Shenzhen Textile (Holdings) Co., Ltd.
2020 Annual Report
March 2020
Chapter 1: 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.
Ms.Zhang Jian, The Company leader, Mr. He Fei, Person in charge of accounting works, Ms. Zhu
Jingjing ,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.
All the directors attended the board meeting for the review of this Report.
The company’s profit distribution plan approved by the board of directors this time is: based on 507,772,279
shares, a cash dividend of 0.3 yuan (tax included) will be distributed to all shareholders for every 10 shares, and 0
shares (tax included) will be given as bonus shares. The capital reserve will not be converted into share capital.
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 convertible corporate bonds
IX. Information about Directors, Supervisors and Senior Executives
X. Administrative structure
XI. Corporate Bond
XII. Financial Report
XIII. Documents available for inspection
Definition
Terms to be defined Definition
Company/The Company/ Shen Textile Shenzhen Textile (Holdings) Co., Ltd
Articles of Association Articles of Association of Shenzhen Textile (Holdings) Co., Ltd
Actual controller / National Assets Regulatory
National Assets Regulatory Commission of Shenzhen
Commission of Shenzhen Municipal People's
Municipal People's Government
Government
The Controlling shareholder/ Shenzhen
Shenzhen Investment Holding Co., Ltd.
Investment Holding Co., Ltd.
Shenchao Technology Shenzhen Shenchao Technology Investment Co., Ltd.
SAPO Photoelectric Shenzhen SAPO Photoelectric Co., Ltd.
Jinjiang Group Hangzhou Jinjiang Group Co., Ltd.
Jinhang Investment Hangzhou Jinhang Equity Investment Fund Partnership (LP)
Nitto Denko Nitto Denko Corporation
Kunshan Zhiqimei Kunshan Zhiqimei Material Technology Co., Ltd.
Guanhua Company Shenzhen Guanhua Printing & Dyeing Co., Ltd.
Shenzhen Xieli Shenzhen Xieli Automobile Enterprise Co., Ltd.
Covid-19 Novel Coronavirus Pneumonia Outbreak
Line 6 TFT-LCD polarizer II phase Line 6 project
Line 7 Industrialization project of polaroid for super large size TV
Company Law Company Law of the People’s Republic of China
Securities Law Securities Law of the People’s Republic of China
The Report 2020 Annual Report
Chapter 2: 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 Zhang Jian
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 address 518031
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 North 6/F, Shenfang Building, No.3 Huaqiang North
Contact address
Road, Futian District, Shenzhen 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 Securities Times, China Securities, Shanghai Securities
information disclosure Daily ,Securities Daily and Hongkong Commercial Daily.
Internet website designated by CSRC for
http://www.cninfo.com.cn
publishing the Annual report of the Company
The place where the Annual report is prepared
Secretarial office of the Board
and 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
industry, textile equipment and accessories, instruments, standard parts, raw textile
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
Changes in principal
business."
business activities since
In December 2018, approved by Shenzhen Market Supervisory Authority, the
listing (if any)
company's business scope was changed to: production and operation of polarizers and
other optical film products; hotel and property leasing and management; production and
processing of textiles, knitwear, clothing, and decorative fabrics , Belts, trademark belts,
handicrafts (excluding restricted items); department stores, special equipment for the
textile industry, textile equipment and accessories, meters, standard parts, textile raw
materials, dyes, electronic products, chemical products, electromechanical equipment,
textile products, office Supplies and domestic trade (excluding franchise, control, and
monopoly commodities); import and export business.
In October 2004,In accordance with the Decision on Establishing Shenzhen Investment
Holdings Co., Ltd. issued by State-owned Assets Administration Committee of
Changes is the
Shenzhen Municipal People's Government (Shen Guo Zi Wei (2004) No. 223
controlling shareholder
Document), Shenzhen Investment Management Co., Ltd., the controlling shareholder of
in the past (is any)
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 Grant Thornton International Ltd（Special Geneaal Partnership）
Office address： 5/F, Scitech Plaza, 22 Jianguomenwai Street, Chaoyang District, Beijing
Names of the Certified Public
Cheng Zhiyao, Li Yao
Accountants as the signatories
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
2020 2019 Changed over last year（％） 2018
Operating income（RMB） 2,108,964,687.80 2,158,184,855.71 -2.28% 1,272,356,771.34
Net profit attributable to the shareholders
37,267,995.74 19,679,910.43 89.37% -22,980,624.93
of the listed company（RMB）
Net profit after deducting of non-recurring
gain/loss attributable to the shareholders of 18,084,607.04 -41,179,849.56 143.92% -65,404,429.81
listed company(RMB)
Cash flow generated by business operation,
1,930,932.76 383,145,788.50 -99.50% -460,494,321.15
net（RMB）
Basic earning per share(RMB/Share) 0.07 0.04 75.00% -0.04
Diluted gains per
0.07 0.04 75.00% -0.04
share(RMB/Share)(RMB/Share)
Weighted average ROE(%) 1.36% 0.75% 0.61% -0.96%
2020 2019 Changed over last year（％） 2018
Gross assets（RMB） 4,969,547,552.23 4,531,399,885.99 9.67% 4,619,203,416.79
Net assets attributable to shareholders of
2,766,234,174.39 2,727,764,144.36 1.41% 2,373,329,991.86
the listed company（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
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
Operating income 384,038,897.58 472,274,451.16 616,632,602.23 636,018,736.83
Net profit attributable to the shareholders
-5,827,092.54 6,546,827.28 24,726,413.83 11,821,847.17
of the listed company
Net profit after deducting of
non-recurring gain/loss attributable to the -9,495,160.00 2,377,214.57 20,780,909.95 4,421,642.52
shareholders of listed company
Net Cash flow generated by business
-84,585,231.55 -51,034,243.68 85,768,341.55 51,782,066.44
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
IX.Items and amount of non-current gains and losses
√Applicable □ Not applicable
In RMB
Items Amount (2020) Amount (2019) Amount (2018) Notes
Non-current asset disposal gain/loss(including
the write-off part for which assets impairment 273,229.58 54,895,878.65 -97,477.14
provision is made)
Govemment subsidy recognized in current gain Mainly due to recognize other
and loss(excluding those closely related to the income from government
29,506,252.69 27,547,902.92 17,228,202.21
Company’s business and granted under the subsidies related to the main
state’s policies) business.
Gain/loss on entrusting others with investment
1,037,735.85 52,271,862.25
or asset management
Switch back of provision for depreciation of
account receivable which was singly taken 469,470.61
depreciation test.
Other non-recurring Gains/loss items 1,310,556.26 4,582,973.27 1,143,552.02
Less :Influenced amount of income tax 53,313.37 13,886,055.96 48,007.18
Influenced amount of minor shareholders’
11,853,336.46 12,750,409.50 28,074,327.28
equity (after tax)
Total 19,183,388.70 60,859,759.99 42,423,804.88 --
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.
Chapter 3: Business Profile
I. Main Business the Company is Engaged in During the Report Period
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.
During the reporting period, the company's main business did not have big change. Firstly, The company
adjusted its marketing strategy, optimized its customer and product structure, and successfully completed the
introduction and mass production of multiple projects for panel customers such as LGD, Huaxing Optoelectronics,
Huike, and Sharp to further enhance its anti-risk and profitability capabilities. Secondly, Actively promote cost
reduction and quality improvement, reduce costs through various measures such as increasing machine speed,
equipment and technological transformation, upgrading the level of automation in the back-end, and broadening
procurement channels, while taking into account the improvement of product quality. Thirdly, actively respond to
the COVID-19, overcome the adverse effects, and make every effort to promote the construction of the
ultra-large-size TV polarizer industrialization project (line 7). The line 7 project was affected by the epidemic and
resumed work in mid-March 2020. The company adopted strict control of the epidemic Measures such as
prevention and control, actively coordinating the entry of Japanese technical personnel into the factory, and
formulating a special assessment plan for the construction of Line 7 projects to accelerate the progress of the
project to the greatest extent.. Fourthly, in order to jointly respond to the novel coronavirus pneumonia epidemic
and actively fulfill social responsibilities, the company and its wholly-owned enterprises responded to the call of
the Shenzhen Municipal Party Committee and the State-owned Assets Supervision and Administration
Commission to reduce or exempt some tenants of self-owned properties (except residential properties) for 3
months . Fifthly, the textile industry makes full use of my country's advantages of effective epidemic prevention
and control and early resumption of work and production, actively seizing market share, and achieving both
growth in operating income and net profit. Sixthly, in order to improve the company's overall asset operation
capability and revitalize the stock assets, the company implements transfer and liquidation work for the poorly
managed shareholding companies, and concentrates on the development of the polarizer business. Seventhly,
implement the epidemic prevention and control work, pay attention to safe and green production, the company has
set up a special class for epidemic prevention and control, and formed an efficient epidemic prevention work
mechanism with division of responsibility, layer-by-layer transmission, and coordination to ensure the
implementation of various deployment measures, centralized rectification, and focus Investigate safety and
environmental issues, promote the safe and stable development of enterprises, and actively fulfill social
responsibilities.
2. The company's main products and uses
Polarizers are the upstream raw material of LCD panels and one of the key basic materials in the flat panel
display industry. They are widely used in smart phones, tablet computers, TVs and other LCD panels, OLED
display panels, as well as filters for instruments, sunglasses, and photographic equipment. Many fields such as
light microscopy. The company currently has 6 mass-produced polarizer production lines. The products cover TN,
STN, TFT, OLED, 3D, dye films, optical films for touch screens and other fields. They are mainly used in TV, NB,
navigator, Monitor, automotive, industrial control, Instruments, smart phones, wearable devices, 3D glasses,
sunglasses and other products, the company has become a mainstream panel company such as Huaxing
Optoelectronics, BOE, Sharp, LGD, Shenzhen Tianma, Huike, etc. by continuously strengthening sales channel
expansion and building its own brand. Qualified suppliers.
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
Line 2 Pingshan 500mm 1.2 million m2 TN/STN/CSTN
Line 3 Pingshan 650mm 1 million m2 TFT
Line 4 Pingshan 1490mm 6 million m2 TFT
Line 5 Pingshan 650mm 2 million m2 TFT
Line 6 Pingshan 1490mm 10 million m2 TFT/OLED
Line 7 Pingshan 2500mm 32 million m2 TFT/OLED
3. Company's business model
The polarizer industry has gradually shifted from a traditional business model of R&D, production, and sales
to a customer-centric, joint research and development, and comprehensive service business model. By
understanding customer needs, joint research and develop, manage high-standard production, manufacture
high-quality products, use advanced polarizer roll and attaching equipment to cooperate with downstream panel
manufacturers' production lines, reduce production links, reduce production and transportation costs, and create
value for customers, win-win.
4. Major factors for driving the Company's performance
Refer to "III. Analysis on core competitiveness" in this section for details.
5. 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 rely on more than 20 years of industrial operation experience and location
advantages to continue to deepen the reform of mixed ownership and strengthen strategic cooperation. Through
the integration of industrial resources, improve production technology and management level; at the same time,
seize market opportunities, make every effort to promote the construction of ultra-wide polarizer production line,
and seize the high-margin ultra-large-size LCD TV polarizer product market; make polarizers well The industry
also extends to other flat-panel display-related optical film industries, and then becomes stronger, bigger and
better.
II. Major Changes in Main Assets
1. Major Changes in Main Assets
Main assets Major changes
Equity assets No major changes
Fixed assets No major changes
Intangible assets No major changes
Construction in progress increased by 46,188.39 million yuan year on year, with an
Construction in process increase of 54.99%, mainly due to the increase in construction investment in progress
of the polarizer industrialization project for ultra-large television (Line 7).
Monetary funds decreased by 6,041.32 million yuan year on year,with a decrease of
14.75%, mainly due to: firstly, the investment in the construction of Line 7 of the
Monetary funds
polarizer industrialization project for ultra-large TV; Secondly, the purchase of
financial products.
Trading financial assets decreased by 14,538.27 million yuan year on year, with an
decrease of 17.52%, mainly due to the decrease in investing the purchase of financial
products. Trading financial assets
Notes receivable decreased by 2,361.09 million yuan year on year ,with an decrease of
Notes receivable 58.41%, mainly due to the Banker's acceptance according to the management needs of
reclassification adjustment for receivables financing.
repayments Increased by 18,198.52 million yuan year on year, with a Increase of
Account receivable
49.81%, mainly due to the Increase in sales of polarizer.
Receivables financing increased by 8,411.77 million yuan year on year, with an
Receivables financing increase of 460.05%, mainly due to the significantly increase in customer of
acceptance and settlement this year.
Interest receivable decreased by 761 million yuan year on year, with an decrease of
Interest receivable 100%,mainly due to the reclassification of Interest receivable to Trading financial
assets under the new financial instrument standards for the first time.
Other current assets decreased by 6,338.29 million yuan year on year, with a decrease
Other current assets
of 45.01%, mainly due to the reduction of uncertified VAT to be deducted.
Inventory increased by 8,912.9 million yuan, with a Increase of 22.75%, mainly due to
Inventory
the need for the preparation of polarizer.
2. Main Conditions of Overseas Assets
□ Applicable √ Not applicable
III. Analysis On core Competitiveness
(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 107 invention patents and was authorized with 79 items, among
which: 32 domestic invention patents(14 patents got authorized); 68 domestic utility model patents(61 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 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 a polarizer management team and a team of senior technicians
with strong technical ability, long-term cooperation, rich experience and international vision. Through open
market selection, the Company has hired professional senior management personnel, built a team of professional
managers, cultivated a professional manager culture and enhanced the core competitiveness of the enterprise. The
Company has established a technical cooperation relationship with Nitto Denko Corporation, a world-class
polarizer manufacturer, to learn advanced polarizer production management concepts. Meanwhile, the Company
has accumulated technical experience through independent innovation, improved its core competitiveness, and
gradually accumulated its own advantages in brand, technology, operation and management. Through improving
the salary assessment management system, enriching the connotation of learning-based organizations, and
implementing institutional and cultural construction such as medium-term and long-term incentive and restraint
mechanisms, the Company has deeply bound the interests of employees with the Company, and fully stimulated
the subjective initiative of talents.
In 2019, in order to improve the operating conditions of SSAPO Photoelectric, a subsidiary of the Company,
further promote the implementation of specialization, professionalization and marketization of management
personnel and optimize the management team, SAPO Photoelectric openly organized market-oriented selection of
management teams for talents of the whole society in accordance with the relevant spirit of Shenzhen Municipal
State-owned Assets Supervision and Administration Commission regarding the promotion of professional
manager team construction and in combination with the management situation of SAPO Photoelectric. As of the
end of this reporting period, SAPO Photoelectric has completed the organization registration, qualification
examination and interview selection of the marketing selection management team. The 3 professional managers
selected in the market have been deployed for post in January 2020.
(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. 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.
Chapter 4: Management’s Discussion and Analysis
I. General
In 2020, in the face of the adverse impact of the COVID-19 epidemic, the company did its best to prevent
and control the epidemic and resume work and production, strive to reduce losses and increase profits in the main
work of polarizer, speed up the construction of Line 7 project, respond to the call of the municipal party
committee and government, the municipal State-owned Assets Supervision and Administration Commission and
Shenzhen Investment Control, and reduce rent and fees to support the real economy to overcome difficulties.
In 2020, the company achieved operating income of 2.109 billion yuan, 2.28% less than the same period last
year; The total profit was 51,218,900 yuan, an increase of 437.31% over the same period last year; Net profit
attributable to shareholders of the listed company was 36.93338 million yuan, an increase of 87.67% over the
same period last year. Revenues fall modestly from last year , the main reason is to jointly cope with COVID - 19
outbreak, actively fulfill the social responsibility, the company and its wholly owned enterprises response to the
call of shenzhen municipal party committee municipal government and the state-owned assets supervision and
administration, breaks its own property (in addition to residential property) of a part of the tenant: 3 months this
year, the rental income fell during the reporting period; Second, during this reporting period, the subsidiary SAPO
Photoelectri did not carry out trade business, and the income from trade business decreased compared with the
same period last year. the main reason of the net profit year-on-year growth of Attributable to shareholders of
listed companies is benefit from improving of two to four quarter polaroid 2020 market conditions, adjustment
effect of SAPO Photoelectri orders for products structure is remarkable, capacity has improved, the average gross
margin level has improved, main business of polarizer turned a loss into a profit this year.
Review of the company's key works carried out in 2020 as follows:
1. main business of polarizer turned a loss into a profit
In 2020 , first, the company will adjust its marketing strategy, optimize its customer and product structure,
and successfully complete the introduction and mass production of multiple projects for panel customers such as
LGD, Huaxing Optoelectronics, Huike, and Sharp, to further improve anti-risk and profitability; Second, the
company actively promotes cost reduction and quality improvement, reducing costs and improving product
quality through a number of measures such as increasing machine speed, equipment and technological
transformation, upgrading the level of automation in the back-end, and broadening procurement channels, while
also improving product quality; third, increasing talent Recruitment efforts, reforming the salary structure, and
stimulating the vitality of employees..
Meanwhile, the Company continued to explore R&D innovation and intensify the development of
independent intellectual property rights. Its research and development were combined with the actual market
conditions to carry out product development and market promotion and import, so as to improve product
performance. In 2020,, we carried out R&D and import of a variety of coating adhesive materials, key technology
processes, and new products, totaling 13 items. we applied for 8 patents, including 2 invention patents and 6
utility model patents, obtained 4 authorized patents, including 3 invention patents and 1 utility model patent.
2. The profitability of the textile business rose steadily, property companies responded to the
call for rent reduction and exemption.
At the beginning of 2020, due to the impact of the novel coronavirus pneumonia epidemic, my country's
textile and garment industry exports were blocked. The company took the initiative to overcome labor shortages
and other difficulties, and took full advantage of my country's effective epidemic prevention and control and early
resumption of production to actively seize market share and achieve both growth in operating income and net
profit.
In 2020, the company actively responded to the call of the Municipal Party Committee and the Municipal
Government, fulfilled its social responsibilities, implemented property rent reduction measures, and reduced or
exempted eligible tenants from rent for three months.
3. Actively promote the construction of the industrialization project of ultra-large-size TV
polarizer
At the beginning of 2020, the novel coronavirus pneumonia epidemic had a certain impact on the company’s
construction of the company’s ultra-large-size TV polarizer industrialization project (hereinafter referred to as
"Line 7"). The company actively responded to it. While doing a good job in epidemic prevention, the company
actively cooperated with the government. Departmental communication, one is to promote the full resumption of
work of the Line 7 project on March 12, 2020, the other is to overcome difficulties and to promote two groups of
Japanese technicians to arrive at the factory, and the third is that the company has formulated a special assessment
plan for the line 7 project to fully mobilize the enthusiasm of project personnel And initiative. Through the
implementation of various measures, the project construction progress will be accelerated to the greatest extent.
As of December 31, 2020, the civil engineering of the Line 7 project has basically been completed, and the
preliminary acceptance of the clean area of the main production workshop has been completed; in terms of
process equipment, the main equipment such as the extension machine, the coating machine, and the
anti-checking machine has been installed and commissioned In the stage, the overall commissioning will be
completed in late March 2021 and enter trial production.
4. Effectively organize epidemic prevention and control, production safety, stable and orderly
During the reporting period, the company first strengthened organization and leadership to effectively
prevent and control the epidemic. A special class for epidemic prevention and control has been set up to refine the
division of responsibilities, form an efficient epidemic prevention work mechanism with division of responsibility,
layer-by-layer transmission, and coordination, and weave a network of epidemic prevention responsibility to
ensure that various deployment measures are implemented to effectively protect the lives of employees. The
second is to increase investment in environmental protection, and production is safety,stable and orderly. The
company pays attention to environmental protection and safety, continuously increases safety investment, and at
the same time fully implements the regulations on the main responsibility of production safety for production and
business units.
5. Strengthened safety awareness and earnestly well ensured safety and environmental
protection
In 2020, the company’s party committee, under the correct leadership of the municipal SASAC party
committee and the investment control company’s party committee, will thoroughly study and implement Xi
Jinping’s thoughts on socialism with Chinese characteristics in the new era. General Secretary Xi Jinping will
attend the 40th anniversary celebration of the establishment of the Shenzhen Special Economic Zone and inspect
Guangdong and Shenzhen. The spirit of the speech and important instructions and the spirit of the Fifth Plenary
Session of the 19th Central Committee of the Communist Party of China, resolutely implement the feedback from
the inspections of the superior party committee, and carry out the party member education "five one" project
activities and the "one enterprise, one brand" party building innovation activities, and actively give full play to all
levels The role of party organizations and party members in epidemic prevention and control and resumption of
work and production provides a strong guarantee for the reform, development and stability of enterprises..
II. Main business analysis
1. General
Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”.
2. Revenue and cost
(1) Component of Business Income
In RMB
2020 2019 Increase
Amount Proportion Amount Proportion /decrease
Total operating revenue 2,108,964,687.80 100% 2,158,184,855.71 100% -2.28%
On Industry
Manufacturing 2,012,255,019.03 95.41% 1,475,804,647.66 68.38% 36.35%
Lease and Management of Property 85,177,866.03 4.04% 106,372,055.25 4.93% -19.92%
Domestic and foreign trade 0.00 0.00% 517,020,991.54 23.96% -100.00%
Other 11,531,802.74 0.55% 58,987,161.26 2.73% -80.45%
On Products
Lease and Management of Property 85,177,866.03 4.04% 106,372,055.25 4.93% -19.92%
Textile 60,503,325.78 2.87% 46,047,351.10 2.13% 31.39%
Polarizer sheet 1,951,751,693.25 92.55% 1,429,757,296.56 66.25% 36.51%
Trade 0.00 0.00% 517,020,991.54 23.96% -100.00%
Other 11,531,802.74 0.55% 58,987,161.26 2.73% -80.45%
Area
Domestic 1,768,190,864.75 83.84% 1,981,314,469.39 91.80% -10.76%
Overseas 340,773,823.05 16.16% 176,870,386.32 8.20% 92.67%
(2) Situation of Industry, Product and District Occupying the Company’s Business Income and Operating
Profit with Profit over 10%
√Applicable □ Not applicable
In RMB
Increase/decrea
Increase/decrea Increase/decrea
se of gross
se of revenue se of business
Gross profit rate over
in the same cost over the
Turnover Operation cost profit the same
period of the same period of
rate(%) period of the
previous previous year
previous year
year(%) (%)
(%)
On Industry
Manufacturing 2,012,255,019.03 1,786,199,780.24 11.23% 36.35% 26.85% 6.65%
Lease and 85,177,866.03 21,892,925.24 74.30% -19.92% -9.26% -3.02%
Management
of Property
On Products
Polarizer sheet 1,951,751,693.25 1,737,733,572.46 10.97% 36.51% 26.94% 6.72%
Lease and 85,177,866.03 21,892,925.24 74.30% -19.92% -9.26% -3.02%
Management
of Property
Textile 60,503,325.78 48,466,207.78 19.89% 31.39% 23.74% 4.95%
Area
Domestic 1,768,190,864.75 1,532,415,314.75 13.33% -10.76% -12.53% 1.75%
Overseas 340,773,823.05 281,883,080.27 17.28% 92.67% 71.83% 10.03%
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 2020 2019 Changes
Sales (0000’ square meters) 2,131.28 1,797.1 18.60%
Polarizer sheet Production (0000’ square meters) 2,124.96 1,806.66 17.62%
Stock (0000’ square meters) 121.69 128.01 -4.94%
Sales 0000’ pieces 358 257 39.30%
Knitted clothing Production 0000’ pieces 385 261 47.51%
Stock 0000’ pieces 80 53 50.94%
Explanation for a year-on –year change of over 30%
√Applicable □ Not applicable
The production volume of polarizers was 62.73% and the Sales volume increased by 62.73%, TFT-LCD Phase II
Line 6 was put into production in the second half of 2018. The production capacity was released in the same year,
with a year-on-year increase on sales volume.
(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
2020 2019
Increase/
Proportion in Proportion in
Industry Items Decrease
Amount the operating Amount the operating
(%)
costs (%) costs (%)
Polarizer sheet, 1,786,199,780.24 98.45% 1,408,148,827. 71.35% 26.85%
Manufacturing
Knitted clothing 10
Lease and 21,892,925.24 1.21% 24,128,173.53 1.22% -9.26%
Rental，
Management of
Accommodation
Property
Domestic and Polarizer sheet, 0.00 0.00% 483,603,729.67 24.50% -100.00%
foreign trade Textile
Other Other 6,205,689.54 0.34% 57,614,878.05 2.92% -89.23%
In RMB
2020 2019
Increase/
Classification of Proportion Proportion
Items Decrease(
products Amount in operation Amount in operation
%)
costs(%) costs(%)
1,094,486,243.5
Polarizer sheet Direct materials 1,469,077,219.74 80.97% 55.46% 34.23%
9
Polarizer sheet Direct labor 50,884,076.28 2.80% 46,306,446.19 2.35% 9.89%
Polarizer sheet Power costs 44,834,128.46 2.47% 46,800,313.93 2.37% -4.20%
Polarizer sheet Manufacturing costs 172,598,639.68 9.51% 181,388,859.24 9.19% -4.85%
Knitted clothing Direct materials 30,107,965.70 1.66% 20,014,843.33 1.01% 50.43%
Knitted clothing Direct labor 10,388,237.67 0.57% 9,480,251.60 0.48% 9.58%
Knitted clothing Power costs 1,256,258.98 0.07% 1,370,323.40 0.07% -8.32%
Knitted clothing Manufacturing costs 7,251,535.16 0.40% 8,301,545.82 0.42% -12.65%
(6) Whether Changes Occurred in Consolidation Scope in the Report Period
√Yes □No
As of December 31, 2020, the company has included 8 subsidiaries in the scope of consolidation. For details,
please refer to Section 12-9, 1 "Equity in Subsidiaries" of this report. The scope of the company's consolidation
this year increased by one household compared to the previous year. For details, please refer to Section 12-8, 5
"Changes in Consolidation Scope for Other Reasons" of this report.
(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) 1,347,057,923.29
Proportion of sales to top 5 customers in the annual sales(%) 63.86%
Proportion of the sales volume to the top five customers in the total 5.24%
sales to the related parties in the year
Information of the Company’s top 5 customers
No Name Amount(RMB) Proportion(%)
1 Customer 1 760,941,270.04 36.08%
2 Customer 2 173,448,174.15 8.22%
3 Customer 3 172,152,298.18 8.16%
4 Customer 4 129,970,966.64 6.16%
5 Customer 5 110,545,214.28 5.24%
Total -- 1,347,057,923.29 63.86%
Other Note:
√Applicable □Not applicable
In the report period, the Company bore a relation with the Third 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） 725,936,071.57
Percentage of total purchase of top 5 suppliers In total annual purchase(%) 43.16%
Proportion of purchase amount from the top 5 suppliers in the total purchase
12.14%
amount from the related parties in the year
Information about the top 5 suppliers
No Name Amount（RMB） Proportion
1 Supplier 1 204,282,036.36 12.14%
2 Supplier 2 153,042,316.73 9.10%
3 Supplier 3 147,346,299.63 8.76%
4 Supplier 4 112,838,305.95 6.71%
5 Supplier 5 108,427,112.90 6.45%
Total -- 725,936,071.57 43.16%
Other Notes:
√Applicable □Not applicable
In the report period, the Company bore a relation with the first suppliers of the top five suppliers but the
Company's directors,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
2020 2019 Increase/Decrease(%) Notes
Sale expenses Main reason is that the increase in the
proportion of sales of channel
vendors has led to an increase in
service commissions year-on-year,
28,644,230.87 20,785,078.66 37.81%
and the increase in long-distance
sales and improved transportation
conditions have led to an increase in
transportation costs.
Administration 105,094,934.3
96,870,842.37 8.49%
expenses 6
Mainly due to the exchange loss
Financial expenses 8,287,888.28 15,862,799.64 -47.75%
increased year-on-year.
R & D cost 67,160,964.22 53,178,714.33 26.29%
4. R& D Expenses
√Applicable □ Not applicable
In 2020, the R&D Department will carry out a total of 13 R&D projects, involving the development and research
of IPS-PET, NR01 (TV and commercial display), IPS-05, MNT, wide-format IPS 06 and other products, and has
achieved fruitful results.
1、 Multi-size commercial display/MNT products have been verified by multiple clients to achieve mass
production;
2、 The 55-inch TV realized the first mass production supply in the L and H company, and the 65-inch TV
realized the mass production supply in the C company;
3、 The IPS 05 blind hole project was verified by the head module factory and mass production was realized;
4、 The IPS 06 product was successfully imported into the client to achieve mass production.
Situation of Research and Development Input by the Company
2020 2019 Increase/Decrease(%)
Number of Research and Development persons (persons) 169 163 3.68%
Proportion of Research and Development persons 12.34% 12.18% 0.16%
Amount of Research and Development Investment
67,160,964.22 53,178,714.33 26.29%
( RMB)
Proportion of Research and Development Investment of
3.18% 2.46% 0.72%
Operation Revenue
Amount of Research and Development Investment
0.00 0.00 0.00%
Capitalization ( 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 2019 2018 Increase/Decrease(%)
Subtotal of cash inflow received from operation
2,067,129,172.79 2,339,186,620.64 -11.63%
activities
Subtotal of cash outflow received from operation
2,065,198,240.03 1,956,040,832.14 5.58%
activities
Net cash flow arising from operating activities 1,930,932.76 383,145,788.50 -99.50%
Subtotal of cash inflow received from investing
3,253,008,414.70 4,231,006,091.64 -23.12%
activities
Subtotal of cash outflow for investment activities 3,572,079,379.14 5,175,229,656.48 -30.98%
Net cash flow arising from investment activities -319,070,964.44 -944,223,564.84 66.21%
Subtotal cash inflow received from financing
342,660,000.00 289,808,607.92 18.24%
activities
Subtotal cash outflow for financing activities 12,855,758.88 593,817,393.81 -97.84%
Net cash flow arising from financing activities 329,804,241.12 -304,008,785.89 208.49%
Net increase in cash and cash equivalents 9,690,648.77 -864,927,647.04 101.12%
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 385,226,262.651compared with the
previous period, a decrease of100.54%, It was mainly due to the recovery of trade receivables in the previous year.
(2) The net cash flow from investment activities increased by RMB-625,152,600.40 from the previous
period, a increase of 66.21%, It was mainly due to the investment in the construction of Line 7 project and the
purchase and financing of idle funds.
(3) The net cash flow from financing activities increased byRMB -633,813,027.01 from the previous period,
a increase of 208.49%, It was mainly due to repayment of loans and interest from last year, not this year.
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
-2,080,474.11yuan.The net profit in the consolidated statement of the company was43,015,090.66 yuan, with
significant difference between the two, mainly due to use of credit sales in the form of sales. The difference
During the reporting period between the net cash flow generated by the company's operating activities and the net
profit of the consolidated statement is detailed in Section 12, VII, 79 (1) "Supplementary Information on Cash
Flow Statement" of this report.
III. Analysis of Non-core Business
√ Applicable □Not applicable
In RMB
Proportion in
Amount Explanation of cause Sustainable (yes or no)
total profit
The dividends, contract fees and
Investment interest on structured deposits from
22,599,670.74 43.71% Have the sustainability
income participating enterprises were
obtained.
fair value
Mainly due to the changes in the
through
2,687,518.74 5.20% non-current financial assets and fair Have the sustainability
profit or
value of the structured deposits.
loss
Impairment
-72,412,477.63 -140.06% Loss of inventory price falling, Have the sustainability
of assets
Mainly due to social security return
Non-operati
1,445,662.38 2.80% and other payables that do not need Not sustainable.
ng income
to be paid.
Non-operati Mainly non-current assets damage
138,421.27 0.27% Not sustainable.
ng expenses and scrap losses
Other
29,506,252.69 57.07% Mainly government subsidies Have the sustainability
income
IV. Condition of Asset and Liabilities
1. Condition of Asset Causing Significant Change
In RMB
End of 2020 End of 2019
Proportion
Proportion Proportion
increase/de Notes to the significant change
Amount in the total Amount in the total
crease
assets(%) assets(%)
Monetary 279,087,23 409,564,84
5.62% 9.04% -3.42%
fund 6.95 7.52
Accounts 547,310,21 365,325,02
11.01% 8.06% 2.95%
receivable 7.90 9.38
480,847,58 391,717,93
Inventories 9.68% 8.64% 1.04%
1.44 5.12
Investment 110,572,47 112,730,32
2.23% 2.49% -0.26%
real estate 1.92 0.90
Long-term
147,929,13 152,209,92
equity 2.98% 3.36% -0.38%
7.23 9.72
investment
790,183,90 903,229,07
Fixed assets 15.90% 19.93% -4.03%
5.38 7.83
Constructio 1,301,750,1 839,866,27 Mainly due to the construction
26.19% 18.53% 7.66%
n in process 41.12 5.92 investment of Line 7 projects.
Long-term 343,100,17 Mainly due to borrowing of loans for
6.90% 0.00 0.00% 6.90%
loans 4.35 Line 7 project this year.
Trading
684,617,26 830,000,00 Mainly due to the decrease in
financing 13.78% 18.32% -4.54%
0.06 0.00 structural deposits this year.
assets
2.Asset and Liabilities Measured by Fair Value
√ Applicable □Not applicable
In RMB
Gain/loss Cumulati
Impairme
on fair ve fair
nt Purchased Sold amount
Amount at value value Amount
provision amount in the in the Other
Item year change in change at year
s in the reporting reporting change
beginning the recorded end
reporting period period
reporting into
period
period equity
Financial assets
1. Financial
assets measured
at fair value
830,000,000. 2,938,080,684 3,084,000,00 684,617
through profit or 536,575.34
00 .72 0.00 ,260.06
loss (excluding
derivative
financial assets)
4．Other equity
248,781,946. 3,560,467 -54,260, 190,607
Instrument 7,474,900.00
73 .08 086.27 ,427.54
Investment
Subtotal of 1,078,781,94 3,560,467 2,938,080,684 3,091,474,90 -54,260, 875,224
536,575.34
financial assets 6.73 .08 .72 0.00 086.27 ,687.60
30,650, 30,650,
Total
943.40 943.40
Financial 1,078,781,94 3,560,467 2,938,080,684 152,857,639. -23,609, 905,875
536,575.34
Liability 6.73 .08 .72 94 142.87 ,631.00
Other change
According to the relevant provisions of the new financial instrument standards on the classification of financial
assets, the investment of RMB 28,500,000.00 in Changxing Junying Equity Investment Partnership (Limited
Partnership) was reclassified to the subject of "other non-current financial assets"; due to Shenzhen Xieli
Automobile Enterprise Co., Ltd. It has been cancelled and will hold 25,760,086.27 yuan of equity in the company
for write-off.
□Yes √No
3.estricted asset rights as of the end of this Reporting Period
Subsidiary SAPO Photoelectric uses part of its self-owned properties to apply for a mortgage loan from a
syndicate with Bank of Communications Co., Ltd. Shenzhen Branch as the lead bank, and the company provides
guarantees for the mortgage loan. For details, please refer to http://www.cninfo.com.cn .cninfo.com.cn)
"Announcement on the Company's Application for Bank Mortgage Guarantees for Subsidiaries" (No. 2020-19),
"Announcement on the Progress of the Company Providing Guarantees for Subsidiaries" (No. 2020-46)
V. Investment situation
1. General
□Applicable √Not applicable
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
Accumul Proportio
of raised Total Amount
ative n of Use and
Total capital of Amount of the
amount raised
Amount which of the Whereab Raised
Total of raised capital of
Total of the the Unused outs of Fund
Year of Way of amount capital of which
raised Raised purpose Raised the with over
Raising Raising of Raised which the
capital Fund was Fund at Unused 2 Years’
Funds the purpose
Used at changed the Raised Idling
purpose has been
the in the Current Fund
has been changed
report Period
changed (%)
period
All
deposited
in the
Non-publ 76,261.4 30,927.2 special
2013 96,175.1 290.94 0 32.16% 1,224 0
ic issue 4 2 account
for the
raised
funds.
76,261.4 30,927.2
Total -- 96,175.1 290.94 0 32.16% 1,224 -- 0
4 2
Note to use of raised capital
During the reporting period, the Company actually used the raised funds of 290.94 million yuan, and the
accumulated use of raised funds was76,261.44 million yuan, of which 272.65 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 was35,266.34 million yuan; the actual use of the raised funds for the 7th line project was 18.29
million yuan, with the accumulated use of raised funds for it was 40,995.10 million yuan.
(2) Promised projects of raised capital
√ Applicable □ Not applicable
In RMB10,000
Accumu Date
Investm
lated when
ent
Total amount the Has any
Project progress
raised Total Amount invested project Benefit Has the material
changed ended
Committed capital investm invested at the has realized predicte change
(includi the
investment projects invested ent after in the end of reached in the d result taken
ng reportin
and investment as adjustm reportin the the reportin be place in
partial g
committ ent (1) g period reportin predicte g period realized feasibili
change) period(
ed g d ty
%)(3)=(
period(2 applicab
2)(1)
) le status
Committed investment projects
Phase-II
project of polarizer 96,175. 35,266. June -3,912.8
Yes 70,034 272.65 50.36% No Yes
sheet for TFT-LCD 1 34 7,2018 8
(Line 6)
The utilization of
Not
the surplus raised 40,995.
No 18.29 applicab No
funds（Line 7 1
le
project）
Subtotal of
96,175. 76,261. -3,912.8
committed -- 70,034 290.94 -- -- -- --
1 44 8
investment projects
Subtotal of committed investment projects
No
96,175. 76,261. -3,912.8
Total -- 70,034 290.94 -- -- -- --
1 44 8
Situation about not
coming up to
schemed progress
Not applicable
or expected revenue
and the reason ( in
specific project)
According to the latest situation of the industry development, the original second phase
construction scheme of the TFT-LCD polarizer was optimized, and then according to the
results concluded by the 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
Notes to significant
phase project, then by comprehensive considerations of the company’s production line
change in feasibility
scale and the operation pressure, the company decided to terminate the project of No.7 line,
of the project
and the corresponding amount of funds of 309.2722 million yuan(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, Not applicable
application 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 Not applicable
proceeds 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 (Line 7)” was reviewed and approved, agreeing to
continue to deposit 134.7172 million yuan in the 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 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 405.8311 million yuan 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,
Balance of the 2018, the balance of the special account for raised funds of line 6 was 80.3569 million
proceeds in process yuan. The reasons for the surplus of the raised funds were as follows: 1. the interest income
of project and the investment income of the bank wealth management products were generated during
implementation and the deposit of the raised funds; 2.to grasp the opportunity of the rapid development of the
the cause 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.
As of December 31, 2020, the balance of the special account for raised funds was 12.24
About application
million yuan, of which 12,237,500 yuan was deposited in the special account for funds
and status of the
raised for line 6 projects, and 0.25 million yuan was deposited in the special account for
proceeds unused
funds raised for line 7 projects.
As of December 31, 2020, the cumulative investment of Phase 2 Line 6 project was
Problems existing 699.5442 million yuan, accounting for 99.89% of the total investment of 700.34 million
in application of the yuan after the change, of which the actual paid investment was 689,428,400 yuan (using
proceeds and the raised funds of 352.6634 million yuan, using its own Capital and government funds
information 336,765 million yuan). As of December 31, 2020, the accumulated contract value of the
disclosure or other Line 7 project was 1.628,631,700 yuan, and the actual payment was 1,468,765,700 yuan
issues (using raised funds of 409,951,100 yuan, using self-owned funds and government funds of
1,058,814,700 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
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 Company Sectors Registered Operating
Total assets Net assets Turnover Net Profit
Name type engaged in capital profit
Shenzhen
Lisi Domestic
Industrial trade, 2,360,000. 30,938,547 24,519,148 6,951,857. 2,233,445. 2,141,270.
Subsidiary
Developme Lease 00 .89 .66 86 59 87
nt
Co., Ltd.
Accommod
Shenzhen
ation, 10,005,300 24,454,466 20,083,112 9,003,811. 2,644,133. 2,384,485.
Huaqiang Subsidiary
business .00 .85 .54 17 99 24
Hotel
center;
Shenfang
Property
Property 1,600,400. 11,679,454. 4,432,647. 15,328,717
Subsidiary manageme 533,169.50 498,101.05
Manageme 00 92 95 .06
nt
nt Co., Ltd.
Production
Shenzhen of fully
Beauty electronic
13,000,000 39,107,997 18,372,348 60,503,325 2,119,203. 2,045,056.
Century Subsidiary jacquard
.00 .35 .27 .78 22 52
Garment knitting
Co., Ltd. whole
shape
SAPO Production
583,333,33 3,669,743, 2,792,318, 1,954,299, 9,932,052. 10,777,938
Photoelectr Subsidiary and sales
3. 00 743.06 431.95 219.22 86 .39
ic Co., Ltd. of polarizer
Shenzhen
Operating
Shenfang
import and 5,000,000. 28,781,153 9,336,438. -257,812.9 -324,417.5
Import & Subsidiary 0.00
export 00 .62 49 0 8
export Co.,
business
Ltd.
Shengtou
Sales of HKD10,00 8,059,134. 5,865,258. 3,947,190. -440,853.3 -440,853.3
（HK）Co., Subsidiary
polarizer 0 16 97 95 4 4
Ltd.
Acquirement and disposal of subsidiaries in the Reporting period
□ Applicable √ Not applicable
Note
The financial data of SAPO Photoelectric mentioned in the table above are the financial statements data of its
parent company and non-consolidated statements data. Shenzhen Shenzhen Textile Importand Export Co., Ltd.
and Shengbo Photoelectric Company Limited are SAPO Photoelectric. The fluctuation of subsidiary SAPO
Photoelectric 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 recent years, the new display industry in Mainland China has maintained positive growth. The overall
growth rate has surpassed the global industrial growth rate for many consecutive years. The industrial structure
has been continuously improved, and the market’s competitiveness has steadily improved. Relying on multiple
TFT-LCD panel production lines, China has entered full production. The LCD panel industry in mainland China
ranks first in the world in terms of revenue and shipment area. Compared with the rapid development of the new
display industry in mainland China, overseas manufacturers have chosen to gradually shrink and withdraw.
Samsung Display and LGD have announced that they will gradually shut down LCD panel production lines. LG
Chem sold its LCD polarizer business. With the withdrawal of foreign manufacturers and the transfer of
high-quality industrial assets to mainland China, the focus of the new display industry is accelerating to
concentrate in mainland China.
Overall, the development of my country's new display industry has shifted from the stage of large-scale new
production lines to the stage of completion and shipment. Polarizers are widely used in new display fields, and to
a large extent determine the performance of new display products. The continuous growth of panel manufacturers
in mainland China has led to a substantial increase in the demand for polarizers. According to the statistics of the
industry's authoritative consulting organization IHS, it is expected that the market demand for polarizers in
mainland China will rapidly increase from 280 million square meters in 2018 to 2023. 465 million square meters,
the market demand for polarizers is growing rapidly. It is a good development opportunity for mainland polarizer
manufacturers who have market advantages, policy advantages, and geographic advantages.
At present, the global polarizer industry is mainly composed of three echelons. The first echelon is firmly held
by major manufacturers in Japan and South Korea; the second echelon is mainly composed of some well-known
companies in Japan and South Korea and Taiwanese enterprises in my country; the company is in the third
echelon. It is the most important domestic polarizer R&D, production and sales enterprise.
2. The company's development strategy
2021 is a crucial year for the company's polarizer line 7 project, and it is also a year of opportunity for the
company to seize the market window period. Facing the complex market environment, opportunities and
challenges coexist, only by unity and forge ahead can we maintain progress and development in the fierce
competition.
The main business must continue to improve profitability. First, continue to increase the adjustment of
customer structure and product structure, and increase the proportion of high value-added products; second, seek
breakthroughs in product research and development in the mid-to-high-end market; third, further improve product
quality and Production efficiency; Fourth, continue to promote cost and cost reduction; Fifth, shorten the climbing
period of Line 7 and strictly control the time nodes to ensure the smooth realization of mass production of Line 7
and increase the company's market share. Textile enterprises continue to reform and innovate and maintain
profitability. Property enterprises strengthened their service work and continued to generate revenue and increase
efficiency. Strengthen the construction of talents, improve technical capabilities, and enhance R&D and
innovation capabilities; continue to deepen reforms to stimulate corporate vitality; constantly focus on safety
production, strengthen party style and clean government, and thoroughly implement the "two studies and one
work" learning and education system to normalize and strengthen Responsibility. Fully complete various tasks in
2021, and strive to realize the company's sustainable and healthy business development.
3. Possible risks
(1) Macroeconomic Risks
In 2020, under the huge impact of the new coronavirus pneumonia epidemic, the global economy will be in a
severe recession; in 2021, the development of the epidemic will still be uncertain, and the global economy will
still be shrouded in the haze of the epidemic. Looking forward to 2021, the country will continue to maintain
economic stability, focus on demand-side management, and insist on expanding domestic demand. The first is to
further stimulate consumption potential; the second is to stimulate the investment vitality of the whole society; the
third is to promote employment and improve social security; and the fourth is to optimize the income distribution
structure and expand Middle-income group. Faced with the increasingly complex international environment and
the intensified competition among countries in the industrial chain and supply chain, the state proposes to
"strengthen national strategic scientific and technological strength" and "enhance the independent controllability
of the industrial chain supply chain" to give full play to enterprises in technological innovation. The main role of
the. As an important part of the electronic information industry, the industry in which the company is located will
be strongly supported by national policies, but it cannot be ruled out that unpredictable fluctuations in the macro
economy may pose risks to the company's performance..
(2) Market risks
The polarizer industry is an important part of China's future manufacturing development. The demand for
display panels and the development of corresponding technologies are changing with each passing day. The
domestic substitution process of the polarizer industry is underway. With the gradual mass production of the 10.5
generation line, the super-large size market New changes will be ushered in. If the company’s technology and
products cannot respond to the needs of the application field in time, the wide-format polarizer products and
applications fall short of expectations, or the intensified market competition causes the price of display products to
fall, and the pressure of price cuts is transmitted upwards to the polarizer market. Will have an adverse effect on
the company.
(3) Raw-material risks
The core patents of polarizer terminal materials have high technical barriers and are basically monopolized
by foreign manufacturers. Patents are the main reason for restricting the localization of luminescent materials. At
present, the key raw materials PVA film and TAC film required for the manufacture of polarizers are basically
owned by Japanese companies. Monopoly, the upstream supporting raw material production line and production
technology are constrained by the Japanese side. Compared with the complete industrial chain model of
international manufacturers from upstream raw materials to polarizers to display panels, the company does not
have the corresponding complete industrial supporting facilities and is temporarily unable to make full use of the
industry. Integration effect, and the price of the main membrane materials is affected by the production capacity of
suppliers, market demand and the yen exchange rate, which affects the unit cost of the company’s products.
4. The key work in 2021
(1) Continue to improve the profitability of the main business
One is to continue to increase the adjustment of customer structure and product structure to increase the
proportion of high value-added products; the second is to seek breakthroughs in the mid-to-high-end market for
product research and development; the third is to further improve product quality and production efficiency; the
fourth is to continue to promote cost reduction Reduce fees; Fifth, continue to attract outstanding talents to join;
Sixth, strengthen comprehensive risk management, improve risk control and response capabilities, and further
ensure safe, steady and sustainable development.
(2) Shorten the climbing period of Line 7 and realize production as soon as possible
With the cooperation of the partner Jinjiang Group, actively promote the technical collaboration with
Kunshan Zhimei Material Technology Co., Ltd., earnestly learn from the technical team about equipment
debugging, production operation, operation management and other experience, and strengthen the production with
Nitto Denko Co., Ltd. Manufacturing technology exchanges, shortened the ramp-up period of Line 7, strictly
controlled time nodes, ensured the smooth realization of mass production of Line 7, and increased the company's
market share.
(3) Ensure stable growth of the property business and provide effective support for the company's
development
Property companies closely follow the changes in the surrounding business conditions of the property,
operate around the rental rate and capital recovery rate, overcome the age of the property, poor conditions, and
outdated facilities, continue to tap the potential to increase efficiency, improve service levels, and improve
operating efficiency
(4) Continue to explore and deepen the reform and development path, optimize the system and mechanism
The cooperation period between the company and Jinjiang Group has expired for three years. Based on the
original intention of cooperation and win-win, we must continue to deepen the reform and development path, and
further explore the implementation of market-oriented mechanisms under the mixed ownership model to achieve
the reform goal of "mixing and reforming" . Continue to promote Shengbo Optoelectronics' operation
improvement, management optimization and market-oriented mechanism establishment, optimize the corporate
governance structure, establish a sound system of checks and balances of rights and responsibilities, effectively
play a supervisory role, and strengthen risk prevention capabilities.
(5) Strengthen the construction of talent echelon and enhance the core competitiveness of enterprises
At present, the company is in a critical period of deepening reform and development. The business is
developing rapidly and the existing talent pool is insufficient. It is necessary to continuously improve the quality
of the existing talent team. According to the company's future development strategy, continue to optimize and
improve the company's professional and technical rank evaluations. System and incentive system, through various
forms of training to increase the incentive and cultivation of key reserve talents, improve the stability and
enthusiasm of key reserve talents, and gradually establish a reserve talent echelon for each key position of the
company, so as to continuously improve the core competitiveness of the company. Sustainable development
capability.
(6) Do a good job in safe production and maintain the harmony and stability of the enterprise
The company’s production safety task is very arduous, and the company must tighten the “string” of
production safety at all times and do a good job in ensuring production safety. The company will regularly carry
out large-scale safety inspections, comprehensively inspect the implementation of the safety production
responsibility system, safety production regulations, standard procedures, hidden danger investigation and
rectification and emergency management, and formulate and implement effective rectification measures to
eliminate potential safety hazards.
(7) Strengthen party building and innovating enterprise culture
The company’s party committee will continue to carry out in-depth "two studies and one work" special
education activities, strictly implement the "three meetings and one lesson" system, and strengthen the
construction of the party building system and the building of party members. Earnestly implement the "two
responsibilities" and pay close attention to the construction of party style and clean government. The Disciplinary
Committee of the company must earnestly perform its duties of supervision and execution of discipline and
accountability, and strengthen the integrity of the enterprise.
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 main
content of the
Index of the basic
Reception Reception The wany of Object type of Reception discussion and
situation of the
time place reception reception person the
survey
information
provided
For details, please
The
refer to the "000045
company's
Shenzhen Textile A
main business,
Meeting room Research Activity
Founder line 7 project
on the sixth Information
June 24, 2020 Field research agency Securities Co., construction
floor of the 20200628" (No.
Ltd progress,
company 2020-01) by the
future
company
development
http://www.cninfo.c
plans, etc.
om.cn.
The For details, please
Rongjie company’s refer to the
Meeting room main business, "Investor Relations
Investment
December 24, on the sixth line 7 project Activity Record
Field research others Holding
2020 floor of the construction Form on December
Group Co.,
company progress, 24, 2020" (No.
Ltd.
future 2020-02) by the
development company
plans, etc. http://www.cninfo.c
om.cn.
Number of receptions 2
Number of reception institutions 1
Number of individuals received 0
Number of other objects received 1
Whether to disclose, disclose or divulge
No
undisclosed material information
.
Chapter 5: Important Events
I. Specification of profit distribution of common shares and capitalizing of
common reserves
Formulation, implementation and adjustment of profit distribution policy of common shares especially 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):
The company’s 2020 profit distribution plan is: based on the company’s total share capital of 507,772,279
shares as of December 31, 2020, a cash dividend of RMB 0.30 (including tax) will be distributed to all
shareholders for every 10 shares, and a total cash dividend of RMB 15,233,168.37 (including tax) will be
distributed. Tax), the remaining undistributed profits will be carried forward to the next year; no bonus shares will
be given, and no capital reserve will be converted into share capital.
If the total share capital of the company changes due to factors such as the repurchase and cancellation of
restricted stocks before the implementation of the distribution plan, the total share capital on the equity
registration date when the distribution plan is implemented in the future will be used as the base, and a cash
dividend of RMB 0.30 will be distributed to all shareholders for every 10 shares. (Tax included), the specific
amount is subject to actual distribution. The company's shares held by the company do not participate in the profit
distribution.
Dividend distribution of the latest three years
In RMB
Ratio of the
Ratio of the
total cash
Ratio of the cash bonus
bonus (other
Net profit cash bonus by other
ways
attributable in net profit ways in net
Proportion profit included) in
to common attributable net profit
for cash attributable Total cash
Amount for stock to common attributable
Year for bonus by to common bonus(other
cash shareholders stock to common
other stock ways
bonus shares bonus(tax of listed shareholders stock
ways(i.e. shareholders
included) company in of listed included) shareholders
share of listed
consolidation company of listed
buy-backs) company
statement for contained in company
bonus year consolidation contained in
contained in
statement consolidation
consolidation
statement
statement
15,233,168.3 36,933,796.2 41.24% 0.00 0.00% 15,233,168.3 41.24%
2020
7 6 7
0.00 19,679,910.4 0.00% 0.00 0.00% 0.00 0.00%
2019
3
0.00 -22,980,624. 0.00% 0.00 0.00% 0.00 0.00%
2018
93
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
Number of bonus shares for every 10 shares
0
(shares)
Dividends per 10 shares (RBM) (tax
0.3
included)
The share capital base of the distribution
507,772,279
plan (shares)
Cash dividend amount (RMB) (tax
15,233,168.37
included)
Cash dividend amount in other ways (such
0.00
as share repurchase) (RMB)
Total cash dividends (including other
15,233,168.37
methods) (RMB)
Distributable profit (RBM) 33,056,666.16
The ratio of total cash dividends (including
100%
other methods) to total profit distribution
Situation of this cash dividend
When the company's development stage is in the growth period and there are major capital expenditure
arrangements, when the profit distribution is carried out, the proportion of cash dividends in this profit
distribution should be at least 20%
Detailed explanation of the profit distribution or capital reserve transfer plan
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
Commit Period of
making Fulfillm
Commitment ment Type Contents commit
commit ent
maker ment
ment
As Shenzhen Investment Holdings Co., Ltd.,
the controlling shareholder of the company,
Shenzhe
Share committed when the restricted-for-sale shares
n
reduct from the shares restructuring were listed for Sustaine Under
Commitment on Investme August
ion circulation in the market: i. if they plan to sell d and Fulfillm
share reform nt 4, 2006
comm the shares through the securities exchange effective ent
Holdings
itment system in the future, and the decrease of the
Co., Ltd.
shares they hold reaches 5% within 6 months
after the first decrease, they will disclose an
announcement indicating the sale through the
company within two trading days before the
first decrease; ii. They shall strictly observe
the “ Guidelines on Transfer of
Restricted-for-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
Shenzhen Investment Holdings Co., Ltd.
signed a “ Letter of Commitment and
Com
Statement on Horizontal Competition
mitme
Avoidance ” when the company issued
nts on
non-public stocks in 2009. Pursuant to the
horizo
Letter of Commitment and Statement,
ntal
Shenzhen Investment Holdings Co., Ltd. and
comp
Shenzhe its wholly owned subsidiary, subsidiaries
etition
n under control or any other companies that
Commitments , October Sustaine Under
Investme have actual control of it shall not be involved
made upon relate 9, d and Fulfillm
nt in the business the same as or similar to those
issuance d 2009 effective ent
Holdings Shenzhen Textile currently or will run in the
transa
Co., Ltd. future, or any businesses or activities that may
ction
constitute direct or indirect competition with
and
Shenzhen Textile; if the operations of
capita
Shenzhen Investment Holdings Co., Ltd. and
l
its wholly owned subsidiaries, subsidiaries
occup
under control or other companies that have
ation
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
Com
hasn't the production and business activities of
mitme
inter-industry competition with Shenzhen
nts on
Textile or its share-holding subsidiary. 2.
horizo
Shenzhen Investment Holdings and its
ntal
share-holding subsidiaries or other enterprises
comp
Shenzhe owned the actual control rights can't be
etition
n directly and indirectly on behalf of any
, Sustaine Under
Investme person, company or unit to engage in the July 14,
relate d and Fulfillm
nt same or similar business in any districts in the 2012
d effective ent
Holdings future by the form of share-holding, equity
transa
Co., Ltd. participation, joint venture, cooperation,
ction
partnership, contract, lease, etc., and ensure
and
not to use the controlling shareholder's status
capita
to damage the legitimate rights and interests
l
of Shenzhen Textile and other shareholders, or
occup
to gain the additional benefits. 3. If there will
ation
be the situation of inter-industry competition
with Shenzhen Textile for Shenzhen
Investment Holdings and its share-holding
subsidiaries or other enterprises owned the
actual control rights in the future, Shenzhen
Investment Holdings will promote the related
enterprises to avoid the inter-industry
competition through the transfer of equity,
assets, business and other ways. 4. Above
commitments will be continuously effective
and irrevocable during Shenzhen Investment
Holdings as the controlling shareholder of
Shenzhen Textile or indirectly controlling
Shenzhen Textile.
1.The company undertakes not to provide
loans, loan guarantees, and any other forms of
Shenzhe financial assistance to the incentive objects
n for obtaining the restricted stocks in the
Other Novemb Decembe Under
Equity incentive Textile( incentive plan; 2. The company undertakes
comm er r Fulfillm
commitment Holdings that there is no circumstance that the stock
itment 27,2017 27,2021 ent
) Co., incentive shall be prohibited as stipulated in
Ltd. the provisions of Article 7 of the “Measures
for the Management of Stock Incentives of
Listed Companies”.
Other
commitments
made to minority
shareholders
Executed timely or
Yes
not?
If the
commitments
failed to complete
the execution
when expired, Not applicable
should 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
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
VI. Explain change of the accounting policy, accounting estimate and
measurement methods as compared with the financial reporting of last
year.
√ Applicable □Not applicable
1. Changes in accounting policies
(1) Overview of changes in accounting policies
1. Reason for change
The Ministry of Finance of the People's Republic of China (hereinafter referred to as the "Ministry of
Finance") revised and issued the "Accounting Standards for Business Enterprises No. 14-Revenue" (Cai Kuai
[2017] No. 22) (hereinafter referred to as the "New Revenue Standards") on July 5, 2017 ); On September 19,
2019, the "Notice on Revising and Issuing the Format of Consolidated Financial Statements (2019 Edition)" (Cai
Kuai [2019] No. 16) and the "Notice on Revising and Issuing the Format of General Enterprise Financial
Statements for 2019" were issued on September 19, 2019. (Cai Kuai [2019] No. 6) Supporting implementation.
According to the regulations, the company shall implement the "Accounting Standards for Business
Enterprises No. 14-Revenue" from January 1, 2020, and the "Notice on Revising and Issuing the Format of
Consolidated Financial Statements (2019 Edition)" shall be implemented from the date of issuance.
2. Accounting policies before and now
Before this change, the company implemented the "Accounting Standards for Business Enterprises-Basic
Standards" issued by the Ministry of Finance and various specific accounting standards, guidelines for the
application of the Accounting Standards for Business Enterprises, an Interpretation Announcement of the
Accounting Standards for Business Enterprises and other relevant regulations.
After this accounting policy change, the company will implement the "Accounting Standards for Business
Enterprises No. 14-Revenue" (Cai Kuai [2017] No. 22) from January 1, 2020; the company's 2019 financial
statements and subsequent financial statements will be Implement the "Notice on Revising and Issuing the Format
of Consolidated Financial Statements (2019 Edition)" (Cai Kuai [2019] No. 16).
Except for the above-mentioned changes in accounting policies, other unchanged parts are still in accordance
with the "Accounting Standards for Business Enterprises-Basic Standards" issued by the Ministry of Finance in
the previous period and various specific accounting standards, guidelines for the application of Accounting
Standards for Business Enterprises, Interpretation Announcements on Accounting Standards for Business
Enterprises, and other relevant regulations carried out.
(2) The main content of this accounting policy change
1. The main changes to the new revenue standards:
①Incorporate the current revenue and construction contract standards into a unified revenue recognition model;
② Use the transfer of control rights instead of the transfer of risk rewards as the criterion for determining the
timing of revenue recognition, and introduce a five-step model of revenue recognition and measurement;
3 Provide clearer guidance on the accounting treatment of contracts that include multiple transaction
arrangements;
4 Clear regulations are given for the revenue recognition and measurement of certain specific transactions (or
events).
2. The main content of financial statement format adjustment:
In accordance with the requirements of Caikuai [2019] No. 6 and Caikuai [2019] No. 16, the company adjusted
the listing of the following financial statement items and adjusted the comparative data for comparable accounting
periods accordingly:
(1) Balance sheet
① The "Notes Receivable and Accounts Receivable" item is split into "Notes Receivable" and "Accounts
Receivable" items;
② The "Notes Payable and Accounts Payable" item is split into "Notes Payable" and "Accounts Payable" items;
③ Newly added items such as "receivable financing", "right to use assets", "lease liabilities", and "special
reserves".
(2) Income statement
① Adjust the item of "minus: asset impairment loss" to "plus: asset impairment loss (losses are listed with "—")";
② Under the "Investment income" line item, the line item "Including: the financial asset derecognition income
measured at amortized cost" has been added;
③ Adjusted the presentation order of the line items of "asset impairment loss" and "credit impairment loss".
(3) Cash flow statement
The line items such as "net increase in financial assets held for trading purposes" and "cash received from
issuance of bonds" in the original consolidated cash flow statement were deleted.
(4) Owner's equity table
Newly added "special reserve" line items and column items.
(3) The impact of this accounting policy change on the company
1. In accordance with the transitional provisions of the old and new standards, the company will implement the
new revenue standards from January 1, 2020, and adjust the initial retained earnings and the amount of other
related items in the financial statements based on the cumulative impact of the first implementation of the
standards. To adjust. The implementation of the new revenue standard is not expected to have a significant impact
on the company's operating results, nor will it cause a significant change in the company's revenue recognition
method, and will not have a significant impact on the financial statements.
2. The adjustment of the financial statement format only affects the financial statement format and the
presentation of some subjects, does not involve retrospective adjustments in previous years, and does not affect
the company's net assets, net profit and other related financial indicators
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
As of December 31, 2020, the company has included 7 subsidiaries in the scope of consolidation. For details,
please refer to Section 12-9, 1 "Equity in Subsidiaries" of this report. The scope of the company’s consolidation
this year has increased by one household compared to the previous year. For details, please refer to Section 12-8, 5
"Changes in Consolidation Scope for Other Reasons" of this report.
IX. Engagement/Disengagement of CPAs
CPAs currently engaged
Grant Thornton International Ltd （ Special
Name of the domestic CPAs
General Partnership）
Remuneration for domestic accounting firm (RMB10,000) 82.5
Continuous life of auditing service for domestic accounting firm 0
Name of domestic CPA Cheng Zhifang,Li Yao
Continuous fixed number of year for the auditing service
0
provided by CPA in domestic CPA Firms
Has the CPAs been changed in the current period
√ Yes □ No
Has to reappoint an accounting firm during the audit
□Yes √ No
Has fulfilled the approval procedures when the replacement accounting company
√ Yes □ No
A detailed explanation of the reappointment and change of accounting company:
The company’s original annual financial statements and internal control audit agency, Peking Certified
Public Accountants (Special General Partnership), has provided audit services for the company for 9 consecutive
years and insisted on independent auditing during the practice. Principles, reflect the company’s financial status
objectively, fairly and fairly, earnestly perform the duties of the audit agency, and safeguard the interests of the
company and all shareholders.
According to the "Interim Regulations on Auditing the Annual Financial Statements of State-owned
Enterprises in Shenzhen", based on the independence, objectivity and fairness of the audit work, the company
decided not to re-appoint Peking Certified Public Accountants as the annual financial account after
communicating with Peking Certified Public Accountants in advance. The report and internal control audit agency,
Peking Certified Public Accountants clearly understands this matter and expresses its understanding.
The company held the 31st meeting of the seventh board of directors on August 18, 2020, and held the 2020
third extraordinary general meeting of shareholders on September 22, 2020. The "Proposal on the Appointment of
Audit Institutions for 2020" was reviewed and approved. , Agreed to appoint Grant Thornton Certified Public
Accountants (Special General Partnership) (hereinafter referred to as "Grant Thornton") as the company’s 2020
financial statements and internal control audit service agency. The total annual audit fee is 828,000 yuan (tax
included). The actual situation of the audit business and with reference to the charging standards of the audit
industry, negotiated with Grant Thornton to determine the itemized expenses of the financial statements and
internal control audit business, and signed relevant agreements and documents.
Description of the CPAs, financial adviser or sponsor engaged for internal control auditing
√Applicable □Not applicable
During the reporting period, the company engaged Grant Thornton International Ltd (Special General Partnership)
as the company's internal control audit agency for 2020, with an audit remuneration of RMB 820,000 (including
travel expenses and other expenses). The actual situation of the audit business and with reference to the charging
standards of the audit industry, negotiated with Grant Thornton to determine the itemized expenses of the
financial statements and internal control audit business, and signed relevant agreements and documents.
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
Amount Implementati
Whether to Litigation Litigation
Basic situation of involved on of
form (arbitratio (arbitration) Disclosure Disclosure
litigation (ten litigation
estimated n) trial results and date Index
(arbitration) thousand (arbitration)
liabilities progress impact
yuan) judgments
The For details,
In view of the
arbitration please refer
For the company's
case was to the
company's involvement in
heard at company's
matters involving this arbitration
the disclosure
arbitration and and the
Seventh As of the on March
compensation of uncertainty of
Arbitratio disclosure 11, 2020,
its subsidiaries' the results of
n Tribunal date of this March 28,
performance the arbitration,
of the announcemen 2020,
commitments in Jinjiang March 11, November
24,478.38 No Court of t, the
2019, please refer Group's 2020
Arbitratio arbitration 5, 2020,
to "20. Major unfulfilled
n at the has not yet and
Subsidiaries of commitment to
office of been December
the Company" in the company's
the awarded. 17, 2020.
"Section V subsidiary
Shenzhen “Announce
Important Shengbo
Stock ment on the
Matters" of this Optoelectronic
Exchange Company’s
report. s for the 2019
at 9:30 on Involvemen
annual
December t in
performance is
1, 2020. Arbitration
As of the uncertain. ” (No.
disclosure 2020-07),
date of “Announce
this ment on the
announce Company’s
ment, the Progress in
arbitration Arbitration
has not ” (No.
yet been 2020-21),
awarded. “Announce
ment on the
Company’s
Progress in
Arbitration
”
(2020-50),
“About the
Company’s
Progress in
Arbitration
”
(2020-50),
Announce
ment on
Progress
Involving
Arbitration
(No.
2020-56)。
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
1. 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.
2. 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
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.
3. Progress of restricted stock
(1) Regarding the repurchase and cancellation of some restricted stocks, i.e. the repurchase and cancellation
of restricted stocks in Phase II and held by 3 original incentive objects
On June 4, 2019, the Company convened the 19th meeting of the 7th board of directors and the 13th meeting
of the 7th board of supervisors to consider and pass the Proposal on Repurchase and Cancellation of Some
Restricted Share, agreeing to repurchase and cancel the 1,877,720 restricted shares held by the Company for 116
incentive objects at a repurchase price of 5.92 yuan/share, which did not meet the conditions for lifting the
restriction on sale in phase I. The buyback price of 5.73 yuan per share was used to cancel 58,000 restricted shares
held by 3 original incentive subjects who left the company for personal reasons, and a total of 1,935,720 restricted
shares were repurchased and canceled.
On June 26, 2019, the Company held its 2018 annual shareholders' meeting to consider and pass the Proposal
on Repurchase and Cancellation of Some Restricted Shares, agreeing to repurchase and cancel the 1,877,720
restricted shares held by 116 incentive objects at a repurchase price of 5.92 yuan per share in phase I and 58,000
restricted shares held by 3 original incentive objects who left the company for personal reasons at a repurchase
price of 5.73 yuan per share, and a total of 1,935,720 restricted shares were repurchased and canceled.
On September 12, 2019, the above-mentioned restricted stock companies completed the repurchase and
cancellation procedures in Shenzhen Branch of China Securities Depository and Clearing Corporation Limited.
On September 12, 2019, the above-mentioned restricted stock companies completed the repurchase and
cancellation procedures in Shenzhen Branch of China Securities Depository and Clearing Corporation Limited.
(2) Regarding the repurchase and cancellation of some restricted stocks, i.e. the repurchase and cancellation
of restricted stocks held by 3 original incentive objects
On December 30, 2019, the Company held the 25th meeting of the 7th board of directors and the 17th
meeting of the 7th board of supervisors to consider and pass the Proposal on Repurchase and Cancellation of
Some Restricted Shares, agreeing that the company will repurchase and cancel 69,900 restricted shares held by 3
original incentive objects who left the company for personal reasons at a repurchase price of 5.73 yuan per share.
On January 16, 2020, the Company convened the first extraordinary shareholders' meeting in 2020 to
consider and pass the Proposal on Repurchase and Cancellation of Some Restricted Shares and agreed to
repurchase and cancel 69,900 shares of restricted shares held by 3 original incentive objects who left the company
for personal reasons at a repurchase price of 5.73 yuan per share.
On November 12, 2020, the company completed the repurchase and cancellation procedures of the
above-mentioned restricted stocks at the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd.
(3)Regarding the repurchase and cancellation of some restricted stocks and the second phase of the
repurchase and cancellation and the restricted stocks held by 3 original incentive objects
On March 12, 2020, the company held the 27th meeting of the seventh board of directors and the 19th
meeting of the seventh board of supervisors. A total of 1,313,340 restricted stocks held by the incentive objects
that did not meet the conditions for lifting the restriction on the second phase were repurchased and cancelled. The
repurchase price was calculated as the grant price of 5.73 yuan/share plus the interest on bank deposits during the
same period; the company agreed to the 3 Incentives who have resigned due to personal reasons, a total of
120,000 restricted stocks that have been granted but have not been lifted, will be repurchased and cancelled at a
repurchase price of 5.73 yuan per share; in summary, a total of 1,433,340 restricted stocks have been repurchased
Purchase cancellation.
On April 3, 2020, the company convened the second extraordinary general meeting of shareholders in 2020
to consider and pass the "Proposal on Repurchase and Cancellation of Certain Restricted Stocks", and agreed that
the company's holding of 110 incentive objects for the second phase did not reach the lifting limit A total of
1,313,340 restricted stocks subject to sales conditions will be repurchased and cancelled at a repurchase price of
6.01 yuan/share; the company agrees to repurchase a total of 120,000 restricted stocks that have been granted but
not yet lifted by 3 resignation incentive objects. Cancellation, the repurchase price is 5.73 yuan/share. It is agreed
that the company will repurchase and cancel all the 120,000 restricted stocks that have been granted but not yet
lifted from the sales restrictions for the 3 resignation incentive objects, at a repurchase price of 5.73 yuan per
share.
On November 12, 2020, the company completed the repurchase and cancellation procedures of the
above-mentioned restricted stocks at the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd.
(4) Regarding the repurchase and cancellation of some restricted stocks and the repurchase and cancellation
of restricted stocks held by 6 original incentive objects
On June 8, 2020, the company held the 30th meeting of the 7th Board of Directors and the 21st meeting of
the 7th Board of Supervisors. The board of directors deliberated and approved the "Proposal on Repurchase and
Cancellation of Some Restricted Stocks", and plans to repurchase and cancel the 57,150 restricted shares held by
the 5 original incentive objects who resigned due to personal reasons, at a repurchase price of RMB 5.73 per
share ; It is proposed to repurchase and cancel 5,760 restricted stocks held by a former incentive object who
resigned due to retirement reasons, at a repurchase price of 6.14 yuan per share.
On June 29, 2020, the company held the 2019 Annual General Meeting of Shareholders to consider and pass
the "Proposal on Repurchase and Cancellation of Some Restricted Stocks", agreeing to the company's restriction
on the total of 57,150 shares held by the five original incentive objects who resigned due to personal reasons.
Repurchase and cancellation of sexual shares at a repurchase price of 5.73 yuan/share; agree to the company’s
repurchase and cancellation of 5,760 restricted stocks held by a retired original incentive object, at a repurchase
price of 6.14 yuan/share, total repurchase and cancellation 62,910 restricted shares.
On November 12, 2020, the company completed the repurchase and cancellation procedures of the
above-mentioned restricted stocks at the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd.
(5) Matters concerning the repurchase and cancellation of some restricted stocks and the repurchase and
cancellation of restricted stocks held by 2 original incentive objects
On January 15, 2021, the company held the 35th meeting of the 7th Board of Directors and the 25th meeting
of the 7th Board of Supervisors. The board of directors deliberated and approved the "Proposal on Repurchase and
Cancellation of Some Restricted Stocks", which intends to repurchase and cancel 7,950 restricted stocks held by
an original incentive object who resigned due to personal reasons, at a repurchase price of RMB 5.73 per share; It
is proposed to repurchase and cancel the 6,000 restricted shares held by a retired incentive object at a price of 6.23
yuan per share.
On February 2, 2021, the company held the first extraordinary general meeting of shareholders in 2021 to
consider and pass the "Proposal on Repurchase and Cancellation of Certain Restricted Stocks", agreeing to the
company's total holdings of 1 original incentive object who resigned due to personal reasons 7,950 restricted
stocks were repurchased and cancelled at a repurchase price of 5.73 yuan/share; agreed that the company would
repurchase and cancel 6,000 restricted stocks held by a retired incentive object at a repurchase price of 6.14
yuan/share, in total 13,950 restricted stocks were repurchased and cancelled.
As of the disclosure date of this report, the company has not completed the repurchase and cancellation
procedures of the above-mentioned restricted stocks in the Shenzhen Branch of China Securities Depository and
Clearing Co., Ltd.
(6) Regarding the repurchase and cancellation of some restricted stocks and the repurchase and cancellation
of the third phase of restricted stocks
On March 10, 2021, the company held the second meeting of the eighth board of directors and the second
meeting of the eighth board of supervisors. The "Proposal on Repurchase and Cancellation of Certain Restricted
Stocks" was reviewed and passed, and the company agreed to provide incentives to 102 A total of 1,236,480
restricted stocks held in the third period that did not meet the conditions for lifting the restrictions were
repurchased and cancelled. The repurchase price was calculated as the grant price of RMB 5.73 per share plus the
interest on bank deposits during the same period.
This matter still needs to be submitted to the company's 2020 annual general meeting of shareholders for
review and approval, and it needs to be approved by more than 2/3 of the voting rights held by shareholders
attending the meeting.
XVI. Material related transactions
1. Related transactions in connection with daily operation
√Applicable □ Not applicable
Wheth
Tradin
er over
Princip g limit Market
the Index
Subject le of Amou price
Ratio approv Date of
s of the pricing Price nt of approv Way of of
Related Relatio Type of in of inform
related the of trade payme similar
parties nship trade similar ed disclos ation
transac related trade RMB1 ed nt trade
trades （RM ure disclos
tions transac 0,000) availab
limited ure
tions B’ le
or not
0000）
(Y/N)
Purcha
Kunsha
Jingjia se of
n
ng Purcha optical
Zhiqime
Group' se of film
i Market Agree
s produc product 20,428 12.14 Transf 20428.
Material Princip ment 26,744 No
shareh ts from s and .2 % er 2
s le price
olding related relevan
Technol
compa parties t
ogy Co.,
ny materia
Ltd.
ls
Purcha
Kunsha
Jingjia se of
n
ng optical
Zhiqime Sale of
Group' film
i goods Market Agree
s product 11,054 Transf 11054.
Material to Princip ment 5.24% 14,937 No
shareh s and .52 er 52
s related le price
olding relevan
Technol parties
compa t
ogy Co.,
ny materia
Ltd.
ls
31,482
Total -- -- -- 41,681 -- -- -- -- --
.72
Details of any sales return of a
Not applicable
large amount
Give the actual situation in the
report period where a forecast
had been made for the total
Normal performance
amounts of routine related-party
transactions by type to occur in
the current period(if any)
Reason for any significant
difference between the
Not applicable
transaction price and the market
reference price (if applicable)
2. Related-party transactions arising from asset acquisition or sold
□Applicable √Not applicable
During the reporting period, there were no related transactions involving the acquisition or sale of assets or equity.
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
Does Amount
increased Interest in
there exist recovered
Opening amount in the Ending
non-opera in the
Related Relations Causes of balance the Interest reporting balance
tion reporting
parties hip formation (RMB reporting rate period(R (RMB10,0
capital period(R
10,000) period MB10,00 00)
occupancy MB10,00
（RMB 0)
? 0)
10,000)
Shenzhen 40.48 110 40.48 110
Investmen
Dailishi Sharing
t No
Underwea company
dividend
r Co., Ltd.
Anhui 180 180
Huapeng Joint Investmen
No
Textile venture t dividend
Co., Ltd.
Kunshan 5,389.38 12,491.61 15,793.07 2,087.92
Jingjiang
Zhiqimei
Group's
Materials Sale
shareholdi No
Technolo products
ng
gy Co.,
company
Ltd.
The 73.3 167.92 183.05 58.17
Chairman
Shenzhen
of the
Tianma
Company Sale
Microelec Yes
was Vice products
tronics
Chairman
Co., Ltd.
of the
company
Influence of the
related rights of During the reporting period, the creditor's rights of related parties were formed by normal
credit and liabilities production, operation and investment activities. There was no financial risk caused by the
upon the company’s occupation of funds by related parties, nor was there any damage to the company's
operation results and interests caused by unfair prices of related transactions.
financial position
Due to related parties
Amount
Amount
newly Interest in
repaid in Ending
Opening increased the
Related Relationshi Causes of the Interest balance
balance(R in the reporting
parties p formation reporting rate (RMB10,00
MB10,000) reporting period(RM
period(RM 0)
period(RM B10,000)
B10,000)
B10,000)
Kunshan
Jingjiang
Zhiqimei
Group's
Materials Purchase 5,624.5 23,024.21 25,069.95 3,578.76
shareholdin
Technology
g company
Co., Ltd.
Shenzhen
Xinfang Sharing Current
24.48 24.48
Knitting company amount
Co., Ltd.
Shenzhen
Changlianfa
Sharing Current
Printing & 158.09 158.09
company amount
dyeing
Co., Ltd.
Yehui
Sharing Current
International 121.67 5.04 12.4 114.31
company amount
Co., Ltd.
SAPO
Sharing Current
（HK）Co., 31.5 31.5
company amount
Ltd.
Shenzhen
Guanhua
Sharing Current
Pringing & 381.11 381.12
company amount
Dyeing Co.,
Ltd.
Shenzhen
Guanhua
Sharing Current
Pringing & 381.11
company amount
Dyeing Co.,
Ltd.
Influence of the related
rights of credit and
During the reporting period, the debts of related party was caused by normal
liabilities upon the
production and operation activities, and there was no act damaging the interests of the
company’s operation
Company and its shareholders.
results and financial
position
5. Other significant related-party transactions
□ Applicable √Not applicable
Nil
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..
2. Guarantees
√Applicable □Not applicable
（1）Guarantee situation
单位：万元
The company and its subsidiaries’ external guarantees (excluding guarantees to subsidiaries)
Disclosur
e date of
it is a
the
Actual Has it related
Name of guarantee announce guarantee Type of Guarantee
Actual date guarantee been party
object ment of amount guarantee period
amount fulfilled guarante
the
e
guarantee
amount
The company's guarantees to subsidiaries
Disclosur
e date of it is a
the Actual Has it related
Name of guarantee guarantee Type of Guarantee
announce amount Actual date guarantee been party
object guarantee period
ment of amount fulfilled guarante
the e
guarantee
amount
2 years
from the
effective
date of the
guarantee
Joint
March 18, agreement
SAPO Co., Ltd. 48,000 27,412.8 liability No No
2020 to the
guarantee
expiry date
of the
actual loan
performanc
e period
The total amount of Total actual amount of
guarantees approved for guarantees to
48,000 27,412.8
subsidiaries during the subsidiaries during the
reporting period（B1） reporting period（B2）
The total balance of
The total amount of
actual guarantees to
guarantees to subsidiaries
48,000 subsidiaries at the end 27,412.8
approved at the end of the
of the reporting period
reporting period（B3）
（B4）
subsidiaries's guarantees to The company
Disclosur
e date of
it is a
the
Actual Has it related
Name of guarantee announce guarantee Type of Guarantee
Actual date guarantee been party
object ment of amount guarantee period
amount fulfilled guarante
the
e
guarantee
amount
Total company guarantee(the total of the first three items)
The total amount of
Total approved guarantee guarantees actually
amount during the reporting 48,000 occurred during the 27,412.8
period（A1+B1+C1） reporting period
（A2+B2+C2）
Total actual guarantee
The total amount of approved
balance at the end of
guarantees at the end of the 48,000 27,412.8
the reporting period
reporting period（A3+B3+C3）
（A4+B4+C4）
The actual total guarantee（即 A4+B4+C4）as a
9.91%
percentage of the company’s net assets
Among them：
The balance of guarantees provided for shareholders,
0
actual controllers and their related parties (D)
The balance of debt guarantee provided directly or
indirectly for the guaranteed object whose asset-liability 0
ratio exceeds 70% (E)
The amount of the total guarantee exceeding 50% of the
0
net assets (F)
The total amount of the above three guarantees (D+E+F) 0
Description of the specific circumstances of the use of composite guarantees
（2）Violation of external guarantees
□ Applicable √ Not applicable
During the reporting period, the company had no violations of external guarantees.
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 entrusted The Occurred Amount of Undue Un-recovered of
Specific type
financial management Entrusted Wealth-management balance overdue amount
Bank financial
Self fund 77,900 30,000 0
products
Bank financial
Self fund 66,000 57,000 0
products
Total 478,000 143,900 87,000
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
In RMB10,000
Name Type Prod Amou Capit Start Expir Fund Meth Refer Expe Actua The Amo Whet Whet Sum
of of uct nt al Date y s od of ence cted l actual unt her her mary
Trust Truste Type Sourc Date Alloc Rewa Annu Inco profit recov of passe there of
ee e e ation rd alized me and ery of provi d the is event
Orga Organ Deter Rate (if loss profit sion statut any s and
nizati izatio minat of any) durin and for ory entru relate
on (or n(or ion Retur g the loss impai proce sted d
Trust Truste n report durin rment dure finan searc
ee e) ing g the (if cial h
Name perio report any) plan index
) d ing in the (if
perio futur any)
d e
China 3.85 539 539.5
Merc % 4
hants
Bank
Co.,
Bank Rede
Ltd.S Struc Febru Due
Augu finan mptio Not
henzh ture Self ary paymen
Bank 28,000 st 03, cial n at Yes appli
en Depo Fund 05, t at a
2020 produ matur cable
Shenf sit 2020 time
cts ity
ang
Build
ing
Branc
h
China 233.5 233.5 Rede Yes Not
Merc 7 7 mptio appli
hants n at cable
Bank matur
Co., ity
Bank
Ltd.S Struc Septe Due
Mar finan
henzh ture Self mber paymen 3.85
Bank 12,000 12,20 cial
en Depo Fund 14, t at a %
20 produ
Shenf sit 2020 time
cts
ang
Build
ing
Branc
h
China
South
Redemp
ern Publi
Septe tion on
Fund fund Mon Marc c Not Not
Self mber T day, 2.95
Mana comp etary 12,000 h 10, fund 38.4 37.72 expir Yes appli
Fund 08, arrival %
geme any Fund 2021 produ ed cable
2020 on T+1
nt cts
day
Co.,
Ltd.
China Septe Marc Publi Rede 2.95 Not Yes Not
South mber h 10, c mptio % expir appli
ern 15, 2021 fund n on ed cable
Fund fund Mon 2020 produ T
Self
Mana comp etary 22,000 cts day,
Fund
geme any Fund arriva
nt l on
Co., T+1
Ltd. day
772.5 773.1
Total 82,500 -- -- -- -- -- -- -- -- -- --
7 1
Entrusted financing appears to be unable to recover the principal or there may be other circumstances that may
result in impairment
□ Applicable √ Not applicable
(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
Compan Compan Contract Contract Book Assessed Appraisa Base Pricing Transacti Whether Connecti Executio Date of Disclosur
y Name y Name Object Signing Value of Value of l Agency Date of Principle on Price A on n Disclosur e Index
of the of the Date the the Name (If Assessm (RMB10, Related Relation Conditio e
Party Other Assets Assets Any) ent (if 000) Traction n As Of
Making Party of Involved Involved any) The End
the the by the by the Of The
contract Contract Contract Contract Reportin
(RMB10, (RMB10, g Period
000) (If 000)
Any)
Hangz Nitto Nove With In Nove
SAPO hou Denko mber Consi no norma mber
Photo Jinjian provid 6, dering associ l 7,
electri g es 2017 the ation perfor 2017
Group polari relatio mance
c formul
Co., zer nship
Ltd., manuf ation with
Kunsh acturi of the
an ng marke compa
Zhiqi techno ny
mei logy t price
Materi and and
Http://
al related techni
Techn corpor www.c
ology ation. cal
ninfo.c
Co., servic
om.cn:
Ltd., e
Japan (Anno
period
Nitto uncem
Denko , the
ent
Corpo No final 86,900 No
ration No. :2
transa
017-5
ction
3)on
price
Nove
is
mber
based
7,
on the
2017
comm
ercial
negoti
ation
results
of
both
parties
.
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. Independent directors have paid close attention to the company's
operation, put forward many valuable professional suggestions for the company's daily operation and key
concerns, and played an important role in improving the company's supervision mechanism and protecting the
legitimate rights and interests of the company and all shareholders.
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 2020, the company strives to create a good corporate culture atmosphere, strengthen employee
psychological care, During the new crown pneumonia epidemic, through online communication and
communication between group executives and employees returning to Shenzhen from key epidemic areas, we care
about and care for employees returning to Shenzhen from key epidemic areas, listen to the true voices of
employees, and enhance employees' sense of ownership and belonging; at the same time, In order to understand
the ideological status of grassroots employees by the group leaders, and to better care for and help employees
grow into talents, SAPO Photoelectric organized a symposium on the theme of "growth, struggle, dedication, and
dedication" organized by employee representatives of recent graduates who have joined the company in recent
years.
At the same time, the company has newly revised the " Shenzhen Textile Group Cadre Selection and
Appointment Management System", " Shenzhen Textile Group Training Management System", " Shenzhen
Textile Group's New Employees' Salary Adjustment Management Measures for One Year", "Shenzhen Textile
Group's Interim Measures for Annual Advanced Selection", etc. Nine human resources management systems have
optimized and improved the company’s human resources related work such as personnel training, performance
compensation management, and training management. Actively guide and assist subordinate companies to
promote various human resource management standards, and according to the actual conditions of each company,
guide each company to complete the salary reform, and make reasonable adjustments to the salary level of
employees. Strengthen the scientific and standardization of human resource management, avoid labor risks,
improve the level of human resource management, and further mobilize the enthusiasm of employees
(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.
In order to thoroughly implement the spirit of General Secretary Xi Jinping’s important instructions on
epidemic prevention and control, and fully implement the major decisions of the Party Central Committee and the
State Council, the Shenzhen Municipal Party Committee and Municipal Government issued on February 7 the
Several Difficult Measures." In order to jointly respond to the epidemic, actively perform social responsibilities,
accelerate the implementation of the municipal party committee and municipal government’s decision and
deployment, and comprehensively consider the negative impact of the recent epidemic on property tenants, the
company actively responded to the call of the Shenzhen Municipal Party Committee and the State-owned Assets
Supervision and Administration Commission, and formulated the company and its affiliates. The implementation
plan for rent reduction and exemption of self-owned properties of funded enterprises, to overcome difficulties
with customers, bravely assume the social responsibilities of state-owned enterprises, and help win the battle
against epidemic prevention and control.
2. Execution of social responsibility of targeted poverty alleviation
(1) Precision poverty alleviation program
The company has no precise social responsibility for poverty alleviation in theperiodand bas no follow-up
plan either.
(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 —— ——
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 Implemen
Company pollutant
Emission port Emission ted Verified Excessive
or and Emission Total
port distributio concentrat pollutant total emission
subsidiary specific way emission
number n ion emission emission condition
name pollutant
condition standards
name
The
discharge
Exhaust
port is
gas:non-
SAPO located on
methane Altitude <100mg/ 120mg/m
Photoelect 2 the east 840kg/d 1728kg/d No
total emission m3 3
ric side of the
hydrocar
roof of
bons
Building
No. 1
Open
SAPO Waste channel Southeast
Photoelect water： discharge 1 side of <60mg/L 70mg/L 37.5804t/a 43.8438t/a No
ric COD after plant area
treatment
Prevention and control of pollution facilities construction and operation
The waste gas treatment facility adopted the RTO waste gas regenerative incineration process of SAPO
Photoelectric. 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.
The wastewater treatment facility of SAPO Photoelectric has improved the Fenton system in the early stage,
and currently adopts the wastewater treatment process of UASB anaerobic + aerobic + MBR membrane +
coagulation sedimentation. The process has strong impact resistance, stable system operation, low energy
consumption, low maintenance and operation cost, high degree of automation, and good wastewater treatment
effluent effect. The waste water produced in the production process can meet the environmental protection
requirements of standard discharge after being treated by waste water treatment facilities.
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 Photoelectric，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
1. Progress of polarizer industrialization project for ultra-large TV (Line 7)
In order to meet the funding needs for the construction of the Line 7 project, the 28th meeting of the seventh
board of directors of the company reviewed and approved the "Proposal on Subsidiaries Applying for Mortgage
Loans from Banks" and "Proposal on Providing Guarantees for Subsidiaries' Mortgage ,The Second Extraordinary
General Meeting of Shareholders in 2020 reviewed and passed the "Proposal on Providing Guarantees for
Subsidiary Mortgage Loans", and agreed that its subsidiary SAPO Photoelectric will apply for 80,000 thousand
yuan from lead Bank such as Communications Co., Ltd. Shenzhen Branch for some of its self-owned properties.
This fixed asset loan does not exceed 8 years .The specific terms and term are subject to the actual signed loan
contract; it is agreed that the company will provide joint liability guarantee for the above-mentioned loan at a 60%
shareholding ratio, and exempt it from paying the company The company’s legal representative or its authorized
representative shall be authorized to handle the above-mentioned guarantee matters on behalf of the company and
sign the guarantee contract and any other documents related to this guarantee; agree that the company and the
other guarantor Jinjiang Group shall conduct joint and several guarantee related issues Agreement stipulated. For
details, please refer to Announcement Nos. 2020-18, 2020-19 and 2020-22 of the company on
www.cninfo.com.cn (http://www.cninfo.com.cn).
As of the disclosure date of this report, Line 7 project has completed the main plant roof capping and
extension machine equipment manufacturing. Affected by the novel coronavirus pneumonia epidemic, due to
shortages of labor, insufficient supply of engineering materials and equipment, and transportation restrictions, the
Line 7 project will not be fully resumed until mid-March 2020. The company further strengthened the monitoring
and management of budget, progress, quality and other aspects, and rearranged the construction time nodes. As of
December 31, 2020, the civil engineering of the line 7 project has basically been completed, and the clean area of
the main production workshop has completed preliminary acceptance ; In terms of process equipment, main
equipment such as extension machines, coating machines, and anti-detection machines have been installed and
entered the commissioning stage. The overall commissioning will be completed in late March 2021 and enter trial
production.
During the reporting period, the company, after prudential evaluation, invested an additional RMB 147.2
million in the construction of 1 RTP production line and 2 RTS production lines in the No. 7 line project. The
source of funds was its own funds and bank loans. The main reasons for this increase in investment are to meet the
needs of downstream panel customers and enhance the depth of customer cooperation; the second is to help
improve the overall production efficiency of Line 7 project, simplify the production process, and effectively
reduce production costs; third, to further improve Enterprise competitiveness provides guarantee for the successful
operation of Line 7 project. For the above details, please refer to the "Announcement on the Increase of
Investment and Construction Progress in the Industrialization Project of Polarizers for Super Large TVs (Line 7)"
by Juchao Information Network (http://www.cninfo.com.cn) on April 30, 2020. (No. 2020-25). As of the
disclosure date of this report, the company has built 1 RTP production line, and RTP equipment production is in
progress. It is expected to achieve mass production in the third quarter of 2021; 1 RTS production line is already
under construction, and it is expected to be achieved in the third quarter of 2021. Mass production.
As of December 31, 2020, the cumulative investment contract value of the Line 7 project was 1.628,631,700
yuan, and the actual payment was 1,468,765,700 yuan (using raised funds of 409,951,100 yuan, using self-owned
funds and government funds of 1,058,114,700 yuan).
2. Progress of Renting of Guanhua Building
In order to further revitalize the company’s stock assets, concentrate resources on the main business, and
stimulate the vitality of the company, the “Regarding the Transfer of Shenzhen Guanhua Printing and Dyeing Co.,
Ltd. The “Proposal of 50.16% of the Company’s Equity” agrees that the company will transfer the 50.16% equity
of Guanhua Company held by the company by public listing in Shenzhen United Property Rights Exchange at a
price no less than RMB 340,468,300 as the assessment result approved by the state-owned asset management
department. However, due to market reasons and changes in relevant circumstances, after the company’s
comprehensive consideration, Guanhua’s equity was not listed on the Shenzhen United Assets and Equity
Exchange. The company originally planned to combine it according to market conditions during the validity
period of the target equity evaluation report (August 30, 2020). The company actually chooses the opportunity to
list on the market. For the details of the above specific situation, please refer to the company's announcement No.
2019-55, 2019-63, and 2019-71 on the Juchao Information Network (http://www.cninfo.com.cn).
Due to market reasons and changes in relevant circumstances, the company did not publicly list and transfer
the equity of the target company on the Shenzhen United Assets and Equity Exchange. As of the disclosure date of
this report, the evaluation report of Guanhua Company has passed its validity period (valid until August 30, 2020).
If the equity transfer continues to be implemented, a new asset evaluation will be required. In view of the market
reasons affected by the new crown pneumonia epidemic this year, combined with the company's actual operating
conditions, the company, after careful consideration, intends to terminate the transfer of 50.16% of Guanhua's
equity. The company held the 33rd meeting of the seventh board of directors on October 29, 2020, and held the
first extraordinary general meeting of 2021 on February 2, 2021. It reviewed and approved the ``Regarding the
termination of the transfer of Shenzhen Guanhua Printing and Dyeing Co., Ltd. "The Proposal on 50.16% of the
Company’s Equity" agrees that the company will terminate the public listing and transfer of 50.16% of the equity
of Shenzhen Guanhua Printing and Dyeing Co., Ltd. in accordance with market changes and actual operating
conditions. For the above content, please refer to http: //www.cninfo.com.cn) "Announcement on Terminating the
Transfer of 50.16% Equity of Shenzhen Guanhua Printing and Dyeing Co., Ltd." (No. 2020-49).
3. The disposal of assets of the joint venture company Xieli Automobile Co., Ltd.
Shenzhen Xieli Automobile Enterprise Co., Ltd. (hereinafter referred to as "Shenzhen Xieli") is a
Sino-foreign joint venture invested and established by the company and Hong Kong Xieli Maintenance Company
in 1981, with a registered capital of 3.12 million yuan, and the company holds 50% of the equity. The company's
operating period ended in 2008, and its business license was revoked in 2014. The company's main asset is real
estate. Up to now, the company has received RMB 25.76 million. This matter has no impact on the company’s
profit and loss. The company still needs to negotiate with other shareholders regarding the property under the
name of Shenzhen Xieli, and promote the resolution of related issues. The company will promptly follow the
follow-up progress. Fulfill information disclosure obligations.
XX. Material events of subsidiaries
√ Applicable □Not applicable
1. Matters concerning the company's arbitration and compensation for its subsidiaries'
performance commitments in 2019
On March 9, 2020, the company received the 2020 Shen Guozhong Acceptance No. 452-2 "Arbitration
Notice" from the Shenzhen International Arbitration Court and the "Arbitration Application" submitted by
Hangzhou Jinjiang Group Co., Ltd. as the applicant. The respondent of the arbitration matter, Hangzhou Jinjiang
Group Co., Ltd. filed an arbitration request: 1. The award made the following changes to the "Cooperation
Agreement": (1) The original Article 3.1 of the "Cooperation Agreement" was deleted, and the relevant unfulfilled
rights and obligations were no longer fulfilled. (2) Delete the original Article 6.4 of the Cooperation Agreement,
and the relevant unfulfilled rights and obligations will no longer be fulfilled; 2. The ruling that the respondent
shall bear the arbitration fees in this case and the actual expenses of the arbitration tribunal. The applicant reserves
the right to further modify the arbitration request. For details, please refer to the "Announcement on the
Company's Involvement in Arbitration" (No.2020-07) of Juchao Information Network
(http://www.cninfo.com.cn)..
On March 26, 2020, the company received the 2020 Shenzhen International Arbitration Court No. 452-3
"Notice on Extending the Time Limit for Appointment of Arbitrators" from the Shenzhen Court of International
Arbitration. Due to the complex disputes in this case and the special epidemic background, the claimant needed
extra time to negotiate and communicate the procedural matters of this case with the respondent, so it applied to
the Shenzhen Court of International Arbitration to extend the time limit for appointing arbitrators in this case. The
Shenzhen Court of International Arbitration considers that the claimant’s request is reasonable, and both parties
are requested to notify the Shenzhen Court of International Arbitration in writing of the result of the appointment
of the arbitrator before March 30, 2020. Therefore, the company will postpone the appointment of arbitrators
within 15 days after receiving the notice of arbitration on March 9, 2020 until the appointment of arbitrators
before March 30, 2020, and notify the Shenzhen International Arbitration Court of the result in writing. For details,
please refer to the "Announcement on the Company's Progress Involving Arbitration" (No. 2020-21) on the
company's Juchao Information Network (http://www.cninfo.com.cn).
On April 17, 2020, the company received the 2020 Shenzhen International Arbitration Court No. 452-4
"Notice of Arbitration Tribunal Composition" from Shenzhen International Arbitration Court. Both parties to the
arbitration have selected arbitration in accordance with the arbitration procedures before March 30, 2020. The
Shenzhen Court of International Arbitration was notified in writing of the results of the arbitrators, each
appointing an arbitrator and jointly appointing a chief arbitrator. On April 16, 2020, the arbitration tribunal to hear
the case was formed.
On December 1, 2020, the arbitration case was heard in the Seventh Arbitration Tribunal of the Court of
Arbitration located at the Shenzhen Stock Exchange. As of the disclosure date of this announcement, the
arbitration has not yet been awarded. In view of the company's involvement in the aforementioned arbitration
matters and the uncertainty of the arbitration results, Jinjiang Group's unfulfilled commitment to the company's
subsidiary SAPO SAPO Photoelectric for 2019 performance is uncertain. The company will continue to pay
attention to the follow-up progress of this arbitration and timely perform its information disclosure obligations.
2. 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, 2019, Changxing Junying had accumulated 3 investment projects with a total investment
of 42 million yuan. The profit during the reporting period was 2,150,900 yuan.
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
3 Shenzhen Hengbaoshun Technology Development Co., Ltd. Optical Film 1,500
3. Provision of guarantees for subsidiaries to apply for bank mortgages
In order to meet the capital requirements for the construction of the polarizer industrialization
project (line 7) for super-large TVs, the 28th meeting of the seventh board of directors of the
company deliberated and approved the "Proposal on Subsidiaries Applying for Mortgage Loans
from Banks" and "About The Proposal on Providing Guarantees for Subsidiaries' Mortgage Loans,
the Proposal on Providing Guarantees for Subsidiaries' Mortgage Loans Deliberated and Passed by
the Second Extraordinary General Meeting of Shareholders in 2020, the 34th Meeting of the
Seventh Board of Directors, and the first interim meeting in 2021 The general meeting of
shareholders reviewed and approved the "Proposal on Clarifying the "Proposal on Providing
Guarantees for Subsidiary Mortgage Loans" and the scope of guarantees in the resolution", and
agreed that the subsidiary SAPO Photoelectric will use some of its self-owned properties to take the
Bank of Communications Co., Ltd. Shenzhen Branch as the lead The bank’s syndicated application
for a fixed asset loan of RMB 80 million with a term of no more than 8 years is based on the
"Oversized TV Polarizer Industrialization Project (Line 7) Syndicated Loan" and "Oversized TV"
signed by SAPO Photoelectric and the lender. "The Mortgage Contract of Syndicated Loan for
Polarizer Industrialization Project (Line 7)" shall prevail;
Agreed to provide a joint liability guarantee for 60% of the total debts of the subsidiary SAPO
Photoelectric under the above-mentioned project loan to the above-mentioned syndicate. The
principal amount of the secured creditor's rights is RMB 480 million, and the legal representative of
the company or its authorized representative is authorized to represent the company Handle the
above guarantee matters and sign the guarantee contract and any other documents related to this
guarantee. For details, please refer to the company's announcements No. 2020-18, 2020-19,
2020-22, 2020-52, and 2021-11 on www.cninfo.com.cn. As of the date of the disclosure of this
report, the company has signed the "Guarantee Contract for Syndicated Loans for the
Industrialization Project of Polarizers for Ultra-Large TVs (Line 7)" with Bank of Communications
Co., Ltd. Shenzhen Branch, the guarantee agent of the syndicate. For details, please refer to the
"Announcement on the Company's Progress in Providing Guarantees to Subsidiaries" (No. 2020-46)
on October 24, 2020, http://www.cninfo.com.cn.
Chapter 6: 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 Proporti Capitaliz
on Share ation of
Bonus Proporti
allotmen common Other Subtotal Quantity
shares on
t reserve
fund
1.Shares with conditional 2,893,83 -1,567,4 -1,567,4 1,326,40
0.57% 0.25%
subscription 0 25 25 5
1.State -owned shares 0 0.00% 0 0 0 0.00%
2. State-owned legal
0 0.00% 0 0 0 0.00%
person shares
2,893,83 -1,567,4 -1,567,4 1,326,40
3.Other domestic shares 0.57% 0.25%
0 25 25 5
Incl：Domestic legal
0 0.00% 0 0 0 0.00%
person shares
Domestic Natural Person 2,893,83 -1,567,4 -1,567,4 1,326,40
0.57% 0.25%
shares 0 25 25 5
4.Foreign share 0 0.00% 0 0 0 0.00%
Incl：Foreign legal person
0 0.00% 0 0 0 0.00%
share
Foreign Natural
0 0.00% 0 0 0 0.00%
Person shares
II.Shares with
506,444, 506,445,
unconditional 99.43% 1,275 1,275 99.75%
599 874
subscription
1.Common shares in 457,016, 457,017,
89.73% 1,275 1,275 90.02%
RMB 599 874
2.Foreign shares in 49,428,0 49,428,0
9.70% 0 0 9.74%
domestic market 00 00
3. Foreign shares in
0 0.00% 0 0 0 0.00%
foreignc market
4.Other 0 0.00% 0 0 0 0.00%
509,338, -1,566,1 -1,566,1 507,772, 100.00
III. Total of capital shares 100.00%
429 50 50 279 %
Reasons for share changed
√ Applicable □Not applicable
The company’s performance in 2020 did not meet the conditions for the release of the second sale restriction
period stipulated in the 2017 Restricted Stock Incentive Plan, according to the company’s Restricted Stock
Incentive Plan in 2017,Chapter VIII of the restricted stock grant conditions And the conditions for lifting the sales
restriction ,If the conditions for lifting the sales restriction in the current period are not met, the company will
repurchase the restricted stocks that can be released for the current year and cancel them in accordance with the
provisions of this plan. The second phase held by the company for 116 incentive objects The 1,313,340 restricted
stocks that did not meet the conditions for lifting the restrictions were repurchased and cancelled. Secondly ,The
company’s original incentive targets, including 11 people who resigned due to personal reasons, including Liao
Zhichao, Xu Kai, Xu Liqun, Zhang Yonggang, Xiong Sheng, Yuan Rubing, Xie Fengzhen, Xu Weiwen, Pu
Xueying, Liu Shuhong, and Qin Wei. According to the relevant provisions of the Incentive Plan (Draft), the
above-mentioned personnel no longer meet the incentive conditions, and the company shall repurchase and cancel
the 247,050 restricted stocks that have been granted but not yet lifted. Thirdly, the company’s original incentive
object, Yang Jianjun, retires. According to the company’s "2017 Restricted Stock Incentive Plan", this person no
longer meets the incentive conditions, and the company has granted 5,760 restricted stocks that have not been
lifted. Cancellation of repurchase. In summary, a total of 1,566,150 restricted stocks were repurchased and
cancelled. For details, please refer to the "Announcement on Repurchase and Cancellation of Certain Restricted
Stocks" (No. 2019-75, 2020-17, 2020-30) of the company on www.cninfo.com.cn. On November 12, 2020, the
company completed the repurchase and cancellation procedures of the above-mentioned restricted stocks at the
Shenzhen Branch of China Securities Depository and Clearing Corporation Limited. For details, please refer to
www.cninfo.com (http://www.cninfo.com). .cn) "Announcement on Completion of Repurchase and Cancellation
of Certain Restricted Stocks" (No. 2020-51) of the company.
In addition, the company's shares held by Zhang Xiaodong, the company's former employee supervisor, were
partially unlocked during the reporting period, and 1,275 shares of shares not subject to sales restrictions were
added.
Approval of Change of Shares
√ Applicable □Not applicable
Regarding the transfer of the above-mentioned restricted stocks, Grant Thornton International Ltd (special
general partnership) conducted an inspection on the above-mentioned repurchase and cancellation of some
restricted stocks and issued 07552020090097235311 Capital Verification Report. The company has issued a report
on November 12, 2020. The Shenzhen Branch of China Securities Depository and Clearing Corporation Limited
completed the repurchase cancellation procedures. For details Juchao Website: （ http://www.cninfo.com.cn.,
Company "Announcement on Completion of Repurchase and Cancellation of Certain Restricted
Stocks" ,Announcement No. 2020-51).
Ownership transfer of share changes
√ Applicable □Not applicable
Regarding the transfer of the above restricted stocks, ShineWing Accounting Firm (special general
partnership) verified some restricted stocks cancelled by the above repurchase and issued the capital verification
report XYZH/2019SZA20370. The Company completed the repurchase and cancellation procedures in Shenzhen
branch of China Securities Depository and Clearing Co., Ltd on September 12, 2019. For details Juchao Website:
（http://www.cninfo.com.cn. (Announcement No.2019--42).
Progress on any share repurchase:
√ Applicable □Not applicable
For details, please refer to Section V, "XV. Implementation of the Company's Equity Incentive Plan,
Employee Stock Ownership Plan or Other Employee Incentive Measures (III) Progress of Restricted Stock".
Progress on reducing the repurchased shares by means of centralized bidding:
□ 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
After the Company repurchased and cancelled some restricted stocks, the total capital of the Company was
changed from 509,338,429 shares to 507,772,279 shares. The impact of this share change on the Company's
financial indicators such as basic earnings per share and diluted earnings per share, net assets per share
attributable to the company's common shareholders in the latest year and period is as follows:
Items Year 2019 Year 2020
According to the According to the new According to the new
original capital capital capital
Basic earnings per share (yuan/share) 0.04 0.07
Diluted earnings per share 0.04 0.07
Net assets per share 5.36 5.45
Other information necessary to disclose for the company or need to disclosed under requirement from security
regulators
□ Applicable √Not applicable
2. Change of shares with limited sales condition
√ Applicable □Not applicable
Number of Increase the Number of Number of
restricted number of restricted restricted
Name of Reasons for
shares at the restricted shares lifted in shares at the Release date
Shareholder restricted sale
beginning of shares in the the current end of the
the period current period period period
Executives
Zhang Xiaodong 5,250 1,275 0 3,975 Jan 1, 2020
lock stocks
Total 5,250 1,275 0 3,975 -- --
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
For details, please refer to Section 5 "15. Implementation of the company's equity incentive plan, employee stock
ownership plan or other employee incentive measures (3) Progress of restricted stocks".
3. About the existing employees’ shares
□Applicable √Not applicable
III. Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
In Shares
Total
preferred sha
Total number Total The total numbe reholders at
of common shareholders at r of preferred sh the end of the
shareholders the end of the areholders votin month from
at the end of 29,622 month from 28,741 g rights restored 0 the date of 0
the the date of at period-end(if disclosing the
reporting disclosing the any)(See Notes annual
period annual report 8) report(if
any)(See
Notes 8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Number Amount Number of share
Proporti Amount
of Changes of pledged/frozen
Shareholders on of of
Nature of shares in un-restri
shares restricte
shareholder held at reportin cted
held d shares
period g period shares State of share Amount
（%） held
-end held
Shenzhen 46.10% 234,069 0 234,069,
Investment State-owned ,436 436
Holdings Co., legal person
Ltd.
Shenzhen 3.18% 16,129, 0 16,129,0
Shenchao State-owned 032 32
Technology
Investment Co., Legal person
Ltd.
Domestic 0.64% 3,224,7 0 3,224,76
Sun Minghui
Nature person 67 7
Domestic 0.56% 2,823,0 224996 2,823,06
Su Weipeng
Nature person 66 6 6
Domestic 0.49% 2,509,1 230910 2,509,10
Chen Xiaobao
Nature person 00 0 0
Domestic 0.45% 2,277,7 227770 2,277,70
Deng Yan
Nature person 00 0 0
Domestic 0.35% 1,765,3 176530 1,765,30
Shen Zhenxing
Nature person 00 0 0
Domestic 0.33% 1,678,0 141240 1,678,00
Wang Zhongjin
Nature person 00 0 0
Domestic 0.32% 1,612,5 161259 1,612,59
Hou Xiulan
Nature person 91 1 1
Domestic 0.31% 1,598,7 452097 1,598,79
Li Zengmou
Nature person 97 7
Strategy investors or general
legal person becomes top 10
No
shareholders due to rights issued
(if applicable)（See Notes 3）
Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned
subsidiary of Shenzhen Investment Holdings Co., Ltd., According to the
decision of the State-owned Assets Supervision and Administration
Commission of Shenzhen Municipal People's Government, Shenzhen
Shenchao Technology Investment Co., Ltd was transferred to Shenzhen Major
Industrial Investment Group Co., Ltd in June 2019. After the completion of
the transfer, Shenzhen Investment Holdings Co., Ltd., the controlling
shareholder of the company, no longer holds the equity of Shenzhen Shenchao
Explanation on shareholders
Technology Investment Co., Ltd., and Shenzhen Shenchao Technology
participating in the margin
Investment Co., Ltd. is changed to a wholly-owned subsidiary of the Industrial
trading business
Investment Group. Shenzhen Investment Holdings Co., Ltd. and Shenzhen
Shenchao Technology Investment Co., Ltd. no longer constitute a concerted
person relationship.Except this, the Company did not whether there is
relationship between the top ten shareholders holding non-restricted
negotiable shares and between the top ten shareholders holding 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
Name of the shareholder Quantity of unrestricted shares held at the end Share type
of the reporting period Share type Quantity
Shenzhen Investment Holdings Common
234,069,436 234,069,436
Co., Ltd. shares in RMB
Shenzhen Shenchao Technology Common
16,129,032 16,129,032
Investment Co., Ltd. shares in RMB
Common
Sun Huiming 3,224,767 3,224,767
shares in RMB
Foreign shares
Su Weipeng 2,823,066 in domestic 2,823,066
market
Common
Chen Xiaobao 2,509,100 2,509,100
shares in RMB
Common
Deng Yan 2,277,700 2,277,700
shares in RMB
Common
Shen Zhenxing 1,765,300 1,765,300
shares in RMB
Common
Wang Zhongjing 1,678,000 1,678,000
shares in RMB
Common
Hou Xiulan 1,612,591 1,612,591
shares in RMB
Common
Li Zengmou 1,598,797 1,598,797
shares in RMB
Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned
subsidiary of Shenzhen Investment Holdings Co., Ltd., According to the
decision of the State-owned Assets Supervision and Administration
Commission of Shenzhen Municipal People's Government, Shenzhen
Shenchao Technology Investment Co., Ltd was transferred to Shenzhen Major
Explanation on associated Industrial Investment Group Co., Ltd in June 2019. After the completion of
relationship or consistent action the transfer, Shenzhen Investment Holdings Co., Ltd., the controlling
among the top 10 shareholders of shareholder of the company, no longer holds the equity of Shenzhen Shenchao
non-restricted negotiable shares Technology Investment Co., Ltd., and Shenzhen Shenchao Technology
and that between the top 10 Investment Co., Ltd. is changed to a wholly-owned subsidiary of the Industrial
shareholders of non-restricted Investment Group. Shenzhen Investment Holdings Co., Ltd. and Shenzhen
negotiable shares and top 10 Shenchao Technology Investment Co., Ltd. no longer constitute a concerted
shareholders person relationship.Except this, the Company did not whether there is
relationship between the top ten shareholders holding non-restricted
negotiable shares and between the top ten shareholders holding 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.
Explanation on shareholders
participating in the margin Company shareholder Chen Xiaobao holds 2,332,700 shares through a credit
trading business(if any )(See transaction secured securities account.
Notes 4)
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
Name of the Legal
Date of Organization
Controlling representative/ Principal business activities
incorporation code
shareholder Leader
Investment and acquisition of financial and
similar financial stock rights such as bank,
security, insurance, fund and guarantee;
Engage in real estate development and
management business within the limit of
legally-acquired land use right; Carry out
investment and service in the field of
strategic emerging industry; Carry out
Shenzhen investment, operation and management of
Wang October
Investment 76756642-1 state-owned stocks of wholly-owned, holding
Yongjian 13,2004
Holdings Co., Ltd. and joint-stock company by reorganization &
integration, capital operation and asset
disposal; Other businesses undertaken by
authorization of municipal SASAC(State
Asset Supervision and Administration
Commission) (If the above business scope
needs to be approved according to national
regulations, the business can only be
operated after the approval is obtained).
Shen Property A（000011），Quantity of shares 339.45 million，Shareholding ratio：56.96%；
SPGA（000029），Quantity of shares 642.28 million，Shareholding ratio：63.55%；Shen
Universe A（000023），Quantity of shares 9.59 million，shareholding ratio：6.91%；Pingan
Equity of other （601318），Quantity of shares 962.72 million，shareholding ratio：5.27%；Guosen Seurities
domestic/foreign （002736），Quantity of shares 3223.11 million，shareholding ratio：33.53%；Guotai Junan
listed （601211），Quantity of shares 609.24 million，H shareholding ratio：103.37%,Total
company with shareholding ratio :8.00%；Telling holding（000829），Quantity of shares 195.03 million，
share shareholding ratio：18.8%；Shenzhen International（00152），Quantity of shares：952.01
controlling and million，shareholding ratio：44.04%；Beauty Star（002243），Quantity of shares：604082
share million，shareholding ratio：51.93%； Hopewell Highway (00737），Quantity of shares：
participation by 2213.45 million，shareholding ratio：71.83%; Infinova（002528），Quantity of shares：315.83
million，shareholding ratio：26.35%; Eternal Asia（002183），Quantity of shares：388.45
controlling
million，shareholding ratio：18.3%；Shen Enerty（000027)，Quantity of shares：5.64 million，
shareholder in
shareholding ratio：0.14%;Bank Communication（601328）Quantity of shares：9.52 million，
reporting period
shareholding ratio：0.01%；Tehan Ecological （300197）Quantity of shares：113.98 million，
shareholding ratio：4.86%and CHINA VANKE（02202）Quantity of shares：77.278 million，
shareholding ratio：0.68%.
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 representative/ Date of
Organization code Principal business activities
shareholder person in establishment
charge
Performing the
responsibilities of investors
State-owned Assets
on behalf of the state and
Regulatory Commission of
Yu Gang July 31,2004 K3172806-7 supervising and managing
Shenzhen Municipal
state-owned assets
People's Government
according to authorization
and law.
Equity of other
domestic/foreign listed
company with share Except for Shenzhen Holdings Co., Ltd., the holding shareholder of the company,
controlling and share
other domestic and foreign listed companies of the equity held by the actual
participation by
controller haven’ been shown in the 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
5. Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers,
Restructuring Party and Other Commitment Subjects
□Applicable √Not applicable
Chapter 7: Situation of the Preferred Shares
□ Applicable √Not applicable
The Company had no preferred shares in the reporting period.
Chapter 8: Information about convertible corporate bonds
□ Applicable √Not applicable
During the reporting period, the company did not have convertible corporate bonds.
Chapter 9: Information about Directors, Supervisors and Senior
Executives
I. Change in shares held by directors, supervisors and senior executives
Amount Amount
of of
Shares Shares
shares shares Other
held at held at
Starting Expiry increase decrease changes
Position Office the the
Name Sex Age date of date of d at the d at the increase
s status year-beg year-geg
tenure tenure reportin reportin /decreas
in(share in(share
g g e
) )
period(s period(s
hare) hare)
Board
chairma
n，
Februar
Zhang Secretar Februar
In office Female 41 y 0 0 0 0 0
Jian y of the y 9,2024
10,2021
party
committ
ee
Deputy
Secreta
ry of
the
Party
commi
Zhu July Februar
ttee， In office Male 56 174,000 0 40,500 133,500
Meizhu 19,2017 y 9,2024
Directo
r,
Genera
l
Mange
r
Director
,
Deputy
Secreta
ry of
the
Party
commi
Decemb
Ning ttee Februar
In office Male 45 er 73,200 0 36,600 36,600
Maozai and y 9,2024
14,2017
Secreta
ry of
the
Commi
ssion
for
Discipl
ine
Februar
Yin Februar
Director In office Male 46 y 0 0 0 0
Kefei y 9,2024
10,2021
Director
, January Februar
He Fei In office Male 43 0 0 0 0
16,2020 y 9,2024
CFO
Februar
Sun Februar
Director In office Male 39 y 0 0 0 0
Minghui y 9,2024
10,2021
Indepen
He July Februar
dent In office Male 58 0 0 0 0
Zuowen 19,2017 y 9,2024
Director
Cai Indepen
July Februar
Yuanqin dent In office Male 51 0 0 0 0
19,2017 y 9,2024
g Director
Indepen
Wang January Februar
dent In office Male 37 0 0 0 0
Kai 16,2020 y 9,2024
Director
Chairma
n of the
supervis January Februar
Ma Yi In office Male 54 0 0 0 0
ory 16,2020 y 9,2024
committ
ee
Shareho
Yuan lders' January Februar
In office Male 40 0 0 0 0
Shuwen Supervis 16,2020 y 9,2024
ors
Shareho
Februar
Zhan lders' Februar
In office Female 51 y 33,600 0 16,800 16,800
Lumei Supervis y 9,2024
10,2021
ors
Le Deputy April Februar
In office Male 57 73,200 0 36,600 36,600
Kunjui GM 28,2017 y 9,2024
Liu Deputy July Februar
In office Male 56 76,200 0 36,600 39,600
Honglei GM 19,2017 y 9,2024
Secretar
Jiang y to the January Februar
In office Female 50 60,000 0 30,000 30,000
Peng board of 16,2015 y 9,2024
directors
Board Februar
Dimissi January
Zhu Jun chairma Male 57 y 82,200 0 41,100 41,100
on 16,2015
n 10,2021
Februar
Huang Dimissi July
Director Male 46 y 0 0 0 0
Yu on 19,2017
10,2021
Septemb Februar
Wang Dimissi
Director Male 48 er y 0 0 0 0
Chuan on
1,2018 10,2021
Indepen
He Dimissi August January
dent Male 68 0 0 0 0
Qiang on 16,2013 16,2020
Director
Chairma
n of the
Wang supervis Dimissi May January
Male 52 0 0 0 0
Weixing ory on 20,2015 16,2020
committ
ee
Shareho
lders' Dimissi June January
Li Lei Male 45 0 0 0 0
Supervis on 26,2019 16,2020
ors
Employ
Zhang Februar
ee Dimissi August
Xiaodon Male 45 y 5,300 0 0 5,300
supervis on 9,2013
g 10,2021
or
合计 -- -- -- -- -- -- 577,700 0 238,200 0 339,500
II. Change in shares held by directors, supervisors and senior executives
√ Applicable □Not applicable
Name Positions Types Date Reason
Board Left for term
Zhu Jun February 10,2021 The term of office expires.
chairman expiration
Left for term
Huang Yu Director February 10,2021 The term of office expires.
expiration
Wang Left for term
Director February 10,2021 The term of office expires.
Chuan expiration
Independen Left for term
He Qiang January 16,2020 The term of office expires.
t Director expiration
Independen The former independent director Left for
Wang Kai Elected January 16,2020
t Director term expiration
Chairman
Wang of the
Left January 16,2020 Job change
Weixing supervisory
committee
Chairman
of the The former chairman of the board of
Ma Yi Elected January 16,2020
supervisory supervisors leaves office
committee
Shareholder
Li Lei s' Left January 16,2020 Job change
Supervisors
Shareholder
Yuan The former Shareholders' Supervisors
s' Elected January 16,2020
Shuwen Leaves office
Supervisors
Zhang Employee Left for term
February 10,2021 The term of office expires.
Xiaodong supervisor expiration
Zhan Employee The former employee supervisor Left for
Elected February 10,2021
Lumei supervisor term expiration
III.Posts holding
Professional background, work experience and main duties in the Company of existing directors, supervisors and
senior management
(1) Director
Zhang Jian, female, born in June 1979, master's degree, member of the Communist Party of China. She has
served as an office clerk of the marketing department of Shenzhen Postal Savings and Foreign Exchange
Reserves Bureau, deputy director of the Finance Department of Shenzhen Development and Reform
Commission (formerly Shenzhen Development and Reform Bureau), Senior Staff Member, Principal Staff
Member and Deputy Director of the Industrial Coordination Department of Shenzhen Development and Reform
Commission, Deputy Director of the Economic System Reform Department of Shenzhen Development and
Reform Commission, and Party Member and Deputy General Manager of Shenzhen Kunpeng Equity
Investment Management Co., Ltd. She is currently Party Secretary and Chairman of the Company, and
concurrently serves as Party Committee Member, Deputy General Manager and Secretary of the Board of
Directors of Shenzhen SEG Group Co.,Ltd., Director of Shenzhen SEG Co., Ltd., Vice Chairman of Shenzhen
Huakong SEG Co., Ltd., Chairman of Shenzhen Daming Electronics Co., Ltd., Chairman of Shenzhen SEG
High-tech Investment Co., Ltd. and Chairman of SEG (Hong Kong) 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, Assistant 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 of the Company.
Yin Kefei, male, born in July 1974, master degree, engineer, member of the Communist Party of China. He
has served as Technician and Deputy Director of Customer Service Center of Pipeline Gas Branch of Shenzhen
Gas Group Co., Ltd.; Deputy Director, Director of Civil Service Department and Director of General Office of
Pipeline Gas Customer Service Branch of Shenzhen Gas Group Co., Ltd.; Deputy General Manager of Shenzhen
Gas Group Co., Ltd. Ganzhou Shenran Natural Gas Co., Ltd.; Member of the Party Group and Deputy Director of
the State-owned Assets Supervision and Administration Commission of Dongguan City, Guangdong Province, and
concurrently the Vice Chairman of Dongguan Water Investment Group Co., Ltd.; Deputy Secretary-General of
Dongguan Municipal Government of Guangdong Province, Party Secretary and Director of Dongguan Municipal
Government Liaison Office in Beijing, and concurrently Chairman of the Board of Supervisors of Dongguan
Biotechnology Industry Development Co., Ltd.; Deputy Secretary of the Party Committee, Director and General
Manager of Dongguan Financial Holding Group Co., Ltd., concurrently Director of Dongguan Bank and Director
of Dongguan Asset Management Company; He is currently the Deputy General Manager of Shenzhen Investment
Holdings Co., Ltd. and Director of the Company.
He Fei, male, born in February 1978, master's degree, member of Communist Party of China, Chinese
certified public accountant, accountant. He successively served as accountant of the Planning and Finance
Department of Shenzhen Gas Group Co., Ltd., accountant of the Finance Department of Shenzhen Gas Investment
Co., Ltd., which is affiliated to Shenzhen Gas Group Co., Ltd., and manager of the Finance Department of Hubei
Shengjie Clean Energy Co., Ltd., which is affiliated to Shenzhen Gas Investment Co., Ltd.; Director of General
Finance Department of Shenzhen Convention & Exhibition Center Management Co., Ltd.; Vice Director of
Finance Department (Settlement Center) of Shenzhen Investment Holding Co., Ltd. Currently, he is the company
director and chief financial officer of the company and Supervisor of SAPO Photoelectric Co., Ltd.
Sun Minghui, male, born in September 1981, master degree, accountant, member of the Communist Party of
China. He has served as Staff Member of the Finance Department of Shenzhen Energy Finance Co., Ltd. and the
Financial Management Department of Shenzhen Energy Group Co., Ltd., Finance Management Director of the
Financial Budget Department of Shenzhen Investment Holdings Co., Ltd., Senior Director of the Finance
Department and the Board Office, and Deputy Director of the Finance Department (Settlement Center). He is
currently the Director of Finance Department (Settlement Center) of Shenzhen Investment Holdings Co., Ltd. and
Director of the Company.
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，Independent director of Shenzhen Special Economic Zone Real Estate (Group) Co., Ltd.,
and Independent Director of the Company.
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., Independent
director of Ogilvy Medical Supplies Co., ltd. and independent directors of the Company.
Wang Kai, male, born in 1983, Ph.D. of Huazhong University of Science and Technology, Member of the
Communist Party of China, associate professor and researcher of Southern University of Science and Technology
Department of Electronic and Electrical Engineering, and Outstanding Young Man of Guangdong Province. He
has served as a member of the Technical Committee of Beijing Branch of Society for Information Display (SID), a
member of the National Standardization Technical Committee of Flat Panel Display Devices, Deputy Director of
the Key Laboratory of Energy Conversion and Storage Technology of the Ministry of Education, and Deputy
Director of the Key Laboratory of Quantum Dot Advanced Display and Lighting in Guangdong Universities, and
independent director of the Company.
（2）Supervisor
Ma Yi, male, born in 1966, bachelor's degree, member of Communist Party of China, assistant economist.
He has successively served as a cadre of the automobile manufacturing and distribution plant of Hainan
automobile transportation corporation, director of the Business Department, assistant to the general manager and
manager of the Transportation Department of Shenzhen Shenjiu International Logistics Co., Ltd. Guangzhou
Branch, operation director of Cosco Logistics Guangzhou Antaida Logistics Co., Ltd., general manager of
Shenzhen Shenjiu International Logistics Co., Ltd. Guangzhou Branch, director of Planning and Development
Department, director assistant, chief of Futian station, deputy secretary of the Party Committee, director and
general manager of Shenzhen highway passenger and freight transportation service center. He is the current
chairman of the board of supervisors of the company.
Yuan Shuwen, male, born in 1980, master's degree. He has successively served as chief of Shigu
management station of Hengshan county rural management bureau, financial director of Shenzhen Fengcheng
Iron Wire Products Co., Ltd., project manager of Shenzhen branch of BDO Accounting Firm Co., Ltd., general
ledger accountant of Shenzhen Zhenye (Group) Co., Ltd., director of Financial Budget Department and senior
director of Assessment and Distribution Department of Shenzhen Investment Holding Co., Ltd. Currently, he is
vice director of Assessment and Distribution Department of Shenzhen Investment Holding Co., Ltd. and
supervisor of the Company.
Zhan Lumei, female, born in June 1969, college degree, Senior Labor Relations Coordinator, Senior Career
Instructor, member of the Communist Party of China. She has served as the Administrative Personnel Director of
Shenzhen Hualang Garment Co., Ltd., Director and Manager of the Human Resources Department of the
Company. Currently, she is the vice chairman of the Federation of Trade Unions, Director of the Party-mass Work
Department, and Chairman of the Trade Union and the Employee Supervisor of the Company.
（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 Deputy General Manager of the Company, and Director of SAPO Photoelectric Co., Ltd.
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. He is also the secretary and director of the party branch of Shenzhen SAPO Photoelectric
Technology Co., Ltd.
Jiang Peng, Female, born in 1970, Bachelor Degree, member of communist party, She has served as a Clerk
and Deputy Section Chief of the office of Shandong Aquatic Enterprise Group Corporation, Section Chief of the
Office of the Board of Directors of Shandong Zhonglu Ocean Fishery Co., Ltd., Deputy Director and Securities
Affairs Representative. 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
Names
Expiry receive
of the
Names of the Titles engaged in Sharing date of date of remuneration
person
shareholders the shareholders office term office or allowance
s in
term from the
office
shareholder
Yin Shenzhen Investment
Deputy GM January 11,2021 Yes
Kefei Holdings Co., Ltd.
Director of
Sun
Shenzhen Investment Financial
Mingh November 11,2020 Yes
Holdings Co., Ltd. Dept( Clearing
ui
centre）
Yuan Deputy Director
Shenzhen Investment of discipline
Shuwe September 18,2017 Yes
Holdings Co., Ltd. Inspection &
n
Supervision
Office
Offices taken in other organizations
√Applicable □Not applicable
Does
he/she
Titles
receive
Name of engaged
remunerati
the in the Starting date of Expiry date of
Name of other organizations on or
persons other office term office term
allowance
in office organiza
from other
tions
organizati
on
Sun Meizhou Shenmei Youyi Building
Director January 13,2014 June 18,2020 No
Minghui Co., Ltd.
Sun China Nanshan Development Supervis
October 17,2017 No
Minghui (Group) Co., Ltd. or
Shenzhen Highway Passenger &
Sun Supervis
Cargo Transportation Service June 16,2017 No
Minghui or
Center Co., Ltd.
Sun Supervis
CASTD June 27,2017 No
Minghui or
Sun ULTRARICH INTERNATIONAL November
Director No
Minghui LIMITED 11,2020
Sun Shenzhen Special Economic Zone November
Director No
Minghui Real Estate (Group) Co., Ltd. 11,2020
Sun Southern Asset Management Co., Supervis November
No
Minghui Ltd. or 11,2020
Sun Hubei Shentoukong Investment November
Director No
Minghui Development Co., Ltd. 11,2020
Sun Shenzhen Textile(Holdings) Co.,
Director January 25,2021 No
Minghui Ltd.
Yuan Shenzhen International Tendering Supervis
October 22,2017 June 10,2020 No
Shuwen Co., Ltd. or
Yuan Shenzhen Textile(Holdings) Co., Supervis September
No
Shuwen Ltd. or 27,2019
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
Remuneration
Total actually
Office remuneration receives at the
Name Positions Sex Age
status received from end of the
the shareholder reporting
period
Zhang Board chairman，Secretary
Female 41 In Office 0 No
Jian of the party committee
Deputy Secretary of the
Zhu
Party committee，Director, Male 56 In office 122 No
Meizhu
General Manger
Director, Deputy Secretary
Ning of the Party committee and
Male 45 In Office 102 No
Maozai Secretary of the
Commission for Discipline
Yin
Director Male 46 In Office Yes
Kefei
He Fei Director, CFO Male 43 In office 90 No
Sun
Minghu Director Male 39 In Office Yes
i
He
Independent Director Male 58 In Office 12 Yes
Zuowen
Cai
Yuanqin Independent Director Male 51 In office 12 No
g
Wang
Independent Director Male 37 In Office 12 No
Kai
Chairman of the supervisory
Ma Yi Male 54 In Office 97 No
committee
Yuan
Shareholders' Supervisors Male 40 In office 0 Yes
Shuwen
Zhan
Employee supervisor Female 51 In Office No
Lumei
Le
Deputy GM Male 57 In Office 109 No
Kunjui
Liu
Deputy GM Male 56 In office 103 No
Honglei
Jiang Secretary to the board of
Female 50 In Office 92 No
Peng directors
Zhu Jun Board chairman Male 57 Dimission 125 No
Huang
Director Male 46 Dimission 0 Yes
Yu
Wang
Director Male 48 Dimission 0 Yes
Chuan
He
Independent Director Male 68 Dimission 0.5 No
Qiang
Wang Chairman of the supervisory
Male 52 Dimission 0 No
Weixing committee
Li Lei Shareholders' Supervisors Male 45 Dimission 0 Yes
Zhang
Xiaodo Employee supervisor Male 45 Dimission 41 Yes
ng
Total -- -- -- -- 917.5 --
Note: (1) In 2020, the remuneration of the Company's executive includes deferred remuneration from 2017 to
2018; (2) He Zuowen, an independent director of the company, also serves as an independent director of Shenzhen
Special Economic Zone Real Estate (Group) Co., Ltd., and receives an independent director's allowance from
Shenzhen Properties Group, which is a holding subsidiary controlled by Shenzhen Investment Holdings, the
controlling shareholder of the Company, and is a related party of the Company.
Incentive equity to directors, supervisors or/and senior executives in the reporting period
□Applicable√ Not applicable
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
51
（person）
Number of in-service staff of the main subsidiaries
1,318
（person）
Total number of the in-service staff（person） 1,369
Total number of staff receiving remuneration in the
1,369
current period（person）
The number of the parent company and the main
subsidiary’s retired staffs who need to bear the cost 0
（person）
Professional
Classified according by Professions Number of persons（person）
Production 996
Sales 33
Technical 204
Financial 35
Administrative 101
Total 1,369
Education
Classified according by education background Number of persons（person）
Postgraduate or above 36
Universities 240
Colleges 114
Mid-school or below 979
Total 1,369
2. Remuneration policies
In 2020, 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
Combining with the company's development strategy, we will continuously strengthen the company's
personnel training system to help the joint development of both the employees and the Company. In 2020, on the
basis of the original training work, we will help employees open up new horizons of learning from multiple
dimensions and promote employees to apply theory to practical work. First, promote internal and external learning,
communication and carry forward the culture of "passing on, helping and guiding", and share diversified contents
through "deep spinning lecture hall"; Second, add a variety of refined courses and upgrade the platform of
"Shenzhen Textile Group Network College"; Third, innovate online knowledge contest to welcome the 40th
anniversary of the establishment of Shenzhen Special Economic Zone.
4. Outsourcing situation
□ Applicable √ Not applicable
Chapter 10: Administrative structure
I. Basic state of corporate governance
During the reporting period, the Company operated in strict accordance with the requirements of relevant
laws, regulations and normative documents such as Company Law, Securities Law, Guidelines for the
Standardized Operation of Listed Companies of Shenzhen Stock Exchange and Code for the Governance of Listed
Companies, and strengthened risk management and control to ensure the healthy and stable development of the
Company. At present, the Company maintains basically sound governance systems, standardized operation, and
complete corporate governance structure, and meets the requirements of the regulatory documents on the
governance of listed companies issued by China Securities Regulatory Commission.
In 2020, 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 2020, the board of directors held 9 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 2020, the board of supervisors held 7 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 2020, 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
98
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. 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 2020, 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.
In 2020, according to the State Council's Opinions on Further Improving the Quality of Listed Companies (GF
[2020] No.14) and the Shenzhen Securities Regulatory Bureau's Notice on Promoting Listed Companies in
Jurisdiction to Implement Main Responsibilities, Improve Governance Level and Achieve High Quality
Development (SZJGS Zi [2020] No.128), the Company actively formulated self-inspection work plans, organized
directors, supervisors and senior management personnel of the Company and important subsidiaries to carry out
special study, set up special working groups to implement self-inspection, found out potential risks and
outstanding problems that restrict the quality improvement of the Company, and formulated feasible follow-up
rectification plans. The Company has reported the Self-inspection Report and Rectification Plan on Implementing
Main Responsibility, Improving Governance Level and Achieving High-quality Development to Shenzhen
Securities Regulatory Bureau, and will push forward the quality improvement of listed companies according to the
above rectification plan.
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
99
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.
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
Disclosure
Sessions Type participation Meeting Date Disclosure index
date
ratio
Provisiona
The first
l
provisional （http://www.cninfo.com.c
shareholde January January
shareholders’ 49.17% n）Announcement
rs’ 16,2020 17,2020
General No.:2020-01
General
meeting in 2020
Meeting
Provisiona
The second
l
provisional （http://www.cninfo.com.c
shareholde
shareholders’ 49.13% April 3,2020 April 4,2020 n）Announcement
rs’
General No.:2020-22
General
meeting in 2020
Meeting
Annual General Sharehold 49.14% June 29,2020 June 30,2021 （http://www.cninfo.com.c
Meeting of ers’ n）Announcement
100
2019 General No.:2020-32
Meeting
Provisiona
The second
l
provisional （http://www.cninfo.com.c
shareholde September September
shareholders’ 49.13% n）Announcement
rs’ 22,2020 23,2020
General No.:2020-44
General
meeting in 2020
Meeting
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
Number of Number of
Board of Number of Failure to attendanc
Indepen Number of
meetings meetings attendance Number personally attend e at
dent spot
necessary to attended s by of board meetings general
Director attendance
be attended in by representa absence successively meetings
s s
the reporting Communi tive twice (Yes/No) of
period cation sharehold
ers
He
9 1 8 0 0 No 4
Zuowen
Cai
Yuanqin 9 1 8 0 0 No 4
g
Wang
9 1 8 0 0 No 4
Kai
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.
101
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.
During the reporting period, the Company's independent directors conscientiously performed their duties in
accordance with the requirements of regulatory laws and regulations and the company's Independent Director
System:
（1）Attend the board of directors convened by the Company on time and attend the shareholders' meeting
and other relevant meetings. Before the meeting, the independent directors carefully reviewed the meeting
materials, made full use of their professional advantages and business management experience, and put forward
reasonable opinions and suggestions on the proposal. They also expressed independent opinions on related parties'
fund occupation, internal control, changes in accounting policies, profit distribution, appointment of audit
institutions, appointment of directors and independent directors, appointment of senior management personnel,
use of idle raised funds, cash management of self-owned funds, related party transactions, repurchase and
cancellation of some restricted stocks, insurance of directors, supervisors and senior management personnel,
signing of the Payment Agreement for the Performance Commitment Compensation for 2018 and equity transfer,
giving full play to the guidance and supervision role of 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 ） It kept communication with the management of the Company, listened to the reports of relevant
personnel in detail, and focused on the trade, trust financing, fund investment operation of subsidiary SAPO
Photoelectric during 2017-2018, performance commitment compensation matters of subsidiary SAPO
Photoelectric, polarizer industrialization project for super-large TV, entrusted financing and daily related
transactions with some of its own funds, so as to timely understand and master the progress of major issues of the
Company.
（ 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.
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
102
by every special committee on time.
(I) Audit Committee: During the reporting period, the Audit Committee held meetings and formed
resolutions on internal audit work plans and reports, hiring audit institutions, the Company's production and
operation and financial status, financial final accounts reports, profit distribution plans, fund raising reports,
internal control self-evaluation reports, and proposals for hiring audit institutions;
(II) Remuneration and Appraisal Committee: The Remuneration and Appraisal Committee held meetings and
formed resolutions on the issue of repurchase and cancellation of some restricted stocks and the remuneration
appraisal of senior managers of the Company in 2019.
103
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. According to
the actual situation of the Company, the 2020 annual senior management assessment plan will be implemented
from March to June 2021.
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 accordance 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
March 12,2021
report on internal control
104
Disclosure index of appraisal Juchao Website:（http://www.cninfo.com.cn）, Self-evaluation report of
report on internal control internal control in 2020
Proportion of total unit assets
covered by appraisal in the
total assets of the consolidated 100.00%
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
In the following circumstances,
the company was identified as
existing non-financial –
reporting related significant
The defects related to financial reports
defects of internal controlling
were divided into general defects,
defects:
important defects and significant defects
according to their severity. Significant The business activities of the
defects referred to one or multiple company seriously violated
combinations of controlling defects, national laws and regulations; (2)
which may lead to serious deviation The decision-making process of
from the controlling objectives. "Three-Importance& One-Large"
Important defects referred to one or were unscientific, leading to
Qualitative standard
multiple combinations of controlling major decision errors, and
defects, and their severity and economic causing major property loses to
consequences were below significant the company; (3) Massive loss of
defects, but they could still lead to key posts or technology talents;
serious deviation from the controlling (4) The controlling system
objectives. General defects referred to involving important business
other internal controlling defects which fields of the company failed; (5)
couldn't constitute significant defects or It Caused serious negative effects
important defects. 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
105
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
Quantitative criteria gross profit; 0.5% of Total asset Not applicable
≤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 profit ＜
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.
Number of major defects in
0
financial reporting（a）
Number of major defects in
0
non financial reporting (a)
106
Number of important defects
0
in financial reporting（a）
Number of important defects
0
in non 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, 2020.
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, 2020.
Grant Thornton International Ltd.(Special General Partnership)
Chinese C.P.A. Chen Zhifang
Chinese C.P.A. Li Yao
March 10, 2021
Disclosure date of audit report Disclosure
107
of internal control (full-text)
Index of audit report of
March 12,2021
internal control (full-text)
Juchao Website:（http://www.cninfo.com.cn）;Audit report of internal control
Internal audit report’s opinion
of the Company
Type of audit report on
Unqualified auditor’s report
internal control
Whether there is significant
defection non-financial No
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
Chapter 11: 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
108
Chapter 12: Financial Report
I. Audit report
Type of audit opinion Standard Unqualified opinion
Type of audit opinion March 10,2021
Grant Thornton International Ltd.(Special General
Name of audit firm
Partnership)
The audit report number Zi Tong Shen Zi（2021）No.:110ASXXXX
Name of the certified accountants Chen Zhifang, Li Yao
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, 2020, 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, 2020 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.
109
(1) Recognition of revenue
Please refer to Note III, 26 and Note V, 35 to the financial statement for details of the relevant information
disclosure.
1.Description of matters
The operating income of Shenzhen Textile in 2020 was RMB 2,108,964,700, of which the main business
income was RMB 2,097,432,900, accounting for 99.45%. As revenue is one of the key performance indicators of
Shenzhen Textile, there is inherent risk that the Company's management manipulates revenue recognition in order
to achieve specific goals or expectations, and since the main business income is large, we identify revenue
recognition as a key audit item.
2. Response to the audit
For revenue recognition, we mainly implemented the following audit procedures:
(1) Understand, evaluate and test the design effectiveness and operation effectiveness of internal control
related to sales revenue cycle;
(2) Obtain the main sales contracts according to the products and business types, check the relevant clauses
related to revenue recognition, and interview the management to evaluate whether the revenue recognition meets
the requirements of accounting standards;
(3) Implement analytical procedures, compare the changes of income between this year and last year
according to product types, observe the fluctuations of income between months and the changes of important
customers in this period, and analyze the rationality of income changes based on factors such as the company's
production capacity, market expansion and industry trends;
(4) Perform detailed tests to check whether the basis related to sales revenue recognition is sufficient,
including checking sales contracts or performing detailed tests, including checking sales contracts or orders,
delivery orders, customs declarations and other supporting documents, evaluate the authenticity and accuracy of
revenue recognition, and evaluate the authenticity and accuracy of revenue recognition;
(5) Perform cut-off test to evaluate whether income is recorded in the proper accounting period;
(6) Select samples from major customers on this recognition procedures, and perform alternative tests on the
non-replied parts to judge the authenticity of sales revenue.
(2) Inventory falling price reserves
Please refer to Note III, 12 and Note V, 8 to the financial statement for details of the relevant information
disclosure.
1.Description of matters
As of December 31, 2020, the balance of inventory depreciation reserve of Shenzhen Textile is RMB 75,474,600.
As the inventory depreciation reserve and its changes have a significant influence on the financial statements, the
determination of the net realizable value of inventory involves the major judgment and estimation of the
management, so we identify the inventory depreciation reserve as a key audit item.
2. Response to the audit
The audit process implemented for inventory falling price reserves includes mainly:
(1) Understand, evaluate and test the design and operation effectiveness of internal control related to
inventory depreciation reserve;
(2) Understand and evaluate the appropriateness of the Company's accrual policy for inventory depreciation
110
reserve;
(3) Understand and inquire about inventory storage location and inventory accounting method, and determine
the scope of inventory supervision; Implement inventory supervision procedures to check whether the inventory is
damaged, obsolete, outdated, defective, etc.;
(4) Obtain the inventory year-end inventory age list, and carry out analytical review of inventory age
according to the status of products to analyze whether the inventory depreciation reserve is reasonable;
(5) Review and evaluate the rationality of the major estimates made by the management when determining
the net realizable value;
(6) Obtain the calculation table of inventory depreciation reserve, check whether the accrual of inventory
depreciation reserve is implemented according to relevant accounting policies, and recalculate the inventory
depreciation reserve; Check the changes of inventory depreciation accrued in previous years, evaluate the
rationality of estimated selling price and estimated related taxes and fees as key parameters of net realizable value,
review the sufficiency of basis of estimated selling price, and analyze the rationality of inventory depreciation
reserve.
IV. Other information
The management of the Company is responsible for the other information. The other information comprises
information of the Company's annual report in 2019, 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 Accounting Standards for Business Enterprises to achieve a fair presentation, and for designing,
implementing and maintaining internal control that is necessary to ensure that the financial statements are free
from material misstatements, whether due to frauds or errors.
In preparing the financial statements, management of the Company is responsible for assessing the Company's
ability to continue as a going concern, disclosing matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the audit standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
111
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management of the Company.
(4) Conclude on the appropriateness of using the going concern assumption by the management of the
Company, and conclude, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events
or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements and bear all liability for the
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit matters, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters.
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.
Grant Thornton International Ltd.(Special General Partnership)
Chinese C.P.A. Chen Zhifang（Project Partner)
Chinese C.P.A. Li Yao
112
March 10,2021
Beijing China
II. Financial Statements
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated balance sheet
Prepared by: Shenzhen Textile (Holdings) Co., Ltd.
December 31,2019
In RMB
Items December 31,2020 December 31,2019
Current asset：
Monetary fund 279,087,236.95 409,564,847.52
Settlement provision
Outgoing call loan
Transactional financial assets 684,617,260.06 830,000,000.00
Derivative financial assets
Note receivable 16,813,657.28 40,424,601.97
Account receivable 547,310,217.90 365,325,029.38
Financing of receivables 102,051,314.08 17,933,597.98
Prepayments 16,902,516.39 18,445,857.53
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance
contracts receivable
Other account receivable 5,265,002.71 12,440,761.13
113
Including：Interest 7,610,043.19
receivable
Dividend receivable
Repurchasing of financial
assets
Inventories 480,847,581.44 391,717,935.12
Contract assets
Assets held for sales
Non-current asset due within 1
year
Other current asset 77,482,083.47 140,821,609.72
Total of current assets 2,210,376,870.28 2,226,674,240.35
Non-current assets：
Loans and payment on other’s
behalf disbursed
Creditor's right investment
Other Creditor's
investment
Long-term receivable
Long term share equity 147,929,137.23 152,209,929.72
investment
Other equity instruments 190,607,427.54 248,781,946.73
investment
Other non-current financial 30,650,943.40
assets
Real estate investment 110,572,471.92 112,730,320.90
Fixed assets 790,183,905.38 903,229,077.83
Construction in progress 1,301,750,141.12 839,866,275.92
114
Production physical assets
Oil & gas assets
Use right assets
Intangible assets 36,048,978.91 36,517,996.34
Development expenses
Goodwill
Long-germ expenses to be 2,876,561.53 2,692,750.67
amortized
Deferred income tax asset 5,243,425.26 5,618,026.43
Other non-current asset 143,307,689.66 3,079,321.10
Total of non-current assets 2,759,170,681.95 2,304,725,645.64
Total of assets 4,969,547,552.23 4,531,399,885.99
Current liabilities
Short-term loans
Loan from Central Bank
Borrowing funds
Transactional financial
liabilities
Derivative financial
liabilities
Notes payable
Account payable 329,468,601.90 241,297,770.64
Advance receipts 3,542,394.33 30,530,117.62
Contract liabilities 279,631.27
Selling of repurchased
financial assets
115
Deposit taking and interbank
deposit
Entrusted trading of securities
Entrusted selling of securities
Employees’ wage payable 55,642,549.53 38,556,180.20
Tax payable 12,198,522.02 22,545,550.33
Other account payable 156,118,440.42 152,645,780.14
Including：Interest payable
Dividend payable
Fees and commissions
payable
Reinsurance fee payable
Liabilities held for sales
Non-current liability due within
1 year
Other current liability
Total of current liability 557,250,139.47 485,575,398.93
Non-current liabilities：
Reserve fund for insurance
contracts
Long-term loan 343,100,174.35
Bond payable
Including：preferred stock
Sustainable debt
Lease liability
116
Long-term payable
Long-term remuneration
payable to staff
Expected liabilities
Deferred income 110,740,322.21 121,264,571.22
Deferred income tax liability 59,141,666.58 69,944,345.66
Other non-current liabilities
Total non-current liabilities 512,982,163.14 191,208,916.88
Total of liability 1,070,232,302.61 676,784,315.81
Owners’ equity
Share capital 507,772,279.00 509,338,429.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 1,967,514,358.53 1,974,922,248.03
Less：Shares in stock 7,525,438.20 16,139,003.40
Other comprehensive income 116,605,932.42 119,737,783.31
Special reserve
Surplus reserves 94,954,652.14 90,596,923.39
Common risk provision
Retained profit 86,912,390.50 49,307,764.03
Total of owner’s equity belong 2,766,234,174.39 2,727,764,144.36
to the parent company
Minority shareholders’ equity 1,133,081,075.23 1,126,851,425.82
117
Total of owners’ equity 3,899,315,249.62 3,854,615,570.18
Total of liabilities and owners’ 4,969,547,552.23 4,531,399,885.99
equity
Legal Representative: Zhang Jian
Person-in-charge of the accounting work：He Fei
Person-in -charge of the accounting organ：Zhu Jingjing
2.Parent Company Balance Sheet
In RMB
Items December 31,2020 December 31,2019
Current asset：
Monetary fund 113,560,327.21 27,979,338.37
Transactional financial assets 514,277,000.82 650,000,000.00
Derivative financial assets
Note receivable
Account receivable 1,461,400.20 522,931.04
Financing of receivables
Prepayments 18,706.17 768,099.94
Other account receivable 7,450,934.40 17,039,506.00
Including：Interest
7,329,228.31
receivable
Dividend receivable
Inventories 8,808.00
Contract assets
Assets held for sales
118
Non-current asset due within 1
year
Other current asset
Total of current assets 636,777,176.80 696,309,875.35
Non-current assets：
Creditor's right investment
Other Creditor's
investment
Long-term receivable
Long term share equity
2,103,977,343.32 2,102,430,511.88
investment
Other equity instruments
177,142,433.45 206,816,952.64
investment
Other non-current financial
assets
Real estate investment 101,644,481.93 107,199,622.80
Fixed assets 21,876,099.34 25,500,695.77
Construction in progress 19,552.00
Production physical assets
Oil & gas assets
Use right assets
Intangible assets 492,923.62 659,937.75
Development expenses
Goodwill
Long-germ expenses to be 800,858.17
amortized
Deferred income tax asset 5,097,360.00 5,466,478.06
119
Other non-current asset 96,871,196.43
Total of non-current assets 2,507,101,838.09 2,448,894,609.07
Total of assets 3,143,879,014.89 3,145,204,484.42
Current liabilities
Short-term loans
Transactional financial
liabilities
Derivative financial
liabilities
Note payable
Account payable 411,743.57 411,743.57
Advance receipts 639,024.58 2,878,936.58
Contract Liabilities 2,236,912.00
Employees’ wage payable 14,824,723.81 11,910,175.11
Tax payable 11,497,591.21 20,801,961.18
Other account payable 95,023,378.12 119,984,209.60
Including：Interest payable
Dividend payable
Liabilities held for sales
Non-current liability due within
1 year
Other current liability
Total of current liability 124,633,373.29 155,987,026.04
Non-current liabilities：
Long-term loan
120
Bond payable
Including：preferred stock
Sustainable debt
Lease liability
Long-term payable
Long-term remuneration
payable to staff
Expected liabilities
Deferred income 500,000.00 600,000.00
Deferred income tax liability 56,150,418.06 66,953,097.14
Other non-current liabilities
Total non-current liabilities 56,650,418.06 67,553,097.14
Total of liability 181,283,791.35 223,540,123.18
Owners’ equity
Share capital 507,772,279.00 509,338,429.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 1,583,307,509.86 1,589,869,499.36
Less：Shares in stock 7,525,438.20 16,139,003.40
Other comprehensive income 91,494,901.23 110,764,037.74
Special reserve
Surplus reserves 94,954,652.14 90,596,923.39
Retained profit 692,591,319.51 637,234,475.15
121
Total of owners’ equity 2,962,595,223.54 2,921,664,361.24
Total of liabilities and owners’
3,143,879,014.89 3,145,204,484.42
equity
3.Consolidated Income statement
In RMB
Items Year 2020 Year 2019
I. Income from the key business 2,108,964,687.80 2,158,184,855.71
Incl：Business income 2,108,964,687.80 2,158,184,855.71
Interest income
Insurance fee earned
Fee and commission received
II. Total business cost 2,030,833,538.40 2,168,659,186.75
Incl：Business cost 1,814,298,395.02 1,973,495,608.35
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
Net amount of withdrawal of insurance contract reserve
Insurance policy dividend paid
Reinsurance expenses
Business tax and surcharge 7,347,125.65 8,466,143.40
Sales expense 28,644,230.87 20,785,078.66
Administrative expense 105,094,934.36 96,870,842.37
122
R & D costs 67,160,964.22 53,178,714.33
Financial expenses 8,287,888.28 15,862,799.64
Including：Interest expense 234,815.67 4,893,018.58
Interest income 3,702,735.59 8,593,894.58
Add: Other income 29,506,252.69 27,547,902.92
Investment gain（“-”for loss） 22,599,670.74 78,038,530.25
Incl: investment gains from affiliates -3,446,613.86 -7,404,083.27
Financial assets measured at amortized cost cease to
be recognized as income
Gains from currency exchange
Net exposure hedging income
Changing income of fair value 2,687,518.74
Credit impairment loss -10,394,533.65 7,005,890.93
Impairment loss of assets -72,412,477.63 -97,172,532.71
Assets disposal income 276,544.73 3,967.97
III. Operational profit（“-”for loss） 50,394,125.02 4,949,428.32
Add ：Non-operational income 1,445,662.38 5,003,548.34
Less: Non-operating expense 138,421.27 420,575.07
IV. Total profit(“-”for loss) 51,701,366.13 9,532,401.59
Less：Income tax expenses 8,203,720.98 28,059,080.22
V. Net profit 43,497,645.15 -18,526,678.63
(I) Classification by business continuity
1.Net continuing operating profit 43,497,645.15 -18,526,678.63
2.Termination of operating net profit
123
(II) Classification by ownership
1.Net profit attributable to the owners of parent 37,267,995.74 19,679,910.43
company
2.Minority shareholders’ equity 6,229,649.41 -38,206,589.06
VI. Net after-tax of other comprehensive income -3,131,850.89 -52,500,997.28
-3,131,850.89 -52,500,997.28
Net of profit of other comprehensive income attributabl
e to owners of the parent company.
（I）Other comprehensive income items that will not be -2,815,824.67 -52,715,913.64
reclassified into gains/losses in the subsequent
accounting period
1.Re-measurement of defined benefit plans of changes i
n net debt or net assets
2.Other comprehensive income under the equity metho
d investee can not be reclassified into profit or loss.
3. Changes in the fair value of investments in other -2,815,824.67 -52,715,913.64
equity instruments
4. Changes in the fair value of the company’s credit
risks
5.Other
（II） -316,026.22 214,916.36
Other comprehensive income that will be reclassified in
to profit or loss.
1.Other comprehensive income under the equity metho
d investee can be reclassified into profit or loss.
2. Changes in the fair value of investments in other debt
obligations
3. Other comprehensive income arising from the
reclassification of financial assets
124
4.Allowance for credit impairments in investments in
other debt obligations
5. Reserve for cash flow hedges
6.Translation differences in currency financial statemen -316,026.22 214,916.36
ts
7.Other
Net of profit of other comprehensive income attributabl
e to Minority shareholders’ equity
VII. Total comprehensive income 40,365,794.26 -71,027,675.91
Total comprehensive income attributable to the owner 34,136,144.85 -32,821,086.85
of the parent company
Total comprehensive income attributable minority 6,229,649.41 -38,206,589.06
shareholders
VIII. Earnings per share
（I）Basic earnings per share 0.07 0.04
(II)Diluted earnings per share 0.07 0.04
Legal Representative: Zhang Jian
Person-in-charge of the accounting work：He Fei
Person-in -charge of the accounting organ：Zhu Jingjing
4. Income statement of the Parent Company
In RMB
Items Year 2020 Year 2019
I. Income from the key business 61,296,888.21 123,585,753.10
Incl：Business cost 10,666,274.44 60,654,551.98
Business tax and surcharge 2,435,257.11 3,088,345.17
125
Sales expense
Administrative expense 38,680,586.21 38,275,813.43
R & D expense
Financial expenses -1,020,628.37 -2,114,743.82
Including：Interest expenses 13,780.96 476,191.57
Interest income 1,012,329.64 2,611,348.37
Add：Other income 117,006.72 106,720.83
Investment gain（“-”for loss） 35,656,479.65 68,053,467.35
Including: investment gains from affiliates -3,446,613.86 -7,404,083.27
Financial assets measured at amortized cost cease to be
recognized as income
Net exposure hedging income
Changing income of fair value 392,767.12
Credit impairment loss -799,858.92 -194,490.83
Impairment loss of assets -95,343.40
Assets disposal income 286,963.56 280.00
II. Operational profit（“-”for loss） 46,093,413.55 91,647,763.69
Add ：Non-operational income 562,910.99 146,868.07
Less：Non -operational expenses 27,244.40
III. Total profit(“-”for loss) 46,629,080.14 91,794,631.76
Less：Income tax expenses 7,746,152.13 25,628,936.32
IV. Net profit 38,882,928.01 66,165,695.44
1.Net continuing operating profit 38,882,928.01 66,165,695.44
2.Termination of operating net profit
126
V. Net after-tax of other comprehensive income -3,131,850.89 -52,500,997.28
（I）Other comprehensive income items that will not be -2,815,824.67 -52,715,913.64
reclassified into gains/losses in the subsequent
accounting period
1.Re-measurement of defined benefit plans of changes i
n net debt or net assets
2.Other comprehensive income under the equity method
investee can not be reclassified into profit or loss.
3. Changes in the fair value of investments in other -2,815,824.67 -52,715,913.64
equity instruments
4. Changes in the fair value of the company’s credit
risks
5.Other
-316,026.22 214,916.36
(II)Other comprehensive income that will be reclassifie
d into profit or loss
1.Other comprehensive income under the equity method
investee can be reclassified into profit or loss.
2. Changes in the fair value of investments in other debt
obligations
3. Other comprehensive income arising from the
reclassification of financial assets
4.Allowance for credit impairments in investments in
other debt obligations
5. Reserve for cash flow hedges
6.Translation differences in currency financial statement -316,026.22 214,916.36
s
7.Other
VI. Total comprehensive income 35,751,077.12 13,664,698.16
127
VII. Earnings per share
（I）Basic earnings per share
(II)Diluted earnings per share
5. Consolidated Cash flow statement
In RMB
Items Year 2020 Year 2019
I.Cash flows from operating activities
Cash received from sales of goods or rending of services 1,827,292,276.43 2,239,603,149.40
Net increase of customer deposits and capital kept for
brother company
Net increase of loans from central bank
Net increase of inter-bank loans from other financial
bodies
Cash received against original insurance contract
Net cash received from reinsurance business
Net increase of client deposit and investment
Cash received from interest, commission charge and
commission
Net increase of inter-bank fund received
Net increase of repurchasing business
Net cash received by agent in securities trading
Tax returned 116,428,895.93 37,887,179.50
Other cash received from business operation 123,408,000.43 61,696,291.74
Sub-total of cash inflow 2,067,129,172.79 2,339,186,620.64
128
Cash paid for purchasing of merchandise and services 1,742,576,211.51 1,664,396,359.07
Net increase of client trade and advance
Net increase of savings in central bank and brother
company
Cash paid for original contract claim
Net increase in financial assets held for trading purposes
Net increase for Outgoing call loan
Cash paid for interest, processing fee and commission
Cash paid to staffs or paid for staffs 181,692,353.93 163,768,856.39
Taxes paid 43,712,017.07 31,514,698.29
Other cash paid for business activities 97,217,657.52 96,360,918.39
Sub-total of cash outflow from business activities 2,065,198,240.03 1,956,040,832.14
Net cash generated from /used in operating activities 1,930,932.76 383,145,788.50
II. Cash flow generated by investing
Cash received from investment retrieving 6,437,640.00 60,428,769.00
Cash received as investment gains 2,908,856.94 5,821,323.94
Net cash retrieved from disposal of fixed assets, intangible 2,800,914.39 298,580.00
assets, and other long-term assets
Net cash received from disposal of subsidiaries or other
operational units
Other investment-related cash received 3,240,861,003.37 4,164,457,418.70
Sub-total of cash inflow due to investment activities 3,253,008,414.70 4,231,006,091.64
Cash paid for construction of fixed assets, intangible assets 564,014,103.94 618,799,656.48
and other long-term assets
Cash paid as investment
129
Net increase of loan against pledge
Net cash received from subsidiaries and other operational
units
Other cash paid for investment activities 3,008,065,275.20 4,556,430,000.00
Sub-total of cash outflow due to investment activities 3,572,079,379.14 5,175,229,656.48
Net cash flow generated by investment -319,070,964.44 -944,223,564.84
III.Cash flow generated by financing
Cash received as investment
Including: Cash received as investment from minor
shareholders
Cash received as loans 342,660,000.00 86,033,453.75
Other financing –related cash received 203,775,154.17
Sub-total of cash inflow from financing activities 342,660,000.00 289,808,607.92
Cash to repay debts 536,552,100.76
Cash paid as dividend, profit, or interests 3,511,622.58 43,473,617.45
Including: Dividend and profit paid by subsidiaries to
minor shareholders
Other cash paid for financing activities 9,344,136.30 13,791,675.60
Sub-total of cash outflow due to financing activities 12,855,758.88 593,817,393.81
Net cash flow generated by financing 329,804,241.12 -304,008,785.89
IV. Influence of exchange rate alternation on cash and cash -2,973,560.67 158,915.19
equivalents
V.Net increase of cash and cash equivalents 9,690,648.77 -864,927,647.04
Add: balance of cash and cash equivalents at the beginning 268,646,588.18 1,133,574,235.22
of term
VI ..Balance of cash and cash equivalents at the end of 278,337,236.95 268,646,588.18
130
term
6. Cash Flow Statement of the Parent Company
In RMB
Items Year 2020 Year 2019
I.Cash flows from operating activities
Cash received from sales of goods or rending of services 64,167,036.73 76,051,827.26
Tax returned
Other cash received from business operation 6,524,378.62 16,144,244.57
Sub-total of cash inflow 70,691,415.35 92,196,071.83
Cash paid for purchasing of merchandise and services 4,462,365.49 5,479,277.51
Cash paid to staffs or paid for staffs 27,619,751.65 22,463,068.76
Taxes paid 34,788,061.46 20,712,126.49
Other cash paid for business activities 8,944,859.88 25,827,850.33
Sub-total of cash outflow from business activities 75,815,038.48 74,482,323.09
Net cash generated from /used in operating activities -5,123,623.13 17,713,748.74
II. Cash flow generated by investing
Cash received from investment retrieving 6,437,640.00 72,428,769.00
Cash received as investment gains 1,957,306.47 2,715,003.90
Net cash retrieved from disposal of fixed assets, intangible
2,759,267.00 34,500.00
assets, and other long-term assets
Net cash received from disposal of subsidiaries or other
operational units
Other investment-related cash received 1,623,459,188.57 1,448,303,833.93
Sub-total of cash inflow due to investment activities 1,634,613,402.04 1,523,482,106.83
131
Cash paid for construction of fixed assets, intangible assets
2,528,077.97 10,991,096.71
and other long-term assets
Cash paid as investment 3,555,968.96
Net cash received from subsidiaries and other operational
units
Other cash paid for investment activities 1,530,015,275.20 1,580,000,000.00
Sub-total of cash outflow due to investment activities 1,536,099,322.13 1,590,991,096.71
Net cash flow generated by investment 98,514,079.91 -67,508,989.88
III. Cash flow generated by financing
Cash received as investment
Cash received as loans
Other financing –related ash received 6,545,900.00 3,806,454.17
Sub-total of cash inflow from financing activities 6,545,900.00 3,806,454.17
Cash to repay debts
Cash paid as dividend, profit, or interests 11,231.64 356,766.80
Other cash paid for financing activities 14,344,136.30 11,091,675.60
Sub-total of cash outflow due to financing activities 14,355,367.94 11,448,442.40
Net cash flow generated by financing -7,809,467.94 -7,641,988.23
IV. Influence of exchange rate alternation on cash and cash
equivalents
V.Net increase of cash and cash equivalents 85,580,988.84 -57,437,229.37
Add: balance of cash and cash equivalents at the beginning
27,979,338.37 85,416,567.74
of term
VI ..Balance of cash and cash equivalents at the end of
113,560,327.21 27,979,338.37
term
132
7. Consolidated Statement on Change in Owners’ Equity
Amount in this period
In RMB
Year 2020
Owner’s equity Attributable to the Parent Company
Other C
Equity o
instrument m
Oth Min
Sp m Total
Les er or
eci o of
Items s: Co Ret O shar
Sha Pr Capi ali Sur n own
Sha mpr aine t ehol
re ef Su tal ze plus ri Subt ers’
O res ehe d h ders’
Cap er sta reser d rese sk otal equit
t in nsiv prof e equit
ital re in ves res rves pr y
h stoc e it r y
d ab er o
e k Inco
st le ve vi
r me
oc de si
k bt o
n
509 1,97 16, 119 90, 49, 2,72 1,12 3,85
I .Balance at ,33 4,92 139 ,73 596 307 7,76 6,85 4,61
the end of 8,4 2,24 ,00 7,7 ,92 ,76 4,14 1,42 5,57
last year 29. 8.03 3.4 83. 3.3 4.0 4.36 5.82 0.18
00 0 31 9 3
Add: Change
of
account
ing
policy
Correcting
of previous
errors
Merger of
entities
under
common
control
Other
509 1,97 16, 119 90, 49, 2,72 1,12 3,85
II.Balance at ,33 4,92 139 ,73 596 307 7,76 6,85 4,61
the
8,4 2,24 ,00 7,7 ,92 ,76 4,14 1,42 5,57
beginning of
current year 29. 8.03 3.4 83. 3.3 4.0 4.36 5.82 0.18
00 0 31 9 3
133
-1, -7,4 -8, -3, 4,3 37, 38,4 6,22 44,6
III .Changed 566 07,8 613 131 57, 604 70,0 9,64 99,6
in the current ,15 89.5 ,56 ,85 728 ,62 30.0 9.41 79.4
year 0.0 0 5.2 0.8 .75 6.4 3 4
0 0 9 7
1,5 37, 38,8 6,22 45,0
（1）Total 62, 267 30,5 9,64 60,1
comprehensi 508 ,99 04.3 9.41 53.7
ve income .59 5.7 3 4
4
（II） -1, -7,4 -8, -360 -360
Investment 566 07,8 613 ,474 ,474
or ,15 89.5 ,56 .30 .30
decreasing 0.0 0 5.2
of capital by
0 0
owners
1．Ordinary
Shares invest
ed by shareh
olders
2．Holders of
other equity
instruments i
nvested capit
al
3．Amount
of shares
paid and
accounted as
owners’
equity
-1, -7,4 -8, -360 -360
566 07,8 613 ,474 ,474
4．Other ,15 89.5 ,56 .30 .30
0.0 0 5.2
0 0
3,8 -3,
88, 888
（III）Profit
292 ,29
allotment
.80 2.8
0
1.Providing 3,8 -3,
of surplus 88, 888
reserves 292 ,29
134
.80 2.8
0
2.Providing
of common
risk
provisions
3．Allotment
to the
owners (or
shareholders
)
4．Other
-4, 469 4,2
(IV) Internal 694 ,43 24,
transferring
,35 5.9 923
of owners’
equity 9.4 5 .53
8
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 -4, 469 4,2
comprehensi 694 ,43 24,
ve income ,35 5.9 923
carry-over 9.4
135
retained 8 5 .53
earnings
6．Other
(V). Special
reserves
1. Provided
this year
2．Used this
term
（VI）Other
507 1,96 7,5 116 94, 86, 2,76 1,13 3,89
IV. Balance ,77 7,51 25, ,60 954 912 6,23 3,08 9,31
at the end of 2,2 4,35 438 5,9 ,65 ,39 4,17 1,07 5,24
this term 79. 8.53 .20 32. 2.1 0.5 4.39 5.23 9.62
00 42 4 0
Amount in last year
In RMB
Year 2019
Owner’s equity Attributable to the Parent Company
Other
C
Equity
Oth o Min
instrument Sp Tota
Les er m or
eci Sur l of
Items s: Co m Ret O shar
Sha Pr Capi ali plu own
Sha mpr on aine t ehol
re ef tal ze s Subt ers’
Su O res ehe ris d h ders’
Cap er rese d res otal equi
sta t in nsiv k prof e equi
ital re rves res erv ty
ina h stoc e pr it r ty
d er es
ble e k Inc ov
st ve
de r ome isi
oc
bt on
k
511, 27, 80, -57,
1,86 1,3 2,37 1,08 3,45
I .Balance at 274 230 004 774
5,71 39, 3,32 6,15 9,48
the end of last ,14 ,67 ,80 ,47
6,98 208 9,99 0,53 0,52
year 9.0 9.0 3.2 3.4
3.63 .41 1.86 4.88 6.74
0 0 3 1
Add: Change 170 3,9 35, 210, 210,
of ,89 75, 779 655, 655,
accounti 9,5 550 ,95 078. 078.
136
ng 72. .61 5.5 32 32
policy 18 3
Correcting of
previous
errors
Merger of
entities under
common
control
Other
511, 27, 172 83, -21,
II.Balance at 1,86 2,58 1,08 3,67
274 230 ,23 980 994
the beginning 5,71 3,98 6,15 0,13
,14 ,67 8,7 ,35 ,51
of current 6,98 5,07 0,53 5,60
9.0 9.0 80. 3.8 7.8
year 3.63 0.18 4.88 5.06
0 0 59 4 8
-11, -52, 71,
-1,9 109, 6,6 143, 40,7 184,
III .Changed 091 500 302
35, 205, 16, 779, 00,8 479,
in the current ,67 ,99 ,28
720 264. 569 074. 90.9 965.
year 5.6 7.2 1.9
.00 40 .55 18 4 12
0 8 1
19,
5,7 25,4 -38, -12,
（1）Total 679
37, 17,8 206, 788,
comprehensiv ,91
943 54.1 589. 734.
e income 0.4
.75 8 06 88
3
（II） -11,
-1,9 -9,1
Investment or 091
35, 55,9
decreasing of ,67
720 55.6
capital by 5.6
.00 0
owners 0
1．Ordinary S
hares invested
by sharehold
ers
2．Holders of
other equity i
nstruments in
vested capital
3．Amount of
shares paid
and
accounted as
owners’
equity
137
-11,
-1,9 -9,1
091
35, 55,9
4．Other ,67
720 55.6
5.6
.00 0
0
6,6 -6,6
（III）Profit 16, 16,
allotment 569 569
.55 .55
6,6 -6,6
1.Providing
16, 16,
of surplus
569 569
reserves
.55 .55
2.Providing
of common
risk
provisions
3．Allotment
to the owners
(or
shareholders)
4．Other
-58, 58,
(IV) Internal
238 238
transferring
,94 ,94
of owners’
1.0 1.0
equity
3 3
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
138
defined
benefit plans
that carry
forward
Retained
earnings
5．Other
-58, 58,
comprehensiv 238 238
e income
,94 ,94
carry-over
1.0 1.0
retained 3 3
earnings
6．Other
(V). Special
reserves
1. Provided
this year
2．Used this
term
118, 118, 78,9 197,
361, 361, 07,4 268,
（VI）Other
220. 220. 80.0 700.
00 00 0 00
509 16, 119, 90, 49,
1,97 2,72 1,12 3,85
IV. Balance at ,33 139 737 596 307
4,92 7,76 6,85 4,61
the end of this 8,4 ,00 ,78 ,92 ,76
2,24 4,14 1,42 5,57
term 29. 3.4 3.3 3.3 4.0
8.03 4.36 5.82 0.18
00 0 1 9 3
8.Statement of change in owner’s Equity of the Parent Company
Amount in this period
In RMB
Year 2020
Other Equity
instrument Other
Spe Total
Capita Less: Com Surp
Items Share ciali Retai O of
Pre l Shar prehe lus
capit zed ned th owner
fer Sust O reserv es in nsive reser
al rese profit er s’
red aina th es stock Inco ves
rve equity
sto ble er me
ck debt
509,3 1,589, 16,1 110,7 90,5 637,2 2,921,
I.Balance at the
38,42 869,4 39,0 64,03 96,9 34,47 664,3
139
end of last year 9.00 99.36 03.4 7.74 23.3 5.15 61.24
0 9
Add: Change of
accounting
policy
Correcting of
previous errors
Other
509,3 1,589, 16,1 110,7 90,5 637,2 2,921,
II. Balance at the
38,42 869,4 39,0 64,03 96,9 34,47 664,3
beginning of
9.00 99.36 03.4 7.74 23.3 5.15 61.24
current year 0 9
-1,56 -6,561 -8,61 -3,13 4,35 39,21 40,93
III .Changed in the
6,150 ,989.5 3,56 1,850 7,72 9,558 0,862.
current year
.00 0 5.20 .89 8.75 .74 30
（I）Total 1,562 38,88 40,44
comprehensive ,508. 2,928 5,436.
income 59 .01 60
(II) Investment or -1,56 -7,407 -8,61 -360,4
decreasing of 6,150 ,889.5 3,56 74.30
capital by owners .00 0 5.20
1．Ordinary Shares
invested by shareh
olders
2．Holders of other
equity instruments
invested capital
3.Amount of
shares paid and
accounted as
owners’ equity
-1,56 -7,407 -8,61 -360,4
4．Other 6,150 ,889.5 3,56 74.30
.00 0 5.20
3,88 -3,88
（III）Profit
8,29 8,292
allotment
2.80 .80
3,88 -3,88
1.Providing of
8,29 8,292
surplus reserves
2.80 .80
140
2．Allotment to the
owners (or
shareholders)
3．Other
(IV) Internal -4,69 469, 4,224
transferring of 4,359 435. ,923.
owners’ equity .48 95 53
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 -4,69 469, 4,224
comprehensive 4,359 435. ,923.
income carry-over .48 95 53
retained earnings
6．Other
(V) Special
reserves
1. Provided this
year
2．Used this term
845,9 845,9
（VI）Other
00.00 00.00
507,7 1,583, 7,52 107,6 94,9 676,4 2,962,
IV. Balance at the 72,27 307,5 5,43 32,18 54,6 54,03 595,2
end of this term 9.00 09.86 8.20 6.85 52.1 3.89 23.54
4
141
Amount in last year
In RMB
Year 2019
Other Equity
instrument
Other
Spe Total
Capit Less: Com Surp
Items Share cial Retai O of
Pre al Shar prehe lus
Capit Sus ized ned th owner
fer O reserv es in nsive reser
al tain rese profit er s’
red th es stock Inco ves
able rve equity
sto er me
ck deb
t
27,2 80,0
511,2 1,599, 1,339 483,6 2,648,
I. Balance at the 30,6 04,8
74,14 025,4 ,208. 66,45 079,3
end of last year 79.0 03.2
9.00 54.96 41 2.70 89.30
0 3
Add: Change of 161,9 3,97 35,77 201,6
accounting 25,82 5,55 9,955 81,33
policy 6.61 0.61 .53 2.75
Correcting of
previous errors
Other
27,2 83,9
II. Balance at the 511,2 1,599, 163,2 519,4 2,849,
30,6 80,3
beginning of 74,14 025,4 65,03 46,40 760,7
79.0 53.8
current year 9.00 54.96 5.02 8.23 22.05
0 4
-11,0
-1,93 -9,155 -52,5 6,61 117,7 71,90
III. Changed in the 91,6
5,720 ,955.6 00,99 6,56 88,06 3,639.
current year 75.6
.00 0 7.28 9.55 6.92 19
0
（I）Total 5,737 66,16 71,90
comprehensive ,943. 5,695 3,639.
income 75 .44 19
-11,0
(II) Investment or -1,93 -9,155
91,6
decreasing of 5,720 ,955.6
75.6
capital by owners .00 0
0
1．Ordinary Shares
invested by shareh
olders
2．Holders of other
equity instruments
142
invested capital
3.Amount of
shares paid and
accounted as
owners’ equity
-11,0
-1,93 -9,155
91,6
4．Other 5,720 ,955.6
75.6
.00 0
0
6,61 -6,61
（III）Profit
6,56 6,569
allotment
9.55 .55
6,61 -6,61
1.Providing of
6,56 6,569
surplus reserves
9.55 .55
2．Allotment to the
owners (or
shareholders)
3．Other
(IV) Internal -58,2 58,23
transferring of 38,94 8,941
owners’ equity 1.03 .03
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
-58,2 58,23
comprehensive 38,94 8,941
income carry-over
1.03 .03
retained earnings
143
6．Other
(V) Special
reserves
1. Provided this
year
2．Used this term
（VI）Other
16,1 90,5
509,3 1,589, 110,7 637,2 2,921,
IV. Balance at the 39,0 96,9
38,42 869,4 64,03 34,47 664,3
end of this term 03.4 23.3
9.00 99.36 7.74 5.15 61.24
0 9
III. Basic Information of the Company
(1)Company Profile
Shenzhen Textile (Group) Co., Ltd. (hereinafter referred to as "Company" or "the Company") is a
joint-stock company registered in Guangdong Province with a registered capital of RMB 511.274149
million and a unified social credit code of 91440300192173749Y. The Company has publicly issued RMB
common shares (A shares) and domestic listed foreign shares (B shares) to the public at home and abroad,
and listed and traded them. The Company is headquartered address are 6/F,Shenfang Building, No.3
Huaqiang Road. North, Futian District, Shenzhen.
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 (Group) Co., Ltd. ，As of December 31, 2020, the Company has issued a
total of 507,772,279.00 shares.
The Company has established the corporate governance structure of General Meeting of Shareholders,
Board of Directors and Board of Supervisors, and currently has the Board Office, Office, Strategic
Development Department, Operation and Management Department, Finance Department, Audit
Department, Human Resources Department and other departments.
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.
The financial statements have been authorized for issuance of the 2n meeting of the 8th Board of
Directors of the Group on March 10,2021.
(2)Scope of consolidated financial statements
As of December 31, 2020, A total of 8 subsidiaries of the Company are included in the scope of
consolidation. For details, please refer to Note VII "Rights and Interests in Other Subjects". The
consolidation scope of the Company this year has increased by one compared with the previous year. For
details, please refer to Note VI "Change of Consolidation Scope".
IV. Basic for the preparation of financial statements
The financial statements are prepared in accordance with the Accounting Standards for Business
Enterprises promulgated by the Ministry of Finance and its application guidelines, interpretations and other
relevant provisions (collectively referred to as the "Accounting Standards for Business Enterprises"). In
144
addition, the Company also disclosed relevant financial information in accordance with the Rules No.15 for
the Information Disclosure and Compilation of Companies Offering Securities Public Issuance - General
Provisions on Financial Report (revised in 2014) issued by China Securities Regulatory Commission.
The financial statements are presented on the basis of going concern.
The accounting of the Company is based on accrual basis. Except for some financial instruments, the
financial statements are based on historical costs. In case of asset impairment, impairment provision shall
be made in accordance with relevant regulations.
VII. Important accounting policies and estimations
According to its own production and operation characteristics, the Company determines the policies of
depreciation of fixed assets, amortization of intangible assets and revenue recognition. See Note III. 16, III.
19 and III. 26 for specific accounting policies.
1.Statement on complying with corporate accounting standards
This financial statement conforms to the requirements of Accounting Standards for Business Enterprises,
and truly and completely reflects the combination and financial status of the Company on December 31,
2020, as well as the combination and operating results and cash flow of the Company in 2020.
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
The operating cycle of the Company is 12 months.
4. Accounting standard money
The Company and its domestic subsidiaries use RMB as their bookkeeping base currency. The overseas
subsidiaries of the Company determine RMB as their bookkeeping base currency according to the currency
in the main economic environment in which they operate. The currency used by the Company in preparing
the financial statements is RMB.
5. Accounting process method of enterprise consolidation under same and different controlling.
（1）Enterprise merger under same control
For business combination under the same control, the assets and liabilities of the combined party
acquired by the merging party during the combination shall be measured according to the book value of the
combined party in the consolidated financial statements of the final controlling party on the combination
date, except for the adjustment due to different accounting policies. The difference between the book value
of the combination consideration and the book value of the net assets obtained in the combination adjusts
the capital reserve. If the capital reserve is insufficient to offset, the retained earnings will be adjusted.
Business combination under the same control shall be achieved step by step through multiple
transactions
In individual financial statements, the share of the book value of the net assets of the combined party
in the consolidated financial statements of the ultimate controlling party shall be taken as the initial
investment cost of the investment on the combination day calculated by the shareholding ratio on the
combination day; Adjust the capital reserve for the difference between the initial investment cost and the
book value of the investment held before the combination plus the book value of the consideration paid on
the new day of the combination. If the capital reserve is insufficient to offset, adjust the retained earnings.
In the consolidated financial statements, the assets and liabilities of the combined party acquired by
the merging party in the combination shall be measured according to the book value in the consolidated
145
financial statements of the ultimate controlling party on the combination date, except for the adjustment
due to different accounting policies; The difference between the book value of the investment held before
the combination plus the book value of the consideration paid on the new day of the combination and the
book value of the net assets obtained during the combination will be adjusted for capital reserve. If the
capital reserve is insufficient to offset, the retained earnings will be adjusted. For the long-term equity
investment held by the merging party before obtaining the control right of the combined party, the relevant
profits and losses, other comprehensive income and other changes in owner's equity have been recognized
from the date of obtaining the original equity and the date when the merging party and the combined party
are under the same final control to the combination date, and the initial retained earnings or current profits
and losses during the comparative report period shall be offset respectively.
(2) Business combination involving entities not under common control
For business combination not under the same control, the combination cost refers to the assets paid,
liabilities incurred or assumed, and fair value of the issued equity securities in order to gain control over the
acquiree on the acquisition date. On the acquisition date, the acquired assets, liabilities and contingent
liabilities of the acquiree are recognized at fair value.
The difference between the combination cost and the fair value share of identifiable net assets
acquired in the combination is recognized as goodwill, and the accumulated impairment provision is
deducted by cost for subsequent measurement; The difference between the combination cost and the fair
value share of identifiable net assets acquired by the acquiree in the combination shall be recorded into the
current profits and losses after review.
Business combination under the same control shall be achieved step by step through multiple
transactions
In individual financial statements, the sum of the book value of the equity investment held by the
acquiree before the acquisition date and the new investment cost on the acquisition date is taken as the
initial investment cost of the investment. Other comprehensive income recognized by the equity investment
held before the acquisition date due to accounting by the equity method is not treated on the acquisition
date, and accounting treatment is carried out on the same basis as that of the investee's direct disposal of
related assets or liabilities; The owner's equity recognized due to the change of owner's equity of the
investee except net profit and loss, other comprehensive income and profit distribution shall be transferred
to the current profit and loss during the disposal period when the investment is disposed. If the equity
investment held before the acquisition date is measured by fair value, the accumulated changes in fair value
originally included in other comprehensive income will be transferred to the current profits and losses
when accounting by cost method.
In the consolidated financial statements, the consolidated cost is the sum of the consideration paid on
the acquisition date and the fair value of the equity of the acquiree held before the acquisition date on the
acquisition date. The equity of the acquiree held before the acquisition date shall be re-measured according
to the fair value of the equity on the acquisition date, and the difference between the fair value and its book
value shall be included in the current income; Equity of the acquiree held before the acquisition date
involves other comprehensive income, and other changes in owner's equity are converted into current
income on the acquisition date, except for other comprehensive income arising from the remeasurement of
net liabilities or changes in net assets of the set income plan by the investee.
(3) Treatment of transaction costs in business combination
Intermediary expenses such as auditing, legal services, evaluation and consultation, and other related
management expenses incurred for business combination are included in the current profits and losses
when they occur. Transaction costs of equity securities or debt securities issued as combination
consideration are included in the initial recognition amount of equity securities or debt securities.
6 Compilation method of consolidated financial statements
(1)The scope of consolidation
The consolidation scope of consolidated financial statements is determined on the basis of control.
Control refers to that the company has the power over the investee, enjoys variable returns by participating
146
in the related activities of the investee, and has the ability to use the power over the investee to affect its
return amount. Subsidiaries refer to subjects controlled by the Company (including enterprises, divisible
parts of investee, structured subjects, etc.).
The consolidation scope of consolidated financial statements is determined on the basis of control.
Control refers to that the company has the power over the investee, enjoys variable returns by participating
in the related activities of the investee, and has the ability to use the power over the investee to affect its
return amount. Subsidiaries refer to subjects controlled by the Company (including enterprises, divisible
parts of investee, structured subjects, etc.).
(2) Compilation method of consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and its
subsidiaries, and are prepared by the Company according to other relevant information. When preparing the
consolidated financial statements, the accounting policies and accounting period requirements of the
Company and its subsidiaries are consistent, and major transactions and current balances between
companies are offset.
During the reporting period, the subsidiaries and businesses increased due to the business combination
under the same control shall be deemed to be included in the consolidation scope of the Company from the
date when they are controlled by the ultimate controller, and their operating results and cash flows from the
date when they are controlled by the ultimate controller shall be included in the consolidated income
statement and the consolidated cash flow statement respectively.
During the reporting period, the income, expenses and profits of subsidiaries and businesses increased
from the acquisition date to the end of the reporting period due to business combination not under the same
control during the reporting period are included in the consolidated income statement, and their cash flows
are included in the consolidated cash flow statement.
The part of shareholders' equity of subsidiaries that is not owned by the Company is listed separately
as minority shareholders' equity in the consolidated balance sheet; The share of minority shareholders'
equity in the current net profit and loss of subsidiaries is listed as "minority shareholders' profit and loss"
under the net profit item in the consolidated income statement. If the loss of subsidiary shared by minority
shareholders exceeds the share enjoyed by minority shareholders in the initial owner's equity of such
subsidiary, the balance still offsets minority shareholders' equity.
(3) Acquisition of minority shareholders' equity of subsidiaries
The capital reserve in the consolidated balance sheet shall be adjusted for the difference between the
newly acquired long-term equity investment cost due to the acquisition of minority shares and the share of
net assets continuously calculated by subsidiaries from the acquisition date or combination date, and the
difference between the disposal price obtained from partial disposal of equity investment in subsidiaries
without losing control and the share of net assets continuously calculated by subsidiaries from the
acquisition date or combination date corresponding to the disposal of long-term equity investment. If the
capital reserve is insufficient to offset, the retained earnings shall be adjusted.
(4) Treatment of losing control over subsidiaries
If the control over the original subsidiary is lost due to the disposal of part of the equity investment or
other reasons, the remaining equity shall be re-measured according to its fair value on the date of loss of
control; The sum of the consideration obtained from the disposal of equity and the fair value of remaining
equity, minus the sum of the share of the original subsidiary's book value of net assets calculated
continuously from the acquisition date and goodwill calculated according to the original shareholding ratio,
and the difference formed is included in the investment income of the current period of loss of control.
Other comprehensive income related to the original subsidiary's equity investment will be transferred
to the current profits and losses when the control right is lost, except for other comprehensive income
generated by the investee's remeasurement of the net liabilities or changes in net assets of the set income
plan.
147
7.Joint venture arrangements classification and Co-operation accounting treatment
Joint venture arrangement refers to an arrangement under the joint control of two or more participants.
The joint venture arrangement of the Company is divided into joint operation and joint venture.
(1) Joint operation
Joint operation refers to the joint venture arrangement in which the Company is entitled to the assets
related to the arrangement and bears the liabilities related to the arrangement.
The Company recognizes the following items related to the share of interests in joint operation, and
carries out accounting treatment in accordance with the relevant accounting standards for business
enterprises:
A. Recognize assets held separately and assets held jointly according to their shares;
B. Recognize the liabilities undertaken separately, and recognize the liabilities jointly undertaken
according to their shares;
C. Recognize the income generated from the sale of its share of joint operating output;
D. Recognize the income generated by the sale of output from joint operation according to their
shares;
E. Recognize the expenses incurred separately, and recognize the expenses incurred in joint operation
according to their shares.
(2) Joint venture
A joint venture refers to a joint venture arrangement in which the Company only has rights to the net
assets of the arrangement.
The Company shall carry out accounting treatment on the investment of the joint venture in
accordance with the provisions on accounting of long-term equity investment by the equity method.
8.Recognition Standard of Cash & Cash Equivalents
Cash refers to cash on hand and deposits that can be used for payment at any time. Cash equivalents
refer to investments held by the Company with short term, strong liquidity, easy conversion into known
cash and little risk of value change.
9.Foreign currency transaction
In case of foreign currency business of the Company, the exchange rate determined by a systematic
and reasonable method which is similar to the spot exchange rate on the transaction date shall be used to
convert it into the bookkeeping base currency amount.
Balance sheet date: foreign currency monetary items shall be converted at the spot exchange rate on
the balance sheet date. Exchange differences arising from the difference between the spot exchange rate on
the balance sheet date and the spot exchange rate at the time of initial recognition or the previous balance
sheet date are included in the current profits and losses; For foreign currency non-monetary items measured
at historical cost, the spot exchange rate on the transaction date is still adopted; Foreign currency
non-monetary items measured at fair value are converted at the spot exchange rate on the fair value
determination date, and the difference between the converted bookkeeping base currency amount and the
original bookkeeping base currency amount is included in the current profits and losses.
10.Financial instruments
Financial instruments refer to contracts that form financial assets of one party and financial liabilities
or equity instruments of other parties.
(1) Recognition and derecognition of financial instruments
When the Company becomes a party to a financial instrument contract, a financial asset or financial
liability is recognized.
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Financial assets that meet one of the following conditions shall be derecognized:
① Termination of the contractual right to receive cash flow from the financial asset;
② The financial asset has been transferred and the following conditions for derecognition of financial
asset transfer are met.
If all or part of the current obligations of a financial liability have been discharged, the financial
liability or part of it shall be derecognized. If the Company (debtor) signs an agreement with the creditor to
replace the existing financial liabilities by assuming new financial liabilities, and the contract terms of the
new financial liabilities are substantially different from those of the existing financial liabilities, the
existing financial liabilities shall be derecognized and the new financial liabilities shall be recognized at the
same time.
When trading the financial assets in a conventional way, accounting recognition and derecognition
shall be carried out according to the trading day.
(2) Classification and measurement of financial assets
According to the business model of managing financial assets and the contractual cash flow
characteristics of financial assets, the Company divides financial assets into the following three categories:
financial assets measured at amortized cost, financial assets measured at fair value with changes included in
other comprehensive income, and financial assets measured at fair value with changes included in current
profits and losses.
Financial assets measured at amortized cost
The Company classifies the financial assets that meet the following conditions and are not designated
to be measured at fair value with changes included in current profits and losses as financial assets measured
at amortized cost:
The Company's business model of managing such financial assets is to collect contract cash flow as
the goal;
According to the contract terms of the financial asset, the cash flow generated on a specific date is
only the payment of principal and interest based on the unpaid principal amount.
After initial recognition, such financial assets are measured in amortized cost by the effective interest
rate method. Gains or losses arising from financial assets measured in amortized cost that are not part of
any hedging relationship are included in current profits and losses when derecognition, amortization
according to the effective interest rate method, or impairment recognition.
Financial assets measured at fair value and changes included in other comprehensive income
The Company classifies financial assets that meet the following conditions and are not designated to
be measured at fair value with changes included in current profits and losses as financial assets measured at
fair value with changes included in other comprehensive income
The company's business model of managing the financial assets aims at both collecting contract cash
flow and selling the financial assets.
According to the contract terms of the financial asset, the cash flow generated on a specific date is
only the payment of principal and interest based on the unpaid principal amount.
After initial recognition, the fair value of such financial assets is subsequently measured. Interest,
impairment losses or gains and exchange gains and losses calculated by the effective interest rate method
are included in the current profits and losses, while other gains or losses are included in other
comprehensive income. Upon termination of recognition, the accumulated gains or losses previously
included in other comprehensive income shall be transferred out of other comprehensive income and
included in current profits and losses.
Financial assets measured at fair value with changes included in current profits and losses
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Except for the above financial assets measured at amortized cost and at fair value with changes
included in other comprehensive income, the Company classifies all other financial assets as financial
assets measured at fair value with changes included in current profits and losses. At the time of initial
recognition, in order to eliminate or significantly reduce accounting mismatch, the Company irrevocably
designated some financial assets that should have been measured at amortized cost or at fair value with
changes included in other comprehensive income as financial assets measured at fair value with changes
included in current profits and losses.
After initial recognition, the financial assets are subsequently measured at fair value, and the resulting
gains or losses (including interest and dividend income) are included in the current profits and losses,
unless the financial assets are part of the hedging relationship.
However, for non-trading equity instrument investments, the Company can irrevocably designate them
as financial assets measured at fair value with changes included in other comprehensive income upon initial
recognition. The designation is made on the basis of a single investment, and the relevant investment
conforms to the definition of equity instruments from the perspective of the issuer.
After initial recognition, the fair value of such financial assets is subsequently measured. Dividend
income that meets the requirements is included in profit or loss, and other gains or losses and changes in
fair value are included in other comprehensive income. Upon termination of recognition, the accumulated
gains or losses previously included in other comprehensive income shall be transferred out of other
comprehensive income and included in retained income.
The business model of managing financial asset refers to how the Company manages financial assets
to generate cash flow. The business model determines whether the cash flow of financial assets managed by
the Company comes from contract cash flow, sale of financial assets or both. The Company determines the
business model of managing financial assets based on objective facts and specific business objectives of
managing financial assets decided by key management personnel.
The Company evaluates the contractual cash flow characteristics of financial assets to determine
whether the contractual cash flow generated by related financial assets on a specific date is only the
payment of principal and interest based on the unpaid principal amount. Where, the principal refers to the
fair value of financial assets at initial recognition; Interest includes consideration for the time value of
money, credit risk related to the unpaid principal amount in a specific period, and other basic borrowing
risks, costs and profits. In addition, the Company evaluates the contract clauses that may cause changes in
the time distribution or amount of cash flow of financial assets contracts to determine whether they meet
the requirements of the above-mentioned contract cash flow characteristics.
Only when the Company changes its business model for managing financial assets, all affected
financial assets shall be reclassified on the first day of the first reporting period after the business model
changes, otherwise, financial assets shall not be reclassified after initial recognition.
Financial assets are measured at fair value upon initial recognition. For financial assets measured at
fair value, whose changes are included in current profits and losses, relevant transaction costs are directly
included in current profits and losses; For other types of financial assets, relevant transaction costs are
included in the initial recognition amount. Accounts receivable arising from the sale of products or the
provision of labor services that do not include or take into account significant financing components are
initially recognized by the Company in accordance with the amount of consideration that the Company is
expected to be entitled to receive.
(3) Classification and measurement of financial liabilities
At initial recognition, the financial liabilities of the Company are classified into: financial liabilities
measured at fair value with changes included in current profits and losses, and financial liabilities measured
at amortized cost. For financial liabilities that are not classified as measured at fair value with changes
included in current profits and losses, relevant transaction costs are included in their initial recognition
amount.
Financial liabilities measured at fair value with changes included in the current profits and losses
Financial liabilities measured at fair value with changes included in current profits and losses include
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transactional financial liabilities and financial liabilities designated at fair value at initial recognition with
changes included in current profits and losses. Such financial liabilities are subsequently measured
according to fair value, and the gains or losses caused by changes in fair value and dividends and interest
expenses related to such financial liabilities are included in current profits and losses.
Financial liabilities measured in amortized cost
Other financial liabilities are subsequently measured according to the amortized cost by the effective
interest rate method, and the gains or losses arising from derecognition or amortization are included in the
current profits and losses.
Distinction between financial liabilities and equity instruments
Financial liabilities refer to liabilities that meet one of the following conditions:
① Contract obligation to deliver cash or other financial assets to other parties.
② The contractual obligation to exchange financial assets or financial liabilities with other parties
under potential unfavorable conditions.
③ Non-derivative contracts that need to be settled or can be settled by the enterprise's own equity
instruments in the future, for which the enterprise will deliver a variable number of its own equity
instruments according to this contract.
④ Derivative contracts that need to be settled or can be settled by the enterprise's own equity
instruments in the future, except for derivative contracts that exchange a fixed amount of its own equity
instruments for a fixed amount of cash or other financial assets.
Equity instruments refer to contracts that can prove ownership of an enterprise's residual equity in
assets after deducting all liabilities.
If the Company can't unconditionally avoid delivering cash or other financial assets to fulfill a
contractual obligation, the contractual obligation meets the definition of financial liabilities.
If a financial instrument needs to be settled or can be settled by the Company's own equity instrument,
it shall be considered whether its own equity instrument used to settle the instrument is a substitute for cash
or other financial assets, or it is to enable the holder of such instrument to be entitled to the remaining
equity in the assets after all liabilities are deducted by the issuer. In the former case, the instrument is the
financial liability of the Company; In the latter case, the instrument is the equity instrument of the
Company.
(4) Derivative financial instruments and embedded derivative instruments
Initially, it is measured at the fair value on the day when the derivative transaction contract is signed,
and then measured at its fair value. Derivative financial instruments with positive fair value are recognized
as an asset, while those with negative fair value are regarded as an liability. Any gains or losses arising
from changes in fair value that do not meet the requirements of hedge accounting are directly included in
the current profits and losses.
For mixed instruments including embedded derivative, if the main contract is financial assets, the
relevant provisions of financial asset classification shall apply to the mixed instruments as a whole. If the
main contract is not a financial asset, and the mixed instrument is not measured at fair value with changes
included in the current profits and losses for accounting treatment, the embedded derivative is not closely
related to the main contract in terms of economic characteristics and risks, and has the same conditions as
the embedded derivative, and if the independent instrument meets the definition of derivative, the
embedded derivative is split from the mixed instrument and treated as a separate derivative financial
instrument. If the embedded derivative cannot be separately measured at the time of acquisition or on the
subsequent balance sheet date, the mixed instruments as a whole are designated as financial assets or
financial liabilities measured at fair value with changes included in the current profits and losses.
(5) Fair value of financial instruments
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See Note III. 11 for the determination method of the fair value of financial assets and financial
liabilities.
(6) Impairment of financial assets
Based on the expected credit loss, the Company will carry out impairment accounting treatment on the
following items and recognize the loss reserve:
① Financial assets measured at amortized cost;
② Receivables and debt investments measured at fair value and included in other comprehensive
income;
③ Lease receivables;
④ Financial guarantee contracts (except those which are measured at fair value with changes
included in current profits and losses, in which the transfer of financial assets does not meet the conditions
for derecognition, or those formed by continuing to involve the transferred financial assets).
Measurement of expected credit loss
Expected credit loss refers to the weighted average of the credit losses of financial instruments
weighted by the risk of default. Credit loss refers to the difference between the cash flow of all contracts
discounted according to the original real interest rate and the expected cash flow of all contracts receivable
according to the contract, that is, the present value of all cash shortages.
The Company takes into account reasonable and reliable information on historical events, current
situation and future economic situation forecasts, and uses the risk of default as the weight to calculate the
probability weighted amount of the present value of the difference between the cash flow receivable from
the contract and the cash flow expected to be received to recognize the expected credit loss.
The Company separately measures the expected credit losses of financial instruments at different
stages. If the credit risk of financial instruments has not increased significantly since the initial recognition,
it is in the first stage. The Company measures the loss reserve according to the expected credit loss in the
next 12 months; If the credit risk of a financial instrument has increased significantly since its initial
recognition but no credit impairment has occurred, it is in the second stage. The Company measures the
loss reserve according to the expected credit loss of the instrument throughout the duration; If a financial
instrument has suffered credit impairment since its initial recognition, it is in the third stage. The Company
measures the loss reserve according to the expected credit loss of the instrument throughout the duration.
For financial instruments with low credit risk on the balance sheet date, the Company assumes that
their credit risk has not increased significantly since the initial recognition, and measures the loss reserve
according to the expected credit loss in the next 12 months.
The expected credit loss in the whole duration refers to the expected credit loss caused by all possible
default events in the whole expected duration of financial instruments. The expected credit loss in the next
12 months refers to the expected credit loss caused by the financial instrument default event that may occur
within 12 months after the balance sheet date (or within the expected duration if the expected duration of
the financial instrument is less than 12 months), which is a part of the expected credit loss in the whole
duration.
When measuring the expected credit loss, the longest period that the Company needs to consider is the
longest contract period during which the enterprise is subject to credit risk (including the option to renew
the contract).
For financial instruments in the first and second stages and with low credit risk, the Company
calculates interest income based on the book balance before deducting impairment provisions and the
actual interest rate. For financial instruments in the third stage, the interest income shall be calculated
according to their book balance minus the amortized cost after impairment provision and the actual interest
rate.
For notes receivable and accounts receivable, regardless of whether there is significant financing
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component, the Company always measures the loss reserve according to the amount equivalent to the
expected credit loss in the whole duration.
When a single financial asset cannot evaluate the expected credit loss information at a reasonable cost,
the Company divides the notes receivable and accounts receivable into portfolios according to the credit
risk characteristics, calculates the expected credit loss on the basis of the combinations, and determines the
combination on the following basis:
A. Notes receivable
Notes receivable portfolio 1: bank acceptance bill
Notes receivable portfolio 2: commercial acceptance bill
B. Accounts receivable
Accounts receivable portfolio 1: polarizer sales receivable
Accounts receivable portfolio 2: textile and garment sales receivable
Accounts receivable portfolio 3: operating funds receivable from self-own property
Accounts receivable portfolio 4: other receivables
For notes receivable divided into portfolios, the Company refers to the historical credit loss experience,
and calculates the expected credit loss through the default risk exposure and the expected credit loss rate of
the whole duration based on the current situation and forecasts the future economic situation.
For accounts receivable divided into combinations, the Company refers to the historical credit loss
experience, combines the current situation with the forecast of future economic situation, compiles a
comparison table of aging/overdue days of accounts receivable and the expected credit loss rate for the
whole duration, and calculates the expected credit loss.
Other receivables
The Company classifies other receivables into several combinations according to the credit risk
characteristics, and calculates the expected credit losses based on the portfolios. The basis for determining
the portfolio is as follows:
Other receivables portfolio: aging portfolio
For other receivables classified as portfolios, the Company calculates the expected credit loss through
the default risk exposure and the expected credit loss rate in the next 12 months or the whole duration.
Debt investment and other debt investment
For creditor's rights investment and other creditor's rights investment, the Company calculates the
expected credit loss according to the nature of the investment, the counterparty and various types of risk
exposure and based on the expected credit loss rate in the next 12 months or the whole duration.
Evaluation of significant increase in credit risk
By comparing the risk of default of financial instruments on the balance sheet date with the risk of
default on the initial recognition date, the Company determines the relative change of default risk of
financial instruments in the expected duration, and evaluates whether the credit risk of financial
instruments has increased significantly since initial recognition.
When determining whether the credit risk has increased significantly since the initial recognition, the
company considers to obtain reasonable and reliable information without unnecessary extra costs or efforts,
including forward-looking information. Information considered by the Company includes:
The debtor fails to pay the principal and interest according to the expiration date of the contract;
Serious deterioration of external or internal credit rating (if any) of financial instruments that has
occurred or is expected;
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Serious deterioration of the debtor's operating results that has occurred or is expected;
Changes in existing or expected technology, market, economic or legal environment, and significant
adverse effects on the debtor's repayment ability of the Company.
According to the nature of financial instruments, the Company assesses whether credit risks have
increased significantly on the basis of individual financial instruments or financial instrument
portfolios. When evaluating on the basis of financial instrument portfolio, the Company can classify
financial instruments based on common credit risk characteristics, such as overdue information and
credit risk rating.
Financial assets with credit impairment
On the balance sheet date, the Company evaluates whether the financial assets measured at amortized
cost and the creditor's rights investments measured at fair value with changes included in other
comprehensive income have suffered credit impairment. When one or more events that adversely affect the
expected future cash flow of a financial asset occur, the financial asset becomes a financial asset with credit
impairment. Evidence of credit impairment of financial assets includes the following observable
information:
The issuer or debtor has major financial difficulties;
The debtor violates the contract, such as default or overdue payment of interest or principal;
The Company gives concessions that the debtor will not make under any other circumstances due to
economic or contractual considerations related to the debtor's financial difficulties;
The debtor is likely to go bankrupt or undergo other financial restructuring;
The financial difficulties of the issuer or debtor cause the active market of the financial assets to
disappear.
Presentation of expected credit loss provision
In order to reflect the change of credit risk of financial instruments after initial recognition, the
Company re-measures the expected credit loss on each balance sheet date, and the resulting increase or
reversal amount of loss reserve shall be included in the current profits and losses as impairment losses or
gains. For financial assets measured in amortized cost, the loss reserve shall be offset against the book
value of the financial assets listed in the balance sheet; For creditor's rights investments measured at fair
value with changes included in other comprehensive income, the Company recognizes its loss reserve in
other comprehensive income, which does not offset the book value of the financial asset.
Cancel after verification
If the Company no longer reasonably expects the contract cash flow of financial assets to be fully or
partially recovered, it will directly write down the book balance of the financial assets. This write-down
constitutes the derecognition of related financial assets. It usually happens when the Company determines
that the debtor has no assets or income sources to generate enough cash flow to repay the amount to be
written down. However, according to the Company's procedures for recovering the due amount, the
written-down financial assets may still be affected by the implementation activities.
If the written-down financial assets are recovered later, they will be included in profits and losses of
the current recovery period as the reversal of impairment losses.
(7) Transfer of financial assets
Transfer of financial assets refers to the transfer or delivery of financial assets to another party
(transferee) other than the issuer of the financial assets.
If the company has transferred almost all risks and rewards in the ownership of the financial asset to
the transferee, the recognition of the financial asset shall be terminated; If almost all risks and rewards on
the ownership of a financial asset are retained, the financial asset shall not be derecognized.
If the Company has neither transferred nor retained almost all risks and rewards in the ownership of
financial assets, it shall be dealt with as follows: if the control of the financial assets is abandoned, the
financial assets shall be derecognized and the resulting assets and liabilities shall be recognized; If the
control of the financial assets is not abandoned, the relevant financial assets shall be recognized according
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to the extent of their continued involvement in the transferred financial assets, and the relevant liabilities
shall be recognized accordingly.
(8) Offset of financial assets and financial liabilities
When the Company has the legal right to offset the recognized financial assets and financial liabilities,
which can be enforced at present, and the Company plans to settle by net amount or at the same time
realize such financial assets and pay off such financial liabilities, the financial assets and financial liabilities
are listed in the balance sheet with the amount after offset. In addition, financial assets and financial
liabilities are listed separately in the balance sheet and will not be offset against each other.
11.Fair value measurement
Fair value refers to the price that a market participant must pay to sell or transfer a liability in an
orderly transaction that occurs on the measurement date.
The Company measures related assets or liabilities at fair value, assuming that the orderly transaction
of selling assets or transferring liabilities is conducted in the main market of related assets or liabilities; If
there is no major market, the Company assumes that the transaction will be conducted in the most favorable
market of related assets or liabilities. The main market (or the most favorable market) is the trading market
that the Company can enter on the measurement day. The Company adopts the assumptions used by market
participants to maximize their economic benefits when pricing the assets or liabilities.
If there are financial assets or financial liabilities in an active market, the fair value of the financial
assets or financial liabilities shall be determined by the quotation in the active market by the Company. For
financial instruments with active market, the Company adopts valuation technology to determine their fair
values.
When measuring non-financial assets at fair value, the ability of market participants to apply the assets
for the best purpose to generate economic benefits or the ability to sell the assets to other market
participants for the best purpose to generate economic benefits shall be considered.
The Company adopts the valuation technology which is applicable in the current situation and
supported by sufficient available data and other information, and gives priority to the relevant observable
input values, and only uses the unobservable input values when the observable input values are unavailable
or impractical.
For assets and liabilities measured or disclosed at fair value in financial statements, the fair value level
is determined according to the lowest level input value which is of great significance to fair value
measurement as a whole: The first-level input value is the unadjusted quotation of the same assets or
liabilities that can be obtained on the measurement date in an active market; The second-level input value is
directly or indirectly observable input value of related assets or liabilities except the first-level input value;
The third-level input value is the unobservable input value of related assets or liabilities.
On each balance sheet date, the Company reassesses the assets and liabilities recognized in the
financial statements that are continuously measured at fair value to determine whether there is a conversion
between the fair value measurement levels.
12.Inventory
(1)Investories class
The Company's inventory includes raw materials, in-process products, low-value consumables,
packaging materials, inventory goods, and issued goods.
(2) Pricing method of issued inventory
The Company's inventory is priced at the actual cost when it is acquired. The weighted average
method is adopted when raw materials and inventory goods are issued.
(3) Determination basis of net realizable value of inventory and accrual method of inventory
depreciation reserve
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The net realizable value of inventory is the estimated selling price of inventory minus the estimated
costs to be incurred upon completion, estimated sales expenses and related taxes. For determination of the
net realizable value of inventories, the solid evidence shall serve as the basis, and the purpose of holding
inventories and the influence of events after the balance sheet date shall be considered.
On the balance sheet date, if the inventory cost is higher than its net realizable value, inventory
depreciation reserve shall be made. The Company usually accrues the inventory depreciation reserve
according to individual inventory items. On the balance sheet date, if the influencing factors of previous
inventory value written down have disappeared, the inventory depreciation reserve will be returned within
the originally accrued amount.
(4) Inventory system of inventory
Perpetual inventory system is adopted for the Company's inventory system.
(5) Amortization method of low-value consumables and packaging materials
Low-value consumables and packaging materials of the Company are amortized by one-time write-off
method.
13.Held for sale and discontinuing operation
(1) Classification and measurement of non-current assets or disposal groups held for sale
When the book value of a non-current asset or disposal group is recovered by the Company mainly by
selling it (including the exchange of non-monetary assets with commercial nation) rather than continuously
using it, the non-current asset or disposal group is classified as held for sale.
The above-mentioned non-current assets do not include investment real estate measured by fair value
model, biological assets measured by net amount of fair value minus selling expenses, assets formed by
employee compensation, financial assets, deferred income tax assets and rights arising from insurance
contracts.
The disposal group refers to a group of assets disposed of together by sale or other means in a
transaction as a whole, and liabilities directly related to these assets transferred in the transaction. Under
certain circumstances, the disposal group includes goodwill obtained in business combination, etc.
Meanwhile, non-current assets or disposal groups that meet the following conditions are classified as
held-for-sale: according to the practice of selling such assets or disposal groups in similar transactions, the
non-current assets or disposal groups can be sold immediately under the current situation; The sale is very
likely to happen, that is, a resolution has been made on a sale plan and a certain purchase commitment has
been obtained, and it is expected that the sale will be completed within one year. If the control over
subsidiaries is lost due to the sale of investments in subsidiaries, whether or not the Company retains part
of the equity investments after the sale, when the investment in subsidiaries to be sold meets the
classification conditions of holding for sale, the investment in subsidiaries will be classified as held-for-sale
as a whole in individual financial statements, and all assets and liabilities of subsidiaries will be classified
as held-for-sale in consolidated financial statements.
When the non-current assets or disposal groups held for sale are initially measured or re-measured on
the balance sheet date, the difference between the book value and the net amount after deduction of the
sales expenses from the fair value is recognized as the asset impairment loss. For the amount of asset
impairment loss recognized by the disposal group held for sale, the book value of goodwill in the disposal
group is offset first, and then the book value of non-current assets in the disposal group is offset
proportionally.
If the net amount of non-current assets held for sale or disposal group's fair value minus sales
expenses increases on the subsequent balance sheet date, the previously written-down amount will be
restored and reversed within the amount of asset impairment loss recognized after being classified as
held-for-sale, and the reversed amount will be included in the current profits and losses. The book value of
offset goodwill shall not be reversed.
Non-current assets held for sale and assets in disposal group held for sale are not depreciated or
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amortized; Interest and other expenses of liabilities in disposal group held for sale continue to be
recognized. All or part of the investments of associated enterprises or joint ventures classified as held for
sale shall be accounted for by the equity method for those classified as held for sale, while those retained
(not classified as held for sale) shall continue to be accounted for by the equity method; When the
Company loses significant influence on the associated enterprises and joint ventures due to the sale, it shall
stop using the equity method.
If a certain non-current asset or disposal group is classified as held-for-sale, but the classification
conditions of held-for-sale are no longer met, the Company will stop classifying it as held-for-sale and
measure it according to the lower of the following two amounts:
① The book value of the asset or disposal group before it is classified as held-for-sale, and the
amount adjusted according to the depreciation, amortization or impairment that should have been
recognized without being classified as held-for-sale;
② Recoverable amount.
(2) Discontinuing operation
Discontinuing operation refers to the components that have been disposed of by the Company or
classified as held-for-sale by the Company and can be distinguished separately, which meet one of the
following conditions:
① Such component represents an independent main business or a separate main business area.
② Such component is part of an associated plan to dispose an independent main business or a
separate main business area.
③ Such component is a subsidiary acquired for resale.
(3) Presentation
In the balance sheet, the Company presents the non-current assets held for sale or the assets in the
disposal group held for sale as "assets held for sale", and presents the liabilities in the disposal group held
for sale as "liabilities held for sale".
The Company separately presents the profit and loss from continuing operations and the profit and
loss from discontinuing operations in the income statement. For non-current assets or disposal groups held
for sale that do not meet the definition of discontinuing operation, the impairment loss, reversal amount and
disposal profit and loss are presented as the profit and loss of continuing operations. Operating profit and
loss and disposal profit and loss such as impairment loss and reversal amount of discontinuing operation
are presented as discontinuing operation profits and losses.
A disposal group that intends to terminate its use instead of selling and meets the conditions of
relevant components in the definition of discontinuing operation shall be presented as discontinuing
operation from the date when it ceases to use.
For the discontinuing operation reported in the current period, in the current financial statements, the
information originally presented as the profits and losses of continuing operation is re-presented as the
profits and losses of discontinuing operation in the comparable accounting period. If the discontinuing
operation no longer meets the classification conditions of holding for sale, the information originally
presented as the profits and losses of discontinuing operation in the current financial statements will be
presented again as the profits and losses of continuing operation in the comparable accounting period.
14.Long-term equity investments
Long-term equity investment includes equity investment in subsidiaries, joint ventures and associated
enterprises. If the Company can exert significant influence on the investee, it is an associated enterprise of
the Company.
(1) Determination of initial investment cost
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Long-term equity investment forming business combination: the long-term equity investment obtained
by business combination under the same control shall be taken as the investment cost according to the book
value share of the owner's equity of the combined party in the consolidated financial statements of the final
controlling party on the combination date; Long-term equity investment obtained by business combination
not under the same control shall be regarded as the investment cost of long-term equity investment
according to the combination cost.
For long-term equity investment obtained by other means: For long-term equity investment obtained
by payment in cash, the actual purchase price is taken as the initial investment cost; For long-term equity
investment obtained by issuing equity securities, the fair value of issuing equity securities is taken as the
initial investment cost.
(2) Subsequent measurement and profit and loss recognition method
Investment in subsidiaries shall be accounted by cost method, unless the investment meets the
conditions of holding for sale; Investment in associated enterprises and joint ventures shall be accounted
for by equity method.
For the long-term equity investment calculated by the cost method, except for the cash dividends or
profits that have been declared but not yet issued and that included in the actual payment or consideration,
the cash dividends or profits declared and distributed by the investee are recognized as investment income
and included in the current profits and losses.
If the initial investment cost of long-term equity investment accounted by equity method is greater
than the fair value share of identifiable net assets of the investee, the investment cost of long-term equity
investment shall not be adjusted; If the initial investment cost is less than the fair value share of the
identifiable net assets of the investee at the time of investment, the book value of the long-term equity
investment shall be adjusted, and the difference shall be included in the profit and loss of the current
investment period.
In case of accounting by equity method, the investment income and other comprehensive income are
recognized respectively according to the share of net profits and losses and other comprehensive income
realized by the investee, and the book value of long-term equity investment is adjusted at the same time;
According to the profit or cash dividend declared and distributed by the investee, the part to be entitled to
shall be calculated, and the book value of long-term equity investment shall be reduced correspondingly;
The investee adjusts the book value of long-term equity investment for other changes in owner's equity
except net profits and losses, other comprehensive income and profit distribution and includes them in
capital reserve (other capital reserve). When recognizing the share of the net profit and loss of the investee,
the fair value of identifiable assets of the investee at the time of investment is taken as the basis, and the net
profit of the investee is recognized after adjustment according to the accounting policies and accounting
periods of the Company.
If it can exert significant influence on the investee due to additional investment or implement joint
control but does not constitute control, on the conversion date, the sum of the fair value of the original
equity plus the new investment cost shall be taken as the initial investment cost calculated by the equity
method instead. The difference between the fair value and book value of the original equity on the
conversion date, as well as the accumulated fair value changes originally included in other comprehensive
income, are transferred to the current profits and losses accounted for by the equity method.
If the joint control or significant influence on the investee is lost due to the disposal of some equity
investments, the remaining equity after disposal shall be accounted for according to Accounting Standards
for Business Enterprises No.22-Recognition and Measurement of Financial Instruments on the date of loss
of joint control or significant influence, and the difference between fair value and book value shall be
included in the current profits and losses. Other comprehensive income recognized by the original equity
investment due to the adoption of the equity method shall be accounted for on the same basis as the direct
disposal of related assets or liabilities by the investee when the equity method is terminated; Changes in
other owners' equity related to the original equity investment are transferred into current profits and losses.
If the control over the investee is lost due to the disposal of part of equity investment, and the
remaining equity after disposal can jointly control or exert significant influence on the investee, it shall be
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accounted for according to the equity method instead, and the remaining equity shall be regarded as being
adjusted by the equity method when it is acquired; If the remaining equity after disposal cannot exercise
joint control or exert significant influence on the investee, it shall be accounted for according to the
relevant provisions of Accounting Standards for Business Enterprises No.22-Recognition and Measurement
of Financial Instruments, and the difference between its fair value and book value on the date of loss of
control shall be included in the current profits and losses.
If the Company's shareholding ratio decreases due to capital increase of other investors, causing loss
of control, but it can exercise joint control or exert significant influence on the investee, the share of net
assets increased by the investee due to capital increase and share expansion shall be recognized according
to the new shareholding ratio, and the difference between the original book value of long-term equity
investment corresponding to the decreased shareholding ratio shall be included in the current profits and
losses; Then, according to the new shareholding ratio, it is regarded as being adjusted by the equity method
when the investment is obtained.
For unrealized internal transaction gains and losses between the Company and its associated
enterprises and joint ventures, the portion attributable to the Company shall be calculated according to the
shareholding ratio, and investment gains and losses shall be recognized on the basis of offset. However, if
the unrealized internal transaction losses between the Company and the investee are the impairment losses
of the transferred assets, they will not be offset.
(3) Basis for determination of joint control and significant influence on the investee
Joint control refers to the common control of an arrangement in accordance with the relevant
agreement, and the relevant activities of such arrangement must be unanimously agreed by the participants
who share the control rights before any decision is made. When judging whether there is common control,
firstly, judge whether all participants or a combination of participants collectively control the arrangement,
and secondly, judge whether the decision-making of activities related to the arrangement must be
unanimously agreed by the participants who collectively control the arrangement. If all participants or a
group of participants must act in concert to decide the relevant activities of an arrangement, it is considered
that all participants or a group of participants collectively control the arrangement; If two or more
participants can collectively control an arrangement, it does not constitute joint control. When judging
whether it is joint control, the protective rights entitled to are not considered.
Significant influence means that the investor has the right to participate in the decision-making on the
financial and operating policies of the investee, but cannot control or jointly control the formulation of
these policies with other parties. When determining whether it can exert significant influence on the
investee, the influence of the voting shares of the investee directly or indirectly held by the investor and the
current executable potential voting rights held by the investor and other parties shall be considered,
including the influence of the current convertible warrants, share options and convertible corporate bonds
issued by the investee.
When the Company directly or indirectly owns more than 20% (including 20%) but less than 50% of
the voting shares of the investee, it is generally considered to have a significant influence on the investee,
unless there is clear evidence that it cannot participate in the production and operation decisions of the
investee under such circumstances, in which case it does not have a significant influence; When the
Company owns less than 20% (excluding) of the voting shares of the investee, it is generally not considered
to have a significant influence on the investee, unless there is clear evidence that it can participate in the
production and operation decisions of the investee under such circumstances, in which case it has a
significant influence.
(4) Equity investment held for sale
If all or part of the equity investment in an associated enterprise or joint venture is classified as assets
held for sale, please refer to Note III. 13 for relevant accounting treatment.
For the remaining equity investments that are not classified as assets held for sale, the equity method
is adopted for accounting treatment.
If the equity investment in an associated enterprise or joint venture that has been classified as held for
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sale no longer meets the classification conditions of assets held for sale, the equity method shall be used for
retrospective adjustment from the date that it is classified as assets held for sale.
(5) Test method for impairment and accrual method for impairment provision
For investment in subsidiaries, associated enterprises and joint ventures, please refer to Note III. 21 for
the accrual method for impairment provision.
15.Investment real estate
Investment real estate refers to real estate held for rent or capital appreciation, or both. The Company's
investment real estate includes leased land use rights, land use rights transferred after holding and preparing
for appreciation, and leased buildings.
The Company's investment real estate is initially measured according to the cost at the time of
acquisition, and depreciation or amortization is accrued on schedule according to the relevant provisions of
fixed assets or intangible assets.
For investment real estate that is subsequently measured by cost model, please refer to Note III. 21 for
the accrual method of asset impairment.
The difference between the disposal income from the sale, transfer, scrapping or damage of investment
real estate after deduction of its book value and related taxes shall be included in the current profits and
losses.
16.Fixed assets
(1) Recognition conditions of fixed assets
The Company's fixed assets refer to tangible assets held for the production of commodities, provision
of labor services, leasing or operation and management, with a service life exceeding one fiscal year.
Only when the economic benefits related to the fixed assets are likely to flow into the enterprise and
the cost of the fixed assets can be measured reliably, can the fixed assets be recognized.
The fixed assets of the Company are initially measured according to the actual cost at the time of
acquisition.
(2) Depreciation methods of various fixed assets
The Company adopts the life average method to accrue depreciation. Depreciation of fixed assets
begins when they reach the intended usable state, and stops when they are derecognized or classified as
non-current assets held for sale. Without considering the impairment provision, according to the category,
estimated service life and estimated residual value of fixed assets, the Company determines the annual
depreciation rate of various fixed assets as follows:
Estimated residual
Category Expected useful life（Year） Depreciation
value
House and Building-- Production 35 4.00 2.74
House and Building-Non- 40 4.00 2.40
Production
Decoration of Fixed assets 10 10.00
Machinery and equipment 10-14 4.00 9.60-6.86
Transportation equipment 8 4.00 12.00
Electronic equipment 8 4.00 12.00
Other equipment 8 4.00 12.00
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For the fixed assets with the impairment provision withdrawn, the accumulative amount of the
withdrawn fixed assets impairment provision shall be also deducted to calculate and determine the rate of
depreciation.
(3) See Note III. 21 for the impairment test method and accrual method for impairment provision of
fixed assets.
(4) Identification basis, valuation method and depreciation method of fixed assets leased by financing
Fixed assets leased by the Company shall be recognized as fixed assets acquired under finance leases
when they meet one or more of the following criteria:
① Upon expiration of the lease term, the ownership of the leased assets shall be transferred to the
Company.
② The Company has the option right to purchase the leased assets, and the concluded purchase price
is expected to be far lower than the fair value of the leased assets when exercising the option right.
Therefore, the exercise of this option right by the Company can be determined reasonably on the starting
date of the lease.
③ Even though the ownership of the assets is not transferred, the lease term accounts for most of the
service life of the leased assets.
④ The present value of the minimum lease payment of the Company on the lease start date is almost
equal to the fair value of the leased assets on the lease start date.
⑤ In case of special properties of the leased assets and no large alteration, only the Company can use
them.
Fixed assets leased by finance lease shall be recorded at the lower of the fair value of the leased assets
on the lease start date and the present value of the minimum lease payment. The minimum lease payment is
taken as the recorded value of long-term payables, and the difference is taken as unrecognized financing
expenses. Initial direct expenses such as handling fees, attorney fees, travel expenses, stamp duty, etc.,
which occur during the lease negotiation and signing of the lease contract, are included in the value of the
leased assets. Unrecognized financing expenses are amortized by the effective interest rate method in each
period of the lease term.
Fixed assets leased by financing shall be depreciated by adopting policies consistent with the
self-owned fixed assets. If it can be reasonably determined that the ownership of the leased asset will be
acquired upon the expiration of the lease term, depreciation shall be accrued within the serviceable life of
the leased asset; If it is impossible to reasonably determine that the ownership of the leased asset can be
acquired at the expiration of the lease term, depreciation shall be accrued within the shorter of the lease
term and the serviceable life of the leased asset.
(5) At the end of each year, the Company rechecks the service life, estimated net salvage value and
depreciation method of fixed assets.
If the estimated service life is different from the original estimate, the service life of fixed assets shall
be adjusted; If the estimated net salvage value is different from the original estimate, the estimated net
salvage value shall be adjusted.
(6) Major repair cost
The major repair cost incurred by the Company in carrying out regular inspections of fixed assets, if
there is conclusive evidence showing that they meet the conditions for recognition of fixed assets, shall be
included in the cost of fixed assets, while those that do not meet the conditions for recognition of fixed
assets shall be included in the profits and losses of the current period. Fixed assets shall be depreciated
during the interval between regular overhaul.
17.Construction in progress
The cost of construction in progress of the Company is determined according to the actual project
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expenditure, including all necessary project expenditures incurred during the construction period,
borrowing costs that should be capitalized before the project reaches the intended usable state, and other
related expenses.
Construction in progress is transferred to fixed assets when it reaches the scheduled usable state.
See Note III. 21 for the method of depreciation of assets in construction in progress.
18.Borrowing costs
(1) Recognition principle of capitalization of borrowing costs
If the borrowing costs incurred by the Company can be directly attributed to the purchase,
construction or production of assets that meet the capitalization conditions, they will be capitalized and
included in the relevant asset costs; Other borrowing costs, when incurred, are recognized as expenses
according to the amount incurred, and included in current profits and losses. Borrowing costs shall be
capitalized if they meet the following conditions at the same time:
① Asset expenditure has already occurred, including the expenditure incurred in the form of payment
in cash, transfer of non-cash assets or assumption of interest-bearing debts for the purchase, construction or
production of assets that meet the capitalization conditions;
② Borrowing costs have already occurred;
③ The purchase, construction or production activities necessary to make the assets reach the intended
usable or saleable state have started.
(2) Capitalization period of borrowing costs
Capitalization of borrowing costs shall be stopped when assets eligible for capitalization acquired,
constructed or produced by the Company reach the intended usable or saleable state. Borrowing costs
incurred after the assets in line with the capitalization conditions reach the intended usable or saleable state
shall be recognized as expenses according to the amount incurred when they occur, and shall be included in
current profits and losses.
If the assets that meet the capitalization conditions are abnormally interrupted in the process of
purchase, construction or production, and the interruption lasts exceeds 3 months, the capitalization of
borrowing costs shall be suspended; Borrowing costs during normal interruption period continue to be
capitalized.
(3) Capitalization rate of borrowing costs and calculation method of capitalization amount
The interest expenses actually incurred in the current period of special borrowing shall be capitalized
after deducting the interest income from the unused borrowing funds deposited in the bank or the
investment income from temporary investment; The capitalization amount of general borrowings is
determined by multiplying the weighted average of the accumulated asset expenditure over the special loan
by the capitalization rate of the occupied general borrowings. Capitalization rate is calculated and
determined according to the weighted average interest rate of general borrowings.
During the capitalization period, all the exchange differences of special borrowings in foreign
currency are capitalized; Exchange differences of general borrowings in foreign currency are included in
current profits and losses.
19.Intangible assets
The intangible assets of the Company include land use rights, proprietary technology and software.
Intangible assets are initially measured at cost, and their service life is analyzed and judged when they
are acquired. If the service life is limited, the intangible assets shall be amortized within the expected
service life by the amortization method that can reflect the expected realization mode of the economic
benefits related to the assets from the time when they are available for use; If it is impossible to reliably
determine the expected realization mode, they shall be amortized by straight-line method; Intangible asset\s
with uncertain service life are not amortized.
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Amortization methods of intangible assets with limited service life are as follows:
Items Useful life（year） Amortization method Notes
Land use right 50 Straight
Special technoloogy 15 Straight
Software 5 Straight
At the end of each year, the Company rechecks the service life and amortization method of intangible
assets with limited service life, adjusts the original estimate if it is different from the previous estimate, and
handles the change according to the accounting estimate.
On the balance sheet date, if it is estimated that an intangible asset can no longer bring future
economic benefits to the enterprise, all the book value of the intangible asset will be transferred to the
current profits and losses.
See Note III. 21 for the method of depreciation of intangible assets.
20.Research and development expenditure
The Company divides the expenditure of internal research and development projects into expenditures
in research stage and expenditures in development stage.
Expenditures in research stage are included in current profits and losses when they occurs.
Expenditures in development stage can only be capitalized if they meet the following conditions: it is
technically feasible to complete the intangible assets so that they can be used or sold; There is the intention
to complete the intangible assets and use or sell them; The ways in which intangible assets generate
economic benefits, including those that can prove the existence of market for products produced by the
intangible assets or the existence of market for the intangible assets themselves, and that for the intangible
assets that will be used internally, their usefulness can be proved; There are sufficient technical, financial
and other resources to complete the development of the intangible assets and the ability to use or sell the
intangible assets; Expenditures attributable to the development stage of the intangible assets can be
measured reliably. Development expenditures that do not meet the above conditions are included in current
profits and losses.
The research and development project of the Company will enter the development stage after the
above conditions are met and a project is approved through technical feasibility and economic feasibility
study.
Capitalized expenditures in development stage are listed as development expenditures on the balance
sheet, and are converted into intangible assets from the date when the project reaches the intended purpose.
21. Assets Impairment
The asset impairment of long-term equity investment of subsidiaries, associated enterprises and joint
ventures, investment real estate, fixed assets, construction in progress, intangible assets, goodwill, etc.
(except inventory, investment real estate measured according to fair value model, deferred income tax
assets and financial assets) shall be determined according to the following methods:
On the balance sheet date, judge whether there is any sign of possible impairment of assets. If there is
any sign of impairment, the Company will estimate its recoverable amount and conduct impairment test.
The goodwill formed by business combination, intangible assets with uncertain service life and intangible
assets that have not yet reached the usable state are tested for impairment every year regardless of whether
there is any sign of impairment.
The recoverable amount is determined according to the higher of the net amount of the fair value of
the asset minus the disposal expenses and the present value of the estimated future cash flow of the asset.
The Company estimates its recoverable amount on the basis of individual assets; If it is difficult to estimate
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the recoverable amount of a single asset, the recoverable amount of the asset group shall be determined
based on the asset group to which the asset belongs. The identification of asset group is based on whether
the main cash inflow generated by asset group is independent of cash inflow of other assets or asset groups.
When the recoverable amount of an asset or asset group is lower than its book value, the Company
will write down its book value to the recoverable amount, and the written-down amount will be included in
the current profits and losses, and the corresponding asset impairment provision will be accrued at the same
time.
As far as the impairment test of goodwill is concerned, the book value of goodwill formed by business
combination is amortized to relevant asset groups according to a reasonable method from the acquisition
date; If it is difficult to amortize to the related asset group, it shall be amortized to the related asset group
portfolio. The related asset group or asset group portfolio is one that can benefit from the synergy effect of
business combination, and is not larger than the reporting segment determined by the Company.
In the impairment test, if there are signs of impairment in the asset group or asset group portfolio
related to goodwill, firstly, the asset group or asset group portfolio without goodwill shall be tested for
impairment, the recoverable amount shall be calculated, and the corresponding impairment loss shall be
recognized. Then impairment test shall be carried out on the asset group or asset group portfolio containing
goodwill, and its book value shall be compared with the recoverable amount. If the recoverable amount is
lower than the book value, the impairment loss of goodwill shall be recognized.
Once the asset impairment loss is recognized, it will not be reversed in future accounting periods.
22.Long-term deferred expenses
The long-term deferred expenses incurred by the Company are priced at actual cost and amortized
equally according to the expected benefit period. For long-term deferred expense items that cannot benefit
future accounting periods, all their amortized values are included in current profits and losses.
23. remuneration
(1) Scope of employee remuneration
Employee compensation refers to various forms of remuneration or compensation given by enterprises
to obtain services provided by employees or to terminate labor relations. Employee remuneration includes
short-term salary, post-employment benefits, dismissal benefits and other long-term employee benefits.
Benefits provided by enterprises to spouses, children, dependents, family dependants of deceased
employees and other beneficiaries are also employee remuneration.
According to liquidity, employee remuneration is listed in the "Payable Employee Remuneration" and
"Long-term Payable Employee Remuneration" in the balance sheet.
(2) Short term remuneration
During the accounting period when employees provide services, the Company recognizes the actual
wages, bonuses, social insurance premiums such as medical insurance premiums, work-related injury
insurance premiums and maternity insurance premiums paid for employees and housing provident funds as
liabilities, and includes them in current profits and losses or related asset costs. If the liability is not
expected to be fully paid within twelve months after the end of the annual reporting period when
employees provide relevant services, and the financial impact is significant, the liability will be measured
at the discounted amount.
(3) Post-employment benefits
After-service benefit plan includes defined contribution plan and defined benefit plans. Where the set
deposit plan refers to the post-employment benefits plan in which the enterprise no longer undertakes
further payment obligations after paying fixed fees to independent funds; Set benefit plan refers to the
post-employment benefits plan except the set deposit plan.
Set deposit plan
The set deposit plan includes basic old-age insurance, unemployment insurance and enterprise annuity
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plan, etc.
In addition to the basic old-age insurance, the Company establishes an enterprise annuity plan
("annuity plan") according to the relevant policies of the national enterprise annuity system, and
employees can voluntarily participate in the annuity plan. Moreover, the Company has no other
significant social security commitments for employees.
During the accounting period when employees provide services, the amount that should be paid
according to the set deposit plan is recognized as a liability and included in the current profits and losses or
related asset costs.
Set benefit plan
For set benefit plans, an actuarial valuation is conducted by an independent actuary on the annual
balance sheet date, and the cost of benefit provision is determined by the expected cumulative benefit unit
method. The employee remuneration cost caused by set benefit plans of the Company includes the
following components:
① Service cost, including current service cost, past service cost and settlement gain or loss. Where:
the current service cost refers to the increase of the present value of set benefit plan obligations caused by
the employees providing services in the current period; Past service cost refers to the increase or decrease
of the present value of set benefit plan obligations related to employee service in previous period caused by
the modification of set benefit plans.
② The net interest of set benefit plan's net liabilities or net assets, including interest income of
planned assets, interest expense of set benefit plan obligations and interest affected by asset ceiling.
③ Changes arising from remeasurement of net liabilities or net assets of set benefit plans.
Unless other accounting standards require or allow employee benefit costs to be included in asset costs,
the Company will include the above items ① and ② in current profits and losses; Include item ③ in
other comprehensive income and such item will not be transferred back to profit or loss in the subsequent
accounting period. When the original set benefit plan is terminated, all the parts originally included in other
comprehensive income will be carried forward to undistributed profits within the scope of equity.
(4) Dismissal benefits
If the Company provides dismissal benefits to employees, the employee remuneration liabilities
arising from the dismissal benefits shall be recognized and included in the current profits and losses on the
earlier of the following dates: When the Company cannot unilaterally withdraw the dismissal benefits
provided by the termination of labor relations plan or layoff proposal; When the Company recognizes the
costs or expenses related to the reorganization involving the payment of dismissal benefits.
If the employee's internal retirement plan is implemented, the economic compensation before the
official retirement date is the dismissal benefit. From the day when the employee stops providing services
to the normal retirement date, the wages of the retired employees and the social insurance premiums paid
will be included in the current profits and losses at one time. Economic compensation after the official
retirement date (such as normal pension) shall be treated as post-employment benefits.
(5) Other long-term benefits
If other long-term employee benefits provided by the Company to employees meet the conditions for
the set deposit plan, they shall be handled in accordance with the above-mentioned relevant provisions on
the set deposit plan. If it meets the set benefit plans, it shall be handled in accordance with the
above-mentioned relevant regulations on set benefit plans, but the part of the related employee
remuneration cost, which is "the change caused by remeasurement of set benefit plan's net liabilities or net
assets", shall be included in the current profits and losses or related asset costs.
24. Estimated Liabilities
If the obligation related to contingencies meets the following conditions at the same time, the
Company will recognize it as estimated liabilities:
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(1) Such obligation is the current obligation undertaken by the Company;
(2) The performance of such obligation is likely to lead to the outflow of economic benefits from the
Company;
(3) The amount of such obligation can be measured reliably.
Estimated liabilities are initially measured according to the best estimate of expenditure required to
fulfill relevant current obligations, and factors such as risks, uncertainties and time value of money related
to contingencies are comprehensively considered. If the time value of money has great influence, the best
estimate is determined by discounting the related future cash outflow. The Company rechecks the book
value of the estimated liabilities on the balance sheet date, and adjusts the book value to reflect the current
best estimate.
If all or part of the expenses required to pay off the recognized estimated liabilities are expected to be
compensated by a third party or other parties, the compensation amount can only be recognized as an asset
when it is basically confirmed that it can be received. The recognized compensation amount shall not
exceed the book value of the recognized liabilities.
25.Share-based payment and equity instruments
(1) Types of share-based payment
The share-based payment of the Company is divided into equity-settled share-based payment and
cash-settled share-based payment.
(2) Method for determining fair value of equity instruments
The fair value of equity instruments such as options granted by the Company with active market is
determined according to the quoted price in the active market. The fair value of granted equity instruments
such as options without active market is determined by option pricing model. The selected option pricing
model considers the following factors: A. The exercise price of options; B. The validity period of the option;
C. The current price of the underlying shares; D. Estimated volatility of share price; E. Expected dividend
of shares; F. Risk-free interest rate within the validity period of the option.
(3) Basis for determining the best estimation of feasible equity instruments
On each balance sheet date during the waiting period, the Company makes the best estimate based on
the latest available follow-up information such as changes in the number of employees with feasible rights,
and revises the estimated number of equity instruments with feasible rights. On the vesting date, the final
estimated number of vesting rights and interests instruments shall be consistent with the actual number of
vesting rights.
(4) Accounting treatment related to implementation, modification and termination of share-based
payment plan
Equity-settled share-based payment is measured at the fair value of equity instruments granted to
employees. If the right is exercised immediately after the grant, the relevant costs or expenses shall be
included in the fair value of equity instruments on the grant date, and the capital reserve shall be increased
accordingly. If the rights can be exercised only after the services within the waiting period are completed or
the specified performance conditions are met, on each balance sheet date within the waiting period, based
on the best estimate of the number of equity instruments available, the services obtained in the current
period shall be included in the relevant costs or expenses and capital reserve according to the fair value on
the grant date of equity instruments. After the vesting date, the recognized related costs or expenses and the
total owner's equity will not be adjusted.
Equity-settled share-based payment shall be measured according to the fair value of liabilities
calculated and determined on the basis of shares or other equity instruments undertaken by the Company. If
the right is exercised immediately after the grant, the fair value of the liabilities assumed by the Company
shall be included in the relevant costs or expenses on the grant date, and the liabilities shall be increased
accordingly. For cash-settled share-based payment that is feasible only after the service within the waiting
period is completed or the specified performance conditions are met, on each balance sheet date within the
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waiting period, based on the best estimation of the feasibility and according to the fair value of the
liabilities assumed by the Company, the services obtained in the current period are included in the costs or
expenses and corresponding liabilities. On each balance sheet date and settlement date before the
settlement of related liabilities, the fair value of liabilities shall be re-measured, and the changes shall be
included in the current profits and losses.
When the Company modifies the share-based payment plan, if the fair value of the granted equity
instruments is increased by modification, the increase of the services obtained shall be recognized
according to the increase of the fair value of the equity instruments; If the number of granted equity
instruments is increased by modification, the fair value of the increased equity instruments will be
recognized as the increase in services obtained accordingly. The increase of fair value of equity instruments
refers to the difference between the fair values of equity instruments before and after modification on the
modification date. If the total fair value of share-based payment is reduced by modification or the terms and
conditions of the share-based payment plan are modified in other ways that are unfavorable to employees,
the accounting treatment of the obtained services will continue, as if with no changes unless the Company
cancels some or all of the granted equity instruments.
During the waiting period, if the granted equity instruments are cancelled (except those cancelled due
to non-market conditions that do not meet the feasible rights conditions), the Company will treat the
cancellation of the granted equity instruments as an accelerated exercise, and immediately record the
amount to be recognized in the remaining waiting period into the current profits and losses, and recognize
the capital reserve at the same time. If the employee or other party can choose to meet the non-feasible
right condition but fails to meet it during the waiting period, the Company will treat it as a cancellation for
granting equity instruments.
① Distinction between financial liabilities and equity instruments
According to the contract terms of the issued financial instruments and their economic essence, not
only in legal form, but also in combination with the definitions of financial assets, financial liabilities and
equity instruments, the Company classifies the financial instruments or their components as financial assets,
financial liabilities or equity instruments at the time of initial recognition.
② Accounting treatment of other financial instruments such as preferred shares and perpetual bonds
The financial instruments issued by the Company are initially recognized and measured according to
the financial instrument standards; After that, interest is accrued or dividends are distributed on each
balance sheet date, which shall be handled according to relevant accounting standards for specific
enterprises. That is, to determine the accounting treatment of interest expense or dividend distribution of
such instrument based on the classification of issued financial instruments. For financial instruments
classified as equity instruments, their interest expenses or dividend distribution are regarded as the profit
distribution of the Company, and their repurchase and cancellation are treated as changes in equity; For
financial instruments classified as financial liabilities, the interest expense or dividend distribution shall be
treated according to the borrowing costs in principle, and the profit or loss arising from repurchase or
redemption shall be included in the current profits and losses.
When the Company issues financial instruments, the transaction expenses such as handling fees and
commissions, which are classified as debt instruments and measured in amortized cost, are included in the
initial measurement amount of the issued instruments; If it is classified as an equity instrument, it will be
deducted from equity.
26. Revenue
(1) General principles
The Company has fulfilled the performance obligation in the contract, that is, to recognize the revenue
when the customer obtains the control right of related goods or services.
If the contract contains two or more performance obligations, the Company will amortize the
transaction price to each individual performance obligation according to the relative proportion of the
individual selling price of the goods or services promised by each individual performance obligation on the
contract start date, and measure the income according to the transaction price amortized to each individual
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performance obligation.
When one of the following conditions is met, the Company will fulfill its performance obligations
within a certain period of time; Otherwise, it performs the performance obligation at a certain time:
① The customer obtains and consumes the economic benefits brought by the Company's performance
at the same time of the its performance.
② Customers can control the goods under construction during the performance of the Company.
③ The commodities produced during the performance of the Company have irreplaceable uses, and
the Company has the right to collect payment for the performance part accumulated so far during the whole
contract period.
For the performance obligations performed within a certain period of time, the Company recognizes
the income according to the performance progress within that period. If the performance progress cannot be
reasonably determined, and the cost incurred of the Company is expected to be compensated, the income
shall be recognized according to the amount of the cost incurred until the performance progress can be
reasonably determined.
For obligations performed at a certain time, the Company shall recognize the income at the time when
the customer obtains control of the relevant goods or services. When judging whether a customer has
obtained control of goods or services, the Company will consider the following signs:
① The Company has the current right to receive payment for the goods or services, that is, the
customer has the current payment obligation for the goods or services.
② The Company has transferred the legal ownership of the goods to the customer, that is, the
customer has the legal ownership of the goods.
③ The Company has transferred the physical goods to the customer, that is, the customer has
physically taken possession of the goods.
④ The Company has transferred the main risks and rewards on the ownership of the goods to the
customer, that is, the customer has obtained the main risks and rewards on the ownership of the goods.
⑤ The customer has accepted the goods.
⑥ Other signs that the customer has obtained control of the goods.
The Company has transferred goods or services to customers and has the right to receive consideration
(and the right depends on other factors except the passage of time) as contract assets, and the contract
assets are depreciated on the basis of expected credit losses. The right of the Company to collect
consideration from customers unconditionally (only depending on the passage of time) is listed as
receivables. The obligation of the Company to transfer goods or services to customers for received or
receivable consideration from customers shall be regarded as a contractual liability.
Contract assets and contract liabilities under the same contract are listed in net amount. If the net amount
is debit balance, they are listed in "Contract Assets" or "Other Non-current Assets" according to their
liquidity; If the net amount is the credit balance, it shall be listed in "Contract Liabilities" or "Other
Non-current Liabilities" according to its liquidity.
(2) Specific method
The specific method of revenue recognition of the Company is as follows:
Polarizer/Textile and garment sales contract:
Domestic sales: When the goods are delivered to the customer and the customer has accepted the
goods, the customer obtains the control of the goods, and the Company recognizes the revenue.
Export: A. When the customer receives goods in China, the revenue recognition is the same as
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"Revenue Recognition for Domestic Sales"; B. When the delivery place of customer is outside the country,
the Company mainly adopts FOB. When the goods are delivered from the warehouse and have been
exported for customs declaration, the Company recognizes the revenue.
Revenue from property/accommodation services:
In the process of property/accommodation service provision, the Company recognizes revenue by
stages.
27.Contract costs
Contract costs include incremental costs incurred for obtaining contracts and contract performance
costs.
The incremental cost incurred for obtaining the contract refers to the cost that the Company will not
incur without obtaining the contract (such as sales commission, etc.). If the cost is expected to be recovered,
the Company will recognize it as the contract acquisition cost as an asset. Other expenses incurred by the
Company to obtain the contract except the incremental cost expected to be recovered are included in the
current profits and losses when incurred.
If the cost incurred for the performance of the contract does not fall within the scope of other
accounting standards for enterprises such as inventory and meets the following conditions at the same time,
the Company will recognize it as the contract performance cost as an asset:
① Such cost is directly related to a current or expected contract, including direct labor, direct
materials, manufacturing expenses (or similar expenses), costs clearly borne by the customer, and other
costs incurred only due to this contract;
② Such cost increases the resources of the Company for fulfilling its performance obligations in the
future;
③ The cost is expected to be recovered.
Assets recognized by contract acquisition cost and assets recognized by contract performance cost
(hereinafter referred to as "Assets Related to Contract Cost") shall be amortized on the same basis as the
revenue recognition of goods or services related to the assets, and shall be included in current profits and
losses.
When the book value of the assets related to the contract cost is higher than the difference between the
following two items, the Company will accrue impairment provision of the excess and recognize it as the
asset impairment loss:
① The remaining consideration expected to be obtained by the Company due to the transfer of goods
or services related to the asset;
② The estimated cost to be incurred for transferring the related goods or services.
The contract performance cost recognized as an asset shall be amortized for no more than one year or
one normal business cycle at the time of initial recognition, which shall be listed in "Inventory", and the
amortization period for more than one year or one normal business cycle at the time of initial recognition
shall be listed in "Other Non-current Assets".
The contract acquisition cost recognized as an asset shall be amortized for no more than one year or
one normal business cycle at initial recognition, and shall be listed in "Other Current Assets". The
amortization period for initial recognition shall exceed one year or one normal business cycle, and shall be
listed in "Other Non-current Assets".
28.Government subsidy
Government subsidies are recognized when they meet the conditions attached to government subsidies
and can be received.
Government subsidies for monetary assets shall be measured according to the amount received or
169
receivable. Government subsidies for non-monetary assets are measured at fair value; If the fair value
cannot be obtained reliably, it shall be measured according to the nominal amount RMB 1.
Government subsidies related to assets refer to government subsidies obtained by the Company for
purchasing and building or forming long-term assets in other ways; In addition, as a government subsidy
related to income.
Where the government documents do not specify the object of the subsidy, and the subsidy can form
long-term assets, the part of the government subsidies corresponding to the value of the assets shall be
regarded as the government subsidy related to the assets, and the rest shall be regarded as the government
subsidies related to the income; where it is difficult to be distinguished, government subsidies as a whole
are treated as income-related government subsidies.
Government subsidies related to assets offset the book value of related assets, or are recognized as
deferred income and included in profits and losses by stages according to a reasonable and systematic
method within the service life of related assets. Government subsidies related to income, which are used to
compensate related costs or losses that have occurred, are included in current profits and losses or offset
related costs; If used to compensate related costs or losses in later periods, they will be included in the
deferred income, and included in the current profits and losses or offset related costs during the recognition
period of related costs or losses. Government subsidies measured in nominal amount are directly included
in current profits and losses. The Company adopts a consistent approach to the same or similar government
subsidy business.
Government subsidies related to daily activities are included in other income or offset related costs
according to the nature of economic business. Government subsidies irrelevant to routine activities shall be
included into the non-operating receipt and disbursement.
When the recognized government subsidy needs to be returned, if the book value of related assets is
offset during initial recognition, the book value of assets will be adjusted; If there is a relevant deferred
income balance, the book balance of the relevant deferred income will be offset, and the excess will be
included in the current profits and losses; In other cases, it is directly included in the current profits and
losses.
For the discount interest of preferential policy loans, if the finance allocates the discount interest funds
to the lending bank, the actually received loan amount is taken as the recorded value of the loan, and the
borrowing costs are calculated according to the loan principal and preferential policy interest rate. If the
finance directly allocates the discount interest funds to the Company, the discount interest will offset the
borrowing costs.
29.The Deferred Tax Assets / The deferred Tax Liabilities
Income tax includes current income tax and deferred income tax. Except for adjusted goodwill arising
from business combination or deferred income tax related to transactions or matters directly included in
owner's equity, they are all included in current profits and losses as income tax expenses.
According to the temporary difference between the book value of assets and liabilities and the tax
basis on the balance sheet date, the Company adopts the balance sheet liability method to confirm deferred
income tax.
All taxable temporary differences are recognized as related deferred income tax liabilities, unless the
taxable temporary differences are generated in the following transactions:
(1) Initial recognition of goodwill, or the initial recognition of assets or liabilities arising from
transactions with the following characteristics: the transaction is not a business combination, and the
transaction does not affect accounting profits or taxable income when it occurs;
(2) For taxable temporary differences related to investments of subsidiaries, joint ventures and
associated enterprises, the time for the temporary differences to be reversed can be controlled and the
temporary differences will probably not be reversed in the foreseeable future.
For deductible temporary differences, deductible losses and tax deductions that can be carried forward
to later years, the Company shall recognize the deferred income tax assets arising therefrom to the extent
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that it is likely to obtain the future taxable income used to offset the deductible temporary differences,
deductible losses and tax deductions, unless the deductible temporary differences are generated in the
following transactions:
(1) The transaction is not a business combination, and it does not affect accounting profit or taxable
income when the transaction occurs;
(2) For deductible temporary differences related to investments of subsidiaries, joint ventures and
associated enterprises, corresponding deferred income tax assets are recognized if the following conditions
are met at the same time: temporary differences are likely to be reversed in the foreseeable future, and
taxable income used to offset the deductible temporary differences is likely to be obtained in the future.
On the balance sheet date, the Company measures deferred income tax assets and deferred income tax
liabilities according to the applicable tax rate during the expected period of recovering the assets or paying
off the liabilities, and reflects the income tax impact of the expected way of recovering the assets or paying
off the liabilities on the balance sheet date.
On the balance sheet date, the Company rechecks the book value of deferred income tax assets. If it is
unlikely that sufficient taxable income will be obtained in the future period to offset the benefits of deferred
income tax assets, the book value of deferred income tax assets will be written down. When sufficient
taxable income is likely to be obtained, the written-down amount shall be reversed.
30.Operating lease and financing lease
The Company recognizes the leases that have substantially transferred all risks and rewards related to
asset ownership as financial leases, and other leases except financial leases as operating leases.
(1) The Company serves as the lessor
In the financial lease, at the beginning date of the lease term, the Company takes the sum of the
minimum lease payment and the initial direct expenses as the recorded value of the financial lease
receivable, and records the unsecured residual value; The difference between the sum of the minimum lease
payment amount, initial direct expenses and unsecured residual value and its present value is recognized as
unrealized financing income. For the unrealized financing income, the current financing income shall be
calculated and recognized as per the effective interest method in all periods within the lease term.
For the rent in the operating lease, the Company recognizes the current profits and losses according to
the straight-line method in each period of the lease term. The initial direct expenses incurred are included in
current profits and losses.
(2) The Company serves as the lessee
In financial leasing, at the beginning date of the lease term, the Company take the lower of the fair
value of leased assets and the present value of the minimum lease payment as the recorded value of leased
assets, and the minimum lease payment as the recorded value of long-term payables, and the difference
between them as unrecognized financing expenses. The initial direct cost shall be included into the value of
the leased assets. For the unrecognized financing cost, the current financing cost shall be calculated and
recognized as per the effective interest method in all periods within the lease term. The Company adopts
the depreciation policy consistent with that of the self-owned fixed assets to withdraw the depreciation of
the leased assets.
The rent in the operating lease is included in the relevant asset cost or current profits and losses by the
Company according to the straight-line method in each period of the lease term; The initial direct expenses
incurred are included in current profits and losses.
(3) Rent concession caused by COVID-19 outbreak
For rent concessions such as rent reduction or exemption and deferred payment reached between the
Company and the lessee on the existing lease contract directly caused by the COVID-19 outbreak, and the
following conditions are met, the Company adopts simplified methods for leasing houses and buildings:
① The lease consideration after concession is reduced or basically unchanged compared with that
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before concession, in which the lease consideration is not discounted or is discounted at the discount rate
before concession;
② After comprehensive consideration of qualitative and quantitative factors, it is determined that
there is no significant change in other terms and conditions of the lease.
The Company does not evaluate whether there is any lease change.
When the Company serves as the lessor, for operating lease, the Company continues to recognize the
original contract rent as lease revenue in the same way as before the concession. In case of rent reduction or
exemption, the Company will take the reduced rent as contingent rent and offset the lease revenue during
the reduction or exemption period. In case of rent reduction or exemption, the Company will take the
reduced rent as contingent rent, and when the concession agreement is reached and other rights to collect
the original rent are waived, the original recognized lease revenue will be offset.
31.Share repurchase
The repurchased shares of the Company shall be managed as treasury shares before cancellation or
transfer, and all expenses for repurchased shares shall be converted into treasury shares cost. Where the
consideration and transaction costs paid in share repurchase reduce the owner's equity, when repurchasing,
transferring or canceling the Company's shares, the gains or losses are not recognized.
Transfer of treasury stock shall be included in the capital reserve according to the difference between
the actually received amount and the book amount of the treasury stock. If the capital reserve is insufficient
to offset, the surplus reserve and undistributed profits shall be offset. For write-off of treasury stocks,
reduce capital stock according to par value and number of cancelled stocks, and write off capital reserve
according to the difference between book balance and par value of cancelled treasury stocks. If capital
reserve is insufficient to write off, write off surplus reserve and undistributed profits.
32.Restricted stocks
In the equity incentive plan, the Company grants restricted stocks to the incentive object, and the
incentive object subscribes for stocks first. If the unlocking conditions specified in the equity incentive plan
are not met later, the Company will repurchase the stocks at the price agreed in advance. If the restricted
stocks issued to employees have gone through the registration and other capital increase procedures
according to relevant regulations, on the grant date, the Company will recognize the capital stock and
capital reserve (capital stock premium) according to the share subscription payment by employees; At the
same time, the treasury stocks and other payables are recognized for repurchase obligations.
33.Significant accounting judgments and estimates
Based on historical experience and other factors, including reasonable expectations for future events,
the Company continuously evaluates the important accounting estimates and key assumptions adopted.
Important accounting estimates and key assumptions that are likely to cause significant adjustment risks to
the book value of assets and liabilities in the next fiscal year are listed as follows:
Classification of financial assets
The major judgments involved in determining the classification of financial assets by the Company
include the analysis of business model and contract cash flow characteristics.
The Company determines the business model of managing financial assets at the level of financial
asset portfolio. The factors considered include the way of evaluating and reporting the financial asset
performance to key managers, the risks affecting the financial asset performance and their management
methods, and the way of getting remuneration for relevant business managers.
When evaluating whether the contractual cash flow of financial assets is consistent with the basic loan
arrangement, the Company focuses on the following main judgments: Whether the time distribution or
amount of the principal may change during the duration due to prepayment and other reasons; Whether
interest only includes the time value of money, credit risk, other basic borrowing risks, and consideration
with costs and profits. For example, whether the prepayment amount only reflects the unpaid principal and
interest based on the unpaid principal, and the reasonable compensation paid for the early termination of
172
the contract.
Measurement of expected credit loss of accounts receivable
The Company calculates the expected credit loss of accounts receivable through the default risk
exposure and expected credit loss rate of accounts receivable, and determines the expected credit loss rate
based on the default probability and loss given default. The Company uses internal historical credit loss
experience and other data to determine the expected credit loss rate, and adjusts the historical data based on
the current situation and forward-looking information. When considering forward-looking information, the
indicators used by the Company include the risk of economic downturn, and changes in external market
environment, technical environment and customer conditions. The Company regularly monitors and
rechecks the assumptions related to the calculation of expected credit losses.
Deferred income tax assets
Deferred income tax assets shall be recognized for all unused tax losses to the extent that it is likely
that there will be enough taxable profits to offset the losses. It requires a lot of judgments from the
management to estimate the time and amount of future taxable profits, and to determine the amount of
deferred income tax assets that should be recognized based on the tax planning strategies.
Determination of fair value of unlisted equity investment
The fair value of unlisted equity investment is the estimated future cash flow discounted according to
the current discount rate of items with similar terms and risk characteristics. This valuation requires the
Company to estimate the expected future cash flow and discount rate, so it is uncertain. Under limited
circumstances, if the information used to determine fair value is insufficient, or the possible estimated
amount of fair value is widely distributed, and the cost represents the best estimate of fair value within the
range, such cost can represent its proper estimate of fair value within the distribution range.
34.Changes in important accounting policies and accounting estimates
(1) Changes in important accounting policies
① New income standards
The Ministry of Finance promulgated the Accounting Standards for Business Enterprises
No.14-Income (Revised) in 2017 (hereinafter referred to as the "New Income Standards"). The Company
implemented such Standards from January 1, 2020 after deliberation and approval by the 27th meeting of
the Seventh Board of Directors, and adjusted the relevant contents of accounting policies.
The Company has fulfilled the performance obligation in the contract, that is, to recognize the revenue
when the customer obtains the control right of related goods or services. When certain conditions are met,
the Company will perform its performance obligations within a certain period of time; Otherwise, it will
perform its performance obligations at a certain time. If the contract contains two or more performance
obligations, the Company will amortize the transaction price to each individual performance obligation
according to the relative proportion of the individual selling price of the goods or services promised by
each individual performance obligation on the contract start date, and measure the revenue according to the
transaction price amortized to each individual performance obligation.
The Company has adjusted the relevant accounting policies according to the specific provisions on
specific matters or transactions in the new income standards.
The Company has transferred goods to customers and has the right to receive consideration, and such
right is listed as contract assets depending on other factors except the passage of time. The Company's
obligation to transfer goods to customers for received or receivable consideration from customers is listed
as a contractual liability.
According to the cumulative impact of the first implementation of the New Income Standards, the
Company adjusted the amount of retained earnings and other related items in the financial statements at the
beginning of 2020, but did not adjust the data of the comparative financial statements. The Company only
adjusted its retained earnings at the beginning of 2020 and the amount of other related items in the financial
173
statements for the cumulative impact of unfinished contracts on January 1, 2020. Due to the
implementation of the New Income Standards, the Company reclassified the advance receipts related to the
sales of goods and the provision of labor services as contract liabilities.
Affected amount
Contents and causes of changes in accounting policies Affected report items
(January 1, 2020)
Due to the implementation of the New Income Standards, the Contract liabilities 2,349,448.90
Company reclassified the advance receipts related to the
sales of goods and the provision of labor services as contract
Advance receipts -2,349,448.90
liabilities.
Compared with the original income standards, the impact of implementing the New Income Standards
on related items in the 2020 financial statements is as follows:
Affected balance sheet items Affected amount
December 31, 2020
Contract liabilities 2,511,466.76
Advance receipts -2,511,466.76
Affected income statement items Affected amoun
Year 2020t
None
② Interpretation of Accounting Standards for Business Enterprises No.13
In December 2019, the Ministry of Finance issued the Interpretation of Accounting Standards for
Business Enterprises No.13 (CS [2019] No.21) (hereinafter referred to as "Interpretation No.13").
Interpretation No.13 revised the three elements constituting the business, refined the judgment conditions
of the business, and introduced the method of "concentration test" to the acquirer of business combination
not under the same control when judging whether the acquired operating activities or asset portfolios
constitute a business.
Interpretation No.13 clarifies that the related parties of an enterprise include joint ventures or
associated enterprises of other common member units (including parent companies and subsidiaries) of the
enterprise to which the enterprise is affiliated, and joint ventures or associated enterprises of investors who
jointly control the enterprise.
Interpretation No.13 will be implemented as of January 1, 2020, and the Company will adopt the
future applicable law for accounting treatment of the above changes in accounting policies.
The adoption of Interpretation No.13 has no significant impact on the financial position, operating
results and related party disclosure of the Company.
③ In June 2020, the Ministry of Finance issued the Notice on Printing and Distributing the
"Accounting Treatment Regulations for Rent Concessions Due to COVID-19" (CS [2020] No.10), which
allows a simplified method for rent concessions due to COVID-19 according to the accounting treatment
regulations.
The Company has adopted the simplified method in the accounting treatment regulations (see Notes
III. 30. (3)) for the rent concessions related to the house lease since January 1, 2020, and recorded the
relevant rent concessions into profit and loss during the concession period or when the relevant rights and
obligations are released and abandoned when the concession agreement is reached. The amount of impact
174
of the simplified method on the current profit is RMB 10,113,923.47.
The above simplified treatment method is not applicable to the rent concessions occurred for the
Company before January 1, 2020.
(2)Changes in accounting estimates
None
(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New
Standards Governing Financial Instruments, Revenue or Leases
Consolidated balance sheet
Amount involved
Items December 31,2019 January 1,2020
in the adjustment
Current asset：
Monetary fund 409,564,847.52 409,564,847.52
Transactional financial assets 830,000,000.00 830,000,000.00
Derivative financial assets
Notes receivable 40,424,601.97 40,424,601.97
Account receivable 365,325,029.38 365,325,029.38
Financing of receivables 17,933,597.98 17,933,597.98
Prepayments 18,445,857.53 18,445,857.53
Other account receivable 12,440,761.13 12,440,761.13
Including：Interest receivable 7,610,043.19 7,610,043.19
Dividend receivable
Inventories 391,717,935.12 391,717,935.12
Contract assets
Assets held for sales
Non-current asset due within 1 year
Other current asset 140,821,609.72 140,821,609.72
Total of current assets 2,226,674,240.35 2,226,674,240.35
Non-current assets：
Creditor's right investment
Other investment on bonds
Long-term receivable
175
Amount involved
Items December 31,2019 January 1,2020
in the adjustment
Net assets for defined benefit plan
Long term share equity investment 152,209,929.72 152,209,929.72
Other equity instruments investment 248,781,946.73 248,781,946.73
Other non-current financial assets
Real estate investment 112,730,320.90 112,730,320.90
Fixed assets 903,229,077.83 903,229,077.83
Construction in progress 839,866,275.92 839,866,275.92
Production physical assets
Oil & gas assets
Intangible assets 36,517,996.34 36,517,996.34
Development expenses
Goodwill
Long-germ expenses to be amortized 2,692,750.67 2,692,750.67
Deferred income tax asset 5,618,026.43 5,618,026.43
Other non-current asset 3,079,321.10 3,079,321.10
Total of non-current assets 2,304,725,645.64 2,304,725,645.64
Total of assets 4,531,399,885.99 4,531,399,885.99
Current liabilities
Short-term loans
Transactional financial liabilities
Derivative financial liabilities
Notes payable
Account payable 241,297,770.64 241,297,770.64
Advance receipts 30,530,117.62 28,180,668.72 -2,349,448.90
Contract liabilities 2,349,448.90 2,349,448.90
Employees’ wage payable 38,556,180.20 38,556,180.20
Tax payable 22,545,550.33 22,545,550.33
176
Amount involved
Items December 31,2019 January 1,2020
in the adjustment
Other account payable 152,645,780.14 152,645,780.14
Including：Interest payable
Dividend payable
Liabilities held for sales
Non-current liability due within 1 year
Other current liability
Total of current liability 485,575,398.93 485,575,398.93
Non-current liabilities：
Long-term loan
Bond payable
Including：preferred stock
Sustainable debt
Long-term payable
Long-term remuneration payable to
staff
Expected liabilities
Deferred income 121,264,571.22 121,264,571.22
Deferred income tax liability 69,944,345.66 69,944,345.66
Other non-current liabilities
Total non-current liabilities 191,208,916.88 191,208,916.88
Total of liability 676,784,315.81 676,784,315.81
Owners’ equity：
Share capital 509,338,429.00 509,338,429.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 1,974,922,248.03 1,974,922,248.03
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Amount involved
Items December 31,2019 January 1,2020
in the adjustment
Less：Shares in stock 16,139,003.40 16,139,003.40
Other comprehensive income 119,737,783.31 119,737,783.31
Special reserve
Surplus reserves 90,596,923.39 90,596,923.39
49,307,764.03 49,307,764.03
Retained profit
Total of owner’s equity belong to the
2,727,764,144.36 2,727,764,144.36
parent company
Minority shareholders’ equity 1,126,851,425.82 1,126,851,425.82
Total of owners’ equity 3,854,615,570.18 3,854,615,570.18
Total of liabilities and owners’ equity 4,531,399,885.99 4,531,399,885.99
Parent Company Balance Sheet
Amount involved
Items 2019.12.31 2020.01.01
in the adjustment
Current asset：
Monetary fund 27,979,338.37 27,979,338.37
Transactional financial assets 650,000,000.00 650,000,000.00
Derivative financial assets
Notes receivable
Account receivable 522,931.04 522,931.04
Financing of receivables
Prepayments 768,099.94 768,099.94
Other account receivable 17,039,506.00 17,039,506.00
Including：Interest receivable 7,329,228.31 7,329,228.31
Dividend receivable
Inventories
Assets held for sales
Non-current asset due within 1 year
178
Amount involved
Items 2019.12.31 2020.01.01
in the adjustment
Other current asset
Total of current assets 696,309,875.35 696,309,875.35
Non-current assets：
Creditor's right investment
Other investment on bonds
Long-term receivable
Net assets for defined benefit plan
Long term share equity investment 2,102,430,511.88 2,102,430,511.88
Other equity instruments investment 206,816,952.64 206,816,952.64
Other non-current financial assets
Real estate investment 107,199,622.80 107,199,622.80
Fixed assets 25,500,695.77 25,500,695.77
Construction in progress 19,552.00 19,552.00
Production physical assets
Oil & gas assets
Intangible assets 659,937.75 659,937.75
Development expenses
Goodwill
Long-germ expenses to be amortized 800,858.17 800,858.17
Deferred income tax asset 5,466,478.06 5,466,478.06
Other non-current asset
Total of non-current assets 2,448,894,609.07 2,448,894,609.07
Total of assets 3,145,204,484.42 3,145,204,484.42
Current liabilities
Short-term loans
Transactional financial liabilities
Derivative financial liabilities
179
Amount involved
Items 2019.12.31 2020.01.01
in the adjustment
Notes payable
Account payable 411,743.57 411,743.57
Advance receipts 2,878,936.58 639,024.58 -2,239,912.00
Contract Liabilities -2,239,912.00 2,239,912.00
Employees’ wage payable 11,910,175.11 11,910,175.11
Tax payable 20,801,961.18 20,801,961.18
Other account payable 119,984,209.60 119,984,209.60
Including：Interest payable
Dividend payable
Liabilities held for sales
Non-current liability due within 1
year
Other current liability
Total of current liability 155,987,026.04 155,987,026.04
Non-current liabilities：
Long-term loan
Bond payable
Including：preferred stock
Sustainable debt
Long-term payable
Long-term remuneration payable to
staff
Expected liabilities
Deferred income 600,000.00 600,000.00
Deferred income tax liability 66,953,097.14 66,953,097.14
Other non-current liabilities
Total non-current liabilities 67,553,097.14 67,553,097.14
Total of liability 223,540,123.18 223,540,123.18
180
Amount involved
Items 2019.12.31 2020.01.01
in the adjustment
Owners’ equity
Share capital 509,338,429.00 509,338,429.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 1,589,869,499.36 1,589,869,499.36
16,139,003.40 16,139,003.40
Less：Shares in stock
Other comprehensive income 110,764,037.74 110,764,037.74
Special reserve
Surplus reserves 90,596,923.39 90,596,923.39
Retained profit 637,234,475.15 637,234,475.15
Total of owners’ equity 2,921,664,361.24 2,921,664,361.24
Total of liabilities and owners’ equity 3,145,204,484.42 3,145,204,484.42
IV. Taxes of the Company
1. Main taxes categories and tax rate
Taxes Tax references Applicable tax rates
VAT The taxable turnover 13，6，5
City construction tax Turnover tax to be paid allowances 7
Education surcharge Turnover tax to be paid allowances 3
Local education surcharge Turnover tax to be paid allowances 2
Business income tax Taxable income 25，20，16.5，15
Name of taxpayer Income tax rates
Shenzhen Textile (Holdings) Co., Ltd 25%
Shenzhen Lisi Industrial Co., Ltd. 20%
181
Shenfang Property Management Co., Ltd. 20%
Shenfang Property Management Co., Ltd. 20%
Shenzhen Huaqiang Hotel 20%
Shenzhen Beauty Century Garment Co., Ltd. 20%
SAPO Photoelectric Co., Ltd. 15%
Shenzhen Shenfang Imports & Exports Co., Ltd. 25%
Shengtou （HK）Co., Ltd. 16.5%
2. Tax preference and approval file
In accordance with relevant provisions of the Notice of Ministry of Finance, General Administration o
f Customs and State Taxation Administration Regarding Tax Preference Policies for Further Supporting the
Development of New-type Display Device Industry (Cai Guan Shui (2016) No. 62), Shenzhen Shengbo O
ptoelectronic Technology Co., Ltd. manufactured key materials and parts for the upstream industry of new-t
ype display devices including colorful light filter coating and polarizer sheet that comply with the planning
for independent development of domestic industries may enjoy the preferential policies of exemption from
import tariff for the import of raw materials and consumables for the purpose of self use and production tha
t can not be produced domestically from January 1, 2016 and December 31, 2020.
SAPO Photoelectric Co., Ltd. the subsidiary company of our company, has been qualified as
national high-tech enterprise since 2019 ,High-tech and enterprise certificate No.: GR201944205666 ,The
certificate is valid for three years, The enterprise income tax rate of this year is 15%.
Shenzhen Beauty Century Garment Co., Ltd., Shenzhen Huaqiang Hotel Garment Co., Ltd. and
Shenzhen Lisi Industrial Development Co., Ltd., subsidiaries of the Company, are all small and low-profit
enterprises as stipulated in the Notice of the Ministry of Finance and the State Administration of Taxation
on Implementing Inclusive Tax Concession Policy for Small and Micro Enterprises (CS [2019] No.13). For
the part of the taxable income of this year that does not exceed RMB 1 million, the taxable income is
reduced to 25%, and the enterprise income tax is paid at a rate of 20%; For the taxable income of this year
that exceeds RMB 1 million but does not exceed RMB 3 million, the taxable income is reduced to 50% and
the enterprise income tax is paid at a rate of 20%.
V. Notes of consolidated financial statement
1.Monetary Capital
Items 2020.12.31 2019.12.31
Cash at hand 4,127.10 11,091.94
Bank deposit 271,085,025.10 272,366,495.29
Other monetary funds 7,998,084.75 137,187,260.29
Total 279,087,236.95 409,564,847.52
Including : The total amount of deposit abroad 7,829,822.78 3,272,384.31
Note: At the end of the period, RMB 750,000.00 of other monetary funds of the Company is the L/C
security deposit, except for which there is no mortgage, pledge or freezing, or money deposited abroad with
restricted repatriation.
182
2. Transactional financial assets
Items 2020.12.31 2019.12.31
Structure deposit 200,536,575.34 830,000,000.00
Monetary funds 484,080,684.72 --
Total 684,617,260.06 830,000,000.00
3. Notes receivable
2020.12.31 2019.12.31
Category
Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Bank
-- -- -- 40,424,601.97 -- 40,424,601.97
acceptance
.Commercial
acceptance 16,898,148.02 84,490.74 16,813,657.28 -- -- --
bill
Total 16,898,148.02 84,490.74 16,813,657.28 40,424,601.97 -- 40,424,601.97
Note：
(1) The company has no Notes receivable pledged.
Amount of recognition termination at Amount of not terminated recognition
Category
the period-end at the period-end
Bank acceptance 60,260,489.10 --
(2) At the end of the period, the Company has no bills transferred to accounts receivable due to the
drawer's non-performance
(3) Classification by accrual method for bad debts
2020.12.31 2019.12.31
Bad debt Bad debt
Book balance Book balance
provision provision
Category
Book
Expecte Book value value
Credit
Proportion( d credit Proportion( Amou
Amount Amount Amount loss rate
%) loss rate %) nt
(%)
(%)
183
Bad debt
provision
is accrued
according -- -- -- -- -- -- -- -- -- --
to
individual
items
Bad debt
provision
is accrued
according
to
portfolios
Including：
Commercial 16,898,148. 84,490.7 16,813,657.2
100.00 0.50 -- -- -- -- --
acceptance 02 4 8-
bill
Bank 40,424,601. 40,424,601.
-- -- -- -- -- 100.00 -- --
acceptance 97 97
16,898,148. 84,490.7 16,813,657.2 40,424,601. 40,424,601.
Total 100.00 0.50 100.00 -- --
02 4 8 97 97
Note：
Accrual of bad debt provision by portfolio:
Portfolio accrual items: commercial acceptance bills
2020.12.31 2019.12.31
Name Expected Expected
Bad-debt Notes Bad-debt
Notes receivable credit loss rate credit loss rate
provision receivable provision
(%) (%)
.Commercial
16,898,148.02 84,490.74 0.50 -- -- --
acceptance bill
(4) Bad debt provision accrued, recovered or reversed in the current period
Amount of bad-debt
provision
2019.12.31
Current accrual 84,490.74
2020.12.31 84,490.74
(6) There is no actual write-off of notes receivable in the current period
4. Account receivable
(1)Disclosure by aging
Aging 2020.12.31 2019.12.31
184
Within 1 year 567,264,103.99 382,065,942.05
1-2 years 6,063,040.66 813,122.40
2-3 years 103,011.28 1,076.93
3-4 years 389.73 6,728.70
4-5 years 6,728.70 4,636,402.32
Over 5 years 12,483,245.35 7,930,426.56
Subtotal 585,920,519.71 395,453,698.96
Less：Bad debt provision 38,610,301.81 30,128,669.58
Total 547,310,217.90 365,325,029.38
(2)Disclosure by classification according to the bad debt accrual method
2020.12.31 2019.12.31
Bad-debt
Book balance Book balance Bad-debt provision
provision
Types Expect Expect
ed Book value ed Book value
Proportion credit Proportion credit
Amount Amount Amount Amount
(%) loss (%) loss
rate rate
(%) (%)
Bad
debt
provisi
on is
accrued 20,641,002. 13,552,865 12,753,137. 10,823,862 1,929,275.2
3.52 7,088,136.9 3.22 84.87
accordi 24 .25 65.66 41 .18 3
9
ng to
individ
ual
items
Bad
debt
provisi
on is
565,279,51 25,057,436 540,222,08 382,700,56 19,304,807 363,395,75
accrued 96.48 4.43 96.78 5.04
7.47 .56 0.90 1.55 .40 4.15
accordi
ng to
portfoli
os
585,920,51 38,610,301 547,310,21 395,453,69 30,128,669 365,325,02
Total 100.00 6.59 100.00 7.62
9.71 .81 7.89 8.96 .58 9.38
Accrual of bad debt provision by single item:：
Unit name 2020.12.31
185
Expected
Bad-debt
Book balane credit loss Accrual reason
provision
rate (%)
There is a dispute between the
two parties that the net recovery
Dongguan Xiangteng New after deducting the amount
6,961,050.25 397,710.96 5.71
Material Technology Co., Ltd. payable is extremely unlikely
and bad debts have been fully
accrued on the net portion
The credit period is exceeded by
Dongguan Yaxing
2,797,016.81 2,797,016.81 100.00 a long time, and the possibility
Semiconductor Co., Ltd.
of recovery is extremely slim
The credit period is exceeded by
Dongguan Fair LCD Co., Ltd. 1,698,449.31 1,698,449.31 100.00 a long time, and the possibility
of recovery is extremely slim
The credit period is exceeded by
Guangdong Ruili Baolai
1,298,965.36 1,298,965.36 100.00 a long time, and the possibility
Technology Co., Ltd.
of recovery is extremely slim
The credit period is exceeded by
Jiangsu Xiangteng New Material
1,049,595.40 524,797.70 50.00 a long time, and the possibility
Co., Ltd.
of recovery is extremely slim
The credit period is exceeded by
Total of other individual accrual
6,835,925.11 6,835,925.11 100.00 a long time, and the possibility
units
of recovery is extremely slim
Total 20,641,002.24 13,552,865.25 65.66
Accrual of bad debt provision by portfolio:
Portfolio accrual items:
2020.12.31 2019.12.31
Expected Expected
Bad-debt
Receivable Bad-debt provision credit loss Receivable credit loss
provision
rate (%) rate (%)
Within 1
564,591,259.21 24,862,108.87 4.40 382,032,402.05 19,101,620.10 5.00
year
1-2 years 688,258.26 195,327.69 28.38 668,159.50 203,187.30 30.41
Total 565,279,517.47 25,057,436.56 4.43 382,700,561.55 19,304,807.40 5.04
(3) Bad debt provision accrued, recovered or reversed in the current period
Amount of bad-debt provision
2019.12.31 30,128,669.58
Adjustment amount for the first implementation of the New Income Standards
--
186
2020.01.01 30,128,669.58
Current accrual 8,481,632.23
Withdrawal or reversal in current period --
2020.12.31 38,610,301.81
(4) There is no account receivable actually written off in the current period
(5) The top five units of the closing balance of accounts receivable collected by the arrears
Proportion of total
Bad-debt
Nature of Other receivable closing balance of
Unit name Aging provision
payment closing balance other receivables
Closing balance
(%)
Top 1 Goods 132,428,291.01 Within 1 year 22.60% 5,840,087.63
Top 2 Goods 68,516,402.40 Within 1 year 11.69% 3,021,573.35
Top 3 Goods 51,794,178.25 Within 1 year 8.84% 2,284,123.26
Top 4 Goods 39,315,045.56 Within 1 year 6.71% 1,733,793.51
Top 5 Goods 38,777,319.65 Within 1 year 6.62% 1,710,079.80
Total -- 330,831,236.87 -- 56.46% 14,589,657.55
(6)No account receivable which terminate the recognition owning to the transfer of the financial assets
(7)The amount of the assets and liabilities formed by the transfer and the continues involvement of
accounts receivable
5.Receivable financing
Items 2020.12.31 2019.12.31
Notes receivable 102,051,314.08 17,933,597.98
Some subsidiaries of the Company discount and endorse some bank acceptance bills according to the
needs of their daily fund management, therefore the bank acceptance bills of the subsidiaries are classified
as financial assets measured at fair value with changes included in other comprehensive income.
There is no single bank acceptance bill with impairment provision of the Company. On December 31,
2020, the Company considered that there was no significant credit risk in the bank acceptance bills held by
it, and there would be no significant loss due to bank default.
6.Prepayments
(1) Disclosure by age
2020.12.31 2019.12.31
Aging
Amount Proportion% Amount Proportion%
187
Within 1 year 14,934,263.03 88.35 16,750,558.60 90.82
1-2 years 557,043.06 3.30 729,266.20 3.95
2-3 years 540,748.42 3.20 15,494.14 0.08
Over 3 years 870,461.88 5.15 950,538.59 5.15
Total 16,902,516.39 100.00 18,445,857.53 100.00
Note: As of December 31, 2020, there is no large prepayment for more than 1 year in the balance of
prepayments.
(2) The top five ending balances of prepayments collected according to prepaid objects totaled RMB
12,005,147.74, accounting for 71.03% of the total closing balances of prepayments
7.Other receivale
Items 2020.12.31 2019.12.31
Interest receivable -- 7,610,043.19
Other receivavble 5,265,002.71 4,830,717.94
Total 5,265,002.71 12,440,761.13
(1)Interest receivable
①Category of interest receivable
Items 2020.12.31 2019.12.31
Fixed deposit -- 109,425.24
Structure deposit -- 7,500,617.95
Subtotal -- 7,610,043.19
Less：Bad debt provision -- --
Total -- 7,610,043.19
(2)Other receivable
1 Category of interest receivable
Aging 2020.12.31 2019.12.31
Within 1 year 5,011,410.31 2,250,037.41
1-2 years 550,486.21 1,213,773.48
2-3 years 697,124.67 647,494.79
3-4 years 173,007.52 1,837,174.29
4-5 years 1,802,920.64 1,015,782.04
Over 5 years 14,827,417.02 13,835,408.91
188
Subtotal 23,062,366.37 20,799,670.92
Less：Bad debt provision 17,797,363.66 15,968,952.98
Total 5,265,002.71 4,830,717.94
2 Other accounts receivable classified by the nature of accounts
2020.12.31 2019.12.31
Items
Book balance Book Balance
Export rebate 1,658,146.29 1,191,949.50
Unit account 16,369,395.10 15,674,175.33
Deposit 2,585,585.87 2,435,689.74
Reserve fund and staff
379,477.97 428,019.47
loansLoans
Other 2,069,761.14 1,069,836.88
Subtotal 23,062,366.37 20,799,670.92
Less：Bad debt provision 17,797,363.66 15,968,952.98
Total 5,265,002.71 4,830,717.94
3 Bad-debt provision
At the end of the period, bad debt provision in the first stage:
Types Book Balance Bad-debt provision Book value
Bad debt provision accrued by aging
5,838,599.72 573,597.01 5,265,002.71
portfol
Total 5,838,599.72 573,597.01 5,265,002.71
At the end of the period, the Company does not have interest receivable, dividend receivable and other
receivables in the second stage;
At the end of the period, bad debt provision in the third stage:
Types Book Balance Bad-debt provision Book value Reason
Bad debt provision is accrued Long aging and low possibility
17,223,766.65 17,223,766.65 --
according to individual items of recovery
Total 17,223,766.65 17,223,766.65 --
On December 31, 2019, bad debt provisions are as follows:
Bad debt provision in the first stage:
Types Book Balance Bad-debt provision Book value
189
Bad debt accrued by aging
6,406,385.55 1,575,667.61 4,830,717.94
portfolios
Total 6,406,385.55 1,575,667.61 4,830,717.94
As of December 31, 2019, the Company has no interest receivable, dividend receivable and other
receivables in the second stage.As of December 31, 2019,，Bad debt provision in the third stage:
Types Book Balance Bad-debt provision Book value Reason
Bad debt provision is accrued Long aging and low possibility of
14,393,285.37 14,393,285.37 --
according to individual items recovery
Total 14,393,285.37 14,393,285.37 --
4 Bad debt provision accrued, recovered or reversed in the current period
Stage 1 Stage 2 Stage 3
Expected credit
Bad debt provision Expected credit Expected credit loss losses for the entire Total
losses over the over life (no credit duration (credit
next 12 months impairment) impairment
occurred)
Balance as at December 31,2019 1,575,667.61 -- 14,393,285.37 15,968,952.98
Balance as at December 31,2019In
-- -- -- --
current
——Transfer to stage II -- -- -- --
——Transfer to stage III -1,059,367.39 -- 1,059,367.39 --
——Transfer to stage II -- -- -- --
——Transfer to stage I -- -- -- --
Provision in the current period 57,296.79 -- 1,771,113.89 1,828,410.68
Turn back in the current period -- -- -- --
Reseller in the current period -- -- -- --
Write - off in the current period -- -- -- --
Other -- -- -- --
Balance as at December 31,2020 573,597.01 -- 17,223,766.65 17,797,363.66
⑤Other account receivables actually cancel after write-off :Nil
⑥Top 5 of the closing balance of the other accounts receivable collected according to the arrears party
190
Portion in total Bad debt
Name Nature Year-end balance Age other provision of
receivables(%) year-end
balance
Top 1 Unit account 11,389,044.60 Over 5 years 49.38% 11,389,044.60
Top 2 Unit account 1,800,000.00 4-5 years 7.80% 1,800,000.00
Top 3 Unit account 1,100,000.00 Within 1 year 4.77% 55,000.00
Top 4 Unit account 1,018,295.37 1-2 years，2-3 4.42% 349,497.32
years,3-4 years
Top 5 Deposit 980,461.06 Over 5 years 4.25% 980,461.06
Total -- 16,287,801.03 -- 70.63% 14,574,002.98
⑦No Accounts receivable involved with government subsidies
⑧ No other account receivable which terminate the recognition owning to the transfer of the financial
assets
⑨ The amount of the assets and liabilities formed by the no transfer and the continues involvement of
other accounts receivable
8.Inventory
（1）Inventories types
2020.12.31 2019.12.31
Items Book balance Provision for Book value Book balance Provision for Book value
bad debts bad debts
Raw materials 258,191,196.82 13,788,646.60 244,402,550.22 212,371,911.48 31,148,714.05 181,223,197.43
Processing
132,780,479.72 43,914,789.90 88,865,689.82 135,636,148.29 53,692,060.27 81,944,088.02
products
Finished product 2,715,845.96 -- 2,715,845.96 5,962,105.18 -- 5,962,105.18
Semi-finished
131,069,647.77 14,613,640.62 116,456,007.15 130,209,635.92 36,196,938.50 94,012,697.42
product
Goods in transit 524,698.46 -- 524,698.46 1,618,894.41 48,491.27 1,570,403.14
Commissioned
31,040,280.45 3,157,490.62 27,882,789.83 30,643,409.60 3,637,965.67 27,005,443.93
materials
Total 556,322,149.18 75,474,567.74 480,847,581.44 516,442,104.88 124,724,169.76 391,717,935.12
（2）Inventory Impairment provision
Increased in current Decreased in current period
Items 2020.01.01 2020.12.31
Provision Other Transferred back Other
191
Raw materials 31,148,714.05 3,666,817.13 -- 21,026,884.58 -- 13,788,646.60
Finished product 53,692,060.27 27,366,959.59 -- 37,144,229.96 -- 43,914,789.90
Semi-finished
36,196,938.50 34,909,052.14 -- 56,492,350.02 -- 14,613,640.62
product
Goods in transit 48,491.27 -- -- 48,491.27 -- --
Commissioned
3,637,965.67 -- -- 480,475.05 -- 3,157,490.62
materials
Total 124,724,169.76 65,942,828.86 -- 115,192,430.88 -- 75,474,567.74
Inventory Impairment provision（Continue)
Specific basis for determining the net realizable Reversal or resale in current period
Items value/remaining consideration and the cost to be
incurred Reason for provision for inventor
Raw materials Net realizable value is lower than inventory cost Use of relevant materials
Finished product Net realizable value is lower than inventory cost Sales of related finished products
Semi-finished product
Net realizable value is lower than inventory cost Sales of related semi-finished products
Goods in transit Net realizable value is lower than inventory cost Sales of related finished products
Collection of relevant consigned
Commissioned materials Net realizable value is lower than inventory cost
processing materials
9.Other current assets
Items 2020.12.31 2019.12.31
After the deduction of input VAT 77,482,083.47 140,821,609.72
Total 77,482,083.47 140,821,609.72
192
10.Long-term equity investment
Increase/decrease
Clos
Ch
ing
an Cash
With bala
Investment ge bonu
Addi draw nce
Neg profit and s s or
tiona Adjustment of al of of
Investees 2019.12.31 ative loss profi 2020.12.31
l of other impa Ot impa
inve recognized ot ts
inve comprehensi he irme her irme
stme under the anno
stme ve income nt nt
nt equity r unce
nt prov prov
method eq d to
ision ision
uit issue
y
I. Joint venture
Anhui Huapeng 10,098,833. 698,189.3 10,797,023.14
Textile Co.,Ltd. 77 7
Shenzhen 127,906,165.1
Guanhua 129,623,072 -1,716,907 7
Printing & .69 .52
Dyeing Co., Ltd.
139,721,906 -1,018,718 138,703,188.3
Subtotal
.46 .15 1
2. Affiliated
Company
Shenzhen
Changlianfa 2,450,676.1 255,586.2
2,706,262.38
Printing & 4 4
dyeing Company
Jordan Garment -904,422.9
902,269.19 2,153.80
Factory 9
Hongkong Yehui
9,135,077.9 -2,297,211 -318,180.0
International Co., 6,519,686.54
3 .37 2
Ltd.
12,488,023. -2,946,048 -316,026.2
Subtotal 9,225,948.92
26 .12 2
152,209,929 -3,964,766 -316,026.2 147,929,137.2
Total
.72 .27 2 3
11. Other equity instruments investment
Items 2020.12.31 2019.12.31
FUAO（000030） 10,129,390.84 6,568,923.76
Shenzhen Dailishi Underwear Co., Ltd. 12,315,939.61 12,315,939.61
Union Development Group Co., Ltd. 152,469,200.00 152,469,200.00
Shenzhen Xiangjiang Trade Co., Ltd. -- 7,474,900.00
Shenzhen Xinfang Knitting Co., Ltd. 2,227,903.00 2,227,903.00
Jintian Industry（Group）Co., Ltd. -- --
Shenzhen Jiafeng Textile Industry Co., ltd. -- --
Shenzhen Xieli Auto Co., Ltd. -- 25,760,086.27
Shenzhen South Textile Co., Ltd. 13,464,994.09 13,464,994.09
193
Changxing Junying Investment Partnership -- 28,500,000.00
Total 190,607,427.54 248,781,946.73
As the above items are investments that the Company plans to hold for a long time for strategic
purposes, the Company designates them as financial assets measured at fair value with changes included in
other comprehensive income.
Amount of other
Recognized comprehensive
Accumulating Accumulating
Items dividend income Reason
income losses
income transferred to
retained earnings
Fuao（000030） 234,604.42 1,188,792.53
Shenzhen Dailishi
1,037,735.85 9,756,083.35
Underwear Co., Ltd.
Union Development
208,000.00 149,869,200.00
Group Co., Ltd.
Shenzhen Xiangjiang
358,702.05 7,314,900.00 4,694,359.48 Disposal
Trade Co., Ltd.
Shenzhen Xinfang
156,000.00 1,703,903.00
Knitting Co., Ltd.
Jintian Industry（Group）
14,831,681.50
Co., Ltd.
Shenzhen Jiafeng Textile
16,800,000.00
Industry Co., ltd.
Shenzhen Xieli Auto Co.,
21,516,380.83 Disposal
Ltd.
Shenzhen South Textile
951,550.47 11,964,994.09
Co., Ltd.
12. Other non-current financial assets
Types 2020.12.31 2019.12.31
Financial assets measured at fair value with changes
30,650,943.40 --
included in current profits and losses
Total 30,650,943.40 --
13. Investment real estate
(1) Investment real estate adopted the cost measurement mode
Items House, Building
I. Original price
194
1.2019.12.31 257,183,260.74
2. Increase in the current period 4,559,679.79
(1) Purchase 4,559,679.79
3.Decreased amount of the period --
4.2020.12.31 261,742,940.53
II.Accumulated amortization
1.2019.12.31 144,452,939.84
2.Increased amount of the period 6,717,528.77
(1) Withdrawal 6,717,528.77
3.Decreased amount of the period --
4.2020.12.31 151,170,468.61
IV.Book value
1.Book value at period -end 110,572,471.92
2.Book value at period-beginning 112,730,320.90
(2) Fixed assets without property right certificate
Reasons for failing to obtain the
Items Book value
property right certificate
Unable to apply for warrants due to
House, Building 11,115,759.53
historical reasons
14. Fixed assets
Items 2020.12.31 2019.12.31
Fixed assets 790,183,905.38 903,229,077.83
Total 790,183,905.38 903,229,077.83
1.Fixed assets
Houses &
Items Machinery equipment Transportations Other equipment Total
buildings
I.Original price
195
1.2019.12.31 548,661,452.06 1,017,917,028.03 10,160,884.32 39,760,701.71 1,616,500,066.12
2.Increased amount of
105,312.66 1,971,675.05 1,721,088.34 3,144,439.59 6,942,515.64
the period
(1) Purchase 105,312.66 1,971,675.05 1,721,088.34 3,144,439.59 6,942,515.64
3.Decreased amount
2,869,833.47 2,195,270.12 502,243.58 484,468.16 6,051,815.33
of the period
（1）Disposal 2,759,267.00 2,090,183.17 500,725.00 439,068.16 5,789,243.33
（2）Other 110,566.47 105,086.95 1,518.58 45,400.00 262,572.00
4.2020.12.31 545,896,931.25 1,017,693,432.96 11,379,729.08 42,420,673.14 1,617,390,766.43
II. Accumulated
depreciation
1.2019.12.31 140,171,992.87 545,911,130.40 2,841,269.42 24,225,958.94 713,150,351.63
2.Increased amount of
20,033,362.68 86,571,277.07 855,148.09 3,262,794.71 110,722,582.55
the period (1) Withdrawal
(1) Withdrawal 20,033,362.68 86,571,277.07 855,148.09 3,262,794.71 110,722,582.55
（2）Other
3.Decrease in the
286,963.56 1,964,902.60 479,386.65 404,469.05 3,135,721.86
reporting period
196
（1）Disposal 286,963.56 1,964,902.60 479,386.65 404,469.05 3,135,721.86
（2）Other
4.2020.12.31 159,918,391.99 630,517,504.87 3,217,030.86 27,084,284.60 820,737,212.32
III. Impairment
provision
1.2019.12.31 120,636.66 -- -- -- 120,636.66
2.Increase in the
-- 6,373,080.81 -- 96,567.92 6,469,648.73
reporting period
(1)Withdrawal -- 6,373,080.81 -- 96,567.92 6,469,648.73
（2）Other -- -- -- -- --
3.Decrease in the
120,636.66 -- -- -- 120,636.66
reporting period
（1）Disposal -- -- -- -- --
（2）Other 120,636.66 -- -- -- 120,636.66
4.2020.12.31 -- 6,373,080.81 -- 96,567.92 6,469,648.73
IV. Book value
1.2020.12.31Book
385,978,539.26 380,802,847.28 8,162,698.22 15,239,820.62 790,183,905.38
value
2.2019.12.31Book
408,368,822.53 472,005,897.63 7,319,614.90 15,534,742.77 903,229,077.83
value
(2) Fixed assets without property right certificate
197
Reasons for failing to obtain the property
Items Book value right certific
Unable to apply for warrants due to
Houses and buildings 21,195,008.77
historical reasons
15. Construction in progress
Items 2020.12.31 2019.12.31
Construction in progress 1,301,750,141.12 839,866,275.92
Total 1,301,750,141.12 839,866,275.92
（1）Construction in progress(1) List of construction in progress
2020.12.31 2019.12.31
Items Book balance Provision Book Net value Book balance Provision Book Net value
for for
devaluation devaluation
Industrializati
on project of
polaroid for
1,301,693,689.12 -- 1,301,693,689.12 839,443,318.50 -- 839,443,318.50
super large
size TV
(Line 7)
Other 56,452.00 -- 56,452.00 422,957.42 -- 422,957.42
Total 1,301,750,141.12 -- 1,301,750,141.12 839,866,275.92 -- 839,866,275.92
（2）Changes of significant construction in progress
Including：
Transfer Capitalisation Current
Increase at this red to Other of interest Capitalis
amount ation of
Name 2019.12.31 decrea 2020.12.31
interest
period fixed se accumulated
of ratio（%)
assets balance capitalization
of interest
Industrializati
on project of
polaroid 839,443,318.50 462,250,370.62 -- -- 3,940,565.29 3,940,565.29 4.41 1,301,693,689.12
for super
large size TV
Total 839,443,318.50 462,250,370.62 -- -- 3,940,565.29 3,940,565.29 4.41 1,301,693,689.12
Changes of significant construction in progress（Continuous）
198
Name
Budget Proportion(%) Progress of work Source of funds
Basic completion of civil
engineering, primary acceptance of
clean area of main production
Industrialization workshop; process equipment,
project of extension machine, coating
polaroid machine, counter inspection
187,477.00 million 78.34% Self
machine and other main equipment
for super large have been installed and completed
size TV (Line 7) and into the commissioning stage,
the overall commissioning is
expected to be completed in March
2021 into trial production
Total 187,477.00 million 78.34%
16. Intangible assets
(1) Information
Items Land use right Software Patent right Total
I. Original price
1.2019.12.31 48,258,239.00 2,936,607.54 11,825,200.00 63,020,046.54
2.Increase in the current period
(1) Purchase 1,143,346.16 1,143,346.16
3.Decreased amount of the period
4.2020.12.31 48,258,239.00 4,079,953.70 11,825,200.00 64,163,392.70
II.Accumulated amortization
1.2019.12.31 12,591,751.27 2,085,098.93 11,825,200.00 26,502,050.20
2. Increase in the current period
(1) Withdrawal 895,440.00 716,923.59 1,612,363.59
3.Decreased amount of the period
4. 2020.12.31 13,487,191.27 2,802,022.52 11,825,200.00 28,114,413.79
III. Impairment provision
199
1.2019.12.31
2. Increase in the current period
3.Decreased amount of the period
4.2020.12.31
4. Book value
1.2020.12.31Book value 34,771,047.73 1,277,931.18 -- 36,048,978.91
2.2019.12.31 Book value 35,666,487.73 851,508.61 -- 36,517,996.34
17. Goodwill
(1) Original book value of goodwill
Name of the investees or the
2019.12.31 Increase Decrease 2020.12.31
events formed goodwill
SAPO Photoelectric 9,614,758.55 9,614,758.55
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.
Total 11,864,346.37 11,864,346.37
（2）Impairment of goodwill
Increased at this .Decreased at this
Investee 2019.12.31 2020.12.31
period period
SAPO Photoelectric 9,614,758.55 9,614,758.55
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.
Total 11,864,346.37 11,864,346.37
18. Long term amortize expenses
Decreased at this period
Increase in Amortized
Items 2019.12.31 2020.12.31
this period expenses Other loss
Decoration fee 96,994.84 40,000.00 25,452.99 111,541.85
Renovation fee 1,595,771.58 330,816.84 1,264,954.74
Other
999,984.25 726,329.58 226,248.89 1,500,064.94
-
Total 2,692,750.67 766,329.58 582,518.72 2,876,561.53
200
19. Deferred income tax assets/deferred income tax liabilities
（1）Details of the un-recognized deferred income tax assets
2020.12.31 2019.12.31
Items Deductible Deferred
Deductible temporary
Deferred income tax assets temporary income tax
difference
difference assets
Deferred income tax assets
Assets depreciation 18,865,669.84 4,709,761.70 17,933,263.39 4,478,077.03
reserves
Unattained internal 2,413,307.05 361,996.06 2,502,421.73 375,363.26
sales profits
Changes in fair value -- -- 2,371,674.55 592,918.64
of investments in other
equity instruments
Restricted stock
686,670.00 171,667.50 686,670.00 171,667.50
repurchase interest
Subtotal 21,965,646.89 5,243,425.26 23,494,029.67 5,618,026.43
Deferred income tax liabilities
The difference
between the initial
recognition cost and 62,083,693.36 15,520,923.34 77,651,921.36 19,412,980.34
tax base of long-term
equity investment
Changes in fair value
174,482,972.97 43,620,743.24 202,125,461.26 50,531,365.32
of investments in other
equity instruments
Total 236,566,666.33 59,141,666.58 279,777,382.62 69,944,345.66
(2)Details of the un-recognized deferred income tax liabilities
Items 2020.12.31 2019.12.31
Deductible temporary difference 122,887,462.20 156,410,415.69
Deductible loss 682,013,840.25 605,506,184.05
Total 804,901,302.45 761,916,599.74
(3)Deductible losses of the un-recognized deferred income tax asset will expire in the following years
Year 2020.12.31 2019.12.31 Remark
2021 -- 1,128,868.47
2023 129,226,944.33 129,226,944.33
2024 148,095,898.11 148,095,898.11
2025 83,287,153.64 83,287,153.64
201
2026 120,820,767.06 120,820,767.06
2028 22,594,586.97 22,594,586.97
2029 100,351,965.47 100,351,965.47
2030 77,636,524.67 ——
Total 682,013,840.25 605,506,184.05
20 .Other non-current assets
Items 2020.12.31 2019.12.31
Advance payment for
47,483,219.83 3,079,321.10
equipment fund
Certificate of deposit for more than 1 year 70,064,383.56 --
Other 25,760,086.27 --
Total 143,307,689.66 3,079,321.10
21. Accounts payable
Items 2020.12.31 2019.12.31
Within 1 year 325,354,275.46 238,370,055.75
1-2 years 1,912,000.86 196,392.86
2-3 years 96,543.25 1,691,830.35
3-4 years 1,093,369.87 37,402.40
4-5 years 37,402.40 35,075.05
Over 5 years 975,010.06 967,014.23
Total 329,468,601.90 241,297,770.64
No Significant accounts payable that aged over one year
22.Advance account
Items 2020.12.31 2019.12.31
Within 1 year 671,534.26 29,824,350.33
1-2 years -- 16,004.11
2-3 years -- 30,171.98
Over 3 years 639,024.58 659,591.20
Total 1,310,558.84 30,530,117.62
23.Contract liabilities
Items 2020.12.31 2019.12.31
202
Goods 200,000.00 --
Rent received in advance 2,311,466.76 --
Less：Contractual liabilities
charged to other non-current -- --
liabilities
Total 2,511,466.76 --
24.Payable Employee wage
Increase in this Decrease in this
Items 2019.12.31 2020.12.31
period period
Short-term employee
38,556,180.20 188,713,147.25 171,626,777.92 55,642,549.53
benefits
Post-employment benefits -- 7,080,075.35 7,080,075.35 --
Termination benefit -- 2,985,500.66 2,985,500.66 --
Total 38,556,180.20 199,149,610.77 181,692,353.93 55,642,549.53
（1）Short-term remuneration
Increase in this Decrease in this
Items 2019.12.31 2020.12.31
period period
Wages, bonuses, allowances and 36,751,528.90 169,798,753.71 153,256,730.67 53,293,551.94
subsidies
Employee welfare -- 6,351,145.22 6,310,052.02 41,093.20
Social insurance premiums -- 2,682,417.92 2,682,417.92 --
Including：1.Medical insurance -- 2,220,227.06 2,220,227.06 --
2.Maternity insurance -- 100,867.74 100,867.74 --
3.Work injury insurance -- 324,403.12 324,403.12 --
203
4．Supplementary medical
-- 36,920.00 36,920.00 --
insurance
Public reserves for housing -- 6,020,759.24 6,020,759.24 --
.Union funds and staff education
1,804,651.30 3,860,071.16 3,356,818.07 2,307,904.39
fee
Total 38,556,180.20 188,713,147.25 171,626,777.92 55,642,549.53
（2）Defined contribution plans listed
Increase in this period Decrease in this
Items 2019.12.31 2020.12.31
period
After-service benefits -- 7,080,075.35 7,080,075.35 --
1. Basic old-age insurance premiums -- --
4,962,621.48 4,962,621.48
-- --
2.Unemployment insurance 168,614.71 168,614.71
-- --
3. Annuity payment 1,948,839.16 1,948,839.16
Total -- 7,080,075.35 7,080,075.35 --
25.Tax Payable
Items 2020.12.31 2019.12.31
Enterprise Income tax 11,219,726.43 18,567,808.63
Individual Income tax 469,169.71 441,485.02
VAT 286,928.75 2,992,712.57
House property Tax 102,146.02 127,685.17
City Construction tax 48,751.30 209,489.81
Education surcharge 33,386.49 149,635.58
Stamp tax 36,370.02 54,690.21
Land use tax 2,043.30 2,043.34
Total 12,198,522.02 22,545,550.33
204
26.Other payable
Items 2020.12.31 2019.12.31
Other payable 156,118,440.42 152,645,780.14
Total 156,118,440.42 152,645,780.14
（1）Other payable
Items 2020.12.31 2019.12.31
Project equipment funds 32,713,413.76 36,025,975.90
Unit current 48,394,939.72 51,891,693.06
Deposit 36,130,306.12 27,258,145.87
Restrictive stock repurchase
7,844,373.00 16,825,673.40
obligations
Other 31,035,407.82 20,644,291.91
Total 156,118,440.42 152,645,780.14
27.Long-term borrowings
Interest rate Interest rate
Items 2020.12.31 2019.12.31
interval interval
4.41% -- --
Mortgage+Deposit 343,100,174.35
Subtotal 343,100,174.35 -- -- --
-- --
Less ： Long-term borrowings due
within 1 year -- --
Total 343,100,174.35 -- -- --
28.Deferred income
Items
2019.12.31 Increase at this Decrease at this 2020.12.31 Reason
Govemment
121,264,571.22 1,710,000.00 12,234,249.01 110,740,322.21
Subsidy
Note: See Note XIV. 2, Government Subsidies for details of government subsidies included in deferred income.
29.Stock capital
Items 2019.12.31 Issuance Bonus Changed（+，-）
Capitalization 2020.12.31
of new of Other Subtotal
shares
Total shares 509,338,429.00 -1,566,150.00 -1,566,150.00 507,772,279.00
Note: This year, 1,566,150.00 restricted shares which have been granted but not unlocked have been repurchased and
cancelled, and the share capital has been reduced by RMB 1,566,150.00, which has been verified by the same accounting
205
firm (special general partnership), and the capital verification report (ZTY Zi (2020) No. 441ZC00334) was issued on
September 11, 2020.
30.Capital reserve
Increase in the current Decrease in the current
Items 2019.12.31 period period 2020.12.31
Share premium 1,839,805,031.94 -- 7,407,889.50 1,832,397,142.4443
Other 135,117,216.09 -- -- 135,117,216.09
Total 1,974,922,248.03 -- 7,407,889.50 1,967,514,358.53
Note: The change of capital stock premium in the current period is from the repurchase and cancellation of some restricted
stocks granted by the Company's restricted stock incentive plan in 2017.
31. Treasury stock
Increase in the Decrease in the
current current
Items 2019.12.31 2020.12.31
period period
Treasury stock 16,139,003.40 -- 8,613,565.20 7,525,438.20
Note: The change of capital stock premium in the current period is from the repurchase and cancellation of some restricted
stocks granted by the Company's restricted stock incentive plan in 2017.
32.Other Comprehensive incom
Amount of current period
Less：
Amount
transferr Aft
ed into er-t
profit Less：Prior ax
and loss period attr
in the included in ibu 2020.12.3
2019.12.31
Items Amount current other Less： After-tax te 1
incurred period composite Income attribute to to
before that income tax the parent mi
income tax recognie transfer to expenses company nor
d into retained ity
other income in the sha
compreh current period reh
ensive old
income er
in prior
period
1. Other
comprehensive
income that 118,183,658 -1,925,707.9 890,116. -18,953,110. 99,230,54
cannot be 16,137,285.62 --
.54 2 75 29 8.25
reclassified in
the loss and
gain in the
206
future
Changes in fair
value of
118,183,658 -1,925,707.9 890,116. -18,953,110. 99,230,54
investments in 16,137,285.62 --
.54 2 75 29 8.25
other equity
instruments
2.Other
comprehensive
income
1,554,124.7 1,238,098
reclassifiable -316,026.22 -- -- -316,026.22 --
7 .55
to profit or loss
in subsequent
periods
Translation
differences of
1,554,124.7 1,238,098
financial -316,026.22 -- -- -316,026.22 --
7 .55
statements
denominated
2.Energy
Menthod
Total of other
119,737,783 -2,241,734.1 890,116. -19,269,136. 100,468,6
comprehensive 16,137,285.62 --
.31 4 75 51 46.80
income
33. Surplus reserves
Increase in the Decrease in
Items 2019.12.31 Adjustment 2020.01.01 current period the current 2020.12.31
period
Statutory surplus
90,596,923.39 -- -- 4,346,566.05 94,943,489.44
reserve
34.Retained profits
Amount of Amount of
current period previous period
Items Proportion%
Before adjustments: Retained profits at the period end 49,307,764.03 -57,774,473.41 --
Adjustment: Total unappropriated profits at the beginning of the
-- 35,779,955.53 --
year
207
After adjustments: Retained profits at the period beginning 49,307,764.03 -21,994,517.88 --
Add: Net profit attributable to owners of the Company for the
37,267,995.74 19,679,910.43 --
period
Other consolidated earnings carried forward to retained earnings 20,362,209.15 58,238,941.03 --
for the current year
Less: Appropriation to statutory surplus reserve 3,888,292.80 6,616,569.55 10%
Retained profits at the period end 103,049,676.12 49,307,764.03 --
35.Business income, Business cost
(1) Business income, Business cost
Amount of current period Amount of previous period
Items
Income Cost Income Cost
Main business cost
2,097,432,885.06 1,808,092,705.48 2,099,197,694.45 1,915,880,730.30
Other business cost
11,531,802.74 6,205,689.54 58,987,161.26 57,614,878.05
Total 2,108,964,687.80 1,814,298,395.02 2,158,184,855.71 1,973,495,608.35
（2）Main business（Industry）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Domestic and foreign
-- -- 517,020,991.54 483,603,729.67
trade
Manufacturing 2,012,255,019.03 1,786,199,780.24 1,475,804,647.66 1,408,148,827.10
Property management,
85,177,866.03 21,892,925.24 106,372,055.25 24,128,173.53
leasing
Subtotal 2,097,432,885.06 1,808,092,705.48 2,099,197,694.45 1,915,880,730.30
（3）Main business（Production）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
208
Property and rental
85,177,866.03 21,892,925.24 106,372,055.25 24,128,173.53
income
Textile income 60,503,325.78 48,466,207.78 46,047,351.10 39,166,964.15
Polaroid income 1,951,751,693.25 1,737,733,572.46 1,429,757,296.56 1,368,981,862.95
Trade income -- -- 517,020,991.54 483,603,729.67
Subtotal 2,097,432,885.06 1,808,092,705.48 2,099,197,694.45 1,915,880,730.30
（4）Main Business（Area）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Domestic 1,756,659,062.01 1,526,209,625.21 1,922,327,308.13 1,751,836,922.09
Oversea 340,773,823.05 281,883,080.27 176,870,386.32 164,043,808.21
Total 2,097,432,885.06 1,808,092,705.48 2,099,197,694.45 1,915,880,730.30
36.Business tax and subjoin
Amount of current period Amount of previous period
Items
House taxes 4,338,584.18 5,772,193.68
Urban construction tax 718,695.23 665,327.79
Education surcharge 517,483.70 477,821.51
Other 1,772,362.54 1,550,800.42
Total 7,347,125.65 8,466,143.40
37.Sales expenses
Amount of current period Amount of previous period
Items
Wage 12,958,215.67 3,900,045.35
Transportation changes -- 6,328,597.94
Business expenses 668,407.23 380,985.91
Sell 12,697,476.62 3,077,231.50
Other 2,320,131.35 7,098,217.96
Total 28,644,230.87 20,785,078.66
Note: The increase in sales expenses and wages this year is mainly due to the department adjustment of the
Company and the better benefit of the subsidiary SAPO Photoelectric; The increase of sales service fee is
mainly due to the increase of new customers, which leads to the increase of new agents.
209
38.Administrative expenses
Amount of current period Amount of previous period
Items
Wage 74,848,348.24 57,632,391.81
Depreciation of fixed assets 9,794,203.66 11,714,741.86
Water and electricity 2,576,447.96 2,736,839.25
Intermediary organ 3,271,775.61 6,188,892.57
1,612,363.59
Intangible assets amortization 1,362,819.51
Travel expenses 408,221.21 1,506,687.67
Office expenses 946,055.89 878,072.35
615,454.09
Business entertainment 922,668.63
Lawsuit expenses 144,161.32 327,254.72
Repair charge 1,366,609.60 2,030,445.26
Property insurance 380,689.81 483,245.82
Other 9,130,603.38 11,086,782.92
Total 105,094,934.36 96,870,842.37
39.R & D costs
Amount of current period Amount of previous period
Items
Wage 13,177,489.03 13,430,653.87
Material 49,679,847.18 34,839,486.54
Depreciation 2,984,978.79 2,782,174.41
Fuel & Power 1,017,795.21 1,447,036.66
Travel expenses 226,949.44 356,165.02
Other 73,904.57 323,197.83
Total 67,160,964.22 53,178,714.33
40.Financial Expenses
Amount of current period Amount of previous period
Items
Interest expenses 4,175,380.96 4,893,018.58
210
Less：Interest Capitalization 3,940,565.29
Interest income -3,702,735.59 -8,593,894.58
Exchange loss 8,108,404.80 16,760,131.65
Fees and other 3,647,403.40 2,803,543.99
Total 8,287,888.28 15,862,799.64
41.Other income
Amount incurred in Related to assets/
Subsidy items (source of other income) Amount incurred in current
previous period Related to
period
income
Amortization of textile special funds 142,857.16 142,857.16
Related to assets
Amortization of subsidy funds for industrialization items
1,300,000.00 1,300,000.00 Related to assets
of TFT-LCD polarizer 销
Amortization of subsidy funds for narrow line (Line 5) of
500,000.00 500,000.00 Related to assets
TFT-LCD polarizer phase I project
Amortization for purchasing imported equipment and
175,090.20 175,090.20 Related to assets
technical subsidies
Amortization of innovation and venture funds for
50,000.00 50,000.00 Related to assets
TFT-LCD polarizer phase I project
Amortization of innovation and venture funds in Shenzhen
50,000.00 50,000.00 Related to assets
polarized materials and technology engineering laboratory
Amortization of polarized materials and technical
500,000.00 500,000.00 Related to assets
engineering laboratory in Shenzhen
Amortization of subsidy funds for technical center
300,000.00 300,000.00 Related to assets
construction
Amortization of subsidy funds for introducing advanced
14,388.10 14,388.10 Related to assets
technology
Amortization of local supporting funds for TFT-LCD
1,500,000.00 1,500,000.00 Related to assets
polarizer phase II project (Line 6)
211
Amortization of innovation and venture funds for
50,000.00 50,000.00 Related to assets
TFT-LCD polarizer phase II project (Line 6)
Amortization of subsidy funds for key technology R&D
500,000.00 500,000.00 Related to assets
equipment of optical compensation film for polarizer
Amortization of national subsidy for TFT-LCD polarizer
1,000,000.00 1,000,000.00 Related to assets
phase II project (Line 6)
Amortization of funds for pilot projects of regional
agglomeration development of strategic emerging 2,500,000.00 2,500,000.00 Related to assets
industries in Guangdong Province
Amortization of subsidies for new production lines and
purchased equipment in the phase II project of polarizer 3,000,000.00 3,000,000.00 Related to assets
for TFT-LCD
Amortization of subsidy funds for energy-saving
29,642.93 29,642.93 Related to assets
transformation
Amortization of subsidy funds for old elevator renovation 142,255.72 142,255.72 Related to assets
Special fund subsidies for improving the quality of
468,931.57 -- Related to assets
atmospheric environment in Shenzhen
2020 Subsidy for special technical transformation
investment project of multiplication by technical 11,083.33 -- Related to assets
transformation
Related to
Subsidy for post stabilization 160,712.86 174,114.77
Income
Sewage fee refund 597,362.55 -- Related to
Income
Tax bureau fee refund 24,898.73 416,818.25 Related to
Income
Subsidy for cost reduction of industrial and commercial Related to
6,952,943.71 6,486,248.28
electricity in Shenzhen Income
212
Maternity allowance returned to the employees by Social Related to
32,609.51 --
Security Bureau Income
Related to
Insurance premium refund by Social Security Bureau 1,815 Income
Second batch of epidemic grants from Pingshan District Related to
759 Income
Finance Bureau
Water saving carrier award fund from Shenzhen Water Related to
374,102.00 --
Affairs Bureau in 2019 Income
Harmonious labor relations enterprise incentive fund from Related to
1,000,000.00 --
Shenzhen Pingshan District Finance Bureau in 2018 Income
Enterprise R&D Funds from Shenzhen Science and Related to
1,278,000.00 --
Technology Innovation Committee in 2018 Income
High-tech enterprise certification award from Pingshan
Related to
District Science and Technology Innovation Bureau in 50,000.00 --
Income
2019
Subsidies for working in lieu of by training in Pingshan Related to
1,645,500.00 --
District Income
Trial post training subsidy of Human Resources Bureau of Related to
111,600.00 --
Pingshan District, Shenzhen City Income
2020 Pingshan district foreign trade stable growth funds of Related to
1,200,000.00 360,000.00
the Financial Bureau of Pingshan District, Shenzhen City Income
Received refund of unemployment benefits from the social Related to
2,709,874.84 --
security bureau to the enterprises affected by the epidemic Income
The second batch of patent grants from the Market Related to
9,000.00 --
Supervision Administration in 2018 Income
213
Related to
Government subsidies for epidemic protection articles 10,000.00 --
Income
Related to
Cultural tourism stabilization support subsidy 100,000.00 --
Income
The first batch of special funds for scientific and Related to
966,000.00 --
technological innovation in 2019 Income
Received subsidies from the Public Employment Service Related to
1,425.20 --
Center to help enterprises stabilize their posts Income
Received the award for epidemic prevention effect from Related to
20,000.00 --
the Bureau of Industry and Information Technology Income
Received epidemic prevention subsidy from the Housing
Related to
and Construction Bureau of Luohu District, Shenzhen for 5,638.00 --
Income
#145 residential building on Fenghuang Road
Received epidemic prevention subsidy from Shenzhen
Luohu District Housing and Construction Bureau for Related to
8,531.45 --
Shenzhen Textile Courtyard at No.52 Tianbei Second Income
Road
Related to
Halved urban construction tax and surcharges 1,047.51 --
Income
Halved stamp duty 183.32 -- Related to
Income
Related to
Epidemic prevention subsidy in Luohu District 10,000.00 --
Income
Shenzhen standard special funds -- 360,000.00 Related to
Income
Related to
The first batch of premium subsidies for new materials -- 4,806,400.00
Income
Cuizhu Street 2018 old residential property management Related to
-- 30,000.00
support project qualified property Tianbei courtyard Income
The second batch of enterprise R&D subsidy funds of Related to
-- 1,935,000.00
Shenzhen Municipal Finance Committee Income
Other -- 25,087.51 Related to
Income
214
National subsidy fund for special project of
-- 1,000,000.00 Related to assets
industrialization of new flat panel display devices
Matching funds for high-tech industrialization Related to
-- 200,000.00
demonstration projects income
Total 29,506,252.69 27,547,902.92
42. Investment income
Items Amount of this period Amount of last period
Long-term equity investment returns accounted for by equity
-3,446,613.86 -7,404,083.27
method
Investment income from the disposal of long-term equity
-- 55,481,817.13
investment
Dividend income earned during investment holdings in other equity
2,946,592.79 4,654,009.67
instruments
structured deposit interest 18,231,107.84 25,306,786.72
Interest income on term deposits over 1 year 853,205.47
Net monetary gains 4,015,378.50 --
Total 22,599,670.74 78,038,530.25
43. Income from change in income fair value
Sources of income from changes in fair value Amount of this period Amount of last period
Other non-current financial assets
Where: Financial assets measured at fair value with
2,687,518.74 --
changes included in current profits and losses
Total 2,687,518.74 --
44. Credit impairment loss
Items Amount of this period Amount of last period
Lossof bad debt notes receivable -84,490.74
Loss of bad debts account receivable -8,481,632.23 6,929,467.72
Other -1,828,410.68 76,423.21
215
Total -10,394,533.65 7,005,890.93
45. Losses from asset impairment
Items Amount of this period Amount of last period
Loss of inventory price -65,942,828.90 -97,172,532.71
Loss on impairment of fixed assets -6,469,648.73 --
Total -72,412,477.63 -97,172,532.71
46. Asset disposal income
Items Amount of current period Amount of previous period
Gains& losses on the disposal of fixed assets 276,544.73 3,967.97
47. Non-Operation income
Amount of previous Amount included in
Items Amount of current period non-recurrent gains and
period
losses for the year
Loss of end-of-life gains on non-current
-- 39,823.01 --
assets
Insurance compensation -- 4,033,846.00 --
Payable without payment 1,371,678.99 597,578.12 1,371,678.99
Other 73,983.39 332,301.21 73,983.39
Total 1,445,662.38 5,003,548.34 1,445,662.38
48.Non-current expenses
Amount included in
non-recurrent
Items Amount of current period Amount of previous period
gains and losses for the
year
Non-current asset Disposition loss 3,315.15 414,453.28 3,315.15
Fine expenses 115,314.20 6,000.00 115,314.20
Other 19,791.92 121.79 19,791.92
Total 138,421.27 420,575.07 138,421.27
216
49.Income tax expenses
(1)Income tax expenses
Items Amount of current period Amount of previous period
Current income tax calculated according to tax law and
8,422,038.43 28,069,828.99
relevant regulations
Deferred income tax expense -218,317.45 -10,748.77
Total 8,203,720.98 28,059,080.22
(2) The relationship between income tax expense and total profit is as follows:
Amount of current period Amount of previous period
Items
Total profits 51,701,366.13 9,532,401.59
Income tax expenses calculated at the applicable tax rate
12,925,341.53 2,383,100.40
(total profit *25%)
Influence of different tax rates applied by some subsidiaries -1,928,531.95 9,445,356.09
Adjustment of current income tax in previous periods 21,090.96 178,201.63
Profit and loss of joint ventures and associated enterprises
991,191.57 3,794,799.87
accounted by equity method
Income not subject to tax -630,419.57 -322,906.47
Non-deductible costs, expenses and losses 295,317.96 221,237.56
The influence of tax rate change on the balance of deferred
-1,222.02 5,458.59
income tax at the beginning
Tax impact by the unrecognized deductible losses and
-173,798.62 -775,053.15
deductible temporary differences in previous years
Tax impact of unrecognized deductible losses and
5,073,772.21 19,522,497.03
deductible temporary differences
217
Tax impact of research and development fee plus deduction -7,555,608.48 -5,982,605.36
Income tax fee reduction and exemption -813,412.61 -411,005.97
Income tax fee 8,203,720.98 28,059,080.22
50. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities
Items Amount of current Amount of previous period
period
Letter of Credit Deposit 95,971,397.61 32,712,277.24
Interest income and other 3,812,160.83 9,787,432.90
Government Subsidy 10,319,059.97 8,107,420.53
Current account 4,476,707.73 7,629,683.54
Other 4,817,267.42 3,459,477.53
Total 119,396,593.56 61,696,291.74
(2).Other cash paid related to operating activities
Items Amount of current period Amount of previous
period
Letter of Credit Deposit 50,257,183.69 42,928,583.04
Cash charges 37,855,834.17 39,178,178.19
Other 9,104,639.66 14,254,157.16
Total 97,217,657.52 96,360,918.39
(3)Other Cash received related to investment activities
Amount of current period Amount of previous
Items period
Structured deposits, financial products, principal and
3,112,161,370.37 4,093,427,051.70
income
L/C margin for purchase of line 7 equipment 126,799,633.00 71,030,367.00
Credit deposit for non-Line 7 equipment 1,900,000.00 --
Total 3,240,861,003.37 4,164,457,418.70
(4).Cash paid related to other investment activities
Items Amount of current period Amount of previous
period
218
Structured deposits, financial products, principal and 3,004,000,000.00 4,360,000,000.00
income
L/C margin for purchase of line 7 equipment 2,150,000.00 196,430,000.00
Credit deposit for non-Line 7 equipment 1,900,000.00 --
Stock transaction cost 15,275.20 --
Total 3,008,065,275.20 4,556,430,000.00
（5）Other cash received in relation to financing activities
Amount of current period Amount of previous
Items period
Performance compensation -- 197,268,700.00
Borrowing funds -- 6,506,454.17
Total -- 203,775,154.17
（6）Cash paid related with financing activities
Amount of current period Amount of previous
Items period
Restricted stock of stock repurchase incentive object 9,344,136.30 11,091,675.60
Borrowing funds 2,700,000.00
Total 9,344,136.30 13,791,675.60
51.Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
Supplement Information
Amount of current period Amount of previous period
I. Adjusting net profit to cash flow from operating activities
Net profit
43,497,645.15 -18,526,678.63
Add: Impairment loss provision of assets
72,412,477.63 97,172,532.71
Credit impairment losses 10,394,533.65 -7,005,890.93
Depreciation of fixed assets, oil and gas assets and
117,440,111.32 120,272,039.47
consumable biological assets
219
Amortization of intangible assets 1,612,363.59 1,362,819.51
Amortization of Long-term deferred expenses 582,518.72 505,932.97
Loss on disposal of fixed assets, intangible assets and other
-276,544.73 -3,967.97
long-term deferred assets
Loss on scrap of fixed assets 3,315.15 374,630.27
Loss on fair value changes -2,687,518.74 --
Financial cost 455,850.38 4,734,103.39
Loss on investment -22,599,670.74 -78,038,530.25
Decrease in deferred income tax assets 374,601.17 351,508.05
Increased of deferred income tax liabilities -10,802,679.08 1,478,752.30
Decrease of inventories -39,880,044.30 12,010,403.04
-188,437,910.96 289,069,889.61
Decease of operating receivables
15,830,477.68 -40,611,755.04
Increased of operating Payable
Other --
Net cash flows arising from operating activities -2,080,474.11 383,145,788.50
II. Significant investment and financing activities that without
-
cash flows:
Debt-to-capital conversion -- --
Convertible loan due within 1 year -- --
220
Fixed assets acquired under financial lease -- --
3．Movement of cash and cash equivalents：
Ending balance of cash 274,325,830.08 268,646,588.18
Less: Beginning balance of cash equivalents 268,646,588.18 1,133,574,235.22
Add：Ending balance of cash equivalents --
Less: Beginning balance of cash equivalents --
Net increase of cash and cash equivalents 5,679,241.90 -864,927,647.04
(2)Composition of cash and cash equivalents
Items Year-end balance Year-beginning balance
1. I. Cash 2. 274,325,83 3. 268,646,588.1
0.08 8
4. Including：Cash at hand 5. 4,127.10 6. 11,091.94
7. Demand bank deposit 8. 274,085,02 9. 268,424,080.6
5.1 7
10. Demand other monetary funds 11. 236,677.88 12. 211,415.57
13. II. Cash equivalents 14. -- 15. --
17. 274,325,83 18. 268,646,588.1
16. III. Balance of cash and cash equivalents at the period end
0.08 8
52. The assets with the ownership or use right restricted
Items Book value at the end of the period Restricted reason
Monetary fund 750,000.00 Letter of Credit margin
Fixed assets 330,744,828.51 Mortgage
Intangible assets 产 34,771,047.73 Mortgage
Construction in process 1,301,880,727.03 Mortgage
Total 1,668,146,603.27
221
53.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 8,843,259.32 6.5249 57,701,382.74
Yen 78,877,109.00 0.063236 4,987,872.86
HKD 811,727.03 0.84164 683,181.94
Account receivable
Including：USD 18,973,368.14 6.5249 123,799,329.78
HKD 278,280.00 0.84164 234,211.58
Advance payments
Including：USD 257,305.00 6.5249 1,678,889.39
Euro 805,500.00 8.025 6,464,137.50
Other receivable
Including：USD 37,399.02 6.5249 244,024.87
Account payable
Including：USD 4,530,318.93 6.5249 29,559,877.99
Yen 2,680,544,919.88 0.063236 169,506,938.56
Other payable
Including：USD 676,686.00 6.5249 4,415,308.48
HKD 1,986,068.33 0.84164 1,671,554.55
Yen 3,381,983.93 0.063236 213,863.14
Euro 22,500.00 8.025 180,562.50
VI. Change in consolidation scope
On August 24, 2020, the Company established Shenzhen Textile Sungang Property Management Co.,
Ltd. with a registered capital of RMB 1,000,000.00, which was included in the consolidation scope in this
period.
VII. Equity in other entity
1. Equity in subsidiary
（1）Constitute of enterprise
Main Registered Business nature Share-holding ratio Acquired
Subsidiary
operation place Directly Indirectly way
Shenzhen Lishi Domestic trade, Property Establish
Shenzhen Shenzhen 100
Industry Development Management
222
Co., Ltd
Accommodation,
Shenzhen Huaqiang
Shenzhen Shenzhen restaurants, business 100 Establish
Hotel
center;
Shenfang Property Establish
Shenzhen Shenzhen Property Management 100
Management Co., Ltd.
Shenzhen Beauty Production of fully Establish
Century Garment Co., Shenzhen Shenzhen electronic jacquard 100
Ltd. knitting whole shape
Shenzhen Shenfang
Sungang Property Shenzhen Shenzhen Property Management 100 Establish
Management Co., Ltd.
SAPO Photoelectric Operating import and
Shenzhen Shenzhen 60 Purchase
Co., Ltd export business
Shenzhen Shenfang Establish
Import & export Co., Shenzhen Shenzhen Operating import and 100
Ltd. export business
Shengtou (Hongkong) Production and sales of
Hongkong Hongkong 100 Establish
Co.,Ltd. polarizer
2.Equity in joint venture arrangement or associated enterprise
（1）Joint venture or associated enterprise
Share-holding ratio The accounting
Joint venture or Place of Place of treatment of
Nature
associated enterprise operation registration investment in
Directly Indirectly associates
Joint venture：
Shenzhen Guanhua
Printing & Dyeing Shenzhen Shenzhen Property leasing 50.16 Equity method
Co.,Ltd.
Anhui Huapeng Textile
Anhui Anhui Manufacturing 50.00 Equity method
Co., Ltd.
Associated enterprise
Shenzhen Changlianfa
Printing and dyeing Shenzhen Shenzhen Property leasing 40.25 Equity method
Company
Jordan Garment
Jordan Jordan Manufacturing 35.00 Equity method
Factory
Yehui International Co.,
Hongkong Hongkong Manufacturing 22.75 Equity method
Ltd.
（2）Key financial information of significant joint venture or associated enterprise
Shenzhen Guanhua Printing & Dyeing Co.,Ltd
Items
2020.12.31 2019.12.31
Current assets 19,854,144.21 10,286,534.45
223
Non-current assets 242,190,971.30 254,848,270.68
Total asseats 262,045,115.51 265,134,805.13
Current liabilities 12,261,343.60 10,815,587.15
Non-current liabilities 37,356,444.69 39,522,035.69
Total liabilities 49,617,788.29 50,337,622.84
Net assets 212,427,327.23 214,797,182.29
including：Minority shareholders' rights -- --
Attributable to shareholders of the parent 212,427,327.23 214,797,182.29
company
Share of net assets calculated by stake 106,553,547.34 107,742,266.64
Adjustment
Including：Goodwill 21,595,462.44 21,595,462.44
Unrealized internal transaction gains and losses -- --
Impairment preparation -- --
Other 285,343.61 285,343.61
Book value of equity investment in joint 128,434,353.39 129,623,072.69
ventures
Continue：
Shenzhen Guanhua Printing & Dyeing Co.,Ltd
Items
Amount of current period Amount of previous period
Operating revenue 14,623,800.97 4,434,022.16
Financial expenses -39,339.28 -18,017.22
Income tax expenses -2,118,023.83 1,624,193.25
Net profit -3,422,861.88 -7,457,362.64
Net profit from termination -- --
-Other Comprehensive income -- --
Total comprehensive income -3,422,861.88 -7,457,362.64
Dividends received from joint ventures this period -- --
VIII. Risks Related to Financial Instruments
The Company's main financial instruments include monetary funds, notes receivable, accounts
receivable, receivables financing, other receivables, trading financial assets, investment in other equity
224
instruments, accounts payable, other payables and long-term loans. Details of various financial instruments
have been disclosed in relevant notes. The risks related to these financial instruments and the risk
management policies adopted by the Company to reduce these risks are as follows. The management of the
Company manages and monitors these risks to ensure that the above risks are controlled within a limited
range.
1. Risk management objectives and policies
The objective of the Company in risk management is to strike a proper balance between risks and
benefits, and strive to reduce the adverse impact of financial risks on the Company's financial performance.
Based on this risk management objective, the Company has formulated risk management policies to
identify and analyze the risks faced by the Company, set appropriate risk acceptable levels and design
corresponding internal control procedures to monitor the risk level of the Company. The Company will
regularly review these risk management policies and related internal control systems to adapt to changes in
market conditions or business activities of the Company. The internal audit department of the Company
also regularly or randomly checks whether the implementation of the internal control system complies with
the risk management policy.
The main risks caused by the Company's financial instruments are credit risk, liquidity risk and market
risk (including exchange rate risk, interest rate risk and commodity price risk).
The Board of Directors is responsible for planning and establishing the Company's risk management
framework, formulating the Company's risk management policies and relevant guidelines, and supervising
the implementation of risk management measures. The Company has formulated risk management policies
to identify and analyze the risks faced by the Company. These risk management policies clearly define
specific risks, covering many aspects such as market risk, credit risk and liquidity risk management. The
Company regularly evaluates changes in the market environment and its business activities to decide
whether to update the risk management policies and systems. The risk management of the Company is
carried out by the Risk Management Committee in accordance with the policies approved by the Board of
Directors. The Risk Management Committee identifies, evaluates and avoids relevant risks through close
cooperation with other business departments of the Company. The internal audit department of the
Company regularly reviews the risk management control and procedures, and reports the review results to
the Audit Committee of the Company.
The Company disperses the risks of financial instruments through appropriate diversified investment
and business portfolio, and reduces the risks concentrated in a single industry, a specific region or a certain
counterparty by formulating corresponding risk management policies.
(1) Credit risk
Credit risk refers to the risk that the counterparty fails to fulfill its contractual obligations, resulting in
financial losses of the Company.
The Company manages credit risk according to portfolio classification. Credit risks mainly arise from
bank deposits, notes receivable, accounts receivable and other receivables.
The bank deposits of the Company are mainly deposited in state-owned banks and other large and
medium-sized listed banks, and such bank deposits are not expected to have significant credit risks.
For notes receivable, accounts receivable, other receivables and long-term receivables, the Company
sets relevant policies to control credit risk exposure. The Company evaluates customers' credit
qualifications based on their financial status, credit records and other factors such as current market
conditions, and sets corresponding credit periods. The Company will regularly monitor customers' credit
records. For customers with bad credit records, the Company will adopt written dunning, shortening of
credit period or cancellation of credit period to ensure that the overall credit risk of the Company is within
the controllable range.
Debtors of accounts receivable of the Company are customers distributed in different industries and
regions. The Company continuously evaluates the financial status of accounts receivable and purchases
credit guarantee insurance when appropriate.
225
The maximum credit risk exposure the company is subject to is the book amount of each financial
asset in the balance sheet. The Company has not provided any other guarantee that may expose the
Company to credit risk.
Among the accounts receivable of the Company, the accounts receivable of the top five customers
accounted for 56.46% of the total accounts receivable of the Company (in 2019: 65.56%); Among the other
receivables of the Company, the other receivables of the top five companies in arrears accounted for
74.16% of the total other receivables of the Company (in 2019: 75.87%).
(2) Liquidity risk
Liquidity risk refers to the risk of shortage of funds when the Company fulfills its obligation to settle
by delivering cash or other financial assets.
The member companies of the Company are responsible for their own cash management, including
short-term investment of cash surplus and raising loans to meet the estimated cash demand (if the loan
amount exceeds certain preset authorization limits, it needs to be approved by the Board of Directors of the
Company). In addition, the Company will also consider negotiating with suppliers to reduce part of the debt
amount, or obtain funds in advance by selling long-aged accounts receivable, so as to reduce the cash flow
pressure of the Company. The Company's policy is to regularly monitor the short-term and long-term
liquidity demand and whether it meets the requirements of the loan agreement, so as to ensure that
sufficient cash reserves and securities that can be realized at any time are maintained, and at the same time,
to obtain sufficient reserve funds that major financial institutions promise to provide, so as to meet the
short-term and long-term liquidity demand.
The Company raises working capital through funds generated from business operations and bank and
other loans. On December 31, 2020, the unused bank loan amount of the Company was RMB 456,899,800
(December 31, 2019: not applicable).
At the end of the period, the financial assets, financial liabilities and off-balance sheet guarantee items
held by the Company are analyzed according to the maturity period of the undiscounted remaining contract
cash flow as follows (In RMB10,000):
2020.12.31
items
Within 1 year 1 year to Within 5 years Over 5 years Total
Finance liabilities：
Account payable 32,946.86 32,946.86
Other payable 13,035.84 13,035.84
Long-term loans -- 34,310.02 -- 34,310.02
Total of Finance liabilities 45,982.70 34,310.02 -- 80,292.72
At the beginning of the period, the financial assets, financial liabilities and off-balance sheet guarantee
items held by the Company are analyzed according to the maturity period of the undiscounted remaining
contract cash flow as follows (In RMB10,000):
2019.12.31
Items
Within 1 year 1 year to Within 5 years Over 5 years Total
226
Finance liabilities：
Account payable 24,129.78 -- -- 24,129.78
Other payable 15,264.58 -- -- 15,264.58
Total of Finance liabilities 39,394.36 -- -- 39,394.36
The amount of financial liabilities disclosed in the above table is the undiscounted contract cash flow,
therefore it may be different from the book amount in the balance sheet.
(3) Market risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow of financial
instruments will fluctuate due to market price changes, including interest rate risk, exchange rate risk and
other price risks.
Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flow of financial instruments will
fluctuate due to changes in market interest rates. Interest rate risk can be caused by recognized
interest-bearing financial instruments and unrecognized financial instruments (such as certain loan
commitments).
The Company's interest rate risk mainly arises from long-term bank loans. Financial liabilities with
floating interest rate expose the Company to cash flow interest rate risk, while financial liabilities with
fixed interest rate expose the Company to fair value interest rate risk.
The Company pays close attention to the impact of interest rate changes on its interest rate risk. At
present, the Company has not adopted interest rate hedging policy. However, the management is
responsible for monitoring interest rate risk and will consider hedging significant interest rate risk when
necessary.
The interest-bearing financial instruments held by the Company are as follows (In RMB10,000):
Item Number of this year Number of last year
Floating-rate financial instruments
Financial liabilities 34,310.02 --
Including: long-term loans 34,310.02 --
On December 31, 2020, if the borrowing rate calculated by floating interest rate increases or decreases
by 25 basis points, while other factors remain unchanged, the net profit and shareholders' equity of the
Company will decrease or increase by about RMB 857,800 (December 31, 2019: not applicable).
For financial instruments held on the balance sheet date, which expose the Company to fair value
interest rate risk, the impact of net profit and shareholders' equity in the above sensitivity analysis is the
impact of remeasuring the financial instruments according to the new interest rate, assuming that the
interest rate changes on the balance sheet date. For the floating interest rate non-derivative instruments held
on the balance sheet date, which expose the Company to cash flow interest rate risk, the impact of the
above sensitivity analysis on net profit and shareholders' equity is the impact of the above interest rate
changes on the annual estimated interest expense or income. Last year's analysis was based on the same
assumptions and methods.
Exchange rate risk
227
Exchange rate risk refers to the risk that the fair value or future cash flow of financial instruments will
fluctuate due to the change of foreign exchange rate. Exchange rate risk can be derived from financial
instruments denominated in foreign currencies other than the functional currency.
Exchange rate risk mainly refers to the impact of foreign exchange rate fluctuations on the financial
position and cash flow of the Company. The ratio of foreign currency assets and liabilities held by the
Company to the total assets and liabilities is not significant. Therefore, the Company believes that the
exchange rate risk it faces is not significant.
2. Capital management
The objective of the Company's capital management policy is to ensure that the Company can
continue to operate, thereby providing returns to shareholders and benefiting other stakeholders, while
maintaining the best capital structure to reduce the capital cost.
In order to maintain or adjust the capital structure, the Company may adjust the financing method,
adjust the dividend amount paid to shareholders, return capital to shareholders, issue new shares and other
equity instruments or sell assets to reduce debts.
The Company monitors the capital structure on the basis of asset-liability ratio (i.e. total liabilities
divided by total assets). On December 31, 2020, the asset-liability ratio of the Company was 21.52%
(December 31, 2019: 14.94%).
IX.Fair value
According to the input value of the lowest level which is of great significance to the whole
measurement in fair value measurement, the fair value level can be divided into:
Level I: Quotes of the same assets or liabilities in active markets (unadjusted).
Level II: Use observable input values other than the market quotation of assets or liabilities in the
Level I directly (i.e. price) or indirectly (i.e. derived from price).
Level III: Assets or liabilities use any input value that is not based on observable market data
(unobservable input value).
(1) Items and amounts measured at fair value
On December 31, 2020, the assets and liabilities measured at fair value are listed as follows according
to the above three levels:
Level I fair Level III fair
Level II fair value
Item value value Total
measurement
measurement measurement
I. Continuous fair value
measurement
(I) Transactional financial assets -- -- 684,617,260.06 684,617,260.06
1. Financial assets measured at fair
value with changes included in
current profits and losses
-- -- 684,617,260.06 684,617,260.06
228
(II) Receivable financing -- -- 102,051,314.08 102,051,314.08
(III) Investment in other equity
10,129,390.84 180,478,036.70 190,607,427.54
instruments
(V)Other noncurrent financial assets 30,650,943.40 30,650,943.40
Total assets continuously measured
10,129,390.84 997,797,554.24 997,797,554.24
at fair value
X. Related parties and related-party transactions
1.Parent company information of the enterprise
The parent The parent
Registered capitalcompany of company of the
Registered
Name Nature the Company's
address （RMB10,000) Company’s
shareholding
ratio vote ratio
18/F, Investment Equity investment ,
Shenzhen Investment Building, Shennan Real-estate
2,800,900.00 45.96 45.96
Holdings Co.,Ltd. Road, Futian Development and
District, Shenzhen 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.
During the reporting period, the registered capital of the parent company changed as follows:
In 10,000
Increase in the current Decrease in the
current
Year-beginning balance period Year-end balance
period
RMB 27,649 million 36,000.00 -- 2,800,900.00
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
229
Shenzhen Shenchao Technology Investment Co., Ltd. Subject to the same party controls
Shenzhen City Construction and Development (Group) Co., Ltd Subject to the same party controls
Chairman of the Board Is the Vice Chairman of the
Shenzhen Tianma Microelectronics Co., Ltd.
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.
Shengbo （HK）Co., Ltd. The Company Executives are Director of the company
Zhejiang Hengjie Industry Co., Ltd. A subsidiary of Hangzhou Jinjiang Group Co., Ltd.
Hengmei Photoelectri Co., Ltd. A subsidiary of Hangzhou Jinjiang Group Co., Ltd.
Shenzhen Xinfang Knitting Co., Ltd. Sharing Company
Shenzhen Dailishi Underwear Co., Ltd. Sharing Company
5. Related transactions.
（1）Related transactions on purchasing goods and receiving services
①Acquisition of goods and reception of labor service
Related party Content Current amount Last amount
Hengmei Photoelectri Co., Ltd. Polarized 204,282,036.36 143,888,209.10
②Related transactions on sale goods and receiving services
Content of related Amount of current
Related parties Amount of previous period
transaction period
Shenzhen Tianma Microelectronics
Sales polarizer sheet 1,485,995.60 1,444,346.74
Co., Ltd.
Hengmei Photoelectri Co., Ltd. Polarized 110,545,214.28 141,106,466.92
230
（2）Related-party guarantee
1 Related guarantee
Whether the guarantee
Guaranteed party Amount Guarantee start date Guarantee end date
has been fulfilled
Two years from the
SAPO Photoelectric 342,660,000.00 2020.09.08 expiration of the debt No
performance period
(3) Inter-bank lending of capital of related parties：
Related party Amount Start date Expiring date Note
Borrowing fund：：
Shenzhen Guanhua Printing & The annual lending rate is
3,806,454.17 2019.07.30 Not yet agreed
Dyeing Co., Ltd. 0.30%
(4). Rewards for the key management personnel
Items Amount of current period Amount of previous period
Rewards for the key
8.2102 million 6.1638million
management personnel
6. Receivables and payables of related parties
（1）Receivables
2020.12.31 2019.12.31
Name Related party Bad debt Bad debt
Balance of Book Balance of Book
Provision Provision
Shenzhen Tianma
Account Microelectronics 581,696.96 25,652.84 733,038.52 36,651.93
receivable
Hengmei
Account
Photoelectri Co., 20,879,229.37 1,578,235.08 53,893,840.80 2,694,692.04
receivable
Ltd.
Anhui Huapeng
Other receivable 1,800,000.00 1,800,000.00 1,800,000.00 1,800,000.00
Textile Company
Shenzhen Dailishi
Other receivable 1,100,000.00 55,000.00 404,780.23 20,239.01
Underwear Co., Ltd
231
（2）Payables
Name Related party 2020.12.31 2019.12.31
Account payable Hengmei Photoelectri Co., Ltd 35,787,643.44 56,245,028.58
Other payable Shenzhen Xinfang Knitting Co., Ltd. 244,789.85 244,789.85
Shenzhen Changlianfa Printing and
Other payable 1,580,949.95 1,580,949.95
dyeing Co., Ltd.
Other payable Yehui International Co.,Ltd. 1,143,127.81 1,216,719.38
Other payable 款 SAPO （Hongkong）Co., Ltd. 315,000.00 315,000.00
Shenzhen Guanhua Printing &
Other payable 3,811,240.92 3,811,053.20
Dyeing Co., Ltd.
XI.Share payment
1.Overall situation of share payment
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
1,566,150 shares
have expired in the current period
The scope of executive price of the company’s
outstanding share options at the end of the period and the remaining term
of the contract
The scope of executive price of the company’s other equity instruments
5.73 yuan/share， 1 year
at the end of the period and the remaining term of the contract
On December 14, 2017, the company's 3rd Extraordinary General Meeting of Shareholders in 2017 passed the Proposal
232
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
The first restriction lifting rate of operating revenue in 2018 compared with 2016 is not less than 70%, and is not
period 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
The second restriction lifting of operating revenue in 2019 compared with 2016 is not less than 130%, and is not lower
period 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%.
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
The third restriction lifting of operating revenue in 2020 is not less than 200% compared to 2016, and is not lower
period 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.
233
On January 16, 2020, the Company convened the first extraordinary shareholders' meeting in 2020 to consider and pass
the Proposal on Repurchase and Cancellation of Some Restricted Shares and agreed to repurchase and cancel 69,900 shares
of restricted shares held by 3 original incentive objects who left the company for personal reasons at a repurchase price of
5.73 yuan per share.
On March 12, 2020, the 27th meeting of the Seventh Board of Directors of the Company deliberated and approved the
Proposal on Repurchase and Cancellation of Some Restricted Stocks, on which related directors Zhu Jun, Zhu Meizhu and
Ning Maozai avoided voting according to relevant laws, regulations and the Articles of Association of the Company. The
company plans to repurchase and cancel a total of 1,313,340 restricted stocks held by 110 incentive targets that have not
reached the conditions for lifting the restrictions on sales. The repurchase price is calculated at the grant price of RMB
5.73/share plus the bank deposit interest for the same period; A total of 120,000 restricted stocks which have been granted to
the 3 resigned employees but have not yet lifted the restrictions on sale are planned to be repurchased and cancelled, at a
repurchase price of RMB 5.73/share. A total of 1,433,340 restricted stocks were repurchased and cancelled by the Company.
Independent directors of the Company issued independent opinions and lawyers issued legal opinions.
On April 3, 2020, the Company held the second extraordinary general meeting of shareholders in 2020 to review and
approve the Proposal on Repurchase and Cancellation of Some Restricted Stocks, and agreed that the Company held a total
of 1,313,340 restricted stocks that failed to lift the restrictions on sales in Phase II of 110 incentive objects at a repurchase
price of RMB 6.01/share; It is agreed that the Company will repurchase and cancel a total of 120,000 restricted stocks that
have been granted to the 3 resigned employees but have not yet lifted the restrictions on sale at a repurchase price of RMB
5.73/share, and a total of 1,433,340 restricted stocks will be repurchased and cancelled.
On June 8, 2020, the Company held the 30th meeting of the Seventh Board of Directors and the 21st meeting of the Seventh
Board of Supervisors. The Board of Directors deliberated and approved the Proposal on Repurchase and Cancellation of
Some Restricted Stocks, and proposed to repurchase and cancel 57,150 restricted stocks held by the 5 original incentive
objects who resigned for personal reasons at a repurchase price of RMB 5.73/share; It is proposed to repurchase and cancel
5,760 restricted stocks held by 1 retired original incentive object at the repurchase price of RMB 6.14/share. Independent
directors of the Company expressed their agreed independent opinions. The Board of Supervisors deliberated and approved
the Proposal on Repurchase and Cancellation of Some Restricted Stocks, verified the number of repurchased and cancelled
stocks and the list of incentive targets, and issued verification opinions, and lawyers issued legal opinions.
On June 29, 2020, the company held the 2019 Annual General Meeting of Shareholders to deliberate and approve the
Proposal on Repurchase and Cancellation of Some Restricted Stocks, and agreed to repurchase and cancel 57,150 restricted
stocks held by the 5 original incentive objects who resigned for personal reasons at a repurchase price of RMB 5.73/share; It
is agreed to repurchase and cancel 5,760 restricted stocks held by 1 retired original incentive object at the repurchase price of
RMB 6.14/share, and a total of 62,910 restricted stocks will be repurchased and cancelled.
2.Equity-settled share-based payment
Determination method of the fair value of equity instruments on the grant The closing price of the company's stock on
date grant date - grant price
On each balance sheet date of the waiting period,
it is determined based on the latest information
Determination basis of the number of vesting equity instruments such as the change in the number of people that
can be released from restrictions and the
completion of performance indicators
The reasons for the significant difference between the current estimate
and the previous estimate
Equity-settled share-based payment is included in the accumulated
--
amount of capital reserve
234
Total amount of fees confirmed by equity-settled share-based payments
--
in the current period
XII. Commitments
1. Significant commitments
As of December 31,2020,The company does not disclose the pension plan undisclosed matter should exist.
2. Contingency
As of December 31,2020,The company does not disclose the pension plan undisclosed matter should exist.
XIII. Events after balance sheet date
The Company has no events after the balance sheet date that should be disclosed.
XIV. Other significant events
1. Segment information
According to the Company's internal organizational structure, management requirements and internal
reporting system, the Company's business includes 4 reporting segments: polarizer, textile, property leasing
and trade. These reporting segments are determined based on the financial information required by the
Company's daily internal management. The management of the Group regularly evaluates the operating
results of these reporting segments, so as to decide to allocate resources to them and evaluate their
performance. Segment profit or loss, assets and liabilities are as follows:
Current period or
Polarizer otal
end of current period Property lease Textile Trade Offset
--
1,954,299,27 95,691,578.25 -1,529,492.13 2,108,964,687.8
Operating income 60,503,325.78
5.90
0
Including: revenue --
1,954,299,27 94,195,699.39 -- 2,108,964,687.8
from foreign 60,469,712.51
5.90
transaction 0
Revenue --
from inter-segment -- 1,495,878.86 33,613.27 -1,529,492.13 --
transactions
Including: revenue 1,954,299,275.90 --
86,707,358.16 -4,077,074.78
from main business 60,503,325.78 2,097,432,885.0
6
-- 1,814,298,395.0
Operating cost 1,737,374,562.38 28,134,125.79 49,877,951.65 -1,088,244.80
2
--
Including: main 1,737,374,562.38 21,928,436.25 49,877,951.65 -1,088,244.80 1,808,092,705.4
business cost
8
Operating profit 9,491,199.52 39,054,820.16 2,119,203.22 -257,812.90 -371,420.53 50,394,125.02
235
-1,964,319,763. 4,969,547,552.2
Total assets 3,676,840,413.21 3,190,112,708.3
38,262,097.35 28,781,153.62 74 3
9
878,156,778.18 177,919,940.25 20,735,649.08
Total indebtedness 19,444,715.13 -26,024,780.03 1,070,232,302.6
1
2. Government subsidy
Government subsidies included in deferred income are subsequently measured by the total amount
method
Listed
items
Amount carried
New carried Others forwar
subsidy forward to d into Asset-related/revenue-relat
Subsidy item 2019.12.31 2020.12.31
amount in profit or loss Change profit ed
the current in the current s or loss
period period in the
current
period
Amortization of
textile special funds Other
428,571.41 -- 142,857.16 -- 285,714.25 Related to assets
income
Amortization of --
subsidy funds for
industrialization Other
3,033,333.34 -- 1,733,333.34 Related to assets
1,300,000.00 income
items of TFT-LCD
polarizer 销
Amortization of --
subsidy funds for
narrow line (Line 5) Other
1,500,000.00 -- 500,000.00 1,000,000.00 Related to assets
of TFT-LCD income
polarizer phase I
project
Amortization for --
purchasing imported Other
501,926.58 -- 175,090.20 326,836.38 Related to assets
equipment and income
technical subsidies
Amortization of --
innovation and
Other
venture funds for 150,000.00 -- 50,000.00 100,000.00 Related to assets
income
TFT-LCD polarizer
phase I project
Amortization of --
innovation and
venture funds in Other
Shenzhen polarized 262,500.00 -- 50,000.00 212,500.00 Related to assets
income
materials and
technology
engineering
236
laboratory
Amortization of --
polarized materials
and technical Other
2,625,000.00 -- 500,000.00 2,125,000.00 Related to assets
engineering income
laboratory in
Shenzhen
Amortization of --
subsidy funds for Other
1,575,000.00 -- 300,000.00 1,275,000.00 Related to assets
technical center income
construction
Amortization of --
subsidy funds for
Other
introducing 43,164.31 -- 14,388.10 28,776.21 Related to assets
income
advanced
technology
Amortization of --
local supporting
Other
funds for TFT-LCD 12,750,000.00 -- Related to assets
1,500,000.00 11,250,000.00 income
polarizer phase II
project (Line 6)
Amortization of --
innovation and
venture funds for Other
425,000.00 -- 50,000.00 375,000.00 Related to assets
TFT-LCD polarizer income
phase II project
(Line 6)
Amortization of --
subsidy funds for
key technology
Other
R&D equipment of 3,625,000.00 -- 500,000.00 3,125,000.00 Related to assets
income
optical
compensation film
for polarizer
Amortization of --
national subsidy for
Other
TFT-LCD polarizer 8,500,000.00 -- 7,500,000.00 Related to assets
1,000,000.00 income
phase II project
(Line 6)
Amortization of --
funds for pilot
projects of regional
agglomeration
Other
development of 21,250,000.00 -- Related to assets
2,500,000.00 18,750,000.00 income
strategic emerging
industries in
Guangdong
Province
Amortization of --
subsidies for new
production lines and Other
purchased 25,500,000.00 -- Related to assets
3,000,000.00 22,500,000.00 income
equipment in the
phase II project of
polarizer for
237
TFT-LCD
Amortization of --
subsidy funds for Other
56,815.63 -- 29,642.93 27,172.70 Related to assets
energy-saving income
transformation
Amortization of --
subsidy funds for Other
1,004,752.95 -- 142,255.72 862,497.23 Related to assets
old elevator income
renovation
Investment funds in --
the central budget of
polarization
Other
industrialization 30,000,000.00 -- Related to assets
30,000,000.00 income
project for
super-large TV
(Line 7)
R&D subsidy for --
key technologies of
Other
polarizers for 2,000,000.00 -- 2,000,000.00 Related to assets
income
ultra-thin IPS smart
phone terminals
Shenzhen Municipal --
Finance Committee
(R&D key
technologies of
Other
high-performance 5,000,000.00 1,000,000.0 6,000,000.00 Related to assets
income
polarizers for 0
C2018N007
large-size display
panels)
Special fund subsidy --
for improving
atmospheric
Other
environmental 1,033,507.00 -- 442,931.57 590,575.43 Related to assets
income
quality in Shenzhen
- SAPO
Photoelectric
Special fund
subsidies for
improving the
quality of Other
-- 520,000.00 26,000.00 -- 494,000.00 Related to assets
atmospheric income
environment in
Shenzhen-Meibainia
n
Subsidy for special
technical
transformation
Other
investment project -- 11,083.33 -- 178,916.67 Related to assets
190,000.00 income
of multiplication by
technical
transformation
121,264,571.2 1,710,000.0 12,234,249.0 110,740,322.2
Total --
2 0 1 1
238
3．Other important matters affecting investors' decision-making
(1) Arbitration between the company and Jinjiang Group
At the end of 2016, the Company introduced Jinjiang Group as a strategic investor for SAPO
Photoelectric' capital increase and share expansion. The Company, SAPO Photoelectric, Jinjiang Group and
the limited partnership named Hangzhou Jinhang Equity Investment Fund Partnership (Limited Partnership)
(hereinafter referred to as "Jinhang Investment") established by the Jinjiang Group as actual controllers,
signed the Cooperation Agreement. Jinjiang Group made a commitment to the performance of SAPO
Photoelectric from 2017 to 2019 and Jinjiang Group undertook to make up the difference between the
promised net profit and the actual profit in cash if the promised income and net profit were not fulfilled. In
2018 and 2019, Jinjiang Group did not complete its performance commitments as agreed. The performance
compensation company in 2018 has been received in 2019 as agreed, totaling RMB 197,268,700; As for the
performance compensation in 2019, Jinjiang Group believes that it cannot dominate the operation and
management of SAPO Photoelectric, which leads to the failure of the contractual purpose of the
Cooperation Agreement, and applies to Shenzhen International Arbitration Court for arbitration. Request:
① To award the applicant to be exempted from fulfilling the 2019 annual performance compensation
obligation stipulated in Article 3.1 of the Cooperation Agreement, that is, the applicant no longer pays
RMB 244,783,800 to SAPO Photoelectric; ② If the arbitration tribunal finds that it will not support the
first arbitration request mentioned above, then, request an award to rescind Article 3.1 of the Cooperation
Agreement; The respondent shall compensate the applicant RMB 197,268,700 paid by the applicant in
2018; And the respondent shall compensate the applicant for the profit loss of RMB 202,340,700 that it
could have obtained; ③ To award the respondent to bear the arbitration fee and the actual expenses of the
arbitration tribunal. As of the reporting date, the above arbitration has not yet been finalized.
(2) Undelivered property of Shenzhen Xieli Automobile Enterprise Co., Ltd. (hereinafter referred to as
"Xieli Automobile")
Shenzhen Xieli Automobile Co., Ltd. (hereinafter referred to as "Shenzhen Xieli") is a Sino-foreign
joint venture invested by the Company and Hong Kong Xieli Maintenance Co., Ltd in 1981, with a
registered capital of RMB 3.12 million, and 50% equity held by the Company. The business term of the
company ended in 2008 and its business license was revoked in 2014. The main asset of the company is
real estate. In March 2020, the Industrial and Commercial license of Shenzhen Xieli was cancelled, but
how to dispose of three properties under its name needs to be resolved upon further negotiation between
shareholders of both parties.
XV. Notes s of main items in financial reports of parent company
1. Account receivable
（1）Aging disclosure
Aging 2020.12.31 2019.12.31
Within 1 year 1,538,316.00 550,453.73
Less：Bad debt provision 76,915.80 27,522.69
Total 1,461,400.20 522,931.04
（2）Disclosure by classification according to the bad debt accrual method
Types 2020.12.31 2019.12.31
239
Bad-debt Bad-debt
Book balance Book balance
provision provision
Book
Expecte Book value Expecte value
Proportion( d credit Proportion( d credit
Amount Amount Amount Amount
%) loss rate %) loss rate
(%) (%)
Bad debt
provision
is
accrued 1,538,316.0 76,915.8 1,461,400.2 550,453.7 27,522.6 522,931.0
100.00 5.00 100.00 5.00
accordin 0 0 0 3 9 4
g to
individua
l items
Bad debt provision is accrued according to portfoliosAccrual of bad debt provision by single item:：
2020.12.31 2019.12.31
Expected Expected
Bad-debt Bad-debt
Book balane credit loss rate Book balane credit loss rate
provision provision
(%) (%)
Within 1
1,538,316.00 76,915.80 5.00 550,453.73 27,522.69 5.00
year
(3) Bad debt provision accrued, recovered or reversed in the current period
Amount of bad-debt provision
2019.12.31 27,522.69
Adjustment amount for the first implementation of the New Income Standards --
2020.01.01 27,522.69
Current accrual 49,393.11
Withdrawal or reversal in current period --
2020.12.31 76,915.80
(4) There is no account receivable actually written off in the current period
(5) The top five units of the closing balance of accounts receivable collected by the arrears
The total amount of the top five accounts receivable collected by the Company according to the
arrearage party was 1,538,316.00 yuan, accounting for 100% of the total year-end balance of accounts
receivable, and all the top five arrears were rental of houses. The sum of the closing balance of the
corresponding provision for bad debts is 76915.80 yuan
(6)No account receivable which terminate the recognition owning to the transfer of the financial assets
(7)The amount of the assets and liabilities formed by the transfer and the continues involvement of
accounts receivable
240
2.Other receivale
Items 2020.12.31 2019.12.31
Interest receivable -- 7,329,228.31
Other receivavble 7,450,934.40 9,710,277.69
Total 7,450,934.40 17,039,506.00
(1) Interest receivable
1 Category of interest receivable
Items 2020.12.31 2019.12.31
Fixed deposit -- --
Structure deposit -- 7,329,228.31
Subtotal： -- 7,329,228.31
Less：Bad debt provisio -- --
Total -- 7,329,228.31
(2) Other receivable
1 Category of Other receivable
Aging 2020.12.31 2019.12.31
Within 1 year 5,011,410.31 5,143,593.73
1-2 years 2,410,316.25 3,828,819.36
2-3 years 328,819.35 1,830,359.77
3-4 years 454,759.77 1,810,047.30
4-5 years 1,800,000.00 --
Over 5 years 12,461,099.73 12,476,252.43
Subtotal 23,580,195.11 25,089,072.59
Less：Bad debt provision 16,129,260.71 15,378,794.90
Total 7,450,934.40 9,710,277.69
2 Other accounts receivable classified by the nature of accounts
2020.12.31 2019.12.31
Items
Book balance Book Balance
Export rebate 7,175,600.00 9,366,582.51
241
Unit account 16,369,395.10 15,678,175.33
Deposit 10,000.00 --
Other 25,200.01 44,314.75
Subtotal 23,580,195.11 25,089,072.59
Less：Bad debt provision 16,129,260.71 15,378,794.90
Total 7,450,934.40 9,710,277.69
3 Bad-debt provision
At the end of the period, bad debt provision in the first stage:
Types Book Balance Bad-debt provision Book value
Bad debt provision accrued by
8,468,948.79 1,018,014.39 7,450,934.4
aging portfol
Total 8,468,948.79 1,018,014.39 7,450,934.4
At the end of the period, the Company does not have interest receivable, dividend receivable and other
receivables in the second stage;
At the end of the period, bad debt provision in the third stage:
Types Book Balance Bad-debt provision Book value Reason
Bad debt provision is accrued Long aging and low possibility
15,111,246.32 15,111,246.32 --
according to individual items of recovery
Total 15,111,246.32 15,111,246.32 --
On December 31, 2019, bad debt provisions are as follows:
Bad debt provision in the first stage:
Types Book Balance Bad-debt provision Book value
Bad debt accrued by aging
10,996,121.64 1,285,843.95 9,710,277.69
portfolios
Total 10,996,121.64 1,285,843.95 9,710,277.69
As of December 31, 2019, the Company has no interest receivable, dividend receivable and other
receivables in the second stage.
As of December 31, 2019,Bad debt provision in the third stage:
Types Book Balance Bad-debt provision Book value Reason
Bad debt provision is accrued Long aging and low possibility of
14,092,950.95 14,092,950.95 --
according to individual items recovery
Total 14,092,950.95 14,092,950.95 --
242
④ Bad debt provision accrued, recovered or reversed in the current period
Stage 1 Stage 2 Stage 3
Expected credit
Bad debt provision Expected credit Expected credit loss losses for the entire Total
losses over the over life (no credit duration (credit
next 12 months impairment) impairment
occurred)
Balance as at December 31,2019 1,285,843.95 -- 14,092,950.95 15,378,794.90
Balance as at December 31,2019In -- -- -- --
current
——Transfer to stage II -- -- -- --
——Transfer to stage III -181,045.68 -- 181,045.68 --
——Transfer to stage II -- -- -- --
——Transfer to stage I -- -- -- --
Provision in the current period -- -- 837,249.69 837,249.69
Turn back in the current period 86,783.88 -- -- 86,783.88
Reseller in the current period -- -- -- --
Write - off in the current period -- -- -- --
Other -- -- -- --
Balance as at December 31,2020 1,018,014.39 -- 15,111,246.32 16,129,260.71
⑤Other account receivables actually cancel after write-off :Nil
⑥Top 5 of the closing balance of the other accounts receivable collected according to the arrears party
Portion in total Bad debt
Name Nature Year-end balance Age other provision of
receivables(%) year-end
balance
Top 1 Unit account 11,389,044.60 Over 5 years 48.30% 11,389,044.60
Top 2 Unit account 7,175,600.00 Within 1 year，1-2 years 30.43% --
Top 3 Unit account 1,800,000.00 4-5 years 7.63% 1,800,000.00
Top 4 Unit account 1,100,000.00 Within 1 year 4.66% 55,000.00
Top 5 Deposit 1,018,295.37 1-2 year，2-3 years，3-4 4.32% 349,497.32
years
Total 22,482,939.97 95.35% 13,593,541.92
⑦ No Accounts receivable involved with government subsidies
243
⑧No other account receivable which terminate the recognition owning to the transfer of the financial
assets
⑨ The amount of the assets and liabilities formed by the no transfer and the continues involvement of
other accounts receivable
3.Long-term equity investment
2020.12.31 2019.12.31
Items
Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Investment to
the 1,972,630,835.39 16,582,629.30 1,956,048,206.09 1,966,803,211.46 16,582,629.30 1,950,220,582.16
subsidiary
Investment to
138,703,188.31 138,703,188.31 139,721,906.46 139,721,906.46
joint ventures
Investment to
associated 9,225,948.92 9,225,948.92 12,488,023.26 12,488,023.26
enterprises
Total 2,120,559,972.62 16,582,629.30 2,103,977,343.32 2,119,013,141.18 16,582,629.30 2,102,430,511.88
（1）Investment to the subsidiary
Withdrawn
impairment Closing
provision balance of
Name 2019.12.31 Increase Decrease 2020.12.31 impairment
in the
reporting provision
period
SAPO Photoelectric 1,924,663,070.03 1,924,663,070.03 14,415,288.09
Shenzhen Lisi
Industrial
8,073,388.25 8,073,388.25
Development Co.,
Ltd.
Shenzhen Beauty
Century Garment 16,864,215.55 16,864,215.55 2,167,341.21
Co., Ltd.
Shenzhen Huaqiang
15,489,351.08 15,489,351.08
Hotel
244
Shenfang Property
Management Co., 1,713,186.55 1,713,186.55
Ltd.
Shenfang Sungang
Property
5,827,623.93 5,827,623.93
Management Co.,
Ltd.
Total 1,966,803,211.46 5,827,623.93 1,972,630,835.39 16,582,629.30
（2）Investment to joint ventures and associated enterprises
Increase /decrease in reporting period
Clos
Ot Decl ing
he arati With bala
Decr r on draw nce
Add ease Adjustment eq of n of
Name 2019.12.31 2020.12.31
inve d Gain/loss of of other uit cash impa Ot impa
stme inve Investment comprehensi y divi irme her irme
nt stme ve income ch dend nt nt
nt an s or prov prov
ge profi ision ision
s t
I. Joint ventures
Anhui Huapeng 10,098,833. 698,189.3
10,797,023.14
Textile Co.,Ltd. 77 7
Shenzhen
Guanhua 129,623,072 -1,716,907 127,906,165.1
Printing & .69 .52 7
Dyeing Co., Ltd.
139,721,906 -1,018,718 138,703,188.3
Subtotal
.46 .15 1
II. Associated
enterprises
Shenzhen
Changlianfa 2,450,676.1 255,586.2
2,706,262.38
Printing and 4 4
dyeing Company
Jordan Garnent -904,422.9
902,269.19 2,153.80
Factory 9
Yehui
9,135,077.9 -2,297,211 -318,180.0
International Co., 6,519,686.54
3 .37 2
Ltd.
12,488,023. -2,946,048 -316,026.2
Subtotal 9,225,948.92
26 .12 2
152,209,92
-3,964,766 -316,026.2 147,929,137.2
Total
.27 2 3
9.72
245
4.Business income, Business cost
（1）Business income, Business cost
Amount of current period Amount of previous period
Items
Income Cost Income Cost
Main business cost 57,649,817.53 7,019,203.76 71,861,233.77 8,340,126.19
Other business cost 3,647,070.68 3,647,070.68 51,724,519.33 52,314,425.79
Total 61,296,888.21 10,666,274.44 123,585,753.10 60,654,551.98
（2）Main business（Industry）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Property rental 57,649,817.53 7,019,203.76 71,861,233.77 8,340,126.19
（3）Main business（Production）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Property rental 57,649,817.53 7,019,203.76 71,861,233.77 8,340,126.19
（4）Main Business（Area）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Shenzhen 57,649,817.53 7,019,203.76 71,861,233.77 8,340,126.19
5.Investment income
Items Amount of current period Amount of previous period
Income from long-term equity investment measured by adopting
18,304,138.91 --
the Cost method
Income from long-term equity investment measured by adopting
-3,446,613.86 -7,404,083.27
the equity method
Investment income from the disposal of long-term equity
-- 55,481,817.13
investment
Dividend income earned during investment holdings in other equity
1,995,042.32 1,558,400.13
instruments
Structured deposit interest 14,919,678.58 18,417,333.36
Net monetary gains 3,884,233.70 --
Total 35,656,479.65 68,053,467.35
XVI. Supplement information
1. Particulars about current non-recurring gains and loss
Items Amount Notes
Non-current asset disposal gain/loss 273,229.58
Govemment subsidy recognized in current gain and Mainly due to recognize
other income from
loss(excluding those closely related to the Company’s 29,506,252.69
government subsidies related
business and granted under the state’s policies)
to the main business.
Other non-business income and expenditures other than
1,310,556.26
the above
Net amount of non-operating income and expense
--
except the aforesaid items
Other non-recurring Gains/loss items 31,090,038.53
Less：Income tax impact on non-current gains & losse 53,313.37
Net non-current gains & losses 31,036,725.16
Less ： Net impact of non-current gains & losses
11,853,336.46
attributable to minority shareholders (after tax)
Non-current gains & losses attributable to common
19,183,388.70
shareholders of the company
2. Return on net asset and earnings per share
Earnings per share
Weighted average
Profit of report period Basic earnings per Diluted earnings
returns equity(%)
per
share(RMB/share）
share(RMB/share)
Net profit attributable to the Common stock
1.36 0.07 0.07
shareholders of Company.
Net profit attributable to the Common stock
shareholders of Company after deducting of 0.66 0.04 0.04
non-recurring gain/loss.
Shenzhen Textile (Holdings) Co., Ltd.
March 12, 2021
