,806,454.17
& dyeing Co., Ltd.
Shenzhen Xinfang Knitting 244,789.85 244,789.85
Other payable
Co., Ltd.
Shenzhen Investment 643,987.04 -
Other payable
Holdings Co., Ltd
XIII. Commitments and contingencies
1. Important commitments
(1) Capital commitment
In RMB
Amount at the end of this
Items Amount at the end of last year
year
Contracted but not recognized in the financial statements
Commitment to purchase and build long-term assets 3,761,094.00
2. Contingencies
In 2022, litigation disputes between the Company and its controlling subsidiary Shengbo Optoelectronics and its non-controlling
shareholder, Hangzhou Jinhang Equity Investment Fund Partnership (Limited Partnership) (hereinafter referred to as "Jinhang Fund"),
including the shareholder's right to know, the dissolution of Shengbo Optoelectronics, and the confirmation of the effectiveness of the
resolution of Shengbo Optoelectronics, were heard in the Pingshan District People's Court of Shenzhen City, Guangdong Province.
The Company believes that the above litigation matters were caused by differences and disputes between the shareholders of Shengbo
Optoelectronics and the failure to reach an agreement, which did not significantly affect the financial situation and production and operation
of Shengbo Optoelectronics.
As of December 31, 2022, the Company has no pending litigation, external guarantees, and other contingencies that should be disclosed
beyond the above.
XIV. Matters after the balance sheet date
1. Profit distribution after the balance sheet date
On April 1, 2023, the company held a board meeting and approved the 2022 profit distribution plan. The company plans to distribute a
cash dividend of RMB 0.6 (tax inclusive) per 10 shares to all shareholders based on the total capital stock of 506521849 shares as of
December 31, 2022, with a total cash dividend of RMB 30391310.94 (tax inclusive). The profit distribution plan is yet to be approved by the
Company's shareholders' meeting.
In RMB
Items Amount
Profits or dividends to be distributed 30,391,310.94
Profits or dividends declared after deliberation and approval 30,391,310.94
XV. Other important matters
1. Segment information
(1) Determination basis and accounting policy of reporting segment
According to the company's internal organizational structure, management requirements, and internal reporting system, the company's
business is divided into three operating segments, and the company's management regularly evaluates the operating results of these segments
to determine the allocation of resources and evaluate performance. On the basis of operating segments, the company has determined the
following three reporting segments: polarizer business, property leasing business, and textile business.
Segment reporting information is disclosed in accordance with the accounting policies and measurement standards adopted by each
segment when reporting to the management, and these measurement bases are consistent with the accounting and measurement bases used in
the preparation of financial statements.
(2) Financial information of reporting segment
In RMB
This year or the end
Polarizer Property leasing Textile Offset Total
of this year
Operating income:
External transaction
2,728,009,332.54 81,731,913.50 28,247,018.32 - 2,837,988,264.36
income
Inter-segment
- 4,709,369.95 - (4,709,369.95) -
transaction income
Total operating
2,728,009,332.54 86,441,283.45 28,247,018.32 (4,709,369.95) 2,837,988,264.36
income of segment
Operating expenses
2,527,835,900.31 77,013,737.77 39,239,385.90 (4,360,768.89) 2,639,728,255.09
(note)
Operating profit 20,266,160.12 30,304,595.91 (12,022,403.47) (1,715,534.86) 36,832,817.70
Net profit 91,118,912.03 34,073,314.37 (12,013,091.49) (1,387,168.59) 111,791,966.32
Total assets of
4,355,319,002.77 1,282,812,378.49 37,349,989.80 (58,344,003.16) 5,617,137,367.90
segment
Total liabilities of
1,404,343,189.16 202,684,944.37 29,223,370.78 (50,156,461.83) 1,586,095,042.48
segment
Note: This item includes operating costs, taxes and surcharges, administrative expenses, research and development expenses, sales
expenses, and financial expenses.
2. Other important transactions and matters that have an impact on investors' decisions
(1) Significant asset restructuring
On December 30, 2022, the Company held the 19th meeting of the 8th Board of Directors and deliberated and passed the Proposal on
the Plan for Issuing Shares and Paying Cash to Purchase Assets, Raising Supporting Funds, and Related Party Transactions. The Company
plans to purchase 100% of the total equity of Hengmei Optoelectronics Co., Ltd. held by 17 companies such as Qimei Materials and Haosheng
(Danyang) through issuing shares and paying cash. The cash consideration for this transaction is proposed to be paid by the company with
self raised funds such as merger and acquisition loans and raised matching funds. The company plans to raise matching funds through non-
public offering of shares to no more than 35 qualified specific investors. The total amount of raised matching funds shall not exceed 100% of
the transaction price for the proposed purchase of assets through the issuance of shares, and the number of shares issued shall not exceed 30%
of the total share capital of the listed company after the completion of the purchase of assets through the issuance of shares.
This transaction will not result in a change in the control of the company. Before and after this transaction, the actual controller of the
company is the State-owned Assets Supervision and Administration Commission of the Shenzhen Municipal People's Government. As of the
date of approval and issuance of this financial statement, this transaction still needs to obtain relevant approval or approval, filing, and other
procedures. The audit, evaluation, due diligence, and other work involved in this transaction are still in progress. After the relevant work is
completed, the company will again convene the board of directors to review the relevant matters of this transaction.
(2) Properties not yet disposed of by Shenzhen Xieli Automobile Enterprise Co., Ltd. (hereinafter referred to as "Shenzhen Xieli")
Shenzhen Xieli, a Sino-foreign joint venture established by the Company and Hong Kong Xieli Maintenance Company (hereinafter
referred to as "Hong Kong Xieli"), was deregistered by the Shenzhen Municipal Market Supervision and Administration in March 2020.
However, there are still three properties under the name of Shenzhen Xieli that need to be negotiated between the shareholders of both parties.
In July 2020, the company filed a lawsuit to the People's Court of Yantian District, Shenzhen City, Guangdong Province to revoke the
cancellation of Shenzhen Xieli approved by the Shenzhen Market Supervision and Administration Bureau.
In December 2022, the People's Court of Yantian District, Shenzhen City, Guangdong Province, made a first instance judgment revoking
the administrative act of canceling the registration of Shenzhen Xieli. In January 2023, the third person in the original trial, Hong Kong Xieli,
appealed to the Shenzhen Intermediate People's Court of Guangdong Province. Later, due to the failure of Hong Kong Xieli to pay the case
acceptance fee in advance on schedule, the Shenzhen Intermediate People's Court of Guangdong Province issued an administrative ruling,
ruling that Hong Kong Xieli withdraw its appeal processingl.
XVI. Notes on main items of parent company's financial statements
1. Accounts receivable
(1) Disclosure by age
In RMB
Balance at the end of this year
Aging
Accounts receivable Credit loss provision Accrual proportion (%)
Within 1 year 13,871,107.36 713,159.25 5.14
1-2 years 2,485,076.00 - -
Total 16,356,183.36 713,159.25
(2) Classified disclosure by credit loss accrual method
In RMB
Balance at the end of this year
Book balance Credit loss provision
Category
Proportion Accrual Book value
Amount Amount
(%) proportion
(%)
Credit loss provision accrued by
- - - - -
item
Credit loss provision accrued by
16,356,183.36 10000 713,159.25 4 15,643,024.11
portfolio
Total 16,356,183.36 10000 713,159.25 4 15,643,024.11
Accounts receivable for which provision for credit losses is made by portfolio:
In RMB
Balance at the end of this year
Accounts receivable Credit loss provision Expected credit loss rate (%)
Within 1 year 13,871,107.36 713,159.25 5.14
1-2 years 2,485,076.00 - -
Total 16,356,183.36 713,159.25
Description of accounts receivable for which provision for credit losses is made by portfolio:
As a part of the company's credit risk management, the company uses an impairment matrix to determine the expected credit losses of
accounts receivable formed by property leasing businesses based on the aging of accounts receivable. This type of business involves a large
number of customers with the same risk characteristics, and aging information can reflect the solvency of such customers when their
accounts receivable mature.
(3) Credit loss provision withdrawn, recovered or reversed this year
In RMB
Balance at mount of change this year Balance at
Category the beginning Recovery or Write-off or Other the end of
Accrual
of this year reversal cancellation changes this year
Accounts receivable with credit
- - - - - -
loss provision accrued by item
Accounts receivable with credit 295,479.71 713,159.25
417,679.54 - - -
loss provision accrued by portfolio
Total 417,679.54 295,479.71 - - - 713,159.25
Changes in credit loss provision of accounts receivable:
In RMB
Expected credit loss for the whole duration
Items
Year-beginning balance 417,679.54
Accrual this year 295,479.71
Reversal this year -
Write-off this year -
Other changes -
Year-end balance 713,159.25
(4) No actual write-off of accounts receivable this year.
(5) Top five units of the year-end balance of accounts receivable collected by the defaulting party
In RMB
Proportion of total
Year-end balance of
Book balance at accounts receivable
Unit name credit loss provision
the end of this year (%)
Total accounts receivable of the top five balances on
15,404,631.71 94.18 709,106.85
December 31, 2022
(6) There are no accounts receivable that have been derecognized due to the transfer of financial assets this year.
2.Other receivable
In RMB
Items Closing balance Opening balance
Other accounts receivable 14,132,756.62 14,383,631.68
Total 14,132,756.62 14,383,631.68
(1) Disclosure by aging
In RMB
Balance at the end of this year
Aging
Other receivables Credit loss provision Accrual proportion (%)
Within 1 year 3,408,892.46 59,301.12 1.74
1-2 years 10,707,995.02 3,018.92 0.03
2-3 years - - -
Over 3 years 15,279,395.10 15,201,205.92 99.49
Total 29,396,282.58 15,263,525.96
(2) Disclosure by payment nature
In RMB
Book balance at the end Book balance at the end
Payment nature
of this year of last year
Deposit and security deposit 10,000.00 10,000.00
External unit transactions 15,349,339.97 15,349,339.97
Related party transactions within the consolidation scope 12,980,241.09 14,475,600.00
Others 1,056,701.52 1,047,702.42
Total 29,396,282.58 30,882,642.39
(3) Accrual of credit loss provision
In RMB
Year-end amount
Stage Expected average loss rate
Book balance Loss provision Book value
(%)
Other receivables for
which credit loss
provision is made
51.92 29,396,282.58 15,263,525.96 14,132,756.62
according to the
combination of credit
risk characteristics
(4) Changes in credit loss provision of other receivables:
In RMB
Third stage
Second stage
First stage Expected credit
Expected credit
Expected credit loss for the whole
Credit loss provision loss for the whole Total
loss in next 12 duration (credit
duration (no credit
months impairment has
impairment)
occurred)
Balance as at 1 Jan. 2022 1,387,764.39 - 15,111,246.32 16,499,010.71
Book balance of other account
receivable in Current Year as at 1 Jan.
2022
--Transfer to the second stage (1,115.91) 1,115.91 - -
- - - -
-- Transfer to the third stage
- - - -
-- Reversal to the second stage
- - - -
-- Reversal to the first stage
Provision in Current Year - 1,903.01 89,959.60 91,862.61
(1,327,347.36) - - (1,327,347.36)
Reversal in Current Year
Conversion in Current Year - - - -
- - - -
Write off in Current Year
Other change - - - -
Balance as at 31 Dec. 2022 59,301.12 3,018.92 15,201,205.92 15,263,525.96
(5) Other receivables with no actual write-off this year
(6) Top five companies with year-end balance of other receivables collected by the defaulting party
In RMB
Proportion of total
Year-end year-end balance
Year-end balance of
balance of of other
Unit name Payment nature Aging credit loss provision
other receivables (%)
receivables
Current
payment
Total other receivables of receivable
Within 1 year, Over
the top five balances on between 15,899,759.97 54.09 14,858,609.97
3 years
December 31, 2022 companies and
internal current
payment
3. Long-term equity investment
In RMB
Closing balance Opening balance
Items Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investments in 1,974,532,127. 1,957,949,498. 1,972,630,835.
16,582,629.30 16,582,629.30 1,956,048,206.09
subsidiaries 39 09 39
Investments in
129,506,271.76 - 129,506,271.76 128,214,225.54 - 128,214,225.54
joint ventures
Investments in
associates 4,975,563.98 - 4,975,563.98 4,808,100.23 - 4,808,100.23
company
2,109,013,963. 2,092,431,333. 2,105,653,161.
Total 16,582,629.30 16,582,629.30 2,089,070,531.86
13 83 16
（1）Investment to the subsidiary
In RMB
Balance at the Decreased Withdrawn Closing balance of
Add Balance at the end
Name beginning of this investmen impairment impairment
investment of this year
year t provision provision
SAPO Photoelectric 1,924,663,070.03 - - 1,924,663,070.03 - 14,415,288.09
Shenzhen Lisi - - 8,073,388.25 - -
Industrial
8,073,388.25
Development Co.,
Ltd.
Shenzhen Beauty - 18,765,507.55 - 2,167,341.21
Century Garment 16,864,215.55 1,901,292.00
Co., Ltd.
Shenzhen Huaqiang - - 15,489,351.08 - -
15,489,351.08
Hotel
Shenzhen Shenfang - - 1,713,186.55 - -
Real Estate
1,713,186.55
Management Co.,
Ltd.
Shenzhen Shenfang - - 5,827,623.93 - -
Sungang Real Estate
5,827,623.93
Management Co.,
Ltd.
Total 1,972,630,835.39 1,901,292.00 - 1,974,532,127.39 - 16,582,629.30
（2）Investment to joint ventures and associated enterprises
In RMB
Increase /decrease in reporting period
Closin
Wit
g
Declarat hdra
Adjustme balanc
Add Other ion of wn
Opening nt of other Ot Closing e of
Name inve equity cash imp
balance comprehe he balance impair
stme chang dividend airm
nsive r ment
nt es s or ent
income provis
profit prov
ion
ision
I. Joint
ventures
Shenzhen 1.00 - - - - - -
Guanhua
128,214,225 1,292,045.2 129,506,271
Printing & -
.54 2 .76
Dyeing Co.,
Ltd.
128,214,225 1.00 - 1,292,045.2 - - - - 129,506,271 -
Subtotal -
.54 2 .76
II. Associated
enterprises
Shenzhen - - - - - - -
Changlianfa
2,972,202.9 3,105,796.5
Printing and 133,593.58 -
7 5
dyeing
Company
Yehui - - - - - - 1,869,767.4 -
1,835,897.2 (117,999.65 151,869.8
International 3
6 ) 2
Co., Ltd.
4,808,100.2 - - 151,869.8 - - - - 4,975,563.9 -
Subtotal 15,593.93
3 2 8
133,022,325 1.00 - 1,307,639.1 151,869.8 - - - - 134,481,835 -
Total
.77 5 2 .74
4.Business income and Business cost
(1）Business income and Business cost
In RMB
Amount of current period Amount of previous period
Items
Business income Business cost Business income Business cost
Income from Main
56,046,883.88 9,544,956.96 74,272,555.42 7,660,814.11
Business
Other Business
- - 3,887,130.77 3,887,130.77
income
Total 56,046,883.88 9,544,956.96 78,159,686.19 11,547,944.88
(2) Main business income and main business cost classified by product
In RMB
Amount incurred this year Amount incurred last year
Product
Main business income Main business cost Main business income Main business cost
Property leasing 56,046,883.88 9,544,956.96 74,272,555.42 7,660,814.11
(3)Main business income and main business cost classified by area
In RMB
Amount incurred this year Amount incurred last year
Area
Main business income Main business cost Main business income Main business cost
Domestic 56,046,883.88 9,544,956.96 74,272,555.42 7,660,814.11
5.Investment income
In RMB
Items Amount of current Amount of previous
period period
Income from long-term equity investment measured by adopting the equity
1,307,639.15 33,984.66
method
Investment income from the disposal of long-term equity investment - 20,779.93
Investment income of trading financial assets during the holding period 15,748,625.37 16,344,590.24
Dividend income earned during investment holdings in other equity
1,599,735.85 1,659,743.65
instruments
Other - 2,350,000.00
Total 18,656,000.37 20,409,098.48
XVII. Supplement information
1. Particulars about current non-recurring gains and loss
√ Applicable □Not applicable
According to China Securities Regulatory Commission's Explanatory Announcement No.1 on Information Disclosure of Companies
Offering Securities to the Public - Non-recurring gains and losses (2008), the Group's non-recurring gains and losses in 2022 are as follows:
In RMB
Items Amount
Non-current asset disposal gain/loss 31,264.60
Government subsidy recognized in current gain and loss(excluding those closely related to the
26,350,210.89
Company’s business and granted under the state’s policies)
Losses/gains from changes of fair values occurred in holding trading financial assets and trading
financial liabilities, and investment income obtaining from the disposal of trading financial assets,
-
trading financial liability and financial assets available-for-sale, excluded effective hedging business
relevant with normal operations of the Company
Reversal of the account receivable depreciation reserves subject to separate impairment test -
Other non-business income and expenditures other than the above 7,516,025.10
Total non-recurring gains and losses 33,897,500.59
Less :Influenced amount of income tax 5,589,310.62
Net non-recurring gains and losses 28,308,189.97
Influenced amount of minor shareholders’ equity (after tax) 9,147,064.53
Non-recurring gains or losses attributable to the common shareholders of the Company 19,161,125.44
2. Return on net asset and earnings per share
This statement of return on net assets and earnings per share is prepared by the Group in accordance with the relevant provisions of the Rule
No.9 for Compilation of Information Disclosure of Public Offering Securities Companies - Calculation and Disclosure of Return on Net
Assets and Earnings per Share (revised in 2010) issued by China Securities Regulatory Commission.
In RMB
Weighted Earnings per share
Profit of report period average returns Basic earnings per Diluted earnings
equity(%) share per share
Net profit attributable to the Common stock shareholders of
2.59 0.14 0.14
Company.
Net profit attributable to the Common stock shareholders of
1.91 0.11 0.11
Company after deducting of non-recurring gain/loss.
