Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Shenzhen Textile (Holdings) Co., Ltd.
2018 Annual Report
April 2019
1
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
I. Important Notice, Table of Contents and Definitions
The Board of Directors , Supervisory Committee, All Directors, Supervisors and Senior executives of the
Company hereby guarantees that there are no misstatement, misleading representation or important omissions in
this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the
contents hereof.
Mr.Zhu Jun, The Company leader, Mr. Zhu Meizhu, Person in charge of accounting works, and Ms.Mu
Linying, the person in charge of the accounting department (the person in charge of the accounting )hereby
confirm the authenticity and completeness of the financial report enclosed in this annual report.
Other directors attending the Meeting for annual report deliberation except for the followed:
Name of director absent Title for absent director Reasons for absent Attorney
Zhu Jun Chairman Working reason Zhu Meizhu
I. Concerning the forward-looking statements with future planning involved in the Report, they do not constitute a
substantial commitment for investors, investors should be cautious with investment risks .
II. The company has the macroeconomic risks, market competition risks and raw material risks. Investors are
advised to pay attention to investment risks. For details, please refer to the possible risk factors that the company
may face in the “IX Prospects for the future development of the company" in the “Section IV Discussion and
Analysis of Business Operation”.
III. The company to remind the majority of investors，Securities Time, China Securities Journal, Securities Daily,
Shanghai Securities News , Hongkong Commercial Daily and Juchao Website（http://www.cninfo.com.cn）are the
media for information disclosure appointed by the Company, all information under the name of the Company
disclosed on the above said media shall prevail, and investors are advised to exercise caution of investment risks.
This Report has been prepared in both Chinese and English. In case of any discrepancy, the Chinese version shall
prevail.
In this report, the Company has described in detail the existing macro-economic risks as well as operation risks.
Investors are advised to refer to the contents concerning risk factors possibly to be confronted with and the
countermeasures in the IX(3) Company's future development prospect in Section 4 Discussion and Analysis of the
Management.
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Table of Contents
I.Important Notice, Table of contents and Definitions
II. Basic Information of the Company and Financial index
III. Outline of Company Business
IV. Management’s Discussion and Analysis
V. Important Events
VI. Change of share capital and shareholding of Principal Shareholders
VII. Situation of the Preferred Shares
VIII. Information about Directors, Supervisors and Senior Executives
IX. Administrative structure
X. Corporate Bond
XI. Financial Report
XII. Documents available for inspection
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Definition
Terms to be defined Refers to Definition
Company/The Company/ Shen Textile Refers to Shenzhen Textile (Holdings) Co., Ltd
Articles of Association Refers to Articles of Association of Shenzhen Textile (Holdings) Co., Ltd
Actual controller / National Assets Regulatory
National Assets Regulatory Commission of Shenzhen Municipal
Commission of Shenzhen Municipal People's Refers to
People's Government
Government
The Controlling shareholder/ Shenzhen
Refers to Shenzhen Investment Holding Co., Ltd.
Investment Holding Co., Ltd.
Shenchao Technology Refers to Shenzhen Shenchao Technology Investment Co., Ltd.
SAPO Photoelectric Refers to Shenzhen SAPO Photoelectric Co., Ltd.
Jinjiang Group Refers to Hangzhou Jinjiang Group Co., Ltd.
Nitto Denko Refers to Nitto Denko Corporation
Kunshan Zhiqimei Refers to Kunshan Zhiqimei Material Technology Co., Ltd.
Line 6 Refers to TFT-LCD polarizer II phase Line 6 project
Line 7 Refers to Industrialization project of polaroid for s uper large size TV
“CSRC” Refers to China Securities Regulatory Commission
Company Law Refers to Company Law of the People’s Republic of China
Securities Law Refers to Securities Law of the People’s Republic of China
The Report Refers to 2018 Annual Report
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
II. Basic Information of the Company and Financial index
Ⅰ.Company Information
Stock abbreviation Shen Textile A ,Shen Textile B Stock code： 000045、200045
Stock exchange for listing Shenzhen Stock Exchange
Name in Chinese 深圳市纺织(集团)股份有限公司
Chinese abbreviation (If any) 深纺织
English name (If any) SHENZHEN TEXTILE （HOLDINGS） CO.,LTD
English abbreviation (If any) STHC
Legal Representative Zhu Jun
Registered address 6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen
Postal code of the Registered
518031
Address
Office Address 6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen
Postal code of the office
518031
address
Internet Web Site http://www.chinasthc.com
E-mail szfzjt@chinasthc.com
Ⅱ.Contact person and contact manner
Board secretary Securities affairs Representative
Name Jiang Peng Li Zhenyu
6/F, Shenfang Building, No.3 Huaqiang 6/F, Shenfang Building, No.3 Huaqiang
Contact address
North Road, Futian District, Shenzhen North Road, Futian District, Shenzhen
Tel 0755-83776043 0755-83776043
Fax 0755-83776139 0755-83776139
E-mail jiangp@chinasthc.com lizy@chinasthc.com
Ⅲ. Information disclosure and placed
Newspapers selected by the Company for information Securities Times, China Securities, Shanghai Securities Daily ,Securities
disclosure Daily and Hongkong Commercial Daily.
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Internet website designated by CSRC for publishing
http://www.cninfo.com.cn
the Annual report of the Company
The place where the Annual report is prepared and
Secretarial office of the Board
placed
Ⅳ.Changes in Registration
Organization Code 19217374-9
In July 2012, The business scope of the company is changed to "production, textiles
processing, knitwear, clothing, upholstery fabrics, belts, trademark bands, handicrafts
(without restrictions); general merchandise, the special equipment of the textile
Changes in principal business activities industry, textile equipment and accessories, instruments, standard parts, raw textile
since listing (if any) materials, dyes, electronic products, chemical products, mechanical and electrical
equipment, light industrial products, office supplies and domestic trade (excluding the
franchise, the control and the monopoly of goods) ; operation of import and export
business." after approval of Shenzhen Market Supervisory Authority .
In October 2004,In accordance with the Decision on Establishing Shenzhen Investment
Holdings Co., Ltd. issued by State-owned Assets Administration Committee of
Shenzhen Municipal People's Government (Shen Guo Zi Wei (2004) No. 223
Changes is the controlling shareholder in
Document), Shenzhen Investment Management Co., Ltd., the controlling shareholder
the past (is any)
of the Company, and Shenzhen Construction Holding Company and Shenzhen
Commerce and Trade Holding Company merged into Shenzhen Investment Holdings
Co., Ltd.
Ⅴ. Other Relevant Information
CPAs engaged
Name of the CPAs Peking Certified Public Accountants（Special Geneaal Partnership）
Office address： 11/F, Zhongtang Building , No.110, Xihimen Street , Beijing
Names of the Certified Public
Lan Tao, Liu Ru
Accountants as the signatiries
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
□ Applicable √Not applicable
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
□ Applicable √ Not applicable
VI.Summary of Accounting data and Financial index
May the Company make retroactive adjustment or restatement of the accounting data of the previous years
□ Yes √ No
2018 2017 Changed over last year 2016
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
（％）
Operating income（RMB） 1,272,356,771.34 1,475,545,719.72 -13.77% 1,198,200,216.42
Net profit attributable to the
shareholders of the listed company -22,980,624.93 52,776,101.46 -143.54% -87,270,604.54
（RMB）
Net profit after deducting of
non-recurring gain/loss attributable
-65,404,429.81 3,140,446.26 -2,182.65% -102,767,648.41
to the shareholders of listed
company（RMB）
Cash flow generated by business
-460,494,321.15 -28,518,702.31 -1,514.71% -55,264,465.84
operation, net（RMB）
Basic earning per
-0.0449 0.100 -144.90% -0.17
share(RMB/Share)
Diluted gains per
-0.0449 0.100 -144.90% -0.17
share(RMB/Share)(RMB/Share)
Weighted average ROE(%) -0.96% 2.23% -3.19% -4.10%
End of Changed over last year
End of 2018 End of 2016
2017 （％）
Gross assets（RMB） 4,619,203,416.79 4,195,746,507.56 10.09% 4,119,586,266.47
Net assets attributable to
shareholders of the listed company 2,373,329,991.86 2,397,474,603.79 -1.01% 2,339,554,176.31
（RMB）
VII.The differences between domestic and international accounting standards
1．Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed
in the financial reports of differences in net income and net assets.
□ Applicable□√ Not applicable
Nil
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards.
□ Applicable √Not applicable
Nil
VIII.Main Financial Index by Quarters
In RMB
First quarter Second quarter Third quarter Fourth quarter
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Operating income 221,307,388.08 252,955,020.49 433,011,400.70 365,082,962.07
Net profit attributable to the
5,616,717.00 4,030,259.15 2,621,782.96 -35,249,384.04
shareholders of the listed company
Net profit after deducting of
non-recurring gain/loss attributable
-4,641,384.38 -6,175,930.54 -7,620,712.88 -46,966,402.01
to the shareholders of listed
company
Net Cash flow generated by
-35,263,573.85 -93,587,315.59 -269,937,851.60 -61,705,580.11
business operation
Whether significant variances exist between the above financial index or the index with its sum and the financial
index of the quarterly report as well as semi-annual report index disclosed by the Company.
√ Yes □ No
Operating income First quarter Second quarter Third quarter 1-3 quarter in total
Disclosure amount 221,307,388.08 316,980,662.53 533,270,021.4 1,071,558,072.01
Audited Confirmed
221,307,388.08 252,955,020.49 433,011,400.7 907,273,809.27
Amount
discrepancy 0 -64,025,642.04 -100,258,620.70 -164,284,262.74
IX.Items and amount of non-current gains and losses
√Applicable □Not applicable
In RMB
Items Amount (2018) Amount (2017) Amount (2016) Notes
Non-current asset disposal
gain/loss(including the write-off part for -97,477.14 -52,131.44 -138,610.37
which assets impairment provision is made)
Govemment subsidy recognized in current
gain and loss(excluding those closely related
17,228,202.21 12,567,426.98 9,578,484.46
to the Company’s business and granted
under the state’s policies)
Gain/loss on entrusting others with
52,271,862.25 49,885,730.58
investment or asset management
Switch back of provision for depreciation of
account receivable which was singly taken 332,073.93 634,628.72
depreciation test.
Net amount of non-operating income and
1,143,552.02 -1,175,757.59 5,493,881.12
expense except the aforesaid items
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Other non-recurring Gains/loss items 23,068,858.53
Less :Influenced amount of income tax 48,007.18 1,828,395.90 71,340.06
Influenced amount of minor shareholders’
28,074,327.28 33,162,149.89
equity (after tax)
Total 42,423,804.88 49,635,655.20 15,497,043.87 --
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and
its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure
for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□ Applicable√ Not applicable
None of Non-recurring gain /loss items recorgnized as recurring gain /loss/items as defined by the information
disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period.
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
III. Business Profile
Ⅰ.Main Business the Company is Engaged in During the Report Period
Whether the company needs to comply with the disclosure requirements of the particular industry
No
1. Main Business the Company
The company's main business covered such the high and new technology industry as represented by LCD
polarizer, its own property management business and the retained business of high-end textile and garment
In the report period, no significant change happened to the main business of the Company. On one hand, the
Company focused on promotion of the polarizer operation capacity, wherein it took measures of optimizing
production process and product structure, tightening quality control and highlighting technology research &
development among others, and shifted its priority from sales to selling profits in a strategically market-oriented
way; on the other hand, it completed the construction and optimization of the Line 6 Project as planned, to be
specific, in June 2018, it completed the technical transformation and test run of TFT-LCD and OLED polarizer
Line 6 Project that was transferred to fixed assets and embarked on a mass production stage. With regard to
optimization and promotion of the Line 6 Project, the Company completed the comprehensive acceleration of the
first three processes--pre-processing, extension and coating, introduced shape grinding machines in the rear
section of the production line in the first half of year and realized regular mass production in the third quarter,
filling the Company's gap in the shape polarizer processing; thirdly, the Company took the initiative to boost
construction of the jumbo TV polarizer industrialization project (Line 7) and completed the project approval,
feasibility study and examination and approval work. Adopted at the General Meeting of Shareholders in August
2018 through deliberation, the Line 7 Project duly embarked on its construction in September 2018 and passed the
EIA in December 2018. The plant and equipment design was optimized in the Line 7 Project on the ground of a
significant technical support given by Nitto Denko in terms of production technology, plant design, and AGV path
optimization among others; fourthly, to enhance management service and increase benefit of property
management enterprises, the Company further intensified all the management service ideas of property
management enterprises, took the initiative to cope with all the adverse effects of such factors as economic
downturn and market depression on property leasing and management and increased the rental income with effort;
fifthly, confronted with the sluggish traditional textile industry, the Company took the initiative to overcome such
unfavorable effects as a rise in the cost of raw materials and labor and gave priority to order production through
optimization of customer and product structure to bring the money-losing textile business into the black; sixthly,
the Company tightened safety and environmental protection work, safeguarded enterprise harmony and stability,
and kept giving a priority to safe and environment-friendly production to take the initiative to discharge its social
responsibility while pursuing a green, health and sustainable development.
As a type of upstream raw materials of LCD panels and one of essential and fundamental materials in the
panel display industry, polarizers are widespread used in a variety of areas, LCD panels and OLED panels for
smart phones, tablet PCs and TV sets, instruments, apparatuses, sunglasses, and light filters of camera equipment,
to name a few. At the moment, the Company has 6 mass polarizer production lines for making products that cover
such areas as TN, STN, TFT, OLED, 3D, dye films, and optical films for touch screens and are primarily used in
TV, NB, navigators, Monitor, vehicle-mounted, industrial control, instruments, apparatuses, smart phones,
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
wearable equipment, 3D glasses, sunglasses and other products, based on which, the Company has become a
qualified supplier to China Star Optoelectronics Technology (CSOT), BOE, Infovision Optoelectronics (IVO),
Shenchao Optoelectronic, LGD, Tianma and other major panel enterprises through constant extension of its
marketing channels and building of its own brand.
The Company's main products made in each polarizer production line and their application are as follows:
Line Place Product breadth Planned capacity Main products
Line 1 Pingshan 500mm 600,000 m2 TN/STN/ dye film
2
Line 2 Longhua 500mm 1.2 million m TN/STN/CSTN
2
Line 3 Longhua 650mm 1 million m TN/STN/CSTN/TFT
Line 4 Pingshan 1490mm 6 million m2 TN/STN/CSTN/TFT
2
Line 5 Pingshan 650mm 2 million m TFT
2
Line 6 Pingshan 1490mm 10 million m TFT/OLED
Line 7 Pingshan
(Under construction) 2500mm 32 million m2 TFT/OLED
(II) Company's business model
The priority of the polarizer industry is gradually shifting from the conventional research &
development-production-sales business model to the customer-oriented business model of joint research &
development and full service. The Company reduced production links and costs and created value for customers
and a win-win situation through cooperation by understanding customers' needs, making high-quality products
through joint research & development and high-standard production management and using advanced polarizer
rolling and attaching equipment in conjunction with downstream panel manufacturers' production lines.
(III) Major factors for driving the Company's performance
Refer to "III. Analysis on core competitiveness" in this section for details.
(IV) Development stage and periodic characteristics of the industry where the Company is involved and the
Company's position in the industry
Refer to "IX. Company's outlook for future development" in Section IV for details.
In the future, the Company will deepen driving the mixed-ownership reform work and strengthen strategic
cooperation based on more than 20 years of industrial operation experience and regional advantages. To be
specific, the Company will further optimize its equity structure, invigorate its operation and promote its
production technology and business management standards through integration of resources in the polarizer and
optical film industries; meanwhile, the Company will spare no effort to push forward the construction of an
ultra-wide polarizer production line to occupy the highly lucrative jumbo LCD TV polarizer product market; in
addition to working on the polarizer industry, the Company will make a leaping development towards the optical
film industry to make SAPO Photoelectric a bigger and stronger enterprise.
II.Major Changes in Main Assets
1.Major Changes in Main Assets
Main assets Major changes
Equity assets No major changes
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Fixed assets at the end of the reporting period increased by RMB331.7430 million
Fixed assets compared to the beginning of the period, an increase of 50.56%, mainly due to the
carry-over of fixed assets in the current phase II of the TFT-LCD polarizer. Line 6.
Intangible assets No major changes
Construction in process at the end of the reporting period decreased by RMB306.9489
Construction in process million compared to the beginning of the period, a decrease of 95.165%, mainly due to
the carry-over of fixed assets in the current phase II of the TFT-LCD polarizer. Line 6.
Notes receivable & Account receivable at the end of the reporting period increased by
Notes receivable & Account receivable RMB292.6303 million compared to the beginning of the period, an increase of 123.62%,
Mainly due to the increase in trade volume this year.
Prepayment at the end of the reporting period increased by RMB215.2736 million
Prepayment compared to the beginning of the period, an increase of 1565.04%,Mainly due to the
increase in prepayments for the current period.
Other account receivable at the end of the reporting period decreased by RMB13.8079
Other account receivable million compared to the beginning of the period, a decrease of 48.19%，Mainly due to the
decrease in interest receivable.
Inventories at the end of the reporting period increased by RMB164.1375 million
compared to the beginning of the period, an increase of 59.55%，Mainly due to the
Inventories
increase in the production of semi-finished products after the coordinated production of
No. 4 and No. 6 production lines, and the increase in raw materials purchased.
2. Main Conditions of Overseas Assets
□ Applicable √Not applicable
III.Analysis On core Competitiveness
Whether the company needs to comply with the disclosure requirements of the particular industry
No
（1）Technology advantages.
SAPO Photoelectric is the first domestic national high-tech company which entered into the R&D and
production of the polarizer，We are one of the largest, most technical and professional polarizer R&D teams in the
country and has more than 20 years of operating experience in the polarizer industry. Products include TN-type,
STN-type, IPS-TFT-type, VA-TFT-type,OLED, vehicle-mounted industrial display, flexible display, 3D stereo
and polarizer for sunglasses, and optical film for touch screens, etc., We have proprietary technology for
polarizers and new intellectual property rights for various new products. By the end of the reporting period, the
company applied for 91 invention patents and was authorized with 66 items, among which: 23 domestic invention
patents(8 patents got authorized); 61 domestic utility model patents(54 patents got authorized); 1 overseas
invention patent(0 patents got authorized); 6 overseas utility model patents(4 patents got authorized). There were
4 national standards and 2 industrial standards that were developed by the company are approved and then will be
implemented. The company, possessing the two technology platforms “Shenzhen polarizing materials and
engineering laboratory" and "Municipal research and development center", focused on the R&D and the
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
industrialization of the core production technology of LCD polarizer, the developing and industrialization of the
new products of OLED polarizer and the “domestication” research on the production materials of polarizer.
Through the introduction of various types of sophisticated testing equipments to perfect the test means of
small-scale test and medium-scale test, further by improving the incentive system of research and development
and building the collaborative innovation platform of “Industry-Study-Research-Utilization” and so forth means,
the company comprehensively enhanced the level of research and development.
（2）Talents advantages.
The company has the management team and the senior technical team with strong technical ability, enduring
cooperative spirit, rich experience and international vision on the polarizer. The company had engaged overseas
technical personnel who have great experiences on advanced polarizer production and established the technology
management team with its own technical team and complemented by engaging foreign technical personnel, Since
the end of 2017,The Company has with the world-class polaroid manufacturers nitto electrical co., LTD
established technical cooperation relations, through technical cooperation, learning advanced polaroid production
management idea, through independent innovation technology experience, at the same time to improve their core
competitiveness, gradually accumulate their own brands, the advantages of the technology, operation management,
and through the distribution of perfecting examination system, and the salaries and incentives focus is shifted to
core employees such as management and research and development, giving full play to the subjective initiative of
the talents.
（3）Market advantages.
The company has good customer groups not only in domestic market but in foreign market, compared with
foreign advanced counterparts, the biggest advantage lies in the localization for supporting, close to the panel
market, as well as the strong support of the national policy. In terms of market demand, with the mass production
of the 10.5/11-generation TFT-LCD panel production lines under construction and planned for the next few years,
the production capacity of high-generation TFT-LCD panels in mainland China will increase significantly in the
next few years, the corresponding domestic polaroid film market demand has also increased, and the domestic
market is the most important market for polaroid manufacturers, especially in the large-size polarizer market.
Mainland polarizer manufacturers will usher in important industry opportunities; in terms of market development,
the company takes production material control as the core, technology services as the guide, customer needs as the
focus, organically combines production and sales, establishes a rapid response mechanism, fully exploits
localization advantages, and uses its own accumulated technology and talents, does a good job of peer-to-peer
professional services, forms a stable supply chain and increases market share.
(4) Quality advantages.
The company always adhered to the quality policy of "Satisfying customer demands and pursuing excellent
quality" and focused on product quality control. The company strictly controls product performance indicators,
standardizes inspection standards for incoming materials, starts with quality improvement and consumption
reduction, and achieves simultaneous increase in output and quality; through the introduction of a modern quality
management system, the products have passed ISO9001 Quality Management System and ISO14001
Environmental Management System, OHSAS18000 Occupational Health and Safety Management System,
QCO80000 System Certification; the product is tested by SGS and meets the environmental protection ,The
company had increased the automatic detecting and marking equipments in the beginning section and the ending
section, strictly controlled the product quality and improved the product utilization rate and product management
efficiency.
（5）Management advantages.
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
SAPO Photoelectric has accumulated rich management experiences in more than 20 years in the
manufacturing of polarizer, possessing the home most advanced control technology of the production management
process of the polarizer and quality management technology and the stable raw material procurement channel so
forth management systems. The company had carried out comprehensive benchmarking work, organized the
management personnel to learn advanced experiences from customers and peers to force the elevation of
management ability, and drew on the foreign company’s management experiences of polarizer, optimized the
company's organizational structure, reduced the managerial hierarchy and further enhanced the company's
management efficiency. After the introduction of the strategic investor, Through close cooperation with Jinjiang
Group, we complement each other's strengths, absorb the vitality of private enterprises, continue to implement
advanced management systems, reasonable incentive mechanisms, etc., improve the efficiency of
decision-making, enhance the speed of market response, improve the research and development incentive system,
and also realize the deep integration of the value of the company and its employees and stimulates the new vitality
of the business.
（6）Policy advantages.
Polarizer is seen as an essential part of the panel display industry and SAPO Photoelectric in its development
has promoted the supply capacity of national polarizers, greatly lowered the dependence of national panel
enterprises on imported polarizers, and safeguarded the national panel industry, which serves as a good facilitator
to enhancing the overall competitiveness of China's panel industry chain and coordinated development of the
whole industry chain of the panel display industry cluster in Shenzhen. Recognized as a national high-tech
enterprise, the Company is entitled to the preferential policy for duty-free import of own productive raw materials
that cannot be produced at home and frequently gained national, provincial and municipal policy and financial
support in its polarizer projects. Meanwhile, the Company tightened supplier management, improved its overall
purchasing strategy, and downsized suppliers while introducing a competitive mechanism, wherein focus was
given to introduction of new materials at a competitive price, to further lower its production cost and improve its
product competitiveness.
IV. Management’s Discussion and Analysis
Ⅰ.General
In 2018, the economic environment change was intensified, and the Company was affected by unfavorable
factors such as Sino-US trade friction, large exchange rate fluctuations, intensified market competition, high
production unit consumption, poor product structure optimization, and the overall increase in production factors
prices. The business situation of polarizer production and operation was not up to expectations.
In 2018, the Company realized the operating income of RMB 1,272.3568 million, a decrease of 13.77% over
the same period of the previous year; the total profit recorded a loss of RMB 53.4231million, a decrease of 162.89%
over the same period of the previous year; the net profit attributable to owners of the parent company recorded a loss
of RMB 22.9806 million, a YOY decline of 143.54%. The main reasons for the Company's losses were: first, due to
the adverse impact of the decline in the price of the display terminal during the reporting period, the sales price of
polarizer for TV products of the Company declined; secondly, the project of Line 6 was still in the climbing stage
after the project was put into production, resulting in a fixed cost of the product unit was relatively high, third, in the
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
reporting period, due to the decline of the exchange rate of RMB against the Japanese yen, the purchase cost of
imported raw materials increased, and the exchange loss increased; fourth, due to the decline in the selling price of
the products during the reporting period, the provision for inventory falling price increased.
Facing the increasingly severe overall operation situation of polarizer and the weakening global economic
situation under the trade protectionism, the Company faced up to the difficulties, overcame the difficulties, gave
full play to its internal advantages, deepened and promoted the mixed-ownership reform work, and laid a solid
foundation for further transformation and development of the Company. It optimized the product structure of
traditional textile business to turn loss into profit; strengthened the management services of property-kind
enterprises and improved the efficiency.
Review of the company's key works carried out in 2018 as follows:
(I) Polarizer's operating capability has been improved
In 2018, based on market-oriented, the Company optimized the product structure, expanded the panel product to
high-value-added orders such as large-size and thin-form product, and shifted the emphasis from sales volume to
sales profit, sped up the introduction and start-up of new projects. Meanwhile, it had comprehensively carried out
high-profit machine verification work; second, focusing on technology research and development and the overall
strategic deployment, it increased the research and development efforts in new products, new materials,
production processes, etc.; third, optimized the production processes, improved the quality control, and controlled
the inventory quantity by reducing product quality abnormality and improving the inventory turnover; fourth,
actively strived for scientific research policy support funds.
Furthermore, the Company increased research & development of independent intellectual property rights.
Throughout the year, the Company applied for 10 patents (including 4 invention patents and 6 utility model
patents) and imported 1 PCT patent (utility model patent) into South Korea and Japan respectively. Till December
31, 2018, the Company applied for 91 patents in total (66 licensed), including 23 national invention patents (8
licensed), 61 national utility model patents (54 licensed), 1 international invention patent (0 licensed) and 6
international utility model patents (4 licensed). The Company studied and formulated 4 national standards and 2
industrial standards which have been adopted and put into practice. The Company has two technical
platforms--"Shenzhen Polarizing Materials and Technology Engineering Lab" and "Municipal Research and
Development Center" where focus is given to research & development and industrialization of key LCD polarizer
production techniques, research & development and industrialization of new OLED polarizer products and
research on localization of polarizer production materials. The Company raised its research & development
standard in all respects by taking measures of introducing all types of precision testing equipment, improving
methods of preliminary and pilot tests and research & development incentive system and building an
"industry-university-research" integrated innovation platform among others.
(II) Enhancement of management services of property management and textile enterprises for the sake of
benefit increase
In 2018, the Company further reinforced all the management service ideas of property management
enterprises, handled all the adverse effects caused by economic downturn and market depression to property
leasing and management in a scientific way, faced up to difficulty with courage, made great efforts in leasing
operation to promote services and stabilize customers, carried out standardized management, enhanced correction
of potential safety threats, elaborated management process, lowered disbursement and enhanced efficiency to
increase the rental income.
Confronted the depression in the traditional textile industry, the Company took the initiative to overcome
effects of such unfavorable factors as a rise in the cost of raw materials and labor and gave priority to order
production through optimization of customer and product structure to bring the money-losing textile business into
15
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
the black.
（III) Completion of construction and optimization of Line 6 Project as scheduled
In view of a certain decline in the price of 32-inch products at the polarizer market at the end of 2017, the
Company optimized and promoted the main equipment in the Line 6 at the end of 2017, wherein the full
acceleration of the first three processes stood out, filling the gap of the Company in shape polarizer processing. In
June 2018, the Company completed the optimization, promotion and test run of the Line 6 Project that was
transferred to fixed assets and embarked on a mass production stage in the third quarter.
(IV) Facilitated construction of jumbo TV polarizer industrialization project with effort
In 2018, the Company took the initiative to boost construction of the jumbo TV polarizer industrialization
project (Line 7). In the first place, project approval, feasibility study and examination and approval were
completed. Adopted at the General Meeting of Shareholders in August 2018 through deliberation, the Line 7
Project duly embarked on its construction in September 2018 and passed the EIA in December 2018. Secondly,
the plant and equipment design was optimized in the Line 7 Project on the ground of a significant technical
support given by Nitto Denko in terms of production technology, plant design, and AGV path optimization among
others. Thirdly, a business unit was set up for the Line 7 Project where independent accounting and business
management were implemented to push forward project construction with all the efforts.
（V）Tightened safety and environmental protection and safeguarding of enterprise harmony and stability
In 2018, the Company kept giving a priority to safe and environment-friendly production by adhering to the
philosophy of safety overriding anything else. As always, the Company highlighted the safety and environmental
protection work. Throughout the year, the Company invested RMB 18.71 million in adding and maintaining safe
and environment-friendly equipment, predominantly completed upgrading and transformation the waste water
processing system and updating the RTO waste gas processing equipment in the Line 6 and updating and
eliminating high liquor ratio dying equipment for Beauty Century among other work, and fulfilled 100%
up-to-standard waste water and gas emission, 0 more-than-average environmental pollution accident and 0
environmental protection irregularity to practically perform its social responsibility.
（VI) Constant reinforcement of foundation and strengthening of primary Party building work
On the ground of implementing and putting into practice the spirit of the 19th National Congress of the
Communist Party of China, the Company thoroughly carried out the Party's new deployment and demand for
seeing Party self-governance exercised fully and with rigor, carefully fulfilled the entity responsibility of the Party
Committee and supervision responsibility of the Disciplinary Inspection Commission, reinforced the system of
"one post taking a dual responsibility", and implemented the Party Building Responsibility Statement to guarantee
that the Party building work was put into practice; it pushed forward Party building system building and raised the
standard of the normalization of the Party building work step by step; it took the initiative to explore and drive the
Party building work in enterprises involved in mixed-ownership reform and guided corporate business
development by Party building work.
Ⅱ.Main business analysis
1. General
Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”.
16
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
2. Revenue and cost
(1)Component of Business Income
In RMB
2018 2017
Increase /decrease
Amount Proportion Amount Proportion
Total operating
1,272,356,771.34 100% 1,475,545,719.72 100% -13.77%
revenue
On Industry
Domestic and
288,744,806.35 22.69% 490,391,227.85 33.23% -41.12%
foreign trade
Manufacturing 879,409,830.28 69.12% 869,112,546.94 58.90% 1.18%
Lease and
Management of 98,327,018.46 7.73% 93,781,583.42 6.36% 4.85%
Property
Other 5,875,116.25 0.46% 22,260,361.51 1.51% -73.61%
On Products
Lease and
Management of 98,327,018.46 7.73% 93,781,583.42 6.36% 4.85%
Property
Textile 47,188,632.17 3.71% 41,273,987.57 2.80% 14.33%
Polarizer sheet 832,221,198.11 65.41% 851,531,250.79 57.71% -2.27%
Trade 288,744,806.35 22.69% 466,698,536.43 31.63% -38.13%
Other 5,875,116.25 0.46% 22,260,361.51 1.51% -73.61%
Area
Domestic 944,994,550.59 74.27% 1,103,749,604.72 74.80% -13.69%
Overseas 327,362,220.75 25.73% 371,796,115.00 25.20% -11.95%
(2)Situation of Industry, Product and District Occupying the Company’s Business Income and Operating Profit
with Profit over 10%
√ Applicable □Not applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
No
In RMB
Increase/decrease Increase/decrease Increase/decrease
Gross profit
Turnover Operation cost of revenue in the of business cost of gross profit
rate(%)
same period of over the same rate over the same
17
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
the previous period of period of the
year(%) previous year (%) previous year (%)
On Industry
Domestic and
288,744,806.35 271,514,631.70 5.97% -41.12% -43.59% 4.12%
foreign trade
Manufacturing 879,409,830.28 839,415,041.00 4.55% 1.18% 6.74% -4.97%
Lease and
Management of 98,327,018.46 25,838,344.67 73.72% 4.85% -2.75% 2.05%
Property
On Products
Lease and
Management of 98,327,018.46 25,838,344.67 73.72% 4.85% -2.75% 2.05%
Property
Textile 47,188,632.17 41,092,884.63 12.92% 14.33% 10.23% 3.24%
Polarizer sheet 832,221,198.11 798,322,156.37 4.07% -2.27% 3.44% -5.29%
Trade 288,744,806.35 271,514,631.70 5.97% -38.13% -40.80% 4.25%
Area
Domestic 944,994,550.59 824,950,912.58 12.70% -14.38% -11.99% -2.37%
Overseas 327,362,220.75 317,299,372.09 3.07% -11.95% -11.11% -0.92%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main
business based on latest on year’s scope of period-end.
□ Applicable √Not applicable
(3)Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
Classification Items Unit 2018 2017 Changes
(0000’ square
Sales 1,079.2 881.73 22.40%
meters)
(0000’ square
Polarizer sheet Production 1,110.26 853.29 30.12%
meters)
(0000’ square
Stock 118.45 87.39 35.54%
meters)
Sales 0000’ pieces 295 249 18.47%
Knitted clothing Production 0000’ pieces 296 234 26.50%
Stock 0000’ pieces 49 48 2.08%
Explanation for a year-on –year change of over 30%
√Applicable□ Not applicable
18
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
The production volume of polarizers was increased by 30.12% and the inventory increased by 35.54%, mainly du
e to the production of the company's polarizer line 6 in 2018, with increased production and sales.
(4)Degree of Performance of the Significant Sales Contract Signed up to this Report Period
□ Applicable √Not applicable
(5)Component of business cost
Industry and product classification
In RMB
2018 2017
Proportion in the Proportion in the Increase/Decrease
Industry Items
Amount operating costs Amount operating costs (%)
(%) (%)
Domestic and Polarizer sheet,
271,514,631.70 23.77% 481,342,760.55 37.04% -43.59%
foreign trade Textile
Polarizer sheet,
Manufacturing 839,415,041.00 73.49% 786,401,813.99 60.51% 7.83%
Knitted clothing
Lease and
Rental，
Management of 25,838,344.67 2.26% 26,568,634.40 2.04% -2.75%
Accommodation
Property
Other Other 5,482,267.30 0.48% 5,290,510.43 0.41% 3.62%
In RMB
2018 2017
Classification of
Proportion in Proportion in Increase/Decrease
products Items
Amount operation Amount operation (%)
costs(%) costs(%)
Polarizer sheet Direct materials 633,828,818.77 55.49% 585,570,976.73 45.06% 9.54%
Polarizer sheet Direct labor 31,895,556.85 2.79% 34,391,814.72 2.65% -7.26%
Polarizer sheet Power costs 23,825,672.61 2.09% 28,735,642.71 2.21% -17.09%
Manufacturing
Polarizer sheet 108,772,108.14 9.52% 100,422,875.03 7.73% 8.31%
costs
Knitted clothing Direct materials 21,024,776.26 1.84% 17,539,683.14 1.35% 19.87%
Knitted clothing Direct labor 9,321,761.79 0.82% 8,028,204.05 0.62% 16.11%
Knitted clothing Power costs 1,851,454.61 0.16% 1,720,566.62 0.13% 7.61%
Manufacturing
Knitted clothing 8,903,943.69 0.78% 9,992,050.99 0.77% -10.89%
costs
19
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Note
(6)Whether Changes Occurred in Consolidation Scope in the Report Period
□Yes √ No
(7)Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in the Company’s
Report Period
□ Applicable √Not applicable
(8)Situation of Main Customers and Main Supplier
Information of Main Customers
Total sales amount to top 5 customers (RMB) 789,064,703.69
Proportion of sales to top 5 customers in the annual
62.02%
sales(%)
Proportion of the sales volume to the top five customers
6.88%
in the total sales to the related parties in the year
Information of the Company’s top 5 customers
No Name Amount(RMB) Proportion(%)
1 Customer 1 378,093,076.16 29.72%
2 Customer 2 151,566,770.47 11.91%
3 Customer 3 107,607,236.64 8.46%
4 Customer 4 87,524,774.55 6.88%
5 Customer 5 64,272,845.87 5.05%
Total -- 789,064,703.69 62.02%
Other Note :
√Applicable □Not applicable
In the report period, the Company bore a relation with the fourth biggest client of the top five clients but the
Company's directors, supervisors, senior executives, key management and technical personnel, shareholders with
more than 5% of shares, actual controllers and other related parties had no direct or indirect rights or interests in
any key client.
Principal suppliers
Total purchase of top 5 Suppliers（RMB） 447,712,128.10
Percentage of total purchase of top 5 suppliers In total
39.20%
annual purchase(%)
20
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Proportion of purchase amount from the top 5 suppliers in
the total purchase amount from the related parties in the 4.27%
year
Information about the top 5 suppliers
No Name Amount（RMB） Proportion
1 Supplier 1 166,425,066.85 14.57%
2 Supplier 2 105,561,846.29 9.24%
3 Supplier 3 72,276,354.70 6.33%
4 Supplier 4 54,677,850.65 4.79%
5 Supplier 5 48,771,009.61 4.27%
Total -- 447,712,128.10 39.20%
Other Notes :
√Applicable □Not applicable
There exists no the association relations between the top five suppliers and the company, and the directors,
supervisors and senior management, core technical staff, shareholders with holding of more than 5% stocks, actual
controllers and other affiliated parties do not have direct or indirect equity of the major suppliers.
3.Expenses
In RMB
Increase/Decrea
2018 2017 Notes
se(%)
Sale expenses 9,636,559.05 9,940,696.87 -3.06%
Administration expenses 88,590,439.30 75,320,512.60 17.62%
1. Exchange loss increases due to
changes in the yen's exchange rate;
Financial expenses -971,661.37 -31,171,160.81 -96.88%
2.Increase in interest on bank
borrowings
R & D cost 41,951,786.15 39,036,089.05 7.47%
4.R& D Expenses
√Applicable □Not applicable
This year, the R&D Department worked on a total of 12 development projects, involving development of jumbo
VA TV polarizer products, performance optimization of smart phone polarizers & development of ultra-thin
polarizer products, development of OLED polarizers, development of vehicle-mounted industrial control products,
development of thinning PVA films, performance improvement and new product development for TNSTN
products, performance improvement and new product development for dye film products, technical development
and research for UV glue, product development at the new production line--Line 6, development of premium IPS
21
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
products, development, performance improvement and research of pressure sensitive adhesive materials,
development of raw materials suppliers at multiple levels, etc. In the report period, the Company successfully
made 225 new products in total (by product model), significantly improved its innovation capacity, further
promoted its product competitiveness and kept increasing its market share.
Situation of Research and Development Input by the Company
2018 2017 Increase/Decrease(%)
Number of Research and
107 105 1.90%
Development persons (persons)
Proportion of Research and
10.18% 10.20% -0.02%
Development persons
Amount of Research and
Development Investment (In 41,951,786.15 39,036,089.05 7.47%
RMB)
Proportion of Research and
Development Investment of 3.30% 2.65% 0.65%
Operation Revenue
Amount of Research and
Development Investment 0.00 0.00 0.00%
Capitalization (In RMB)
Proportion of Capitalization
Research and Development
0.00% 0.00% 0.00%
Investment of Research and
Development Investment
The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the
Business Income Year on Year
□ Applicable √ Not applicable
Explanation of the Reason for Substantial Changes in the Research and Development Input’s Capitalization Rate
and Its Reasonableness
□ Applicable √ Not applicable
5.Cash Flow
In RMB
Items 2018 2017 Increase/Decrease(%)
Subtotal of cash inflow received
1,573,802,884.38 1,746,560,969.61 -9.89%
from operation activities
Subtotal of cash outflow
received from operation 2,034,297,205.53 1,775,079,671.92 14.60%
activities
Net cash flow arising from -460,494,321.15 -28,518,702.31 -1,514.71%
22
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
operating activities
Subtotal of cash inflow received
4,176,293,175.68 3,571,994,746.81 16.92%
from investing activities
Subtotal of cash outflow for
4,006,115,720.59 3,375,984,019.80 18.67%
investment activities
Net cash flow arising from
170,177,455.09 196,010,727.01 -13.18%
investment activities
Subtotal cash inflow received
630,493,275.82 216,890,764.68 190.70%
from financing activities
Subtotal cash outflow for
367,419,548.31 151,388,307.46 142.70%
financing activities
Net cash flow arising from
263,073,727.51 65,502,457.22 301.62%
financing activities
Net increase in cash and cash
-27,665,904.11 231,125,702.76 -111.97%
equivalents
Note to the year-on-year change of the relevant data
√Applicable □Not applicable
1. The net cash flow from operating activities decreased by RMB 431,975,618.84 compared with the previous
period, a decrease of 1,514.71%, mainly due to the increase in pre-payments for the increase in trade volume and
the increase in the purchase of raw materials for the production of Line 6.
2. The net cash flow from financing activities increased by 197,571,270.29 yuan from the previous period, a
decrease of 301.62%, which was mainly due to the increase in short-term borrowings.
Notes to the big difference between cash flow from operating activities and net profit in the reporting year
√Applicable □Not applicable
During the reporting period, the net cash flow from the Company's operating activities was -460,494,321.15 yuan,
and the net profit for the year was -62,649,374.26 yuan. There were significant differences between the afore-said
two, which was mainly due to the increase in pre-payments for the increase in trade volume and the increase in
purchases of raw materials for the production Line 6.
Ⅲ.Analysis of Non-core Business
√ Applicable □Not applicable
In RMB
Proportion in total
Amount Explanation of cause Sustainable (yes or no)
profit
The dividends from the
Obtained the dividends from
share-participating enterprise
the share-participating
and the contracting fees
Investment income 51,793,705.47 -96.95% enterprise, obtained
possess the sustainability, but
contracting fees, and gains
the proceeds from the trust
from trust wealth
wealth management does not
23
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
management possess the sustainability
Impairment of Loss of inventory price
106,348,320.75 -199.07% Have the sustainability
assets falling, loss of bad debts
Non-operating Mainly due to the insurance
1,265,178.66 -2.35% Not sustainable.
income claims
Non-operating Mainly due to the payment
219,103.78 -0.41% Not sustainable.
expenses of compensation
Mainly government
Other income 17,228,202.21 -32.04% Have the sustainability
subsidies
Ⅳ.Condition of Asset and Liabilities
1.Condition of Asset Causing Significant Change
In RMB
End of 2018 End of 2017 Proportio
Proportion in n
Notes to the significant change
Amount the total increase/d
assets(%) ecrease
The increase in total assets in the
1,165,048,108.
Monetary fund 1,141,759,374.60 24.72% 27.77% -3.05% current period has led to a decline in
83
the proportion of monetary funds.
Accounts Mainly due to the increase in trade
528,454,015.59 11.44% 192,503,077.70 4.59% 6.85%
receivable volume this year
Mainly due to the increase in the
production of semi-finished products
Inventories 439,752,718.77 9.52% 275,615,176.16 6.57% 2.95% after the coordinated production of No.
4 and No. 6 production lines, and the
increase in raw materials purchased.
Investment real
167,997,941.98 3.64% 173,105,806.27 4.13% -0.49%
estate
Long-term
equity 32,952,085.66 0.71% 20,380,734.56 0.49% 0.22%
investment
The completion of the second phase of
the TFT-LCD polarizer project to fixed
Fixed assets 987,876,247.55 21.39% 656,133,200.19 15.64% 5.75%
assets led to an increase in the
proportion of fixed assets.
The second phase of the polarizer for
Construction in
15,621,286.64 0.34% 322,570,173.73 7.69% -7.35% TFT-LCD was completed and
process
transferred to fixed assets, resulting in
24
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
a decrease in the proportion of
construction in progress.
The increase in raw materials
Short-term loans 411,522,111.40 8.91% 88,638,181.45 2.11% 6.80% purchased by the exchange of
borrowings.
Return Shenchao technology
Long-term loans 0.00% 40,000,000.00 0.95% -0.95%
borrowing.
2.Asset and Liabilities Measured by Fair Value
√ Applicable □Not applicable
In RMB
Gain/loss on
Cumulative fair Impairment Purchased
fair value Sold amount in
Amount at year value change provisions in amount in the Amount at
Item change in the the reporting
recorded into the reporting reporting
beginning reporting period year end
equity period period
period
Financial assets
3.
Available-for-sa
7,994,294.63 -2,874,398.17 5,119,896.46
le financial
assets
Subtotal of
7,994,294.63 -2,874,398.17 5,119,896.46
financial assets
Total 7,994,294.63 -2,874,398.17 5,119,896.46
Financial
0.00 0.00
Liability
Did great change take place in measurement of the principal assets in the reporting period ?
□ Yes √ No
3. Restricted asset rights as of the end of this Reporting Period
Not applicable
Ⅴ.Investment situation
1. General
□Applicable √Not applicable
25
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
2.Condition of Acquiring Significant Share Right Investment during the Report Period
□Applicable √Not applicable
3.Situation of the Significant Non-equity Investment Undergoing in the Report Period
□ Applicable √ Not applicable
4.Investment of Financial Asset
（1）Securities investment
□ Applicable √ Not applicable
Nil
（2）Investment in Derivatives
□ Applicable √ Not applicable
Nil
5.Application of the raised capital
√ Applicable □ Not applicable
（1）General application of the raised funds
√ Applicable □ Not applicable
In RMB10,000
Amount of Total
Accumulat Proportion
raised Amount of Amount of
ive amount of raised Use and
Total capital of the the Raised
Total of raised capital of Whereabo
Total Amount of which the Unused Fund with
Year of Way of amount of capital of which the uts of the
raised the Raised purpose Raised over 2
Raising Raising Raised which the purpose Unused
capital Fund Used was Fund at Years’
Funds purpose has been Raised
at the changed in the Idling
has been changed Fund
the report Current
changed (%)
period Period
All
deposited
in the
Non-publi
2013 96,175.1 26,291.36 46,667 0 30,927.22 32.16% 30,333.61 special
c issue
account
for the
raised
26
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
funds.
Total -- 96,175.1 26,291.36 46,667 0 30,927.22 32.16% 30,333.61 -- 0
Note to use of raised capital
During the reporting period, the Company actually used the raised funds of 262.9136 million yuan, and the accumulated use of raised
funds was 466.67 million yuan, of which 111.9479 million yuan of raised funds was actually used for the second phase of the line 6
project of TFT-LCD polarizer-and the accumulated use of raised funds for it was 315.7043 million yuan; the actual use of the raised
funds for the 7th line project was RMB 150.9657 million, with the accumulated use of raised funds for it was RMB 150.9657 million.
（2）Promised projects of raised capital
√ Applicable □ Not applicable
In RMB10,000
Date
Accumul Investme
Total when the
ated nt Has any
Project raised Total Amount project Benefit
amount progress Has the material
changed(i capital investme invested has realized
Committed investment invested ended the predicted change
ncluding invested nt after in the reached in the
projects and investment at the end reporting result be taken
partial as adjustme reporting the reporting
of the period(% realized place in
change) committe nt (1) period predicted period
reporting )(3)=(2)( feasibility
d applicabl
period(2) 1)
e status
Committed investment projects
Phase-II Not
June
project of polarizer Yes 96,175.1 70,034 11,194.79 31,570.43 45.08% -2,445.79 applicabl Yes
7,2018
sheet for TFT-LCD e
The utilization of the Not
surplus raised funds No 15,096.57 15,096.57 applicabl No
（Line 7 project） e
Subtotal of committed
-- 96,175.1 70,034 26,291.36 46,667 -- -- -2,445.79 -- --
investment projects
Subtotal of committed investment projects
No
Total -- 96,175.1 70,034 26,291.36 46,667 -- -- -2,445.79 -- --
Situation about not
coming up to schemed
progress or expected Not applicable
revenue and the reason
( in specific project)
Notes to significant According to the latest situation of the industry development, the original second phase construction
27
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
change in feasibility of scheme of the TFT-LCD polarizer was optimized, and then according to the results concluded by the
the project experts, the company decided to continue to promote the construction of the No.6 line project. At the same
time, in the light of there was a large funds gap between the actual raised capital and the planned raised
capital for the second phase project, then by comprehensive considerations of the company’s production
line scale and the operation pressure, the company decided to terminate the project of No.7 line, and the
corresponding amount of funds of RMB309.2722 million(including interests) for No.7 line project shall be
changed for permanently supplementing the liquidity. The Proposal on Alteration of the Use of Part of the
Raised Capital for the Second Phase Project of TFT-LCD Polarizer was examined and approved in the
2015 annual shareholder meeting on April 21, 2016..
Amount, application Not applicable
and application
progress of the
unbooked proceeds
About the change of Not applicable
the implementation site
of the projects invested
with the proceeds
Adjustment of the Not applicable
implementation way of
investment funded by
raised capital
About the initial Not applicable
investment in the
projects planned to be
invested with the
proceeds and the
replacement
Using the idle proceeds Not applicable
to supplement the
working capital on
temporary basis
Applicable
On August 31, 2018, in the company's second extraordinary shareholders’ meeting of 2018, the “Proposal
on the Use of Surplus Raised Funds to Invest in the Large-scale TV Polarizer Industrialization Project
Balance of the (Line 7)” was reviewed and approved, agreeing to continue to deposit RMB 134.7172 million in the
proceeds in process of original special account of raised funds for the follow-up expenditure of line 6 project and the remaining
surplus raised funds shall be used for the investment of line 7 project, with the amount shall be subject to
project implementation
and the cause the interest settlement of the bank on the day the funds are transferred out. According to the use
arrangement for the surplus raised funds, on November 12, 2018, the Company transferred the surplus
raised funds for the No. 6 line project by RMB 405.8311 million to the newly opened special account of
raised funds for project of Line 7, which will be used for the ultra-large-size TV polarizer industrialization
project (Line 7), and as of November 12, 2018, the balance of the special account for raised funds of line 6
28
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
was RMB 80.3569 million. The reasons for the surplus of the raised funds were as follows: 1. the interest
income and the investment income of the bank wealth management products were generated during the
deposit of the raised funds; 2.to grasp the opportunity of the rapid development of the domestic polarizer
industry and accelerate the construction of the No. 6 line project, the Company had in advance invested
some funds in the second phase of the polarizer project of Line 6, and in view of the fact that the funds
raised at the time were in place, as there was a large funding gap between the actual raised funds and the
planned and the original investment project needed to be re-demonstrated, the Company did not replace the
advance investment in time after the raised funds were received; 3. the second phase of the polarizer
project was subsidized by the National Development and Reform Commission and the Shenzhen
Municipal Government after the project was established ,which had been all put into the project
construction according to the requirements , thereby reduced the investment of the raised funds
accordingly; 4. to ensure the original investment project to have a good market prospect and profitability,
the Company optimized the construction plan of the original raised-funds investment project of No. 6 line,
and it adopted the cost control, optimized the production process and took other measures to achieve
reasonable savings under the premise of ensuring the original design and technical conditions of the
project.
About application and As of December 31, 2018, the balance of the raised funds was 303.3361 million yuan, of which 48.3008
status of the proceeds million yuan was deposited in the special account of raised funds for project of the line 6, and the special
unused account of raised funds for project of the line 7 had 255.0353 million yuan.
As of December 31, 2018, the accumulated investment for the second phase of Line 6 project was 699.58
million yuan, accounting for 99.89% of the total investment of 700.34 million yuan after the change, of
Problems existing in
which the actual investment payment was 652.4692 million yuan (using the raised funds of 315.7043
application of the
million yuan, using its own funds and government funds of 336.7649 million yuan). As of December 31,
proceeds and the
2018, the cumulative investment to the Line 7 project was 819.6749 million yuan, accounting for 41.83%
information disclosure
of the total investment of 1,959.4984 million yuan, of which the actual investment payment was 344.7704
or other issues
million yuan (using the raised funds of 150.9657 million yuan, using its own funds and government funds
of 193.8047 million yuan).
（3）Changes of raised funds projects
□ Applicable √ Not applicable
Nil
Ⅵ.Significant Asset and Right Offering
1.Situation of Significant Asset Sale
□ Applicable √ Not applicable
Nil
2.Situation of Substantial Stake Sale
□ Applicable √ Not applicable
29
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Ⅶ.Analysis of the Main Share Holding Companies and Share Participating Companies
√ Applicable □ Not applicable
Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company
In RMB
Company Sectors Registered Operating
Company type Total assets Net assets Turnover Net Profit
Name engaged in capital profit
Shenzhen
Lisi Domestic
22,569,173.2 19,085,808.6
Industrial Subsidiary trade, Lease 2,360,000.00 8,197,802.35 3,904,801.09 3,150,624.42
9 9
Development
Co., Ltd.
Shenzhen Accommodat
10,005,300.0 29,751,081.5 22,913,499.8 11,542,533.5
Huaqiang Subsidiary ion, business 4,663,088.29 3,456,946.73
0 3 0 2
Hotel center;
Shenfang
Property Property 10,698,821.8 10,155,195.2
Subsidiary 1,600,400.00 3,483,222.03 470,518.45 291,930.16
Management management 2 9
Co., Ltd.
Production of
Shenzhen
fully
Beauty
electronic 25,000,000.0 47,678,530.9 27,463,571.6 51,287,550.9
Century Subsidiary 3,440,990.70 3,318,279.36
jacquard 0 6 9 0
Garment Co.,
knitting
Ltd.
whole shape
SAPO Production
583,333,333. 3,672,595,28 2,693,297,67 953,843,059. -101,070,513 -99,883,239.
Photoelectric Subsidiary and sales of
00 8.68 3.78 26 .08 36
Co., Ltd. polarizer
Shenzhen
Operating
Shenfang
import and 94,382,820.2 16,215,190.5 170,532,287.
Import & Subsidiary 5,000,000.00 2,891,553.61 2,158,905.18
export 2 0 72
export Co.,
business
Ltd.
Shengtou
Sales of 21,536,315.9 70,670,771.6
（HK）Co., Subsidiary HKD10,000 5,505,226.90 711,955.39 351,790.95
polarizer 4 7
Ltd.
Acquirement and disposal of subsidiaries in the Reporting period
□ Applicable √ Not applicable
Note
The financial data of Shengbo Photoelectric Company mentioned in the table above are the financial
statements data of its parent company and non-consolidated statements data. Shenzhen Shenzhen Textile Import
30
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
and Export Co., Ltd. and Shengbo Photoelectric Company Limited are Shengbo Photoelectric Company.
The fluctuation of subsidiary Shengbo Optoelectronic Performance and the reasons for its change are
described in detail in Section IV Operating Situation Discussions and Analysis and Section V Important Matters.
Section III: Performance of Commitments. The commitment made by shareholders and counterparties in reporting
annual operating performance.
VIII.Special purpose vehicle controlled by the Company
□ Applicable √ Not applicable
Ⅸ.Prospect for future development of the Company
1. The Development Trend of the Industry
In the wake of price stabilization of LCD panels and capacity release in advanced-line panel production lines
in Mainland China, polarizer market demand has risen and major polarizer enterprises around the world have seen
a modified profitability as a whole. On a global scale, the shipping area of jumbo panels accounts for more than
80% of the total shipping area, indicating that the shipping area of LCD TV panels has remained flat as a whole in
recent years. Regarding the industry, jumbo is inevitable and gradual mass production of 10.5-line is bound to
steadily increase the supply capacity of jumbo panels and more quickly further popularize jumbo TV sets.
The dominance of production at the world's LCD TV panel market has sped up its shift from the 8.5-line to
10.5-line, hence the jumbo will be a focus of competition among manufacturers on market in the future. In the
wake of the 10.5-line capacity release, the supply and demand situation in the global LCD panel market is not
promising, which will faster drive a variation in the industrial pattern. After hitting the highest growth rate in 2018,
the world's panel display area demand is expected to still continue to rise but at a slow growth in 2019-2021. It is
estimated that panel manufacturers in Mainland China will account for more than 40％ at the world's LCD TV
panel market in 2019 in respect of capacity, which will rise to 50％+ in 2022. Besides, as polarizer enterprises
expand production slower than panel enterprises, it is expected that polarizers will be short of supply in 2019.
The polarizer industry shows a certain periodicity. Most panel display terminal products are consumables in a
stable annual demand but as electronic products, they are to be substituted by new techniques in 2-3 years in
average in the long run. As a result, the polarizer industry will basically keep pace with such products in
upgrading.
At the moment, the global polarizer industry mainly comprises three echelons: major manufacturers in Japan
and South Korea stand in the first echelon; some famous Japanese and Korean enterprises and enterprises in
Taiwan, P. R. China stand in the second echelon; the Company stands in the third echelon and serves as the
predominant enterprise of polarizer research & development, production and sales in China.
2.The company's development strategy
In 2018, the Company integrated and utilized its existing assets, optimized allocation of its resources, and
improved the total asset operation capacity to give a full support to the development of its main
business--polarizers.
In the period of the "13th Five-Year Plan", the Company will keep quickly driving the polarizer industry to go
professional, mass and efficient, seize the good opportunity of great development in the industry, make full use of
policies of the state and Shenzhen in favor of development of the polarizer industry, further deepen the
mixed-ownership reform, boost industria l integration, accelerate ultra-wide production line construction, raise the
production technology and business management standards with effort, enhance talent team building, give full
31
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
play to effects of the long-term incentive mechanism and inspire its vitality to boost a constant growth of its main
business--polarizers.
Looking ahead in 2019, the United States will not put an end to the increase of interest rates; affected by the
China-US trade friction, though under the instruction of the monetary policy of "handling the relation of
stabilizing growth, deleveraging and tightening regulation", China need further relieve its tension of liquidity and
recover its macro economy and will sustain increasingly more pressure of a slowdown in economic growth and
face a severe challenge of "two-way pressure" inflicted by developed countries and other developing countries in
manufacturing. China proposes to implement the strategy of "building a manufacturing power" and drives the
structural reform at supply side in manufacturing and right now, it is in a critical period of overcoming difficulties
in building a manufacturing power. The industry where the Company is involved is an essential part of the
electronic information industry and sees a fierce market competition where world-class giant enterprises from
Japan and South Korea are at an advantage with high strengths in raw materials, scientific research and funds
among others and highly resistant to macro economic fluctuation risks while the Company may sustain some risks
in performance if an unpredictable fluctuation occurs to the macro economy.
3.Possible risks
1. Macroeconomic Risks
Looking ahead in 2019, the United States will not put an end to the increase of interest rates; affected by the
China-US trade friction, though under the instruction of the monetary policy of "handling the relation of
stabilizing growth, deleveraging and tightening regulation", China need further relieve its tension of liquidity and
recover its macro economy and will sustain increasingly more pressure of a slowdown in economic growth and
face a severe challenge of "two-way pressure" inflicted by developed countries and other developing countries in
manufacturing. China proposes to implement the strategy of "building a manufacturing power" and drives the
structural reform at supply side in manufacturing and right now, it is in a critical period of overcoming difficulties
in building a manufacturing power. The industry where the Company is involved is an essential part of the
electronic information industry and sees a fierce market competition where world-class giant enterprises from
Japan and South Korea are at an advantage with high strengths in raw materials, scientific research and funds
among others and highly resistant to macro economic fluctuation risks while the Company may sustain some risks
in performance if an unpredictable fluctuation occurs to the macro economy.
2. Market risks
Due to the characteristics of rapid replacement and upgrading of display end-product, there is higher
requirement for the timely response ability of technology and products, while the price decline-trend also
increasingly squeezes the profit space of upstream polarizer business. China's manufacturing industry has faced a
long-term “lack of cores and screens”. The polarizer industry is an important part of China's future manufacturing
industry, and the process of domestic substitution of polarizers is in progress. With the gradual mass production of
the 10.5-generation line, the ultra-large size market will usher in new changes.If the company's technology and
products cannot timely respond to the needs of the application fields or the market competition leads to lower
prices, the company will get an adverse impact.
3. Raw-material risks
At present, the key raw materials required for the manufacture of polarizer, PVA film and TAC film, are
basically monopolized by Japanese companies, making the company constrained in the upstream supporting raw
material production line and production technology. Compared with the complete industry chain model of
32
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
upstream raw materials - polarizer - display panel from international manufacturers, the company does not realize
industrial integration effect for the time being due to lack of corresponding supporting material. The price of the
main film materials is affected by the supplier’s production capacity, market demand and the Yen exchange rate,
which affects the unit cost of the company’s products.
4.The key work in 2019
1. Deepening reform and highlighting the main business to improve the current business situation
Firstly, SAPO Photoelectric will deepen reform, enhance communication, facilitate integration, adjust and
optimize implementation paths for cooperation with Jinjiang Group with effort and solve a plurality of
contradictions in operation. For that end, the Company will focus on operation of its own main business and
promote the profitability of all its niches; secondly, the Company will further deepen industrial collaboration and
cooperation, give full play to the advantage of synergy in all respects such as production technology, purchase of
raw materials and sales, and take such specific measures as accelerating production lines, improving the product
yield, importing new materials, enhancing quality but lowering disbursement to invigorate its operation and
promote the operation capacity of its polarizer business in all respects.
2. Driving construction of the Line 7 Project and tightening project's purchasing process supervision
The Company will speed up construction of the Line 7 Project and complete project construction as planned
with a guarantee on both quality and quantity. Granted with a construction permit, the project is expected to enter
the civil construction stage in April 2019 and lay a foundation for being available for moving equipment in March
2020. During construction, the Company will ensure that routine operation department will well do their work and
that the supervision committee and supervision work unit will implement their assignments and ca rry out
corresponding supervision management measures to the letter, and practically tighten the effective supervision of
the discipline inspection on engineering construction to guarantee that the new project is an honest project.
3. Driving property management enterprises to promote service quality, guarantee earnings and take the
initiative to seek new growth points
Concerning leasing rate and rate of recovery of funds, property management enterprises will take advantage
of customer resources accumulated in years to overcome unfavorable effects, further promote service quality,
continue to facilitate the property leasing promotion plan and fulfill a reasonable increase in the rental of new
contracts concluded to render a solid cash flow support to the Company; work pertaining to leasing of Guanhua
Building will be facilitated and good customers will be selected to guarantee a stable return on leasing of Guanhua
Building.
4. Enhancing talent echelon building and reinforcing core competitiveness of company
At a critical period of transformation and development, the Company has a rapid business development,
hence it is advised to highlight team building of all kinds of talents, adhere to the orientation of employing talents
with both morality and professional competence, wherein morality comes first, implement a reform in human
resources work, get through the occupational development channel, reserve talents beforehand, continue to
optimize the compensation mechanism and system, and stabilize the talent team to keep promoting its core
competitiveness and sustainable development capacity.
5. Having a clear picture of the current work safety situation and ensuring no major work safety accident
The safety director of each enterprise shall carefully do the work safety work with a highly responsible
attitude and take the initiative to put into practice the superior work safety deployment and work safety duties
level by level and adopt a work safety assessment.
At all levels, the Company must be vigilant in work safety, continue to handle work safety, energy
conservation & emission reduction, and environmental protection among other work in each enterprise,
implement the work safety responsibility system in all respects, and tighten the construction of the long-term work
33
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
safety mechanism and inspection and correction of potential safety threats to guarantee no work safety liability
accident throughout the year and fully recognize, and institutionalize work safety, discharge duties and take
measures in this respect.
6. Boosting Party building work, cultivating enterprise culture and strengthening construction of the Party
conduct and a clean organization
Under the instruction of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the
Company will thoroughly study and implement the spirit of the 19th National Congress of the Communist Party of
China, continue toe boost construction of the enterprise culture, reinforce and fulfill the entity responsibility of
the Party Committee and supervision responsibility of the Disciplinary Inspection Commission, enhance
construction of the Party conduct and a clean organization and continue to carry out the in-depth special education
activity of "studies on the theoretical and practical issues of party building".
7. Elevating risk management standard in all respects and tightening risk control
In 2019, the Company will spare no effort to do the internal control and total risk management work,
improve the risk management awareness, hike risk control standard, make an evaluation, study and judgment on
major risks, and prepare corresponding risk response measures and solutions to well combine total risk
management with routine operation. The Company will further tighten risk control, guarantee the safety of the
trading business, decrease capital risks, and assure safety of state-owned assets, wherein as far as financial
products are concerned, the Company will follow state-owned asset supervision procedures, give a consideration
to risk control methods beforehand, and select low-risk guaranteed financial services to ensure safety in both the
principal and return.
Ⅹ.Particulars about researches, visits and interviews received in this reporting period
1.Particulars about researches, visits and interviews received in this reporting period
Applicable √ □ Not applicable
The company did not receive researches, visits and interviews received in this reporting period.
34
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
V. Important Events
ⅠSpecification of profit distribution of common shares and capitalizing of common reserves
Formulation, implementation and adjustment of profit distribution policy of common shares especia lly cash
dividend policy during the reporting period
□ Applicable √ Not applicable
The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into
share capital in the past three years(with the reporting period inclusive):
Based on the needs of the construction of TFT-LCD polarizer project and the company business development,
there were no cash dividends and there were no capital reserves converted into share capital in the last three years.
Dividend distribution of the latest three years
In RMB
Ratio of the
Ratio of the
total cash
cash bonus
bonus (other
Ratio of the by other
Net profit ways
cash bonus in ways in net
attributable to included) in
net profit profit
common stock Proportion for net profit
attributable to attributable Total cash
Amount for shareholders of cash bonus by attributable
Year for common stock to common bonus(other
cash bonus(tax listed company other ways(i.e. to common
bonus shares shareholders of stock ways
included) in share stock
listed company shareholders included)
consolidation buy-backs) shareholders
contained in of listed
statement for of listed
consolidation company
bonus year company
statement contained in
contained in
consolidation
consolidation
statement
statement
2018 0.00 -22,980,624.93 0.00% 0.00 0.00% 0.00 0.00%
2017 0.00 52,776,101.46 0.00% 0.00 0.00% 0.00 0.00%
2016 0.00 -87,270,604.54 0.00% 0.00 0.00% 0.00 0.00%
In the reporting period, both the Company’s profit and the parent company’s retained earnings were positive
however not cash dividend distribution proposal has been put forward.
□Applicable√ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable √ Not applicable
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
35
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
III. Commitments to fulfill the situation
1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the
reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor, senior
management personnel and other related parities.
√ Applicable □ Not applicable
Time of
Period of
Commitm making Fulfillme
Commitment Type Contents commitme
ent maker commitme nt
nt
nt
As Shenzhen Investment Holdings Co., Ltd., the controlling
shareholder of the company, committed when the
restricted-for-sale shares from the shares restructuring were
listed for circulation in the market: i. if they plan to sell the
Share shares through the securities exchange system in the future,
Shenzhen
Commitment reductio and the decrease of the shares they hold reaches 5% within Sustained Under
Investmen August 4,
on share n 6 months after the first decrease, they will disclose an and Fulfillme
t Holdings 2006
reform commit announcement indicating the sale through the company effective nt
Co., Ltd.
ment within two trading days before the first decrease; ii. They
shall strictly observe the “Guidelines on Transfer of
Restricted-for-sale Original Shares of Listed
Companies” and the provisions of the relevant business
principles of Shenzhen Stock Exchange.
Commitment
in the
acquisition
report or the
report on
equity changes
Commitment
made upon the
assets
replacement
Commit Shenzhen Investment Holdings Co., Ltd. signed a “Letter of
ments Commitment and Statement on Horizontal Competition
on Avoidance” when the company issued non-public stocks in
Shenzhen
Commitments horizont 2009. Pursuant to the Letter of Commitment and Statement, Sustained Under
Investmen October 9,
made upon al Shenzhen Investment Holdings Co., Ltd. and its wholly and Fulfillme
t Holdings 2009
issuance competit owned subsidiary, subsidiaries under control or any other effective nt
Co., Ltd.
ion, companies that have actual control of it shall not be
related involved in the business the same as or similar to those
transacti Shenzhen Textile currently or will run in the future, or any
36
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
on and businesses or activities that may constitute direct or indirect
capital competition with Shenzhen Textile; if the operations of
occupati Shenzhen Investment Holdings Co., Ltd. and its wholly
on owned subsidiaries, subsidiaries under control or other
companies that have actual control of it compete with
Shenzhen Textile in the same industry or contradict the
interest of the issuer in the future, Shenzhen Investment
Holdings Co., Ltd. shall urge such companies to sell the
equity, assets or business to Shenzhen Textile or a third
party; when the horizontal competition may occur due to
the business expansion concurrently necessary for
Shenzhen Investment Holdings Co., Ltd. and its wholly
owned subsidiaries, subsidiaries under control or other
companies that have actual control of it and Shenzhen
Textile, Shenzhen Textile shall have priority.
The commitments during the period non-public issuance in
2012: 1. Shenzhen Investment Holdings, as the controlling
shareholder of Shenzhen Textile, currently hasn't the
production and business activities of inter-industry
competition with Shenzhen Textile or its share-holding
subsidiary. 2. Shenzhen Investment Holdings and its
share-holding subsidiaries or other enterprises owned the
Commit
actual control rights can't be directly and indirectly on
ments
behalf of any person, company or unit to engage in the
on
same or similar business in any districts in the future by the
horizont
form of share-holding, equity participation, joint venture,
al
Shenzhen cooperation, partnership, contract, lease, etc., and ensure
competit Sustained Under
Investmen not to use the controlling shareholder's status to damage the July 14,
ion, and Fulfillme
t Holdings legitimate rights and interests of Shenzhen Textile and 2012
related effective nt
Co., Ltd. other shareholders, or to gain the additional benefits. 3. If
transacti
there will be the situation of inter-industry competition with
on and
Shenzhen Textile for Shenzhen Investment Holdings and its
capital
share-holding subsidiaries or other enterprises owned the
occupati
actual control rights in the future, Shenzhen Investment
on
Holdings will promote the related enterprises to avoid the
inter-industry competition through the transfer of equity,
assets, business and other ways. 4. Above commitments
will be continuously effective and irrevocable during
Shenzhen Investment Holdings as the controlling
shareholder of Shenzhen Textile or indirectly controlling
Shenzhen Textile.
Shenzhen 1.The company undertakes not to provide loans, loan
Equity Other November December Under
Textile(Ho guarantees, and any other forms of financial assistance to
incentive commit 27,2017 27,2021 Fulfillme
ldings) the incentive objects for obtaining the restricted stocks in
37
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
commitment Co., Ltd. ment the incentive plan; 2. The company undertakes that there is nt
no circumstance that the stock incentive shall be prohibited
as stipulated in the provisions of Article 7 of the “Measures
for the Management of Stock Incentives of Listed
Companies”.
Other
commitments
made to
minority
shareholders
Executed
Yes
timely or not?
If the
commitments
failed to
complete the
execution
when expired,
should
Not applicable
specifically
explain the
reasons of
unfulfillment
and the net
stage of the
working plan
2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is still in the
forecast period, the company has assets or projects meet the original profit forecast made and the reasons
explained
√Applicable □Not applicable
Asset or Project
Start date of End date of the Forecast Actual
Name of Reason for less Disclosure date Reference for
the forecasting forecasting earnings(RMB earnings(RMB
Earnings than forecast of the Forecast the Forecast
period period 10,000) 10,000)
Forecast
Subsidiary- See on
SAPO http://www.cni
See on
Photoelectric December December nfo.com.cn
January 1,2017 10,000 -9,726.87 http://www.cni
Introduces 31,2018 31,2016 announcement
nfo.com.cn
strategic (Announcemen
investors t No.:2016-67)
38
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Commitments made by shareholders or counterparties in reporting annual operating results
√ Applicable □Not applicable
I. Basic information
In order to improve the operation of Shengbo Optoelectronics, at the end of 2016, the company introduced
Jinjiang Group as a strategic investor by increasing capital and shares at Shengbo Optoelectronics level. The
company, Shengbo Optoelectronics, Jinjiang Group and Jinjiang Group, a limited partnership established by
Jinjiang Group as actual controllers, jointly signed the Capital Increase Agreement of Shenzhen Shengbo
Optoelectronics Technology Co., Ltd. and Jinhang Investment as capital increase. The main body subscribes for
40% of Shengbo Optoelectronics, with an additional capital of 135.64 million yuan. In order to give full play to
the institutional and institutional advantages of private enterprises and the resource advantages of state-owned
enterprises, the company signed the "Cooperation Agreement" with Jinjiang Group and Jinhang Investment on the
premise of reaching consensus on the future management and development of Shengbo Optoelectronics. Jinjiang
Group undertook performance commitment to Shengbo Optoelectronics in order to achieve better results after
introducing strategic investors.
II. Performance Commitments and Compensation Arrangements
According to the Cooperation Agreement, Jinjiang Group will give full play to the advantages of Jinjiang
Group in system, mechanism, industry, management and successful experience of industry integration after
investing in Shengbo Optoelectronics through Jinhang Airlines, and make performance commitments to Shengbo
Optoelectronics.
The sales revenue and net profit in 2017, 2018 and 2019 are not less than 1.5 billion yuan/50 million yuan, 2
billion yuan/100 million yuan and 2.5 billion yuan/150 million yuan, respectively. In principle, the sales revenue
of polarizers and related optical film products accounted for no less than 70% of the total revenue in 2017 and no
less than 80% after 2018. If the above performance fails to be achieved, Jinjiang Group shall make up the
difference of net profit in cash within 10 days from the date of completion of annual sales revenue and annual net
profit statistics.
The calculation method of the actual annual earnings is based on the current effective accounting standards
in China, and is determined by the results of the special audit issued by the qualified accounting firms hired by the
company.
III. Completion of Performance Commitments
1. Achievement of Shengbo Optoelectronics Performance Commitment in 2018
In 2018, Shengbo Optoelectronics Co., Ltd. and Jinjiang Group cooperated actively to cope with many
problems, such as fiercer market competition, rising commodity prices leading to high procurement costs of
consumables and great changes in internal organizational structure. Through actively adjusting product sales
structure, introducing low-cost raw materials, and establishing small and medium-sized business departments,
Shengbo Optoelectronics Co., Ltd. was facing severe external conditions. Under the circumstances, to ensure the
stable operation of the company and reduce the impact of adverse factors on the company. Audited by Zhongqin
Wanxin Accounting Firm (Special General Partnership), Shengbo Optoelectronics realized business income of
1.125 billion yuan in 2018, net profit of - 97.2687 million yuan, and sales revenue of polarizers and related optical
film products accounted for 74.01% of the total revenue. Therefore, Shengbo Optoelectronics has not fulfilled its
performance commitment in 2018.
2. Explanation of Performance Commitment Differences
Although sales of key products continued to increase this year, the sales scale of products was not up to
expectations. The difference between the promised sales revenue, net profit and the proportion of sales revenue of
39
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
polarizers and related optical film products to total revenue was 87,545.9 million yuan, 19,726.87 million yuan
and 5.99% respectively. According to the "Cooperation Agreement", Jinjiang Group needs to make up the
difference of net profit by cash.
3. Reasons for unfulfilled performance commitments
The main reasons for the unfulfilled performance commitment are as follows: firstly, due to the adverse
effects of shrinking sales of display terminals and falling prices during the reporting period, the sales price of TV
products of the company declined with polarizers; secondly, the project of TFT-LCD Phase II Line 6 is still in the
climbing stage after putting into operation, resulting in higher fixed cost per unit of products; thirdly, the
occupancy rate of small and medium-sized markets with original profits declined due to the relocation of
production lines of Longhua Plant. Fourthly, due to the impact of the falling exchange rate of RMB, the purchase
cost of imported raw materials increased and the exchange loss increased during the reportin g period. Fifthly, due
to the decline in product prices, the preparation for the reduction of inventory prices increased during the reporting
period.
IV.Compensation for Performance Commitment and the Measures to be taken in the Follow-up
1. The company and Jinjiang Group have conducted in-depth analysis and frank exchanges on the objective
situation and main reasons for the unfulfilled performance commitments in 2018, formulated the objectives and
measures for improving the main business in 2019, and further consultation on the follow-up cooperation matters.
At the same time, preliminary communication has been conducted on the compensation of performance
commitments in 2018. Jinjiang Group has proposed that it should be based on the actual situation and fair and
reasonable. Principle and properly handle the issue of performance compensation through consultation. Before the
two sides reached an agreement, Jinjiang Group temporarily failed to fulfill its performance commitment
compensation obligations under the Cooperation Agreement. At present, the company has not consulted with
Jinjiang Group on the compensation of performance commitment, and the two sides have not yet reached a
performance compensation scheme.
2. The company will continue to urge Jinjiang Group to fulfil its compensation obligations as stipulated in
the Cooperation Agreement. It will continue to pay attention to the progress of the matter and timely fulfill its
relevant review procedures and announcement obligations.
3. Whether the company and Jinjiang Group can reach an agreement is still uncertain. The actual amount of
compensation for performance and the time of payment for compensation are not yet predictable. If no agreement
can be reached, the company will settle the compensation for performance commitment through arbitration
according to the agreement of the Cooperation Agreement.
IV. Particulars about the non-operating occupation of funds by the controlling shareholder
□ Applicable √ Not applicable
No non-operating occupation from controlling shareholders and its related party in the period.
V. Explanation of the Supervisory Committee and Independent Directors (If applicable)on the Qualified
Auditor’s Report Issued by the CPAs.
□ Applicable √ Not applicable
40
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
VI. Explain change of the accounting policy, accounting estimate and measurement methods as compared
with the financial reporting of last year.
√ Applicable □ Not applicable
On June 15, 2018, Ministry of Finance released a Notice on Revision and Issue of 2018 Format of Financial
Statements for General Enterprises (Cai Kuai [2018] No.15) to revise the format of financial statements for general
enterprises. The Company started to implement the above notice as scheduled by the Ministry of Finance after
adopting a proposal at the fifteenth meeting of the seventh board of directors on October 29, 2018.
Before implementing the Notice on Revision and Issue of 2018 Format of Financial Statements for General
Enterprises (Cai Kuai [2018] No.15), the Company followed the Accounting Standard for Business
Enterprises-Basic Standard, all the particular accounting standards, guides to application of accounting standards
for business enterprises, interpretations and announcements of accounting standards for business enterprises and
other relevant regulations promulgated by Ministry of Finance. Upon the alteration, the Company started to
comply with relevant terms in the Notice on Revision and Issue of 2018 Format of Financial Statements for
General Enterprises (Cai Kuai [2018] No.15) released by the Ministry of Finance on June 15, 2018 in its
accounting policies. In addition to the above alteration of the accounting policies, others still followed the prior
relevant rules, guides, announcements and other relevant terms issued by the Ministry of Finance.
Effects of alteration of accounting policies on the Company's beginning amount of this year and amount of
the prior year
Contents and reasons for the changes of
No Statement items affected Amount
accounting policies
Retroactive adjustment
Notes receivable -44,207,119.00
"Accounts receivable" and "notes receivable"
1 were incorporated into "accounts receivable Account receivable -192,503,077.70
and notes receivable" for presentation
Notes receivable & Account receivable 236,710,196.70
Interest receivable -15,728,872.62
"Interests receivable", "dividends receivable"
2 and "other receivables" were combined into Dividend receivable
"other receivables" for presentation
Other receivable 15,728,872.62
"Accounts payable" and "notes payable" were Notes payable
3 combined into "accounts payable and notes
payable" for presentation Account Payable -97,104,697.18
41
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Contents and reasons for the changes of
No Statement items affected Amount
accounting policies
Notes payable & Account payable 97,104,697.18
"Management expenses" fell into Management expenses -39,036,089.05
4 "management expenses" and "R&D expenses"
for presentation R & D cost 39,036,089.05
This alteration of accounting policies had no impact on the Company's total assets, total liabilities, net asset
and net profit in the current period and before the alteration of accounting policies.
VII. Explain retrospective restatement due to correction of significant accounting errors in the reporting
period
□Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the
period.
VIII. Explain change of the consolidation scope as compared with the financial reporting of last year.
□Applicable √ Not applicable
No changes in consolidation statement’s scope for the Company in the period.
IX. Engagement/Disengagement of CPAs
CPAs currently engaged
Peking Certified Public Accountants（Special General
Name of the domestic CPAs
Partnership）
Remuneration for domestic accounting firm (RMB10,000) 60
Continuous life of auditing service for domestic accounting firm 8
Name of domestic CPA Lan Tao, Liu Ru
Continuous fixed number of year for the auditing service
5
provided by CPA in domestic CPA Firms
Has the CPAs been changed in the current period
□ Yes √ No
Description of the CPAs, financial adviser or sponsor engaged for internal control auditing
√Applicable □Not applicable
During the reporting period, the company engaged Peking Certified Public Accountants(Special General Partnership) as the
company's internal control audit agency for 2018, with an audit remuneration of RMB 250,000 (including travel
expenses and other expenses).
42
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
X.Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly Report
□Applicable √ Not applicable
XI.Bankruptcy reorganization
□Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period.
XII.Significant lawsuits and arbitrations of the Company
□Applicable √ Not applicable
No significant lawsuits and arbitrations occourred in the reporting period.
XIII. Situation of Punishment and Rectification
□Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Credit Condition of the Company and its Controlling Shareholders and Actual Controllers
√Applicable □ Not applicable
During reporting period, there was no effective judgment of a court and large amount of debt maturity that the
company, its controlling shareholders and actual controller failed to perform or pay off.
XV. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock Ownership Plan or
Other Employee Incentive Measures
√Applicable □ Not applicable
(I) Formulation of Restricted Stock Incentive Plan
On November 27, 2017, the Proposal on the Company's Implementation Measures of Evaluation for the 2017
Restricted Stock Incentive Plan (Draft) and summary and the Proposal on the Company's Implementation
Measures of Evaluation for the 2017 Restricted Stock Incentive Plan was examined and approved in the 7th board
meeting of the company’s 7th session board of directors, and related proposals agreed to fulfill the relevant
procedures and related proposals agreed to fulfill the relevant procedures
On December 11, 2017, the SASAC agreed in principle to implement the restricted stock incentive plan.
On December 14, 2017, the company held the third extraordinary shareholders' general meeting in 2017,
which reviewed and approved the Proposal on the Company's Implementation Measures of Evaluation for the
2017 Restricted Stock Incentive Plan (Draft) and summary and Proposal on the Company's Implementation
Measures of Evaluation for the 2017 Restricted Stock Incentive Plan and other issues.
(II) Information on granting the restricted stock
On December 14, 2017, the company held the 8th meeting of the 7th Board of Directors, which reviewed and
approved the “Proposal on Adjusting the List of Incentive Objects and Granting Quantity of the 2017 Restricted
43
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Stock Incentive Plan” and the “Proposal on Granting the Restricted Stocks to Incentive Objects”. The restricted
shares actually granted by this stock incentive plan totaled 4,752,300 shares, and 119 incentive objects were granted,
with the granting price was 5.73 yuan per share.
On December 27, 2017, the company’s restricted stock completed the grant registration formalities at China
Securities Depository and Clearing Corporation Shenzhen Branch.
XVI. Material related transactions
1. Related transactions in connection with daily operation
√Applicable □ Not applicable
Whe
ther
Tradin over
Princi g limit the Marke
Subjec ple of Rati
Amou t price
ts of pricin o in approv appr Way Date
Relate Type Price nt of of
the g the simil of of Index of information
d Relationship of of trade ed oved pay similar
related relate ar disclos disclosure
parties trade trade RMB1 trade
transac d trade ment ure
s （RM limit
0,000) availa
tions transa
ble
ctions B’000 ed or
0） not
(Y/
N)
Kunshan Pur
Zhiqimei is a cha Purch
Kunsh
holding se ase of
an
subsidiary of of optica
Zhiqi
SAPO pro l film
mei Marke Augus http://www.cninfo.com.cn
Photoelectric, duct produ Agree
Materi t 4,877. 71.6 Tran 4,877. t On August 15,
wherein the s cts ment 8,000 No
als Princi 1 3% sfer 1 15,201 1018(Announcement
Company owns fro and price
Techn ple 8 No.2018-35)
40% of its m releva
ology
equity and rela nt
Co.,
Jinjiang Group ted mater
Ltd.
is a shareholding part ials
enterprise ies
Kunsh Kunshan Sale
http://www.cninfo.com.cn
an Zhiqimei is a of Selling Marke
Agree Augus On August 15,
Zhiqi holding good polariz t 8,752. 10.6 Tran 8,752.
ment 21,600 No t 15, 1018(Annoucement
mei subsidiary of s to ing Princi 47 6% sfer 47
price 2018 No.2018-35)
Materi SAPO relat film ple
als Photoelectric, ed
44
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Techn wherein the parti
ology Company owns es
Co., 40% of its
Ltd. equity and
Jinjiang Group
is a shareholding
enterprise
14,585
Total -- -- -- 30,200 -- -- -- -- --
.48
Details of any sales return of a large
Not applicable
amount
Give the actual situation in the report
period where a forecast had been
made for the total amounts of routine Not applicable
related-party transactions by type to
occur in the current period(if any)
Reason for any significant difference
between the transaction price and the Not applicable
market reference price (if applicable)
2. Related-party transactions arising from asset acquisition or sold
□Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period.
3. Related-party transitions with joint investments
□Applicable √ Not applicable
No main related transactions of joint investment outside for the Company in reporting period.
4. Credits and liabilities with related parties
√Applicable □Not applicable
Was there any non-operating credit or liability with any related party?
√ Yes □No
Due from related parties
Newly Amount
Does there Interest in
Opening increased recovered in Ending
exist the
Related Relationshi Causes of balance amount in the balance
non-operati Interest rate reporting
parties p formation (RMB the reporting (RMB10,00
on capital period(RM
10,000) reporting period(RM 0)
occupancy? B10,000)
period(RM B10,000)
45
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
B’0000)
Shenzhen
Dailishi Sharing Investment
No 44.05 100 102.4 41.64
Underwear company dividend
Co., Ltd.
Anhui
Huapeng Joint Investment
No 180 180
Textile Co., venture dividend
Ltd.
Kunshan
Jingjiang
Zhiqimei
Group's Sale
Materials No 0 10,266.4 1,860.14 8,406.26
shareholdin products
Technology
g company
Co., Ltd.
The
Chairman
Shenzhen
of the
Tianma
Company Sale
Microelectr No 155.55 286.78 352.88 89.44
was Vice products
onics Co.,
Chairman
Ltd.
of the
company
Influence of the related
rights of credit and
liabilities upon the
In the report period, Increase investment income of RMB1 million.
company’s operation
results and financial
position
Due to related parties
Amount
Amount
newly Interest in
Opening repaid in the Ending
Causes of increased in the reporting
Related parties Relationship balance(RM reporting Interest rate balance
formation the reporting period(RMB
B10,000) period(RMB (RMB10,000)
period(RMB 10,000)
10,000)
10,000)
Kunshan
Jingjiang
Zhiqimei
Group's
Materials Purchase 0 1,740.57 1,740.57
shareholding
Technology
company
Co., Ltd.
Shenzhen
Sharing Current 24.48 24.48
Xinfang
46
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Knitting Co., company amount
Ltd.
Shenzhen
Changlianfa
Sharing Current
Printing & 117.84 117.84
company amount
dyeing Co.,
Ltd.
Shenzhen
Haohao
Sharing Current
Property 410.45 35 445.45
company amount
Leasing Co.,
Ltd
Yehui
Sharing Current
International 113.54 5.47 119.01
company amount
Co., Ltd.
SAPO （HK）Sharing Current
31.5 31.5
Co., Ltd. company amount
Shenzhen
Shenchao Controlled
Interest
Technology by the same 4,557.07 163.47 1,000 3,720.54
payable
Investment party
Co., Ltd.
Influence of the related rights
of credit and liabilities upon
In the report period, Increase financial interest expense of RMB 1.6347 million.
the company’s operation
results and financial position.
5. Guarantee Provided by Related Parties
In February 2018, Jinjiang Group issued a guarantee letter to Shengbo Photoelectric Company, a subsidiary of the company,
and made the following commitments on its proposed trade business carried out by Shengbo Photoelectric Company. If any problems
(including but not limited to capital or other problems) arise in the course of trade transactions, the full responsibility of Jinjiang
Group shall be borne by Jinjiang Group. In January 2019, Henan Fuxin Investment Co., Ltd. pledged 10% of its stake in Hualian
Development Group Co., Ltd. to Shengbo Photoelectric in accordance with the company's requirements and coordinated by Jinjiang
Group, in order to guarantee the performance of Shengbo Photoelectric's above-mentioned trade business creditor's rights.
In addition, Jinjiang Group issued a guarantee letter for the financial products "Wanxiang Trust-Yuquan 204 Single Fund Trust"
and "Wanxiang Trust-Yuquan 205 Single Fund Trust" purchased by Shengbo Photoelectric Company. It promised that if Wanxiang
Trust could not return Shengbo Photoelectric Principal and Income in time, the principal and Income of Wanxiang Trust should be
returned 10 days after the expiration date of the principal and income period. Within one working day, Jinjiang Group will transfer its
own funds to Shengbo Photoelectric designated account for repayment of principal and income. As of December 31, 2018, the
principal and income of the above trust funds have been recovered.
47
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
6. Other significant related-party transactions
√Applicable □Not applicable
To ensure the construction progress of polarizer with TFT-LCD, SAPO Photoelectric, Shenzhen Shenchao
Technology Investment Co., Ltd. and Shenzhen Development Bank, Shenzhen Branch, First Tower Subbranch
signed “Contract on Consigned Loan”, of whose main content is: Shenzhen Shenchao Technology Investment Co.,
Ltd applied to the bank for 200 million RMB of construction of dedicated plant and auxiliary projects for polarizer
with TFT-LCD for SAPO Photoelectric, The term of the loan is 108 months from the day when the first
installment of entrusted loan is transferred to the account of the Company. The interest rate of the entrusted loan is
the rate of commercial loans with a term of 5 years quoted by People's Bank of China minus 2%. In case of
adjustment of such commercial loan rate, the rate of commercial loans with a term of 5 years after adjustment
minus 2% shall apply as interest rate of entrusted loan from the first day of the next month after the adjustment of
basic interest rate. The term of the loan is 108 months from the day when the first installment of entrusted loan is
transferred to the account of the Company. As of December 31,2018,The Company actually received a loan of
RMB 40 million.
Website for temporary disclosure of the connected transaction
Announcement Date of disclosure Website for disclosure
http//www.cninfo.com.cn. Announcement
Announcement of related Transactions December 12, 2009
No.2009-55
Announcement of Resolutions of the Second http//www.cninfo.com.cn. Announcement
December 30,2009
provisional shareholders’ general meeting No.2009-57
Announcement of related Transactions http//www.cninfo.com.cn. Announcement
July 1, 2010
progress No.2010-26
XVII.Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□Applicable √ Not applicable
No trusteeship, contract or leasing for the Company in reporting period.
(2) Contract
□ Applicable √ Not applicable
No any contract for the Company in the reporting period.
(3) Lease
□Applicable √ Not applicable
No any lease for the Company in the reporting period..
48
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
2.Guarantees
□Applicable √ Not applicable
No any guarantees for the Company in the reporting period..
3.Situation of Entrusting Others for Managing Spot Asset
(1)Situation of Entrusted Finance
√ Applicable □Not applicable
Overview of entrusted wealth-management during the reporting period
In RMB 10,000
Source of funds for The Occurred Amount of
Un-recovered of
Specific type entrusted financial Entrusted Undue balance
overdue amount
management Wealth-management
Bank financial products Self fund 32,000 0 0
Trust financial products Self fund 120,000 0 0
Total 152,000 0 0
The detailed information of entrusted wealth-management with significant amount or low safety, poor liquidity or
high risk with no promise of principal
√ Applicable □Not applicable
49
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
In RMB10,000
Name of Type of Produc Amo Capital Start Expiry Funds Method of Referenc Expected Actual profit The actual Amount of Whether Whether there Summary of
Trustee Trustee t Type unt Source Date Date Allocati Reward e Income (if and loss during recovery of provision for passed the is any events and
Organizati Organiz on Determina Annuali any) the reporting profit and loss impairment statutory entrusted related
on (or ation(or tion zed Rate period during the (if any) procedure financial plan search index
Trustee Trustee) of reporting in the future (if any)
Name) Return period
Designa
ted Use
Wanxiang Busines Janu Http://www.cni
Trust Quarterly
Trust s 40,0 ary January nfo.com.cn:
Trust Self fund financial interest 6.00% 2,430.61 2,430.61 2,430.61 Yes Not applicable
Co., Manage 00 13,2 13,2018 (Announcemen
products payments
Ltd. ment 017 t No. 2017-04)
Funding
Trust
Designa
ted Use
Busines Febr Http://www.cni
Wanxiang Decemb Trust Quarterly
s 20,0 uary nfo.com.cn:
Trust Co., Trust Self fund er financial interest 7.50% 2,733.49 2,733.49 2,733.49 Yes Not applicable
Manage 00 17,2 (Announcemen
Ltd. 17,2018 products payments
ment 017 t No. 2017-26)
Funding
Trust
Designa
ted Use
Busines Febr Http://www.cni
Wanxiang Trust Quarterly
s 20,0 uary August nfo.com.cn:
Trust Co., Trust Self fund financial interest 7.50% 2,242.3 2,242.3 2,242.3 Yes Not applicable
Manage 00 20,2 20,2018 (Announcemen
Ltd. products payments
ment 017 t No. 2017-26)
Funding
Trust
50
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Designa
ted Use
Busines Janu Http://www.cni
Wanxiang Decemb Trust Quarterly
s 40,0 ary nfo.com.cn:
Trust Co., Turst Self fund er financial interest 7.50% 2,809.35 2,809.35 2,809.35 Yes Not applicable
Manage 00 13,2 (Announcemen
Ltd. 28,2018 products payments
ment 018 t No. 2018-04)
Funding
Trust
Shenzhen Bank Structur Bank Due
Textile ed fi nanci al paym ent at a
Octo
Building deposits products time
Branch of 22,0 ber January
Self fund 3.88% 213.19 213.19 213.19 Yes Not applicable
China 00 9,20 7,2019
Merchants
18
Bank Co.,
Ltd.
Shenzhen Bank Structur Bank Due
Textile ed fi nanci al paym ent at a
Dece
Building deposits products time
Branch of 10,0 mber March
Self fund 3.71% 92.71 92.71 92.71 Yes Not applicable
China 00 14,2 14,2019
Merchants
018
Bank Co.,
Ltd.
152,
Total -- -- -- -- -- -- 10,521.65 10,521.65 -- -- -- --
000
Entrusted financing appears to be unable to recover the principal or there may be other circumstances that may result in impairment
□ Applicable √ Not applicable
51
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
（2）Situation of Entrusted Loans
□ Applicable √ Not applicable
No any Entrusted loans for the Company in the reporting period..
4. Other significant contract
√ Applicable □Not applicable
52
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Compan Compan Contract Contract Book Assess ed Apprais Base Date of Pricing Principle Transaction Price Whether A Rel ated Connection Execution Condition Dat e of Disclosure Index
y Name y Name Object Signing Value of Value of the al Assessm ent (RMB10,000) Traction Relation As Of The End O f Disclosure
of the of the Date the Assets Agency (if any) The Reporting Period
Party Other Assets Involved by Nam e
Making Party of Involved the Contract (If Any)
the the by the (RMB10,000)
contract Contract Contract
(RMB10,
000) (If
Any)
SAPO Hangzh Nitto Novem With no In normal November
ou Denko ber 6, association performance 7, 2017
Photoel Considering
Jinjiang provide 2017 relationship
ectric Group s the with the
Co., polarize formulation of company
Ltd., r
market price
Kunsha manufa
n cturing and technical
Http://www.cninfo.c
Zhiqim technol service period,
ei ogy and om.cn:
the final
Materia related No 86,900 No (Announcement No.
l corpora transaction
2017-53)on
Technol tion. price is based
November 7, 2017
ogy on the
Co.,
commercial
Ltd.,
Japan negotiation
Nitto results of both
Denko
parties.
Corpor
ation
53
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
XVIII. Social responsibilities
1. Performance of poverty relieving responsibilities
(1)The protection of shareholder’s rights and interests
During the reporting period, the company operated with in accordance with laws and strictly conformed to
the requirements of laws and regulations such as The Company Law, The Securities Law and Corporate
Governance Guidelines for Listed Companies, and the company continuously perfected the governance structure
and further standardized the operation of the company. Adhered to the core system constituted by shareholders'
meeting, board of directors, board of supervisors and the independent director system, further improved the
corporate governance structure and the management system, constantly improved the company's internal control
system in the process of business management, adopted effective measures to prevent operational risks and
soundly safeguarded and protected the rights and interests of shareholders to lay a solid foundation for the
company's healthy, sustainable development. The company strictly enforces information disclosure obligations in
accordance with the law, and truthfully, accurately, completely, timely, and fairly discloses information that has a
significant impact on investment decisions, the disclosure content is concise and easy to understand, and fully
reveals risks, facilitates access for all shareholders. And according to regulatory requirements, the company
further sort out and improve relevant systems and improve the quality of information disclosure.
During the reporting period, the company further improved information disclosure and information transparency,
strictly fulfilled the obligation of information disclosure in accordance with regulatory requirements,
communicated and communicated with investors through multiple channels, answered questions raised by
investors in a timely manner, improved information transparency, and cooperated with regulatory authorities and
at the same time, cooperated with the regulatory authorities to purify the market space, safeguard the interests of
investors, especially small and medium-sized investors, and achieve positive interaction and harmonious (2) The
protection of legal right of staff
(2) The protection of legal right of staff
Subject to the enterprise development strategy, the Company worked out a compliance, legitimate, scientific
and reasonable human resources management system. The Company established a labor relation with each
employee by concluding an employment contract and made necessary management on employees pursuant to
Labor Law and relevant management regulations in the Company. The Company formulated assessment
management systems separately geared to senior executives, middle management and regular employees and
established a systematic and standardized performance assessment and evaluation system for a comprehensive,
objective, fair and accurate assessment on all the employees regarding performance of duties and completion of
tasks, results of which were seen as the basis for determination of the employee compensation, reward or
punishment and appointment.
In 2018, the Company set up an Employee Business Promotion Channel Management System of Shenzhen
Textile (Holdings) Co., Ltd., wherein the business personnel promotion channel management system and value
distribution system based on performance and ability evaluation were improved and development channels were
opened for employees in all respects; it revised Middle Management Appointment and Dismissal Management
System of Shenzhen Textile (Holdings) Co., Ltd., wherein procedures for selection and appointment of the middle
management leaders were improved and guaranteed to be compliance and legitimate; it built a Market-oriented
Enterprise Management Selection and Hiring Management System of Shenzhen Textile (Holdings) Co., Ltd.,
wherein procedures and requirements for selecting and hiring enterprise management and contracting
management and exit mechanism were improved. Besides, the Company optimized and modified its talent
54
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
training system, performance assessment system, hiring management and other HR-related work to raise its HR
management standard and further mobilize the initiative of employees at work.
(3) The protection of environment
Building a modern "green enterprise" with effort is a permanent responsibility which the Company keeps
taking. For that end, the Company holds firm to building a green and recycled industry chain throughout the entire
process to realize green and recycling economy in real means and improves quality of environment surrounding
the Company to facilitate its production. In the report period, the Company's out-of-boundary noise, industrial
waste water and gas emission passed the surveillance of the environmental protection administration and met
standard requirements in relevant laws and regulations. In the report period, through a rotary RTO treatment
process, more than 99% of VOCs were removed from the Company's organic waste gas and on the ground of
up-to-standard emission, the Company further reduced emission of pollutants to practically fulfill the social
responsibility as a listed company and inflicted no major environmental protection accident. Furthermore, the
Company advocated for green office with effort and carried out environmental protection publicity and education
activities in a variety of forms to enhance the energy-saving and emission reduction awareness among employees
and coordinate production & operation and environmental protection in production to fulfill its social
responsibility literally.
(4) The protection of consumer rights and interests
The company always sticks to the core values of "honesty, responsibility first". As the responsibility to the
customer is the source of enterprise value, the company committed to provide customers with professional,
personalized, full range of products and services.Sustainable customer-oriented service and impeccable product
quality motive our performance and sustainable development and guarantee long-term customers. And our
long-term partnership is established on the basis of initiative attention, quick responding and sincere care to
customers.
2. Execution of social responsibility of targeted poverty alleviation
(1) Precision poverty alleviation program
(2) Annual precision poverty alleviation
(3) Accuracy of poverty alleviation
Index Measurement unit Quantity / Status
I. General situation —— ——
II. Breakdown Input —— ——
1. Poverty alleviation by industrial development —— ——
2. Poverty alleviation by transfer employment —— ——
3. Poverty alleviation by relocation —— ——
4. Educational poverty alleviation —— ——
5. Health poverty alleviation —— ——
6. Ecological protection poverty alleviation —— ——
7. Guarantee of all the details —— ——
55
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
8. Social poverty alleviation —— ——
9. Other projects —— ——
III. Awards (Content and level) —— ——
（4）Subsequent targeted poverty alleviation program
3. Information on environmental protection
The Listed Company and its subsidiary whether belongs to the key sewage units released from environmental
protection department
Yes
Main
Emission Implemente
Company or pollutant Emission Verified Excessive
Emission Emission port d pollutant Total
subsidiary and specific concentratio total emission
way port number distribution emission emission
name pollutant n emission condition
condition standards
name
The
Exhaust discharge
gas:non-m port is
SAPO
ethane Altitude located on
Photoelect 2 <100mg/m3 120mg/m3 840kg/d 1728kg/d No
total emission the east side
ric
hydrocarb of the roof
ons of Building
No. 1
Open
SAPO channel Southeast
Waste
Photoelect discharge 1 side of plant <80mg/L 90mg/L 56kg/d 96kg/d No
water：COD
ric after area
treatment
Prevention and control of pollution facilities construction and operation
Waste gas of Pingshan plant:
The waste gas treatment facility adopted the RTO waste gas regenerative incineration process. which can fully
meet the emission requirements of discharge gas. The removal rate of organic waste gas VOCs reached more than
99%,Meanwhile, the equipment adopted the imported thermal storage material, with the heat storage effect
reached 90%, so that the equipment operation had low energy consumption; after RTO treatment, the exhaust gas
produced by the production process can meet the discharge standard.
Waste Water of Pingshan Plant:
The wastewater treatment facility adopts fenton + biological method + physicochemical method +MBR
membrane wastewater treatment process. The wastewater treatment system will be expanded with the project of
line 6 in 2018 and put into use with the production equipment of line 6 in 2018. The equipment has the advantages
of stable operation, low energy consumption, low maintenance cost, high degree of automation, good wastewater
treatment effect and strong impact resistance. The waste water produced in the production process can meet the
56
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
environmental protection requirements of standard discharge after being treated by waste water treatment
facilities.
Waste gas of Longhua factory:
The process related to generation of organic waste gas in Longhua Plant was removed as a whole at the end of
2017, indicating that Longhua Plant is generating no organic waste gas.
Situation of Construction project environmental impact assessment and other environmental protection
administrative licenses
The Company complied with relevant environmental protection regulations at such three stages as project design,
construction and operation and obtained environmental protection approvals needed at each corresponding stage
including EIA report, EIA approval, environmental protection acceptance decision and emission permit among
others.
Emergency Plan for Emergency Environmental Incidents
According to the actual situation of the company, the preparation of the emergency plan for emergency
environmental incidents was completed, and an emergency environmental emergency plan filing application
Environmental Self-Monitoring Program
Surveillance done subject to surveillance requirements made by the surveillance station and operation needs of all
systems of SAPO，the specific monitoring programs are as follows: organic exhaust gas is 8 times per year (2 per
quarter), wastewater discharge is 4 times per year (once per quarter), boiler exhaust gas is 2 times per year (once
every six months), and canteen fume is 2 times per year (once every six months), the noise at the plant boundary
is 2 times per year (once every six months).
Other Environmental Information That Should Be Disclosed
Nil
Other Environmental Related Information
Nil
XIX. Other material events
√ Applicable □ Not applicable
（I）Progress of Renting of Guanhua Building
During the reporting period, the company first reached a common intention with the Hong Kong
shareholder Qiaohui Industrial Co., Ltd. on the external rent of Guanhua Building, and formed a public rent
scheme. At present, this work is still in progress; second, the completion of the settlement of Guanhua Building
has been completed.
In order to smooth the equity relationship between Shenzhen Guanhua Printing and Dyeing Co., Ltd. and
Guanhua Building, the company and Qiaohui Industrial Co., Ltd. signed an equity transfer agreement to transfer
5.16% of the shares of Shenzhen Guanhua Printing and Dyeing Co., Ltd. and completed the equity transfer. After
the transfer, the company and Qiaohui Industrial Co., Ltd. hold 50.16% and 49.84% of the shares of Shenzhen
Guanhua Printing and Dyeing Co., Ltd. On February 28, 2019, in order to improve the investment obligations of
the shareholders of Shenzhen Guanhua Printing and Dyeing Co., Ltd., the company and Qiaohui Industrial Co.,
Ltd. increased the capital of Shenzhen Guanhua Printing and Dyeing Co., Ltd. according to the proportion of
50.16% and 49.84% of the rights and interests occupied by the buildings of Guanhua Building, respectively, and
the corresponding evaluation value of the buildings of Guanhua Building was 49.9351 million yuan and 49.616
57
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
million yuan. Shenzhen Guanhua Printing and Dyeing Co., Ltd. signed the Capital Increase Agreement with
Qiaohui Industry Co., Ltd. and Shenzhen Guanhua Printing and Dyeing Co., Ltd. After the capital increase is
completed, Shenzhen Guanhua Printing and Dyeing Co., Ltd. is an enterprise jointly controlled by the company
and Qiaohui Industry Co., Ltd. See the announcement of Juchao Information Network (http://www.cninfo.com.cn)
Co., Ltd. 2019-07. Up to the disclosure date of this report, Shenzhen Guanhua Printing and Dyeing Co., Ltd. has
obtained the "Real Property Registration Certificate" of Guanhua Building, and the registration procedures for the
change of shareholding rights and the increase of registered capital have been completed.
（II) Progress of the transfer of equity of Union Development Group Co., Ltd.
The Company held the fifteenth meeting of the seventh board of directors and the third extraordinary
shareholders, meeting of 2018 on October 29, 2018 and November 14, 2018, respectively, in which the Proposal
on the Transfer of Equity of Union Development Group Co. Ltd was reviewed and approved, agreed that the
2.8694% equity of
Union Development Group Co., Ltd. held by the Company shall be openly listed for transfer in Shenzhen
United Property Exchange at a price not lower than the estimated value of RMB 152.4936 million, with the final
listing price not lower than the evaluation result by the state-owned asset management. The matter was
file-recorded on November 15, 2018 by the state-owned assets management department, and the evaluation result
confirmed by the file-record was 152.4692 million yuan, which was 24, 400 yuan lower than the pre-record
evaluation result of 152.4936 million yuan.For details, please refer to the Announcement of
2018-45,2018-48 ,2018-52 and 2018-53 on the website of http://www.cninfo.com.cn.
On December 28, 2018, the Company received the “Description of Purchase Information” from the Shenzhen
United Property Exchange. The Company listed its 2.8694% holding equity of Union Development Group Co.,
Ltd on the Shenzhen United Property Exchange for transfer from November 22, 2018 to December 26, 2018, and
until the expiration of the listing announcement period, there was no intended transferee filing the application to
the Shenzhen United Property Exchange for transfer.For details, please refer to the Announcement of 2018-58 on
the website of http://www.cninfo.com.cn.
XX. Material events of subsidiaries
√ Applicable □Not applicable
(I) Matters on the end of capital and share increase and introduction of strategic investors to the subsidiary SAPO
Photoelectric
On June 1, 2018, the Company convened the 12th meeting of the seventh board of directors, where it deliberated
and adopted the Proposal on Capital and Share Increase and Introduction of Strategic Investors to the Subsidiary
Shenzhen SAPO Photoelectric Co., Ltd. and agreed that the subsidiary SAPO Photoelectric would solicit no more
than 5 strategic investors in public at Shenzhen United Property and Share Rights Exchange through capital and
share increase based on the registered asset evaluation results and determine the final strategic investors through
competitive negotiation in compliance with state-owned asset supervision regulations.For details, please refer to
the Announcement of 2018-24 on the website of http://www.cninfo.com.cn.
As SAPO Photoelectric was pushing forward matters pertaining to capital and share increase and introduction of
strategic investors, the Company took the initiative to negotiate and consult with investors with an intention on
matters of capital increase, whereas in the context of fluctuating national investment environment and financial
policies, a financial strain in the financial market and a more prudent attitude held by investors, investors with an
intention took lots of factors into account regarding conditions of cooperation, indicating that the Company was
confronted a great uncertainty in continuing to drive SAPO Photoelectric to increase capital and share and bring in
58
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
strategic investors. Whereas the Company still failed to come into terms with any investor with an intention on
details of cooperation on capital increase, the Company gave a comprehensive consideration to all the above
factors to convene the sixteenth meeting of the seventh board of directors on January 29, 2019, where it
deliberated and adopted the Proposal on the End of Capital and Share Increase and Introduction of Strategic
Investors to the Subsidiary Shenzhen SAPO Photoelectric Co., Ltd. and agreed to end matters of capital and share
increase and introduction of strategic shareholders to the subsidiary SAPO Photoelectric.For details, please refer
to the Announcement of 2019-02 and 2019-03 on the website of http://www.cninfo.com.cn.
(II) Matters on progress of conclusion of a technical cooperation contract between the subsidiary SAPO
Photoelectric and Nitto Denko
In order to bring in techniques of the Japanese polarizer enterprise that takes the lead in the world and
prepare for building the 2,500 mm ultra-wide TFT-LCD polarizer production project (Line 7 Project), the
Company's holding subsidiary SAPO Photoelectric, together with Jinjiang Group and Kunshan Zhiqimei, entered
into a Contract of Technical Cooperation with Nitto Denko on matters pertaining to introduction of techniques of
2,500 mm polarizer production line on November 6, 2017, which was signed on the ground of all the essential
cooperation-related conditions specified by Nitto Denko and parties that give a support hereinbefore. In addition
to this contract, a technical support contract and appendix are planned to be concluded later. For details, please
refer to the Announcement of 2018-53 on the website of http://www.cninfo.com.cn.
To take and bring in ultra-wide polarizer production techniques of Nitto Denko as soon as possible, construction
of the Line 7 Project need accelerating. On November 13, 2018, SAPO Photoelectric agreed with Nitto Denko on
details of "equipment startup support", "instruction on manufacturing know-how", and "technical support (quality
maintenance support)" among others regarding Nitto Denko's offer of ultra-wide polarizer production techniques
in Contract of Technical Cooperation (Manufacturing Line 2) (Manufacturing Line 1 refers to the 2,500 mm
production line of Kunshan Zhiqimei) which as a technical support contract based on Contract of Technical
Cooperation applied to what was specified in the Contract of Technical Cooperation.For details, please refer to the
Announcement of 2018-51 on the website of http://www.cninfo.com.cn.
(III)Progress in subsidiaries participating in the establishment of industrial funds
On November 16, 2017, the company's controlling subsidiary SAPO Photoelectric signed the Changxing Junying
Equity Investment Partnership (Limited Partnership) Agreement with the fund manager Huizhi Investment
Management Co., Ltd, general partner Jinxin Investment Co., Ltd and other limited partners, and co-sponsored the
establishment of an industrial fund, focusing on the optical film industry chain related projects related to the
company's main business, with a fund size of 50 million yuan. SAPO Photoelectric, as one of the limited partners
of the industrial fund, subscribed for a capital contribution of 28.5 million yuan.
For details Juchao Website:（http://www.cninfo.com.cn. (Announcement No.2017--55).
On February 10, 2018, Changxing Junying Equity Investment Partnership completed the industrial and
commercial registration and completed the private equity investment fund registration on February 8, 2018. For
details Juchao Website:（http://www.cninfo.com.cn. (Announcement No.2018--05).
As of December 31, 2018, Changxing Junying had accumulated 3 investment projects with a total investment of
RMB 42 million. The profit during the reporting period was RMB 2,150,943.40
Fund contribution
No Name Investment
（RMB 10,000）
1 Shenzhen Kaichuang Shijia Technology Co., Ltd. Optical Film 1,400
2 Shenzhen Shenfuyu Electronic Technology Co., Ltd. Optical Film 1,300
59
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
3 Shenzhen Hengbaoshun Technology Development Co., Ltd. Optical Film 1,500
60
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
VI. Change of share capital and shareholding of Principal Shareholders
Ⅰ.Changes in share capital
1. Changes in share capital
In Shares
Before the change Increase/decrease（+，-） After the Change
Amount Proportio Capitaliza
n tion of
Share Bonus Proportio
common Other Subtotal Quantity
allotment shares n
reserve
fund
1.Shares with conditional
4,824,300 0.94% 5,250 5,250 4,829,550 0.94%
subscription
3.Other domestic shares 4,824,300 0.94% 5,250 5,250 4,829,550 0.94%
Domestic Nature shares 4,824,300 0.94% 5,250 5,250 4,829,550 0.94%
II.Shares with unconditional 506,449,8 506,444,5
99.06% -5,250 -5,250 99.06%
subscription 49 99
457,021,8 457,016,5
1.Common shares in RMB 89.39% -5,250 -5,250 89.39%
49 99
2.Foreign shares in domestic 49,428,00 49,428,00
9.67% 9.67%
market 0 0
511,274,1 511,274,1
III. Total of capital shares 100.00% 100.00%
49 49
Reasons for share changed
√ Applicable □Not applicable
On February 9, 2018, February 12, 2018, and February 14, 2018, Zhang Xiaodong, the company's supervisor,
purchased 3,000 shares, 3,000 shares, and 1,000 shares of the company's A shares, respectively, for a total of
7,000 shares, of which 75% were 5,250 shares. Changed to a restricted sale of shares.
Approval of Change of Shares
□ Applicable √ Not applicable
Ownership transfer of share changes
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to
common shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose for the company or need to disclosed under requirement from security
61
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
regulators
□ Applicable √Not applicable
2. Change of shares with limited sales condition
√ Applicable □ Not applicable
In shares
Number of
Number of Restricted Shares Date of
Initial Restricted Increased Reason for
Shareholder Name Unrestricted in the End of the Restriction
Shares Restricted Shares Restricted Shares
Shares This Term Term Removal
This Term
The shares
transferred
annually during
the term of office
determined
during the term
of office and
Supervisors hold within 6 months
Zhang Xiaodong 0 0 5,250 5,250 75% of the shares after the
as required expiration of the
term of office
shall not exceed
25% of the total
number of shares
of the company
held by the
company.
Total 0 0 5,250 5,250 -- --
Ⅱ.Issuing and listing
1.Explanation of the Situation of the Security Issue(No Preferred Shares) in the Report Period
□ Applicable √Not applicable
2.Change of asset and liability structure caused by change of total capital shares and structure
□ Applicable √Not applicable
3.About the existing employees’ shares
□Applicable √Not applicable
62
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Ⅲ.Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
In Share
Total
preferred shareh
Total number Total The total number o
olders at the end
of common shareholders at f preferred shareho
of the month
shareholders at the end of the lders voting rights
36,891 35,264 0 from the date of 0
the end of the month from the restored at period-e
disclosing the
reporting date of disclosing nd(if any)(See
annual report(if
period the annual report Notes 8)
any)(See Notes
8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Number Amount Amount Number of share pledged/frozen
Proportio Changes
of shares of of
Shareholders Nature of n of in
held at restricted un-restrict
shareholder shares reporting State of share Amount
period shares ed shares
held（%） period
-end held held
Shenzhen
State-owned legal 234,069,4 234,069,4
Investment 45.78% 0 0
person 36 36
Holdings Co., Ltd.
Shenzhen
Shenchao
State-owned 16,129,03 16,129,03
Technology 3.15% 0 0
Legal person 2 2
Investment Co.,
Ltd.
Fujiang Bairui
Jiayuan, Asset
Management Co.,
Other 0.77% 3,934,035 -20,700 0 3,934,035
Ltd.－Bairui
Jiayuan Growth I
Fund
Domestic Nature
Sun Huiming 0.62% 3,192,767 0 0 3,192,767
person
Domestic Nature
Li Songqiang 0.56% 2,873,078 40,000 0 2,873,078
person
Domestic Nature
Zheng Junsheng 0.36% 1,830,000 0 0 1,830,000
person
Kuang Guowei Domestic Nature 0.28% 1,457,000 520,800 0 1,457,000
63
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
person
Domestic Nature
Zhu Ye 0.22% 1,131,945 0 0 1,131,945
person
Domestic Nature
Li Zengmao 0.20% 1,038,800 505,300 0 1,038,800
person
Domestic Nature
Hong Fan 0.20% 1,028,900 0 0 1,028,900
person
Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned subsidiary of
Shenzhen Investment Holding Co., Ltd. and a person taking concerted action. Except this,
the Company did not whether there is relationship between the top ten shareholders holding
Related or acting-in-concert parties
non-restricted negotiable shares and between the top ten shareholders holding
among shareholders above
non-restricted negotiable shares and the top 10 shareholders or whether they are persons
taking concerted action defined in Regulations on Disclosure of Information about
Shareholding of Shareholders of Listed Companies.
Shareholding of top 10 shareholders of unrestricted shares
Quantity of unrestricted shares held at the end of the Share type
Name of the shareholder
reporting period Share type Quantity
Shenzhen Investment Holdings Co., Common shares
234,069,436 234,069,436
Ltd. in RMB
Shenzhen Shenchao Technology Common shares
16,129,032 16,129,032
Investment Co., Ltd. in RMB
Fujiang Bairui Jiayuan, Asset
Common shares
Management Co., Ltd.－Bairui 3,934,035 3,934,035
in RMB
Jiayuan Growth I Fund
Foreign shares in
Sun Huiming 3,192,767 3,192,767
domestic market
Common shares
Li Songqiang 2,873,078 2,873,078
in RMB
Common shares
Zheng Junsheng 1,830,000 1,830,000
in RMB
Common shares
Kuang Guowei 1,457,000 1,457,000
in RMB
Common shares
Zhu Ye 1,131,945 1,131,945
in RMB
Common shares
Li Zengyin 1,038,800 1,038,800
in RMB
Common shares
Hong Fan 1,028,900 1,028,900
in RMB
Explanation on associated relationship Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned subsidiary of
64
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
or consistent action among the top 10 Shenzhen Investment Holdings Co., Ltd. and a person taking concerted action. Except this,
shareholders of non-restricted the Company did not whether there is relationship between the top ten shareholders holding
negotiable shares and that between the non-restricted negotiable shares and between the top ten shareholders holding
top 10 shareholders of non-restricted non-restricted negotiable shares and the top 10 shareholders or whether they are persons
negotiable shares and top 10 taking concerted action defined in Regulations on Disclosure of Information about
shareholders Shareholding of Shareholders of Listed Companies.
The Company Shareholder Fujiang Bairui Jiayuan, Asset Management Co., Ltd.－Bairui
Explanation on shareholders Jiayuan Growth I Fund holds 3,954,735 shares of the Company through stock account with
participating in the margin trading credit transaction; The Company Shareholder Li Songqiang holds 2,872,653 shares of the
business(if any )(See Notes 4) Company through stock account with credit transaction ; The Company Shareholder Zhu Ye
holds 1,031,945 shares of the Company through stock account with credit transaction.
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a
buy-back agreement dealing in reporting period.
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company
have no buy –back agreement dealing in reporting period.
2.Controlling shareholder
Nature of Controlling Shareholders: Local state holding
Type of Controlling Shareholders: Legal person
Legal
Name of the Controlling
representative/Leade Date of incorporation Organization code Principal business activities
shareholder
r
Investment and acquisition
of financial and similar
financial stock rights such
as bank, security, insurance,
fund and guarantee; (Ⅱ)
Engage in real estate
development and
management business
within the limit of
Shenzhen Investment
Wang Yongjian October 13,2004 76756642-1 legally-acquired land use
Holdings Co., Ltd.
right; (Ⅲ) Carry out
investment and service in
the field of strategic
emerging industry; (Ⅳ)
Carry out investment,
operation and management
of state-owned stocks of
wholly-owned, holding and
joint-stock company by
65
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
reorganization &
integration, capital
operation and asset
disposal; (Ⅴ) Other
businesses undertaken by
authorization of municipal
SASAC(State Asset
Supervision and
Administration
Commission)
Shen Property A（000011），Quantity of shares 380.38 million，Shareholding ratio：63.82%； SPG
A（000019），Quantity of shares 642.88 million，shareholding ratio：63.55%；Shen Universe A
（000023），Quantity of shares 12.36 million，shareholding ratio：8.91%；Pingan（601318），
Quantity of shares 962.72 million，shareholding ratio：5.27%；Guosen Seurities（002736），Quantity
Equity of other of shares 2749.52 million，shareholding ratio：33.53%；Guotai Junan（601211），Quantity of shares
domestic/foreign listed 609.24 million，H shareholding ratio：103.37%,Total shareholding ratio :8.18%；Telling holding
company with share （000829），Quantity of shares 195.03 million，shareholding ratio：18.8%；Etop information
controlling and share （834386），Quantity of shares 42 million，shareholding ratio：60.00%；Inspection test（836325），
participation by Quantity of shares：20 million，shareholding ratio：40.00% ,Shenzhen International（00152），
controlling shareholder in Quantity of shares：952.01 million，shareholding ratio：44.81%；Beauty Star（002243），Quantity
reporting period of shares：188 million，shareholding ratio：51.52%； Hopewell Highway (00737），Quantity of
shares：2213.45 million，shareholding ratio：71.83%;Infinova（002528），Quantity of shares：225.90
million，shareholding ratio：21.35%; Eternal Asia（002183），Quantity of shares：338.45 million，
shareholding ratio：18.3%；Shen Enerty（000027)，Quantity of shares：5.64 million，shareholding
ratio：0.14% and BCM（601328），Quantity of shares：9.52 million，shareholding ratio：0.01%,
Change of the actual controller in the reporting period
□Applicable √Not applicable
Nil
3．Information about the controlling shareholder of the Company
Actual controller nature：Local state owned assets management
Actual controller type：Legal person
Legal
Name of the controlling Date of
representative/per Organization code Principal business activities
shareholder establishment
son in charge
Performing the responsibilities
of investors on behalf of the
State-owned Assets Regulatory
state and supervising and
Commission of Shenzhen Yu Gang July 31,2004 K3172806-7
managing state-owned assets
Municipal People's Government
according to authorization and
law.
66
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Equity of other
domestic/foreign listed Except for Shenzhen Holdings Co., Ltd., the holding shareholder of the company, other domestic
company with share
and foreign listed companies of the equity held by the actual controller haven’t been shown in the
controlling and share
participation by list of the top ten shareholders of the company.
controlling shareholder in
reporting period
Changes of the actual controller in the reporting period
□Applicable √Not applicable
No Changes of the actual controller in the reporting period
Block Diagram of the ownership and control relations between the company and the actual controller
The actual controller controls the company by means of trust or managing the assets in other way
□Applicable √Not applicable
4.Particulars about other legal person shareholders with over 10% share held
□Applicable √Not applicable
67
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
5.Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, Restructuring Party
and Other Commitment Subjects
□Applicable √Not applicable
VII. Situation of the Preferred Shares
□ Applicable √Not applicable
The Company had no preferred shares in the reporting period.
68
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
VIII. Information about Directors, Supervisors and Senior Executives
I. Change in shares held by directors, supervisors and senior executives
Amount Amount
Shares of shares of shares Shares
Other
Starting Expiry held at increased decreased held at
Office changes
Name Positions Sex Age date of date of the at the at the the
status increase/d
tenure tenure year-begi reporting reporting year-gegi
ecrease
n(share) period(sh period(sh n(share)
are) are)
Board
January July
Zhu Jun chairman, Appoint Male 55 137,000 0 0 0 137,000
16,2015 18,2020
Director
Director,
Zhu July July
General Appoint Male 54 228,000 0 0 0 228,000
Meizhu 19,2017 18,2020
Manager
Director,
Deputy
Secretar
y of the
Party
committ
Ning December July
ee and In office Male 43 122,000 0 0 0 122,000
Maozai 14,2017 18,2020
Secretar
y of the
Commis
sion for
Discipli
ne
July July
Huang Yu Director In office Male 44 0 0 0 0 0
19,2017 18,2020
Director, April July
Di Yan In office Female 48 0 0 0 0 0
CFO 28,2017 18,2020
Wang Septembe July
Director In office Male 46 0 0 0 0 0
Chuan r 1,2018 18,2020
Independ
August July
He Qiang ent In office Male 66 0 0 0 0 0
16,2013 18,2020
Director
69
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Independ
He July July
ent In office Male 56 0 0 0 0 0
Zhuowen 19,2017 18,2020
Director
Independ
Cai July July
ent In office Male 49 0 0 0 0 0
Yuanqing 19,2017 18,2020
Director
Chairman
of the
Wang superviso May July
In office Male 50 0 0 0 0 0
Weixing ry 20,2015 18,2020
committe
e
Zou Superviso December July
In office Male 36 0 0 0 0 0
Zhiwei r 14,2017 18,2020
Employee
Zhang August July
superviso In office Male 43 0 7,000 0 0 7,000
Xiaodong 9,2013 18,2020
r
Deputy April July
Le Kunjui In office Male 55 122,000 0 0 0 122,000
GM 28,2017 18,2020
Liu Deputy July July
In office Male 54 125,000 0 0 0 125,000
Honglei GM 19,2017 18,2020
Secretary
Jiang to the January July
In office Female 48 100,000 0 0 0 100,000
Peng board of 16,2015 18,2020
directors
Total -- -- -- -- -- -- 834,000 7,000 0 0 841,000
II. Change in shares held by directors, supervisors and senior executives
√ Applicable □Not applicable
Name Positions Types Date Reason
Lin Lebo Director Dimission May 24,2018 Job change
Zhao Lin Director Dimission July 24,2018 Job change
III.Posts holding
Professional background, work experience and main duties in the Company of existing directors, supervisors and
senior management
(1) Director
Zhu Jun, Male, Born in 1963, Master degree，senior engineer , member of the Communist party, He served
successively as secretary of Lige Village, Yutai County, Shandong Province, workshop director of Shandong
70
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Jining Cotton Mill, deputy factory director of Jining Chemical Fibre Factory, office director of Jining Textile
Industry Company, deputy county head of Wenshang County, Shandong Province, office director of Shandong
Textile Department, chief of Personnel Education Division, manager, general manager assistant , Deputy General
Manager, General Manager of Enterprise management Dept of the Company. He served as secretary of Party
Committee ,Board Chairman of the Company, Director and Vice Board chairman of Tianma Microelectronic Co.,
Ltd.
Zhu Meizhu, Male, Born in 1964, Master degree, Senior engineer, once served successively as chief Deputy
general Manager of Enterprise Management Dept of the Company, Director of R& D Center, Assista nt General
Manager and Deputy General Manager, He serves as director and General Manager of the Company, and Board
Chairman of SAPO Photoelectric Co., Ltd.
Ning Maozai, male, born in 1975, bachelor degree, senior administration engineer, Chinese Communist Party
member; he has served successively as the office clerk of Shenzhen Guomao Automobile Industry Co., Ltd, the
clerk, principal staff member, associate director and director of party-mass office of Shenzhen Property
Development (Group) Corp. and hold a concurrent post of deputy human resource Deputy manager and manager;
At present he holds the position of company director, deputy party secretary and secretary of Discipline Inspection
Committee.
Huang Yu, male, born in 1974, postgraduate, senior accountant, Chinese Communist Party member; he has served
successively as the manger of audit department Ⅱ of Shenzhen Hengdaxin Accounting Firm and assistant
director, senior staff member of the audit department of Shenzhen Commerce Trading Invest-holding Company,
senior staff member and principal staff member of the social undertaking division of Shenzhen SASAC, principal
staff member of the business division Ⅱ of Shenzhen SASAC, vice minister and minister of the financial budget
department of Shenzhen Investment Holdings Co., Ltd, office director of Shenzhen Investment Holdings Co., Ltd;
At present he holds the position of chief accountant and director of Shenzhen Investment Holdings Co., Ltd.and
director of the Company.
Di Yan, female, born in 1970, postgraduate degree, senior economist, accountant positional title, Chinese
Communist Party member; she has served successively as the cashier, correspondent bank accountant and
integrated accountant of Development Zone Sub-branch, Xi’an Branch, Agricultural Bank of China, manager of
the fund department, chief of the financial management section and chief of the accounting section of financial
department of Shenzhen Airport(Group) Company, capital settlement business manager of the financing plan
department of Shenzhen Airport Co., Ltd, manager of the financial department of Shenzhen Airport International
Express Supervision Center of Shenzhen Airport Co., Ltd, manager of the financial department of Shenzhen
Airport Air Cargo Co., Ltd, finance minister of Shenzhen General Institute of Architectural Design and Research
and chief financial officer of Shenzhen Yuetong Construction Engineering Co., Ltd and hold a concurrent post of
chief financial officer of Shenzhen Zhongye Pipe Gallery Construction Investment Co., Ltd; At present he holds
the position of director and chief financial officer of the Company.
Mr. Wang Chuan, male, was born in 1972 with a master's degree, economist, engineer, CCP. He had served
successively as deputy minister, minister and assistant director to the cooperation and development department of
Shenzhen National High-tech Industry Innovation Center, served as chairman and general manager of Shenzhen
Innovation Start Technology Co., Ltd., and served as deputy general manager of Shenzhen Tongchan Group Co.,
Ltd. He is currently the Minister of Industry Management Department of Shenzhen Investment Holdings Co., Ltd
and director of the Company.
He Qiang , Male, born in 1952, Professor of finance at the Central University of Finance and Economics, Ph.D .
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
tutor, Director of Securities and Futures Institute, enjoy special government allowances. He was a member of 11th
and 12th CPPCC National Committee, of China Finance Society, the China Investment Association, of China
Economic and Social Council of the other positions. He served as independent director in the Air Investment
Holding Co., Ltd., in Hengyi Petrochemical Co., Ltd., in Golden State Securities corporation, Dongbei Securities
and in the Company. the Company's independent directors.
He Zuowen, male, born in 1962, MBA, associate professor in accountancy, charted certified accountant and
certified tax agent in securities and futures industry. At present he acts as a partner of Da Hua Certified Public
Accountants(Special General Partnership) and secretary of Party General Branch of Shenzhen Branch, meanwhile
he holds the position of chairman of Shenzhen Tianye Certified Tax Agents Limited Corporation, consultancy
expert of Internal Control Standard Committee of the Ministry of Treasury, judge of Guangdong Senior
Accountant Evaluation Committee, member of CPC Shenzhen Social Organization Disciplinary Examination
Committee, deputy secretary & secretary of Discipline Inspection Commission of CPC Shenzhen CPA Industry
Board, director of Shenzhen Certified Tax Agents Association and independent director of Shenzhen JPT
OPTO-ELECTRONICS Co., Ltd., Independent director of Shenzhen Yirui Biology Co., Ltd., the Company's
independent directors.
Cai Yuanqing, born in 1969, Doctor of Laws of Hiroshima University, professor of Law School of Shenzhen
University, director of Company Law Research Center and GSI(Graduate Student Instructor); Meanwhile, he acts
as an arbitrator of Shenzhen Arbitration Commission ,independent director of Shenzhen Rongda Photosensitive
Science & Technology Co., Ltd., Independent director of Shenzhen Oufei Technology Co., Ltd., the Company's
independent directors.
（2）Supervisor
Wang Weixing, male, born in 1968, graduate degree, economist, member of Communist Party of China, has
served successively as cadre of Qingdao TV Factory, staff and senior staff member of Shenzhen Administration of
Industry and Commerce (price bureau) Futian, Che Kung Temple branch, senior staff member and principal staff
member of Shenzhen Administration of Industry and Commerce (price bureau) registration sub-office, principal
staff member of Shenzhen General Asset Management Office, deputy director of Shenzhen Asset Management
Office collective enterprise department, deputy director of general office of Shenzhen Asset Management Office,
deputy director of petition acceptance office of Shenzhen Asset Management Office, director, vice-secretary of
CPC and secretary of discipline commission of Shenzhen Tongchan Packaging Group Co., Ltd, director,
vice-secretary of CPC and secretary of discipline commission of Shenzhen Tongchan Group Co., Ltd and
currently takes the post of chairman of supervisory board of the Company.
Zhou Zhiwei, male, born in 1982, bachelor degree and CPC member; he has served successively as a
member of Shenzhen Prison Political Section, office clerk of Luohu District Bureau of Culture, senior staff
member of Publicity and Education Office and principal staff member of 1st-Case Examination Room of
Shenzhen Discipline Inspection Commission, Board Secretary of Shenzhen Stepwell Environmental Protection
Technology Co., Ltd and executive director of Shenzhen Xuriwenhua Investment Consulting Co., Ltd; At present
he acts as the associate director of Office of Discipline Supervision & Investigation of Shenzhen Investment
Holdings Co., Ltd and supervisor of this company.
Zhang Xiaodong, male, born in 1975, postgraduate degree and CPC member. He began to work for this
company in August 1999 and had served successively as the assistant manager and manager of subsidiary of this
company, manager of business management department of this company and manager of Shenzhen Meibainian
Garment Co., Ltd; At present he acts as the employee supervisor of this company and the head of business
management department.
72
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
（3）Senior Executives
Le Kunjiu, male, born in 1963, bachelor degree economist professional title and CPC member; he has served
successively as the loan officer of the finance department of Zhejiang Ningbo International Trust and Investment
Corporation, deputy director and director of the finance department of CITIC Group Corporation, Ningbo Branch,
manager of the research department of Hainan Fudao Asset Management Co., Ltd, assistant manager of Shenzhen
Leaguer Venture Capital Co., Ltd, vice president & chief financial officer of Shenzhen Leaguer Digital Television
Co., Ltd, chairman & general manager of Shenzhen Oriscape Electronic Co., Ltd, vice president of Shenzhen
International Technology Transfer Center, Tsinghua University, associate director of the industrial funds
preparatory office of Shenzhen Investment Holdings Co., Ltd and Deputy general manager of Shentou Education;
At present he acts as chairman of supervisory board of SAPO Photoelectric Co., Ltd., Board chairman of
Shenzhen Guanhua Printing & Dyeing Co., Ltd., Deputy general manager of the Company.
Liu Honglei, male, born in 1964, bachelor degree and CPC member, Senior engineer, He has served
Technician , Work director, Deputy director of office of First film factory of Ministry of Chemical
Engineering,Director of personnel Education Dept of Education Department of China Lekai Film Group, he has
served as the deputy general manager and general manager of SAPO Photoelectric Co., Ltd from June 2012 to
May 2013 and the head of the party-mass work department and the manager of the business management
department of Shenzhen Textile (Holdings) Co., Ltd; At present he holds the position of deputy general manager
of the company.
Jiang Peng, Female, born in 1970, Bachelor Degree, member of communist party, She served as officer of the
Secretary Office of Shandong Fishery Group Co.,Ltd., Deputy Director of the Secretary office and Securities
affairs Representative of Shandong Zhonglu Oceanic Fisheries Co., Ltd., Securities Representative of Huafu
Holding Co., Ltd., Securities affairs representative and Officer of the Secretariat of the Board of the Company,
now serves as the secretary of the Board of the Company.
Office taking in shareholder companies
√Applicable □Not applicable
Does he /she
Titles
Names of the receive
engaged in Sharing date of Expiry date of
persons in Names of the shareholders remuneration or
the office term office term
office allowance from the
shareholders
shareholder
Chief
Huang Yu Shenzhen Investment Holdings Co., Ltd. March 4,2017 Yes
accountant
Minister of
Industry
Wang Chuan Shenzhen Investment Holdings Co., Ltd. Manageme May 23,2018 Yes
nt
Department
Deputy
Director of
Zou Zhiwei Shenzhen Investment Holdings Co., Ltd. discipline June 16,2017 Yes
Inspection &
Supervision
73
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Office
Offices taken in other organizations
√Applicable □Not applicable
Does he/she
Titles
Name of the receive
engaged in Starting date of Expiry date of
persons in Name of other organizations remuneration or
the other office term office term
office allowance from
organizations
other organization
Vice
Tianma Microelectronic Co., Ltd. February
Zhu Jun Chairman , June 29,2019 No
28,2013
Chairman
Shenzhen General Institute of Architectural October
Huang Yu Director No
Design and Research Co. ,Ltd. 12,2009
Shenzhen Kunpeng Equity Investment December
Huang Yu Director No
Management Co., Ltd. 23,2016
Shenzhen City Construction
Huang Yu Director April 7,2017 No
Development(Group) Co., Ltd.
Wang Chuan Shenzhen Shenfubao(Group) Co., Ltd. Director June 21,2018 No
Shenzhen Shentou Environment Technology
Wang Chuan Director June 27,2018 No
Co., Ltd.
Wang Chuan Shenzhen Shentou Education Co., Ltd. Director July 27,2018 No
Wang Chuan Shenzhen International Tendering Co., Ltd. Director July 27,2018 No
October
Zou Zhiwei Shenzhen Xinxin Paper Co., Ltd. Director
17,2017
Director of
the institute
of securities
He Qiang Central university of finance and economics and futures, July 1,1982 Yes
professor,
doctoral
supervisor
Independent September
He Qiang Guojin Securities Co., Ltd. May 25,2016 Yes
director 14,2018
Independent
He Qiang Northeast Securities Co., Ltd. March 1,2017 Yes
director
Dahua certified public accountants (special December
He Zuowen Partner Yes
general partnership) Shenzhen branch 1,2002
December
He Zuowen Shenzhen Certified Tax Agents Associatio Chairman August 30,2020 Yes
1,2008
74
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Independent October
He Zuowen Shenzhen Tongyi Industry Co., Ltd. Yes
director 11,2018
Shenzhen JPT OPTO-ELECTRONICS Co., Independent
He Zuowen June 1,2017 Yes
Ltd. director
Independent
He Zuowen Shenzhen Yirui Biology Co., Ltd., October 1,2017 Yes
director
Cai Yuanqing Shenzhen University, Law professor April 1,2001 Yes
Cai Yuanqing Shenzhen arbitration commission Arbitrator April 1,2007 Yes
Shenzhen Rongda Photosensitive & Independent December
Cai Yuanqing August 30,2020 Yes
Technology Co.,Ltd. director 31,2014
Shenzhen Guanhua Printing & Dyeing
Le Kunjiu Chairman June 6,2017 No
Co.,Ltd.
Punishments to the current and leaving board directors, supervisors and senior managers during the report period
by securities regulators in the recent three years
□ Applicable √Not applicable
IV. Remuneration to directors, supervisors and senior executives
Decision-making procedures, basis for determination and actual payment of the remuneration to directors ,
supervisors and senior executives
In the report period, The remuneration of directors and senior management paid by the company is determined by
“Director Compensation Management System” and “Executive Compensation Management and Evaluation
System”, the remuneration of independent directors is determined as per the resolution of shareholders’ meeting,
and the remuneration of supervisors paid by the company is determined by their position held in the company.
Remuneration to directors, supervisors and senior executives in the reporting period
In RMB10,000
Total Remuneration
remuneration actually receives
Name Positions Sex Age Office status
received from the at the end of the
shareholder reporting period
Zhu Jun Board Chairman Male 55 Appoint 101.42 No
Zhu Meizhu Director , GM Male 54 Appoint 76.5 No
Director, Deputy
Secretary of the
Party committee
Ning Maozai Male 43 In Office 46.78 No
and Secretary of
the Commission
for Discipline
Huang Yu Director Male 44 In office 0 Yes
Di Yan Director, CFO Female 48 In Office 62.82 No
75
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Wang Chuan Director Male 46 In office 0 Yes
Independent
He Qiang Male 66 In Office 10 No
Director
Independent
He Zhuowen Male 56 In office 10 No
Director
Independent
Cai Yuanqing Male 49 In Office 10 No
Director
Chairman of the
Wang Weixing supervisory Male 50 In Office 65.79 No
committee
Zou Zhiwei Supervisor Male 36 In office 0 Yes
Employee
Zhang Xiaodong Male 43 In Office 39.37 No
supervisor
Le Kunjiu Deputy GM Male 55 In office 65.7 No
Liu Honglei Deputy GM Male 54 In Office 72.14 No
Secretary to the
Jiang Peng Female 48 In office 45.08 No
board of directors
Lin Lebo Director Male 57 Dimission 0 No
Zhao Lin Director Female 39 Dimission 0 No
Total -- -- -- -- 605.6 --
Incentive equity to directors, supervisors or/and senior executives in the reporting period
√ Applicable □Not applicable
In shares
Name Position Number of Number of Exercise Market Number of Number of Number of Granting Number of
vested exercise price of price at the restrictive shares newly-awa price of restrictive
shares stocks the end of stock hold unlocked rded restrictive stock hold
during the during the exercise report at the in the restrictive stock at the end
report report stock period beginning current stock (Yuan per of the
period period during the (Yuan per of the period during the share) report
report share) report report period
period period period
(Yuan per
share)
Board
Zhu Jun 0 0 5.79 137,000 0 0 5.73 137,000
Chairman
Zhu Director ,
0 0 5.79 135,000 0 0 5.73 135,000
Meizhu GM
Ning Director, 0 0 5.79 122,000 0 0 5.73 122,000
76
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Maozai Deputy
Secretary
of the
Party
committee
and
Secretary
of the
Commissi
on for
Discipline
Deputy
Le Kunjiu 0 0 5.79 122,000 0 0 5.73 122,000
GM
Liu Deputy
0 0 5.79 122,000 0 0 5.73 122,000
Honglei GM
Secretary
to the
Jiang Peng 0 0 5.79 100,000 0 0 5.73 100,000
board of
directors
Total -- 0 0 -- -- 738,000 0 0 -- 738,000
V. Particulars about employees.
1. Staff jobs, education, job title number and proportion refer to the following pie chart:
Number of in-service staff of the parent company（person） 46
Number of in-service staff of the main subsidiaries（person） 1,291
Total number of the in-service staff（person） 1,337
Total number of staff receiving remuneration in the current
1,337
period（person）
The number of the parent company and the main subsidiary’s
0
retired staffs who need to bear the cost（person）
Professional
Classified according by Professions Number of persons（person）
Production 889
Sales 26
Technical 152
Financial 41
Administrative 229
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Total 1,337
Education
Classified according by education background Number of persons（person）
Postgraduate or above 38
Universities 195
Colleges 116
Mid-school or below 988
Total 1,337
2. Remuneration policies
In 2018, the Company carried out management for employees’ compensation in strict accordance with the
state’s relevant laws and regulations and guaranteed the fairness and reasonability of the compensation, which
offered relevant rewards and incentives to the employees, accelerate them to jointly develop with the Company ,
and simultaneously reflected humanistic care of the Company.
3.Training plan
In 2018, the Company founded an "Online College of Shenzhen Textile (Holdings) Co., Ltd.", where employees
were encouraged to study by making full use of every minute to further enrich the Company's training
management system; the Company launched a "Shenzhen Textile Lecture Program" to normalize lectures in the
Company and develop the good spirit of "teaching lessons, helping and leading"; the Company built a reading
platform of "theory and practice combination", where a good reading and leaning atmosphere was created and
reading sharing activities and indoor team building activities were organized and well recognized by trainees; the
Company organized an activity of "learning management from movies" and arranged an in-depth discussion and
sharing link in combination with its actual business development situation at the moment to take in correct
management experience from development of external enterprises and delivery positive energy to enhance the
fighting capacity and cohesion in the Company.
4. Outsourcing situation
□ Applicable √ Not applicable
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
IX. Administrative structure
I. Basic state of corporate governance
In the reporting period, the company regulated operations and strengthen risk control in strict accordance with
Securities Law, Corporation Law, the Shenzhen Stock Exchange Standard Operation Instructions for Main-Board
Listed Companies, Corporate Governance Standards for Listed Companies and other related laws and regulations,
to ensure a healthy and stable development. At present, the basically sound governance system, normative
business operation and impeccable corporate governance structure meet the requirements of the normative
documents for regarding corporate governance of listed companies issued by the China Securities Regulatory
Commission.
In 2018, company held a total of 4 general meetings, convened general meetings, standardized voting procedures
to safeguard the effectiveness and legality in strict accordance with the regulations and requirements of
Corporation Law, Articles of Corporation and Rule of Procedure of Shareholders' Meeting. Companies actively
protected the voting rights of minority investors, and general meetings were convened in the form of live network
to adequately assure small investors of their rights to exercise.
In 2018, the board of directors held 7 general meetings, and the convening and voting procedures were all
conducted in strict accordance with the Articles of Corporation and Rule of Procedure of Shareholders' Meeting.
All the directors performed directors ' duties, exercise directors’ rights, attended related meetings and actively
participated in the training and became familiar with relevant laws and regulations with serious, diligent and
honest attitudes. Independent directors independently performed their duties in strict accordance with Articles of
Corporation, The independent director system and other relevant laws and regulations, expressed fully their
independent opinions on corporate operation, decision-making, and important matters, etc. Strategy, audit,
remuneration, evaluation, nomination committees were established under board of directors, all committees
functioned properly, and performed duties such as internal audits, compensation assessment, nomination of senior
management personnel, and provided scientific and professional advisory opinions for board of directors’
decision-making.
In 2018, the board of supervisors held 6 meetings. The board of supervisors strictly followed the requirements
of Articles of Corporation and Rules of procedure of the board of supervisors and other relevant laws and
regulations, supervised the legal compliance of the duties performed by company's financial personnel and
directors, managers and other senior management personnel in the aim of maintaining the legitimate rights and
interests of the company and its shareholders. All the supervisors fulfilled their obligations, exercised their rights
according to the laws. The convening and voting procedures of the board of supervisors were legal, and the
resolutions were legal and valid. The establishment and implementation of board of supervisors played an active
role in improving corporate governance structure and regulating corporate operations.
In 2018, we further increased information transparency, accomplished investors’ protection and
propaganda work. In the reporting period, except disclosing information in a real accurate, timely, fair and
complete manner in accordance with the regulatory requirements,
Moreover, the Company carried out the special work Blue Sky Action according to Notification on
Implementing Special Work where Investors Protect Blue Sky Action published by Shenzhen Securities Bureau to
enhance the quality of information disclosure as the key point, to continuously perfect the communication
79
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
mechanism and to promote the normative development of the Company. Meanwhile, the Company continued to
perfect the voting mechanism for minority investors. In 2018, the minority investors’ voting was counted
separately at each of the two shareholder’s meetings, and whose result was disclosed at the decision
announcement at the shareholder’s meeting, which fully guaranteed the execution of power of the minority
investors.
Moreover, the Company carried out the special work Blue Sky Action according to Notification on
Implementing Special Work where Investors Protect Blue Sky Action published by Shenzhen Securities Bureau to
enhance the quality of information disclosure as the key point, to continuously perfect the communication
mechanism and to promote the normative development of the Company. various platforms were made full use of,
such as telephone, e-mail, website, especially the interactive platform of investors in Shenzhen Stock Exchange,
solved questions brought by investors, and communicated with medium and small investors interactively, and
ensure all the investors obtained equal opportunities for informal access. Meanwhile, in the aim of improving the
transparency of listed companies, company accepted investors’ on-site investigation to have comprehensive
understandings of the company's business situation through face-to-face communication with management, also
urged the company established a responsibility to return on investors, improved and enhanced the corporate
governance standards. Meanwhile, the Company continued to perfect the voting mechanism for
minority investors. In 2018, the minority investors’ voting was counted separately at each of the 4 shareholder’s
meetings, and whose result was disclosed at the decision announcement at the shareholder’s meeting, which fully
guaranteed the execution of power of the minority investors.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the
relevant provisions of CSRC,
√ Yes □No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant
provisions of CSRC.
Shenzhen Investment Holdings Co., Ltd., the holding shareholder of the company, is a Shenzhen SASAC
enterprise. The company has complied with the relevant provisions on the state-owned asset management of
holding shareholders to report non-public information to holding shareholders, mainly including:Letters submitted
monthly index table; fee schedule during the reporting, financial assets table, summary quarterly deposits and
borrowings and financing.In order to strengthen the management of non-public information, the company has
strictly controlled the scope of learners, standardized the process of information delivery and strictly implemented
as per the “Management System on Learner of Insider Information”, took practical measures to prevent inside
information leaks and insider trading.
In addition, there is no difference among the governance of the company, “Company Law” and the relevant
provisions of China Securities Regulatory Commission.
II. Independence and Completeness in business, personnel , assets, organization and finance
The code of conduct of the controlling shareholders of the company did not go beyond the general meetings
directly or indirectly to interfere with the decision-making and business activities, the company had independent
and complete business and autonomous operation capacity , achieved “five point separation” in respect of
personnel, financial, asset, agencies, business.
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
III. Competition situations of the industry
□ Applicable √ Not Applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting Period
1.Annual General Meeting
Investor
Sessions Type Meeting Date Disclosure date Disclosure index
participation ratio
Announcement
Provisional
Annual General No.2018-19
shareholders’ 48.94% April 19,2018 April 20,2018
Meeting of 2017 （http://www.cninfo
General Meeting
.com.cn）
The first provisional Announcement
Provisional
shareholders’ No.2018-27
shareholders’ 48.95% June 20,2018 June 21,2018
General meeting in （http://www.cninfo
General Meeting
2018 .com.cn）
The second
Announcement
provisional Provisional
No.2018-41
shareholders’ shareholders’ 49.01% August 31,2018 September 1,2018
（http://www.cninfo
General meeting in General Meeting
.com.cn）
2018
The third provisional Announcement
Provisional
shareholders’ No.2018-52
shareholders’ 48.98% November 14,2018 November 15,2018
General meeting in （http://www.cninfo
General Meeting
2018 .com.cn）
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √Not applicable
V. Responsibility performance of independent directors in report period
1. The attending of independent directors to board meetings and shareholders’ general meeting
The attending of independent directors
Number of Number of Failure to Number of
Board Number of meetings Number of personally attendance at
Independent Number of
meetings spot attended by attendances by attend board general
Directors absence
necessary to be attendances Communicatio representative meetings meetings of
attended in the n successively shareholders
81
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
reporting twice (Yes/No)
period
He Qiang 7 1 6 0 0 No 1
He Zuowen 7 2 5 0 0 No 4
Cai Yuanqing 7 2 5 0 0 No 3
Notes to failure to personally attend Board Meetings Successively Twice
No
2.Objection of independent directors on some relevant issues
Objection of independent directors on some relevant issues
□ Yes √No
Independent directors proposed no objection against the relevant matters in the reporting period.
3. Other notes to duty performance of independent directors
Has an independent director’s advice to the Company been accepted
√ Yes □No
Explanation on acceptance of or failure to accept an independent director’s advice to the Company.
In the report period, the independent directors of the Company seriously fulfilled duties according to the
requirement of supervision laws and regulations and System of the Company’s Independent Director：
1.The independent directors timely attended the board meeting convened by the Company, and attended
meetings related to the shareholder’s meeting. Beforehand,, we carefully reviewed the information of the meeting.
We fully utilized our own professional advantages and enterprise management experience to put forward
reasonable opinions and suggestions for the proposal and to give independent comment for the related party for its
capital occupation, which fully expressed the guidance and supervision function of the independent directors.
2.The independent directors actively participated in the work of the board’s special committee, and gave
independent comments for events involved with the Company’s periodical report, duty performance and
further employment of annual audit institution, self-assessment report of internal control, To express opinions
on such matters as nomination of candidates for directors, which factually maintained the interest of the
Company and the shareholders’, especially the public shareholder’s, and which benefited the board’s core
function at corporate governance.
3.The independent directors kept communicating with the Company’s managements and thoroughly debrief
relevant personnel, and focused on the construction progress of Project Line 6 of TFT-LCD polaroid glass of
Period II as well as the progress of SAPO Photoelectric's capital increment and share expansion for introducing
strategic investors,. which enabled the independent directors to timely comprehend and master the progress of the
Company’s significant issues.
（4）The Company checked management and use of funds raised and supervised compensation and performance
of duties of directors and senior executives, commitments of the Company and related parties and their
performance to practically safeguard the interest of the Company as a whole and prevent any harm on legitimate
rights and interests of minority shareholders.
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Refer to the announcement of the http://www.cninfo.com.cn disclosure on April 27,2019
VI. Duty Performance of Special Committees under the Board of Directors in the Reporting Period
The independent directors of the company are the key members of all professional committees of the Board of
Directors, and are in the majority and the conveners of Audit Committee, Remuneration and Appraisal Committee
and Nomination Committee. Also, all the three independent directors can attend the daily meeting held by every
special committee on time.
(1) Audit Committee: during the reporting period, the Audit Committee has held two meetings, carefully
examined the regular reports of the company and effectively implemented the work schedule of annual reports.
Also, the Audit Committee has reviewed the internal control of the company, supervised the effective
implementation of internal control, the self-assessment of internal control. Before the board meeting for
deliberating annual report was convened, the Company will strengthen the communication with the certified
public accountant for annual audit, carefully review related information,and will learn about and master the
arrangement and progress of accountant’s audit. The Company will interview the accountant for annual audit to
effectively communicate with the accountant about the problems found during the audit progress, will supervise
and examine the disclosed information, will ensure the Company’s situation will be factually reflected by the
audit report, and will make a comprehensive assessment for accountant for the completion situation of the annual
work and the practising quality. In the report period, the Company will convene meeting sand formed solutions
for audit institution recruitment, self-assessment report of internal control and financial final statement
During the reporting period, Proposal on Carry a meeting ficused on hiring audit institutions, self-assessment
report of the internal control, the Final Accounting Report and other matters and reach a resolution.
（II) Compensation and Assessment Committee: In the report period, the Compensation and Assessment
Committee convened 1 meeting in total on the Company's compensation assessment of senior executives in 2017
with a resolution formed.
(3)Nomination committee: The nomination committee has held during the report period. 2 meetings in total at
which the nominated candidates of independent director and hired senior managers are convened and a resolution
is formed.
VII. Work of the supervisory Committee
Did the supervisory Committee find any risk existing in performing the supervision activities in the reporting
period
□Yes √No
The supervisory Committee has no objection opinion any matters under supervision in the reporting period
VIII. Assessment and incentive Mechanism for Senior executives
The company complies with “Executive Compensation Management and Evaluation System” to conduct the
evaluation for the accomplishment of annual work of the senior executives. The salaries of the senior executives
are determined according to the duty scope, post value, individual ability, wages level on the market, economic
profits of the company and operation goal accomplishment of senior executives with adhering to the principle of
market orientation, responsibility with unified right, and incentive and equal restriction. During the reporting
83
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
period, the senior executives are all qualified in 2018 after evaluation. The directors and the general manager have
conducted the feedback on the annual appraisal evaluation for the senior executives in accordance with the
“Executive Compensation Management and Evaluation System” and proposed the recommendation for
improvement.
IX. Internal control situations
1.Specific situations on major defects of internal control discovered during report period
√ Yes □No
About the significant Defects of the internal control found in the internal control self-assessment report in the reporting period
The identification and rectification of deficiency of the internal control:
1. The identification and rectification of deficiency of the internal control in the financial statement
In accordance with above identification standard of deficiency of the internal control in the financial statement, there is no the
serious and important deficiency of internal control in the financial statement during the reporting period.
2.The identification and rectification of deficiency of the internal control except for that of the financial statement in ac cordance
with above identification standard of deficiency of the internal control except for that of the financial statement, there is no the
serious and important deficiency of internal control except for that of the financial statement during the reporting period.
2.Self-evaluation report on internal control
Disclosure date of appraisal report on
April 27,2019
internal control
Disclosure index of appraisal report on
Juchao Website:（http://www.cninfo.com.cn） Self-evaluation report of internal control
internal control
Proportion of total unit assets covered by
appraisal in the total assets of the
100.00%
consolidated financial statements of the
company
Proportion of total unit incomes covered
by appraisal in the total business incomes
100.00%
of the consolidated financial statements of
the company
Standards of Defects Evaluation
Category Financial Report Non-financial Report
The defects related to financial reports were In the following circumstances, the
divided into general defects, important company was identified as existing
defects and significant defects according to non-financial –reporting related
Qualitative standard their severity. Significant defects referred to significant defects of internal controlling
one or multiple combinations of controlling defects:
defects, which may lead to serious deviation The business activities of the company
from the controlling objectives. Important seriously violated national laws and
84
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
defects referred to one or multiple regulations; (2) The decision-making
combinations of controlling defects, and process of "Three-Importance&
their severity and economic consequences One-Large" were unscientific, leading to
were below significant defects, but they major decision errors, and causing major
could still lead to serious deviation from the property loses to the company; (3)
controlling objectives. General defects Massive loss of key posts or technology
referred to other internal controlling defects talents; (4) The controlling system
which couldn't constitute significant defects involving important business fields of the
or important defects. company failed; (5) It Caused serious
negative effects on business of the
company, and the effects couldn’t be
eliminated; (6) The evaluation results of
internal control were significant defects,
and couldn’t get effective rectification.
Important defects referred to one or
multiple combinations of controlling
defects, and their severity and economic
consequences were below significant
defects, but they could still lead to
serious deviation from the controlling
objectives. General defects referred to
other internal controlling defects which
couldn't constitute significant defects or
important defects.
Misstatement amount of financial statement
fell into the following intervals: significant
defects: Misstatement amount ≥ 1.5% of
total revenue; Misstatement amount ≥ 10%
of gross profit; Misstatement amount ≥ 1%
of total asset; Misstatement amount ≥ 5% of
net asset. significant defects: 0.5% of Total
revenue ≤Misstatement amount ＜ 1.5% of
total revenue; 5% of gross profit
≤Misstatement amount ＜ 10% of gross
Quantitative criteria Not applicable
profit; 0.5% of Total asset ≤Misstatement
amount ＜ 1% of total revenue; 3% of Net
assets ≤Misstatement amount ＜ 5% of net
assets. General defects:0% of total revenue
＜Misstatement amount＜0.5% of Total
revenue; 2% of gross profitt ＜Misstatement
amount＜5% of total profit; 0% of total
assets ＜Misstatement amount＜0.5 of total
assets; 0% of net assets ＜Misstatement
amount＜3% of net assets.
85
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Number of major defects in financial
0
reporting（a）
Number of major defects in non financial
0
reporting (a)
Number of important defects in financial
0
reporting（a）
Number of important defects in non
0
financial reporting（a）
X. Internal Control audit report
√ Applicable □Not applicable
Review opinions in the internal control audit report
To all shareholders of Shenzhen Textile (Holdings) Co., Ltd.：
According to the relevant requirements of the “Audit Guideline of Enterprise Internal Control” and the Chinese
CPA criteria, the company has audited the effectiveness of internal control of the financial statement of Shenzhen
Textile (Holdings) Co., Ltd. (Shenzhen Textile) at the date of December 31, 2018.
1. The responsibility of enterprise for the internal control. According to the provisions of “Fundamental Norms for
Enterprise Internal Control”, “Operation Guideline of Enterprise Internal Control” and “Evaluation Guideline of
Enterprise Internal Control”, the company has established, perfected and effectively implemented the internal
control, and made an evaluation for its effectiveness, which are the responsibilities of the Board of Directors of
Shenzhen Textile.
2. The responsibility of CPA. The company shall be responsible for the expression of audit opinions on the
effectiveness of internal control in the financial statement and the disclosure of serious deficiency of internal
control except for the financial statement on the basis of the implementation of audit.
3. The inherent limitation of internal control. There is the possibility of unpreventable errors. In addition, due to
the change of situation, the inappropriate internal control is maybe shown, or the control policy and the abidance
of procedure can be reduced. Based on the audit results of internal control, the future internal control is expected
to have a certain risk.
4. The audit opinions of internal control in the financial statement. The company believes that Shenzhen Textile
has maintained the effective internal control of the financial statement in all the major aspects according to
“Fundamental Norms for Enterprise Internal Control” and the relevant provisions on December 31, 2018.
Peking Certified Public Accountants(Special General Partnership)
Chinese C.P.A.
(Project partner)
Lan Tao
Chinese C.P.A.
Liu Ru
86
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
April 25,2019
Disclosure date of audit report
Disclosure
of internal control (full-text)
Index of audit report of
April 27,2019
internal control (full-text)
Juchao Website: （http://www.cninfo.com.cn）;Audit report of internal control of Peking
Internal audit report’s opinion
Certified Public Accountants qin xin shen zi 【2019】No.410
Type of audit report on internal
Unqualified auditor’s report
control
Whether there is significant
No
defection non-financial report
Has the CPAs issued a qualified auditor’s report of internal control .
□ Yes √No
Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of
Directors
√Yes □No
X. Corporation bonds
Whether or not the Company public offering corporation bonds in stock exchange, which undue or without
payment in full at maturity on the approval date for annual report disclosed
No
87
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
XI. Financial Report
I. Audit report
Type of audit opinion Standard Unqualified opinion
Type of audit opinion April 25,2019
Peking Certified Public Accountants(Special General
Name of audit firm
Partnership)
Name of the certified accountants Lan Tao , Liu Ru
Auditors’ Report
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, 2018, 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, 2018 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.
(Ⅰ) Recognition of revenue
1. Description of matters
As indicated in Remark Ⅴ(32) of the financial statement, the revenues of the period of Shenzhen Textile (Holdings) Co., Ltd is
RMB1,280,018,761.78 , which are mainly sourced from sales revenue of diffuser and textiles, rental income and trade income. As the revenue
is one KPI of Shenzhen Textile (Holdings) Co., Ltd, appropriate recognition of the revenue will have an effect on the company’s operating
results and shall be confirmed as one key item of a
2. Response to the audit
The audit process implemented for revenue recognition includes mainly: Test and evaluate the effectiveness of internal contro l in
relation to revenue recognition; re-check on the basis of product and business type the consistency of accounting policy used for
various revenue recognition with Accounting Standard for Business Enterprises; perform analytical procedure on the revenue and
evaluate the rationality of revenue recognition; sample the recognized revenue and check sales contract, shipping order, sales invoice
and other supportive documents to evaluate if the revenue has been recognized according to revenue recognition policy; Sample the
revenue recognized before or after the balance sheet date and check relevant supportive documents to evaluate if the revenue has been
recognized in an appropriate period; Sample the recognized accounts receivable and revenue, perform confirmation procedure to
evaluate the veracity of the revenue.
(Ⅱ) Inventory falling price reserves
1. Description of matters
As indicated in Remark Ⅴ(5) of the financial statement, the balance of inventory falling price reserves of Shenzhen Textile (Holdings)
Co., Ltd at the end of the report period is RMB87,762,302.32; as the inventory falling price reserves and any variation will play a great
influence on the financial statement and the process of confirming net realizable value of inventory will involve major judgment and estimate
of the management, we shall confirm inventory falling price reserves as one key item of audit.
2. Response to the audit
The audit process implemented for inventory falling price reserves includes mainly: Test and evaluate the effectiveness of internal
control in relation to inventory falling price reserves; Supervise inventory taking and check the quantity, condition of inventory; get a
year-end inventory list and conduct analytical review on the conditions of various inventories; get the calculating table for inventory falling
price reserves and check it; Check any changes of the accrual of inventory falling price reserves in this period.
IV. Other information
88
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
The management of the Company is responsible for the other information. The other information comprises information of the Company's
annual report in 2018, 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
The Company's management is responsible for preparing the financial statements in accordance with the requirements of Acc ounting
Standards for Business Enterprises to achieve a fair presentation, and for designing, implementing and maintaining internal c ontrol 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 a nd
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 significanc e in the audit
of the financial statements of the current period and are therefore the key audit matters. 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.
Peking Certified Public Accountants(Special General Partnership)
Chinese C.P.A. Lan Tao（Project Partner)
Chinese C.P.A. Liu Ru
April 25,2019
II. Financial Statements
Statement in Financial Notes are carried in RMB/CNY
89
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Consolidated balance sheet
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. December 31,2018 In RMB
Items Notes V At the end of term Beginning of term
Current asset：
Monetary fund (1) 1,141,759,374.60 1,165,048,108.83
Financial assets measured at fair value with
variations accounted into current income
account
Derivative financial assets
Notes receivable & Account receivable （2） 529,340,447.65 236,710,196.70
Prepayments （3） 229,028,791.15 13,755,152.05
Other account receivable （4） 14,846,896.50 28,654,857.07
Inventories （5） 439,752,718.77 275,615,176.16
Assets held for sales
Non-current asset due within 1 year
Other current asset （6） 639,797,959.30 1,148,689,874.10
Total of current assets 2,994,526,187.97 2,868,473,364.91
Non-current assets：
Available-for-sale financial assets （7） 45,373,784.87 66,035,733.04
Expired investment in possess
Long-term receivable
Long term share equity investment （8） 32,952,085.66 20,380,734.56
Property investment （9） 167,997,941.98 173,105,806.27
Fixed assets （10） 987,876,247.55 656,133,200.19
Construction in progress （11） 15,621,286.64 322,570,173.73
Productive biological assets
Oil and natural gas assets
Intangible assets （12） 37,880,815.85 38,870,673.40
Development expenses
Goodwill （13）
Long-germ expenses to be amortized （14） 1,486,209.03 1,035,290.08
Deferred income tax asset （15） 6,036,198.23 1,974,536.90
Other non-current asset （16） 329,452,659.01 47,166,994.48
Total of non-current assets 1,624,677,228.82 1,327,273,142.65
Total of assets 4,619,203,416.79 4,195,746,507.56
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
Consolidated balance sheet(Cont'd)
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. December 31, 2018
In RMB
Items Note V At the end of term Beginning of term
Current liabilities
Short-term loans 411,522,111.40 88,638,181.45
（17）
Current liabilities
Short-term loans
Notes payable & account payable 180,239,452.90 97,104,697.18
（18）
Advance payment 120,702,951.37 34,952,567.83
（19）
Employees’ wage payable 32,506,267.08 29,503,260.65
（20）
Tax payable 7,745,128.99 6,935,262.57
（21）
229,015,279.98 200,826,343.58
Other account payable （22）
Liabilities held for sales
90
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Non-current liability due within 1 year （23） 40,000,000.00 40,000,000.00
Other current liability
Total of current liability 1,021,731,191.72 497,960,313.26
Non-current liabilities：
Long-term loan （24） - 40,000,000.00
Bond payable - -
Including：preferred stock
Sustainable debt
Long-term payable
Long-term payable employees' remuneration
Expected liabilities
Deferred income （25） 137,991,698.33 134,767,064.72
Deferred income tax liability （15） - -
Other non-current liabilities
Total non-current liabilities 137,991,698.33 174,767,064.72
Total of liability 1,159,722,890.05 672,727,377.98
Owners’ equity
Share capital （26） 511,274,149.00 511,274,149.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 1,865,716,983.63 1,866,001,475.17
（27）
Less：Shares in stock 27,230,679.00 27,230,679.00
（28）
Other comprehensive income 1,339,208.41 2,218,703.87
（29）
Special reserves
Surplus reserves （30） 80,004,803.23 77,477,042.19
Common risk provision
Retained profit -57,774,473.41 -32,266,087.44
（31）
Total of owner’s equity belong to the parent company 2,373,329,991.86 2,397,474,603.79
Minority shareholders’ equity 1,086,150,534.88 1,125,544,525.79
Total of owners’ equity 3,459,480,526.74 3,523,019,129.58
Total of liabilities and owners’ equity 4,619,203,416.79 4,195,746,507.56
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
Balance sheet of Parent Company
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. December 31,2018 In RMB
Notes Notes XV Year-end balance Year-beginning balance
Current asset：
Monetary fund 85,416,567.74 413,700,327.95
Financial assets measured at fair value with variations accounted
into current income account
Derivative financial assets
Notes receivable & account receivable 541,948.21 449,536.21
（1）
Prepayments 17,436.00 10,000.00
Other account receivable 13,856,382.02 19,443,487.43
（2）
Inventories
Assets held for sales
Non-current asset due within 1 year
Other current asset 500,000,000.00 120,000,000.00
Total of current assets 599,832,333.97 553,603,351.59
Non-current assets：
91
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Available-for-sale financial assets 15,373,784.87 36,035,733.04
Held-to-maturity investments
Long-term receivable
Long term share equity investment 1,997,175,852.27 1,984,849,008.23
（3）
Property investment 161,053,628.71 165,607,900.07
Fixed assets 26,565,399.91 28,119,990.58
Construction in progress - -
Productive biological assets
Oil and natural gas assets
Intangible assets 1,012,374.75 1,413,305.67
R & D costs
Goodwill - -
Long-germ expenses to be amortized - -
Deferred tax assets 5,818,069.48 1,526,871.33
Other non-current asset - 493,620.44
Total of non-current assets 2,206,999,109.99 2,218,046,429.36
Total of assets 2,806,831,443.96 2,771,649,780.95
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
Balance sheet of Parent Company(Cont'd)
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. December 31,2018 In RMB
Notes Notes Year-end balance Year-beginning balance
Current liabilities
Short-term loans
Financial liabilities measured at fair value with variations accounted
into current income account
Derivative financial liabilities
Notes payable and account payable 411,743.57 411,743.57
Advance payment 639,024.58 639,024.58
Employees’ wage payable 9,760,306.51 8,495,538.21
Tax payable 5,494,627.33 3,247,028.64
Other account payable 141,746,352.67 134,018,771.57
Liabilities held for sales
Non-current liability due within 1 year
Other current liability
Total of current liability 158,052,054.66 146,812,106.57
Non-current liabilities：
Long-term loan
Bond payable
Including：preferred stock
Sustainable debt
Long-term payable
Employees’ wage payable
92
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Expected liabilities
Deferred income 700,000.00 800,000.00
Deferred income tax liability - -
Other non-current liabilities
Total of Non-current liabilities 700,000.00 800,000.00
Total of liability 158,752,054.66 147,612,106.57
Owners’ equity
Share capital 511,274,149.00 511,274,149.00
Other equity instrument
Including：preferred stock
Sustainable debt
Capital reserves 1,599,025,454.96 1,599,381,854.96
Less：Shares in stock 27,230,679.00 27,230,679.00
Other comprehensive income 1,339,208.41 2,218,703.87
Special reserves
Surplus reserves 80,004,803.23 77,477,042.19
Retained profit 483,666,452.70 460,916,603.36
Total of owners’ equity 2,648,079,389.30 2,624,037,674.38
Total of liabilities and owners’ equity 2,806,831,443.96 2,771,649,780.95
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
Consolidated Income statement
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Year 2018 In RMB
Items Report period Same period of the previous
Note
year
1,272,356,771.34 1,475,545,719.72
I. Income from the key business （32）
1,142,250,284.67 1,299,603,719.37
less：Business cost （32）
Business tax and surcharge 8,042,137.62 13,962,996.87
（33）
Sales expense 9,636,559.05 9,940,696.87
（34）
Administrative expense 88,590,439.30 75,320,512.60
（35）
R & D costs 41,951,786.15 39,036,089.05
（36）
Financial expenses -971,661.37 -31,171,160.81
（37）
Including：Interest expense 14,179,121.73 4,130,427.79
（37）
Interest income -27,438,299.41 -34,831,809.25
（37）
Asset impairment loss 106,348,320.75 48,807,727.39
（38）
Add：Other income 17,228,202.21 12,567,426.98
（39）
Investment gain（“-”for loss） 51,793,705.47 53,555,819.95
（40）
Incl: investment gains from affiliates 1,260,154.95 1,101,479.62
Changing income of fair value
Income on disposal of assets
II. Operational profit（“-”for loss） -54,469,187.15 86,168,385.31
Add ：Non-operational income 1,265,178.66 787,567.93
（41）
Less: Non-operating expense 219,103.78 2,015,456.96
（42）
III.Total profit(“-”for loss) -53,423,112.27 84,940,496.28
Less：Income tax expenses 8,879,595.11 11,278,818.41
（43）
-62,302,707.38 73,661,677.87
IV Net profit
93
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
（I）Classification by business continuity
1.Net continuing operating profit -62,302,707.38 73,661,677.87
2.Termination of operating net profit
（II）Classification by ownership
1.Net profit attributable to the owners of parent company -22,980,624.93 52,776,101.46
2.Minority shareholders’ equity -39,322,082.45 20,885,576.41
VI. Net after-tax of other comprehensive income -879,495.46 -1,173,518.20
（44）
-879,495.46 -1,173,518.20
Net of profit of other comprehensive income attributable to owners of the parent company.
（I）Other comprehensive income items that will not be 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 can not be reclassified into profit or lo
ss.
-879,495.46 -1,173,518.20
（II）
Other comprehensive income that will be reclassified into profit or loss.
1.Other comprehensive income under the equity method investee can be reclassified into profit or loss.
2.Gains and losses from changes in fair value available for sale financial assets -1,500,778.50 -288,326.89
3.Held-to-maturity investments reclassified to gains and losses of available for sale financial assets
4.The effective portion of cash flow hedges and losses
5.Translation differences in currency financial statements 621,283.04 -885,191.31
6.Other
Net of profit of other comprehensive income attributable to Minority shareholders’ equity
V Total comprehensive income -63,182,202.84 72,488,159.67
Total comprehensive income attributable to the owner of the parent company -23,860,120.39 51,602,583.26
Total comprehensive income attributable minority shareholders -39,322,082.45 20,885,576.41
VI. Earnings per share
（I）Basic earnings per share -0.04 0.10
-0.04 0.10
(II)Diluted earnings per share
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
94
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Income statement of the Parent Company
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Year 2018 In RMB
Items Report period Same period of the
Notes XV
previous year
I. Operating revenue XV（4) 68,327,680.40 65,474,614.36
Incl：Business cost （4) 14,479,527.62 14,205,521.55
Business tax and surcharge 2,907,383.37 5,875,973.65
Sales expense - -
Administrative expense 31,726,924.70 29,587,958.60
R & D costs
Financial expenses -16,480,997.63 -13,663,222.04
Including：Interest expenses 571,844.26
Interest income -17,084,555.65 -13,653,213.00
Asset impairment loss 1,488,429.82 5,554,598.81
Add：Other income 107,858.68 5,638.3
5
Investment gain（“-”for loss） （5） -3,527,451.56 22,719,665.90
Incl: investment gains from affiliates 1,260,154.95 1,101,479.62
Gains from change of fir value （“-”for loss）
Assets disposal income
II. Operational profit（“-”for loss） 30,786,819.64 46,639,088.04
Add ：Non-operational income 24,597.81 1,510.0
0
Less：Non business expenses 5,061.99 477,949.40
III.Total profit(“-”for loss) 30,806,355.46 46,162,648.64
Less：Income tax expenses 5,528,745.08 8,499,047.25
IV Net profit 25,277,610.38 37,663,601.39
1.Net continuing operating profit
2.Termination of operating net profit
V. Net after-tax of other comprehensive income -879,495.46 -1,173,518.20
（I）Other comprehensive income items that will not be 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 can not be reclassif
ied into profit or loss.
（II） -879,495.46 -1,173,518.20
Other comprehensive income that will be reclassified into profit or loss.
1.Other comprehensive income under the equity method investee can be reclassified
into profit or loss.
-1,500,778.50 -288,326.89
2.Gains and losses from changes in fair value available for sale financial assets
3.Held-to-maturity investments reclassified to gains and losses of available for sale f
inancial assets
4.The effective portion of cash flow hedges and losses
5.Translation differences in currency financial statements 621,283.04 -885,191.31
6.Other
VI. Total comprehensive income 24,398,114.92 36,490,083.19
VII. Earnings per share
（I）Basic earnings per share
(II)Diluted earnings per share
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
95
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Consolidated Cash flow statement
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Year 2018 In RMB
Items Same period of the
Notes V Report period
previous year
I.Cash flows from operating activities
Cash received from sales of goods or rending of services 1,178,134,497.59 1,587,525,262.02
Tax returned 96,325,044.45 47,028,145.81
Other cash received from business operation （45） 299,343,342.34 112,007,561.78
Sub-total of cash inflow 1,573,802,884.38 1,746,560,969.61
Cash paid for purchasing of merchandise and services 1,459,074,751.17 1,511,459,801.99
Cash paid to staffs or paid for staffs 146,910,083.29 133,551,583.94
Taxes paid 45,580,651.00 77,287,145.15
Other cash paid for business activities （45） 382,731,720.07 52,781,140.84
Sub-total of cash outflow from business activities 2,034,297,205.53 1,775,079,671.92
Cash flow generated by business operation, net -460,494,321.15 -28,518,702.31
II.Cash flow generated by investing
Cash received from investment retrieving - -
Cash received as investment gains 5,359,325.16 5,921,598.83
Net cash retrieved from disposal of fixed assets, intangible assets, and other 13,045.98 6,740.00
long-term assets
Net cash received from disposal of subsidiaries or other operational units - -
Other investment-related cash received （45） 4,170,920,804.54 3,566,066,407.98
Sub-total of cash inflow due to investment activities 4,176,293,175.68 3,571,994,746.81
Cash paid for construction of fixed assets, intangible assets and other long-term 380,415,720.59 254,484,019.80
assets
Cash paid as investment - 28,500,000.00
Net cash received from subsidiaries and other operational units - -
Other cash paid for investment activities （45） 3,625,700,000.00 3,093,000,000.00
Sub-total of cash outflow due to investment activities 4,006,115,720.59 3,375,984,019.80
Net cash flow generated by investment 170,177,455.09 196,010,727.01
III.Cash flow generated by financing
Cash received as investment - 27,230,679.00
Incl: Cash received as investment from minor shareholders - -
Cash received as loans 630,493,275.82 189,660,085.68
Cash received from bond placing - -
Other financing –related ash received - -
Sub-total of cash inflow from financing activities 630,493,275.82 216,890,764.68
Cash to repay debts 347,609,345.87 150,340,039.30
Cash paid as dividend, profit, or interests 19,810,202.44 1,048,268.16
Incl: Dividend and profit paid by subsidiaries to minor shareholders - -
Other cash paid for financing activities - -
Sub-total of cash outflow due to financing activities 367,419,548.31 151,388,307.46
Net cash flow generated by financing 263,073,727.51 65,502,457.22
IV Influence of exchange rate alternation on cash and cash equivalents -422,765.56 -1,868,779.16
V.Net increase of cash and cash equivalents -27,665,904.11 231,125,702.76
Add: balance of cash and cash equivalents at the beginning of term 1,161,240,139.33 930,114,436.57
VI ..Balance of cash and cash equivalents at the end of term 1,133,574,235.22 1,161,240,139.33
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Person-in -charge of the accounting organ：Mu Linying
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Cash Flow Statement of the Parent Company
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Year 2018 In RMB
Items Notes Same period of the
Report period
previous year
I.Cash flows from operating activities
Cash received from sales of goods or rending of services 70,428,184.75 66,552,835.48
Tax returned - -
Other cash received from business operation 22,064,255.92 14,836,257.91
Sub-total of cash inflow 92,492,440.67 81,389,093.39
Cash paid for purchasing of merchandise and services 5,684,253.84 5,055,450.06
Cash paid to staffs or paid for staffs 19,166,726.43 17,811,799.19
Taxes paid 15,493,316.47 18,156,899.52
Other cash paid for business activities 6,553,493.05 7,297,312.65
Sub-total of cash outflow from business activities 46,897,789.79 48,321,461.42
Cash flow generated by business operation, net 45,594,650.88 33,067,631.97
II.Cash flow generated by investing
Cash received from investment retrieving - -
Cash received as investment gains 2,310,030.38 5,087,575.52
Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term - 1,510.00
assets
Net cash received from disposal of subsidiaries or other operational units - -
Other investment-related cash received 566,305,459.40 262,490,733.61
Sub-total of cash inflow due to investment activities 568,615,489.78 267,579,819.13
2,493,900.87 4,857,553.44
Cash paid for construction of fixed assets, intangible assets and other long-term assets
Cash paid as investment - -
Net cash received from subsidiaries and other operational units - -
Other cash paid for investment activities 940,000,000.00 350,000,000.00
Sub-total of cash outflow due to investment activities 942,493,900.87 354,857,553.44
Net cash flow generated by investment -373,878,411.09 -87,277,734.31
III.Cash flow generated by financing
Cash received as investment - 27,230,679.00
Cash received as loans - -
Other financing –related ash received - -
Sub-total of cash inflow from financing activities - 27,230,679.00
Cash to repay debts - -
Cash paid as dividend, profit, or interests - -
Other cash paid for financing activities - -
Sub-total of cash outflow due to financing activities - -
Net cash flow generated by financing - 27,230,679.00
IV Influence of exchange rate alternation on cash and cash equivalents - -5,858.82
V.Net increase of cash and cash equivalents -328,283,760.21 -26,985,282.16
Add: balance of cash and cash equivalents at the beginning of term 413,700,327.95 440,685,610.11
VI ..Balance of cash and cash equivalents at the end of term 85,416,567.74 413,700,327.95
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Consolidated Statement on Change in Owners’ Equity
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. In RMB
Amount in this period
Owner’s equity Attributable to the Parent Company
Minor shareholders’ Total of owners’
Items Other Equity instrument
Share Less: Shares in Other Comprehensive Specialized Common risk equity equity
preferred Sustainable Share Capital Surplus reserves
Capital Other stock Income reserve provision Retained profit
stock debt
I.Balance at the end of last year 511,274,149.00 - - - 1,866,001,475.17 27,230,679.00 2,218,703.87 - 77,477,042.19 - -32,266,087.44 1,125,544,525.79 3,523,019,129.58
Add: Change of accounting policy -
Correcting of previous errors -
Merger of entities under common control -
Other -
II.Balance at the beginning of current year 511,274,149.00 - - - 1,866,001,475.17 27,230,679.00 2,218,703.87 - 77,477,042.19 - -32,266,087.44 1,125,544,525.79 3,523,019,129.58
III.Changed in the current year - - - - -284,491.54 - -879,495.46 - 2,527,761.04 - -25,508,385.97 -39,393,990.91 -63,538,602.84
（1）Total comprehensive income -879,495.46 -22,980,624.93 -39,322,082.45 -63,182,202.84
（II）Investment or decreasing of capital by owners - - - - -284,491.54 - - - - - - -284,491.54
1．Ordinary Shares invested by shareholders - -
2．Holders of other equity instruments invested capital - -
3．Amount of shares paid and accounted as owners’ equity -284,491.54 -284,491.54
4．Other -
（III）Profit allotment - - - - - - - - 2,527,761.04 - -2,527,761.04 - -
1.Providing of surplus reserves 2,527,761.04 -2,527,761.04 -
2.Providing of common risk provisions -
3．Allotment to the owners (or shareholders) -
4．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.Change amount of defined benefit plans that carry
forward
Retained earnings -
(V). Special reserves - - - - - - - - - - - - -
1. Provided this year -
2．Used this term -
（VI）Other -71,908.46 -71,908.46
IV Balance at the end of this term 511,274,149.00 - - - 1,865,716,983.63 27,230,679.00 1,339,208.41 - 80,004,803.23 - -57,774,473.41 1,086,150,534.88 3,459,480,526.74
Legal Representative: Zhu Jun Person-in-charge of the accounting work：Zhu Meizhu Person-in -charge of the accounting organ：Mu Linying
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Consolidated Statement on Change in Owners’ Equity
Prepared by: Shenzhen Textile (Holdings) Co., Ltd.
In RMB
Amount in last year
Owner’s equity Attributable to the Parent Company
Items Minor shareholders’
Other Equity instrument Other Total of owners’ equity
Common risk equity
Share Capital reserves Less: Shares in stock Comprehensive Specialized reserve Surplus reserves Retained profit
Sustainable provision
Capital preferred stock Other Income
debt
I.Balance at the end of last year 506,521,849.00 - - - 1,837,205,251.95 - 3,392,222.07 - 73,710,682.05 - -81,275,828.76 1,100,564,805.80 3,440,118,982.11
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 - - - 1,837,205,251.95 - 3,392,222.07 - 73,710,682.05 - -81,275,828.76 1,100,564,805.80 3,440,118,982.11
III.Changed in the current year 4,752,300.00 - - - 28,796,223.22 27,230,679.00 -1,173,518.20 - 3,766,360.14 - 49,009,741.32 24,979,719.99 82,900,147.47
（1）Total comprehensive income -1,173,518.20 52,776,101.46 20,885,576.41 72,488,159.67
（II）Investment or decreasing of capital by owners 4,752,300.00 - - - 22,762,870.54 27,230,679.00 - - - - - - 284,491.54
1．Ordinary Shares invested by shareholders 4,752,300.00 22,478,379.00 27,230,679.00 -
2．Holders of other equity instruments invested capital - -
3．Amount of shares paid and accounted as owners’ equity 284,491.54 284,491.54
4．Other -
（III）Profit allotment - - - - - - - - 3,766,360.14 - -3,766,360.14 - -
1.Providing of surplus reserves 3,766,360.14 -3,766,360.14 -
2.Providing of common risk provisions -
3．Allotment to the owners (or shareholders) -
4．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.Change amount of defined benefit plans that carry
forward
Retained earnings
5．Other -
(V). Special reserves - - - - - - - - - - - - -
1. Provided this year -
2．Used this term -
（VI）Other 6,033,352.68 4,094,143.58 10,127,496.26
IV Balance at the end of this term 511,274,149.00 - - - 1,866,001,475.17 27,230,679.00 2,218,703.87 - 77,477,042.19 - -32,266,087.44 1,125,544,525.79 3,523,019,129.58
Legal Representative: Zhu Jun Person-in-charge of the accounting work：Zhu Meizhu Person-in -charge of the accounting organ：Mu Linying
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Statement of change in owner’s Equity of the Parent Company
Prepared by: Shenzhen Textile (Holdings) Co., Ltd
In RMB
Amount in this period
Owner’s equity Attributable to the Parent Company
Items Other Equity instrument
Share Capital Capital reserves Less: Shares in stock Other Comprehensive IncomeSpecialized reserve Surplus reserves Retained profit Total of owners’ equity
preferred stock Sustainable debt Other
I.Balance at the end of last year 511,274,149.00 - - - 1,599,381,854.96 27,230,679.00 2,218,703.87 - 77,477,042.19 460,916,603.36 2,624,037,674.38
Add: Change of accounting policy -
Correcting of previous errors -
Other -
II.Balance at the beginning of current year 511,274,149.00 - - - 1,599,381,854.96 27,230,679.00 2,218,703.87 - 77,477,042.19 460,916,603.36 2,624,037,674.38
III.Changed in the current year - - - - -356,400.00 - -879,495.46 - 2,527,761.04 22,749,849.34 24,041,714.92
（I）Total comprehensive income -879,495.46 25,277,610.38 24,398,114.92
(II) Investment or decreasing of capital by owners - - - - -356,400.00 - - - - - -356,400.00
1．Ordinary Shares invested by shareholders -
2．Holders of other equity instruments invested capital - -
3.Amount of shares paid and accounted as owners’ equity -356,400.00 -356,400.00
4．Other -
（III）Profit allotment - - - - - - - - 2,527,761.04 -2,527,761.04 -
1.Providing of surplus reserves 2,527,761.04 -2,527,761.04 -
2．Allotment to the owners (or shareholders) -
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.Change amount of defined benefit plans that carry forward
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 511,274,149.00 - - - 1,599,025,454.96 27,230,679.00 1,339,208.41 - 80,004,803.23 483,666,452.70 2,648,079,389.30
Legal Representative: Zhu Jun Person-in-charge of the accounting work：Zhu Meizhu Person-in -charge of the accounting organ：Mu Linying
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Statement of change in owner’s Equity of the Parent Company
Prepared by: Shenzhen Textile (Holdings) Co., Ltd.
In RMB
Amount in last year
Owner’s equity Attributable to the Parent Company
Other Equity instrument Other Total of owners’
Items Share
Capital Capital reserves Less: Shares in stock Comprehensive Specialized reserve Surplus reserves Retained profit equity
Sustainable
preferred stock Other Income
debt
I.Balance at the end of last year 506,521,849.00 - - - 1,576,547,075.96 - 3,392,222.07 - 73,710,682.05 427,019,362.11 2,587,191,191.19
Add: Change of accounting policy -
Correcting of previous errors -
Other -
II.Balance at the beginning of current year 506,521,849.00 - - - 1,576,547,075.96 - 3,392,222.07 - 73,710,682.05 427,019,362.11 2,587,191,191.19
III.Changed in the current year 4,752,300.00 - - - 22,834,779.00 27,230,679.00 -1,173,518.20 - 3,766,360.14 33,897,241.25 36,846,483.19
（I）Total comprehensive income -1,173,518.20 37,663,601.39 36,490,083.19
(II) Investment or decreasing of capital by owners 4,752,300.00 - - - 22,834,779.00 27,230,679.00 - - - - 356,400.00
1．Ordinary Shares invested by shareholders 4,752,300.00 22,478,379.00 27,230,679.00 -
2．Holders of other equity instruments invested capital - -
3.Amount of shares paid and accounted as owners’ equity 356,400.00 356,400.00
4．Other -
（III）Profit allotment - - - - - - - - 3,766,360.14 -3,766,360.14 -
1.Providing of surplus reserves 3,766,360.14 -3,766,360.14 -
2．Allotment to the owners (or shareholders) -
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.Change amount of defined benefit plans that carry
forward
Retained earnings
5．Other -
(V) Special reserves - - - - - - - - - - -
1. Provided this year -
2．Used this term -
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
（VI）Other -
IV Balance at the end of this term 511,274,149.00 - - - 1,599,381,854.96 27,230,679.00 2,218,703.87 - 77,477,042.19 460,916,603.36 2,624,037,674.38
Legal Representative: Zhu Jun Person-in-charge of the accounting work：Zhu Meizhu Person-in -charge of the accounting organ：Mu Linying
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
III. Basic Information of the Company
(1)Company P rofile
1. Enterprise registration address, organization mode and headquarter address.
The company was previously the Shenzhen Textile Industry Company, on April 13, 1994, approved
by the Letter(1994)No.15 issued by Shenzhen Municipal People's Government, the Company was
restructured and named as Shenzhen Textile (Holdings) Co., Ltd. In the same year, approved by the
(1994) No.19 file of Shenzhenshi, the shares of the company were listed in Shenzhen Stock Exchange.
The company now holds a unified social credit code for the 91440300192173749Y business
license,Registration address and headquarter address are 6/F,Shenfang Building, No.3 Huaqiang Road.
North, Futian District, Shenzhen.
2.Enterprise’s business nature and major business operation.
At present, the Company is mainly engaged in high-tech industry focusing on R&D, production and
marketing of polarizers for liquid crystal display, management of properties in bustling business
districts of Shenzhen and reserved high-class textile and garment business.
3. Approval of the financial statements reported
The financial statements have been authorized for issuance by the Board of Directors of the Group on
April 25,2019.
(2)Scope of consolidated financial statements
1.As of the end of the reporting period, there are 7 subsidiaries companies included in the consolidate
d financial statements: SAPO Photoelectric Co., Ltd., Shenzhen Lisi Industrial Development Co.,
Ltd.,Shenzhen Huaqiang Hotel, Shenzhen Shenfang Property Management Co., Ltd. Shenzhen
Beaufity Garments Co., Ltd.,Shzhen Shenfang Import & Export Co., Ltd., and Shengtou (Hongkong)
Co., Ltd.
2．The scope of consolidated financial statements this period did not change.
IV.Basis for the preparation of financial statements
（1）Basis for the preparation
This company’s financial statements is based on going-concern assumption and worked out
according to actual transactions and matters, Accounting Standard for Business Enterprises--Basic
Standard(issued by No.33 Decree of the Ministry of Finance and revised by No.76 Decree of the
Ministry of Finance) issued by the Ministry of Finance, 42 special accounting standards enacted and
revised on and after Feb 15, 2006, guideline for application of accounting standard for business
enterprises, ASBE interpretations and other relevant regulations(hereinafter collectively referred to as
“Accounting Standard for Business Enterprises”) and No.15 of Compilation Rules for Information
Disclosure by Companies Offering Securities to the Public-- General Provisions of Financial Reports
(revised in 2014) issued by China Securities Regulatory Commission.
(2)Continuation
There will be no such events or situations in the 12 months from the end of the reporting period that
will cause material doubts as to the continuation capability of the Company.
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
V. Important accounting policies and estimations
1. Statement on complying with corporate accounting standards
The financial statements prepared by the Company comply with the requirements of corporate
accounting standards. They truly and completely reflect the financial situations, operating results,
equity changes and cash flow, and other relevant information of the company.
2.Fiscal Year
The Company adopts the Gregorian calendar year commencing on January 1 and ending on
December 31 as the fiscal year.
3. Operating cycle
Normal business cycle is realized by the Company in cash or cash equivalents from the purchase of
assets form processing until. Less than 1 year is for the normal operating cycle in the company.
With regard to less than 1 year for the normal operating cycle, the assets realized or the liabilities
repaid at maturity within one year as of the balance sheet date shall be classified into the current
assets or the current liabilities.
4. Accounting standard money
The Company takes RMB as the standard currency for bookkeeping.
5. Accounting process method of enterprise consolidation under same and different controlling.
（1）Enterprise merger under same control：
For a business combination involving enterprises under common control, the party that, on the
combination date, obtains control of another enterprise participating in the combination is the
absorbing party, while that other enterprise participating in the combination is a party being absorbed.
Combination date is the date on which the absorbing party effectively obtains control of the party
being absorbed.
The assets and liabilities obtained are measured at the carrying amounts as recorded by the
enterprise being combined at the combination date. The difference between the carrying amount of
the net assets obtained and the carrying amount of consideration paid for the combination (or the total
face value of shares issued) is adjusted to the capital premium in the capital reserve. If the balance of
the capital premium is insufficient, any excess is adjusted to retained earnings.
The cost of a combination incurred by the absorbing party includes any costs directly attributable to
the combination shall be recognized as an expense through profit or loss for the current period when
incurred.
Accounting Treatment of the Consolidated Financial Statements:
The long-term equity investment held by the combining party before the combination will change if
the relevant profit and loss, other comprehensive income and other owner equity are confirmed
between the ultimate control date and the combining date for the combining party and the combined
party on the acquirement date, and shall respectively offset the initial retained incomes or the profits
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
and losses of the current period during the comparative statement.
(2)Business combination involving entities not under common control
A business combination involving enterprises not under common control is a business combination in
which all of the combining enterprises are not ultimately controlled by the same party or parties both
before and after the business combination. For a business combination not involving enterprises
under common control, the party that, on the acquisition date, obtains control of another enterprise
participating in the combination is the acquirer, while that other enterprise participating in the
combination is the acquiree. Acquisition date is the date on which the acquirer effectively obtains
control of the acquiree.
The difference of the merger cost minus the fair value shares of identifiable net assets obtained by the
acquiree during the merger on the acquisition date, is recognized as the business reputation. While the
merger cost is less than the fair value shares of identifiable net assets obtained by the acquiree during
the merger, all the measurement on the identifiable assets, the liabilities, the fair value of liabilities
and the merger cost obtained by the acquiree should firstly be rechecked, and the difference shall be
recorded into the current profits and costs if the merger cost is still less than the fair value shares of
identifiable net assets obtained by the acquiree during the merger after rechecking.
Where the temporary difference obtained by the acquirer was not recognized due to inconformity
with the conditions applied for recognition of deferred income tax, if, within the 12 months after
acquisition, additional information can prove the existence of related information at acquisition date
and the expected economic benefits on the acquisition date arose from deductible temporary
difference by the acquiree can be achieved, relevant income tax assets can be recognized, and
goodwill offset. If the goodwill is not sufficient, the difference shall be recognized as profit of the
current period.
For a business combination not involving enterprise under common control, which achieved in
stages that involves multiple exchange transactions, according to “The notice of the Ministry of
Finance on the issuance of Accounting Standards Interpretation No. 5” (CaiKuai [2012] No. 19) and
Article51 of “Accounting Standards for Business Enterprises No.33 - Consolidated Financial
Statements” on the “package deal” criterion, to judge the multiple exchange transations whether they
are the"package deal". If it belong to the “package deal” in reference to the preceding paragraphs of
this section and “long-term investment” accounting treatment, if it does not belong to the “package
deal” to distinguish the individual financial statements and the consolidated financial statements
related to the accounting treatment:
In the individual financial statements, the total value of the book valueoftheacquiree's equity
investment before the acquisition date and the cost of new investment at the acquisition date, as the
initial cost of the investment, the acquiree's equity investment before the acquisition date involved in
other comprehensive income, in the disposal of the investment will be in other comprehensive
income associated with the use of infrastructure and the acquiree directly related to the disposal of
assets or liabilities of the same accounting treatment (that is, except in accordance with the equity
method of accounting in the defined benefit plan acquiree is remeasured net changes in net assets or
liabilities other than in the corresponding share of the lead, and the rest into the current investment
income).
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
In the combination financial statements, the equity interest in the acquiree previously held before the
acquisition date re-assessed at the fair value at the acquisition date, with any difference between its
fair value and its carrying amount is recorded as investment income. The previously-held equity
interest in the acquiree involved in other comprehensive income and other comprehensive income
associated with the purchase of the foundation should be used party directly related to the disposal of
assets or liabilities of the same accounting treatment (that is, except in accordance with the equity
method of accounting in the acquiree is remeasured defined benefit plans other than changes in net
liabilities or net assets due to a corresponding share of the rest of the acquisition date into current
investment income).
6.Preparation of the consolidated financial statements
(1)The scope of consolidation
The scope of consolidation for the consolidated financial statements is determined on the basis of
control. Control is the power to govern the financial and operating policies of an enterprise so as to
obtain benefits from its operating activities. The relevant events refer to the activities that have
significant influence on the return to the invested party. In accordance with the specific conditions,
the relevant events of the invested party should conclude the sale and purchase of goods and services,
the management of the financial assets, the purchase and disposal of the assets, the research and
development activities, the financing activities and so on.
The scope of consolidation includes the Company and all of the subsidiaries. Subsidiary is an
enterprise or entity under the control of the Company.
Once the change in the relevant facts and circumstances leading to the definition of the relevant
elements involved in the control of the change, the company will be re-evaluated.
( 2)Preparation of the consolidated financial statements.
The Company based on its own and its subsidiaries financial statements, in accordance with other
relevant information, to prepare the consolidated financial statements.
For a subsidiary acquired through a business combination not under common control, the operating
results and cash flows from the acquisition (the date when the control is obtained) are included in the
consolidated income statement and consolidated statement of cash flows, as appropriated; no
adjustment is made to the opening balance and comparative figures in the consolidated financial
statements. Where a subsidiary and a party being absorbed in a merger by absorption was acquired
during the reporting period, through a business combination involving enterprises under common
control, the financial statements of the subsidiary are included in the consolidated financial
statements. The results of operations and cash flow are included in the consolidated balance sheet and
the consolidated income statement, respectively, based on their carrying amounts, from the date that
common control was established, and the opening balances and the comparative figures of the
consolidated financial statements are restated.
When the accounting period or accounting policies of a subsidiary are different from those of the
Company, the Company makes necessary adjustments to the financial statements of the subsidiary
based on the Company’s own accounting period or accounting policies. Where a subsidiary was
acquired during the reporting period through a business combination not under common control, the
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
financial statements was reconciliated on the basis of the fair value of identifiable net assets at the
date of acquisition.
Intra-Group balances and transactions, and any unrealized profit or loss arising from intra-Group
transactions, are eliminated in preparing the consolidated financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Company are
presented separately in the consolidated balance sheet within shareholders’/ owners’ equity and net
profit. Net profit or loss attributable to minority shareholders in the subsidiaries is presented
separately as minority interest in the consolidated income statement below the net profit line item.
When the amount of loss for the current period attributable to the minority shareholders of a
subsidiary exceeds the minority shareholders’ portion of the opening balance of shareholders’/equity
of the subsidiary, the excess is allocated against the minority interests.
When the Company loses control of a subsidiary due to the disposal of a portion of an equity
investment or other reasons, the remaining equity investment is re-measured at its fair value at the
date when control is lost. The difference between 1) the total amount of consideration received from
the transaction that resulted in the loss of control and the fair value of the remaining equity
investment and 2) the carrying amounts of the interest in the former subsidiary’s net assets
immediately before the loss of the control is recognized as investment income for the current period
when control is lost. Other comprehensive income related to the former subsidiary's equity
investment, using the foundation and the acquiree directly related to the disposal of the same assets or
liabilities are accounted when the control is lost(ie, in addition to the former subsidiary is remeasured
at the net defined benefit plan or changes in net assets and liabilities resulting from, the rest are
transferred to the current investment income). The retained interest is subsequently measured
according to the rules stipulated in the - “Chinese Accounting Standards for Business Enterprises
No.2 - Long-term equity investment” or “Chinese Accounting Standards for Business Enterprises
No.22 - Determination and measurement of financial instruments”.
The company through multiple transactions step deal with disposal of the subsidiary's equity
investment until the loss of control, need to distinguish between equity until the disposal of a
subsidiary's loss of control over whether the transaction is package deal. Terms of the transaction
disposition of equity investment in a subsidiary, subject to the following conditions and the economic
impact of one or more of cases, usually indicates that several transactions should be accounted for as
a package deal:①these transactions are considered。simultaneously, or in the case of mutual influence
made, ②these transactions as a whole in order to achieve a complete business results; ③the
occurrence of a transaction depends on occurs at least one other transaction; ④a transaction look
alone is not economical, but when considered together with other transaction is economical.
If they does not belong to the package deal, each of them separately, as the case of a transaction in
accordance with “without losing control over the disposal of a subsidiary part of a long-term equity
investments“principles applicable accounting treatment. Until the disposal of the equity investment
loss of control of a subsidiary of the transactions belonging to the package deal, the transaction will
be used as a disposal of a subsidiary and the loss of control of the transaction. However, before losing
control of the price of each disposal entitled to share in the net assets of the subsidiary 's investment
corresponding to the difference between the disposal, recognized in the consolidated financial
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statements as other comprehensive income, loss of control over the transferred together with the loss
of control or loss in the period.
7.Joint venture arrangements classification and Co-operation accounting treatment
(1)Joint arrangement
A joint arrangement is an arrangement of which two or more parties have joint control，depending of
the rights and obligation of the Company in the joint arrangement. A joint operation is a joint
arrangement whereby the Company has rights to the assets, and obligations for the liabilities, relating
to the arrangement. A joint venture is a joint arrangement whereby the Company has rights to the net
assets of the arrangement.
(2)Co-operation accounting treatment
When the joint venture company for joint operations, confirm the following items and share common
business interests related to:
（1）Confirm individual assets and common assets held based on shareholdings;
（2）Confirm individual liabilities and shared liabilities held based on shareholdings;
（3）Confirm the income from the sales revenue of co-operate business output
（4）Confirm the income from the sales of the co-operate business output based on shareholdings;
（5）Confirm the individual expenditure and co-operate business cost based on shareholdings.
(3)When a company is a joint ventures, joint venture investment will be recognized as long-term equi
ty investments .
8.Recognition Standard of Cash & Cash Equivalents
Cash and cash equivalents of the Company include cash on hand, ready usable deposits and
investments having short holding term (normally will be due within three months from the day of
purchase), with strong liquidity and easy to be exchanged into certain amount of cash that can be
measured reliably and have low risks of change.
9.Foreign Currency Transaction
（1）Foreign Currency Transaction
The approximate shot exchange rate on the transaction date is adopted and translated as RMB amount
when the foreign currency transaction is initially recognized. On the balance sheet date, the monetary
items of foreign currency are translated as per the shot exchange rate on the balance sheet date, the
foreign exchange conversion gap due to the exchange rate, except for the balance of exchange
conversion arising from special foreign currency borrowings capitals and interests for the purchase
and construction of qualified capitalization assets, shall be recorded into the profits and losses of the
current period. The non-monetary items of foreign currency measured at the historical cost shall still
be translated at the spot exchange rate on the transaction date, of which the RMB amount shall not be
changed. The non-monetary items of foreign currency measured at the fair value shall be translated at
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the spot exchange rate on the fair value recognized date, the gap shall be recorded into the current
profits and losses or other comprehensive incomes.
(2) Translation Method of Foreign Currency Financial Statement
For the assets and liabilities in the balance sheet, the shot exchange rate on the balance sheet date is
adopted as the translation exchange rate. For the owner’s equity, the shot exchange rate on the
transaction date is adopted as the translation exchange rate, with the exception of “undistributed
profits”. The incomes and expenses in the income statement shall be translated at the spot exchange
rate or the approximate exchange rate on the transaction date. The translation gap of financial
statement of foreign currency converted above shall be listed in other comprehensive incomes under
the owner’s equity in the consolidated balance sheet.
10.Financial tools
One financial asset or financial liability shall be recognized when the company becomes the party in
the financial instrument contract. The financial assets and the financial liabilities are measured at the
fair value in the initial recognition. For the financial assets and liabilities that measured at the fair
values and the variation included in the current profits and losses, the relative transaction expenses
shall be directly recorded into the profits and losses. For the financial assets and liabilities of other
categories, the expenses related to transactions are recognized as initial amount.
1 Determination of financial assets and liabilities’ fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’s length transaction. For a financial instrument which has an
active market, the Company uses quoted price in the active market to establish its fair value. The
quoted price in the active market refers to the price that can be regularly obtained from exchange
market, agencies, industry associations, pricing authorities; it represents the fair market trading price
in the actual transaction. For a financial instrument which does not have an active market, the
Company establishes fair value by using a valuation technique. Valuation techniques include using
recent arm’s length market transactions between knowledgeable, willing parties, reference to the
current fair value of another instrument that is substantially the same, discounted cash flow analysis
and option pricing models.
2. Classification, recognition and measurement of financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date
basis. On initial recognition, the Company’s financial assets are classified into including financial
assets at fair value though profit or loss, held-to maturity investments, loans and receivables and
available-for-trade assets.
（1） Financial assets at fair value through profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit or
loss. Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A. the financial asset is acquired for the purpose of selling it in a short term;
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B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively
managed, and there is objective evidence indicating that the enterprise recently manages this portfolio
for the purpose of short-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective hedging
instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by
delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair
value cannot be reliably measured. For such kind of financial assets, fair values are adopted for
subsequent measurement.
Financial asset is designated on initial recognition as at fair value through profit or loss only when it
meets one of the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement or
recognition of relevant gains or losses that would otherwise arise from measuring the financial
instruments on different bases.
B. a Group of financial instruments is managed and its performance is evaluated on a fair value basis,
and is reported to the enterprise’s key management personnel. Formal documentation regarding risk
management or investment strategy has prepared。
Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any
gains or losses arising from changes in the fair value and any dividends or interest income earned on
the financial assets are recognized in the profit or loss.
（2）Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments
and fixed maturity that an entity has the positive intention and ability to hold to maturity. Such kind
of financial assets are subsequently measured at amortized cost using the effective interest method.
Gains or losses arising from derecognition, impairment or amortization are recognized in profit or
loss for the current period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through the
expected life of the financial asset or financial liability or, where appropriate, a shorter period to the
net carrying amount of the financial asset or financial liability. When calculating t he effective interest
rate, the Company shall estimate future cash flow considering all contractual terms of the financial
asset or financial liability without considering future credit losses, and also consider all fees paid or
received between the parties to the contract giving rise to the financial asset and financial liability that
are an integral part of the effective interest rate, transaction costs, and premiums or discounts, etc.
（3）Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment that are
not quoted in an active market. Financial assets classified as loans and receivables by the Company
include note receivables, account receivables, interest receivable dividends receivable and other
receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest
method. Gain or loss arising from derecognition, impairment or amortization is recognized in profit
or loss.
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（4）Financial assets available-for-trade
Financial assets available-for-trade include non-derivative financial assets that are designated on
initial recognition as available for trade, and financial assets that are not classified as financial assets
at fair value through profit or loss, loans and receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses
arising from changes in the fair value are recognized as other comprehensive income and included in
the capital reserve, except that impairment losses and exchange differences related to amortized cost
of monetary financial assets denominated in foreign currencies are recognized in profit or loss, until
the financial assets are derecognized, at which time the gains or losses are released and recognized in
profit or loss. Interests obtained and dividends declared by the investee during the period in which the
financial assets available-for-trade are held, are recognized in investment gains.
3. Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for
the financial assets that measured by the fair value. If there is objective evidence indicating a
financial asset may be impaired, a provision is provided for the impairment.
The company shall make an independent impairment test on the financial assets with significant
single amounts, and carry out an independent impairment test on the financial assets with
insignificant single amounts, or conduct an impairment-related test after they are included in a
combination of financial assets with similar credit risk features so as to carry out. Where, upon
independent test, the financial asset (including those financial assets with significant single amounts
and those with insignificant amounts) has not been impaired, it shall be included in a combination of
financial assets with similar risk features so as to conduct another impairment test. The financial
assets which have suffered from an impairment loss in any single amount shall not be included in any
combination of financial assets with similar risk features for any impairment test.
（1）Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the
estimated present value of future cash flow. The difference is recorded as impairment loss. If there is
objective evidence to indicate the recovery of value of financial assets after impairment, and it is
related with subsequent event after recognition of loss, the impairment loss recorded originally can be
reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the
amortized cost of the financial assets without provisions of impairment loss on the reserving date.
（2）Impairment loss on available-for-trade financial assets
Where the fair value of the equity instrument investment drops significantly or not contemporarily
according to the integrated relevant factors, an available-for-trade financial asset is impaired. The
"serious decline" refers to the cumulative fair value declines more than 30%; "non-temporary
decline" refers to the continuous decline in the fair value of time over 12 months.
When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in
fair value that had been recognized in capital reserve shall be removed and recognized in profit or
loss. The amount of the cumulative loss that is removed shall be difference between the acquisition
cost with deduction of recoverable amount less amortized cost, current fair value and any impairment
loss on that financial asset previously recognized in profit or loss.
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If, after an impairment loss has been recognized, there is objective evidence that the value of the
financial asset is recovered, and it is objectively related to an event occurring after the impairment
loss was recognized, the initial impairment loss can be reversed and the reserved impairment loss on
available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss on
available-for-trade debt instrument is recorded in the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot
be reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by
delivery of such an unquoted equity instrument shall not be reversed.
4. Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under a
pass-through arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either has
transferred substantially all the risks and rewards of the asset, or has neither transferred norretained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over
the asset, the asset is recognized according to the extent it exists as financial asset, and correspondent
liability is recognized. The extent of existence refers the level of risk by the financial asset changes
the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the carrying
amount of the financial asset transferred; and the sum of the consideration received from the transfer
and any cumulative gain or loss that had been recognized in other comprehensive income, is
recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the
transferred financial asset is allocated between the part that continues to be recognized and the part
that is derecognized, based on the relative fair value of those parts. The difference between (a) the
carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for
the part derecognized and any cumulative gain or loss allocated to the part derecognized which has
been previously recognized in other comprehensive income, is recognized in profit or loss.
The Company uses recourse sale financial assets, or financial assets held endorser, determine almost
all of the risks and rewards of ownership of the financial assets have been transferred if. Has
transferred the ownership of the financial assets of almost all the risks and rewards to the transferee,
the derecognition of the financial asset; retains ownership of the financial assets of almost all of the
risks and rewards of financial assets that are not derecognised; neither transfers nor retains ownership
of the financial assets of almost all of the risks and rewards, then continue to determine whether the
enterprise retains control of the assets and the accounting treatment in accordance with the principles
described in the preceding paragraphs.
5. Classification and measurement of financial liabilities
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The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair
value through profit or loss and other financial liabilities. For financial liabilities at fair value through
profit or loss, relevant transaction costs are immediately recognized in profit or loss for the current
period, and transaction costs relating to other financial liabilities are included in the initial recognition
amounts.
(1)Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the
initial recognition to be measured by the fair value follows the same criteria as the classification by
which financial assets held-for-trade and financial assets designed at the initial recognition to be
measured by the fair value and their changes are recorded in the current profit or loss.For the
financial liabilities measured by the fair value and changes recorded in the profit or loss, fair values
are adopted for subsequent measurement. All the gains or losses on the change of fair value and the
expenses on dividends or interests related to these financial liabilities are recognized in profit or loss
for the current period.
（2）Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price
in an active market and their fair value cannot be measured reliably, is subsequently measured by cost
Other financial liabilities are subsequently measured at amortized cost using the effective interest
method. Gains or losses arising from derecognition or amortization is recognized in profit or loss for
the current period.
6. Derecognition of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation
(or part of it) is discharged or cancelled or has expired. An agreement between the Company (an
existing borrower) and existing lender to replace original f inancial liability with a new financial
liability with substantially different terms is accounted for as an extinguishment of the original
financial liability and the recognition of a new liability.
When the Company derecognizes a financial liability or a part of it, it recognizes the difference
between the carrying amount of the financial liability (or part of the financial liability) derecognized
the consideration paid (including any non-cash assets transferred or new financial liabilities assumed)
in profit or loss.
7. Offsetting financial assets and financial liabilities
When the Company has a legal right that is currently enforceable to set off the recognized
financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the
financial asset and settle the financial liability simultaneously, a financial asset and a financial
liability shall be offset and the net amount is presented in the balance sheet. Except for the above
circumstances, financial assets and financial liabilities shall be presented separately in the balance
sheet and shall not be offset.
8. Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company
after deducting all of its liabilities. The consideration received from issuing equity instruments, net of
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transaction costs, are added to shareholders’ equity. All types of distribution (excluding stock
dividends) made by the Company to holders of equity instruments are deducted from shareholders’
equity. The Group does not recognize any changes in the fair value of equity instruments.
11.Accounts Receivable
1.Accounts receivable with material specific amount and specific provisioned bad debt preparation.
The Client Identifies single amount of accounts receivable that
is not less than RMB 1 million as account receivable that are
Judgment criteria or amount standard of material specific individually significant in amount. The Client Identifies single
amount or amount criterial： amount of accounts receivable that is not less than RMB 0.5
million as account receivable that are individually significant in
amount.
Making an independent impairment test. If any objective
evidence shows that it has been impaired, the
impairment-related losses shall be recognized according to the
gap between its present value of future cash flow less than its
Provision method with material specific amount and
book value, and the several shall be determined to withdraw the
provision of specific bad debt preparation：
bad debt provision. If there exists no the impairment after the
impairment test, they shall be included in a combination of the
receivables with similar risk features so as to withdraw the bad
debt provision.
2.The accounts receivable of bad debt provisions made by credit risk Group
(1) Recognition Criteria for the Group and Withdrawing Method of Bad Debt Provision
Name Recognition Criteria Withdrawing Method
Aging Group Division by Aging Aging Analysis Method
(2)Accounts on age basis in the portfolio：
Aging Rate for receivables(%) Rate for other receivables(%)
Within 1 year（Included 1 year） 5.00 5.00
1－2 years 10.00 10.00
2－3 years 30.00 30.00
Over 3 years 50.00 50.00
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(3)Account receivable with non-material specific amount but specific bad debt preparation
Reasons of Withdrawing Individual Bad Debt
There is any objective evidence shows that it has been impaired.
Provision
The impairment-related losses shall be recognized according to the gap
Withdrawing Method of Bad Debt Provision
between its present value of future cash flow less than its book value.
12.Inventory
1.Investories class
Inventory shall include the finished products or goods available for sale during daily activities, the
products in the process of production, the stuff and material consumed during the process of
production or the services offered.
2．Valuation method of inventory issued
The company calculates the prices of its inventories according to the weighted averages method
3. Recognition Criteria for the Net Realizable Value of Different Category of Inventory and
Withdrawing Method of Inventory Falling Price Reserves
The inventory shall be measured by use of the lower between the cost and the net realizable value and
the inventory falling price reserves shall be withdrawn as per the gap of single inventory cost minus
the net realizable value at the balance sheet date. The net realizable value refers to the amounts that
the estimated sale price of inventory minus the estimated costs ready to happen till the completion of
works, the estimated selling expenses and the relevant expenses of taxation. The company shall
recognize the net realizable value of inventory based on the acquired unambiguous evidence and in
view of the purpose to hold the inventory, the influence of matters after the balance sheet date and
other factors.
The net realizable value of inventory directly for sale shall be recognized according to the amounts of
the estimated sale price of the inventory minus the estimated sale expenses and the relevant expenses
of taxation during the process of normal production and operation. The net realizable value of
inventory that required to conduct processing shall be recognized according to the amounts of the
estimated sale price of the finished products minus the estimated costs ready to happen till the
completion of works, the estimated selling expenses and the relevant expenses of taxation. On the
balance sheet date, the net realizable value shall be respectively defined for the partial agreed with the
contract price and others without the contract price in the same inventory, and the amounts of the
inventory falling price reserves withdrawn or returned shall be respectively recognized in comparison
with their corresponding costs.
4. Inventory System:Adopts the Perpetual Inventory System
5．Amortization method for low cost and short-lived consumable items and packaging materials
（1）Low cost and short-lived consumable items
Low cost and short-lived consumable items are amortized using immediate write-off method。
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（2）Packaging materials
Packaging materials are amortized using
13. Available-for-sale non-current asset and disposal group
If the company recovers its book value mainly by sale of non-current asset (including exchange
of non-monetary assets of commercial nature and similarly hereinafter) , instead of continued use of
one non-current asset or disposal group, which shall be included into available-for-sale. In specific
standards, the following conditions shall be met at the same time: One non-current asset or disposal
group is available for sale at all times under current status depending on standard practice of selling
them in similar transactions; the company has made a resolution on the sale plan and gained
definitive purchase commitments; the sale is expected to be finished within one year. In which, the
disposal group refers to one set of assets that may be disposed as a whole along with other assets by
sale or other ways in one deal and the liability transferred and related directly to such assets. If the
asset group or combination of asset group under account title disposal group amortizes the goodwill
obtained from business combination in accordance with No.8 of Accounting Standards for Business
Enterprises-- Asset Impairment, the disposal group shall include the goodwill amortized to it.
When the company’s initial measurement or re-measurement on the balance sheet date is
classified into available-for-sale non-current asset and disposal group, the book value shall be written
down to the net amount of fair value minus selling expenses if it is higher than the net amount of fair
value minus selling expenses, the write-down shall be confirmed as the assets impairment loss and
included in current profits and losses, meanwhile the available-for-sale asset depreciation reserves
shall be accrued. For the disposal group, the asset impairment loss shall be written off pro rata the
book value of each non-current asset that is applicable to No.42 of Accounting Standards for
Business Enterprises: Available-for-sale Non-current Assets, Disposal Group and Discontinued
Operations (hereinafter referred to as “Available-for-sale rule for measurement”) after deducting the
book value of goodwill in it.
If the net amount of the fair value of available-for-sale disposal group minus selling expenses
increases after the balance sheet date, the previous write-downs shall be recovered and reversed in
asset impairment loss of non-current assets that are applicable to available-for-sale rule for
measurement after being included into available-for-sale account title, the amount of reversal shall be
included in current profits and losses and increased pro rata its book value based on the proportion of
the book value of each non-current asset in the disposal group that is applicable to available-for-sale
rule for measurement except for goodwill; the book value of written-off goodwill and the asset
impairment loss confirmed before the non-current asset specified in available-for-sale rule for
measurement is classified into available-for-sale asset must not be reversed.
The available-for-sale non-current assets or the non-current assets in the disposal group shall not
be accrued depreciation or amortization, the interest of debit in available-for-sale disposal group and
other expenses shall continue to be confirmed.
The non-current asset will no longer be included into available-for-sale category or will be
removed from the available-for-sale disposal group if it or the disposal group has no longer satisfied
the conditions for classifying available-for-sale assets and measured as per the lower of: (1) book
value of the non-current asset before being classified into available-for-sale asset adjusted on the
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basis of the depreciation, amortization or impairment that shall be confirmed on the assumption that
the non-current asset is not included into available-for-sale account title; (2)Recoverable amount.
14.Long-term equity investments
Long-term equity investments referred to in this section refer to the Company invested entity has
control, joint control or significant influence over the long-term equity investments. The Company
invested does not have control, joint control or significant influence over the long-term equity
investments as financial assets available for sale or at fair value and the changes included financial
assets through profit or loss.
Joint control is the Company control over an arrangement in accordance with the relevant stipulations
are common, related activities and the arrangement must be after sharing control participants agreed
to the decision-making. Significant influence is the Company s financial and operating policies of the
entity has the right to participate in decision-making, but can not control or with other parties joint
control over those policies.
1. Determination of Investment cost
The cost of a long-term equity investment acquired through business combination under common
control is measured at the acquirer's share of the combination date book value of the acquiree's net
equity in the ultimate controller's consolidated financial statements. The difference between the cost
and book value of cash paid, non-monetary assets transferred and liabilities assumed is adjusted to
capital reserves, and to retained earnings if capital reserves is insufficient. If the consideration is
transferred by way of issuing equity instruments, the face value of the equity instruments issued is
recognised in share capital and the difference between the cost of the face value of the equity
instruments issued is adjusted to capital reserves, and to retained earnings if capital reserves is
insufficient.The cost of a long-term equity investment acquired through business combination not
under common control is the fair value of the assets transferred, liabilities incurred or assumed and
equity instruments issued. (For the equity of the combined party under common control obtained
step-by-step through multiple transactions and the business combination under common control
ultimately formed, the company should respectively dispose all the transactions if belong to the
package deal. For the package deal, all the transactions will be conducted the accounting treatment as
the deal with acquisition of control. For the non-package deal, the shares of the book value of the
stockholders’ equity/owners’ equity of the combined party in the consolidated financial statements of
the ultimate control party shall be as the initial investment cost of the long-term equity investment,
and the capital reserves shall be adjusted for the difference between the initial investment cost of
long-term equity investment and the sum of the book value of long-term equity investment before
merging and that of new consideration payment obtained on the merger date, or the retained earnings
shall be adjusted if the capital reserves are insufficient to offset. As for the equity investment held
before the merger date, the accounting treatment will not be conducted temporarily for other
comprehensive income accounted by equity method or confirmed for the financial assets available for
sale.)
All expenses incurred directly associated with the acquisit ion by the acquirer, including expenditure
of audit, legal services, valuation and consultancy and other administrative expenses, are recognised
in profit or loss for the period during which the acquisition occurs. For the merger of enterprises not
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
under the same control through gaining the shares of the combined enterprise by multiple steps of
deals, it shall deal with it in the following two ways depending on that if it belongs to "a package
deal": if it belongs to "a package deal", it shall deal with all the deals as one obtaining the control
power; if it does not belong to "a package deal", it shall, on the date of merger, regard the sum of
book value of the owner’s original equity of the merged enterprise and the newly increased
investment cost as the initial cost of the long-term equity investment. For the shares originally held
by this enterprise accounted for by weighted equity method, the relevant other comprehensive income
shall not be accounted for temporarily.If the equity investment held originally can be classified as the
financial assets for sale, the difference between the fair value and the book value, and the variation in
the accumulative fair value of other comprehensive returns recorded originally will be transferred into
the current profits and losses.
All expenses incurred directly associated with the acquisition by the acquirer, including expenditure
of audit, legal services, valuation and consultancy and other administrative expenses, are recognised
in profit or loss for the period during which the acquisition occurs.
Long-term equity investments acquired not through business combination are measured at cost on
initial recognition. Depending on the way of acquisition, the cost of acquisition can be the total cash
paid, the fair value of equity instrument issued, the contract price, the fair value or book value of the
assets given away in the case of non-monetary asset exchange, or the fair value of the relevant
long-term equity investments. The cost of acquisition of a long-term equity investment acquired not
through business combination also includes all directly associated expenses, applicable taxes and fees,
and other necessary expenses. When the significant impact or the joint control but non-control on the
invested party can be implemented due to the additional investment, the long-term equity investment
cost is the sum of the fair value of the equity investment originally held and the new investment costs
based on the recognition of “Accounting Standards for Enterprises No.22 – Recognition and
Measurement of Financial Instruments”.
2. Subsequent Measurement
To be invested joint control ( except constitute common operator ) or long-term equity investments
significant influence are accounted for using the equity method. In addition, the Company's financial
statements using the cost method of accounting for long-term equity can exercise control over the
investee.
(1)Cost method of accounting for long-term equity investments
Under the cost method, a long-term equity investment is measured at initial investment cost. Except
for cash dividends or profits declared but not yet paid that are included in the price or consideration
actually paid upon acquisition of the long-term equity investment, investment income is recognized in
the period in accordance with the attributable share of cash dividends or profit distributions declared
by the investee.
(2)Equity method of accounting for long-term equity investments
When using the equity method, the initial investment cost of long-term equity investment exceeds the
investor's net identifiable assets of the fair share of the investment value, do not adjust the initial inve
stment cost of long-term equity investment; the initial investment cost is less than the investee unit sh
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are of identifiable net assets at fair value, the difference is recognized in profit or loss, while the long-
term equity investment adjustment costs.
Where the initial investment cost of a long-term equity investment exceeds the investing enterprise’s
interest in the fair values of the investee’s identifiable net assets at the time of acquisition, no
adjustment shall be made to the initial investment cost. The carrying amount of an long-term equity
investment measured using the equity method is adjusted by the Company's share of the investee's net
profit and other comprehensive income, which is recognised as investment income and other
comprehensive income respectively. The carrying amount of an long-term equity investment
measured using the equity method is reduced by profit distribut ion or cash dividends announced by
the investee. The carrying amount of an long-term equity investment measured using the equity
method is also adjusted by the investee's equity movement other than net profit, other comprehensive
income and profit distribution, which is adjusted to capital reserves。The net profit of the investee is
adjusted by the fair value of the investee's identifiable assets as at acquistion. The financial statements
and hence the net profit and other comprehensive income of an investee which does not adopt
accounting policies or accounting period uniform with the Company is adjusted by the Company's
accounting policies and accounting period. The Company's share of unrealised profit or loss arising
from related party transactions between the Company and an associate or joint venture is deducted
from investment income. Unrealised loss arising from related party transactions between the
Company and an associate or joint venture which is associated with asset impairment is not adjusted.
Where assets transferred to an associate or joint venture which form part of the Company's
investment in the investee but which does not enable the Company obtain control over the investee,
the cost of the additional investment acquired is measured at the fair value of assets transferred and
the difference between the cost of the additional investment and the book value of the assets
transferred is recognised in profit or loss. Where assets transferred to an associate or joint venture
form an operation, the difference between the consideration received and the book value of the assets
transferred in recognised in profit or loss. Where assets transferred from an associate or joint venture
form an operation, the transaction is accounted for in accordance with CAS 20 - Business
Combination, any gain or loss is reocgnised in profit or loss.
The Company's share of an investee's net loss is limited by the sum of the book value of the
long-term equity investment and other net long-term investments in the investees. Where the
Company has obligation to share additional net loss of the investee, the estimatedshare of loss
recognised as accrued liabilities and investment loss. Where the Company has unrecognised share of
loss of the investee when the investee generates net profit, the Company's unrecognised share of loss
is reduced by the Company's share of net profit and when the Company's unrecognised share or loss
is eliminated in full, the Company's share of net profit, if any, is recognised as investment income.
(3)Acquisition of minority interest
The difference between newly increased equity investment due to acquisition of minority interests
and portion of net asset cumulatively calculated from the acquisition date is adjusted as capital
reserve. If the capital reserve is not sufficient to absorb the difference, the excess are adjusted against
returned earnings.
(4)Disposal of long-term equity investment
Where the parent company disposes long-term investment in a subsidiary without a change in control,
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the difference in the net asset between the amount of disposed long-term investment and the amount
of the consideration paid or received is adjusted to the owner’s equity. If the disposal of long-term
investment in a subsidiary involves loss of control over the subsidiary, the related accounting policies
in Note applies. For disposal of long-term equity investments in any situation other than the
fore-mentioned situation, the difference between the book value of the investment disposed and the
consideration received is recognised in profit or loss.
The investee's equity movement other than net profit, other comprehensive income and profit
distribution is reocgnised in profit or loss proportionate to the disposal.
Where a long-term equity investment is measured by the equity method both before and after part
disposal of the investment, cumulative other comprehensive income relevant to the investment
recognised prior to the acquistion is treated in the same manner that the investee disposes the relevant
assets or liabilities proportionate to the disposal. The investee's equity movement other than net profit,
other comprehensive income and profit distribution is reocgnised in profit or loss proportionate to the
disposal.
Where a long-term equity investment is measured at cost both before and after part disposal of the
investment, cumulative other comprehensive income relevant to the investment recognised, as a result
of accounting by equity method or recognition and measurement principles applicable to financial
instruments, prior to the Company's acquisition of control over the investee is treated in the same
manner that the investee disposes the relevant assets or liabilities and recognised in profit or loss
proportionate to the disposal.The investee's equity movement other than net profit, other
comprehensive income and profit distribution, as a result of accounting by equity method, is
reocgnised in profit or loss proportionate to the disposal.
Where the Company's control over an investee is lost due to partial disposal of investment in the
investee and the Company continues to have significant influence over the investee after the partial
disposal, the investment in measured by the equity method in the Company's separate financial
statements; where the Company's control over an investee is lost due to partial disposal of investment
in the investee and the Company ceases to have significant influence over the investee after the
partial disposal, the investment in measured in accordance with the recognition and measurement
principles applicable to financial instruments in the Company's separate financialstatements and the
difference between the fair value and the book value of the remaining investment at the date of loss of
control is recognised in profit or loss. Cumulative other comprehensive income relevant to the
investment recognised, as a result of accounting by equity method or recognition and measurement
principles applicable to financial instruments, prior to the Company's acquisition of control over the
investee is treated in the same manner that the investee disposes the relevant assets or liabilities on
the date of loss of control. The investee's equity movement other than net profit, other comprehensive
income and profit distribution, as a result of accounting by equity method, is reocgnised in profit or
loss when control is lost. Where the remaining investment is measured by equity method, the
fore-mentioned other comprehensive income and other equity movement are recognised in profit or
loss proportionate to the disposal; Where the remaining investment is measured in accordance with
the recognition and measurement principles applicable to financial instruments, the fore-mentioned
other comprehensive income and other equity movement are recognised in profit or loss in full.
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Where the Company's joint control or s ignificant influence over an investee is lost due to partial
disposal of investment in the investee,the remaining investment in the investee is measured in
accordance with the recognition and measurement principles applicable to financial instruments, the
difference between the fair value and the book value of the remaining investment at the date of loss of
joint control or significant influence is recognised in profit or loss.Cumulative other comprehensive
income relevant to the investment recognised, as a result of accounting by equity method, prior to the
partial disposal is treated in the same manner that the investee disposes the relevant assets or
liabilities on the date of loss of joint control or significant influence. The investee's equity movement
other than net profit, other comprehensive income and profit distribution is reocgnised in profit or
loss when joint control or significant influence is lost.
Where the Company's control over an investee is lost through multiple disposals and the multiple
disposals shall be viewed as one single transaction, the multiple disposals is accounted for one single
transaction which result in the Company's loss of control over the investee. Each difference between
the consideration received and the book value of the investment disposed is recognised in other
comprehensive income and reclassified in full to profit or loss at the time when control over the
investee is lost.
15.Investment property
1．The measurement mode of investment property
The investment property of the company includes the leased land use rights, the leased buildings, the
land use rights held and prepared to transfer after appreciation.
The company shall adopt the cost mode to measure the investment property.
2. Depreciation or Amortization Method by Use of Cost Mode
The leased buildings of the investment property in the company shall be withdrawn the depreciation
by the service life average method, and the depreciation policy is the same with that of the fixed
assets. The land use rights held and prepared to transfer after appreciation in the investment property
shall be amortized by the line method, and the specific accounting policy is same with that of the
intangible assets.
16.Fixed assets
1．The conditions of recognition
Fixed assets refers to the tangible assets that are held for the sake of producing commodities,
rendering labor service, renting or business management and their useful life is in excess of one fiscal
year. The fixed assets can be recognized when the following requirements are all met: (1) the
economic benefits relevant to the fixed assets will flow into the enterprise. (2) the cost of the fixed
assets can be measured reliably.
The fixed assets of the company include the houses and buildings, the decoration of the fixed assets,
the machinery equipment, the transportation equipment, the electronic instrument and other devices.
2. Initial Measurement and Subsequent Measurement of the Fixed Assets
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The fixed assets shall be book kept as per the acquired actual cost, and the depreciation shall be
withdrawn from the subsequent month after the usable status reserved and achieved.
3．The method for depreciation
The method for Expected useful Estimated residual
Category Depreciation
depreciation life（Year） value
House and Building- Straight-line
35 year 4% 2.74%
Production method
House and Building-Non- Straight-line
method 40 years 4% 2.40%
Production
Straight-line
Decoration of Fixed assets 10 years 10.00%
method
Straight-line
Machinery and equipment 10-14 years 4% 9.60%-6.86%
method
Straight-line
Transportation equipment 8 years 4% 12.00%
method
Straight-line
Electronic equipment 8 years 4% 12.00%
method
Straight-line
Other equipment 8 years 4% 12.00%
method
4．Cognizance evidence and pricing method of financial leasing fixed assets
(1) Recognition Criteria of the Fixed Assets under Financing Lease
The financing lease shall be recognized if the following one or several criteria are met: ① the
ownership of the leasing assets shall be transferred to the tenant when the expiration of lease term.
② the tenant has the option to purchase the leasing assets, and the made purchase price is expected
to be far less than the fair value of the leasing assets in the implementation of the option. Thus, it can
be reasonably recognized that the tenant will implement the option on the lease date. ③ the
ownership of assets is not transferred, but the lease term shall be the most of the life of the lease
assets. ④ the least present value of the lease payment of the tenant and the least present value of the
lease receipts on the lease date almost equal to the fair value of the leasing assets on the lease date
respectively. ⑤ the leasing assets have the special nature, and only the tenant can use if there is no
major modifications.
(2) Valuation of Fixed Assets Acquired under Finance Leases: the fixed assets acquired under finance
leases shall be book kept according to the lower between the fair value of the leasing assets and the
least lease payment on the lease date.
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(3) Depreciation Method of Fixed Assets Acquired under Finance Leases: the depreciation shall be
withdrawn for the fixed assets acquired under finance leases as per the depreciation policy of own
fixed assets.
17.Construction in progress
1. The projects under construction shall be recognized when the economic benefits may flow into and
the cost can be reliably measured. Meanwhile, the projects under construction shall be measured
according to the actual cost occurred before the assets are built to achieve the expected usable
condition.
2. The projects under construction shall be transferred into the fixed assets according to the actual
project costs when the expected usable condition achieved. For the expected usable condition
achieved while the final accounts for completed projects not handled yet, the projects shall be
transferred into the fixed assets as per the estimated value. After the final accounts for completed
projects handled, the original estimated value shall be adjusted as per the actual cost, but the original
withdrawn depreciation shall not be adjusted again.
18.Borrowing costs
1. Recognition principles for capitalizing of loan expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or
production of asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of
related asset. Other borrowing expenses are recognized as expenses according to the occurred amount,
and accounted into gain/loss of current term.
2. Duration of capitalization of Loan costs
(1).When a loan expense satisfies all of the following conditions, it is capitalized:
1. Expenditures on assets have taken place.
2. Loan costs have taken place;
3. The construction or production activities to make assets to reach the intended use or sale of state
have begun.
（2）Capitalization of borrowing costs is suspended during periods in which the acquisition,
construction or production of a qualifying asset is interrupted by activities other than those necessary
to prepare the asset for its intended use or sale, when the interruption is for a continuous period of
more than 3 months. Borrowing costs incurred during these periods recognized as an expense for the
current period until the acquisition, construction or production is resumed.
（3）When the construction or production meets the intended use or sale of state of capitalization
conditions, the Loan costs should stop capitalization.
3. Computation Method for Capitalization Rate and Amount of Borrowing Costs
With regard to the special borrowings for the purchase and construction of qualified assets, the
capitalized interest amount shall be recognized according to the amount of the interest cost for the
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special borrowings actually occurred during the current period (including the amortization of discount
or premium recognized as per the effective interest method) minus the interest income acquired after
the borrowings deposit in bank or the investment income obtained from the temporary investment.
For the general borrowings for the purchase and construction of qualified assets, the capitalized
interest amount of the general borrowings shall be computed and recognized according to the
weighted average of accumulative asset expense beyond the expense of the special borrowings,
multiplying the capitalization rate of general borrowings.
19.Intangible assets
1. Valuation Method, Service Life and Impairment Test of Intangible Assets
(1) The intangible assets include the land use rights, the professional technology and the software,
which are conducted the initial measurement as per the cost.
(2) The service life of intangible assets is analyzed and judged when of the company acquires the
intangible assets. For the finite service life of the intangible assets, the years of service life or the
quantity of service life formed and the number of similar measurement unit shall be estimated. If the
term of economic benefits of the intangible assets brought for the company is not able to be foreseen,
the intangible assets shall be recognized as that with the indefinite service life.
(3) Estimation Method of Service life of Intangible Assets
1) For the intangible assets with the finite service life, the company shall generally consider the
following factors to estimate the service life: ① the normal service life of products produced with
the assets, and the acquired information of the service life of similar assets. ② the estimation of the
current stage conditions and the future development trends in the aspects of technology and craft. ③
the demand of the products produced by the assets or the offered services in the market. ④ the
expectation of actions adopted by current or potential competitors. ⑤ the expected maintenance
expense for sustaining the capacity to economic benefits brought by the assets and the ability to the
relevant expense expected. ⑥ the relevant law provision or the similar limit to the control term of
the assets, such as the licensed use term and the lease term. ⑦ the correlation with the service life of
other assets held by the company.
2) Intangible Assets with Indefinite Service Life, Judgment Criteria on Indefinite Service Life and
Review Procedure of Its Service Life
The company shall be unable to foresee the term of economic benefits brought by the assets for the
company, or the indefinite term of intangible assets recognized as the indefinite service life of
intangible assets.
The judgment criteria of Indefinite service life: ① as from the contractual rights or other legal rights,
but the indefinite service life of contract provision or legal provisions. ② unable to judge the term of
economic benefits brought by the intangible assets for the company after the integration of
information in the same industry or the relevant expert argumentation.
At the end of every year, the review should be made for the service life of the intangible assets with
the indefinite service life, and the relevant department that uses the intangible assets, shall conduct
the basic review by the method from up to down, in order to evaluate the judgment criteria of the
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indefinite service life if there is the change.
(4) Amortization Method of Intangible Assets Value
The intangible assets with the finite service life shall be systematically and reasonably amortized
according to the expected implementation mode of the economic benefits related to the intangible
assets during the service life, and the line method shall be adopted to amortize for the intangible
assets unable to reliably recognize the expected implementation mode. The specific service life is as
follows:
Items Amortization life time（Year）
Land use right 50 years
Proprietary technology 15 years
Software 5 years
The intangible assets with the indefinite service life shall not be amortized, and the company shall
make the review of the service life of the intangible assets during every accounting period.
(5) If there is the impairment for the intangible assets with the definite service life on the balance
sheet date, the corresponding impairment provision shall be withdrawn according to the difference
between the book value and the recoverable amount. The intangible assets with the indefinite service
life and without the usable condition shall be conducted the impairment test every year whether the
impairment exists.
2. Accounting Policy of Internal Research and Development Expenditure
The expenditure for internal research and development project in the study stage shall be recorded
into the current profits and losses when occurring. The expenditure for internal research and
development project in the development stage shall be recognized as the intangible assets when the
following requirements are simultaneously met: (1) the completion of the intangible assets is
available for use or sale, and feasible in the technology. (2) the intention to complete the intangible
assets and use or sale. (3) the method for the economic benefits produced by the intangible assets,
including the evidence that shows there exists the market for the products generated from the
intangible assets or the intangible assets have the market. The intangible assets are used internally
which shows the serviceability. (4) there are sufficient technology, financial resources and other
resources to support the completion of the development of the intangible assets, and there is ability to
use or sell the intangible assets. (5) the expenditure belong to the development stage of the intangible
assets can be reliably measured.
The specific criteria for the division of the internal research and development projects at the research
stage and the development stage of the company is as follows: (1) the investigation stage planned to
obtain the new technology and knowledge, shall be recognized as the research stage, which has the
features of planning and exploration. (2) before the commercial manufacture and use, the research
results or other knowledge should be applied for the plan or design, in order to produce the new or
improved stages with substantial materials, devices and products, which should be recognized as the
development stage, and this stage has the features of pertinence and more possibility to create the
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achievement.
20.Long-term Assets Impairment
The company shall make judgment of the long-term assets including the long-term equity investment,
the investment property measured by the cost mode, the fixed assets and the projects under
construction if there is possible impairment on the balance sheet date. If there exists the evidence
shows that the long-term assets have the impairment, the impairment test should be conducted, and
the recoverable amount should be estimated. The impairment shall be confirmed if there exists after
the comparison of the estimated recoverable amount of the assets and its book value, and if the assets
impairment provision shall be withdrawn to recognize the corresponding impairment losses. The
estimation of the recoverable amount of assets should be confirmed according to the higher one
between the net amount of the fair value minus the disposal costs and the present value of the cash
flow of assets expected in the future.
The company shall conduct the impairment test at least every year for the goodwill established by the
business combination and the intangible assets with the indefinite service life whether there exists the
impairment.
The impairment loss of long-term assets after recognized shouldn’t be reversed in the future
accounting period.
21.Long-term amortizable expenses
Deferred charges represent expenses incurred that should be borne and amortized over the current and
subsequent period (together of more than one year).
The long-term unamortized expense shall be bookkept as per the actual amount occurred, and shall be
averagely amortize within the benefit period or the specified period. If the long-term unamortized
expense can’t make the benefits for the future accounting period, the amortized value of the
unamortized project shall all be transferred into the current profits and losses.
22.Remuneration
The employee benefits of the company include short-term employee benefits, post-employment
benefits, termination benefits and other long-term employee benefits.
1. Accounting Treatment Method of Short-term Compensation
During the accounting period of service provision of staff, the company shall regard the actual
short-term compensation as the liability and record into the current profits and losses or the relevant
assets cost as per the beneficiary. Of which, the non-monetary welfare shall be measured as per the
fair value.
2. Accounting Treatment Method of Severance Benefit Plans
The severance benefit plans can be divided into the defined contribution plan and the defined benefit
plan according to the risk and obligation borne.
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(1) The Defined Contribution Plan
The contribution deposits that paid to the individual subject for the services provided by the staffs on
the balance sheet date during the accounting period, shall be recognized as the liability, and recorded
into the current profits and losses or the relevant asset costs as per the beneficiary.
(2) The Defined Benefit Plan
The defined benefit plan is the severance benefit plans with the exception of the defined contribution
plans.
1) Based on the expected cumulative welfare unit method, the company shall adopt unbiased and
mutually consistent actuarial assumptions to make evaluation of demographic variables and financial
variables, measure and define the obligations arising from the benefit plan, and determine the period
of the relevant obligations. The company shall discount all the defined benefit plan obligations,
including the obligation within twelve months after the end of the annual report during the expected
services provision of employee. The discount rate adopted in discounting shall be recognized
according to the bonds matched with the defined benefit plan obligation term and the currency at the
balance sheet date or the market return of high-quality corporate bonds in the active market.
2) If there exist the assets for the defined benefit plan, the deficit or surplus arising from the present
value of the defined benefit plan obligations minus the fair value of the defined benefit plan assets are
recognized as the net liability or the net assets of the defined benefit plan. If there exists the surplus of
the defined benefit plan, the lower one between the surplus of the define benefit plan and the upper
limit of assets shall be used to measure the net assets of the defined benefit plan. The upper limit of
assets refers to the present value of economic benefits obtained from the refund of the defined benefit
plans or the reduction of deposit funds of future defined benefit plans.
3) At the end of period, the employee’s payroll costs arising from the defined benefit plan are
recognized as the service costs, the net interests on the net liabilities or the net assets of the defined
benefit plan, and the changes caused by the net liabilities and the net assets of the defined benefit plan
that re-measured. Of which, the service costs and the net interests on the net liabilities or the net
assets of the defined benefit plan shall be recorded into the current profits and losses or the relevant
assets costs, the changes caused by the net liabilities and the net assets of the defined benefit plan that
re-measured shall be recorded into other comprehensive incomes, which should not be switched back
to the profits and losses during the subsequent accounting period, but the amount recognized from
other comprehensive incomes can be transferred within the scope of the rights and interests.
4) The profit or loss of one settlement shall be recognized when settling the defined benefit plan.
3. Accounting Treatment Method of Demission Welfare
The employee compensation liabilities generated by the demission welfare shall be recognized on the
early date and recorded into the current profits and losses: (1) when the company can’t withdraw the
demission welfare provided due to the rundown suggestion or the termination of labor relations plans.
(2) when the company recognizes the costs or the expenses related to the reorganization of demission
welfare payment.
The earlier one between when the company can’t withdraw the rundown suggestion or the
termination of labor relations plans at its side and when the costs relevant to the recombination of
dismission welfare payment, shall be recognized as the liabilities arising from the compensa tion due
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to the termination of labor relations with staff and shall be recorded into the current profits and losses.
Then company shall reasonably predict and recognize the payroll payable arising from the dismission
welfare. The dismission welfare, which is expected to finish the payment within twelve months after
the end of the annual report recognized, shall apply to the relevant provisions of short-term
compensation. The dismission welfare, which is expected to be unfinished for the payment within
twelve months after the end of the annual report recognized, shall apply to the relevant provisions of
short-term compensation, shall apply to the provisions related to other long-term employee benefits.
4. Accounting Treatment Method of Other Long-term Employee Benefits
If other long-term employee benefits of employees provided by the company meet the conditions of
the defined contribution plan, the accounting treatment shall be made in accordance with the defined
contribution plan. Except for these, other long-term benefits shall be made the accounting treatment
according to the defined benefit plan, but the changes arising from the re-measurement of net
liabilities or net assets of other long-term employee benefits shall be recorded into the current profits
and losses or the relevant assets costs.
23. Estimated Liabilities
1. Recognition Criteria of Estimated Liabilities
The liabilities shall be recognized when external guarantee, pending litigation or arbitration, product
quality assurance, staff reduction plan, loss contract, recombination obligation, disposal obligation of
the fixed assets and other pertinent businesses all meet the following requirements:
(1) The obligation is the current obligation borne by the company.
(2) The implementation of the obligation may cause the economic benefits out of the enterprise.
(3) The amount of the obligation can be measured reliably.
2. Measurement Method of Estimated Liabilities
The estimated liabilities shall be made the initial measurement according to the best estimate of the
expenditure required to settle the present obligation. There is the continuous scope for the required
expenditure, and the best estimate with the same possibilities resulted from various outcomes within
the scope shall be recognized as per the intermediate value. The best estimate should be recognize
according to the following methods:
(1) The best estimate shall be recognized as per the most possible amount if there are matters
involved in the single item.
(2) The best estimate shall be calculated and recognized as per the possible amount if there are
matters involved in the multiple item.
If the company pays all the expenses for paying off the estimated liabilities, or partial estimates are
compensated by the third party or other parties, the compensation amount should be separately
recognized as the assets when the receipt of the compensation amount is basically determined.
Meanwhile, the determined compensation amount shall not exceed the book value of the estimated
liabilities recognized.
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The company shall make review of the book value of estimated liabilities at the balance sheet date. If
there is conclusive evidence that the book value cannot really reflect the current best estimate, the
adjustment shall be made for the book value in accordance with the current best estimate.
24. Share payment
1.Accounting Treatment Methods of Share Payment
Share payment is a transaction which is for obtaining the service provided by employees or other
parties, where thus the equity instrument is granted , or for bearing the liability confirmed basing on
the equity instrument. Share payment is divided into the payment settled by equities and the payment
settled by cash.
(1)Shared Payment settled by Equities
The share payment settled by equities, which is used for exchanging the service provided by
employees, will be measured according to the fair value of the equity instrument granted to
employees on date of grant. The amount of such fair value, under the situation that the rights can only
be exercised after the service is finished and the set performance is achieved within the waiting
period, and basing on the optimum estimation for the number of equity instrument which exercise
rights within the waiting period, will be measured according to straight-line method and counted into
relevant costs and expenses. When the rights can be exercised immediately after being granted, the
payment will be counted into relevant costs and expenses, and the capital reserve will be increased
correspondingly.
On each and every balance sheet date within the waiting period, the Company will make optimum
estimations according to the newly-obtained subsequent information after the changes occurred in the
number of employees who exercise rights so as to modify the predicted number of the equity
instrument of exercising rights. The influence from above-mentioned estimations will be counted into
relevant costs and expenses at the current period, and the corresponding adjustment will be made for
the capital reserve.
If the fair value of the other parties’ service can be reliably measured, the share-based payment settled
by equities which is used for exchanging the service of other parties will be measured according to
that fair value on date of acquisition. If not, but the fair value of the equity instrument can be reliably
measured, the payment will be counted according to the fair value of the equity instrument on date of
service acquisition, and it will be counted into relevant costs and expenses, and the equity of the
shareholders will be increased correspondingly.
(2) Share Payment settled by Cash
The share payment settled by cash will be measured according to the fair value of the liability
confirmed basing on the shares borne by the Company and other equity instruments. If the rights can
be exercised immediately after being granted, the payment will be counted into relevant costs or
expenses and the liability will be increased correspondingly. If the rights can only be exercised after
the situation that service within the waiting period is completed and set performance is achieved, the
service obtained at the current period, according to the fair value amount of the liability borne by the
Company, and basing on the optimum estimation for the condition of exercising rights, will be
counted into costs or expenses on each and every balance sheet date during the waiting period, and
the liability will be increased correspondingly.
Each and every balance sheet date and settlement before relevant liability settlement, the fair
value of liability will be remeasured, of which changes occurred will be counted into the current
period.
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2.Relevant Accounting Treatment of Modification and Termination for Share-based Payment
Plan
When the Company modifies the share payment plan, if the fair value of the equity instrument
granted is increased after the modification, the increase in the service obtained will be
correspondingly confirmed according to the increase in the fair value of equity instrument. The
increase in the fair value of equity instrument means the balance between the equity instrument
before modification and the equity instrument after modification on modification date. If decrease
occurred in the total fair value of the equity instrument after the modification or methods which are
unbeneficial to employees are adopted in the modification, accounting treatment will still continue to
be made for the service obtained, and such changes will be regarded as changes that have never
occurred unless the Company has canceled partial or all equity instruments.
During the waiting period, if the granted equity instrument is cancelled, the company will treat
the cancelled equity instrument as the accelerated exercise of power, and immediately include the
balance that should be recognized in the remaining waiting period into the current profit and loss, and
simultaneously confirm the capital reserve. If the employee or other party can choose to satisfy the
non-exercisable condition but not satisfied in the waiting period, then the company will treat it as
cancellation of the granted equity instrument.
3. Accounting treatment involving the share payment transaction between the Company and the
shareholders or the actual controller of the Company
Where involves the share payment transaction between the Company and the shareholders or the
actual controller of the Company and one of the parties of the settlement company and the
service-accepting company is within the company and the other is not within the company, then the
company performs the accounting treatment in the consolidated financial statements of the company
according to the following provisions:
(1) If the settlement company settles in its own equity instrument, then it treats the equity
payment transaction as the equity-settled equity payment; otherwise, it treats as the cash-settled
equity payment.
If the settlement company is an investor to the service-accepting company, it shall be recognized
as a long-term equity investment in the service-accepting company in accordance with the fair value
of the equity instrument or the fair value of the liability it is assumed to bear on the grant date, and
the capital reserve (other capital reserve) or liabilities shall be recognized at the same time.
(2) If the service-accepting company has no settlement obligation or confers its own equity tools
on the employees of the company, then such equity payment transaction shall be treated as
equity-settled equity payment; if the service-accepting company has the settlement obligation and
confers the employees of the company with not its own equity instrument, then such equity payment
transaction shall be treated as cash-settled equity payment;
In the case of the equity payment transaction occurs between the companies within the company,
and the service-accepting company and the settlement company are not the same company, then the
confirmation and measurement of the equity payment transaction shall be carried out respectively in
the financial report of the service-accepting company and the settlement company, with the same
analogy of the above-said principle.
25. Revenue
1. Recognition Principle of Revenue
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
(1) The Goods for Sale
The revenue of the goods for sale shall be recognized when the following requirements are met
simultaneously: the transfer of main risks and rewards on ownership of the goods to the buyers, the
continual management rights related to ownership no longer retained by the company and the
effective control of the sold goods no longer implemented, the reliable measurement of the revenue
amount, the possible inflow of the relevant economic benefits, and the reliable measurement of the
relevant costs incurred or to be incurred.
(2) The Service Provision
If the provided services transaction results can be reliably estimated at the balance sheet date (the
reliable measurement of the revenue amount, the possible inflow of the relevant economic benefits,
the reliable recognition of the completion schedule of transaction, and the reliable measurement of the
relevant costs incurred or to be incurred in the transaction), the company shall recognize the relevant
service incomes according to the completion percentage method and recognized the completion
schedule of the provided service transaction according to the proportion of the costs occurred
accounting for the total estimated costs. If the provided services transaction results cannot be reliably
estimated at the balance sheet date and the occurred service costs can be expected to have
compensation, the company shall recognize to provide the service revenue according to the occurred
service cost amount and transfer the service costs as per the same amount. If the occurred service
costs cannot be expected to have compensation, the occurred service costs shall be recorded into the
current profits and losses and not be recognized as the service revenue.
(3) The Abalienation of the Right to Use Assets
The revenue of abalienation of the right to use assets shall be recognized when the abalienation of the
right to use assets meets the requirements of the possible inflow of the relevant economic benefits and
the reliable measurement of revenue amount. The interest income shall be calculated and determined
according to time and actual interest rate of the monetary capital of the company used by others, and
the royalty revenue shall be measured and determined in accordance with the charging time and
method appointed in the relevant contract or agree.
2. The Specific Recognition Method of Revenue
The company mainly sells the polaroid, textiles and other products. The revenue of the sale of
products in domestic market shall be recognized after the following requirements are met: The
company has agreed to deliver the goods to the purchaser under the contract and the revenue amount
of product sales has been determined, the payment for goods has been withdrawn or the payment
vouchers has been obtained and related economic benefits are likely to inflow, and the costs related to
the products can be measured reliably. The revenue of the sale of products in foreign market shall be
recognized after the following requirements are met: The company has made customs clearance and
departure from port under the contract, the bill of landing has obtained and the revenue of the sale of
products has been recognized, the payment for goods has been withdrawn or the payment vouchers
has been obtained and related economic benefits are likely to inflow, and the costs related to the
products can be measured reliably.
26.Government subsidy
Government grants are monetary assets and non-monetary assets that the company has obtained
free of charge from the government and are divided into government grants related to assets and
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government grants related to income. Asset-related government grants refer to government grants
obtained by the company that are used to purchase or construct or otherwise form long-term assets.
Income-related government subsidies refer to government subsidies other than government subsidies
related to assets.
If there is evidence at the end of the period that the company is able to meet the relevant
conditions stipulated in the financial support policy and it is expected to receive financial support
funds, the government subsidies shall be recognized according to the amount receivable. In addition,
government grants are confirmed upon actual receipt.
Asset-related government grants are recognized as deferred income and are charged to profit or
loss for the current period in a reasonable and systematic manner over the useful life of the relevant
assets. Revenue-related government subsidies, which are used to compensate for the related costs or
losses of the Company in the future period, are recognized as deferred income, and are recognized in
the profits and losses of the current period in the period in which the relevant costs, expenses or
losses are recognized. The relevant costs, expenses or losses that have been used to compensate the
Company have been directly recorded in the current profits and losses. Government grants related to
the company's daily activities are included in other income; those unrelated to the daily activities of
the company are included in non-operating income.
For the policy-subsidized discounted loans obtained by the company, the accounting treatment is
divided into the following two cases: when the finance allocates the interest-subsidy funds to the loan
bank and the loan bank provides the company with a policy-based preferential interest rate, the
company uses the actual amount of the loan received as the entry value of the loan, and calculates the
relevant borrowing costs according to the loan principal and the preferential policy interest rate; if the
finance allocates the interest-free funds directly to the company, the company will reduce the relevant
borrowing costs by the corresponding discount interest.
27.The Deferred Tax Assets / The deferred Tax Liabilities
1. Temporary Difference
The temporary difference includes the difference of the book value of assets and liabilities and the tax
basis, and the difference of the book value and the tax basis that no confirmation of assets and
liabilities but able to confirm the tax basis as per the provisions of tax law. The temporary difference
can be classified into the taxable temporary difference and the deductible temporary difference.
2. Recognition Basis of Deferred Tax Assets
For the deductible temporary difference, the deductible loss and the tax payment offset, the company
shall recognize the deferred tax assets arising from the future taxable income that obtained to deduce
the deductible temporary difference, the deductible loss and the tax payment offset.
The deferred tax assets with the following features and arising from the initial recognition of assets or
liabilities in the transaction shall not be recognized: (1) the transaction is not the business
combination. (2) the transaction doesn’t influence the accounting profits and the taxable incomes (or
the deductible losses).
The company shall recognize the corresponding deferred tax assets for the deductible temporary
133
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
difference related to the investment of subsidiaries, cooperative enterprises and joint ventures if the
following requirements are simultaneously met: (1) the temporary difference is possible to be
reversed in the foreseeable future. (2) the taxable income used to offset the deductible temporary
difference is possible to be obtained in the future.
3. Recognition Basis of Deferred Tax Liabilities
All the taxable temporary differences shall be recognized as the deferred tax liabilities.
But the company shall not recognize the taxable temporary differences arising from the following
transactions as the deferred tax liabilities: (1) the initial recognition of goodwill. (2) the initial
recognition of assets or liabilities arising from the transactions with the following features: this
transaction is not the business combination, and the transaction doesn’t influence the accounting
profits and the taxable incomes (or the deductible losses).
The company shall recognize the corresponding deferred tax liabilities for the taxable temporary
difference related to the investment of subsidiaries, cooperative enterprises and joint ventures. Except
that the following requirements are simultaneously met: (1) the investment enterprise can control the
reversal time of the temporary difference. (2) the temporary difference is possible to not be reversed
in the foreseeable future.
4. Impairment of Deferred Tax Assets
The company shall review the book value of the deferred tax assets at the balance sheet date. If it is
not possible to obtain sufficient taxable income for the reduction of the benefit of the deferred tax
assets in the future, the book value of the deferred tax assets shall be deduced. Except that the
deferred tax assets and the reduction amount are recorded into the owner’s equity when the original
recognition, others shall be recorded into the current income tax expense. The book value of the
deferred tax assets reduced can be recovered when sufficient taxable income is possibly obtained.
5. Income Tax Expense
The income tax expense should include the current income tax and the deferred income tax.
Other comprehensive income or the current income tax and the deferred income tax related to the
transactions and items directly recorded into the stockholders’ equity, shall be recorded into other
comprehensive incomes or the stockholders’ equity, and the book value of goodwill shall be adjusted
by the deferred income tax arising from the business combination, but the rest of the current income
tax and the deferred income tax expense or income shall be recorded into the current profits and
losses.
28.Lease
1. Accounting Treatment Method of Operating Lease
When the company is as the tenant, the rental within the lease term shall be recorded into the relevant
assets cost or recognized as the current profits and losses as per the line method, and the initial direct
expense occurred shall be directly recorded into the current profit and loss. The contingent rental
shall be recorded into the current profit and loss once the actual occurrence.
When the company is as the leaser, the rental within the lease term shall be recognized as the current
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profits and losses as per the line method, and the initial direct expense occurred shall be directly
recorded into the current profit and loss, except that the large amounts are capitalized and recorded
into the profit and loss by stages. The contingent rental shall be recorded into the current profit and
loss once the actual occurrence.
2. Accounting Treatment Method of Finance Lease
When the company is as the tenant, the company shall recognize the less one between the fair value
of leasing assets and the present value of minimum lease payment at the lease commencement date as
the book value of rented assets, recognize the minimum lease payment as the book value of the
long-term payables, and the undetermined fiancé expense of the difference and the initial direct costs
occurred shall be recorded into the leasing asset value. During each lease period, the current financing
charges shall be measured and recognized by the effective interest method.
When the company is as the leaser, the company shall recognize the sum of minimum lease
receivables and initial direct expense at the lease commencement date as the book value of finance
lease receivables, and record the unguaranteed residual value. Meanwhile, the company shall
recognize the difference between the sums of minimum lease receivables, minimum lease receivables
and unguaranteed minus the sum of the present value as the unrealized financing income. During
each lease period, the current financing charges shall be measured and recognized by the effective
interest method.
29.Change of main accounting policies and estimations
(1)Change of main accounting policies
On June 15, 2018, Ministry of Finance released a Notice on Revision and Issue of 2018 Format
of Financial Statements for General Enterprises (Cai Kuai [2018] No.15) to revise the format of
financial statements for general enterprises. The Company started to implement the above notice as
scheduled by the Ministry of Finance after adopting a proposal at the fifteenth meeting of the seventh
board of directors on October 29, 2018.
Before implementing the Notice on Revision and Issue of 2018 Format of Financial Statements
for General Enterprises (Cai Kuai [2018] No.15), the Company followed the Accounting Standard for
Business Enterprises-Basic Standard, all the particular accounting standards, guides to application of
accounting standards for business enterprises, interpretations and announcements of accounting
standards for business enterprises and other relevant regulations promulgated by Ministry of Finance.
Upon the alteration, the Company started to comply with relevant terms in the Notice on Revision and
Issue of 2018 Format of Financial Statements for General Enterprises (Cai Kuai [2018] No.15)
released by the Ministry of Finance on June 15, 2018 in its accounting policies. In addition to the
above alteration of the accounting policies, others still followed the prior relevant rules, guides,
announcements and other relevant terms issued by the Ministry of Finance.
Effects of alteration of accounting policies on the Company's beginning amount of this year and
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
amount of the prior year
Contents and reasons for the changes of
No Statement items affected Amount
accounting policies
Retroactive adjustment
Notes receivable -44,207,119.00
"Accounts receivable" and "notes
receivable" were incorporated into Account receivable -192,503,077.70
1 "accounts receivable and notes
receivable" for presentation Notes receivable & Account
236,710,196.70
receivable
Interest receivable -15,728,872.62
"Interests receivable", "dividends
receivable" and "other receivables" were
2 Dividend receivable
combined into "other receivables" for
presentation
Other receivable 15,728,872.62
Notes payable
"Accounts payable" and "notes payable"
3 were combined into "accounts payable Account Payable -97,104,697.18
and notes payable" for presentation
Notes payable & Account payable 97,104,697.18
Management expenses -39,036,089.05
"Management expenses" fell into
4 "management expenses" and "R&D
expenses" for presentation R & D cost 39,036,089.05
This alteration of accounting policies had no impact on the Company's total assets, total
liabilities, net asset and net profit in the current period and before the alteration of accounting
policies.
（2）Change of main accounting estimations
Nil
VI. Taxes of the Company
1. Main taxes categories and tax rate
Taxes Tax references Applicable tax rates
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Taxes Tax references Applicable tax rates
VAT Th e t axable turnover 17%、16%、5%
City construction tax Turnover tax to be paid allowances 7%
Education surcharge Turnover tax to be paid allowances 3%
Local education
Turnover tax to be paid allowances 2%
surcharge
Business income tax Taxable income 25%、16.5%、15%
2. Tax preference and approval file
(1) SAPO Photoelectric Co., Ltd., the subsidiary company of our company, has been qualified as
national high-tech enterprise since 2016 ,High-tech and enterprise certificate No.:
GR201644201276 ,The certificate is valid for three years, The enterprise income tax rate of this year
is 15%.
(2).In accordance with relevant provisions of the Notice of Ministry of Finance, General Administrati
on of Customs and State Taxation Administration Regarding Tax Preference Policies for Further Supp
orting the Development of New-type Display Device Industry (Cai Guan Shui (2016) No. 62), SAPO
Photoelectric Co., Ltd. manufactured key materials and parts for the upstream industry of new-type di
splay devices including colorful light filter coating and polarizer sheet that comply with the planning
for independent development of domestic industries may enjoy the preferential policies of exemption
from import tariff for the import of raw materials and consumables for the purpose of self use and pro
duction that can not be produced domestically from January 1, 2016 and December 31, 2020.
VII. Notes of consolidated financial statement
Unless otherwise stated, the meaning of "B/f", "C/f", The beginning of the financial statements is the
number of financial statements as of January 1, 2018, and the end of the period is the number of
financial statements as at 31 December 2018. This term refers to January 1, 2018 - December 31,
2018,The same period refers to January 1, 2017 - December 31, 2017. Monetary unit is RMB yuan
1.Monetary Capital
Items Year-end balance Year-beginning balance
Cash at hand 13,559.60 17,771.09
Bank deposit 1,137,431,239.39 1,163,010,967.65
Other monetary funds 4,314,575.61 2,019,370.09
Total 1,141,759,374.60 1,165,048,108.83
Including : The total amount of 9,294,408.13 9,044,548.79
deposit abroad
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Note: ① Ending amount of other monetary funds was margin deposit RMB 4,310,530.42 and
investment eposit RMB 4,045.19.
②As of December 31, 2018，The fixed-term deposit balance of money fund is RMB 8,185,139.38 ,
this part will not be treated as closing cash or closing cash equivalent in preparing cash flow
statement.
（II）Notes receivable & Account receivable
Items Year-end balance Year-beginning balance
Notes receivable 886,432.06 44,207,119.00
Account receivable 528,454,015.59 192,503,077.70
Total 529,340,447.65 236,710,196.70
1.Notes receivables
(1). Classification Notes receivable
Items Year-end balance Year-beginning balance
Bank acceptance 886,432.06 44,207,119.00
Total 886,432.06 44,207,119.00
(2). As of December 31, 2018，The company has no Notes receivable pledged.
(3)Notes endorsement or discount and undue on balance sheet date
Amount derecognizing at period
Items Amount derecognizing at period-end
–end
Bank acceptance 60,485,268.08 0
Total 60,485,268.08 0
(4)Notes transferred to account receivable for the issuer is not able to execute the liability at the
end of period.
2. Account receivable
(1)Classification account receivables.
Amount in year-end
Classification
Book balance Bad debt provision Book value
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Proportion
Amount Amount Proportion(%)
(%)
Accounts receivable of 6,300,455.84 1.11 3,998,201.79 63.46 2,302,254.05
individual significance and
subject to individual
impairment assessment
Accounts receivable subject 552,278,688.56 97.66 27,621,586.89 5.00 524,657,101.67
to impairment assessment
by credit risk characteristics
of a portfolio
Accounts receivable of 6,933,008.49 1.23 5,438,348.62 78.44 1,494,659.87
individual insignificance but
subject to individual
impairment assessment
Total 565,512,152.89 100.00 37,058,137.30 6.55 528,454,015.59
Amount in year-begin
Classification Book balance Bad debt provision
Proportion Book value
Amount Proportion(%)
(%)
Accounts receivable of
individual significance and 6,301,057.07 2.97 3,998,803.02 63.46 2,302,254.05
subject to individual
impairment assessment
Accounts receivable subject
to impairment assessment 199,198,855.51 93.99 10,386,734.84 5.21 188,812,120.67
by credit risk characteristics
of a portfolio
Accounts receivable of
individual insignificance but 6,448,803.57 3.04 5,060,100.59 78.47 1,388,702.98
subject to individual
impairment assessment
Total 211,948,716.15 100.00 19,445,638.45 9.17 192,503,077.70
(1)Accounts receivable of individual significance and subject to individual impairment assessment.
Account receivable Amount in year-end
Bad debt
（Unit） Account receivable Proportion(%) Reason for allowance
provision
Dongguan Fair LCD Co., Beyond the credit period for
1,695,947.73 1,695,947.73 100.00
Ltd. a long time, unlikely to
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
recover.
Beyond the credit period for
Guangdong Ruili Baolai
1,348,965.36 674,482.68 50.00 a long time, uncertain
Technology Co., Ltd.
recovered.
Beyond the credit period for
Dongguan Yaxing
3,255,542.75 1,627,771.38 50.00 a long time, uncertain
Semiconductor Co., Ltd.
recovered.
Total 6,300,455.84 3,998,201.79
（2）Account receivable on which bad debt provisions are provided on age basis in the group
Balance in year-end
Aging
Account receivable Bad debt provision Proportion(%)
Within 1 year 552,152,553.49 27,607,627.64 5.00
1-2 years 119,406.37 11,940.64 10.00
2-3 years 6,728.70 2,018.61 30.00
Over 3 years 50.00
Total 552,278,688.56 27,621,586.89
(2)Recognition , recovery or reversal of allowance for bad debt：
（1）The account of allowance for bad debts recognized during the period is RMB17,612,498.85, The
amount collected or switches back amounting to RMB0.00.
(3)The company has no account receivables written off this period.
(4)The ending balance of receivable owed by the imputation of the top five parties
Balance in Proportion( Bad debt
Name Nature Aging
year-end %) provision
133,592,500.00 Within 1 23.62 6,679,625.00
First Goods
year
106,136,195.38 Within 1 18.77 5,306,809.77
Second Goods
year
84,062,627.96 Within 1 14.86 4,203,131.40
Third Goods
year
47,287,500.00 Within 1 8.36 2,364,375.00
Fourth Goods
year
36,375,000.00 Within 1 6.43 1,818,750.00
Fifth Goods
year
Total 407,453,823.34 72.04 20,372,691.17
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
（5）Account receivable which terminate the recognition owning to the transfer of the financial assets
Nil
(6)The amount of the assets and liabilities formed by the transfer and the continues involvement of
accounts receivable
Nil
3.Prepayments
(1)Disclosure by age
Balance in year-end Balance in year-begin
Aging
Amount Proportion（%） Amount Proportion（%）
Within 1 year 226,726,744.30 98.99 13,705,047.27 99.63
1-2 years 2,263,886.85 0.99 11,944.78 0.09
2-3 years
Over 3 years 38,160.00 0.02 38,160.00 0.28
Total 229,028,791.15 100.00 13,755,152.05 100.00
（2）The ending balance of Prepayments owed by the imputation of the top five parties
Name Balance in year-end Proportion
First 196,426,857.54 85.77
Second 7,474,329.32 3.26
Third 4,168,476.05 1.82
Fourth 4,095,000.00 1.79
Fifth 2,835,000.00 1.24
Total 214,999,662.91 93.88
4.Other receivable
Items Amount in year-end Amount in year-beginning
Other account receivable 9,257,192.06 12,925,984.45
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Items Amount in year-end Amount in year-beginning
Interest receivable 5,589,704.44 15,728,872.62
Dividend receivable
14,846,896.50 28,654,857.07
Total
1.Other receivable
(1)Category of Other receivable
Amount in year-end
Classification Book Balance Bad debt provision
Book value
Amount Proportion(%) Amount Proportion(%)
Other accounts receivable
of individual significance
13,781,464.60 54.47 13,781,464.60 100.00
and subject to individual
impairment assessment
Other accounts receivable
subject to impairment
assessment by credit risk 10,909,282.88 43.12 1,652,090.82 15.14 9,257,192.06
characteristics of a
portfolio
Other accounts receivable
of individual insignificance
611,820.77 2.41 611,820.77 100.00
but subject to individual
impairment assessment
Total 25,302,568.25 100.00 16,045,376.19 63.41 9,257,192.06
Amount in year-beginning
Classification Book Balance Bad debt provision
Book value
Amount Proportion(%) Amount Proportion(%)
Other accounts receivable
of individual significance
13,781,464.60 47.54 13,781,464.60 100.00
and subject to individual
impairment assessment
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Amount in year-beginning
Classification Book Balance Bad debt provision
Book value
Amount Proportion(%) Amount Proportion(%)
Other accounts receivable
subject to impairment
14,596,383.53 50.35 1,670,399.08 11.44 12,925,984.45
assessment by credit risk
characteristics of a portfolio
Other accounts receivable
of individual insignificance
611,820.77 2.11 611,820.77 100.00
but subject to individual
impairment assessment
Total 28,989,668.90 100.00 16,063,684.45 55.41 12,925,984.45
(1)Other receivable accounts with large amount and were provided had debt provisions
individually at end of period.
Amount in year-end
Other receivable accounts
Other account Bad debt Withdrawal
（Unit） Reason for allowance
receivable provision proportion (%)
Jiangxi Xuanli String Co., No executable property,
11,389,044.60 11,389,044.60 100.00
Ltd. unlikely to recover.
Anhui Huapeng Textile
1,800,000.00 1,800,000.00 100.00 Estimated irrecoverable
Co.,Ltd.
Shenzhen Tianlong Has been concealed, unlikely
592,420.00 592,420.00 100.00
Induatry& Trade Co., Ltd. to recover
Total 13,781,464.60 13,781,464.60
(2)Other receivable accounts in Group on which bad debt provisions were provided on age analyze
basis：
Amount in year-end
Aging
Other receivable Bad debt provision Withdrawal proportion
Within 1 year 7,809,057.45 390,452.87 5.00
1-2 years 663,844.79 66,384.48 10.00
2-3 years 114,684.29 34,405.29 30.00
Over 3 years 2,321,696.35 1,160,848.18 50.00
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Total 10,909,282.88 1,652,090.82
2.The current amount of provision for bad debts is RMB-18,308.26, no withdraw or return for bad
debts.
( 3)The company has no other receivables written off this period.
(4)Other accounts receivable classified by the nature of accounts
Category Year-end balance Year-beginning balance
Customs bond 101,758.24 1,454,781.62
Export rebate 3,140,110.71 7,804,119.33
Unit account 15,451,643.71 15,211,367.96
Deposit 1,875,008.00 1,752,199.92
Reserve fund and staff loans 506,154.77 849,212.52
Other 4,227,892.82 1,917,987.55
Total 25,302,568.25 28,989,668.90
(5).Top 5 of the closing balance of the other accounts receivable colleted according to the arrears
party
Proportion of
the total year
Bad debt
Name Nature Closing balance Aging end balance of
provision
the accounts
receivable(%)
First Unit account Over 5 years 11,389,044.60
Second Export rebate 3,381,960.39 Within 1 year 13.37 169,098.02
Third Unit account 3,140,110.71 Within 1 year 12.41 476,068.35
Fourth Deposit 1,800,000.00 2-3 years 7.11 1,800,000.00
Fifth Deposit 980,461.06 Over 5 years 3.87 490,230.53
Total 20,691,576.76 81.77 14,324,441.50
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
(6) Accounts receivable involved with government subsidies
Nil
(7) Other account receivable which terminate the recognition owning to the transfer of the financial
assets Nil
(8) The amount of the assets and liabilities formed by the transfer and the continues involvement of
other accounts receivable
Nil
2. Classification of interest receivable
Items Balance in year-end Balance in year-begin
Trust income 1,627,397.26
Fixed deposit interest 1,302,963.56 12,676,572.40
Structure deposit interest 4,286,740.88 1,418,738.58
Other financing products 6,164.38
Total 5,589,704.44 15,728,872.62
5.Inventories
（1）Inventories types
Year-end balance Year-beginning balance
Items Book balance Provision for Book value Book balance Provision for Book value
bad debts bad debts
Raw materials 164,096,057.16 14,452,368.67 149,643,688.49 134,843,713.96 12,679,234.15 122,164,479.81
Processing
3,895,184.01 3,895,184.01 3,234,902.35 3,234,902.35
products
Finished product 129,671,772.49 44,801,099.13 84,870,673.36 108,902,736.97 24,036,100.64 84,866,636.33
Semi-finished
139,867,237.30 28,508,834.52 111,358,402.78 79,495,655.06 15,302,692.03 64,192,963.03
product
Goods in transit 80,839,399.33 937,486.83 79,901,912.50
Commissioned
10,082,857.63 10,082,857.63 1,156,194.64 1,156,194.64
materials
Total 528,452,507.92 88,699,789.15 439,752,718.77 327,633,202.98 52,018,026.82 275,615,176.16
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
（2）Inventory Impairment provision
Increased in current period Decreased in current period
Year-beginning Year-end
Items Transferred
balance Provision Other Other balance
back
Raw materials 12,679,234.15 11,781,266.11 10,008,131.59 14,452,368.67
Processing
24,036,100.64 55,567,970.26 34,802,971.77 44,801,099.13
products
Semi-finished
15,302,692.03 18,584,013.93 5,377,871.44 28,508,834.52
product
Consigned
937,486.83 937,486.83
processing
Total 52,018,026.82 86,870,737.13 50,188,974.80 88,699,789.15
3. Basis for withdrawal of provision for inventory and reason for recovery or write-off in this
year
Reason for
recovery of
Specific basis for withdrawal of Reason for write-off of provision
Items provision for
provision for inventory for inventory in this year
inventory in this
year
Raw materials
Net realizable value below
Use of relevant materials
inventory cost
Processing products
Net realizable value below
Selling related finished goods
inventory cost
Net realizable value below Selling related semi-finished
Semi-finished product
inventory cost products
6.Other current assets
Items Year-end balance Year-beginning balance
Structural Deposit 540,000,000.00 210,000,000.00
146
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Trust financing 800,000,000.00
Other financing product 10,000,000.00
After the deduction of input VAT 99,797,959.30 128,689,874.10
Total 639,797,959.30 1,148,689,874.10
7.Available-for-sale financial assets
(1)Available-for-sale financial assets
Year-end balance Year-beginning balance
Items Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Available-for-sale
equity
instruments
Measured by fair
5,119,896.46 5,119,896.46 7,994,294.63 7,994,294.63
value
Measured by cost 77,210,531.91 36,956,643.50 40,253,888.41 102,620,741.41 44,579,303.00 58,041,438.41
Total 82,330,428.37 36,956,643.50 45,373,784.87 110,615,036.04 44,579,303.00 66,035,733.04
(2)Available-for-sale financial assets measured by fair value at the period-end
Items Cost Fair value
Equity instrument available for sale
Fawer （000030） 8,940,598.31 5,119,896.46
Total 8,940,598.31 5,119,896.46
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
(3) Available-for-sale financial assets measured by cost at the period-end
Book balance Impairment provision Shareholdi
ng Cash bonus of
Investee proportion the reporting
Period-begin Increase Period-begin Increase Decrease Period-end among the period
investees
Shenzhen Jintian
Industry（Group） 14,831,681.50 14,831,681.50 14,831,681.50 14,831,681.50 2.39
Co., Ltd.
Shenzhen Jiafeng
16,800,000.00 16,800,000.00 16,800,000.00 16,800,000.00 10.80
Textile Co., ltd.
Shenzhen
Guanhua Prnting
5,491,288.71 5,491,288.71 5,058,307.01 5,058,307.01 45.00
& dyeing Co.,
Ltd.
Shenzhen Union
Development 2,600,000.00 2,600,000.00 2.87
Group Co., Ltd
Shenzhen
Xiangjiang Trade 160,000.00 160,000.00 20.00 74,774.15
Co., Ltd.
Shenzhen Xinfang
524,000.00 524,000.00 20.00
Knitting Co., Ltd.
148
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Shenzhen Dailisi
2,559,856.26 2,559,856.26 30.00 943,396.23
Knitting Co., Ltd.
Anhui Huapeng
25,410,209.50 25,410,209.50 7,622,659.50 7,622,659.50
Textile Co., Ltd.
Shenzhen South
1,500,000.00 1,500,000.00 9.84 898,351.38
Textile Co., Ltd.
Shenzhen Xieli
Automobile Co., 4,243,705.44 4,243,705.44 266,654.99 266,654.99 50.00
\ltd.
Changxing
Junying
Investment 28,500,000.00 28,500,000.00 57.00 2,150,943.40
Partnership（LP）
Total 102,620,741.41 25,410,209.50 77,210,531.91 44,579,303.00 7,622,659.50 36,956,643.50 4,067,465.16
Note：（1）During the reporting period, Shenzhen Delis Underwear Co., Ltd. contracted for foreign operations.（2）The business license of Shenzhen Xieli
Automobile Co., Ltd. whose main assets were land use rights was canceled by industrial and commercial administration and the liquidation team resolved to ask the
Hong Kong shareholder to handle this company's asset portfolio but the treatment of this asset portfolio was not yet completed at the end of the period. (3) Former
contracting operation of Anhui Huapeng Textile Co., Ltd. In December 2018, this company's board of shareholders resolved to agree on dissolution and liquidation
and by the end of period, the liquidation was still ongoing. In December 2018, the Company included net assets of Anhui Huapeng Textile Co., Ltd. into long-term
equity investment of RMB 11,784,626.51 by share of fair value, decreased RMB 17,787,550.00 in available-for-sale financial assets and included the balance of
RMB 6,002,923.49 into the investment income.
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
(4)Changes of the impairment of the available-for-sale financial assets during the reporting
period
Available for sale equity Available for sale debts
Category Total
instruments instruments
Impairment amount at the beginning
44,579,303.00 44,579,303.00
period
Current provision
Including: Transferred from other
comprehensive income
Decreased of this period 7,622,659.50 7,622,659.50
Including:transferred from the
increased fair value
Impairment amount at the end of
36,956,643.50 36,956,643.50
period
150
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
8.Long-term equity investment
(1)Long-term equity investment
151
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Increase/decrease
Withd Closing
Investment
Additi Negati rawal balance of
Adjustment of Cash bonus or
profit and loss of
Investees Opening balance onal ve other Changes of profits Closing balance impairme
recognized impair Other
comprehensiv other equity announced to nt
invest invest ment
under the e income issue provision
ment ment provis
equity method
ion
I. Joint venture
Shenzhen Haohao Property
5,369,450.56 671,689.37 400,000.00 5,641,139.93
Leasing Co., Ltd.
Anhui Huapeng Textile
11,784,626.51 11,784,626.51
Co.,Ltd.
Subtotal 5,369,450.56 671,689.37 400,000.00 11,784,626.51 17,425,766.44
2. Affiliated Company
Shenzhen Changlianfa 2,107,155.01 126,902.18 2,234,057.19
Printing & dyeing Company
2,233,902.64 16,820.96 112,891.10 2,363,614.70
Jordan Garment Factory
10,670,226.35 444,742.44 508,391.94 694,713.40 10,928,647.33
Hongkong Yehui
152
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Increase/decrease
Withd Closing
Investment
Additi Negati rawal balance of
Adjustment of Cash bonus or
profit and loss of
Investees Opening balance onal ve other Changes of profits Closing balance impairme
recognized impair Other nt
invest invest comprehensiv other equity announced to
ment provision
under the e income issue
ment ment provis
equity method ion
International Co., Ltd.
Subtotal 15,011,284.00 588,465.58 621,283.04 694,713.40 15,526,319.22
Total 20,380,734.56 1,260,154.95 621,283.04 1,094,713.40 11,784,626.51 32,952,085.66
153
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
9.Investment real estate
（1）Measured by the cost of investment in real estate
Constructio
Items House, Building Land use right Total
n in process
I. Original price
1. Balance at period-beginning 306,466,721.91 306,466,721.91
2.Increase in the current period 2,767,538.83 2,767,538.83
3.Decrease in the current period
4 Year-end balance 309,234,260.74 309,234,260.74
II.Total accumulated depreciation
accumulated amortization
1. Year-begin balance 133,360,915.64 133,360,915.64
2.Increase in the current period 7,875,403.12 7,875,403.12
(1) Withdrawal 7,875,403.12 7,875,403.12
3.Decrease in the current
period
4 Year-end balance 141,236,318.76 141,236,318.76
III. Impairment provision
1. Balance at period-beginning
2.Increased amount of the
period
3.Decrease in the current
period
4. Balance at period-end
IV.Book value
1.Book value at period -end 167,997,941.98 167,997,941.98
2.Book value at
173,105,806.27 173,105,806.27
period-beginning
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
10. Fixed assets
Items Year-end balance Year-beginning balance
Fixed assets 987,876,247.55 656,133,200.19
Disposal of Fixed assets
Total 987,876,247.55 656,133,200.19
(1) List of fixed assets
Houses & Machinery Transportation
Items Other Total
buildings equipment s
I. Original price
1.Opening balance 492,709,415.27 659,301,895.53 3,691,157.72 22,260,594.58 1,177,963,063.10
2.Increased amount of 55,874,611.33 354,067,043.30 6,306,557.81 8,369,468.30 424,617,680.74
the period
(1) Purchase 593,690.94 44,532,824.16 6,306,557.81 2,839,422.96 54,272,495.87
(2) Transferred from
55,280,920.39 309,534,219.14 5,530,045.34 370,345,184.87
construction in progress
3. Decrease in the current
2,307,341.57 163,539.08 2,470,880.65
period
（1）Disposal 2,307,341.57 163,539.08 2,470,880.65
4. Balance at period-end 548,584,026.60 1,011,061,597.26 9,997,715.53 30,466,523.80 1,600,109,863.19
II.Accumulated
amortization
1. Balance at
113,563,999.41 389,901,922.93 3,268,450.66 15,095,489.91 521,829,862.91
period-beginning
2. Increase in the current
17,011,793.27 72,256,353.66 450,578.09 2,035,352.39 91,754,077.41
period
(1) Withdrawal 17,011,793.27 72,256,353.66 450,578.09 2,035,352.39 91,754,077.41
3. Decrease in the current 2,237,766.57 122,590.96 2,360,357.53
period
（1）Disposal 2,237,766.57 122,590.96 2,360,357.53
4. Balance at period-end 130,575,792.68 459,920,510.02 3,719,028.75 17,008,251.34 611,223,582.79
III. Impairment provision
1. Balance at
period-beginning
155
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Houses & Machinery Transportation
Items Other Total
buildings equipment s
2.Increased amount of
1,004,032.85 6,000.00 1,010,032.85
the period
3. Decrease in the current
period
4. Balance at period-end 1,004,032.85 6,000.00 1,010,032.85
IV.Book value
1.Book value at period 417,004,201.07 551,141,087.24 6,278,686.78 13,452,272.46 987,876,247.55
-end
2.Book value at
379,145,415.86 269,399,972.60 422,707.06 7,165,104.67 656,133,200.19
period-beginning
Current depreciation is RMB91,754,077.41 .
13.Project under construction
（1）Project under construction
Year-end balance Year-beginning balance
Book balance Provisi Book Net value Book balance Provis Book Net value
Items on for ion for
devalua devalu
tion ation
TFT-LCD polarizing
315,430,810.41 315,430,810.41
film II project
Industrialization
project of polaroid
9,080,815.92 9,080,815.92 500,168.25 500,168.25
for super large size
TV
Other 6,540,470.72 6,540,470.72 6,639,195.07 6,639,195.07
Total 15,621,286.64 15,621,286.64 322,570,173.73 322,570,173.73
156
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
（2）Changes of significant construction in progress
Including：
Capitalisatio
Current Capitalisatio
Amount at year Increase at this Transferred to Other Balance in n of interest Source of
Name Budget Proportion(%) amount of n of interest
beginning period fixed assets decrease year-end accumulated funds
capitalization ratio（%)
balance
of interest
T TFT-LCD
Collect and
polarizing film 700.34 million 315,430,810.41 39,520,202.14 354,951,012.55
Self-funds
II project
Industrialization
Project of
Polarizer for
195.50 million 500,168.25 8,580,647.67 9,080,815.92 Self-funds
Ultra Large
Size TV (Line
7)
Total 2659.84 million 315,930,978.66 48,100,849.81 354,951,012.55 9,080,815.92
157
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
12.Intangible assets
（1）List of intangible assets
Proprietary
Items Land use right Software Total
technology
I. Original price
1.Opening balance 48,822,064.61 11,825,200.00 2,591,780.00 63,239,044.61
2.Increased amount of the period 344,827.54 344,827.54
(1) Purchase 344,827.54 344,827.54
3.Decreased at this period
4. Balance at period-end 48,822,064.61 11,825,200.00 2,936,607.54 63,583,872.15
II.Accumulated amortization
1. Balance at period-beginning 11,283,873.79 11,825,200.00 1,259,297.42 24,368,371.21
2. Increase in the current period 960,098.73 374,586.36 1,334,685.09
(1) Withdrawal 960,098.73 374,586.36 1,334,685.09
3.Decreased amount of the period
4. Balance at period-end 12,243,972.52 11,825,200.00 1,633,883.78 25,703,056.30
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
IV Book value
1.Book value at period -end 36,578,092.09 1,302,723.76 37,880,815.85
2.Book value at period-beginning 37,538,190.82 1,332,482.58 38,870,673.40
158
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
13.Goodwill
(1)Detail
Increased at this .Decreased at
Investee Balance in year-begin Balance in year-end
period this period
Shenzhen Beauty Century
2,167,341.21 2,167,341.21
Garment Co., Ltd.
Shenzhen Shenfang Import and
82,246.61 82,246.61
Export Co., Ltd.
SAPO Photoelectric Co., Ltd 9,614,758.55 9,614,758.55
Total 11,864,346.37 11,864,346.37
（2）Impairment of goodwill
Increased at this .Decreased at
Investee Balance in year-begin Balance in year-end
period this period
Shenzhen Beauty Century
2,167,341.21 2,167,341.21
Garment Co., Ltd.
Shenzhen Shenfang Import and
82,246.61 82,246.61
Export Co., Ltd.
SAPO Photoelectric Co., Ltd 9,614,758.55 9,614,758.55
Total 11,864,346.37 11,864,346.37
14. Long term amortize expenses
Amortized
Balance in Increase in this Balance in
Items expenses Other loss
year-begin period year-end
Renovation fee 841,713.23 361,148.94 217,170.53 985,691.64
Other 193,576.85 375,710.06 68,769.52 500,517.39
Total 1,035,290.08 736,859.00 285,940.05 1,486,209.03
159
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
15. Deferred income tax assets/deferred income tax liabilities
（1）Details of the un-recognized deferred income tax assets
Balance in year-end Balance in year-begin
Items Deductible Deferred income tax Deductible Deferred income tax
temporary difference assets temporary difference assets
Assets depreciation
18,197,325.09 4,549,331.27 5,190,838.04 1,297,709.51
reserves
Unattained internal sales
2,591,536.27 388,730.44 2,680,650.70 402,097.62
profits
Changes in fair value of
available for sale financial 3,820,701.85 955,175.46 946,303.68 236,575.93
assets
Temporary differences in
the formation of equity 152,615.37 38,153.84
incentives
Temporary difference
formed by the interest of 571,844.26 142,961.06
share incentive repurchase
Total 25,181,407.47 6,036,198.23 8,970,407.79 1,974,536.90
(2) Details of unrecognized deferred income tax assets
Items Balance in year-end Balance in year-begin
Deductible temporary difference 128,283,915.49 80,615,487.41
Deductible loss 562,435,574.75 486,014,140.23
Total 690,719,490.24 566,629,627.64
Due to the uncertainty which exists in whether sufficient taxable income can be obtained in the
future , therefore, delay-tax capital has not been confirmed.
（3）Deductible losses of the un-recognized deferred income tax asset will expire in the following
years
Year Balance in year-end Balance in year-begin Remark
2018 129,226,944.33
2019 148,095,898.11
160
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Year Balance in year-end Balance in year-begin Remark
2020 703,241.36 83,990,395.00
2021 3,880,135.73 124,700,902.79
2023 129,226,944.33
2024 148,095,898.11
2025 83,287,153.64
2026 120,820,767.06
2028 76,421,434.52
Total 562,435,574.75 486,014,140.23
16.Other non-current assets
Items Balance in year-end Balance in year-begin
Advance payment for equipment fund 152,688,087.18 2,772,114.56
Advance payment for technical services 176,764,571.83 44,394,879.92
Total 329,452,659.01 47,166,994.48
17. Short-term loan
（1）Categories of short-term loans
Items Balance in year-end Balance in year-begin
Credit loans 411,522,111.40 88,638,181.45
Total 411,522,111.40 88,638,181.45
Final overdue outstanding short-term borrowing was zero.
18.Notes payable & Account payable
Items Balance in year-end Balance in year-begin
Notes payable
Account payable 180,239,452.90 97,104,697.18
161
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Items Balance in year-end Balance in year-begin
Total 180,239,452.90 97,104,697.18
（1）Account payable
Items Balance in year-end Balance in year-begin
Within 1 year 177,140,118.37 96,043,721.23
1-2 years 2,059,842.85 37,402.40
2-3 years 37,402.40 37,083.00
3-4 years 35,075.05 300,642.80
4-5 years 281,166.48 37,090.00
Over 5 years 685,847.75 648,757.75
Total 180,239,452.90 97,104,697.18
No Significant accounts payable that aged over one year
19.Advance account
（1）Advance account
In RMB
Items Balance in year-end Balance in year-begin
Within 1 year 119,293,518.44 33,708,344.84
1-2 years 560,077.61 240,275.96
2-3 years 210,330.74 364,922.45
Over 3 years 639,024.58 639,024.58
Total 120,702,951.37 34,952,567.83
Accounts payable with major amount and Not aging of over one year
20.Payable Employee wage
（1）Payable Employee wage
Items Balance in Increase in this Payable in this Balance in
162
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
year-begin period period year-end
I. Short-term employee benefits 29,503,260.65 145,744,260.31 142,741,253.88 32,506,267.08
II. Post-employment benefits 4,635,302.08 4,635,302.08
III. Termination benefit 28,356.00 28,356.00
Total 29,503,260.65 150,407,918.39 147,404,911.96 32,506,267.08
（2）Short-term remuneration
Balance in Increase in this Payable in this Balance in
Items
year-begin period period year-end
1.Wages, bonuses, allowances and
27,846,341.48 129,310,803.60 126,362,891.87 30,794,253.21
subsidies
2.Employee welfare 7,512,572.84 7,512,572.84
3. Social insurance premiums 1,249,692.71 1,249,692.71
Including：Medical insurance 1,099,519.75 1,099,519.75
Work injury insurance 56,752.81 56,752.81
Maternity insurance 93,420.15 93,420.15
4. Public reserves for housing 5,117,114.44 5,117,114.44
5.Union funds and staff education fee 1,656,919.17 2,554,076.72 2,498,982.02 1,712,013.87
Total 29,503,260.65 145,744,260.31 142,741,253.88 32,506,267.08
（3）Defined contribution plans listed
Balance in Increase in this Payable in this Balance in
Items
year-begin period period year-end
1. Basic old-age insurance premiums 2,937,894.85 2,937,894.85
2.Unemployment insurance 69,674.43 69,674.43
3. Annuity payment 1,627,732.80 1,627,732.80
Total 4,635,302.08 4,635,302.08
21.Tax Payable
Items Balance in year-end Balance in year-begin
163
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
VAT 793,392.58 548,014.78
City Construction tax 54,516.12 34,389.37
Enterprise Income tax 6,198,704.39 3,912,084.91
Individual Income tax 160,823.58 704,212.04
House property Tax 204,941.07 1,541,424.38
Education surcharge 37,825.82 22,055.75
Other 294,925.43 173,081.34
Total 7,745,128.99 6,935,262.57
22.Other payable
（1）Disclosure by nature
Items Balance in year-end Balance in year-begin
Other payable 189,971,235.59 155,026,799.54
Including：Engineering Equipment fund 62,574,657.07 34,977,749.54
Unit account 53,935,705.78 48,697,613.74
Deposit 25,481,743.17 25,090,664.49
Restrictive stock repurchase obligation 27,802,523.26 27,230,679.00
Other 20,176,606.31 19,030,092.77
Interest payable 39,044,044.39 45,799,544.04
Dividend payable
Total 229,015,279.98 200,826,343.58
(2).list of Interest payable
Items Balance in year-end Balance in year-begin
Pay the interest for long-term loans by 37,220,662.08
45,570,662.08
installments.
Pay the interest for short-term loans by 1,823,382.31
228,881.96
installments.
164
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Items Balance in year-end Balance in year-begin
Total 39,044,044.39 45,799,544.04
23.Non-current liabilities due within 1 year
Items Balance in year-end Balance in year-begin
Long-term borrowings due within 1
40,000,000.00 40,000,000.00
year
Total 40,000,000.00 40,000,000.00
The long-term borrowings at the end of period are the borrowings extended to the Company by
Pingan Bank.Shenzhen Jiangsu Building Branch. Entrusted by Shenzhen Shenchao Technology
Investment Co.,Ltd.
24.Long-term borrowings
（1）Long-term term borrowings
Items Balance in year-end Balance in year-begin
Credit borrowings 40,000,000.00 80,000,000.00
Less：Long-term borrowings due within
40,000,000.00 40,000,000.00
1 year
Total 40,000,000.00
The long-term borrowings at the end of period are the borrowings enxtended to the Company by
Pingan Bank.Shenzhen Jiangsu Building Branch. Entrusted by Shenzhen Shenchao Technology
Investment Co.,Ltd.
25.Deferred income
Balance in Increase at this Decrease at this
Items Balance in year-end
year-begin period period
Govemment Subsidy 134,767,064.72 12,131,780.00 8,907,146.39 137,991,698.33
Total 134,767,064.72 12,131,780.00 8,907,146.39 137,991,698.33
Details of Govemment subsidy：
165
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Profit
Othe Inco
New and loss
r me
grants amount
Balance in trans Balance in relat
Items amount of recorded
year-begin fer year-end ed to
this in the
amo asset
period current
unt s
period
Relat
714,285.7 142,857. 571,428.5 ed to
Textile special funds
3 16 7 asset
s
Relat
High-tech Industrialization demonstration 400,000.0 200,000. 200,000.0 ed to
projects 0 00 0 asset
s
Relat
National grant fundsfor new flat panel display 2,000,000. 1,000,00 1,000,000. ed to
industry 00 0.00 00 asset
s
Relat
Grant funds for TFT-LCD polarizer industry 5,633,333. 1,300,00 4,333,333. ed to
project 34 0.00 34 asset
s
Relat
Grant funds for TFT-LCD polarizer narrow 2,500,000. 500,000. 2,000,000. ed to
line (line 5) project 00 00 00 asset
s
Relat
Purchase of imported equipment and 852,106.9 175,090. 677,016.7 ed to
technology 8 20 8 asset
s
Relat
Innovation and venture capital for TFT-LCD 250,000.0 50,000.0 200,000.0 ed to
polarier I project 0 0 0 asset
s
Relat
Shenzhen polarizing materials and Technology
362,500.0 50,000.0 312,500.0 ed to
Engineering Laboratory innovation venture
0 0 0 asset
capital
s
Relat
Shenzzhen Engineering laboratory polarizing 3,625,000. 500,000. 3,125,000. ed to
material and technical engineeting 00 00 00 asset
s
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Relat
2,175,000. 300,000. 1,875,000. ed to
Capital funding for Technology Center
00 00 00 asset
s
Relat
Subsidy funds to support the introduction of a 14,388.1 ed to
71,940.51 57,552.41
dvanced technology 0 asset
s
Relat
Local supporting funds for TFT-LCD polarizer 15,000,00 750,000. 14,250,00 ed to
Phase II Project (line 6) 0.00 00 0.00 asset
s
Relat
State subsidy for TFT-LCD polarizer Phase II 10,000,00 500,000. 9,500,000. ed to
Project (line 6) 0.00 00 00 asset
s
Relat
Innovation and venture capital for TFT-LCD 500,000.0 25,000.0 475,000.0 ed to
polarizer Phase II Project (line 6) 0 0 0 asset
s
Relat
key technology research and development
4,625,000. 500,000. 4,125,000. ed to
projects of optical compensation film for
00 00 00 asset
polarizer
s
Relat
Strategic industries Development fund of 25,000,00 1,250,00 23,750,00 ed to
Guangdong Province 0.00 0.00 0.00 asset
s
Relat
Grants of Purchase equipment of TFT-LCD 30,000,00 1,500,00 28,500,00 ed to
polarizing film phase II project 0.00 0.00 0.00 asset
s
Relat
116,101.4 29,642.9 ed to
Energy saving transformation grant funds 86,458.56
9 3 asset
s
Relat
941,796.6 325,380.0 120,168. 1,147,008. ed to
Old elevator renovation fund subsidies
7 0 00 67 asset
s
Relat
Polarization Industrialization Project for Super
30,000,00 30,000,00 ed to
Large-sized TVs (Line 7) Central Budget
0.00 0.00 asset
Investment
s
167
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Relat
Research & development subsidy for key
2,000,000 2,000,000. ed to
technologies of ultra-thin IPS polarizer for
.00 00 asset
smart phone terminals
s
Finance committee of Shenzhen municipality Relat
(R&D of key technology of high-performance 5,000,000 5,000,000. ed to
polarizer for large size display panel of .00 00 asset
2018N007) s
The ministry of industry and information Relat
technology, the ministry of finance, the circ 4,806,400 4,806,400. ed to
first batch of new material application .00 00 inco
insurance compensation me
134,767,0 12,131,78 8,907,14 137,991,6
Total
64.72 0.00 6.39 98.33
(1)According to the document of Shenzhen Municipal Development and Reform Commission
【2009】 No. 416 that "The Notice On issued the Governmental Investment Plan in 2009 on Zhong
Ke New Industrial Internet Security Audit System and Other High-tech Industrialization
Demonstration Project and the Public Testing and Consultation Service of Information Security
Industry and other National High-tech Industrial Base Platform Projects”, on May 2009, the company
received the Shenzhen Municipal Development and Reform Commission high-tech industrialization
demonstration project supporting Capital RMB 2 million allocated by Shenzhen City Bureau of
Finance for the construction of “The Project of the Construction Line of Polaripiece for
TFT-LCD”.Our company will use 10 years as asset depreciation period for amortization in current
period. The non-operating income in current period is RMB 200,000.00 and the balance amount of
unfinished final amortization is RMB 200,000.00.
(2) According to the document of the Office of the State Development and Reform Commission
on "The Office of the State Development and Reform Commission on the Reply of New Flat-Panel
Display Industrialization Special Project” (Development and Reform Office High-Tech【2008】No.
2104), the company obtained the state subsidies RMB 10,000,000.00 from the State Development and
Reform Commission New Flat-Panel Display Industrialization Special Project for the construction of
“The Project of Polaripiece Industrialization for TFT-LCD”. On June 2009, December 2009 and April
2010, the company received the special subsidies of State Development and Reform Commission
RMB 10,000,000.00. Our company will use 10 years as asset depreciation period for amortization.
The non-operating income in current period is RMB100,000.00, the balance amount of unfinished
final amortization is RMB1,000,000.00.
(3) In accordance with the Notice of Forwarding the Reply of General Office of State Development
and Reform Commission Regarding Special Plan for Strategic Transformation and Industrialization
of Color TV Industry issued by Shenzhen Development and Reform Commission (Shen Fa Gai (2011)
No. 823), State Development and Reform Commission approved including the project of
industrialization of polarizer sheet for TFT-LCD of SAPO Photoelectric Company into the special
plan for strategic transformation and industrialization of color TV industry in 2010 and appropriated
national aid of RMB 10,000,000.00 to SAPO Photoelectric Company for the research and
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
development in the process of the project of industrialization and the purchase of required software
and hardware equipment. On June 2012 and September 2013, the company received the national
grants of RMB 10,000,000.00.. According to the Notice of Issuing the Governmental Investment Plan
for 2011 Regarding Demonstration Project of High-tech Industrialization Including Specialized
Services Such As Disaster Recovery of Financial Information System issued by Shenzhen
Development and Reform Commission (Shen Fa Gai (2012) No. 3), the Company received subsidy of
RMB 3,000,000.00 for the project of industrialization of polarizer sheet for TFT-LCD in April 2012.
Our company will use 10 years as asset depreciation period for amortization in current period. The
non-operating income in current period is RMB1,300,000.00. and the balance amount of unfinished
final amortization is RMB4,333,333.34.
(4) According to the Notice about the Plan for Supporting the Second Group of Enterprises in
Biological, Internet, New Energy and New Material Industries with Special Development Funds
(Shen Fa Gai (2011) No. 1782), the Company received subsidy of RMB 5,000,000.00 for the
narrow-width line (line 5) of phase-I project of polarizer sheet for TFT-LCD on February 2012. The
Company planned to amortize the subsidy over 10 years according to the depreciation period of
relevant assets. The non-operating income in current period is RMB5,000,000.00 and the balance
amount of unfinished final amortization is RMB2,000,000.00.
(5) On October 2013, The company received the grants for the purchase of imported equipment
and technology in 2012 of RMB 1,750,902.00, the Company planned to amortize the subsidy over 10
years according to the depreciation period of relevant assets. The non-operating income in current
period is RMB50,000.00 and the balance amount of unfinished final amortization is RMB677,016.78.
(6) On December 2013，The company received the funds for innovation and entrepreneurship of
of TFT-LCD polarizing project from Pingshan New District Development and Finance Bureau of
RMB 500,000.00(matching funding category),the Company planned to amortize the subsidy over 10
years according to the depreciation period of relevant assets. The non-operating income in current
period is RMB50,000.00 and the balance amount of unfinished final amortization is RMB200,000.00.
(7)On December 2013，The company received the funds for innovation and entrepreneurship of
of TFT-LCD polarizing project from Pingshan New District Development and Finance Bureau of
RMB 500,000.00(matching funding category),the Company planned to amortize the subsidy over 10
years according to the depreciation period of relevant assets. The non-operating income in current
period is RMB50,000.00 and the balance amount of unfinished final amortization is RMB312,500.00.
(8) According to the Approval of Application of SAPO Photoelectric Co., Ltd. for Project Funds for
Shenzhen Polarization Material and Technology Engineering Laboratory (Shen Fa Gai (2012) No.
1385), Shenzhen Polarization Material and Technology Engineering Laboratory was approved to be
established on the strength of SAPO Photoelectric with total project investment of RMB
24,390,000.00. As approved by Shenzhen Municipal People's Government, this project was included
in the plan for supporting the fourth group of enterprises with special fund for the development of
strategic new industries in Shenzhen in 2012 (new material industry). According to the Notice of
Issuing the Plan for Supporting the Fourth Group of Enterprises with Special Fund for Development of
Strategic New Industries in Shenzhen in 2012 (Shen Fa Gai (2012) No. 1241), the Company received
subsidy of RMB 5,000,000.00 on December 2012 for purchasing instruments and equipment and
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
improving existing technological equipment and test conditions. The fund gap will be filled by the
Company through raising funds by itself. the Company planned to amortize the subsidy over 10 years
according to the depreciation period of relevant assets. The non-operating income in current period is
RMB500,000.00 and the balance amount of unfinished final amortization is RMB3,125,000.00.
(9)According to the “Announcement on the Identification of Technology Centers of 24
Enterprises including Shenzhen Yuanwanggu Information Technology Joint Stock Company Limited
as the Municipal Research and Development Centers (Technical Center)” (SJMXXJS [2013] No.137),
the research and development center of SAPO Photoelectric Co., Ltd. has been regarded as 2012
annual municipal R&D center. In December 2013, the company has received the funding subsidy of
RMB3 million for the construction of the technical center. the Company planned to amortize the
subsidy over 10 years according to the depreciation period of relevant assets. The other income in
current period is RMB300,000.00 and the balance amount of unfinished final amortization is
RMB1,875,000.00.
(10)OnMarch 2014 the company received the introduction of advanced technology import subsi
dy funds of RMB 143,881.00 from Shenzhen Finance Committee, the Company planned to amortize
the subsidy over 10 years according to the depreciation period of relevant assets. The other income in
current period is RMB14,388.09 and the balance amount of unfinished final amortization is
RMB57,552.41.
(11)According to the "Shenzhen Municipal Development and Reform Commission Reply for SAPO
Photoelectric Co., Ltd. application for local matching funds of TFT-LCD polarizing film II project
(Line 6) " (Shenzhen DRC [2013]No. 1771), the company obtained TFT-LCD polarizing film II
project (line 6) local matching funds of RMB 15,000,000.00 in April 2014. TFT-LCD polarizer Phase
II project (Line 6) hit the expected available state and transferred to fixed assets in June 2018.
Amortized by a period of 10 years in depreciation of relevant assets, RMB 750,000.00 was included
into other incomes in the current period and the ending outstanding balance was RMB 14,250,000.00.
(12)According to "National Development and Reform Commission issued on industrial
transformation and upgrading projects (2nd industrial restructuring) notify the central budget for 2014
investment plan" (NDRC Investment [2014] No. 1280), the company obtained TFT- LCD polarizer II
project (line 6) state grants of RMB 10,000,000.00 in December 2014. TFT-LCD polarizer Phase II
project (Line 6) hit the expected available state and transferred to fixed assets in June 2018.
Amortized by a period of 10 years in depreciation of relevant assets, RMB 500,000.00 was included
into other incomes in the current period and the ending outstanding balance was RMB 9,500,000.00.
(13) In December 2014, the company received innovation venture capital (matching funding
category) for Ping Shan District Development and Finance Bureau of TFT-LCD polarizing film II
project (line 6) of RMB 500,000.00. TFT-LCD polarizer Phase II project (Line 6) hit the expected
available state and transferred to fixed assets in June 2018. Amortized by a period of 10 years in
depreciation of relevant assets, RMB 25,000.00 was included into other incomes in the current period
and the ending outstanding balance was RMB475,000.00.
(14)On Jan. 2015, the company received RMB 5 million of grants for key technology
research and development projects of optical compensation film for polarizer from
Shenzhen Scientific and Technological Innovation Committee. The company has reached the
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
expected date of use of the assets., the Company planned to amortize the subsidy over 10 years
according to the depreciation period of relevant assets. The other income in current period is
RMB500,000.00 and the balance amount of unfinished final amortization is RMB4,125,000.00.
(15)According to “Reply on Congregating Development in Emerging Industrial Area Strategic
Pilot Implement Scheme of Guangdong Province ”(Reform and Development Office High-Tech
[2013] No.2552,On December 2015, the Company received RMB20 million of the pilot project
fund( period II project of TFT-LCD polarizer).On October 2016, the Company received RMB 5
million of Shenzhen strategic emerging industries and the future development of industrial
matching funds, TFT-LCD polarizer Phase II project (Line 6) hit the expected available state and
transferred to fixed assets in June 2018. Amortized by a period of 10 years in depreciation of relevant
assets, RMB 1,250,000.00 was included into other incomes in the current period and the ending
outstanding balance was RMB 23,750,000.00.
(16). According to Reform and Development Commission of Shenzhen Municipality sending
the notice of “Reply of National Reform and Development Office on Investing in Petrifaction and
Medicine Project within Central Budget of 2013 for Industry Structure Adjustment Special
Project”(Reform and Development Commission of Shenzhen Municipality [2013]No.1449) , the
Company received 30 million RMB of new production line of TFT-LCD polarizer project period II
and equipment purchase subsidy in August 2015 ,December 2015 and September 2016. TFT-LCD
polarizer Phase II project (Line 6) hit the expected available state and transferred to fixed assets in
June 2018. Amortized by a period of 10 years in depreciation of relevant assets, RMB 1,500,000.00
was included into other incomes in the current period and the ending outstanding balance was RMB
28,500,000.00.
(17) In 2015 and In 2016, the Company received the subsidy funds of 202,608.00 RMB and
34,535.45 RMB on energy-saving reconstruction, amortized by 8-year depreciation life of the
relevant asset, the Other income was RMB 29,642.93 at the current period, the ending balance
without amortization was RMB 86,458.56.
(18). In 2017, the company received 1,218,640.00 yuan for the old elevator upgrade subsidy, the
company received 160,800.00 yuan for the old elevator upgrade subsidy in 2018,which was
apportioned according to the depreciation period of the relevant assets. The current period was
included in other income of 115,760.00 yuan, and the unassessed balance at the end of the period was
986,836.67 yuan. Subsidiaries that run property management business were subsidized by RMB
164,580.00 for updating and transforming old and obsolete elevators this year and this subsidy was
income-related; RMB 4,408.00 was included into the non-operating income in the current period and
the ending outstanding balance was RMB 160,172.00.
(19) According to the Notice of the Ministry of Industry and Information Technology of the
National Development and Reform Commission for Releasing the Central Budgetary Investment Plan
of the 2017 of the Technical Transformation of the Electronic Information Industry (NDRC
Investment {2017} No. 1649), the company received oversize TV for use in November 2017. In
November 2017, the company received an central budgetary investment of RMB 30,000,000.00 of
the oversized TV polarizer industry project. The company shall transfer the deferred income to the
current profit or loss for the period of depreciation from the date when the relevant assets are ready
for their intended use.
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
(20) In accordance with the development plans and policies of Shenzhen Municipality for Strategic
emerging Industries, the Management Measures of Shenzhen City on Funds for Scientific and
Technological Research and Development, the Management Measures of Shenzhen City on Science
and Technology Plan Project and other relevant documents, Shenzhen Science and Technology
Innovation Commission and SAPO Photoelectric completed the development of the key technology
of the 20170535 ultra-thin polarizer used in IPS smart phone terminal in the Shenzhen Science and
Technology Plan issued by SFG [2017] No. 1447 document. In February 2018, the company received
funding from Shenzhen Science and Technology Innovation Commission of 2,000,000 yuan for R &
D. The company will transfer the deferred income to the current profit and loss according to the
depreciation period from the date when the relevant assets reach the expected usable status.
(21). According to Measures for Management of Science and Technology Research &
Development Funds in Shenzhen, Measures for Management of Projects in Shenzhen Municipal
Science and Technology Program and other documents concerned, SAPO Photoelectric Co., Ltd. and
Shenzhen Science and Technology Innovation Committee entered into a Contract of Projects in
Shenzhen Munic ipal Science and Technology Program through consultation to complete development
of key techniques for high-performance polarizers for 2018N007 jumbo display panels in the
program delivered in Shen Fa Gai [2018] No.324 document. The Company was granted with a
financial subsidy of RMB 5,000,000.00 this year. The Company amortized and transferred the
deferred income into the current profit and loss by period of depreciation after relevant assets hit the
expected available state.
(22). Compliance with the document spirit of the Notice of Ministry of Industry and Information
Technology, Ministry of Finance and China Insurance Regulatory Commission on Piloting an
Insurance Compensation Mechanism for the First Batch of Key New Materials (Gong Xin Bu Lian
Yuan [2017] No.222 document). In December 2018, the Company received a relevant premium
subsidy of RMB 4,806,400.00 from the Ministry of Industry and Information Technology but no
relevant premium disbursement was incurred for the moment, hence no amortization was made in the
current period.
26.Stock capital
Changed（+，-）
Year-beginning Capitali Year-end
balance Issuance of Bonus zation balance
Other Subtotal
new share shares of
public
reserve
Total
511,274,149.00 511,274,149.00
shares
27.Capital reserve
Items Year-beginning Increase in the Decrease in the Year-end balance
balance current period current period
172
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Share premium 1,848,960,987.54 1,848,960,987.54
Other 17,040,487.63 284,491.54 16,755,996.09
Total 1,866,001,475.17 284,491.54 1,865,716,983.63
28. Treasury stock
Items Year-beginning Increase in the Decrease in the Year-end balance
balance current period current period
Treasury stock 27,230,679.00 27,230,679.00
Total 27,230,679.00 27,230,679.00
173
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
29.Other Comprehensive income
Amount of current period
Year-beginnin Less： Year-end
Items After - tax attr
Amount for the pe Previously recognized After - tax attrib
g balance Less：Income ibutable to mi balance
riod before incom in profit or loss in oth utable to the par
tax nority shareho
e tax er comprehensive inc ent company
lders
ome
1.Other comprehensive income will be reclassified into
income or loss in the future
Including: Re-measurement Setting Benefit Account Change
Amount
Other Comprehensive Income Which Can't Transfer Loss and
Loss under Equity Law
2. Other comprehensive gains that will be reclassified into 1,500,778.50 -879,495.46
2,218,703.87 621,283.04 1,339,208.41
gains and losses
Including ：Other Comprehensive Benefits of Convertible
Profits and Losses under Equity Law
Gains and losses from changes in fair value of financial 1,500,778.50 -1,500,778.50
1,500,778.50
assets available for sale
Held-to-maturity investment that is reclassified as financial
assets available for sale
174
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Amount of current period
Less： Year-end
Year-beginnin After - tax attr
Items Amount for the pe Previously recognized After - tax attrib
g balance Less：Income ibutable to mi balance
riod before incom in profit or loss in oth utable to the par
tax nority shareho
e tax er comprehensive inc ent company
lders
ome
Effective gains(losses) arising from cash flow hedging
instruments
Translation differences of financial statements 621,283.04
717,925.37 621,283.04 1,339,208.41
denominated
Total of other comprehensive income 2,218,703.87 621,283.04 1,500,778.50 -879,495.46 1,339,208.41
175
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
30.Surplus reserve
Items Year-beginning Increase in the Decrease in the Year-end balance
balance current period current period
Statutory surplus reserve 77,477,042.19 2,527,761.04 80,004,803.23
Total 77,477,042.19 2,527,761.04 80,004,803.23
The increase in the surplus reserves for the current period is caused by the legal surplus reserves
withdrawn as per 10% of the net profits of the parent company.
31.Retained profits
Items Amount of this period Amount of last period
Before adjustments: Retained profits at -32,266,087.44 -81,275,828.76
the period end
Adjustment: Total unappropriated profits
at the beginning of the year
After adjustments: Retained profits at the -32,266,087.44 -81,275,828.76
period beginning
Add: Net profit attributable to owners of -22,980,624.93 52,776,101.46
the Company for the period
Less: Appropriation to statutory surplus 2,527,761.04 3,766,360.14
reserve
Appropriation to discretionary surplus
reserve
Appropriation to Common risk provision
Common stock dividend payable
Common stock dividends
Converted to shares
Retained profits at the period end -57,774,473.41 -32,266,087.44
32.Business income, Business cost
（1）Business income, Business cost
Items Amount of current period Amount of previous period
Income from Main Business 1,266,481,655.09 1,453,285,358.21
Other Business income 5,875,116.25 22,260,361.51
Total 1,272,356,771.34 1,475,545,719.72
Main business cost 1,136,768,017.37 1,294,313,208.94
176
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Other business cost 5,482,267.30 5,290,510.43
Total 1,142,250,284.67 1,299,603,719.37
（2）Main business（Industry）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Domestic and foreign 278,139,524.35 271,514,631.70 490,391,227.85 481,342,760.55
trade
879,409,830.28 839,415,041.00 869,112,546.94 786,401,813.99
Manufacturing
Property management, 98,327,018.46 25,838,344.67 93,781,583.42 26,568,634.40
leasing
Glycol bulk trade 10,605,282.00
Total 1,266,481,655.09 1,136,768,017.37 1,453,285,358.21 1,294,313,208.94
（3）Main business（Production）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Property and rental 98,327,018.46 25,838,344.67 93,781,583.42 26,568,634.40
income
Textile income 47,188,632.17 41,092,884.63 41,273,987.57 37,280,504.80
Polaroid income 832,221,198.11 798,322,156.37 851,531,250.79 771,786,016.96
Trade income 278,139,524.35 271,514,631.70 466,698,536.43 458,678,052.78
Glycol bulk trade 10,605,282.00
Total 1,266,481,655.09 1,136,768,017.37 1,453,285,358.21 1,294,313,208.94
（4）Main Business（Area）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
939,119,434.34 819,468,645.28 1,081,489,243.21 937,367,743.11
Domestic
327,362,220.75 317,299,372.09 371,796,115.00 356,945,465.83
Oversea
Total 1,266,481,655.09 1,136,768,017.37 1,453,285,358.21 1,294,313,208.94
177
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
（5）Operating income from top five clients
Name Income Proportion
First 378,093,076.16 29.72
Second 151,566,770.47 11.91
Third 107,607,236.64 8.46
Fourth 87,524,774.55 6.88
Fifth 64,272,845.87 5.05
Total 789,064,703.69 62.02
33.Business tax and subjoin
Items Amount of current period Amount of previous period
Business tax 2,582,286.91
Urban construction tax 645,044.28 2,614,191.92
Education surcharge 462,140.55 1,867,281.00
House taxes 5,803,460.97 5,654,961.18
Other 1,131,491.82 1,244,275.86
Total 8,042,137.62 13,962,996.87
34.Sales expenses
Items Amount of current period Amount of previous period
Wage 3,301,333.20 3,964,710.67
Transportation changes 4,246,929.38 3,658,484.53
Exhibition fee 124,705.56 128,319.69
Business expenses 442,238.21 1,028,166.65
Samples and product loss 659,642.03 546,124.92
Other 861,710.67 614,890.41
Total 9,636,559.05 9,940,696.87
178
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
35.Administrative expenses
Items Amount of current period Amount of previous period
Wage 52,311,665.52 47,129,961.42
Including ：Equity incentive fee -356,400.00 356,400.00
Depreciation of fixed assets 11,005,866.31 7,515,631.05
Water and electricity 3,749,739.12 3,207,271.84
Agency expenses 3,857,237.09 2,463,731.11
Intangible assets amortization 1,334,685.09 1,276,180.92
Travel expenses 1,606,997.78 1,200,930.15
Office expenses 926,011.06 1,056,086.57
Business entertainment 1,067,901.96 987,917.92
Lawsuit expenses 158,490.57 797,131.31
Repair charge 2,883,879.67 670,928.38
Property insurance 424,962.59 448,304.56
Low consumables amortization 26,694.80 205,480.20
Board fees 65,020.00 57,031.35
Other 9,171,287.74 8,303,925.82
Tax 88,590,439.30 75,320,512.60
36.R & D costs
Items Amount of current period Amount of previous period
Wage 13,172,333.89 11,950,320.43
Material 24,537,372.56 22,841,196.37
Depreciation 2,480,311.39 2,408,460.62
Fuel & Power 835,650.39 945,775.30
Travel expenses 460,801.83 309,226.37
Other 465,316.09 581,109.96
Total 41,951,786.15 39,036,089.05
179
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
37.Financial Expenses
Items Amount of current period Amount of previous period
Interest expenses 14,179,121.73 4,130,427.79
Interest income -27,438,299.41 -34,831,809.25
Exchange loss 10,070,501.67 -2,979,397.55
Fees and other 2,217,014.64 2,509,618.20
Total -971,661.37 -31,171,160.81
38.Loss of assets impairment
Items Amount of current period Amount of previous period
I .Losses for bad debts -2,541,674.78
17,594,190.59
II. Losses for falling price of inventory
43,726,742.67
86,870,737.13
III. Impairment losses on financial assets
873,360.18 7,622,659.50
available for sale
IV. Fixed assets impairment losses 1,010,032.85
106,348,320.75
Total 48,807,727.39
39.Other income
Items Amount of current period Amount of previous period
Govemment Subsidy 17,228,202.21 12,567,426.98
Total 17,228,202.21 12,567,426.98
Governmentsubsidy projects：
Assets-related/
Amount of this Amount of last
Items income
period period
-related
Subsidy amortization of the project of TFT-LCD Related to
1,300,000.00 1,300,000.00
polarizer industrialization assets
Related to
National grant funds for new flat panel display industry 1,000,000.00 1,000,000.00
assets
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Grant funds for TFT-LCD polarizer narrow line (line 5) Related to
500,000.00 500,000.00
project assets
Related to
Shenzhen polarizing material and technical engineering 500,000.00 500,000.00
assets
Amortization of funds for the Development of key Related to
500,000.00 375,000.00
Technology of Optical compensation Film for Polarizer assets
Subsidy funds to support the introduction of advanced Related to
300,000.00 300,000.00
technology assets
Related to
Old Elevator Renovation Fund Subsidy 120,168.00 276,843.33
assets
Related to
National grant funds for new flat panel display industry 200,000.00 200,000.00
assets
Related to
Imported equipment and technology discount funds 175,090.20 175,090.20
assets
Related to
Textile special funds 142,857.16 142,857.15
assets
Innovation entrepreneurship fund amortization of
TFT-LCD polarizer period I project for Pingshan New 50,000.00 50,000.00 Related to
District Development and Finance Bureau assets
Shenzhen Engineering laboratory polarizing material and Related to
50,000.00 50,000.00
technical engineering assets
Related to
Energy saving transformation grant funds amortization 29,642.93 29,642.93
assets
Financing aid amortization of introducing advanced Related to
14,388.10 14,388.09
technique assets
2016 Finance Committee subsidies for productive Related to
4,027,500.00
utilities income
Related to
2016 Enterprise R & D funding 2,892,000.00
income
Shenzhen Science & Technology Innovation Committee
500,000.00 Related to
allocated 2016 annual science and technology award income
Related to
Stable employment subsidies 237,911.40 189,605.28
income
Related to
Patent funding 6,000.00 27,000.00
income
Related to
Subsidy of the exhibition 17,500.00
income
Amortization of supporting funds for TFT-LCD polarizer Related to
750,000.00
phase II project (line 6) assets
Amortization of production plant and equipment subsidy Related to
2,000,000.00
for line 6 assets
Pingshan new Area development and finance bureau Related to
25,000.00
special support fund amortization assets
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Shenzhen finance committee second batch of enterprise Related to
2,430,000.00
research and development subsidy funds income
Regional agglomeration of strategic emerging industries
development pilot project line 6 subsidy fund 1,250,000.00 Related to
amortization assets
Cost reduction subsidy for industrial and commercial Related to
4,613,272.07
electricity in Shenzhen in 2018 income
Related to
Shenzhen standard special fund 965,000.00
income
Pingshan science and technology innovation service Related to
30,000.00
department national high enterprise award income
Related to
Other 38,872.35
income
Total 17,228,202.21 12,567,426.98
40. Investment income
(1)．Detail
Items Amount of this period Amount of last period
Investment income from the disposal of long-term equity
1,260,154.95 1,101,479.62
investment
Hold the investment income during from available-for-sale
4,264,611.76 2,568,609.75
financial assets
Trust income 52,271,862.25 49,885,730.58
Profits and Losses from the Conversion of Equity Rights into
Long-term Equity Rights Investment in Anhui Huapeng Textile -6,002,923.49
Co., Ltd.
Total 51,793,705.47 53,555,819.95
(2).Long-term equity investment income by Equity method
Items Amount of this period Amount of last period
Shenzhen Haohao Property Leasing Co., Ltd. 671,689.37 262,962.99
Shenzhen Changlianfa Printing and dyeing
126,902.18 138,796.89
Company
Jordan Garment Factory 16,820.96 -196,831.05
Yehui International Co., Ltd. 444,742.44 896,550.79
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Items Amount of this period Amount of last period
Total 1,260,154.95 1,101,479.62
41. Non-Operation income
Items Amount of current Amount of previous Recorded in the amount of the
period period non-recurring gains and losses
Scrapping loss of non-current
1,510.00
assets
Other 1,265,178.66 786,057.93 1,265,178.66
Total 1,265,178.66 787,567.93 1,265,178.66
42．Non-current expenses
Amount of current period Amount of previous The amount of non-operating
Items
period gains & lossed
Scrapping loss of
97,477.14 53,641.44 97,477.14
non-current assets
Other 121,626.64 1,961,815.52 121,626.64
Total 219,103.78 2,015,456.96 219,103.78
43.Income tax expenses
(1)Income tax expenses
Items Amount of current period Amount of previous period
Current income tax expense 12,440,996.95 11,572,753.97
Deferred income tax expense -3,561,401.84 -293,935.56
Total 8,879,595.11 11,278,818.41
(2)Reconciliation of account profit and income tax expenses：
Items Amount of current period
Total profits -53,423,112.27
Income tax computed in accordance with the applicable tax rate -13,355,778.06
Effect of different tax rate applicable to the subsidiary Company 10,179,623.11
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Influence of income tax before adjustment 313,006.35
Influence of non taxable income -843,455.83
Impact of non-deductible costs, expenses and losses 493,048.41
Affect the use of deferred tax assets early unconfirmed deductible losses -1,268,754.51
The current period does not affect the deferred tax assets recognized deductible
19,884,594.08
temporary differences or deductible loss
Impact of additional deductions for R & D expense -4,719,575.94
Other -1,803,112.50
Income tax expense 8,879,595.11
44 .Other comprehensive income
(1)．Other comprehensive income items and income tax effects and transferred to profit and loss
Items Amount of current period Amount of previous period
I. Other Comprehensive Income Which Can't Reclassify
Income and Loss
I. Other Comprehensive Income Which Can't Transfer
Loss and Loss under Equity Law
II. Other comprehensive gains that will be reclassified -879,495.46 -1,173,518.20
into gains and losses
1. Other Comprehensive Benefits of Convertible Profits
and Losses under Equity Law
Less：Previously recognized in other comprehensive
income, Profit or loss in current period
Subtotal
2. The income gains (losses) amount of available for -384,435.87
sale financial assets
Less： Recognized in other comprehensive income that -96,108.98
tax effect amount
Less：Previously recognized in other comprehensive 1,500,778.50
income, Profit or loss in current period
Subtotal -1,500,778.50 -288,326.89
3.Translation differences of financial statements
621,283.04 -885,191.31
denominated in foreign currencies
Less：Previously recognized in other comprehensive
income, Profit or loss in current period
Subtotal 621,283.04 -885,191.31
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III.Total of other comprehensive income -879,495.46 -1,173,518.20
(2).Adjustment process of accounting profit and income tax expense
Gains and losses from Foreign currency
changes in fair value translation
Items Subtotal
of available for sale differences of
financial assets financial statements
I. Beginning balance last year 1,789,105.39 1,603,116.68 3,392,222.07
II.Changes in the amount last year -288,326.89 -885,191.31 -1,173,518.20
III.Beginning balance this year 1,500,778.50 717,925.37 2,218,703.87
IV.Changes in the amount this year -1,500,778.50 621,283.04 -879,495.46
V.The year-end balance 1,339,208.41 1,339,208.41
45.Items of Cash flow statement
(1)Other cash received from business operation
Items Amount of current period Amount of previous period
Government Subsidy 20,452,835.82 39,141,742.28
Customs bonds 1,454,781.62 62,147,586.38
Bank deposit interest income and other 28,377,924.90 10,718,233.12
Ethylene glycol bulk trade 249,057,800.00
Total 299,343,342.34 112,007,561.78
(2).Other cash paid related to operating activities
Other cash paid relating to operating activities this period is 382,731,720.07, Mainly for the bulk
trade of glycol 333,224,966.85 yuan and expenses of cash.
(3)Other Cash received related to investment activities
Items Amount of current period Amount of previous period
Principal and income 4,170,920,804.54 3,566,066,407.98
Total 4,170,920,804.54 3,566,066,407.98
(4)Cash paid related to other investment activities
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Items Amount of current period Amount of previous period
Financing investment 3,625,700,000.00 3,093,000,000.00
Total 3,625,700,000.00 3,093,000,000.00
46.Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
Supplement Information Amount of current Amount of
period previous period
I. Adjusting net profit to cash flow from operating activities
Net profit -62,302,707.38 73,661,677.87
Add: Impairment loss provision of assets 56,159,345.95 -4,484,259.21
Depreciation of fixed assets, oil and gas assets and consumable biological
99,629,480.53 80,633,240.11
assets
Amortization of intangible assets 1,334,685.09 1,276,180.92
Amortization of Long-term deferred expenses 285,940.05 310,697.92
Loss on disposal of fixed assets, intangible assets and other long-term
deferred assets
Loss on scrap of fixed assets 97,477.14 52,131.44
Loss on fair value changes
Financial cost -727,282.72 -13,705,106.94
Loss on investment -51,793,705.47 -53,555,819.95
Decrease in deferred income tax assets -3,561,401.84 -293,935.56
Increased of deferred income tax liabilities
Decrease of inventories -200,819,304.94 17,321,781.84
Decease of operating receivables -394,843,085.92 24,700,270.54
Increased of operating Payable 96,402,638.36 -165,297,549.09
Other -356,400.00 10,861,987.80
Net cash flows arising from operating activities -460,494,321.15 -28,518,702.31
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Supplement Information Amount of current Amount of
period previous period
II. Significant investment and financing activities that without cash flows:
Debt-to-capital conversion
Convertible loan due within 1 year
Fixed assets acquired under financial lease
3．Movement of cash and cash equivalents：
Ending balance of cash 1,133,574,235.22 1,161,240,139.33
Less: Beginning balance of cash equivalents 1,161,240,139.33 930,114,436.57
Add：Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase of cash and cash equivalents -27,665,904.11 231,125,702.76
(2)Composition of cash and cash equivalents
Items Year-end balance Year-beginning balance
I. Cash 1,133,574,235.22 1,161,240,139.33
Including：Cash at hand 13,559.60 17,771.09
Demand bank deposit 1,133,556,630.43 1,159,202,998.15
Demand other monetary funds 4,045.19 2,019,370.09
Payments to the central bank for payment
Depositing performs
Loan to performs
II. Cash equivalents
Including：Debt instrument matured within three months
III. Balance of cash and cash equivalents at the period end 1,133,574,235.22 1,161,240,139.33
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47.Foreign currency monetary items
(1)Foreign currency monetary items
Closing foreign currency Closing convert to RMB
Items Exchange rate
balance balance
Monetary funds
Including：USD 1,533,045.44 6.86320 10,521,597.46
HKD 346,842.37 0.87620 303,903.28
JPY 1,585,021.00 0.061887 98,092.19
Account receivable
Including：USD 4,820,772.82 6.86320 33,085,928.04
HKD 278,280.00 0.87620 243,828.94
JPY 2,888,938.00 0.061887 178,787.71
Other receivable
Including：USD 37,399.02 6.86320 256,676.95
Account payable
Including：USD 4,551,505.07 6.86320 31,237,889.60
JPY 1,487,770,193.76 0.061887 92,073,633.98
Other payable
Including：USD 812,419.50 6.86320 5,575,797.51
HKD 3,044.46 0.87620 2,667.56
JPY 132,282,000.00 0.061887 8,186,536.13
Euro 148,745.00 7.84730 1,167,246.64
Short –term loans
Including：USD 15,506,119.43 6.86320 106,421,598.87
JPY 1,060,416,768.20 0.061887 65,626,012.53
Interest payable
Including：USD 157,578.09 6.86320 1,081,489.94
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JPY 5,429,015.62 0.061887 335,985.49
VI. Change in consolidation scope
No change of scope of consolidation from last year.
VII. Equity in other entity
1. Equity in subsidiary
（1）Constitute of enterprise group
Share-holding
ratio
Main Registered Acquir
Subsidiary Business nature
operation place Directl Indirec ed way
y tly
Establi
Shenzhen Lishi Industry Domestic trade,
Shenzhen Shenzhen 100.00
Development Co., Ltd Property Management sh
Accommodation, Establi
Shenzhen Huaqiang Hotel Shenzhen Shenzhen restaurants, business 100.00
sh
center;
Establi
Shenfang Property Management
Shenzhen Shenzhen Property Management 100.00
Co., Ltd. sh
Production of fully Establi
Shenzhen Beauty Century Garment
Shenzhen Shenzhen electronic jacquard 100.00
Co., Ltd. sh
knitting whole shape
Purcha
SAPO Photoelectric Co., Ltd Shenzhen Shenzhen Operating import and 60.00
export business se
Establi
Shenzhen Shenfang Import & Operating import and
Shenzhen Shenzhen 100.00
export Co., Ltd. export business sh
Establi
Shengtou (Hongkong) Co.,Ltd. Production and sales
Hongkong Hongkong 100.00
of polarizer sh
(3).Equity in joint venture arrangement or associated enterprise
1．Joint venture or associated enterprise
Holding
Place of proportion(%) The accounting
Place of
Joint venture or associated enterprise registratio Nature treatment of
operation Direct Indirect
n investment in
ly ly
189
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Shenzhen Haohao Property Leasing Property
Shenzhen Shenzhen 50.00 Equity method
Co., Ltd. leasing
Shenzhen Changlianfa Printing and Property Equity method
Shenzhen Shenzhen 40.25
dyeing Company leasing
Jordan Garment Factory Manufact
Jordan Jordan 35.00 Equity method
uring
Manufact
Yehui International Co., Ltd. Hongkong Hongkong 22.75 Equity method
uring
Manufact Equity method
Anhui Huapeng Textile Co., Ltd. Anhui Anhui 50.00
uring
2.Key financial information of significant joint venture or associated enterprise
Year-beginning balance/
Year-end balance/ Amount
Amount of previous
of current period
period
Joint venture：
Total book value of the investment 17,425,766.44 5,369,450.56
Total amount of the pro rata calculation of the following
items
--Net profit 671,689.37 262,962.99
--Other Comprehensive income
--Total comprehensive income 671,689.37 262,962.99
Dividends received from joint ventures this period 400,000.00
Associated enterprise：
Total book value of the investment 15,526,319.22 15,011,284.00
Total amount of the pro rata calculation of the following
items
--Net profit 588,465.58 838,516.63
--Other Comprehensive income 621,283.04 -885,191.31
--Total comprehensive income 1,209,748.62 -46,674.68
Dividends received from joint ventures this period 694,713.40 707,814.30
VIII. Risks Related to Financial Instruments
The company has the main financial instruments, such as bank deposits, receivables and payables,
investments, loans and so on. Please refer to the relevant disclosure in Notes for the details. The risks
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
associated with these financial instruments mainly include credit risk, market risk and liquidity risk.
The company’s management shall manage and monitor these risks and ensure above risks to be
controlled within certain scope.
（I）Credit Risk
The credit risk of the company is primarily attributable to bank deposits and receivables. Of which,
the bank deposits are mainly deposited in the medium and large commercial banks with strength, high
credibility. For the receivables, the company has developed the relevant policies to control the credit
risk, and set up the corresponding debt and credit limit after the credit status of debtor is evaluated
based on financial condition of debtor, credit history, external ratings, possibility of guarantee
obtained from the third party. Meanwhile, the company shall regularly monitor the debtor’s credit
history. With regard to the bad credit record for the debtor, the company shall adopt the written
reminder, shortening or cancel of credit period to ensure the overall credit risks within the
controllable scope.
（II）Market risk
Market risk of financial instrument arises from changes in fair value or future cash flow of financial
instruments affected by market price . Market risks includes foreign exchange risk and interest risk.
(1) Interest Rate Risk
The interest rate risk faced by the company is mainly from the bank borrowings. The company is
faced the interest rate risk of the cash flow due to the financial liability of the floating interest rate,
and faced the interest rate risk of the fair value due to the financial liability of the fixed interest rate.
The company shall determine the relative proportion in the fixed and floating interest rate contracts.
(2) Foreign Exchange Risk
The foreign exchange risks faced by the company are mainly from the financial assets and liabilities
based on the price of US dollar and JPY. The company matches the income and expenditure of
foreign currency as far as possible in order to reduce the foreign exchange risk.
（III）Liquidity risk
Liquidity risk refers to fund shortage problems when fulfilling obligations settled in cash or other
financial assets. The company shall guarantee to have the sufficient funds to repay the debts through
monitoring the cash balance, the marketable securities available to be cash and the rolling forecast for
the future cash flow.
IX. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Closing fair value
Items Fir value Fir value Fir value
measurement measurement measurement Total
items at level 1 items at level 2 items at level 3
I. Consistent fair value
measurement
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
(1).Available for sale financial assets 5,119,896.46 5,119,896.46
1.Equity instrument investment 5,119,896.46 5,119,896.46
Total of Consistent fair value
5,119,896.46 5,119,896.46
measurement
2. Market price recognition basis for consistent and inconsistent fair value measurement items at level
The fair value of financial assets available for sale at the end of period is measured based on the
closing price of Shenzhen Stock Exchange on December 29,2017.
X. Related parties and related-party transactions
1.Parent company information of the enterprise
Registered The parent
The parent
capital company of the
Name Registered address Nature company of the
Company's
（RMB10,00 Company’s vote
shareholding
0) ratio
ratio
Equity
Shenzhen 18/F, Investment
investment ,
Investment Building, Shennan
Real-estate 2,534,900.00 45.78 48.94
Holdings Road, Futian
Co.,Ltd. Development
District, Shenzhen
and Guarantee
The company is authorized and approved to be state-owned independent company by Shenzhen
Government, and it Executes financial contributor function on state-owned enterprise within
authorization scope.
The finial control of the Company was Shenzhen People’s Govemment state owned assets
supervision & Administration Commission.
2.Subsidiaries of the Company
Details refer to the Note VII-1, Interest in the subsidiary
3. Information on the joint ventures and associated enterprises of the Company
Details refer to the Note VII-2, Interests in joint ventures or associates
4.Other Related parties information
Other related party Relationship to the Company
Shenzhen Shenchao Technology Investment Co., Ltd. Subject to the same party controls
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Chairman of the Board Is the Vice Chairman of the
Shenzhen Tianma Microelectronics Co., Ltd.
Company
Shengbo （HK）Co., Ltd. The Company Executives are Director of the company
Hangzhou Jinjiang Group Co., Ltd. The controlling party of SAPO Photoelectric
Shareholder
Lan Xi Jinxin Investment Management Co., Ltd. A subsidiary of Hangzhou Jinjiang Group Co., Ltd.
Zhejiang Hengjie Industry Co., Ltd. A subsidiary of Hangzhou Jinjiang Group Co., Ltd.
Kunshan Zhiqimei Material Technology Co., Ltd. Sharing Company of Hangzhou Jinjiang Group Co., Ltd.
Shenzhen Xinfang Knitting Co., Ltd. Sharing Company
Shenzhen Dailishi Underwear Co., Ltd. Sharing Company
Anhui Huapeng Textile Co., Ltd. Sharing Company
5. Related transactions.
1．Sales of goods and vendering of services
Amount of current Amount of previous period
Related party Content
period
Shenzhen Tianma
Sales polarizer sheet 2,463,750.30 4,835,900.92
Microelectronics Co., Ltd.
Kunshan Zhiqimei Material
Sales polarizer sheet 87,524,774.55
Technology Co., Ltd.
2. Providing services to related parties
The amount of the
Contents of related The amount of the
Related party current period (tax
transaction previous period
included)
Kunshan Zhiqimei Material
Support film 48,771,009.61
Technology Co., Ltd.
3. Entrusted loans of related party
In order to carry out TFT-LCD polarizer project construction, the company signed an entrusted
loan contract with Shenzhen Shenchao Technology Investment Co., Ltd. and Shenzhen Jiangsu
Building Branch of Ping An Bank in 2010. The contract stipulates that Shenzhen Shenchao Science
& Technology Investment Co., Ltd. entrusts Shenzhen Jiangsu Building Branch of Ping An Bank to
loan 200,000,000.00 yuan to the Company. The term of the loan was 108 months from the date the
first entrusted loan was issued to the company's account. The entrusted loan interest rate was lowered
by 2% based on the 5-year commercial loan interest rate announced and issued by the People's Bank
of China. In case of adjustments to the 5-year commercial loan interest rate of the People's Bank of
China, from the first day of the next month of the benchmark interest rate adjustment, the entrusted
loan interest rate will be lowered by two percentage points according to the adjusted 5-year
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
commercial loan interest rate. As of December 31, 2018, the balance of the company's borrowings
was 40 million yuan.
4. Guarantee provided by related parties
In February 2018, Jinjiang Group issued a guarantee letter to Shengbo Photoelectric Company, a
subsidiary of the company, and made the following commitments on its proposed trade business
carried out by Shengbo Photoelectric Company. If any problems (including but not limited to capital
or other problems) arise in the course of trade transactions, the full responsibility of Jinjiang Group
shall be borne by Jinjiang Group. In January 2019, Henan Fuxin Investment Co., Ltd. pledged 10% of
its stake in Hualian Development Group Co., Ltd. to Shengbo Photoelectric in accordance with the
company's requirements and coordinated by Jinjiang Group, in order to guarantee the performance of
Shengbo Photoelectric's above-mentioned trade business creditor's rights. In addition, Jinjiang Group
issued a guarantee letter for the financial products "Wanxiang Trust-Yuquan 204 Single Fund Trust"
and "Wanxiang Trust-Yuquan 205 Single Fund Trust" purchased by Shengbo Photoelectric Company.
It promised that if Wanxiang Trust could not return Shengbo Photoelectric Principal and Income in
time, the principal and Income of Wanxiang Trust should be returned 10 days after the expiration date
of the principal and income period. Within one working day, Jinjiang Group will transfer its own
funds to Shengbo Photoelectric designated account for repayment of principal and income. As of
December 31, 2018, the principal and income of the above trust funds have been recovered.
5. Rewards for the key management personnel
Items Amount of current period Amount of previous period
Rewards for the key management
6.056 \ million 482.48 万元
personnel
6. Receivables and payables of related parties
（1）Receivables
Amount at year end Amount at year beginning
Name Related party Balance of Bad debt Bad debt
Balance of Book
Book Provision Provision
Account Shenzhen Tianma
894,474.64 44,723.73 1,555,500.44 77,775.02
receivable Microelectronics Co., Ltd.
Account Kunshan Zhiqimei Material
84,062,627.96 4,203,131.40
receivable Technology Co., Ltd.
Other Account Anhui Huapeng Textile
1,800,000.00 1,800,000.00 1,800,000.00 1,800,000.00
receivable Company
Other Account Shenzhen Dailishi Underwear
416,464.86 20,823.24 440,508.46 22,025.42
receivable Co., Ltd.
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
（2）Payables
Name Related party Amount at year end Amount at year beginning
Kunshan Zhiqimei Material
Account payable 17,405,753.46
Technology Co., Ltd.
Shenzhen Xinfang Knitting Co.,
Other payable 244,789.85 244,789.85
Ltd.
Shenzhen Xiangjiang Trade Co.,
Other payable 40,000.00
Ltd.
Shenzhen Changlianfa Printing
Other payable 1,178,449.95 1,178,449.95
and dyeing Co., Ltd.
Shenzhen Haohao Property
Other payable 4,454,489.85 4,104,489.85
Leasing Co., Ltd.
Other payable Yehui International Co.,Ltd. 1,190,070.22 1,135,399.49
Other payable SAPO （Hongkong）Co., Ltd. 315,000.00 315,000.00
Shenzhen Shenchao Technology
Interest payable 37,220,662.08 45,570,662.08
Investment Co., Ltd.
XI.Share payment
1. Overall situation of share payment
Items Related content
Total amount of various equity instruments granted by
the company during the current period
Total amount of various equity instruments that the
company exercises during the period
Total amount of various equity instruments that have
expired in the current period
The scope of executive price of the company’s
The company issued 4,752,300 restricted stocks at the end
outstanding share options at the end of the period and the
of the period, and the grant price was 5.73 yuan/share.
remaining term of the contract
Restrictions shall be lifted at the rate of 40%, 30%, and
30% respectively after 12 months, 24 months, and 36
The scope of executive price of the company’s other
months after the first transaction date of 24 months after
equity instruments at the end of the period and the
the completion of the registration. The period of validity
remaining term of the contract
of the entire plan shall not exceed 60 months from the
date of granting the restricted stock to the date on which
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Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Items Related content
the restricted stocks granted to the incentive object are all
released from restrictions on sale or cancelled by
repurchase.
On December 14, 2017, the company's 3rd Extraordinary General Meeting of Shareholders in
2017 passed the Proposal on ‘Shenzhen Textile (Group) Co., Ltd. 2017 Restricted Stock Incentive
Plan (Draft) and Abstract’; on December 14, 2017, the board of directors of the company reviewed
and passed the Proposal on Adjusting the List of Incentive Objects of Restricted Stock Incentive
Plans and the Number of Equity Granted of 2017, and the Proposal on Granting Restrictive Shares to
Incentive Objects. On December 14, 2017, the company granted 4,752,300 restricted shares to the
incentive object, the grant price was 5.73 yuan/share. Restrictions shall be lifted at the rate of 40%,
30%, and 30% respectively after 12 months, 24 months, and 36 months after the first transaction date
of 24 months after the completion of the registration. The company's performance assessment for the
restricted shares granted each period is as follows:
Restriction lifting period Performance assessment goals
In 2018, the earnings per share shall be no less than 0.07
yuan, and shall not be lower than the 75 fractiles level of
the comparable listed companies in the same industry;
the growth rate of operating revenue in 2018 compared
The first restriction lifting period with 2016 is not less than 70%, and is not lower than the
75 fractiles level of comparable listed companies in the
same industry; in 2018, the proportion of optical film
business such as polarizers to operating revenue is no
less than 70%.
In 2019, earnings per share shall be no less than 0.08
yuan, and shall not be lower than the 75 fractiles level of
the comparable listed companies in the same industry;
the growth rate of operating revenue in 2019 compared
The second restriction lifting period with 2016 is not less than 130%, and is not lower than
the 75 fractiles level of comparable listed companies in
the same industry; in 2019, the proportion of optical
film business such as polarizers to operating revenue is
not less than 75%.
196
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
In 2020, the earnings per share shall be no less than 0.20
yuan, and shall not be lower than the 75 fractiles level of
comparable listed companies in the same industry; the
growth rate of operating revenue in 2020 is not less than
The third restriction lifting period 200% compared to 2016, and is not lower than the 75
fractiles level of comparable listed companies in the
same industry. In 2020, the proportion of optical film
business such as polarizers to operating revenue will be
no less than 80%.
Note: Earnings per share=net profit/total capital stock attributable to common shareholders of
the Company upon deduction of non-recurring profit and loss.
2. Equity-settled share-based payment
Items Related contents
Determination method of the fair value of equity instruments The closing price of the company's stock on grant date -
on the grant date grant price
On each balance sheet date of the waiting period, it is
determined based on the latest information such as the
Determination basis of the number of vesting equity
change in the number of people that can be released
instruments
from restrictions and the completion of performance
indicators
Equity-settled share-based payment is included in the
accumulated amount of capital reserve
Total amount of fees confirmed by equity-settled share-based
-356,400.00
payments in the current period
Because the earnings per share after deduction of recurring gains and losses in 2018 is -0.13
yuan per share, which is lower than the performance appraisal target of the first lifting limit period
mentioned above. In addition, according to the company's budget for 2019 and rolling business plan
for 2019-2021, the company expects that the second lifting limit period and the third lifting limit
period performance appraisal target will not be achieved in 2019 and 2020. In the current period, the
company charges 356,400.00 yuan for the affirmed share payment, and at the same time charges
571,844.26 yuan for the restricted stock investment according to 2.10% interest on the two-year
deposit of the People's Bank of China.
XII. Subsequent events
Nil
XIII. Post-balance-sheet events
197
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
In the report period, Shenzhen SAPO Photoelectric Co., Ltd. had a an import trading business in
the pre-paid amount of USD 21,201,000, wherein SAPO Photoelectric failed to deliver to the client as
scheduled for the supplier's failure to deliver as scheduled. The client of this trading business agreed
on a delayed delivery on April 30, 2019 in the letter and undertook to continue to perform duties of
contract and exempt any liability for breach of contract caused by delayed delivery in the master
contract. Till the date when the financial statements were approved and issued, the supplier of this
trading business gave deliverables to SAPO and compensated losses of RMB 1,791,000 caused to
SAPO by discount; SAPO handed over the above deliverables to the client of this trading business.
XIV.Other Important matters
According to the cooperation agreement made by and between the Company and Hangzhou
Jinjiang Group Co., Ltd. & Hangzhou Jinhang Equity Investment Fund Partnership (Limited
Partnership), Hangzhou Jinjiang Group Co., Ltd. gave the following 2018 performance commitment
to Shenzhen SAPO Photoelectric Co., Ltd.: in 2018, the sales income and net profit are not lower
than RMB 2 billion and RMB 100 million respectively and in principle, the income from sales of
polarizers and relevant optical film products accounts for at least 80.00% of the total income in 2018.
If the above performance commitment is not fulfilled, Jinjiang Group shall supplement the balance of
net profit by cash in 10 days after statistics are completed on annual sales income and annual net
profit among other data.
SAPO Photoelectric realized RMB 1.125 billion in the operating income and RMB
-97.2687million in the net profit in 2018, whose income from sales of polarizers and relevant optical
film products accounted for 74.01% of the total income. In other words, SAPO Photoelectric failed to
fulfill the performance commitment in 2018.
The Company and Jinjiang Group made an in-depth analysis and honest communication on the
objective situation and primary reasons for the failure to fulfill the performance commitment in 2018,
prepared targets and measures for improvement of main business operation in 2019 and made further
negotiation on matters of the follow-up cooperation; besides, the parties made a preliminary
communication on matters of compensation for performance commitment in 2018. However, so far
the parties have failed to come to terms on any performance compensation plan.
XV. Notes s of main items in financial reports of parent company
(1) Notes receivable & Account receivable
Items Year-end balance Year-beginning balance
Notes receivable
Account receivable 570,471.80 473,196.00
Total 570,471.80 473,196.00
198
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
1.Classification account receivables.
Amount in year-end
Classification Book balance Bad debt provision
Book value
Amount Proportion(%) Amount Proportion(%)
Accounts receivable of
individual significance and
subject to individual
impairment assessment
Accounts receivable subject
to impairment assessment by 570,471.80 100.00 28,523.59 5.00 541,948.21
credit risk characteristics of a
portfolio
Accounts receivable of
individual insignificance but
subject to individual
impairment assessment
Total 570,471.80 100.00 28,523.59 5.00 541,948.21
Amount in year-begin
Classification Book balance Bad debt provision
Proportion Book value
Amount Amount Proportion(%)
(%)
Accounts receivable of
individual significance and
subject to individual
impairment assessment
Accounts receivable subject to
impairment assessment by 473,196.00 100.00 23,659.79 5.00 449,536.21
credit risk characteristics of a
portfolio
Accounts receivable of
individual insignificance but
subject to individual
impairment assessment
Total 473,196.00 100.00 23,659.79 5.00 449,536.21
Account receivable on which bad debt provisions are provided on age basis in the group
Aging Balance in year-end
199
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Account receivable Bad debt provision Proportion(%)
Within 1 year 570,471.80 28,523.59 5.00
(2) Other receivable
Items Amount in year-end Amount in year-beginning
Other account receivable 8,881,582.55 5,782,620.63
4,974,799.47 13,660,866.80
Interest receivable
Dividend receivable
13,856,382.02 19,443,487.43
Total
1.Other receivable
(1)Category of Other receivable
Amount in year-end
Book Balance Bad debt provision
Classification
Book value
Amount Proportion Amount Proportion(%)
(%)
Other accounts receivable of
individual significance and
13,781,464.60 57.27 13,781,464.60 100.00
subject to individual
impairment assessment
Other accounts receivable
subject to impairment
9,971,934.77 41.44 1,090,352.22 10.93 8,881,582.55
assessment by credit risk
characteristics of a portfolio
Other accounts receivable of
individual insignificance but
311,486.35 1.29 311,486.35 100.00
subject to individual
impairment assessment
Total 24,064,885.72 100.00 15,183,303.17 63.09 8,881,582.55
Classification Amount in year-beginning
200
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Book Balance Bad debt provision
Book value
Amount Proportion Amount Proportion(%)
(%)
Other accounts receivable of
individual significance and
13,781,464.60 67.70 13,781,464.60 100.00
subject to individual
impairment assessment
Other accounts receivable
subject to impairment
6,262,767.01 30.77 480,146.38 7.67 5,782,620.63
assessment by credit risk
characteristics of a portfolio
Other accounts receivable of
individual insignificance but
311,486.35 1.53 311,486.35 100.00
subject to individual
impairment assessment
Total 20,355,717.96 100.00 14,573,097.33 71.59 5,782,620.63
(1)Other receivable accounts with large amount and were provided had debt provisions
individually at end of period.
Amount in year-end
Other receivable accounts
（Unit） Other account Withdrawal Reason for
Bad debt provision
receivable proportion (%) allowance
No executable
Jiangxi Xuanli String Co.,
11,389,044.60 11,389,044.60 100.00 property, unlikely
Ltd.
to recover.
Anhui Huapeng Textile Estimated
1,800,000.00 1,800,000.00 100.00
Co.,Ltd. irrecoverable
Has been
Shenzhen Tianlong Induatry
592,420.00 592,420.00 100.00 concealed, unlikely
& Trade Co., Ltd.
to recover
Total 13,781,464.60 13,781,464.60
(2)Other receivable accounts in Group on which bad debt provisions were provided on age analyze
basis：
Amount in year-end
Aging
Other receivable Bad debt provision Withdrawal proportion
Within 1 year 4,248,226.22 212,411.31 5.00
201
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
1-2 years 4,454,759.77 445,475.98 10.00
2-3 years 1,010,047.30 303,014.19 30.00
Over 3 years 258,901.48 129,450.74 50.00
Total 9,971,934.77 1,090,352.22
2.The current amount of provision for bad debts is RMB610,205.84.
(3)Other accounts receivable classified by the nature of accounts
Category Year-end balance Year-beginning balance
Internal current account 8,578,542.00 5,075,600.00
Unit account 15,451,143.71 15,206,367.96
Other 35,200.01 73,750.00
Total 24,064,885.72 20,355,717.96
(4)Top 5 of the closing balance of the other accounts receivable colleted according to the arrears
party
Bad debt
Portion in total
provision
Name Nature Year-end balance Age other
Year-end
receivables(%)
balance
First Unit account 11,389,044.60 Over 5 years 47.33 11,389,044.60
Within 1 year
Second Internal current 8,575,600.00 35.64 912,800.00
to Over 5
account
years
Third Unit account 1,800,000.00 2-3 years 7.48 1,800,000.00
Within 1 year,
Fourth Unit account 783,579.12 3.26 61,916.94
1-2 years
Fifth Unit account 592,420.00 Over 5 years 2.46 592,420.00
Total 23,140,643.72 96.17 14,756,181.54
2.Interest receivable
Items Year-end balance Year-beginning balance
Fixed deposit interest 884,141.92 12,312,114.53
202
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Items Year-end balance Year-beginning balance
Structure deposit interest 4,090,657.55 1,348,752.27
Total 4,974,799.47 13,660,866.80
(3).Long-term equity investment
Year-end balance Year-beginning balance
Items Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Investment to
the 1,980,806,395.91 16,582,629.30 1,964,223,766.61 1,981,050,902.97 16,582,629.30 1,964,468,273.67
subsidiary
Investment to
joint ventures 32,952,085.66 32,952,085.66 20,380,734.56 20,380,734.56
and associated
enterprises
Total 2,013,758,481.57 16,582,629.30 1,997,175,852.27 2,001,431,637.53 16,582,629.30 1,984,849,008.23
（1）Investment to the subsidiary
Withdraw
n
impairme Closing
Increas nt balance of
Name Opening balance Decrease Closing balance
e provision impairment
in the provision
reporting
period
SAPO
Photoelectric Co., 1,924,842,841.18 179,771.15 1,924,663,070.03 14,415,288.09
Ltd.
Shenzhen Lisi
Industrial 8,080,587.80 7,199.55 8,073,388.25
Development Co.,
Ltd.
Shenzhen Beauty
Centruty Garment 30,895,388.23 27,988.23 30,867,400.00 2,167,341.21
Co., Ltd.
203
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Withdraw
n
impairme Closing
Increas nt balance of
Name Opening balance Decrease Closing balance
e provision impairment
in the provision
reporting
period
Shenzhen 15,499,430.44 10,079.36 15,489,351.08
Huaqiang Hotal
Shenfang Property
Management Co., 1,732,655.32 19,468.77 1,713,186.55
Ltd.
Total 1,981,050,902.97 244,507.06 1,980,806,395.91 16,582,629.30
204
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
（2）Investment to joint ventures and associated enterprises
Opening Closing
Increase /decrease in reporting period
balance balance Closing
Adjustment of balance of
Name Other Declaration of Withdrawn
Add other impairment
equity cash dividends impairment Other
investment comprehensive provision
changes or profit provision
income
I. Joint ventures
Shenzhen
Haohao
Property 5,369,450.56 671,689.37 400,000.00 5,641,139.93
Leasing Co.,
Ltd.
Shenzhen Xieli
Automobile
Co., Ltd.
Anhui Huapeng
Textile Co., 11,784,626.51 11,784,626.51
Ltd.
Subtotal 5,369,450.56 671,689.37 400,000.00 11,784,626.51 17,425,766.44
II. Associated
enterprises
Shenzhen
2,107,155.01 126,902.18 2,234,057.19
Changlianfa
205
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Printing and
dyeing
Company
Jordan Garnent
2,233,902.64 16,820.96 112,891.10 2,363,614.70
Factory
Yehui
International 10,670,226.35 444,742.44 508,391.94 694,713.40 10,928,647.33
Co., Ltd.
Subtotal 15,011,284.00 588,465.58 621,283.04 694,713.40 15,526,319.22
Total 20,380,734.56 1,260,154.95 621,283.04 1,094,713.40 11,784,626.51 32,952,085.66
206
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
4.Business income and Business cost
（1）Business income and Business cost
Items Amount of current period Amount of previous period
Income from Main Business 63,874,796.19 61,363,107.31
Other Business income 4,452,884.21 4,111,507.05
Total 68,327,680.40 65,474,614.36
Cost from Main Business 10,026,643.42 10,094,014.49
Other Business cost 4,452,884.20 4,111,507.06
Total 14,479,527.62 14,205,521.55
（2）Main business（Industry）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Rental industry 63,874,796.19 10,026,643.42 61,363,107.31 10,094,014.49
Total 63,874,796.19 10,026,643.42 61,363,107.31 10,094,014.49
（3）Main business（Production）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Rental industry 63,874,796.19 10,026,643.42 61,363,107.31 10,094,014.49
Total 63,874,796.19 10,026,643.42 61,363,107.31 10,094,014.49
（4）Main business（Area）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Shenzhen 63,874,796.19 10,026,643.42 61,363,107.31 10,094,014.49
Total 63,874,796.19 10,026,643.42 61,363,107.31 10,094,014.49
（5）Operating income from top five clients
Name Business Income Proportion(%)
207
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
First 30,095,391.34 44.05
Second 1,891,171.80 2.77
Third 1,663,348.00 2.43
Fourth4 1,705,920.00 2.50
Fifth 1,690,755.90 2.47
Total 37,046,587.04 54.22
5.Investment income
1．Detail
Items Amount of current period Amount of previous period
Income from long-term equity investment measured by adopting the cost
19,883,599.84
method
Income from long-term equity investment measured by adopting the
1,260,154.95 1,101,479.62
Equity method
Investment income received from holding of available-for –sale financial
1,215,316.98 1,734,586.44
assets
Profits and Losses from the Conversion of Equity Rights into Long-term
-6,002,923.49
Equity Rights Investment in Anhui Huapeng Textile Co., Ltd.
Total -3,527,451.56 22,719,665.90
6. Supplement information of Cash Flow Statement
Supplement information Amount of Amount of
current period previous period
I. Adjusting net profit to cash flow from operating activities
Net profit 25,277,610.38 37,663,601.39
Add : Impairment loss provision of assets 1,488,429.82 5,554,598.81
Depreciation of fixed assets, oil and gas assets and consumable
9,118,693.34 9,163,495.84
biological assets
Amortization of intangible assets 400,930.92 380,740.92
Amortization of long-term deferred expenses
Loss on disposals of fixed assets, intangible assets and other
long-term assets(“-“for gains)
Loss on discard of fixed assets 15,020.65
208
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Supplement information Amount of Amount of
current period previous period
Loss on fair value changes
Financial expenses -9,027,389.20 -3,413,625.17
Loss on investment 3,527,451.56 -22,719,665.90
Decrease of deferred income tax assets -3,790,938.66 489,041.95
Increase of deferred income tax assets
Decrease in inventories
Decrease of operating receivable 7,120,472.61 -2,355,629.65
Increase of operating receivable 11,591,283.05 7,728,160.19
Other -111,892.94 561,892.94
Net cash flows arising from operating activities 45,594,650.88 33,067,631.97
II. Significant investment and financing activities that without cash
flows
Debt-to –capital conversion
Convertible loan due within 1 year
Fixed assets acquired under financial lease
III. Net Changes of cash and cash equivalents
Ending balance of cash 85,416,567.74 413,700,327.95
Less: Beginning balance of cash 413,700,327.95 440,685,610.11
Add：End balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase of cash and cash equivalents -328,283,760.21 -26,985,282.16
XVI. Supplement information
1. Particulars about current non-recurring gains and loss
Items Amount Notes
209
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
Non-current asset disposal gain/loss -97,477.14
Government subsidies recognized in current gain and
loss(excluding those closely related to the Company’s 17,228,202.21
business and granted under the state’s policies)
Gain/loss on entrusting others with investment or asset
52,271,862.25
management
Single impairment test for impairment of receivables
transferred back to preparation
Net amount of non-operating income and expense except 1,143,552.02
the aforesaid items
Subtotal 70,546,139.34
48,007.18
Amount of influence of income tax
28,074,327.28
Amount of influence of minority interests
Total 42,423,804.88
2. Return on net asset and earnngs per share
Earnings per share
Weighted average
Profit of report period Basic earnings per Diluted earnings per
returnee equity(%)
share(RMB/share） share(RMB/share)
Net profit attributable to the
Common stock shareholders of -0.96 -0.04 -0.04
Company.
Net profit attributable to the
Common stock shareholders of
-2.74 -0.13 -0.13
Company after deducting of
non-recurring gain/loss.
210
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
XII．Documents Available for Inspection
1.Financial statements bearing the seal and signature of legal representative, General Manaager and financial
controller;
2.The original of the auditor’s report bearing the seal of the certified public accountants and the signature of
C.P.A.
3.The originals of all the Company’s documents and the original manuscripts of announcements publicly
disclosed on the newspapers designated by China Securities Regulatory Commission in the report period.
The above documents were completely placed at the Office of Secretaries of the Board of Directors of the
Company.
The Board of Directors of Shenzhen Textile (Holdings) Co., Ltd.
April 27,2019
211
