Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report Shenzhen Textile (Holdings) Co., Ltd.
2016 Annual Report
March 2017
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report I. Important Notice, Table of Contents and Definitions
The Board of Directors , Supervisory Committee, All Directors, Supervisors and Senior executives of the Company hereby guarantees that there are no misstatement, misleading representation or important omissions in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof.
Mr.Zhu Jun, The Company leader, Mr. Zhu Jun, Chief financial officer and the Mr.Mu Linying, the person in charge of the accounting department (the person in charge of the accounting )hereby confirm the authenticity and completeness of the financial report enclosed in this annual report.
All the directors attended the board meeting for reviewing the Annual Report.
Concerning the forward-looking statements with future planning involvedin the Report, they do not constitute a substantial commitment for investors, investors should be cautious with investment risks .
The company to remind the majority ofinvestors，Securities Time, China Securities Journal, Securities Daily, Shanghai Securities News , Hongkong Commercial Daily and JuchaoWebsit（ehttp://www.cninfo.com.cn） are the media for information disclosure appointed by the Company, all information under the name of the Company disclosed on the above said media shall prevail, and investors are advised to exercise caution of investment risks. The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. This Report has been prepared in both Chinese and English. In case of any discrepancy, the Chinese version shall prevail.
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report Table of Contents
I.Important Notice, Table of contents and Definitions
II. Basic Information of the Company and Financial index
III. Outline of Company Business
IV.Management’s Discussion and Analysis
V. Important Events
VI. Change of share capital and shareholding of Principal Shareholders
VII. Situation of the Preferred Shares
VIII. Information about Directors, Supervisors and Senior Executives
IX. Administrative structure
X. Corporate Bond
XI. Financial Report
XII. Documents available for inspection
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report Definition
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|-|-|-|
||Refers||
|Terms to be defined||Definition|
||to||
||Refers||
|Company/The Company/ Shen Textile||Shenzhen Textile (Holdings) Co., Ltd|
||to||
||Refers||
|Articles of Association||Articles of Association of Shenzhen Textile (Holdings) Co., Ltd|
||to||
|Actual controller / National Assets Regulatory|||
||Refers|National Assets Regulatory Commission of Shenzhen Municipal People's|
|Commission of Shenzhen Municipal People's|||
||to|Government|
|Government|||
|The Controlling shareholder/ Shenzhen|Refers||
|||Shenzhen Investment Holding Co., Ltd.|
|Investment Holding Co., Ltd.|to||
||Refers||
|Shenchao Technology||Shenzhen Shenchao Technology Investment Co., Ltd.|
||to||
||Refers||
|Shengbo Optoelectronic||Shenzhen Shengbo Optoelectronic Technology Co., Ltd.|
||to||
||Refers||
|Jinjiang Group||Hangzhou Jinjiang Group Co., Ltd.|
||to||
||Refers||
|Jinhang Investment||Hangzhou Jinhang Equity Investment fund Partnership( LP)|
||to||
||Refers||
|Jinhang Investment||Hangzhou Jinhang Investment Fund Partnership（LP）|
||to||
||Refers||
|TCL Group||TCL Group Co., Ltd.|
||to||
||Refers||
|“CSRC”||China Securities Regulatory Commission|
||to||
||Refers||
|Company Law||Company Law of the People’s Republic of China|
||to||
||Refers||
|Securities Law||Securities Law of the People’s Republic of China|
||to||
||Refers||
|The Report||2016 Annual Report|
||to||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report II. Basic Information of the Company and Financial index
Ⅰ.Company Information
|||||
|-|-|-|-|
|Stock abbreviation|Shen Textile A ,Shen Textile B|Stock code：|000045、200045|
|Stock exchange for listing：|Shenzhen Stock Exchange|||
|Name in Chinese|深圳市纺织(集团)股份有限公司|||
|Chinese abbreviation (If any)|深纺织|||
|English name (If any)|SHENZHEN TEXTILE （HOLDINGS） CO.,LTD|||
|English abbreviation (If any)|STHC|||
|Legal Representative|Zhu Jun|||
|Registered address|6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen|||
|Postal code of the Registered||||
||518031|||
|Address||||
|Office Address|6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen|||
|Postal code of the office||||
||518031|||
|address||||
|Internet Web Site|http://www.chinasthc.com|||
|E-mail|szfzjt@chinasthc.com|||

Ⅱ.Contact person and contact manner
||||
|-|-|-|
||Board secretary|Securities affairs Representative|
|Name|Jiang Peng|Mo Xiayun|
||6/F, Shenfang Building, No.3 Huaqiang|6/F, Shenfang Building, No.3 Huaqiang|
|Contact address|||
||North Road, Futian District, Shenzhen|North Road, Futian District, Shenzhen|
|Tel|0755-83776043|0755-83776043|
|Fax|0755-83776139|0755-83776139|
|E-mail|jiangp@chinasthc.com|moxy@chinasthc.com|

Ⅲ. Information disclosure and placed
|||
|-|-|
|Newspapers selected by the Company for information|Securities Times, China Securities, Shanghai Securities Daily ,Securities|
|disclosure|Daily and Hongkong Commercial Daily.|
|Internet website designated by CSRC for publishing||
||http://www.cninfo.com.cn|
|the Annual report of the Company||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||
|-|-|
|The place where the Annual report is prepared and||
||Secretarial office of the Board|
|placed||

Ⅳ.Changes in Registration
|||
|-|-|
|Organization Code|19217374-9|
||In July 2012, The business scope of the company is changed to "production, textiles|
||processing, knitwear, clothing, upholstery fabrics, belts, trademark bands, handicrafts|
||(without restrictions); general merchandise, the special equipment of the textile|
|Changes in principal business activities|industry, textile equipment and accessories, instruments, standard parts, raw textile|
|since listing (if any)|materials, dyes, electronic products, chemical products, mechanical and electrical|
||equipment, light industrial products, office supplies and domestic trade (excluding the|
||franchise, the control and the monopoly of goods) ; operation of import and export|
||business." after approval of Shenzhen Market Supervisory Authority .|
||In October 2004,In accordance with the Decision on Establishing Shenzhen Investment|
||Holdings Co., Ltd. issued by State-owned Assets Administration Committee of|
||Shenzhen Municipal People's Government (Shen Guo Zi Wei (2004) No. 223|
|Changes is the controlling shareholder in||
||Document), Shenzhen Investment Management Co., Ltd., the controlling shareholder|
|the past (is any)||
||of the Company, and Shenzhen Construction Holding Company and Shenzhen|
||Commerce and Trade Holding Company merged into Shenzhen Investment Holdings|
||Co., Ltd.|

Ⅴ. Other Relevant Information
CPAs engaged
|||
|-|-|
|Name of the CPAs|Peking Certified Public Accountants（Special Geneaal Partnership）|
|Office address：|11/F, Zhongtang Building , No.110, Xihimen Street , Beijing|
|Names of the Certified Public||
||Li Yong, Lan Tao|
|Accountants as the signatiries||

The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
□ Applicable√Not applicable
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
□ Applicable√ Not applicable
VI.Summary of Accounting data and Financial index
May the Company make retroactive adjustment or restatement of the accounting data of the previous years due to change of the accounting policy and correction of accounting errors.
□ Yes√ No
|||||
|-|-|-|-|
|||Changed over last year||
|2016|2015||2014|
|||（％）||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|Operating income（RMB）|1,198,200,216.42|1,226,746,791.62|-2.33%|1,210,952,548.57|
|Net profit attributable to the|-87,270,604.54|8,497,227.40|||
|shareholders of the listed company|||-1,127.05%|-113,591,328.26|
|（RMB）|||||
|Net profit after deducting of|||||
|non-recurring gain/loss attributable|||||
||-102,767,648.41|-92,259,797.61|-11.39%|-148,855,363.05|
|to the shareholders of listed|||||
|company（RMB）|||||
|Cash flow generated by business|-55,264,465.84|39,584,500.37|||
||||-239.61%|-48,701,494.05|
|operation, net（RMB）|||||
|Basic earning per|-0.17|0.02|||
||||-950.00%|-0.22|
|share(RMB/Share)|||||
|Diluted gains per|-0.17|0.02|||
||||-950.00%|-0.22|
|share(RMB/Share)(RMB/Share)|||||
|Net asset earning ratio（%）|-4.10%|0.39%|-4.49%|-5.06%|
|||End of|Changed over last year||
||End of 2016|||End of 2014|
|||2015|（％）||
|Gross assets（RMB）|4,119,586,266.47|2,969,394,978.70|38.73%|2,884,531,917.28|
|Net assets attributable to|2,339,554,176.31|2,174,569,545.55|||
|shareholders of the listed company|||7.59%|2,196,249,248.26|
|（RMB）|||||

VII.The differences between domestic and international accounting standards
1．Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed in the financial reports of differences in net income and net assets.
□Applicable□√ Not applicable
Nil
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards.
□ Applicable√Not applicable
Nil
VIII.Main Financial Index by Quarters
In RMB
|||||
|-|-|-|-|
|First quarter|Second quarter|Third quarter|Fourth quarter|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|Operating income|262,310,373.65|289,847,211.91|305,710,856.98|340,331,773.88|
|Net profit attributable to the|||||
||-10,246,461.60|-19,851,389.80|-22,331,061.71|-34,841,691.43|
|shareholders of the listed company|||||
|Net profit after deducting of|||||
|non-recurring gain/loss attributable|||||
||-11,444,624.15|-20,934,054.20|-28,728,256.10|-41,660,713.97|
|to the shareholders of listed|||||
|company|||||
|Net Cash flow generated by|||||
||-23,635,239.84|-15,680,955.50|-9,241,580.15|-6,706,690.35|
|business operation|||||

Whether significant variances exist between the above financial index or the index with its sum and the financial index of the quarterly report as well as semi-annual report index disclosed by the Company.
□ Yes√No
IX.Items and amount of non-current gains and losses
√Applicable□Not applicable
In RMB
||||||
|-|-|-|-|-|
|Items|Amount (2016)|Amount (2015)|Amount (2014)|Notes|
|Non-current asset disposal|-138,610.37||||
|gain/loss(including the write-off part for||-25,108.97|52,281.62||
|which assets impairment provision is made)|||||
|Govemment subsidy recognized in|9,578,484.46||||
|currentgain and loss(excluding those closely|||||
|||21,420,940.38|16,688,387.98||
|related to the Company’s business and|||||
|granted under the state’s policies)|||||
|Gain arising from investment costs|||||
|for acquisition of subsidiaries, associates|||||
|and joint-ventures by the corporation being|||||
||||3,897,638.73||
|less than its share of fair value of|||||
|identifiable net assets of the investees on|||||
|acquisition|||||
|Gain/loss from change of fair value of|||||
|transactional financial asset and liabilities,|||||
|and investment gains from disposal of|||||
|transactional financial assets and liabilities||88,006,690.51|16,896,190.19||
|and sellable financial assets other than valid|||||
|period value instruments related to the|||||
|Company’s common businesses.|||||
|Switch back of provision for depreciation of|634,628.72||||
|||790,775.00|1,655,886.25||
|account receivable which was singly taken|||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|depreciation test.|||||
|Other non-operating income and expenditure|5,493,881.12||||
|||2,465,842.60|437,923.44||
|except for the aforementioned items|||||
|Less: Amount of influence of income tax|71,340.06|11,902,114.51|4,364,273.42||
|Total|15,497,043.87|100,757,025.01|35,264,034.79|--|

For theCompany’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Compaines Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason.
□ Applicable√ Not applicable
None of Non-recurring gain /loss items recorgnized as recurring gain /loss/itesm as defined by the information disclosure explanatory Announcement No.1- Non–recurring gain/loss in the report period.
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report III. Outline of Company Business
I.Main Business the Company is Engaged in During the Report Period
Whether the company needs to comply with the disclosure requirements of the particular industry
No
In 2016, 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 Polarizer is the upstream raw material for liquid crystal panel, also is one of the key materials for flat panel display industry, and it has been widely used in smart phones, liquid crystal display panel of tablet computers and TVs and so forth, OLED display panel, instrumentation, sun glasses, filter of photographic equipments and so on many fields. Thecompany’s five existing production lines of polarizer with mass production have products covered the fields such as TN, STN, TFT, OLED, 3D, dye plate, optical film for touch screen, and the products mainly used in TV, NB, navigator, monitor, automotive, industrial control, instrumentation, smart phones, wearable devices, 3D glasses, sunglasses and so forth products, becoming the qualified supplier to Huaxing Optoelectronic, BOE, IVO, Shenchao Optoelectronic ,LGD and so forth panel companies.
During the reporting period, firstly, the company effectively improved the production capacity of polarizer through speed-up and capacity-lift of the production line; secondly, the company promoted the second-phase construction of No.6 line project according to the plan and completed the plant decoration and purification and the related projects, as well as the host equipment has been successively arrived in the port while being installed; thirdly; in order to further enhance the company's polarizer production technology and management level, the company launched the introduction of strategic investors for Shenbo Optoelectronic, resulted in that Jinhang Investment - which was set up by Hangzhou Jinjiang Group Co., Ltd and Hangzhou Jinjiang Group Co., Ltd is the actual controller- invested RMB 1352.64 million in cash to subscribe40% stake of Shengbo Optoelectronics. On the basis of the Capital Increase Agreement signed by the company and Jinjiang Group andJinhang Investment, they also signed the Cooperative Agreement which reached a consensus in connection to the future development and management of Shengbo Optoelectronics.
Upon the dual effects of the product line construction and the enormous downstream market, the core of the global display industry has speeded up the transfer to the Mainland China, thus Mainland China has become the investment hotspots for the global panel display industry. The panel display industry is one of the most important development projects listed in Medium and Long Term Development Outline for Information Industry form 2006 to 2020, and is also an industry encouraged by the country. In the future, the company will, upon more than 20 years of operational experiences in the industry and the regional advantages, fully utilize the resource advantages of state-owned enterprise and the mechanism advantages of private enterprise. Based on the all-round improvement of the management level and profitability and production technology, the company will tap into the platform of listed company and the existing industries to integrate the industrial resources of polarizer industry and other related optical film industry both in China and Taiwan area to boost the development of Shengbo Optoelectronics and become perfect, thus to construct the Industrial Cluster of optical film in Shenzhen.
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual ReportⅡ.Major Changes in Main Assets
1.Major Changes in Main Assets
|||
|-|-|
|Main assets|Major changes|
|Equity assets|No major chages|
|Fixed assets|No major chages|
|Intangible assets|No major chages|
||Construction in process at the end of the reporting period increased by RMB 44.0006|
||million compared to the beginning of the period, an increase of 58.05%, which was|
|Construction in process||
||mainly due to the increase of investment for the second-phase project of No.6 line of|
||TFT-LCD polarizer.|
||The monetary funds at the end of the reporting period increased by RMB 181.542|
||million, an increase of 24.13% compared to the beginning of the period, which was|
|Monetary funds||
||mainly due to capital increase by the strategic investor as Shenbo Optoelectronic|
||introduced the strategic investor in the current reporting period.|
||The notes receivable at the end of the reporting period increased by RMB 23.0666|
||million, an increase of 122.42% compared to the beginning of the period, which was|
|Bill receivable||
||mainly due to the increase of using notes for goods payment by Shengbo|
||Optoelectronics.|
||The interest receivable at the end of the reporting period decreased by RMB 23.646|
||million, a decrease of 78.04% compared to the beginning of the period, which was|
|Interest receivable||
||mainly due to the decrease of the interest receivable of structured deposits at the end of|
||the period.|
||Other receivables at the end of the reporting period increased by RMB 22.1389 million,|
|Other account receivable|an increase of 49.05% compared to the beginning of the period, which was mainly due to|
||the increase of guarantee deposits for customs.|
||Other current assets at the end of the reporting period increased by RMB 914.4895|
||million, an increase of 178.07% compared to the beginning of the period, which was|
|Other current assets||
||mainly due to Shengbo Optoelectronics' use of self-owned funds to invest the financing|
||products.|
||The investment real estate at the end of the reporting period increased by RMB 44.9345|
||million, an increase of 33.44% compared to the beginning of the period, which was|
|Real estate investment||
||mainly due to Guanhua building that was completed in the current period turned into|
||investment real estate.|

2. Main Conditions of Overseas Assets
□ Applicable√Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report III.Analysis On core Competitiveness
Whether the company needs to comply with the disclosure requirements of the particular industry
No
（1）Technology advantages. Shengbo Optoelectronic is the first domestic national high-tech company which entered into theR&D and production of the polarizer, and it has more than 20 years of operational experience of the polarizerindustry，The products include monochrome TN type, STN type, IPS-TFT type, VA-TFT type, vehicle-mounted industrial-control display, flexible display, polarizer for 3D stereo and sunglasses, optical film for touch screen etc., and the company possesses the proprietary whole-set technology of polarizer which can satisfy the customers' needs and owns various kinds of independent intellectual property rights of new products. By the end of the reporting period, the company applied for 69 invention patents and was authorized with 52 items, among which: 15 domestic invention patents(7 patents got authorized); 48 domestic utility model patents(42 patents got authorized); 1 overseas invention patent(0 patents got authorized); 5 overseas utility model patents(3 patents got authorized). There were 3 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 theR&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 the management team and the senior technical team with strong technical ability, enduring cooperative spirit, rich experience and international vision on the polarizer. The company had engaged overseas technical personnel who have great experiences on advanced polarizer production and established the technology management team with its own technical team and complemented by engaging foreign technical personnel, and via the combination of independent innovation and technology providing by engaged foreign personnel to accumulate technology, Upon Talents Advantages, the company has established and accumulated the first-mover advantages in terms of brand, technology, operation and management. Through the perfection of assessment system and remuneration system, the company centers on the incentive remuneration toR&D staffs and technical staffs and gives a full play to the role of talents in the innovation-driven.
（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. As to the market development, centered in the production material control, extended to both ends to link the procurement and the market, established a rapid response mechanism, Fully utilize the advantages of localization, adopts the customer development strategy of "method of prescription", and strengthens the point-to-point professional services with the guidance of technology, thus to lay a solid foundation for the product marketing.
(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, thus the product quality has larger advantages compared with other similar-kind domestic companies. The company introduced a modern quality management system, with the products passed the ISO9001 quality management system, ISO14001 environmental management system, OHSAS18000, QCO80000 system certification and SGS testing, was in line with the ROHS environmental protection requirements, and with standardized processes of raw materials supplying,
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report production-manufacturing, marketing, sales and customer services for ensuring the stability of the product quality. 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. Shengbo Optoelectronic 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 foreigncompany’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, the company fully taps into the mechanism advantages of private enterprise, specifies the job responsibilities and inspires employees by linking with the company's actual business profit, thus to realize the deep integration of the corporate value and the employees' values, further invigorating the new vitality of business operation and development.
（6）Policy advantages. The polarizer industry, which belongs to the industries encouraged by the Chinese government, is included in the strategic emerging industries for boosting the future economic and social development. Thecompany’s polarizer project won several times of national and provincial policy-support and funds support, and as the key raw material project of the upstream industry of new display devices, it enjoys the preferential policies of exemption for import duties on the self-used production materials which cannot be manufactured in China. Meanwhile, the company strengthened the management on suppliers, perfected the overall procurement strategy, strictly controlled the number of suppliers while drawing in competition mechanism, actively followed-up the substitution work for many kinds of raw materials and further reduced the production costs to improve the competitiveness of products.
IV.Management’s Discussion and Analysis
Ⅰ.General
In 2016 , by the sharp appreciation of the yen, raw material prices, as well as major asset restructuring and other unfavorable factors, polarizing film production and management challenges. Company management unified thinking, always adhere to the transformation and development, to promote mixed ownership reform, Shengbo photoelectric level in the successful introduction of private capital, improve competitiveness. To promote the construction of polarized film project to improve the main business at the same time to ensure that the property leasing income continued to grow, maintaining a stable and orderly development of the work situation.
In the year of 2016, the Company realized operating income of RMB 1198.2002 million down2.33% from the same period of last year. The total profit loss was RMB 77.9865 million, down280.73% from the same period of last year. The net profit attributable to the shareholders of the listed company was RMB 87.2706 million Year decline of1,127.05%. The main reason is the sharp appreciation of the yen, the company polarizer business raw
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report material costs and exchange losses increased significantly over the same period last year, polarizer business losses increased, while the sale of available-for-sale financial assets to obtain investment.
Review of the company's key works carried out in 2016 as follows:
(a) New achievements obtained in the development of the polarizer business
In 2016, firstly, the company effectively improved the production capacity of polarizer through speed-up and capacity-lift of the production line, meanwhile, the company fully utilized the AOI defect recognition system to strengthen the real-time monitoring and response speed, thus to improve the product quality; secondly, the company actively promoted the client-import work for new products and realized multi-species, multi-client diversified supply pattern, as well as made new breakthroughs in the overseas customers; thirdly, the company carried out theR&D work focused on a variety of new products with high added values especially in IPS ultrathin polarizer and OLED display polarizer, and the company enriched the products types, actively followed-up the substitution work of various raw materials, and reduced the production costs; fourthly, the company actively worked for gaining the industrial policy support, and the company totally got the policy-support funds of RMB 31.29 million and got five years extension of duty-free for imported polarizer raw materials (from January 1, 2016 to December 31, 2020), as well as Shengbo Optoelectronics again passed the national high-tech enterprise recognition; fifthly, the company promoted the construction of No.6 line project according to the plan and completed the plant decoration and purification projects, as well as the host equipment has been successively arrived in the port while being installed.
At the same time, the company increased the efforts for R& D on independent intellectual property rights. During the reporting period, the company totally applied 12 patents which were being accepted (5 invention patents, 5 domestic utility model patents and 2 overseas utility model patents), and the company was authorized with 14 patents(3 invention patents, 10 domestic utility model patents and 1 overseas utility model patents). As of December 31, 2016, the company totally applied 69 patents and was authorized with 52 patents, among which: there were 15 domestic invention patents ( 7 patents got authorization), 48 domestic utility model patents( 42 patents got authorization), 1 overseas invention patents ( o patents got authorization) and 5 overseas utility model patents ( 3 patents got authorization). The "Determination of Optical Compensation value for Polarizer" and the "Test Method for adhesion force of the optical thin-film coating for polarizer" that were developed and set up by the company will be officially implemented from May 1, 2017.
(b) Increasing growth of leasing revenue of property-type companies
In 2016, firstly, the company strengthened the service management of property-type enterprises, optimized the customer structure and strictly implemented the leasing revenue enhancement plan, and the rental price of new contracts continued to maintain a certain increase; secondly, the company fully utilized the opportunity arising from the integrated transformation of buildings in Huaqiang North Commercial Street and completed the facade renovation to enhance the image of the building, thus created conditions for the increasing enhancement on the business performance of the property operation; thirdly, completed the final acceptance of Guan Hua building and made the good preparation work for starting leasing.
(c) Constantly perfected the "13th Five-Year" strategic planning
In 2016, the company constantly demonstrated and perfected the central tasks, business planning objectives and key investment projects in the "13th Five-Year" planning, as well as specified the strategic goal of unswervingly developing the polarizer business. Furthermore, the company would continuously adjust and perfect the "13th Five-Year" strategic planning according to the business operation and development arrangements after Shengbo Optoelectronics' introduction of strategic investors.
(d) Drew in strategic investors and invigorated the mechanism to make a stronger business
In order to further enhance the company's production management level and profitability of polarizer
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report production and shape a stronger polarizer business, the company launched the work to introduce strategic investors for Shengbo Optoelectronics. After the audit, evaluation and the public listing, Jinjiang Group won the bid in Shenzhen United Property Rights Exchange, thus Jinhang Investment-which was set up by Hangzhou Jinjiang Group Co., Ltd and Hangzhou Jinjiang Group Co., Ltd is the actual controller-signed the Capital Increase Agreement with the company, and Hangzhou Jin Hang Equity invested RMB 1352.64 million in cash to subscribe40% stake of Shengbo Optoelectronics.
In order to further tap into the resource advantages of state-owned enterprise and the mechanism advantages of private enterprise, the company, on the basis of the signed Capital Increase Agreement, signed the Cooperative Agreement with Jinjiang Group, reached a consensus on the future management and development of Shengbo Optoelectronics. Upon the all-round improvement of the management level and profitability and production technology, the company will tap into the platform of listed company and the existing industries to integrate the industrial resources of polarizer industry and other related optical film industry both in China and Taiwan area to boost the development of Shengbo Optoelectronics and become perfect, thus to construct the Industrial Cluster of optical film in Shenzhen.
(e) Active cooperation in promoting the work of the major asset restructuring
According to the controlling shareholder's planning of arrangements of the major event, thecompany’s stock trading was suspended from August 4, 2016. During the suspension period, the company has engaged the independent financial adviser, the law firm, the accounting firm, the asset appraisal agency and other intermediaries to carry out the due-diligence, the audit and asset assessment, with active communications and demonstrations in connection to the major asset restructuring plan. Then the Framework Agreement was signed, and there were negotiations carried out for the employee placement and the transaction agreement, thus reached a preliminary intention.
In the demonstration process of the scheme, based on the changes in the current domestic securities market-environment and policies, it will face many uncertainties if continue to promote the major asset restructuring. Therefore, in order to effectively control the risks, after careful study, the company and TCL Group decided to terminate the major asset restructuring plan and signed the Agreement on the Termination of the Major Asset Restructuring, in which TCL Group agreed to compensate for the company's intermediary fees occurred in the period of the major asset restructuring and promised to continuously support the company's polarizer business. After making the application to Shenzhen Stock Exchange, the company's stock trading was resumed from December 19, 2016.
(f) Paying close attention to safety production and taking preventive measures to ensure the safe development of enterprises
In 2016, while well implementing the daily safety checks, the company strengthened the safety inspections during holidays. The company totally found out 203 hidden dangers to safety, a decrease of16.3% compared to 2015. At the same time, the company did a good job in cases of severe weathers such as typhoon and heavy rain, thus ensured the realization of the annual goal of safety production.
Ⅱ.Main business analysis
1. General
Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”.
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report 2. Revenue and cost
(1)Component of Business Income
In RMB
|||||||
|-|-|-|-|-|-|
||2016||2015|||
||||||Increase /decrease|
||Amount|Proportion|Amount|Proportion||
|Total operating|1,198,200,216.42||1,226,746,791.62|||
|||100%||100%|-2.33%|
|revenue||||||
|Industry||||||
|Domestic and||||||
||434,671,637.06|36.28%|429,639,819.01|35.02%|1.17%|
|foreign trade||||||
|Manufacturing|667,042,214.73|55.67%|700,600,503.65|57.11%|-4.79%|
|Lease and||||||
|Management of|92,357,025.54|7.71%|90,743,656.58|7.40%|1.78%|
|Property||||||
|Other|4,129,339.09|0.34%|5,762,812.38|0.47%|-28.35%|
|Products||||||
|Lease and||||||
|Management of|92,357,025.54|7.71%|90,743,656.58|7.40%|1.78%|
|Property||||||
|Textile|29,011,426.03|2.42%|25,205,284.70|2.05%|15.10%|
|Polarizer sheet|798,562,759.96|66.65%|803,719,803.87|65.52%|-0.64%|
|Trade|274,139,665.80|22.88%|301,315,234.09|24.56%|-9.02%|
|Other|4,129,339.09|0.34%|5,762,812.38|0.47%|-28.35%|
|Area||||||
|Domestic|740,115,218.94|61.77%|452,609,409.47|36.90%|63.52%|
|Overseas|458,084,997.48|38.23%|774,137,382.15|63.10%|-40.83%|

 (2)Situation of Industry, Product and District Occupying theCompany’s Business Income and Operating Profit with Profit over10%
√ Applicable□Not applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
No
In RMB
|||||||
|-|-|-|-|-|-|
||||Increase/decrease|Increase/decrease|Increase/decrease|
|||Gross profit|of revenue in the|of business cost|of gross profit|
|Turnover|Operation cost|||||
|||rate(%)|same period of|over the same|rate over the same|
||||the previous|period of|period of the|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
|||||year(%)|previous year (%)|previous year (%)|
|Industry|||||||
|Domestic and|||||||
||434,671,637.06|430,186,062.05|1.03%|1.17%|1.65%|-0.47%|
|foreign trade|||||||
|Manufacturing|667,042,214.73|667,847,188.15|-0.12%|-4.79%|-3.24%|-1.60%|
|Lease and|||||||
|Management of|92,357,025.54|25,973,066.77|71.88%|1.78%|10.64%|-2.25%|
|Property|||||||
|Products|||||||
|Lease and|||||||
|Management of|92,357,025.54|25,973,066.77|71.88%|1.78%|10.64%|-2.25%|
|Property|||||||
|Textile|29,011,426.03|29,754,708.71|-2.56%|15.10%|9.73%|5.02%|
|Polarizer sheet|798,562,759.96|796,982,437.95|0.20%|-0.64%|1.23%|-1.84%|
|Trade|274,139,665.80|271,296,103.54|1.04%|-9.02%|-9.27%|0.27%|
|Area|||||||
|Domestic|735,985,879.85|666,419,200.41|9.45%|64.71%|68.12%|-1.84%|
|Overseas|458,084,997.48|457,587,116.56|0.11%|-40.83%|-38.21%|-4.24%|

 Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on latest onyear’s scope of period-end.
□ Applicable√Not applicable
(3)Whether theCompany’s Physical Sales Income Exceeded Service Income
√ Yes □ No
|||||||
|-|-|-|-|-|-|
|Classification|Items|Unit|2016|2015|Changes|
|||(0000’ square||||
||Sales||866.71|846.98|2.33%|
|||meters)||||
|||(0000’ square||||
|Polarizer sheet|Production||824.1|877.05|-6.04%|
|||meters)||||
|||(0000’ square||||
||Stock||115.83|118.79|-2.49%|
|||meters)||||
||Sales|0000’ pieces|155|164|-5.49%|
|Knitted clothing|Production|0000’ pieces|164|167|-1.80%|
||Stock|0000’ pieces|63|54|16.67%|

Explanation for a year-on–year change of over30%
□ Applicable√Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report (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
||||||||
|-|-|-|-|-|-|-|
|||2016||2015|||
||||Proportion in the||Proportion in the|Increase/Decrease|
|Industry|Items||||||
|||Amount|operating costs|Amount|operating costs|(%)|
||||(%)||(%)||
|Domestic and|Polarizer sheet,||||||
|||430,186,062.05|38.13%|423,199,182.16|37.04%|1.65%|
|foreign trade|Textile||||||
||Polarizer sheet,||||||
|Manufacturing||667,847,188.15|59.20%|690,228,637.37|60.42%|-3.24%|
||Knitted clothing||||||
|Lease and|||||||
||Rental，||||||
|Management of||25,973,066.77|2.30%|23,475,132.76|2.06%|10.64%|
||Accommodation||||||
|Property|||||||

In RMB
||||||||
|-|-|-|-|-|-|-|
|||2016||2015|||
|Classification of|||||||
||||Proportion in||Proportion in|Increase/Decrease|
|products|Items||||||
|||Amount|operation|Amount|operation|(%)|
||||costs(%)||costs(%)||
|Polarizer sheet|Direct materials|606,603,651.00|53.77%|556,833,603.63|48.74%|8.94%|
|Polarizer sheet|Direct labor|32,196,752.56|2.85%|37,928,773.59|3.32%|-15.11%|
|Polarizer sheet|Power costs|33,374,274.35|2.96%|36,800,389.29|3.22%|-9.31%|
||Manufacturing||||||
|Polarizer sheet||124,568,647.78|11.04%|155,739,361.77|13.63%|-20.01%|
||costs||||||
|Knitted clothing|Direct materials|12,479,774.66|1.11%|9,355,247.57|0.82%|33.40%|
|Knitted clothing|Direct labor|6,486,194.20|0.57%|6,128,505.48|0.54%|5.84%|
|Knitted clothing|Power costs|1,121,172.68|0.10%|1,948,677.34|0.17%|-42.46%|
||Manufacturing||||||
|Knitted clothing||9,667,567.17|0.86%|9,685,069.84|0.85%|-0.18%|
||costs||||||

Notes
(6)Whether Changes Occurred in Consolidation Scope in the Report Period
□Yes√ No
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report (7)Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in theCompany’s Report Period
□ Applicable√Not applicable
(8)Situation of Main Customers and Main Supplier
Information of theCompany’s top 5 customers
|||
|-|-|
|Total sales amount to top 5 customers (RMB)|721,041,062.72|
|Proportion of sales to top 5 customers in the annual||
||60.17%|
|sales(%)||
|Proportion of the sales volume to the top five customers||
||0.00%|
|in the total sales to the related parties in the year||

Information of theCompany’s top 5 customers
|||||
|-|-|-|-|
|No|Name|Amount9RMB)|Proportion(%)|
|1|Customer 1|274,139,665.80|22.88%|
|2|Customer 2|242,573,489.49|20.24%|
|3|Customer 3|122,686,975.03|10.24%|
|4|Customer 4|41,355,531.72|3.45%|
|5|Customer 5|40,285,400.68|3.36%|
|Total|--|721,041,062.72|60.17%|

 Other Notes :
√Applicable□Not applicable
There exists no the association relations between the top five suppliers and the company, and the directors, supervisors and senior management, core technical staff, shareholders with holding of more than5% stocks, actual controllers and other affiliated parties do not have direct or indirect equity of the major suppliers.
Principal suppliers
|||
|-|-|
|Total purchase of top 5 Suppliers（RMB）|403,912,297.95|
|Percentage of total purchase of top 5 suppliers In total||
||56.48%|
|annual purchase(%)||
|Proportion of purchase amount from the top 5 suppliers in||
|the total purchase amount from the related parties in the|0.00%|
|year||

Information about the top 5 suppliers
|||||
|-|-|-|-|
|No|Name|Amount（RMB）|Proportion|
|1|Supplier 1|147,191,537.88|20.58%|
|2|Supplier 2|67,801,096.85|9.48%|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
|3|Supplier 3|67,640,154.40|9.46%|
|4|Supplier 4|65,211,956.46|9.12%|
|5|Supplier 5|56,067,552.36|7.84%|
|Total|--|403,912,297.95|56.48%|

 Notes
√Applicable□Not applicable
There exists no the association relations between the top five suppliers and the company, and the directors, supervisors and senior management, core technical staff, shareholders with holding of more than5% stocks, actual controllers and other affiliated parties do not have direct or indirect equity of the major suppliers.
3.Expenses
In RMB
||||||
|-|-|-|-|-|
||||Increase/Decrease(||
||2016|2015||Notes|
||||%)||
|Sale expenses|10,161,699.85|11,743,914.73||The main reason was that Shengbo|
|||||Optoelectronics stopped making a|
||||-13.47%||
|||||provision for customer service fees|
|||||leading to decrease in sales expenses.|
|Administration expenses|106,901,733.12|103,044,704.30|3.74%||
|Financial expenses|-1,678,136.65|-24,448,318.10||As the JPY exchange rate rise,|
||||93.14%|resulting in JPY denominated payables|
|||||increased foreign exchange losses.|

4.R& D Expenses
√Applicable □Not applicable
There were a total of 16R&D projects in the year, includingR&D of thin-type products, performance improvement, development of polarizer for large size TV, performance improvement of polarizer for OLED display and product development for vehicle-mounted industrial control. As of now, the company basically completed the development goals set up at the beginning of the year, and the products of the polarizer for large size TV, polarizer for OLED and products for vehicle-mounted industrial control had passed the client recognition and realized small batch supply. During the reporting period, a total of 63 new products (Counted by product type) successfully got sales orders, which further enriched the company's product-types, so as to better meet the various market demands.
Situation of Research and Development Input by the Company
|||||
|-|-|-|-|
||2016|2015|Increase/Decrease(%)|
|Number of Research and||||
||106|98|8.16%|
|Development persons (persons)||||
|Proportion of Research and|8.44%|7.66%|0.78%|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
|Development persons||||
|Amount of Research and||||
|Development Investment (In|39,308,762.42|30,867,294.24|27.35%|
|RMB)||||
|Proportion of Research and||||
|Development Investment of|3.28%|2.52%|0.76%|
|Operation Revenue||||
|Amount of Research and||||
|Development Investment|0.00|0.00||
|Capitalization (In RMB)||||
|Proportion of Capitalization||||
|Research and Development||||
||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 DevelopmentInput’s Capitalization Rate and Its Reasonableness
□ Applicable√ Not applicable
5.Cash Flow
In RMB
|||||
|-|-|-|-|
|Items|2016|2015|Increase/Decrease(%)|
|Subtotal of cash inflow received|1,288,587,823.52|1,411,832,217.48||
||||-8.73%|
|from operation activities||||
|Subtotal of cash outflow|1,343,852,289.36|1,372,247,717.11||
|received from operation|||-2.07%|
|activities||||
|Net cash flow arising from|-55,264,465.84|39,584,500.37||
||||-239.61%|
|operating activities||||
|Subtotal of cash inflow received|851,568,515.73|125,106,336.14||
||||580.68%|
|from investing activities||||
|Subtotal of cash outflow for|1,880,577,108.61|507,193,753.16||
||||270.78%|
|investment activities||||
|Net cash flow arising from|-1,029,008,592.88|-382,087,417.02||
||||-169.31%|
|investment activities||||
|Subtotal cash inflow received|1,581,219,588.81|244,759,302.00|546.03%|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
|from financing activities||||
|Subtotal cash outflow for|316,577,182.44|256,361,490.38||
||||23.49%|
|financing activities||||
|Net cash flow arising from|1,264,642,406.37|-11,602,188.38||
||||11,000.03%|
|financing activities||||
|Net increase in cash and cash|181,455,560.97|-349,573,483.42||
||||151.91%|
|equivalents||||

Notes to the year-on-year change of the relevant data
√Applicable□ Not applicable
（1）The net cash flows from operating activities decreased by RMB94.849 million and239.61% year onyear， Mainly caused by decrease in cash received for polaroid glass product sales and by decrease in government subsidy received
（2）The net cash flows from investing activities increased by RMB726.4622 million and580.68% year onyear， Mainly caused by the increase in the principal and earning of the structural deposits.
（3）Subtotal of cash out-flow from investment activity increased by RMB1373.3833 million and270.78% year onyear，Mainly caused by the increases in the investments for structural deposits and other financing products（4）Subtotal of cash in-flow from financing activity increased by RMB1336.4603 million and546.03% year onyear，Mainly caused by the strategic investors introduced by Shengbo Optoelectronic at the current period and the incremental capital amount paid by the strategicinvestors。
Notes to the big difference between cash flow from operating activities and net profit in the reporting year□Applicable√Not applicable
Ⅲ.Analysis of Non-core Business
√ Applicable□Not applicable
In RMB
||||||
|-|-|-|-|-|
|||Proportion in total|||
||Amount||Explanation of cause|Sustainable (yes or no)|
|||profit|||
||||Joint-stock Enterprises and||
|Investment incme|5,223,413.76|6.70%||Sustainable|
||||Contracting Costs||
|Changes in fair|||||
|value gains and|0.00|0.00%|||
|losses|||||
|Impairment of|||Loss on inventory valuation||
||42,486,884.12|54.48%||Sustainable|
|assets|||and bad debts||
|Non-operating|||Mainly for the government||
||15,072,447.15|19.33%||Sustainable|
|income|||subsidy received||
|Non-operating|||||
||138,691.94|0.18%||Unsustainable|
|expenses|||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual ReportⅣ.Condition of Asset and Liabilities
1.Condition of Asset Causing Significant Change
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of 2016||End of 2015||Proportio||
|||Proportion in|||n||
|||||||Notes to the significant change|
||Amount|the total|||increase/d||
|||assets(%)|||ecrease||
||933,856,912.73||752,314,871.53|||Mainly for that Shengbo|
|||||||Optoelectronic introduced strategic|
|||||||investors, which substantially increased|
|||||||the asset as well as rights and interests.|
|||||||The Company utilized the incremental|
|Monetary fund||22.67%||25.34%|-2.67%||
|||||||capital amount paid by the strategic|
|||||||investors to invest short-term financing|
|||||||products and structural deposits, which|
|||||||resulted in decline in other asset|
|||||||projects’ proportion of total asset.|
|Accounts|220,222,019.41||182,766,372.05||||
|||5.35%||6.16%|-0.81%||
|receivable|||||||
||283,371,714.07||308,775,044.88||||
|Inventories||6.88%||10.40%|-3.52%||
|Investment real|179,324,547.77||134,389,963.05||||
|||4.35%||4.53%|-0.18%||
|estate|||||||
|Long-term equity|24,849,311.00||22,879,269.06||||
|||0.60%||0.77%|-0.17%||
|investment|||||||
||723,685,287.56||790,019,487.16||||
|Fixed assets||17.57%||26.61%|-9.04%||
|Construction|119,804,231.43||75,803,586.70||||
|||2.91%||2.55%|0.36%||
|inprocess|||||||
|Short-term loans|12,335,695.77|0.30%|53,866,521.87|1.81%|-1.51%||
|Long-term loans|80,000,000.00|1.94%|120,000,000.00|4.04%|-2.10%||

2.Asset and Liabilities Measured by Fair Value
√ Applicable□Not applicable
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
||Amount at yearbeginning|Gain/loss on|Cumulative fair|Impairment|Purchased|Sold amount in|Amount at|
|Item||fair value|value change|provisions in|amount in the|the reporting||
||||||||year end|
|||change in the|recorded into|the reporting|reporting|period||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
|||reporting|equity|period|period||
|||period|||||
|Financial assets|||||||
|3.|||||||
|Avaliable-for-sa|||||||
||10,054,476.60||-561,867.81|||8,378,730.50|
|le financial|||||||
|assets|||||||
|Subtotal of|||||||
||10,054,476.60||-561,867.81|||8,378,730.50|
|financial assets|||||||
|Total|10,054,476.60||-561,867.81|||8,378,730.50|
|Financial|||||||
||0.00|||||0.00|
|Liability|||||||

Did great change take place in measurement of the principal assets in the reporting period ?
□ Yes√ No
3. Restricted asset rights as of the end of this Reporting Period
Applicable
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
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report Nil
5.Application of the raised capital
√ Applicable□ Not applicable
（1）General application of the raised funds
√ Applicable□ Not applicable
InRMB’0000
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||Amount of|||Total|||
|||||||Accumulat|Proportion||||
||||||raised|||Amount of||Amount of|
|||||||ive amount|of raised||Use and||
||||Total||capital of|||the||the Raised|
|||||Total||of raised|capital of||Whereabo||
|||Total|Amount of||which the|||Unused||Fund with|
|Year of|Way of|||amount of||capital of|which the||uts of the||
|||raised|the Raised||purpose|||Raised||over 2|
|Raising|Raising|||Raised||which the|purpose||Unused||
|||capital|Fund Used||was|||Fund at||Years’|
|||||Funds||purpose|has been||Raised||
||||at the||changed in|||the||Idling|
|||||||has been|changed||Fund||
||||||the report|||Current|||
|||||||changed|(%)||||
||||||period|||Period|||
||||||||||There was||
||||||||||RMB 398||
||||||||||million||
||||||||||used for||
||||||||||structured||
||||||||||deposits||
||||||||||and there||
||||||||||was RMB||
||||||||||of 269.385||
||||||||||million of||
||Non-publi||||||||intelligent||
|2013||96,175.1|3,722.52|5,574.42|30,927.22|30,927.22|32.16%|68,826.37||0|
||c issue||||||||deposit,||
||||||||||and the||
||||||||||rest were||
||||||||||deposited||
||||||||||in the||
||||||||||special||
||||||||||account||
||||||||||for the||
||||||||||raised||
||||||||||funds.||
|Total|--|96,175.1|3,722.52|5,574.42|30,927.22|30,927.22|32.16%|68,826.37|--|0|
|Notes to use of raised capital|||||||||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||
|-|
|In the reporting period, the accumulated expenditure of the special account for raised funds was RMB 37.2252 million-which was|
|all used for the construction of the second-phase project of No.6 line of TFT-LCD polarizer. As of the end of the reporting period,|
|the accumulated expenditure of the special account for raised funds is RMB 55.7442 million, and the Investment schedule|
|completion rate is 7.96%.|

（2）Promised projects of raised capital
√ Applicable□ Not applicable
InRMB’0000
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||Date||||
||||||Accumul|Investme|||||
||||||||when the||||
|||Total|||ated|nt||||Has any|
||Project||Total|Amount|||project|Benefit|||
|||raised|||amount|progress|||Has the|material|
||changed(i||investme|inested in|||has|realized|||
|Committed investment||capital|||invested|ended the|||predicted|change|
||ncluding||nt after|the|||reached|in the|||
|projects and investment||invested|||at the end|reporting|||result be|taken|
||partial||adjustme|reporting|||the|reporting|||
|||as|||of the|period(%|||realized|place in|
||change)||nt (1)|period|||predicted|period|||
|||commited|||reporting|)(3)=(2)(||||feasibility|
||||||||applicabl||||
||||||period(2)|1)|||||
||||||||e status||||
|Committed investment projects|||||||||||
|Phase-II|||||||||||
||||||||July||||
|project of polarizer|Yes|96,175.1|70,034|3,722.52|5,574.42|7.96%||0|-|Yes|
||||||||1,2017||||
|sheet for TFT-LCD|||||||||||
|Subtotal of committeed|||||||||||
||--|96,175.1|70,034|3,722.52|5,574.42|--|--||--|--|
|investment projects|||||||||||
|Investment orientation for und arising out of plan|||||||||||
|Nil|||||||||||
|Total|--|96,175.1|70,034|3,722.52|5,574.42|--|--|0|--|--|
|Situation about not|||||||||||
|coming up to schemed|||||||||||
|progress or expected|Not applicable||||||||||
|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||||||||||
|Notes to significant|time, in the light of there was a large funds gap between the actual raised capital and the planned raised||||||||||
|change in feasibility of|capital for the second phase project, then by comprehensive considerations of the company’s production||||||||||
|the project|line scale and the operation pressure, the company decided to terminate the project of No.7 line, and the||||||||||
||corresponding amount of funds of RMB309.2722 million(including interests) for No.7 line project shall be||||||||||
||changed for permanently supplementing the liquidity. The Proposal on Alteration of the Use of Part of the||||||||||
||Raised Capital for the Second Phase Project of TFT-LCD Polarizer was examined and approved in the||||||||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||
|-|-|
||2015 annual shareholder meeting on April 21, 2016..|
|Amount, application|Not applicable|
|and application||
|progress of the||
|unbooked proceeds||
|About the change of|Not applicable|
|the implementation site||
|of the projects invested||
|with the proceeds||
|Adjustment of the|Not applicable|
|implementation way of||
|investment funded by||
|raised capital||
|About the initial|Not applicable|
|investment in the||
|projects planned to be||
|invested with the||
|proceeds and the||
|replacement||
||Applicable|
||On March 29, 2016, the Proposal on Using Part of Idle Raised Funds to Temporarily Supplement theLiquidity was examined and approved in the 20th board meeting of the company’s 6th session board ofdirectors, which agreed with using part of the idle raised funds of the amount of RMB 300 millionoriginally for the second phase project of TFT-LCD polarizer to supplement the company’s liquidity, with aterm of no more than 12 months commenced from the date the board approved the proposal i.e. fromMarch 29, 2016 to March 28, 2017. On March 29, 2016, the amount of RMB 150 million was transferredout from Sheng Bo Optoelectronic Co.,Ltd special account for the raised funds to supplement the liquidity.As the Proposal on Alteration of the Use of Part of the Raised Funds for the Second Phase Project ofTFT-LCD Polarizer was approved in the 2015 annual shareholder meeting on April 21, 2016, the afore-saidfunds had been converted into permanently supplementing the liquidity.On September 18, 2016, the Proposal about the Use of Part Idle Raised Funds to Temporarily SupplementLiquidity was examined and approved in the 27th board meeting of the company's sixth session board ofdirectors, agreed the use of part idle raised funds of the second-phase project of No.6 line to temporarilysupplement liquidity, with the use of the amount of RMB 280 million and its term shall not exceed 12months from the date of approval by the board of directors-the concrete period is from September 18, 2016to September 17, 2017. On September 28, 2016, there was RMB 250 million transferred out from theShengbo Optoelectronics' special account for raised funds to supplement the liquidity; On October 24,2016, there was RMB 10 million transferred out from the Shengbo Optoelectronics' special account forraised funds to supplement the liquidity, but on the dates of October 31, 2016 and November 1, 2016, theafore-said RMB 10 million used for supplementing liquidity was returned; On December 21, 2016, therewas RMB 30 million transferred out from the Shengbo Optoelectronics' special account for raised funds tosupplement the liquidity; On December 27, 2016, the above-mentioned RMB 280 million used for|
|Using the idle proceeds||
|to supplement the||
|working capital on||
|temporary basis||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||
|-|-|
||supplementing liquidity was all returned to the Shengbo Optoelectronics' special account for raised funds.|
|Balance of the|Not applicable|
|proceeds in process of||
|project implementation||
|and the cause||
|About application and|As of December 31, 2016, the balance of the raised funds which has not been used was RMB 688.2637|
|status of the proceeds|million, among which, there was RMB 398 million of structured deposits and RMB 269.385 million of|
|unused|intelligent time deposit, and the rest was deposited in the special account for raised funds.|
|Problems existing in||
||As of December 31, 2016, the cumulative investment for the second-phase project of No.6 line was RMB|
|application of the||
||283.0887 million, accounting for 40.42% of total investment of RMB 700.34 million-which had been|
|proceeds and the||
||adjusted, among which, the use of raised funds was RMB 55.7442 million and the use of self-owned funds|
|information disclosure||
||and government funds was RMB 227.3445 million.|
|or other issues||

（3）Changes of raised funds projects
√ Applicable□Not applicable
InRMB’0000
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||Accumulati|Progress of|||||
||||||||||Whether the|
|||Total||on virtual|the|||Whether it||
|||||||Predicted|||feasibility|
||Correspondi|amount|Virtual|amount|investment||Income|has come up||
|||||||serviceable|||of the|
|Project after|ng original|invested|amount|input|deadline the||achieved in|to the||
|||||||condition|||project|
|the change|committed|after|input in the|deadline the|end of the||the|scheduled||
|||||||date of|||changed|
||project|adjustment|reporting|end of the|reporting||reporting|income||
|||||||project|||after the|
|||(1)||reporting|(%)(3)=(2)/|||(Y/N)||
||||||||||alteratio|
|||||(2)|(1)|||||
||Phase-II|||||||||
||project of|||||||||
||polarizer|||||||||
|-||0|0|0|||0|-|-|
||sheet for|||||||||
||TFT-LCD|||||||||
||(7 Line)|||||||||
|Total|--|0|0|0|--|--|0|--|--|
||||In the light of there was a large funds gap between the actual raised funds and the planned|||||||
||||raised funds for the second phase project, then by comprehensive considerations of the|||||||
||||company’s production line scale and the operation pressure, the company terminated the|||||||
|Changing reason, decision procedure|||project of No.7 line, and the corresponding amount of funds of RMB309.2722|||||||
|and statement of disclosure(In specific|||million(including interests) for No.7 line project shall be changed for permanently|||||||
|project)|||supplementing the liquidity. The Proposal on Alteration of the Use of Part of the Raised|||||||
||||Funds for the Second Phase Project of TFT-LCD Polarizer was examined and approved in|||||||
||||the 2015 annual shareholder meeting. Refer to Company Announcement No. 2016-09 and .|||||||
||||Announcement No. 2016-16 on March 25, 2016 and April 22, 2016 at JuChao information|||||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||
|-|-|
||network (http://www.cninfo.com.cn)|
|Not meet the scheduled progress or||
|projected benefits, and reasons for that|Not applicable|
|(based on specific project)||
|Explanation on significant changes in||
||Not applicable|
|feasibility of projects||

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 over10% net profit influencing to the Company In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Company||Sectors|Registered||||Operating||
||Company type|||Total assets|Net assets|Turnover||Net Profit|
|Name||engaged in|capital||||profit||
|Shenzhen|||||||||
|Lisi||Domestic|||||||
|||||27,939,751.5|24,555,136.7||||
|Industrial|Subsidiary|trade, Lease|2,360,000.00|||7,656,285.54|2,775,168.44|2,226,550.40|
|||||3|0||||
|Development|||||||||
|Co., Ltd.|||||||||
|Shenzhen||Accommodat|||||||
|||||32,196,423.5|25,422,251.7|10,382,000.9|||
|Huaqiang|Subsidiary|ion, business|10,005,300.0||||2,863,053.84|2,200,907.88|
|||||1|0|6|||
|Hotel||center;|0||||||
|Shenfang|||||||||
|Property||Property||||10,031,085.7|||
||Subsidiary|||9,673,428.77|2,780,875.94||334,748.85|249,939.76|
|Management||management|1,600,400.00|||4|||
|Co., Ltd.|||||||||
|||Production of|||||||
|Shenzhen|||||||||
|||fully|||||||
|Beauty||||36,245,075.3|23,558,413.8|32,415,848.3|-5,452,282.5|-5,799,721.4|
||Subsidiary|electronic|25,000,000.0||||||
|Century||||6|4|9|9|8|
|||jacquard|0||||||
|Garment Co.,|||||||||
|||knitting|||||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Ltd.||whole shape|||||||
|Shenzhen|||||||||
|Shengbo||Production|||||||
|||||3,274,511,80|2,740,701,81|801,560,843.|-131,094,111|-116,436,201|
|Opotoelectric|Subsidiary|and sales of|583,333,333.||||||
|||||7.88|6.78|25|.13|.56|
|Technology||polarizer|00||||||
|Co., Ltd|||||||||
|Shenzhen|||||||||
|||Operating|||||||
|Shenfang|||||||||
||Sub-|import and||40,927,481.0||274,139,665.|||
|Import &|||||8,330,844.68||2,495,402.55|1,869,249.08|
||Subsidiary|export|5,000,000.00|6||80|||
|export Co.,|||||||||
|||business|||||||
|Ltd.|||||||||
|Shengtou|||||||||
||Sub-|Sales of||65,364,563.8||160,531,971.|||
|（HK）Co.,|||HKD10,000||2,829,136.67||1,630,915.19|1,640,429.77|
||Subsidiary|polarizer||3||26|||
|Ltd.|||||||||

Acquirement and disposal of subsidiaries in the Reporting period
□ Applicable√ Not applicable
Notes
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, along with the global tendency of making large-size TFT-LCD panel, upon the improvement of the display technology and such factors as high resolution, wide viewing angle, touch application, lighter appearance brought by pluralism of products application, the momentum of global TFT-LCD industry development is strong.BOE and Huaxing Optoelectronics both launched the construction of the 10.5 generation line. On March 1, 2017, Hon Hai Precision Ind also held the commencement ceremony of 10.5 generation line in Zengcheng City Guangzhou. Currently, there are 23 LCD panel production lines already existed in Mainland China, with the production capacity of 65 million square meters / year; and there are 11 lines of six-generation or above LCD panel production under construction, with the planning capacity of more than 80 million square meters / year, and those are expected to be put into operation in 2018. At that time, China will become the world's largest production base of the liquid crystal panel, with the production capacity to be ranked first in the world. LCD is still the mainstream of future development, and it is difficult to produce competitive alternative products. As the continuous growth of panel shipments drives the growth of the matching components of panel, it will promote the development of a variety of supporting industries including polarizer industry.
At present, the world's major polarizer suppliers are Nitto Denko, Sumitomo Chemical, LG Chemical, SDI,
Chi Mei Materials and BenQ Materials. Among them, Nitto Denko, Sumitomo Chemical and LG Chemical have
an obvious advantage in terms of the market shares. With the rapid development of flat-panel display industry in
mainland China, the overseas large polarizer manufacturers such as SDI, LG Chemical and Chi Mei Materials all
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report set up plants in mainland China, while Nitto Denko and Sumitomo Chemical also carry out the construction of front-section full-process line based on the existed end-section of cutting, and the domestic polarizer companies also speed up the pace of constructing new production lines.
Polarizer is one of the indispensable key materials for TFT-LCD and AMOLED panel. However, because the industrial chain maturity is not balanced, so the domestic matching rate is far below the safety value of30%. "Made in China 2025", which is the development guidance and the top-level design of the next 10 years industrial development of China, clearly specifies the goal of enhancement on theR&D, design and manufacturing ability of " Basic materials, basic components, basic technology and basic manufacturing equipment". Therefore, whether from the policy perspective or the market perspective, the domestic polarizer has a huge space for development. 2.The company's development strategy
In 2016, Shengbo Optoelectronics successfully completed the mixed owner-ship reform and drew in industrial resource-based strategic investors, and the company solved the institutional mechanism issue while improving the technology and the management, which also provided a new opportunity for the development of the company's polarizer business. The company will continue to unswervingly develop the polarizer business in the period of "13th Five-Year, and will tap into the platform of listed company and the existing industries to integrate the industrial resources of polarizer industry and other related optical film industry both in China and Taiwan area to boost the development of Shengbo Optoelectronics and become perfect, thus to construct the Industrial Cluster of optical film in Shenzhen.
3.Possible risks
1. Macroeconomic Risks
In the outlook of 2017, China will further promote the supply-side reform and the new economic driving-force and mode will further replace the old economic driving-force and mode, thus the overall economic will expect a stable operation. As china's manufacturing industry is facing the severe challenges of "two-way extrusion" by developed countries and other developing countries, the government proposed the strategy of "manufacturing making a powerful country". The company belongs to the industry which is an important component of the electronic information industry, and that industry will be strongly supported by the nation's policies. However, it cannot rule out the risks of unpredictable changes in the macroeconomic leading to affecting the company's business performance.
2. Market risks
Due to the characteristics of rapid replacement and upgrading of display end-product, there is higher requirement for the timely response ability of technology and products, while the price decline-trend also increasingly squeezes the profit space of upstream polarizer business. If the company's technology and products cannot timely respond to the needs of the application fields or the market competition leads to lower prices, the company will get an adverse impact.
3. Raw-material risks
Currently, the key raw materials for producing polarizer, which are PVA film and TAC film, are basically monopolized by Japanese. The price of the film-material is affected by the suppliers' capacity, the market demand, the yen exchange rate and so on, thus it will further impact the company's product unit costs.
4..The key work in 2017
1. Comprehensively enhancing the business operation ability of polarizer
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report Firstly, tap into the potential of 1-3 lines and increase the efficiency, control costs, improve product quality, optimize customer structure and seek new profit growth point; secondly, continue to optimize the product structure of line 4, strengthen the site management, improve the level of production technology, fully utilize the advantages of equipment, improve quality and reduce energy-consumption, speed-up the production line and lift production capacity; thirdly, speed up the construction of line 6 project, actively follow up the progress of work equipment installation and commissioning to ensure the timely completion of commissioning for well preparing for the mass-production; fourthly, fully utilize Jinjiang Group's experiences in production management, production line construction and other fields and fully utilize the flexible advantages of mixed ownership system to invigorate the business vitality of Shengbo Optoelectronics, thus to comprehensively enhance the business operation ability of polarizer.
2.Property Management Enterprise Makes Actively Boost to Steadily Increase the Property Management Efficiency
The property management enterprise will seize the favorable opportunity from the transformation and upgrading in Huaqiangbei to perfect property function, optimize tenement structure, increase rental income and continuously improve the property management efficiency. Meanwhile, the renting attraction of Guanhua Building will be completed well, which will make it a new growth point of theCompany’s property income. 3.Strengthen the Talent Echelon Construction and Improve theEnterprise’s Core Competitiveness
The Company is now in the middle term of transformation development, where the business development is growing fast. In 2017, the Company will intensify the focus on internal talent training and selection. According to theCompany’s general strategy, the management mechanism of reserved talent echelon construction will be conducted to provide promotion channels for talents, to promote tendency for the cadre echelon to become younger and to continuously improve theenterprise’s core competitiveness and sustainably developing ability. 4.Innovate Operation and Optimize Institution and Mechanism to Motivate New Vitality for the Enterprise Using the successful experience that Shengbo Optoelectronic introduced strategic investors for reference, the Company will innovate the operating modes of its subordinated enterprises and thoroughly change the issues including rigid mechanism and low efficiency to strengthen theenterprise’s vitality.
5. Constantly Focus Effect on Safe Production and Maintain the Harmony and Stability of the Enterprise The Company will seriously implement responsibility system for production safety, actually posses sufficient cognition, system, responsibility and measures for safety production, and persistently focus on checking and solving the safety hazards to ensure no false will occur in both construction and safety of the project.
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
|||||
|-|-|-|-|
|Reception time|Way of reception|Types of visitors|Basic index|
||||To know more about the situation of|
||||polarizer industry and the situation of the|
|May 12,2016|Onsite investigation|Organization||
||||company’s production and operation,|
||||please see details in “Log of Investor|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|||||Relation Activities”posted on the|
|||||interactive platform of investor relation|
|||||on May 12, 2016.（No：2016-01）|
|||||To know more about the situation of|
|||||polarizer industry and the situation of the|
|||||company’s production and operation,|
|July 25,2016|Onsite investigation||Organization|please see details in “Log of Investor|
|||||Relation Activities”posted on the|
|||||interactive platform of investor relation|
|||||on July 25, 2016.（No：2016-02）|
|Reception times||2|||
|Reception agency amount||2|||
|Reception personal number||0|||
|Others||0|||
|Whether to disclose, reveal or disclose non-public|||||
|||No|||
|material information|||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report V. Important Events
ⅠSpecification of profit distribution of common shares and capitalizing of common reserves
Formulation, implementation and adjustment of profit distribution policy of common shares 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):
Based on the needs of the construction of TFT-LCD polarizer project and the company business development, there were no cash dividends and there were no capital reserves converted into share capital in the last three years. Dividend distribution of the latest three years
In RMB
|||||||
|-|-|-|-|-|-|
|||Net profit||||
||||Ratio in net profit|||
|||attributable to the||Amount of cash|Proportion of cash|
||||attributable to the|||
||Cash dividend|over of the parent||dividends from cash|dividends from cash|
|Year|||parent company in|||
||(Including Tax)|company in the||offer to repurchase|offer to repurchase|
||||the consolidated|||
|||consolidated||shares of the funds|shares of the funds|
||||financial statements|||
|||financial statements||||
|2016|0.00|-87,270,604.54|0.00%|0.00|0.00%|
|2015|0.00|8,497,227.40|0.00%|0.00|0.00%|
|2014|0.00|-113,591,328.26|0.00%|0.00|0.00%|

 In the reporting period, both theCompany’s profit and the parentcompany’s retained earnings were positive however not cash dividend distribution proposal has been put forward.
□ Applicable√ Not applicable
II.Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable√ Not applicable
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. 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
||||||||
|-|-|-|-|-|-|-|
|Commitment|Commitment|Type|Contents|Time of|Peiod of|Fulfillment|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
|maker|||making|commitment||
||||commitment|||
|||As Shenzhen||||
|||Investment||||
|||Holdings Co.,||||
|||Ltd., the||||
|||controlling||||
|||shareholder of||||
|||the company,||||
|||committed||||
|||when the||||
|||restricted-for-s||||
|||ale shares||||
|||from the||||
|||shares||||
|||restructuring||||
|||were listed for||||
|||circulation in||||
|||the market: i.||||
|||if they plan to||||
|||sell the shares||||
|Shenzhen||through the||||
||Share|||||
|Investment||securities|August 4,|Sustained and|Under|
||reduction|||||
|Holdings Co.,||exchange|2006|effective|Fulfillment|
||commitment|||||
|Ltd.||system in the||||
|||future, and the||||
|||decrease of||||
|||the 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||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
|||strictly||||
|||observe the||||
|||“Guidelines||||
|||on Transfer of||||
|||Restricted-for-||||
|||sale Original||||
|||Shares of||||
|||Listed||||
|||Companies” a||||
|||nd the||||
|||provisions of||||
|||the relevant||||
|||business||||
|||principles of||||
|||Shenzhen||||
|||Stock||||
|||Exchange.||||
|||The company,||||
|||according to||||
|||the relevant||||
|||provisions of||||
|||Measures for||||
|||the||||
|||Administratio||||
|||n of Major||||
|||Asset||||
|||Restructuring||||
||No major|of Listed||||
|Shenzhen||||||
||asset|Companies,|December|February||
|Textile(Holdin|||||Fulfilled|
||restructuring|No.10|19,2016|18,2017||
|gs) Co., Ltd.||||||
||commitments|Guidelines for||||
|||Business||||
|||Handling of||||
|||Listed||||
|||Companies-||||
|||Major Asset||||
|||Restructuring||||
|||and No.9||||
|||Business||||
|||Memorandum||||
|||of Main Board||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
||||Information||||
||||Disclosure-Su||||
||||spending||||
||||Stock-trading||||
||||for Listed||||
||||Companies,||||
||||committed||||
||||that the||||
||||company shall||||
||||not plan a||||
||||major asset||||
||||restructuring||||
||||matter in 2||||
||||months||||
||||commenced||||
||||from the date||||
||||of termination||||
||||of the major||||
||||asset||||
||||restructuring||||
||||namely the||||
||||date of||||
||||announcement||||
||||on resuming||||
||||the company's||||
||||stock trading.||||
||||Shenzhen||||
||||Investment||||
||||Holdings Co.,||||
||||Ltd. signed a||||
||||“Letter of||||
||||Commitment||||
|||Commitments|||||
||||and Statement||||
|||on horizontal|||||
||Shenzhen||on Horizontal||||
|||competition,|||||
||Investment||Competition|October 9,|Sustained and|Under|
|Commitments made upon issuance||related|||||
||Holdings Co.,||Avoidance”|2009|effective|Fulfillment|
|||transaction|||||
||Ltd.||when the||||
|||and capital|||||
||||company||||
|||occupation|||||
||||issued||||
||||non-public||||
||||stocks in||||
||||2009.||||
||||Pursuant to||||
||||the Letter of||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||
|-|
|Commitment|
|and Statement,|
|Shenzhen|
|Investment|
|Holdings Co.,|
|Ltd. and its|
|wholly owned|
|subsidiary,|
|subsidiaries|
|under control|
|or any other|
|companies|
|that have|
|actual control|
|of it shall not|
|be involved in|
|the business|
|the same as or|
|similar to|
|those|
|Shenzhen|
|Textile|
|currently or|
|will run in the|
|future, or any|
|businesses or|
|activities that|
|may constitute|
|direct or|
|indirect|
|competition|
|with Shenzhen|
|Textile; if the|
|operations of|
|Shenzhen|
|Investment|
|Holdings Co.,|
|Ltd. and its|
|wholly owned|
|subsidiaries,|
|subsidiaries|
|under control|
|or other|
|companies|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||
|-|
|that have|
|actual control|
|of it compete|
|with Shenzhen|
|Textile in the|
|same industry|
|or contradict|
|the interest of|
|the issuer in|
|the future,|
|Shenzhen|
|Investment|
|Holdings Co.,|
|Ltd. shall urge|
|such|
|companies to|
|sell the equity,|
|assets or|
|business to|
|Shenzhen|
|Textile or a|
|third party;|
|when the|
|horizontal|
|competition|
|may occur due|
|to the business|
|expansion|
|concurrently|
|necessary for|
|Shenzhen|
|Investment|
|Holdings Co.,|
|Ltd. and its|
|wholly owned|
|subsidiaries,|
|subsidiaries|
|under control|
|or other|
|companies|
|that have|
|actual control|
|of it and|
|Shenzhen|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
|||Textile,||||
|||Shenzhen||||
|||Textile shall||||
|||have priority.||||
|||The||||
|||commitments||||
|||during the||||
|||period||||
|||non-public||||
|||issuance in||||
|||2012: 1.||||
|||Shenzhen||||
|||Investment||||
|||Holdings, as||||
|||the controlling||||
|||shareholder of||||
|||Shenzhen||||
|||Textile,||||
|||currently||||
|||hasn't the||||
|||production||||
||Commitments|||||
|||and business||||
||on horizontal|||||
|Shenzhen||activities of||||
||competition,|||||
|Investment||inter-industry|July 14,|Sustained and|Under|
||related|||||
|Holdings Co.,||competition|2012|effective|Fulfillment|
||transaction|||||
|Ltd.||with Shenzhen||||
||and capital|||||
|||Textile or its||||
||occupation|||||
|||share-holding||||
|||subsidiary. 2.||||
|||Shenzhen||||
|||Investment||||
|||Holdings and||||
|||its||||
|||share-holding||||
|||subsidiaries or||||
|||other||||
|||enterprises||||
|||owned the||||
|||actual control||||
|||rights can't be||||
|||directly and||||
|||indirectly on||||
|||behalf of any||||
|||person,||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||
|-|
|company or|
|unit to engage|
|in the same or|
|similar|
|business in|
|any districts in|
|the future by|
|the form of|
|share-holding,|
|equity|
|participation,|
|joint venture,|
|cooperation,|
|partnership,|
|contract,|
|lease, etc., and|
|ensure not to|
|use the|
|controlling|
|shareholder's|
|status to|
|damage the|
|legitimate|
|rights and|
|interests of|
|Shenzhen|
|Textile and|
|other|
|shareholders,|
|or to gain the|
|additional|
|benefits. 3. If|
|there will be|
|the situation|
|of|
|inter-industry|
|competition|
|with Shenzhen|
|Textile for|
|Shenzhen|
|Investment|
|Holdings and|
|its|
|share-holding|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
|||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.||||
|||Commitment t||||
|Shenzhen||||||
|||o non-public o||||
|Investment|Share limited||March 25,|||
|||ffering during||2016-03-25|Fulfilled|
|Holdings Co.,|commitment||2013|||
|||the second pha||||
|Ltd.||||||
|||se project of S||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|||hen Textile sh|
|||ares subscribe|
|||d lock handle,|
|||locking Shen|
|||Textile non-pu|
|||blic offering o|
|||n the stock ma|
|||rket of 36 mon|
|||ths.|
|Executed timely or not?|Yes||
|If the commitments failed to complete|||
|the execution when expired, should|||
|specifically explain the reasons of|No||
|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 QualifiedAuditor’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
Note 2. according to CK (2016) No. 22 notice "On printing and Distributing Value-Added tax Accounting
Regulations" issued by the Ministry of Finance, after comprehensive regulations for business tax paid VAT,
business tax and additional course changed name to "tax and additional" course. The course accounts consumption
tax of business activities, urban maintenance and construction tax, resource tax, educational expenses additional
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report and the property tax, land-using tax, vehicle-using taxes, stamp duty and other relevant taxes. The "business tax and additional" column in the income statement should be changed to "tax and additional"column. Thecompany’s property tax, land-using tax, vehicle-using taxes, stamp duty and other relevant taxes should be listed in the management fees. And also be listed in this course since May 1, 2016.
Items
Amount
Taxes and surcharges 3,469,318.93 Management fee -3,469,318.93 The above changes in accounting policies were examined and approved in the 33th meeting of the sixth term board of directors.
VII.Explain retrospective restatement due to correction of significant accounting errors in the reporting period
□Applicable√ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII.Explain change of the consolidation scope as compared with the financial reporting of last year.□Applicable√ Not applicable
No changes in consolidationstatement’s scope for the Company in the period.
IX. Engagement/Disengagement of CPAs
CPAs currently engaged
|||
|-|-|
|Name of the domestic CPAs|Peking Certified Public Accountants（Special General Partnership）|
|Remuneration for domestic accounting firm||
||50|
|(RMB’0000)||
|Continuous life of auditing service for domestic||
||6|
|accounting firm||
|Name of domestic CPA|Li Yong, Lan Tao|

Has the CPAs been changed in the current period
□ Yes√ No
Description of the CPAs, financial adiver or sponsor engaged for intemal control auditing
√Applicable□Not applicable
In the report year, the Company engaged Peking Certified Public Accountants as the internal control audit body in
2016. The audit remuneration was RMB 0.25 million (including traveling expenses).
During the reporting period, the company has engaged CITIC Securities as the independent financial consultant
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report for the company's major asset restructuring; the total amount of the fee charged by the financial consultant and other intermediaries (legal, audit and assessment) employed by the company did not exceed RMB 30 million. On December 16, 2016, the major asset reorganization planned for this project was terminated and the costs associ ated with the reorganization were compensated by the reorganization party.
X.Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly Report□Applicable√ Not applicable
XI.Bankruptcy reorganization
□Applicable√ Not applicable
No bankruptcy reorganization for the Company in reporting period.
XII.Significant lawsuits and arbitrations of the Company
□Applicable√ Not applicable
No significant lawsuits and arbitrations occourred in the reporting period.
Other Lawsuits affairs
√ Applicable□Not applicable
|||||||||
|-|-|-|-|-|-|-|-|
||||Progress of|||||
|||||The oucome and|Execution of|||
|Basic situation of|Involved|Whether to form|the|||||
|||||effects of|litigation|Date of|Index of|
|litigation|amount|expected|litigation(ar|||||
|||||litigation(arbitrati|(arbitration)judg|disclosure|disclosure|
|(arbitration)|(RMB’0000)|liability|bitration(ar|||||
|||||on)|ement|||
||||bitration)|||||
|On March 6,|||On July 6,|||||
|2014,the company|||2016, the|||||
|received the No.28|||company|||||
|respondent notice|||received the|||||
|issued by|||Civil|||||
|Shenzhen|||Verdict by|||||
||||||||Annual|
|||||The verdict has no||||
|Intermediate|||Shenzhen|||||
||||||||Report 2014|
|People's Court|||Intermediat|effect on the|has been judged|March||
||3,185.79|No|||||（http://www|
|(2014) Foreign|||e People's|company||31,2015||
||||||||.cninfo.com.c|
|legislation, the|||Court-(No.2|||||
||||||||n）|
|plaintiff|||8-2014|||||
|association of|||Shenzhen|||||
|Hong Kong Xieli|||Intermediat|||||
|Automobile Co.,|||e People's|||||
|Ltd liability|||Court|||||
|disputes has been|||Foreign-rela|||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||
|-|-|
|formally accepted.|ted Doc),|
|The company as|and the|
|the first defendant,|claim of the|
|Shenzhen Xieli|plaintiff-Xie|
|Automobile Co.,|li|
|Ltd. was the|Maintenanc|
|second defendant.|e Company|
|The plaintiff|was|
|requested: 1, the|overruled|
|economic loss of|by|
|tort liability by the|Shenzhen|
|total amount of|Intermediat|
|RMB 31.8579|e People's|
|million ; 2, the|Court.|
|second defendant||
|involved in joint||
|liability of the||
|amount of||
|compensation; 3,||
|the litigation fee||
|paid by two||
|co-defendants.||

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
During the reporting period, the company has no stock incentive plan, employee stock ownership plan or other
employee incentives that have not been implemented.
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report XVI.Material related transactions
1. Related transactions in connection with daily operation
√Applicable□ Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Whethe|||||
|||||||||Trading|r over|||||
|||||Principl||||limit|the|||||
||||||||||||Market||Index|
||||Subjects|e of||||||||||
|||||||Amount||approve|approve||price of||of|
||||of the|pricing|||Ratio in|||Way of||Date of||
|Related|Relation|Type of|||Price of|of trade|||||similar||informa|
||||related|the|||similar|||paymen||disclosu||
|parties|ship|trade|||trade|RMB0’||d|d||trade||tion|
||||transacti|related|||trades|||t||re||
|||||||000|||||availabl||disclos|
||||ons|transacti||||||||||
|||||||||（RMB|limited||e||ure|
|||||ons||||||||||
|||||||||’0000）|or not|||||
||||||||||(Y/N)|||||
||The|||||||||||||
||Chairma|||||||||||||
||n of the|||||||||||||
||Compan|Sale||||||||||||
|Tianma||||||||||||||
||y was|products|Sales of|Market|Agreem|||||||||
|Microelec||||||||||||||
||Vice|to|polarizer|Principl|ent|154.61|0.19%|600|No|Transfer|154.61|||
|tronic||||||||||||||
||Chairma|related|sheet|e|price|||||||||
|Co., Ltd.||||||||||||||
||n of|parties||||||||||||
||the|||||||||||||
||compan|||||||||||||
||y|||||||||||||
|Total||||--|--|154.61|--|600|--|--|--|--|--|
|Details of any sales return of a large||||||||||||||
|||||Not applicable||||||||||
|amount||||||||||||||
|Give the actual situation in the report||||||||||||||
|period where a forecast had been||||||||||||||
|made for the total amounts of routine||||Not applicable||||||||||
|related-party transactions by type to||||||||||||||
|occur in the current period(if any)||||||||||||||
|Reason for any significant difference||||||||||||||
|between the transaction price and the||||Not applicable||||||||||
|market refernce price (if applicable)||||||||||||||

2. Related-party transactions arising from asset acquisition or sold
□Applicable√ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period.
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report 3. Related-party transitions with joint investments
□Applicable√ Not applicable
No main related transactions of joint investment outside for the Company in reporting period.
4. Credits and liabilities with related parties
√Applicable□Not applicable
Was there any non-operating credit or liability with any related party?
√ Yes□No
Due from related parties
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||Newly|||||
|||||||Amount||||
||||Does there||increased|||Interest in||
|||||Opening||recovered in|||Ending|
||||exist||amount in|||the||
|Related|Relationshi|Causes of||balance||the|||balance|
||||non-operati||the||Interest rate|reporting||
|parties|p|formation||(RMB||reporting|||(RMB’0000|
||||on capital||reporting|||period(RM||
|||||‘0000)||period(RM|||)|
||||occupancy?||period(RM|||B’0000)||
|||||||B’0000)||||
||||||B’0000)|||||
||The|||||||||
||Chairman|||||||||
|Shenzhen||||||||||
||of the|||||||||
|Tianma||||||||||
||Company|Sale||||||||
|Microelectr|||No|34.99|180.89|190.24|||25.64|
||was Vice|products||||||||
|onics Co.,||||||||||
||Chairman|||||||||
|Ltd.||||||||||
||of the|||||||||
||company|||||||||
|Anhui||||||||||
|Huapeng|Sharing|||||||||
|||Contract fee|No|360|180|180|||360|
|Textile Co.,|company|||||||||
|Ltd.||||||||||
|Shenzhen||||||||||
|Dailishi|Sharing|||||||||
|||Contract fee|No|27.72|89.45|87.17|||30|
|Underwear|company|||||||||
|Co., Ltd.||||||||||
|Influence of the related||||||||||
|rights of credit and||||||||||
|liabilities upon the||||||||||
|||In the report period,Increase investment income of RMB2.6945 million.||||||||
|company’s operation||||||||||
|results and financial||||||||||
|position||||||||||

Due to related parties
||||||||||
|-|-|-|-|-|-|-|-|-|
|Related parties|Relationship|Causes of|Opening|Amount|Amount|Interest rate|Interest in|Ending|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|||formation|balance(RM|newly|repaid in the|the reporting|balance|
||||B’0000)|increased in|reporting|period(RMB’|(RMB’0000)|
|||||the reporting|period(RMB’|0000)||
|||||period(RMB’|0000)|||
|||||0000)||||
|Shenzhen||||||||
|Xinfang|Sharing|Current||||||
||||24.48||||24.48|
|Knitting Co.,|company|amount||||||
|Ltd.||||||||
|Shenzhen||||||||
||Sharing|Current||||||
|Xiangjiang|||4||||4|
||company|amount||||||
|Trade Co., Ltd||||||||
|Shenzhen||||||||
|Changlianfa||||||||
||Sharing|Current||||||
|Printing &|||91.67||7.02||84.65|
||company|amount||||||
|dyeing Co.,||||||||
|Ltd.||||||||
|Shenzhen||||||||
|Haohao||||||||
||Sharing|Current||||||
|Property|||417.95|77.5|||495.45|
||company|amount||||||
|Leasing Co.,||||||||
|Ltd||||||||
|Yehui||||||||
||Sharing|Current||||||
|International|||113.8|7.7|||121.5|
||company|amount||||||
|Co., Ltd.||||||||
|Shengbo（HK）|Sharing|Current||||||
||||31.5||||31.5|
|Co., Ltd.|company|amount||||||
|Shenzhen||||||||
|Shenchao|Controlled|||||||
|||Interest||||||
|Technology|by the same||3,900.06|380.48|||4,280.54|
|||payable||||||
|Investment|party|||||||
|Co., Ltd.||||||||
|Indluence of the related||||||||
|rights of credit and liabilities||||||||
|upon the company’s||In the report period, Increase financial interest expense of RMB 3.8048 million.||||||
|operation results and||||||||
|financial position.||||||||

5. Other significant related-party transactions
√Applicable□Not applicable
To ensure the construction progress of polarizer with TFT-LCD, Shenzhen Shengbo Optoelectronic Technology
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report Co., Ltd., Shenzhen Shenchao Technology Investment Co., Ltd. and Shenzhen Development Bank, Shenzhen Branch, First Tower Subbranch signed “Contract on Consigned Loan”, of whose main content is: Shenzhen Shenchao Technology Investment Co., Ltd applied to the bank for RMB 200 million of construction of dedicated plant and auxiliary projects for polarizer with TFT-LCD for Shenzhen Shengbo Optoelectronic Technology Co., Ltd The term of the loan is 108 months from the day when the first installment of entrusted loan is transferred to the account of the Company. The interest rate of the entrusted loan is the rate of commercial loans with a term of 5 years quoted by People's Bank of China minus2%. In case of adjustment of such commercial loan rate, the rate of commercial loans with a term of 5 years after adjustment minus2% shall apply as interest rate of entrusted loan from the first day of the next month after the adjustment of basic interest rate. The term of the loan is 108 months from the day when the first installment of entrusted loan is transferred to the account of the Company.As of December 31,2016,The Company actually received a loan of RMB 120 million.
Website for temporary disclosure of the connected transaction
||||
|-|-|-|
|Announcement|Date of disclosure|Website for disclosure|
|Announcement of related Transactions||http//www.cninfo.com.cn. Announcement|
||December 12, 2009||
|||No.2009-55|
|Announcement of Resolutions of the Secondprovisional shareholders’ general meeting||http//www.cninfo.com.cn. Announcement|
||December 30,2009||
|||No.2009-57|
|Announcement of related Transactionsprogress||http//www.cninfo.com.cn. Announcement|
||July 1, 2010||
|||No.2010-26|

XVII.Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□Applicable√ Not applicable
No trusteeship, contract or leasing for the Company in reporting period.
(2) Contract
□ Applicable√ Not applicable
No any contract for the Company in the reporting period.
(3) Lease
□Applicable√ Not applicable
No any lease for the Company in the reporting period..
2.Guarantees
□Applicable√ Not applicable
No any guarantees for the Company in the reporting period..
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report 3.Situation of Entrusting Others for Managing Spot Asset
(1)Situation of Entrusted Finance
√ Applicable□Not applicable
InRMB’0000
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||Actual|
||||||||||||recover|
|||||||||||Actual||
|||||||||Impairme|||of gain|
||Related|||||Earning|Principal|||gain/loss||
|||Type of||||||nt|Estimate||and|
|Trustee|transactio||Amount|Start date|End date|reconition|recovered|||in the||
|||product||||||provision(|return||loss in|
||n|||||method|actually|||report||
|||||||||If any)|||the|
|||||||||||period||
||||||||||||report|
||||||||||||period|
||||||||||||On|
||||||||||||Januar|
||||||||||||y 3,|
||||||||||||2017,|
||||||||||||the|
||||||||||||redemp|
||||||||||||tion of|
|||Financial||||||||||
||||||||||||the|
|||Product of||||||||||
||||||||||||produc|
|China||principal-||||||||||
|||||December|January||||||t|
|Merchant|No|guarantee|80,000|||-|80,000||16.44|0||
|||||29,2016|3,2017||||||comple|
|s bank||d floating||||||||||
||||||||||||ted,|
|||income||||||||||
||||||||||||resulte|
||||||||||||d in|
||||||||||||actual|
||||||||||||income|
||||||||||||of|
||||||||||||RMB|
||||||||||||164,40|
||||||||||||0.|
||||||||||||On|
|||Financial||||||||||
||||||||||||Februa|
|||Product of|||||||||ry 17,|
|China||principal-|||||||||2017,|
|||||December|February|||||||
|Merchant|No|guarantee|20,000|||-|20,000||57.53|0|the|
|||||29,2016|17,2017|||||||
|s bank||d floating|||||||||redemp|
|||income|||||||||tion of|
||||||||||||the|
||||||||||||produc|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||t|
|||||||||||comple|
|||||||||||ted,|
|||||||||||resulte|
|||||||||||d in|
|||||||||||actual|
|||||||||||income|
|||||||||||of|
|||||||||||RMB|
|||||||||||575,30|
|||||||||||0.|
|Total|100,000|--||--||--|100,000|73.97|0|--|
|Source of fund|Self fund||||||||||
|Principal and return due but not|||||||||||
||0||||||||||
|covered|||||||||||
|Lawsuit (if any)|-||||||||||
||December 29,2016||||||||||
||On December 29, 2016, the Proposal about the Use of Part of its Own Funds for Entrusted||||||||||
||Wealth Management by the Company's Subsidiary of Shenzhen Shengbo Optoelectronics||||||||||
||Technology Co., Ltd was examined and approved in the 31st board meeting of the company's||||||||||
||sixth session board of directors, agreed that Shenzhen Shengbo Optoelectronics Technology Co.,||||||||||
||Ltd (hereinafter referred to as " Shengbo Optoelectronics ") shall, under the condition of ensuring||||||||||
||the safety of funds and not affecting the normal production and business activities and investment||||||||||
|Whether there will be entrusted|||||||||||
||demands, use no more than RMB 1000 million of self-owned funds to commission the wealth||||||||||
|wealth management plan|||||||||||
||management managed by commercial banks, securities companies, trust companies and other||||||||||
||financial institutions, with the concrete financial products that are bank financial products, trust||||||||||
||products, low risk products in asset management plans, upon the valid period from December 29,||||||||||
||2016 to December 28, 2018. For details, please see the Announcement on the Use of Part of its||||||||||
||Own Funds for||Entrusted||Wealth Management by the Company's Subsidiary of Shenzhen||||||
||Shengbo Optoelectronics Technology Co., Ltd disclosed on December 31, 2016(2016-68).||||||||||

（2）Situation of Entrusted Loans
□ Applicable√ Not applicable
No any Entrusted loans for the Company in the reporting period..
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report 4. Other significant contract
□ Applicable√ Not applicable
No other significant contracts for the Company in reporting period.
XVIII. Social responsibilities
1. Performance of poverty relieving responsibilities
□ Applicable√ Not applicable
2. Information of performance of other social responsibilities
(1)The protection ofshareholder’s rights and interests
During the reporting period, the company operated with in accordance with laws and strictly conformed to the requirements of laws and regulations such as The Company Law, The Securities Law and Corporate Governance Guidelines for Listed Companies, and the company continuously perfected the governance structure and further standardized the operation of the company. Adhered to the core system constituted by shareholders' meeting, board of directors, board of supervisors and the independent director system, further improved the corporate governance structure and the management system, constantly improved the company's internal control system in the process of business management, adopted effective measures to prevent operational risks and soundly safeguarded and protected the rights and interests of shareholders to lay a solid foundation for the company's healthy, sustainable development. The company performed the obligation of information disclosure strictly in accordance with laws and ensured the truthful, accurate, complete, timely and fair information discourse to all shareholders, with no situation of selective disclosure.
It is determined this year to make more efforts to advance information disclosure and transparency, make the most of multi-platform to protect the rights and interests due for investors, promptly answer the investors, improve transparent information and safeguard medium and smallshareholders’ legitimate interests.
(2) The protection of legal right of staff
We value human resource management, uphold “unity, vitality, enterprising” management philosophy, provide official Labor Contract and various statutory social insurances and welfares according to Labor Law and related laws and regulations, respect and protectemployee’s legitimate interests and aim for harmonious, stable labor-capital relationship. In 2016, the company established the company institutions including Measures for the Administration of New Employee Orientation Training, Measures for the Administration of Accumulative Points of Training Management and Measures for Internal Instructor Management, strengthened the staff training and improved the overall quality of staff, thus to achieve a win-win effect between the company and employees. Meanwhile, the company again sorted out the responsibilities of each department and gradually shaped a working mode of clear duty, clear responsibility and effective cooperation; comprehensively combed the personnel module of ERP system to achieve the dynamic management of personnel information; soundly improved the management of personnel archives and promoted the scientific and standardized management of archives. Furthermore, optimized and improved the human resource related work such as recruitment of key enterprises, technical rank evaluation, training, assessment and incentive and remuneration and benefits, thus to fully mobilize the enthusiasm of the staff and further strengthen the cohesion of the company.
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report (3) The protection of environment
Modern “green enterprise” iscompany’s long-term goal, which will be achieved by green circulation in all process of industry chain. In reporting period, no occurrence of severe environmental incident; noise, industrial wastewater, exhaust emission, etc of production passed environmental protection monitoring and accorded with related laws and regulations. Moreover, “green office” is promoted and various educational activities of environmental protection are carried out to disseminate awareness of energy conservation and emission reduction and coordinate production and environmental protection.
(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.
Listed company and its subsidiary belongs to the key pollution enterprise listed by Department of Environmental Protection
Not applicable
Whether released Social Responsibility Report
□ Yes√No
XIX. Other material events
√ Applicable□ Not applicable
(a) The company planning a major asset restructuring
1. In the light of the company's controlling shareholder of Shenzhen Investment Holdings Co.,Ltd planning a major event to the company, after making the application, the company's stock-trading was suspended from August 4, 2016. On August 17, 2016, the afore-said major event was confirmed to be a major asset restructuring, the company's stock trading was continuously suspended from August 18, 2016 because of the major asset restructuring. For details JuchaoWebsite:（http://www.cninfo.com.cn. (Announcement No.2016-23 and 2016-25). 2. During the suspension period, the company strictly conformed to the relevant provisions stipulated by CSRC and Shenzhen Stock Exchange to disclose the progress information of the relevant matters once every five trading days. Before the suspension period reaching two months, the company held the 28th board meeting of the sixth session board of directors, in which the Proposal of Applying for Extension of Suspension Period for the Major Asset Restructuring was approved; before the suspension period reaching three months, the company held the 2016-first extraordinary general shareholders' meeting on November 3, 2016, in which the Proposal about Holding a General Shareholders' Meeting to Deliberate the Related Matters of the Extension of Suspension Period was examined and approved; before the suspension period reaching four months, because the company had not yet disclosed the restructuring plan, so the company released the Announcement on the Progress of the Major Asset Restructuring in the Suspension Period on December 2, 2016. For details Juchao Website:（http://www.cninfo.com.cn. (Announcement No.2016-47,2016-55 and 2016-59).
3. During the suspension period, the company actively promoted the major asset restructuring, and the company has engaged the independent financial adviser, the law firm, the accounting firm, the asset appraisal agency and other intermediaries to carry out the due-diligence, the audit and asset assessment, with active
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report communications and the demonstration in connection to the major asset restructuring plan. After the preliminary intention was reached by both parties, the Framework Agreement was signed, and there were negotiations carried out for the employee placement and the transaction agreement, thus reached a preliminary intention.
4. In the demonstration process of the scheme, based on the changes in the current domestic securities market-environment and policies, the conditions for the implementation of the major asset restructuring are not yet mature, so it will face many uncertainties if continue to promote the major asset restructuring. After reaching a consensus by negotiations between the company and TCL Group, both sides intended to terminate the major asset restructuring and both sides rescinded the Framework Agreement which was signed on October 17, 2016. On December 16, 2016, the company held the 33rd board meeting of the sixth session board of directors, in which the Proposal about the Termination of the Major Asset Restructuring and the Resumption of the Company's Stock-trading was examined and approved. After the company's prudent decision-making, the company decided to terminate the major asset restructuring. After the afore-said proposal was approved, both parties signed the Agreement on the Termination of the Major Asset Restructuring. After the company made an application to Shenzhen Stock Exchange, the company's stock-trading was resumed from December 19, 2016. For details JuchaoWebsite:（http://www.cninfo.com.cn. (Announcement No.2016-62).
(b) Matters of the Company's subsidiary-Shengbo Optoelectronics' introduction of strategic investors by the way of capital increase and becoming shareholder
1. In order to solve the current operating difficulties of the Company's subsidiary-Shengbo Optoelectronics and further improve the company's production technology and management level and profitability for polarizer and make a stronger and bigger polarizer business, the company launched the work for Shengbo Optoelectronics' introduction of strategic investors. After the audit, evaluation and the public listing, Jinjiang Group won the bid in Shenzhen United Property Rights Exchange, thus according to the property rights trading rules, the company and Shengbo Optoelectronics and Hangzhou Jinjiang Group Co., Ltd andJinhang Investment-which was set up by Hangzhou Jinjiang Group Co., Ltd and Hangzhou Jinjiang Group Co., Ltd is the actual controller-jointly signed the Capital Increase Agreement of Shenzhen Shengbo Optoelectronics Technology Co.,Ltd, and Jinhang Investment shall fund RMB 1352.64 million in cash to subscribed40% stake of Shenzhen Shengbo Optoelectronics Technology Co.,Ltd. For details JuchaoWebsite:（http://www.cninfo.com.cn. (Announcement No.2016-19,2016-20,2016-21,2016-40 and 2016-63).
2. In order to achieve better results for the cooperation after the introduction of strategic investors and fully utilize the resource advantages of state-owned enterprise and the mechanism advantages of private enterprise, on the basis of the Capital Increase Agreement signed by the company and Jinjiang Group and Jinhang Investment, they also signed the Cooperative Agreement. The Proposal about the Cooperative Agreement Signed by the Company and the Strategic Investors of Shenzhen Shengbo Optoelectronics Technology Co., Ltd was examined and approved in the company's 31st board meeting of the sixth session board of directors and then was approved in the 2017-first extraordinary general shareholders' meeting. For details JuchaoWebsite（: http://www.cninfo.com.cn. (Announcement No.2016-67 and 2017-05).
(c) Progress of the second-phase project of No.6 line of TFT-LCD polarizer
During the reporting period, the second-phase project of No.6 line was in line with the schedule. The plant decoration and purification and related projects, the host equipment manufacturing and the services bidding for the host equipment installation have been completed. Currently, the procurement and bidding work for the second-time matching projects is proceeding. It's expected to finish the installation and commissioning of No.6 line in 2017 and realize the mass-production at the end of 2017. As of December 31, 2016, the cumulative investment for the second-phase project of No.6 line was RMB 283.0887 million, accounting for40.42% of the
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report total investment of RMB 700.34 million-which had been adjusted, among which, the use of the raised funds was RMB 55.7442 million and the use of self-owned funds and government funds was RMB 227.3445 million XX.Material events of subsidiaries
√ Applicable□Not applicable
1. For the details of the company's subsidiary-Shengbo Optoelectronics' introduction of strategic investors by the way of capital increase and becoming shareholder, please see the "Nineteenth. Information about Other Important Matters" in the important matters of the fifth section of 2016 Annual Report.
2. On November 2016,The company's subsidiary-Shengbo Optoelectronics has again passed the national high-tech enterprise recognition.,The Valid for three years. For details JuchaoWebsite:（http://www.cninfo.com.cn. (Announcement No.2017-03).
VI. Change of share capital and shareholding of Principal ShareholdersⅠ.Changes in share capital
1. Changes in share capital
In Shares
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Increase/decrease（+，-）|||||After the Change||
||Amount|Proportio|||Capitaliza|||||
|||n|Share|Bonus|tion of||||Proportio|
||||||common|Other|Subtotal|Quantity||
||||allotment|shares|||||n|
||||||reserve|||||
||||||fund|||||
|1.Shares with conditional|51,527,72|||||-51,457,9|-51,457,9|||
|||10.17%||||||69,750|0.01%|
|subscription|6|||||76|76|||
|2.State-owned legal person|51,457,97|||||-51,457,9|-51,457,9|||
|||10.16%||||||0|0.00%|
|shares|6|||||76|76|||
|3.Other domestic shares|69,750|0.01%||||||69,750|0.01%|
|Domestic Nature shares|69,750|0.01%||||||||
|II.Shares with unconditional|454,994,1|||||51,457,97|51,457,97|506,452,0||
|||89.83%|||||||99.99%|
|subscription|23|||||6|6|99||
||405,563,8|||||51,457,97|51,457,97|457,021,8||
|1.Common shares in RMB||80.07%|||||||90.23%|
||73|||||6|6|49||
|2.Foreign shares in domestic|49,430,25|||||||49,430,25||
|||9.76%|||||||9.76%|
|market|0|||||||0||
|III. Total of capital shares|506,521,8|100.00%||||0|0|506,521,8|100.00%|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||
|-|-|
|49|49|

Reasons for share changed
√ Applicable□Not applicable
During the reporting period, the restriction term of the 51,457,976 shares which the company non-publicly issued to thecompany’s controlling shareholder of Shenzhen Investment Holding Co., Ltd in 2013 was expired, thus it shall newly add 51,457,976 tradable shares which were free from the restriction and being tradable on March 29, 2016. Refer to Company Announcement No. 2016-03.on March 25, 2016 at JuChao information network http://www.cninfo.com.cn)
Approval of Change of Shares
□ Applicable√ Not applicable
Ownership transfer of share changes
□ Applicable√ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
□ Applicable√ Not applicable
Other information necessary to disclose for the company or need to disclosed under requirement from security regulators
□ Applicable√ Not applicable
2. Change of shares with limited sales condition
√ Applicable□ Not applicable
In RMB
||||||||
|-|-|-|-|-|-|-|
||||Number of||||
|||Number of||Restricted Shares||Date of|
||Initial Restricted||Increased||Reason for||
|Shareholder Name||Unrestricted||in the End of the||Restriction|
||Shares||Restricted Shares||Restricted Shares||
|||Shares This Term||Term||Removal|
||||This Term||||
||||||Commitment to||
||||||non-public offer||
||||||ing during the se||
||||||cond phase proje||
||||||ct of Shen Textil||
|Shenzhen|||||||
||||||e shares subscrib||
|Investment|51,457,976|51,457,976|0|0||March 29,2016|
||||||ed lock handle, l||
|Holdings Co., Ltd.|||||||
||||||ocking Shen Tex||
||||||tile non-public o||
||||||ffering on the st||
||||||ock market of 3 6||
||||||months||
|Total|51,457,976|51,457,976|0|0|--|--|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual ReportⅡ.Issuing and listing
1.Explanation of the Situation of the Security Issue(No Preferred Shares) in the Report Period
□Applicable√Not applicable
2.Change of asset and liability structure caused by change of total capital shares and structure
□Applicable√Not applicable
3.About the existingemployees’ shares
□Applicable√Not applicable
Ⅲ.Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
In Share
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Total|||
|||||||||||||preferred shareh|||
|Total number|||Total||||The total number o||||||||
|||||||||||||olders at the end|||
|of common|||shareholders at||||f preferred shareho||||||||
|||||||||||||of the month|||
|shareholders at|||the end of the||||lders voting rights||||||||
||41,555||||46,078|||||0||from the date of||0|
|the end of the|||month from the||||restored at period-e||||||||
|||||||||||||disclosing the|||
|reporting|||date of disclosing||||nd(if any)(See||||||||
|||||||||||||annual report(if|||
|period|||the annual report||||Notes 8)||||||||
|||||||||||||any)(See Notes|||
|||||||||||||8)|||
|Particulars about shares held above 5% by shareholders or top ten shareholders|||||||||||||||
||||||Number|||Amount|Amount||Number of share pledged/frozen||||
|||||Proportio||Changes|||||||||
|Shareholders||Nature of||n of|of shares|in||of|of||||||
||||||held at|||restricted|un-restrict||||||
|||shareholder||shares||reporting|||||State of share||Amount||
||||||period|||shares|ed shares||||||
|||||held（%）||period|||||||||
||||||-end|||held|held||||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
|insurance Co., Ltd.－Self fundsHuatai Portfolio|State-ownedLegal person||00|
|Strategy investors or general legal||||
|person becomes top 10 shareholders||||
|||Nil||
|due to rights issued (if any )(See Notes||||
|3)||||
|||Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned subsidiary of||
|||Shenzhen Investment Holding Co., Ltd. and a person taking concerted action. Except this,||
|||the Company did not whether there is relationship between the top ten shareholders holding||
|Related or acting-in-concert parties||||
|||non-restricted negotiable shares and between the top ten shareholders holding||
|among shareholders above||||
|||non-restricted negotiable shares and the top 10 shareholders or whether they are persons||
|||taking concerted action defined in Regulations on Disclosure of Information about||
|||Shareholding of Shareholders of Listed Companies.||
|Shareholding of top 10 shareholders of unrestricted shares||||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
||Quantity of unrestricted shares held at the end of the|Share type||
|Name of the shareholder||||
||reporting period|Share type|Quantity|
|||RMB Common||
||||234,069,436|
|||shares||
|||RMB Common||
||||16,129,032|
|||shares||
|||RMB Common||
||||6,384,816|
|||shares||
|||RMB Common||
||||3,408,341|
|||shares||
|||Foreign shares||
|||placed in||
||||2,900,814|
|||domestic||
|||exchange||
|||Foreign shares||
|||placed in||
||||2,443,526|
|||domestic||
|||exchange||
|||RMB Common||
||||1,442,600|
|||shares||
|||RMB Common||
||||1,239,109|
|||shares||
|||RMB Common||
||||1,210,000|
|||shares||
|||RMB Common||
||||1,181,694|
|||shares||
|Explanation on associated relationship|Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned subsidiary of|||
|or consistent action among the top 10|Shenzhen Investment Holdings Co., Ltd. and a person taking concerted action. Except this,|||
|shareholders of non-restricted|the Company did not whether there is relationship between the top ten shareholders holding|||
|negotiable shares and that between the|non-restricted negotiable shares and between the top ten shareholders holding|||
|top 10 shareholders of non-restricted|non-restricted negotiable shares and the top 10 shareholders or whether they are persons|||
|negotiable shares and top 10|taking concerted action defined in Regulations on Disclosure of Information about|||
|shareholders|Shareholding of Shareholders of Listed Companies.|||
|Explanation on shareholders||||
||The company's shareholder- Zhu Ye-via Goulian Securities Co.,Ltd's clients' credit-trading|||
|participating in the margin trading||||
||guaranteed securities account-holds 1,239,109 shares.|||
|business(if any )(See 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
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy–back agreement dealing in reporting period.
2.Controlling shareholder
Nature of Controlling Shareholders: Local state holding
Type of Controlling Shareholders:Legal person
||||||
|-|-|-|-|-|
||Legal||||
|Name of the Controlling|||||
||representative/Leade|Date of incorporation|Organization code|Principal business activities|
|shareholder|||||
||r||||
|||||Investment and|
|||||Management of|
|||||State-owned Share Right;|
|||||Development and|
|Shenzhen Investment|||||
||Peng Haibin|October 13,2004|767566421|Operating of Land|
|Holdings Co., Ltd.|||||
|||||Allocated by the|
|||||Government, Strategic|
|||||Investment and Service for|
|||||Emerging Industry|
||Shen Property A（000011），Quantity of shares 380.38 million，Shareholding ratio：63.82%； Shenbo||||
||A（000019），Quantity of shares72.25 million，shareholding ratio：16.00%；Shen Real estate||||
|Equity of other|||||
||A(000029),Quantity of shares 642.88 million，Shareholding ratio：63.55%；Shen Universe A||||
|domestic/foreign listed|||||
||（000023），Quantity of shares 14.44 million，shareholding ratio：10.41%；Pingan（601318），||||
|company with share|||||
||Quantity of shares 962.72 million，shareholding ratio：5.27%；Guosen Seurities（002736），Quantity||||
|controlling and share|||||
||of shares 2749.52 million，shareholding ratio：33.53%；Guotai Junan（601211），Quantity of shares||||
|participation by|||||
||624.07 million，shareholding ratio：8.18%；Telling holding（000829），Quantity of shares||||
|controlling shareholder in|||||
||131,917,569，shareholding ratio：13.76%；Etop information（834386），Quantity of shares 42||||
|reporting period|||||
||million，shareholding ratio：60.00%；Inspection test（836325），Quantity of shares：20 million，||||
||shareholding ratio：40.00%.||||

Change of the actual controller in the reporting period
□Applicable√Not applicable
Nil
3．Information about the controlling shareholder of the Company
Actual controllernature：Local state owned assets management
Actual controllertype：Legal person
||||||
|-|-|-|-|-|
||Legalrepresentative/person in charge||||
|Name of the controlling||Date of|||
||||Organization code|Principal business activities|
|shareholder||establishment|||
|State-owned Assets Regulatory||||Performing the responsibilities|
||Peng Haibin|July 31,2004|K3172806-7||
|Commission of Shenzhen||||of investors on behalf of the|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Municipal People's Government||state and supervising and|
|||managing state-owned assets|
|||according to authorization and|
|||law.|
|Equity of other|||
||Except for Shenzhen Holdings Co., Ltd., the holding shareholder of the company, other domestic||
|domestic/foreign listed|||
|company with share|||
||and foreign listed companies of the equity held by the actual controller haven’t been shown in the||
|controlling and share|||
|participation by|list of the top ten shareholders of the company.||
|controlling shareholder in|||
|reporting period|||

Changes of the actual controller in the reporting period
□Applicable√Not applicable
No Changes of the actual controller in the reporting period
Block Diagram of the ownership and control relations between the company and the actual controller
The actual controller controls the company by means of trust or managing the assets in other way
□Applicable√Not applicable
4.Particulars about other legal person shareholders with over10% shareheld
□Applicable√Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report 5.Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, Restructuring Party and Other Commitment Subjects
□Applicable√Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report VII. Situation of the Preferred Shares
□ Applicable√Not applicable
The Company had no preferred shares in the reporting period.
VIII. Information about Directors, Supervisors and Senior Executives I. Change ein shares held by directors, supervisors and senior executives
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Amount|Amount|||
||||||||Shares|of shares|of shares||Shares|
|||||||||||Other||
||||||Starting|Expiry|held at|increased|decreased||held at|
|||Office||||||||changes||
|Name|Positions||Sex|Age|date of|date of|the|at the|at the||the|
|||status||||||||increase/d||
||||||tenure|tenure|year-begi|reporting|reporting||year-gegi|
|||||||||||ecrease||
||||||||n(share)|period(sh|period(sh||n(share)|
|||||||||are)|are)|||
||Board|||||||||||
||chairman,||||January|August||||||
|Zhu Jun||In office|Male|53|||0|0|0|0|0|
||General||||16,2015|15,2016||||||
||Manager|||||||||||
|Wang|||||May|August||||||
||Director|In office|Male|52|||0|0|0|0|0|
|Yongjian|||||4,2010|15,2016||||||
||||||May|August||||||
|Lin Lebo|Director|In office|Male|55|||0|0|0|0|0|
||||||20,2015|15,2016||||||
|Jin|Director,||||August|August||||||
|||In office|Female|45|||0|0|0|0|0|
|Zhenyuan|CFO||||16,2013|15,2016||||||
||Independ|||||||||||
|Zhang|||||May|August||||||
||ent|In office|Male|57|||0|0|0|0|0|
|Yong|||||4,2010|15,2016||||||
||Director|||||||||||
||Independ|||||||||||
|Shi|||||May|August||||||
||ent|In office|Female|49|||0|0|0|0|0|
|Weihong|||||4,2010|15,2016||||||
||Director|||||||||||
|He Qiang|Independ|In office|Male|64|August|August|0|0|0|0|0|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||ent||||16,2013|15,2016||||||
||Director|||||||||||
||Chairman|||||||||||
||of the|||||||||||
|Wang|superviso||||May|August||||||
|||In office|Male|49|||0|0|0|0|0|
|Weixing|ry||||20,2015|15,2016||||||
||committe|||||||||||
||e|||||||||||
||Superviso||||April|August||||||
|Li Wei||In office|Male|51|||0|0|0|0|0|
||r||||21,2009|15,2016||||||
||Employee|||||||||||
|Zhang|||||August|August||||||
||superviso|In office|Male|41|||0|0|0|0|0|
|Xiaodong|||||9,2013|15,2016||||||
||r|||||||||||
|Feng|Deputy||||July|August||||||
|||In office|Male|54|||0|0|0|0|0|
|Junbin|GM||||30,2003|15,2016||||||
|Zhu|Deputy||||Septembe|August||||||
|||In office|Male|52|||93,000|0|0|0|93,000|
|Meizhu|GM||||r 23,2008|15,2016||||||
||Secretary|||||||||||
|Jiang|to the||||January|August||||||
|||In office|Female|46|||0|0|0|0|0|
|Peng|board of||||16,2015|15,2016||||||
||directors|||||||||||
||||||August|April||||||
|Cao Jin|Director|Dimission|Female|54|||0|0|0|0|0|
||||||16,2013|16,2016||||||
|Total|--|--|--|--|--|--|93,000|0|0|0|93,000|

 II. Change in shares held by directors, supervisors and senior executives
||||||
|-|-|-|-|-|
|Name|Positions|Types|Date|Reason|
|Cao Jin|Director|Dimission|April 16,2016|Due to Resignation for personal reasons|

III.Posts holding
Professional background, work experience and main duties in the Company of existing directors, supervisors and senior management (1) Director
Zhu Jun, Male, Born in 1963, Masterdegree，senior engineer , member of the Communist party, He served successively as secretary of Lige Village, Yutai County, Shandong Province, workshop director of Shandong Jining Cotton Mill, deputy factory director of Jining Chemical Fibre Factory, office director of Jining Textile
Industry Company, deputy county head of Wenshang County, Shandong Province, office director of Shandong
Textile Department, chief of Personnel Education Division, manager of Enterprise management Dept, general
manager assistant and Deputy General Manager of the Company. He served as secretary of Party
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report Committee ,Board Chairman and General manager of the Company, Director and Vice Board chairman of Tianma Microelectronic Co., Ltd.,and board charman of Shengbo Optoelectronic Technology Co., Ltd.
Wang Yongjian , Male, Born in 1964,Master degree, Economic engineer , member of the Communist party, He served successively as Financial Analyst Financial Manger and Chief Financial Officer of U.S.Digital Equipment (China) Company, Senior staff and principal staff of Shenzhen Government Economic Restructuing Office, Manager of China South Securities Co., Ltd., Deputy General Manager of Administrative Headquarters, Deputy Director of office, the board secretary of Shenzhen Shahe Industrial Group ., Deputy General Manager of Shahe Industrial Company, He served as Director and General Manager of Shenzhen Holdings Invetment Co., Ltd. He served as Director of the Company.
Lin Lebo , Male, born in 1961, Bachelor Degree, auditor, member of communist party. He used to be deputy director, director, vice President of the union, party branch secretary in Shenzhen Audit bureau;served as director in shenzhen auditing firm, executive vice President in Shijixingyuan Co., Ltd.,, manager of audit department and secretary of the party branch in Shenzhen investment management company, manager of asset management department and secretary of the party branch in Shenzhen investment management company;used to serve as chairman of the board and party secretary in and shenzhen coptic green industry development co., Ltd., deputy manager in shenzhen Tongchan industrial co., Ltd., director, general manager, deputy party secretary in shenzhen Tongchan packaging group co., Ltd., chairman of the supervisory board in inspection group in the southern electronic product testing (shenzhen) Co., Ltd.. Now serve as Executive director and Deputy General Manager of Shenzhen Shenchao Technology Investment Co., Ltd. He served as Director of the Company.
Jin Zhenyuan, Female, born in 1971, Master Degree, Senior Accountant, CPA, international financial management division. She used to serve as Shenzhen Lionda Group Chief Accountant, Finance Minister in Shenzhen Oriental Enterprise Ltd., Finance Minister in Shenzhen new century drinking Co., Finance Director in Yili Industrial Co., Ltd. of Shenzhen, Finance Minister in Shenzhen, China Transportation Industry Corporation, director and Chief Financial Officer in Shenzhen City-Property Group, , Director in Shenzhen Beauty Star Co., Ltd., Director and Chief Financial Officer of Shenzhen Wuzhou Guest House, LLC. She now serve as the Director and Chief Financial Officer of the Company, She served as Director of Shengbo Optoelectronic Technology Co., Ltd.. Zhang Yong, Male, Born in 1959, Doctor of laws , Lawyer, once served successively as Deputy director of International Economic Law Dept of China University of Political Science ,Associate professor of International Economic Law Dept of Wuhan University, Judge of Shenzhen IntermediatePeople’s Court Second chamber and Third chamber,president and secretary of Party Committee of Shenzhen Lawyer Association, CPPCC member of Shenzhen, He served as independent Director of Shenzhen Agricultural Products Co., Ltd., He now serves as Partner of Guangdong Renren law firm, first level lawyer, a member of the Shenzhen Municipal People's Government Office of Legislative Affairs legal expert advisory committee, the executive director of the Guangdong Provincial Law Association, vice president of the Shenzhen Municipal Law, a member of China International Economic and Trade Arbitration Commission Expert Advisory Committee, a member of Shenzhen Arbitration Commission, members of the Advisory Committee for Huizhou Arbitration Commission , the Company's independent directors.
Shi Weihong, Female, Born 1967, Doctor, certified public accountant, Certified asset appraiser, Certified tax agent,
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report once served successively as Auditor, Project Manger and Director of Guangming Certified public Accountants, she served as Independent Director of Shenzhen Tili(Group) Co., Ltd, as Independent director of Shenzhen SEG Samsung Co., Ltd. Senior partner of Shenzhen Guangming Certified public Accountants, she now serves as Partner of Accounting Firm and Independent director of the Company.
He Qiang , Male, born in 1952, Professor of finance at the Central University of Finance and Economics, Ph.D. tutor, Director of Securities and Futures Institute, enjoy special government allowances. He was a member of 11th and 12th CPPCC National Committee, of China Finance Society, the China Investment Association, of China Economic and Social Council of the other positions. He served as independent director in the Air Investment Holding Co., Ltd., in Hengyi Petrochemical Co., Ltd., in Golden State Securities corporation, Dongbei Securities and in the Company. the Company's independent directors.
（2）Supervisor
Wang Weixing, male, born in 1968, graduate degree, economist, member of Communist Party of China, has served successively as cadre of Qingdao TV Factory, staff and senior staff member of Shenzhen Administration of Industry and Commerce (price bureau) Futian, Che Kung Temple branch, senior staff member and principal staff member of Shenzhen Administration of Industry and Commerce (price bureau) registration sub-office, principal staff member of Shenzhen General Asset Management Office, deputy director of Shenzhen Asset Management Office collective enterprise department, deputy director of general office of Shenzhen Asset Management Office, deputy director of petition acceptance office of Shenzhen Asset Management Office, director, vice-secretary of CPC and secretary of discipline commission of Shenzhen Tongchan Packaging Group Co., Ltd, director, vice-secretary of CPC and secretary of discipline commission of Shenzhen Tongchan Group Co., Ltd and currently takes the post of chairman of supervisory board of the Company.
Li Wei, Male, Born in 1965, Master degree, Economic engineer, member of the Communist party,once served successively as Staffer of Shenzhen Aihua Electronics Company, Cadres of Shenzhen Municapal Taiwan Affairs Office,Assistant director of Office ,Secretary of Board Chairman of Zhongshen Internation Cooperation office, .Assistant Manager of Office and Deputy Director of Assets Dept of Shenzhen Trade Investment Holding Company,Deputy Director of Law Affair Dept and Deputy director of Enterprise No2.Dept of Shenzhen Investment Management Co., Ltd. Deputy director of Enterprise and No.1 Dept and No2.Dept of Shenzhen Holdings Investment Co., Ltd., He new served as Deputy General Manager of Shenzhen Shentou Investment Development Co., Ltd. and Supervisor of the Company.
Zhang Xiaodong , Male, born in 1975, Master Degree, communist party member. He joined the company in August 1999, used to serve as manager assistant, manager of subordinary of Shenzhen textile (Holdings) Co., Ltd., manager in business management department; used to be manager in Shenzhen Beautify Centenary clothing co., Ltd. He new serve as party department minister and superior of the company.
（3）Senior Executives
Feng Junbin , Male, Born in 1962, College degree ,Auditor, He served successively as special enterprise controller of Guangdong Dapu County Finance Bureau, deputy section head of Guangdong Fengshun County, director of Audit Dept., manager of Enterprise Management Dept., general manager assistant and supervisor of the Company, he served as Deputy general manager of the Company. And chairman of the supervisory committee of Shengbo
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report Optoelectronic Technology 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 ofR& D Center, Assistant General Manager, He served as Deputy general Manager of the Company and director of Shenzhen Shengbo Optoelectronic Technology Co., Ltd.
Jiang Peng, Female, born in 1970, Bachelor Degree, member of communist party, She served as officer of the Secretary Office of Shandong Fishery Group Co.,Ltd., Deputy Director of the Secretary office and Securities affairs Representative of Shandong Zhonglu Oceanic Fisheries Co., Ltd., Securities Representative of Huafu Holding Co., Ltd., Securities affairs representative and Officer of the Secretariat of the Board of the Company, now serves as the secretary of the Board of the Company.
Office taking in shareholder companies
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
||||||Does he /she|
|||Titles||||
|Names of the|||||receive|
|||engaged in|Sharting date of|Expiry date of||
|persons in|Names of the shareholders||||remuneration or|
|||the|office term|office term||
|office|||||allowance from the|
|||shareholders||||
||||||shareholder|
|||General||||
|Wang Yongjian|Shenzhen Investment Holdings Co., Ltd.||May 5,2016||Yes|
|||Manager||||
|Wang Yongjian|Shenzhen Investment Holdings Co., Ltd.|Director|May 19,2016||Yes|
||Shenzhen Shenchao Technology|General|January|||
|Lin Lebo|||||Yes|
||Investment Co., Ltd.|Manager|19,2015|||
|||Deputy||||
||Shenzhen Shentou Porperty Developement|||||
|Li Wei||General|August 6, 2014||Yes|
||Co., Ltd.|||||
|||Manager||||

Offices taken in other organizations
□Applicable√Not applicable
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 ofshareholders’ meeting,
and the remuneration of supervisors paid by the company is determined by their position held in the company.
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report Remueration to directors, supervisors and senior executives in the reporting period
Unit：RMB’0000
||||||||
|-|-|-|-|-|-|-|
||||||Total|Remuneration|
||||||remuneration|actually receivect|
|Name|Positions|Sex|Age|Office status|||
||||||received from the|at the end of the|
||||||shareholder|reporting period|
||Board Chairman,||||||
|Zhu Jun||Male|53|In office|60.11|No|
||General Manager||||||
|Wang Yongjian|Director|Male|52|In Office|0|Yes|
|Lin Lebo|Director|Male|55|In office|0|Yes|
|Jin Zhenyuan|Director, CFO|Female|45|In Office|48|No|
||Independent||||||
|Zhang Yong||Male|57|In office|8|No|
||Director||||||
||Independent||||||
|Shi Weihong||Female|49|In Office|8|No|
||Director||||||
||Independent||||||
|He Qiang||Male|64|In office|8|No|
||Director||||||
||Chairman of the||||||
|Wang Weixing|supervisory|Male|49|In Office|41|No|
||committee||||||
|Li Wei|Supervisor|Male|51|In office|0|Yes|
||Employee||||||
|Zhang Xiaodong||Male|41|In office|32.58|No|
||supervisor||||||
|Feng Junbin|Deputy GM|Male|54|In Office|56.55|No|
|Zhu Meizhu|Deputy GM|Male|52|In office|56.55|No|
||Secretary to the||||||
|Jiang Peng||Female|46|In Office|36.74|No|
||board of directors||||||
|Cao Jin|Director|Female|54|Dimission|33.52|No|
|Total|--|--|--|--|389.05|--|

 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（person）|43|
|Number of in-service staff of the main subsidiaries（person）|1,213|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
|||
|-|-|
|Total number of the in-service staff（person）|1,256|
|Total number of staff receiving remuneration in the current||
||1,256|
|period（person）||
|The number of the parent company and the main subsidiary’s||
||0|
|retired staffs who need to bear the cost（person）||
|Professional||
|Classified according by Professions|Number of persons（person）|
|Production|845|
|Sales|29|
|Technical|114|
|Financial|32|
|Administrative|103|
|Service personal|133|
|Total|1,256|
|Education||
|Classified according by education background|Number of persons（person）|
|Postgraduate or above|32|
|Universities|188|
|Colleges|120|
|Mid-school or below|916|
|Total|1,256|

 2. Remuneration policies
In 2016, the Company carried out management foremployees’ compensation in strict accordance with thestate’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 pllan
Company targeted to improve professional skills and support company's operations, it required each post to complete the forms of Training Needs Questionnaire, Internal Training Courses Recommendation Form, Employee Individual Development Plan, and company formulated personal and company annual training plans in accordance with these forms, and simultaneously balanced individual with company and internal training with
external training. Company carried out demand investigation and training evaluation, etc when organizing training
projects to safeguard training effectiveness.
In 2016, the Company carried out several training including Induction Training and Practice For New
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report Employees, Standard Governance Training For Listed Companies and Sand Table Simulation for Non-financialStaffs’ Financial Management, where the Compnay acquired good effect. Meanwhile, demand research and training assessment were carried out in the process of each training project to ensure the training effect, which made theCompany’s training plans and contents meet with the overall demands for each position and theCompany’s development,and continuously improved the general quality of theCompany’s existing staffs to realize the win-win for both the staffs and the Company.
4. Outsourcing situation
□ Applicable√ Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report IX. Administrative structure
I.Basic state of corporate governance
In the reporting period, the company regulated operations and strengthen risk control in strict accordance with Securities Law, Corporation Law, the Shenzhen Stock Exchange Standard Operation Instructions for Main-Board Listed Companies, Corporate Governance Standards for Listed Companies and other related laws and regulations, to ensure a healthy and stable development. At present, the basically sound governance system, normative business operation and impeccable corporate governance structure meet the requirements of the normative documents for regarding corporate governance of listed companies issued by the China Securities Regulatory Commission.
In 2016, company held a total of 2 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 2016, the board of directors held 12 general meetings, and the convening and voting procedures were all conducted in strict accordance with the Articles of Corporation and Rule of Procedure of Shareholders' Meeting. All the directors performed directors ' duties, exercisedirectors’ 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 ofdirectors’ decision-making.
In 2016, the board of supervisors held 6 meetings. The board of supervisors strictly followed the requirements of Articles of Corporation and Rules of procedure of the board of supervisors and other relevant laws and regulations, supervised the legal compliance of the duties performed by company's financial personnel and directors, managers and other senior management personnel in the aim of maintaining the legitimate rights and interests of the company and its shareholders. All the supervisors fulfilled their obligations, exercised their rights according to the laws. The convening and voting procedures of the board of supervisors were legal, and the resolutions were legal and valid. The establishment and implementation of board of supervisors played an active role in improving corporate governance structure and regulating corporate operations.
In 2016, we further increased information transparency, accomplishedinvestors’ 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
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report 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 2016, the minorityinvestors’ voting was counted separately at each of the twoshareholder’s meetings, and whose result was disclosed at the decision announcement at theshareholder’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 acceptedinvestors’ 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 2016, the minorityinvestors’ voting was counted separately at each of the twoshareholder’s meetings, and whose result was disclosed at the decision announcement at theshareholder’s meeting, which fully guaranteed the execution of power of the minority investors.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions of CSRC,
√Yes□No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions of CSRC.
\ Shenzhen Investment Holdings Co., Ltd., the holding shareholder of the company, is a Shenzhen SASAC enterprise. The company has complied with the relevant provisions on the state-owned asset management of holding shareholders to report non-public information to holding shareholders, mainly including:Letters submitted monthly index table; fee schedule during the reporting, financial assets table, summary quarterly deposits and borrowings and financing.In order to strengthen the management of non-public information, the company has strictly controlled the scope of learners, standardized the process of information delivery and strictly implemented as per the “Management System on Learner of Insider Information”, took practical measures to prevent inside information leaks and insider trading.
In addition, there is no difference among the governance of the company, “Company Law” and the relevant provisions of China Securities Regulatory Commission.
II. Independence and Completeness in business, personnel , assets, organization and finance
The code of conduct of the controlling shareholders of the company did not go beyond the general meetings directly or indirectly to interfere with the decision-making and business activities, the company had independent and complete business and autonomous operation capacity , achieved “five point separation” in respect of
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report personnel, financial, asset, agencies, business.
III. Competition situations of the industry
□ Applicable√ Not Applicable
IV. Annual General Meeting and ExtraordinaryShareholders’ Meetings in the Reporting Period
1.Annual General Meeting
|||||||
|-|-|-|-|-|-|
|||Investor||||
|Sessions|Type||Meeting Date|Disclosure date|Disclosure index|
|||participation ratio||||
||Provisional||||Announcement|
|Annual Genral||||||
||shareholders’|0.01%|April 21,2016|April 22,2016|No.2016—16|
|Meeting of 2015||||||
||General Meeting||||www.cninfo.com.cn|
|The first provisional||||||
||||||Announcement|
|shareholders’|Annual General|||||
|||0.19%|November 3,2016|November 4,2016|No.2016—54|
|General meeting in|Meeting|||||
||||||www.cninfo.com.cn|
|2016||||||

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 andshareholders’ general meeting
||||||||
|-|-|-|-|-|-|-|
|The attending of independent directors|||||||
||Number of|||||Failure to|
||||Number of||||
||Board meetings|||Number of||personally attend|
|Independent||Number of spot|meetings||Number of||
||necessary to be|||attendances by||board meetings|
|Directors||attendances|attended by||absence||
||attended in the|||representative||successively|
||||Communication||||
||reporting period|||||twice (Yes/No)|
|Zhang Yong|12|4|8|0|0|No|
|Shi Weihong|12|4|8|0|0|No|
|He Qiang|12|1|11|0|0|No|
|Number of general meetings attended|||||||
|by independent directors as non-voting||1|||||
|delegates|||||||

Notes to failure to personally attend Board Meetings Successively Twice
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report Nil
2.Objection of independent directors on some relevant issues
Objection of independent directors on some relevant issues
□ Yes√No
Independent directors proposed no objection against the relevant matters in the reporting period.
3. Other notes to duty performance of independent directors
Has an independentdirector’s advice to the Company been accepted
√ Yes□No
Explanation on acceptance of or failure to accept an independentdirector’s advice to the Company.
In the report period, the independent directors of the Company seriously fulfilled duties according to the requirement of supervision laws and regulations and System of theCompany’s IndependentDirector：
1.The independent directors timely attended the board meeting convened by the Company, and attended meetings related to theshareholder’s meeting. Beforehand,, we carefully reviewed the information of the meeting. We fully utilized our own professional advantages and enterprise management experience to put forward reasonable opinions and suggestions for the proposal and to give independent comment for the related party for its capital occupation, internal control, profit distribution, audit institution recruitment, usage of idle raised funds, capital increment and share expansion for introducing strategic investors, plannings for the follow-up suspension of significant asset reorganization, terminating the plannings for significant asset reorganization and the entrusted finance management for its own capital, which fully expressed the guidance and supervision function of the independent directors.
2.The independent directors actively participated in the work of theboard’s special committee, and gave independent comments for events involved with theCompany’s periodical report, duty performance and further employment of annual audit institution, self-assessment report of internal control, compensation assessment system for senior managers of 2015, which factually maintained the interest of the Company and theshareholders’, especially the publicshareholder’s, and which benefited theboard’s core function at corporate governance. 3. The independent directors kept communicating with theCompany’s managements and thoroughly debrief relevant personnel, and focused on the construction progress of Project Line 6 of TFT-LCD polaroid glass of Period II as well as the progress of ShengboOptoelectronic’s capital increment and share expansion for introducing strategic investors, which enabled the independent directors to timely comprehend and master the progress of theCompany’s significant issues.
See more details at Work Report of the Independent Directors of 2016 disclosed by the Company at http://www.cninfo.com.cn on March 31, 2017.
VI. Duty Performance of Special Committees under the Board of Directors in the Reporting Period The independent directors of the company are the key members of all professional committees of the Board of Directors, and are in the majority and the conveners of Audit Committee, Remuneration and Appraisal Committee and Nomination Committee. Also, all the three independent directors can attend the daily meeting held by every special committee on time.
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report (1) Audit Committee: during the reporting period, the Audit Committee has held two meetings, carefully examined the regular reports of the company and effectively implemented the work schedule of annual reports. Also, the Audit Committee has reviewed the internal control of the company, supervised the effective implementation of internal control, the self-assessment of internal control. Before the board meeting for deliberating annual report was convened, the Company will strengthen the communication with the certified public accountant for annual audit, carefully review related information,and will learn about and master the arrangement and progress ofaccountant’s audit. The Company will interview the accountant for annual audit to effectively communicate with the accountant about the problems found during the audit progress, will supervise and examine the disclosed information, will ensure theCompany’s situation will be factually reflected by the audit report, and will make a comprehensive assessment for accountant for the completion situation of the annual work and the practising quality. In the report period, the Company will convene meeting sand formed solutions for audit institution recruitment, self-assessment report of internal control and financial final statement
During the reporting period, Proposal on Carry a meeting ficused on hiring audit institutions, self-assessment report of the internal control, the Final Accounting Report and other matters and reach a resolution.
(2) Remuneration and Appraisal Committee: During the reporting period, the Remuneration and Appraisal Committee has held one meetings, During the reporting period, Carry a meeting ficused on 2015 performance appraisal of senior management and reach a resolution.
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 aginst any matters under supervision in the reporting period
VIII. Assessment and incentive Mechanism for Senior executives
The company complies with “Executive Compensation Management and Evaluation System” to conduct the evaluation for the accomplishment of annual work of the senior executives. The salaries of the senior executives are determined according to the duty scope, post value, individual ability, wages level on the market, economic profits of the company and operation goal accomplishment of senior executives with adhering to the principle of market orientation, responsibility with unified right, and incentive and equal restriction. During the reporting period, the senior executives are all qualified in 2014 after evaluation. The directors and the general manager have conducted the feedback on the annual appraisal evaluation for the senior executives in accordance with the “Executive Compensation Management and Evaluation System” and proposed the recommendation for improvement.
IX. Internal control situations
1.Specific situations on major defects of internal control discovered during report period
√ Yes□No
About the significant Defects of the internal control found in the internal control self-assessment report in the reporting period
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||
|-|
|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 report on|||
||March 31,2017||
|internal control|||
|Disclosure index of appraisal report on|Juchao Website:（http://www.cninfo.com.cn）, Selfevaluation report of internal control||
|internal control|of Peking Certified Public Accountants (QXSZ(2017)No.1555||
|Proportion of total unit assets covered by|||
|appraisal in the total assets of the|||
||100.00%||
|consolidated financial statements of the|||
|company|||
|Proportion of total unit incomes covered|||
|by appraisal in the total business incomes|||
||100.00%||
|of the consolidated financial statements of|||
|the company|||
|Standards of Defects Evaluation|||
|Category|Financial Report|Non-financial Report|
|||In the following circumstances, the|
||The defects related to financial reports were|company was identified as existing|
||divided into general defects, important|non-financial –reporting related|
||defects and significant defects according to|significant defects of internal controlling|
||their severity. Significant defects referred to|defects:|
||one or multiple combinations of controlling|The business activities of the company|
||defects, which may lead to serious deviation|seriously violated national laws and|
||from the controlling objectives. Important|regulations; (2) The decision-making|
||defects referred to one or multiple|process of "Three-Importance&|
|Qualitative criteria|||
||combinations of controlling defects, and|One-Large" were unscientific, leading to|
||their severity and economic consequences|major decision errors, and causing major|
||were below significant defects, but they|property loses to the company; (3)|
||could still lead to serious deviation from the|Massive loss of key posts or technology|
||controlling objectives. General defects|talents; (4) The controlling system|
||referred to other internal controlling defects|involving important business fields of the|
||which couldn't constitute significant defects|company failed; (5) It Caused serious|
||or important defects.|negative effects on business of the|
|||company, and the effects couldn’t be|

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|||eliminated; (6) The evaluation results of|
|||internal control were significant defects,|
|||and couldn’t get effective rectification.|
|||Important defects referred to one or|
|||multiple combinations of controlling|
|||defects, and their severity and economic|
|||consequences were below significant|
|||defects, but they could still lead to|
|||serious deviation from the controlling|
|||objectives. General defects referred to|
|||other internal controlling defects which|
|||couldn't constitute significant defects or|
|||important defects.|
||Misstatement amount of financial statement||
||fell into the following intervals: significant||
||defects: Misstatement amount ≥ 1.5% of||
||total revenue; Misstatement amount ≥ 10%||
||of gross profit; Misstatement amount ≥ 1%||
||of total asset; Misstatement amount ≥ 5% of||
||net asset. significant defects: 0.5% of Total||
||revenue ≤Misstatement amount ＜ 1.5% of||
||total revenue; 5% of gross profit||
||≤Misstatement amount ＜ 10% of gross||
|Quantitative criteria||Not applicable|
||profit; 0.5% of Total asset ≤Misstatement||
||amount ＜ 1% of total revenue; 3% of Net||
||assets ≤Misstatement amount ＜ 5% of net||
||assets. General defects:0% of total revenue||
||＜Misstatement amount＜0.5% of Total||
||revenue; 2% of gross profitt ＜Misstatement||
||amount＜5% of total profit; 0% of total||
||assets ＜Misstatement amount＜0.5 of total||
||assets; 0% of net assets ＜Misstatement||
||amount＜3% of net assets.||
|Number of major defects in financial|||
||0||
|reporting（a）|||
|Number of major defects in non financial|||
||0||
|reporting (a)|||
|Number of important defects in financial|||
||0||
|reporting（a）|||
|Number of important defects in non|||
||0||
|financial reporting（a）|||

Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report 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, 2016.||
|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, 2016.||
|Peking Certified Public Accountants(Special General Partnership)||
|Chinese C.P.A.||
|Li Yong||
|March 29, 2017 Chinese C.P.A.||
|Lan Tao||
|Disclosure date of audit report||
||Disclosure|
|of internal control (full-text)||
|Index of audit report of||
||March 31,2017|
|internal control (full-text)||
||Juchao Website: （http://www.cninfo.com.cn）;Audit reort of internal control of Peking|
|Internal audit report’s opinion|Certified Public Accountants (QXSZ(2017)No.1555|
|Type of audit report on internal||
||Unqualified auditor’s report|
|control||
|Whether there is significant||
||No|
|defectin non-financial report||

Has the CPAs issued a qualifiedauditor’s report of internal control .
Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report□ Yes√No
Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of Directors
√Yes□No
X. Corporation bonds
Whether or not the Company public offering corporation bonds in stock exchange, which undue or without payment in full at maturity on the approval date for annual report disclosed
No
XI. Financial Report
I. Audit report
|||
|-|-|
|Type eof audit opinion|Standard Unqualified Audit Opinion|
|Date for signing the auditor’s report|March 29,2017|
||Peking Certified Public Accountants(Special General|
|Name of audit firm||
||Partnership)|
|The audit report number|Qin Xin Zi【2017】No.1556|
|Name of the certified accountants|Li Yong , Lan Tao|

Auditors’ Report
Qin Xin Shen Zi(2017)]No. 1556 To all shareholders of Shenzhen Textile (Holdings) Co.,Ltd.：
We audited accompanying financial statements of Shenzhen Textile (Holdings) Co., Ltd.(the “Company), including Consolidated and parent Company balance sheet as of December 31, 2016, and the Parent Company and Consolidated Income statement, The parent company and Consolidated cash flow statement ,The parent Company and Consolidated Statements of Changes in equity for the year then ended, and the notes to the financial statements .
1. The responsibility of the Management for the financial statements
Shenzhen Textile (Holdings) Co., Ltd’s. management is responsible for the preparation and fair presentation of
these financial statements this responsibility includes : (1) Prepare the financial statements according to business
enterprises regulation, so that making reasonable accounting estimate;(2) Design, implementation and
maintenance of internal control related to the preparation of financial statements so that financial statements are free from material misstatement caused by fraudulent practices or errors.
2. Responsibility of certified public accountants
We are responsible for expressing opinions on financial statements based on our audit. We conducted audit in accordance with the audit criteria for Chinese certified public accountants. The audit criteria for Chinese certified public accountants require us to abide by professional ethics, plan and conduct audit to obtain reasonable assurance as to whether financial statements are free from material misstatement.
Audit involves carrying out audit procedure to obtain the audit evidences about the amounts and disclosure of financial statements. The selected audit procedure relies on the judgment of certified public accountants, including the appraisal of risk of material misstatement of financial statements used by fraudulent practices or errors. While appraising risks, we considered the internal control related to the preparation of financial statements to design proper audit procedure. The audit also includes the appraisal of suitability of accounting policies selected by the management, the reasonableness of accounting estimate and the overall presentation of financial statements. We believe that the audit evidences obtained by us are full and appropriate and provide a basis for expressing audit opinion.
3. Audit opinion
In our opinion, the financial statements of the Company Wharf present fairly, in all material respects, thecompany’s and consolidated financial position as of 31 December 2016, and theCompany’s and consolidated results of operations and cash flows for the year then ended in accordance with Accounting Standards for Business Enterprises.
Peking Certified Public Accountants(Special General Partnership)
Chinese C.P.A.
Li Yong
Chinese C.P.A.
Lan Tao
March 29,2017
II. Financial Statements
Statement in Financial Notes are carried in RMB/CNY
Consolidated balance sheet
Preparedby：Shenzhen Textilen(Holdings) Co., Ltd. December 31,2016 In RMB
||||||
|-|-|-|-|-|
|Items|Notes V|Year-end balance||Year-beginning|
|Current asset：||||balance|
|Monetary fund|（1）|933,856,912.73||752,314,871.53|
|Settlement provision|||||
|Outgoing call loan|||||
|Financial assets measured at fair value with variations accounted intocurrent income account|||||
|Derivative financial assets|||||
|Bill receivable|（2）|41,908,315.45||18,841,745.16|
|Account receivable|（3）|220,222,019.41||182,766,372.05|
|Prepayments|（4）|6,773,323.14||7,853,818.19|
|Insurance receivable|||||
|Reinsurance receivable|||||
|Provisions of Reinsurance contracts receivable|||||
|Interest receivable|（5）|6,652,883.11||30,298,938.80|
|Dividend receivable|||||
|Other account receivable|（6）|67,272,556.72||45,133,672.10|
|Repurchasing of financial assets|||||
|Inventories|（7）||283,371,714.07|308,775,044.88|
|Assets held for sales|||||
|Non-current asset due in 1 year|||||
|Other current asset|（8）|1,428,043,157.76||513,553,675.47|
|Total of current assets||2,988,100,882.39||1,859,538,138.18|
|Non-current assets：|||||
|Loans and payment on other’s behalf disbursed|||||
|Disposable financial asset|（9）|41,565,777.96||43,241,524.06|
|Expired investment in possess|||||
|Long-term receivable|||||

|||||
|-|-|-|-|
||（10）|24,849,311.00||
|Property investment|（11）|179,324,547.77|134,389,963.05|
|Fixed assets|（12）|723,685,287.56|790,019,487.16|
|Construction in progress|（13）|119,804,231.43|75,803,586.70|
|Engineering material||||
|Fixed asset disposal||||
|Production physical assets||||
|Gas & petrol||||
|Intangible assets|（14）|39,698,654.32|40,626,936.34|
|R & D petrol||||
|Goodwill|（15）|||
|Long-germ expenses to be amortized|（16）|973,081.68|633,541.50|
|Differed income tax asset|（17）|1,584,492.36|2,262,532.65|
|Other non-current asset||||
|Total of non-current assets||1,131,485,384.08|1,109,856,840.52|
|Total of assets||4,119,586,266.47|2,969,394,978.70|

 LegalRepresentative：Zhujun Person in charge ofaccounting：Zhujun Accounting DeptLeader：Mu Linying Consolidated balancesheet(Cont’d)
Preparedby：Shenzhen Textilen(Holdings) Co., Ltd. December 31,2016 In RMB
|||||
|-|-|-|-|
|Items|Notes V|Year-end balance|Year-beginning balance|
|Current liabilities||||
|Short-term loans|（18）|12,335,695.77|53,866,521.87|
|Loan from Central Bank||||
|Deposit received and hold for others||||
|Call loan received||||
|Financial liabilities measured at fair value withvariations accounted into current income account||||
|Derivative financial liabilities||||
|Bill payable||||

||||||
|-|-|-|-|-|
|Account payable|（19）|175,461,715.72||227,528,808.60|
|Advance payment|（20）|30,297,446.49||28,199,415.11|
|Selling of repurchased financial assets|||||
|Fees and commissions receivable|||||
|Employees’ wage payable|（21）|27,379,719.86||35,307,822.40|
|Tax payable|（22）||13,995,726.19|14,682,643.09|
|Interest payable|（23）|42,842,605.52||39,088,887.96|
|Dividend payable|||||
|Other account payable|（24）|147,108,590.19||125,775,723.80|
|Reinsurance fee payable|||||
|Insurance contract provision|||||
|Entrusted trading of securities|||||
|Entrusted selling of securities|||||
|Liabilities held for sales|||||
|Non-current liability due in 1 year|（25）|40,000,000.00||40,000,000.00|
|Other current liability|||||
|Total of current liability||489,421,499.74||564,449,822.83|
|Non-current liabilities：|||||
|Long-term loan|（26）|80,000,000.00||120,000,000.00|
|Bond payable|||||
|Including：preferred stock|||||
|Sustainable debt|||||
|Long-term payable|||||
|Long-term payable employees’s remuneration|||||
|Special payable|||||
|Expected liabilities|||||
|Deferred income|（27）|110,045,784.62||99,524,165.58|
|Deferred income tax liability|（17）|||10,851,444.74|
|Other non-current liabilities|||||
|Total non-current liabilities||190,045,784.62||230,375,610.32|
|Total of liability||679,467,284.36||794,825,433.15|
|Owners’ equity|||||
|Share capital|（28）|506,521,849.00||506,521,849.00|
|Other equity instruments|||||
|Including：preferred stock|||||

|||||
|-|-|-|-|
|Sustainable debt||||
|Capital reserves|（29）|1,837,205,251.95|1,585,130,051.37|
|Less：Shares in stock||||
|Other comprehensive income|（30）|3,392,222.07|3,212,187.35|
|Special reserves||||
|Surplus reserves|（31）|73,710,682.05|70,539,319.86|
|Common risk provision||||
|Undistributed profit|（32）|-81,275,828.76|9,166,137.97|
|Total of owner’s equity belong to the parent company||2,339,554,176.31|2,174,569,545.55|
|Minority shareholders’ equity||1,100,564,805.80||
|Total of owners’ equity||3,440,118,982.11|2,174,569,545.55|
|Total of liabilities and owners’ equity||4,119,586,266.47|2,969,394,978.70|

LegalRepresentative：Zhu Jun Person in charge ofaccounting：Zhu Jun Accounting DeptLeader：Mu Linying Balance sheet of Parent Company
Preparedby：Shenzhen Textilen(Holdings) Co., Ltd. December 31,2016 In RMB
|||||
|-|-|-|-|
|Items|Notes XIII|Year-end balance|Year-beginning|
|Current asset：|||balance|
|Monetary fund||440,685,610.11|271,582,749.03|
|Financial assets measured at fair value with variationsaccounted into current income account||||
|Derivative financial assets||||
|Bill receivable||1,000,000.00||
|Account receivable|（1）|492,974.01|819,054.57|
|Prepayments||120,000.00|1,754,880.00|
|Interest receivable||3,218,526.94|22,294,015.02|
|Dividend receivable|||7,798,378.51|
|Other account receivable|（2）|12,524,256.75|72,543,709.78|
|Inventories||||
|Assets held for sales||||

|||||
|-|-|-|-|
|Non-current asset due in 1 year||||
|Other current asset||30,000,000.00|260,000,000.00|
|Total of current assets||488,041,367.81|636,792,786.91|
|Non-current assets：||||
|Disposable financial asset||40,065,777.96|41,741,524.06|
|Expired investment in possess||||
|Long-term receivable||||
|Long term share equity investment|（3）|1,989,073,077.61|1,779,103,035.67|
|Property investment||172,279,313.75|126,873,096.51|
|Fixed assets||27,403,189.39|26,579,978.92|
|Construction in progress|||38,792,110.90|
|Engineering material||||
|Fixed asset disposal||||
|Production physical assets||||
|Gas & petrol||||
|Intangible assets||1,345,846.59|1,378,688.61|
|R & D petrol||||
|Goodwill||||
|Long-germ expenses to be amortized||||
|Deferred income tax asset||1,919,804.30|2,556,126.29|
|Other non-current asset||||
|Total of non-current assets||2,232,087,009.60|2,017,024,560.96|
|Total of assets||2,720,128,377.41|2,653,817,347.87|

 LegalRepresentative：Zhu Jun Person in charge ofaccounting：Zhu Jun Accounting DeptLeader：Mu Linying Balance sheet of ParentCompany(Cont’d)
Preparedby：Shenzhen Textilen(Holdings) Co., Ltd. December 31,2016 In RMB
|||||
|-|-|-|-|
|Items|Notes|Year-end balance|Year-beginningbalance|
|Current liabilities||||
|Short-term loans||||

|||||
|-|-|-|-|
|Financial liabilities measured at fair value with variationsaccounted into current income account||||
|Derivative financial liabilities||||
|Bill payable||||
|Account payable|411,743.57||411,743.57|
|Advance payment|639,024.58||639,024.58|
|Employees’ wage payable|6,533,138.24||7,299,686.80|
|Tax payable||4,398,387.25|12,558,340.06|
|Interest payable||||
|Dividend payable||||
|Other account payable|120,954,892.58||77,332,555.09|
|Liabilities held for sales||||
|Non-current liability due in 1 year||||
|Other current liability||||
|Total of current liability|132,937,186.22||98,241,350.10|
|Non-current liabilities：||||
|Long-term loan||||
|Bond payable||||
|Including：preferred stock||||
|Sustainable debt||||
|Long-term payable||||
|Employees’ wage payable||||
|Special payable||||
|Expected liabilities||||
|Deferred income||||
|Deferred income tax liability|||278,469.57|
|Other non-current liabilities||||
|Total of Non-current liabilities|||278,469.57|
|Total of liability|132,937,186.22||98,519,819.67|
|Owners’ equity||||
|Share capital|506,521,849.00||506,521,849.00|
|Other equity instrument||||
|Including：preferred stock||||
|Sustainable debt||||
|Capital reserves|1,576,547,075.96||1,576,547,069.58|

|||||
|-|-|-|-|
|Less：Shares in stock||||
|Other comprehensive income|3,392,222.07||3,212,187.35|
|Special reserves||||
|Surplus reserves||73,710,682.05|70,539,319.86|
|Undistributed profit|427,019,362.11||398,477,102.41|
|Total of owners’ equity|2,587,191,191.19||2,555,297,528.20|
|Total of liabilities and owners’ equity|2,720,128,377.41||2,653,817,347.87|

LegalRepresentative：Zhu Jun Person in charge ofaccounting：Zhu Jun Accounting DeptLeader：Mu Linying Consolidated Income Statement
Preparedby：Shenzhen Textilen(Holdings) Co., Ltd. Year 2016 In RMB
|||||
|-|-|-|-|
|Items|Notes V|Amount in thisperiod|Amount in lastperiod|
|I. Income from the key business||1,198,200,216.42|1,226,746,791.|
|Incl：Business income|（33）|1,198,200,216.42|621,226,746,791.|
|Interest income|||62|
|Insurance fee earned||||
|Fee and commission received||||
|II. Total business cost||1,296,343,917.53|1,302,269,276.|
|Incl：Business cost|（33）|1,128,134,488.54|481,142,511,012.|
|Interest expense|||84|
|Fee and commission paid||||
|Insurance discharge payment||||
|Net claim amount paid||||
|Insurance policy dividend paid||||
|Insurance policy dividend paid||||
|Reinsurance expenses||||
|Business tax and surcharge|（34）|10,337,248.55|7,624,971.76|
|Sales expense|（35）|10,161,699.85|11,743,914.73|
|Administrative expense|（36）|106,901,733.12|103,044,704.3|

||||||
|-|-|-|-|-|
||（37）|-1,678,136.65|||
|Asset impairment loss|（38）|42,486,884.12||61,792,990.95|
|Add：Gains from change of fir value （“-”for loss）|||||
|Investment gain（“-”for loss）|（39）|5,223,413.76||94,812,557.58|
|Incl: investment gains from affiliates||1,467,403.29||2,431,042.20|
|Gains from currency exchange（“-”for loss）|||||
|III. Operational profit（“-”for loss）||-92,920,287.35||19,290,072.72|
|Add ：Non-operational income|（40）|15,072,447.15||24,122,339.62|
|Including：Income from disposal of non-current assets||||235,533.62|
|Less：Non business expenses|（41）|138,691.94||260,665.61|
|Incl：Loss from disposal of non-current assets||138,610.37||260,642.59|
|IV.Total profit(“-”for loss)||-77,986,532.14||43,151,746.73|
|Less：Income tax expenses|（42）||9,284,072.40|34,654,519.33|
|V. Net profit||-87,270,604.54||8,497,227.40|
|Net profit attributable to the owners of parent company||-87,270,604.54||8,497,227.40|
|Minority shareholders’ equity|||||
|VI. Other comprehensive income|（43）|180,034.72||-30,176,930.11|
|Net of profit of other comprehensive income attributable to owners of the paren||180,034.72||-30,176,930.11|
|t company.（I）Other comprehensive income items that will not be reclassified intogains/losses in the subsequent accounting period|||||
|1.Re-measurement of defined benefit plans of changes in net debt or net assets|||||
|2.Other comprehensive income under the equity method investee can not be rec|||||
|lassified into profit or loss.(II)Other comprehensive income that will be reclassified into profit or loss.||180,034.72||-30,176,930.11|
|1.Other comprehensive income under the equity method investee can be reclassified into profit or loss.|||||
|2.Gains and losses from changes in fair value available for sale financial assets||-1,256,809.58||-30,375,486.14|
|3.Held-to-maturity investments reclassified to gains and losses of available forsale financial assets|||||
|4.The effective portion of cash flow hedges and losses|||||

||||
|-|-|-|
||1,436,844.30|198,556.03|
|6.Other|||
|7.Net of profit of other comprehensive income attributable to Minorityshareholders’ equity|||
|VII. Total comprehensive income|-87,090,569.82|-21,679,702.71|
|Total comprehensive income attributable to the owner of the parent company|-87,090,569.82|-21,679,702.71|
|Total comprehensive income attributable minority shareholders|||
|VIII. Earnings per share|||
|（I）Basic earnings per share|-0.17|0.02|
|(II)Diluted earnings per share|-0.17|0.02|

LegalRepresentative：Zhu Jun Person in charge ofaccounting：Zhu Jun Accounting DeptLeader：Mu Linying Income statement of the Parent Company
Preparedby：Shenzhen Textilen(Holdings) Co., Ltd. Year 2016 In RMB
|||||
|-|-|-|-|
|Items|NotesXIII|Amount in|Amount in last|
|I. Income from the key business|（4）|63th,9is2 3p,e2r8io6d.0 7|64,p4e7r3io,3d5 1.83|
|Incl：Business cost|（4）|12,754,930.31|12,333,803.24|
|Business tax and surcharge||3,823,490.12|5,494,540.21|
|Sales expense||||
|Administrative expense||28,068,523.83|28,207,859.60|
|Financial expenses||-12,288,105.4|-19,528,024.29|
|Asset impairment loss||9-3,107,155.76|14,939,945.14|
|Add：Gains from change of fir value （“-”for loss）||||
|Investment gain（“-”for loss）|（5）|4,545,773.24|58,283,064.18|
|Incl: investment gains from affiliates||1,467,403.29|2,431,042.20|
|II. Operational profit（“-”for loss）||39,217,376.30|81,308,292.11|
|Add ：Non-operational income||23,692.50|2,047,648.92|
|Including：Income from disposal of non-current assets|||235,233.62|
|Less：Non business expenses||117,153.06|13,020.92|

|||||
|-|-|-|-|
|Incl：Loss from disposal of non-current assets|117,153.06||13,020.92|
|III.Total profit(“-”for loss)|39,123,915.74||83,342,920.11|
|Less：Income tax expenses||7,410,293.85|21,979,992.46|
|IV. Net profit（“-”for net loss）|31,713,621.89||61,362,927.65|
|V.Net of profit of other comprehensive income|180,034.72||-30,176,930.11|
|（I）Other comprehensive income items that will not be reclassified intogains/losses in the subsequent accounting period||||
|1.Re-measurement of defined benefit plans of changes in net debt or net assets||||
|2.Other comprehensive income under the equity method investee can not be reclassified into profit or loss.||||
|(II)Other comprehensive income that will be reclassified into profit or loss.|180,034.72||-30,176,930.11|
|1.Other comprehensive income under the equity method investee can be reclassified into profit or loss.||||
|2.Gains and losses from changes in fair value available for sale financial assets|-1,256,809.58||-30,375,486.14|
|3.Held-to-maturity investments reclassified to gains and losses of available forsale financial assets||||
|4.The effective portion of cash flow hedges and losses||||
|5.Translation differences in currency financial statements|1,436,844.30||198,556.03|
|6.Other||||
|VI. Total comprehensive income|31,893,656.61||31,185,997.54|
|VII. Earnings per share：||||
|（I）Basic earnings per share||||
|(II)Diluted earnings per share||||

LegalRepresentative:：Zhu Jun Person in charge ofaccounting：Zhu Jun Accounting DeptLeader：Mu Linying
Consolidated Cash flow statement
Preparedby：Shenzhen Textilen(Holdings) Co., Ltd. Year 2016 In RMB
|||||
|-|-|-|-|
|Items|Notes V|Amount in this|Amount in last|
|I.Cash flows from operating activities||period|period|
|Cash received from sales of goods or rending of services||1,151,157,518.74|1,247,874,437.38|
|Net increase of customer deposits and capital kept for brother||||
|companyNet increase of loans from central bank||||
|Net increase of inter-bank loans from other financial bodies||||
|Cash received against original insurance contract||||
|Net cash received from reinsurance business||||
|Net increase of client deposit and investment||||
|Net increase of amount from disposal financial assets that measuredby fair value and with variation reckoned into current gains/losses||||
|Net increase of inter-bank fund received||||
|Net increase of trade financial asset disposal||||
|Net increase of repurchasing business||||
|Tax returned||69,122,511.24|68,431,596.59|
|Other cash received from business operation|（44）|68,307,793.54|95,526,183.51|
|Sub-total of cash inflow||1,288,587,823.52|1,411,832,217.48|
|Cash paid for purchasing of merchandise and services||1,085,677,364.56|1,157,396,626.23|
|Net increase of client trade and advance||||
|Net increase of savings n central bank and brother company||||
|Cash paid for original contract claim||||
|Cash paid for interest, processing fee and commission||||
|Cash paid for policy dividend||||

|||||
|-|-|-|-|
|Cash paid to staffs or paid for staffs||129,329,006.02|128,028,856.25|
|Taxes paid||47,012,479.57|36,667,118.26|
|Other cash paid for business activities|（44）|81,833,439.21|50,155,116.37|
|Sub-total of cash outflow from business activities||1,343,852,289.36|1,372,247,717.11|
|Cash flow generated by business operation, net||-55,264,465.84|39,584,500.37|
|II.Cash flow generated by investing||||
|Cash received from investment retrieving||2,366,612.87|89,640,023.95|
|Cash received as investment gains||3,633,486.12|4,871,581.37|
|Net cash retrieved from disposal of fixed assets, intangible assets,||160.00|2,950.00|
|and other long-term assetsNet cash received from disposal of subsidiaries or other operational||||
|unitsOther investment-related cash received|（44）|845,568,256.74|30,591,780.82|
|Sub-total of cash inflow due to investment activities||851,568,515.73|125,106,336.14|
|Cash paid for construction of||114,577,108.61|17,134,529.58|
|Cash paid as investment||||
|fNixeet din acsrseeatsse, ionft alonagnib aleg aaisnssett sp ledge||||
|Net cash received from subsidiaries and other operational units||||
|and other long-term assetsOther cash paid for investment activities|（44）|1,766,000,000.00|490,059,223.58|
|Sub-total of cash outflow due to investment activities||1,880,577,108.61|507,193,753.16|
|Net cash flow generated by investment||-1,029,008,592.88|-382,087,417.02|
|III.Cash flow generated by financing||||
|Cash received as investment||1,352,640,000.00||
|Incl: Cash received as investment from minor shareholders||1,352,640,000.00||
|Cash received as loans||228,579,582.43|244,759,302.00|
|Cash received from bond placing||||
|Other financing –related ash received||6.38||
|Sub-total of cash inflow from financing activities||1,581,219,588.81|244,759,302.00|
|Cash to repay debts||315,726,235.45|255,569,374.85|
|Cash paid as dividend, profit, or interests||850,946.99|792,115.53|
|Incl: Dividend and profit paid by subsidiaries to minor shareholders||||
|Other cash paid for financing activities||||

||||
|-|-|-|
|Sub-total of cash outflow due to financing activities|316,577,182.44|256,361,490.38|
|Net cash flow generated by financing|1,264,642,406.37|-11,602,188.38|
|IV. Influence of exchange rate alternation on cash and cash|1,086,213.32|4,531,621.61|
|equivalentsV.Net increase of cash and cash equivalents|181,455,560.97|-349,573,483.42|
|Add: balance of cash and cash equivalents at the beginning of term|748,658,875.60|1,098,232,359.02|
|VI ..Balance of cash and cash equivalents at the end of term|930,114,436.57|748,658,875.60|

 LegalRepresentative：Zhu Jun Person in charge ofaccounting：Zhu Jun Accounting DeptLeader：Mu Linying Cash flow statement of the Parent Company
Preparedby：Shenzhen Textilen(Holdings) Co., Ltd. Year 2016 In RMB
|||||
|-|-|-|-|
|Items|Notes|Amount in this|Amount in last|
|I.Cash flows from operating activities||period|period|
|Cash received from sales of goods or rending of services||66,944,479.62|63,862,579.19|
|Tax returned||||
|Other cash received from business operation||104,001,892.47|18,819,989.01|
|Sub-total of cash inflow||170,946,372.09|82,682,568.20|
|Cash paid for purchasing of merchandise and services||6,013,836.98|4,835,838.70|
|Cash paid to staffs or paid for staffs||17,161,992.17|14,524,922.32|
|Taxes paid||20,714,808.63|22,477,306.54|
|Other cash paid for business activities||23,027,843.36|9,551,257.85|
|Sub-total of cash outflow from business activities||66,918,481.14|51,389,325.41|
|Cash flow generated by business operation, net||104,027,890.95|31,293,242.79|
|II.Cash flow generated by investing||||
|Cash received from investment retrieving|||46,395,738.95|
|Cash received as investment gains||10,754,224.11|3,777,417.02|
|Net cash retrieved from disposal of fixed assets, intangible assets,||||

and other long-term assets
||||
|-|-|-|
|Net cash received from disposal of subsidiaries or other operational|||
|unitsOther investment-related cash received|326,615,158.57|30,591,780.82|
|Sub-total of cash inflow due to investment activities|337,369,382.68|80,764,936.79|
|Cash paid for construction of|4,300,131.91|7,855,316.71|
|Cash paid as investment|208,000,000.00||
|fNixeet dc aasshs ertesc, eiinvteadn gfirbolme assusbestisd iaries and other operational units|||
|Other cash paid for investment activities|60,000,000.00|290,000,000.00|
|aSnudb -otothtaelr olof ncga-sthe romu tafslosewts d ue to investment activities|272,300,131.91|297,855,316.71|
|Net cash flow generated by investment|65,069,250.77|-217,090,379.92|
|III.Cash flow generated by financing|||
|Cash received as investment|||
|Cash received as loans|||
|Other financing –related ash received|6.38||
|Sub-total of cash inflow from financing activities|6.38||
|Cash to repay debts|||
|Cash paid as dividend, profit, or interests|||
|Other cash paid for financing activities|||
|Sub-total of cash outflow due to financing activities|||
|Net cash flow generated by financing|6.38||
|IV. Influence of exchange rate alternation on cash and cashequivalents|5,712.98||
|V.Net increase of cash and cash equivalents|169,102,861.08|-185,797,137.13|
|Add: balance of cash and cash equivalents at the beginning of term|271,582,749.03|457,379,886.16|
|VI ..Balance of cash and cash equivalents at the end of term|440,685,610.11|271,582,749.03|

 LegalRepresentative：Zhu Jun Person in charge ofaccounting：Zhu Jun Accounting DeptLeader：Mu Linying
Consolidated Statement on Change inOwners’ Equity
Prepared by : Shenzhen Textile (Holdings) Co., Ltd. In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Year 2016|||||||||||||
||Owner’s equity Attributable to the Parent Company|||||||||||Minorshareholders’ equity|Total ofowners’equity|
||ShareCapital|Other Equityinstrusment|||Capitalreserves|Less:Sharesinstoc|OtherComprehensiveIncome|Specializedreserve|Surplusreserves|Commonriskprovision|Attributable profit|||
|||Preferredstock|Sustainabledebt|Other||||||||||
|I.Balance at the end of last year|506,521,849.00||||1,585,130,051.37|k|3,212,187.35||70,539,319.86||9,166,137.97||2,174,569,545.55|
|Add: Change of accounting policy||||||||||||||
|Correcting of previous errors||||||||||||||
|Merger of entities under commoncontrol||||||||||||||
|Other||||||||||||||
|II.Balance at the beginning of currentyear|506,521,849.00||||1,585,130,051.37||3,212,187.35||70,539,319.86||9,166,137.97||2,174,569,545.55|

||||||||
|-|-|-|-|-|-|-|
||252,075,200.58|180,034.72|3,171,362.19|-90,441,966.73|1,100,564,805.80||
|（1）Total comprehensive income||180,034.72||-87,270,604.54||-87,090,569.82|
|（II）Investment or decreasing ofcapital by owners|252,075,194.20||||1,100,564,805.80|1,352,640,000.00|
|1．Ordinary Shares invested by hareholders|||||||
|2．Holders of other equity instruments invested capital|||||||
|3．Amount of shares paid andaccounted as owners’ equity|||||||
|4．Other|252,075,194.20||||1,100,564,805.80|1,352,640,000.00|
|（III）Profit allotment|||3,171,362.19|-3,171,362.19|||
|1.Providing of surplus reserves|||3,171,362.19|-3,171,362.19|||
|2.Providing of common riskprovisions|||||||
|3．Allotment to the owners (orshareholders)|||||||

|||||||||
|-|-|-|-|-|-|-|-|
|(IV) Internal transferring of owners’equity||||||||
|1. Capitalizing of capital reserves (orto capital shares)||||||||
|2. Capitalizing of surplus reserves (orto capital shares)||||||||
|3．Making up losses by surplusreserves.||||||||
|4. Other||||||||
|(V). Special reserves||||||||
|1. Provided this year||||||||
|2．Used this term||||||||
|（VI）Other||6.38|||||6.38|
|IV. Balance at the end of this term|506,521,849.00|1,837,205,251.95|3,392,222.07|73,710,682.05|-81,275,828.76|1,100,564,805.80|3,440,118,982.11|

 LegalRepresentative：Zhu Jun Person in charge ofaccounting：Zhu Jun Accounting DeptLeader：Mu Linying
Consolidated Statement on Change inOwners’ Equity
Prepared by : Shenzhen Textile (Holdings) Co., Ltd. In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Year 2015|||||||||||||
||Owner’s equity Attributable to the Parent Company|||||||||||Minorshareholders’equity|Total ofowners’equity|
||ShareCapita|Other Equityinstrusment|||Capitalreserves|Less:Shares instock|OtherComprehensiveIncome|Specializedreserve|Surplusreserves|Commonriskprovision|Attributable profit|||
|||preferredstock|Sustainabledebt|Other||||||||||
|I.Balance at the end of last year|506,521,849.00||||1,585,130,051.37||33,389,117.46||64,403,027.10||6,805,203.33||2,196,249,248.26|
|Add: Change of accounting policy||||||||||||||
|Correcting of previous errors||||||||||||||
|Merger of entities under commoncontrol||||||||||||||
|Other||||||||||||||
|II.Balance at the beginning of currentyear|506,521,849.00||||1,585,130,051.37||33,389,117.46||64,403,027.10||6,805,203.33||2,196,249,248.26|
|III.Changed in the current year|||||||-30,176,930.11||6,136,292.76||2,360,934.64||-21,679,702.71|
|（1）Total comprehensive income|||||||-30,176,930.11||||8,497,227.40||-21,679,702.71|

||||
|-|-|-|
|1．Ordinary Shares invested by hareholders|||
|2．Holders of other equity instrumentsinvested capital|||
|3．Allotment to the owners (orshareholders)|||
|4．Other|||
|(IV) Internal transferring of owners’equity|6,136,292.76|-6,136,292.76|
|1. Capitalizing of capital reserves (orto capital shares)|6,136,292.76|-6,136,292.76|
|2. Capitalizing of surplus reserves (orto capital shares)|||
|3．Making up losses by surplusreserves.|||
|4. Other|||
|(VI )Special reserves|||
|1. Provided this year|||
|2．Used this term|||
|（VII）Other|||

||||||||
|-|-|-|-|-|-|-|
|(V) Special reserves|||||||
|1. Provided this year|||||||
|2．Used this term|||||||
|（VI）Other|||||||
|IV. Balance at the end of this term|506,521,849.00|1,585,130,051.37|3,212,187.35|70,539,319.86|9,166,137.97|2,174,569,545.55|

 LegalRepresentative：Zhu Jun Person in charge ofaccounting：Zhu Jun Accounting DeptLeader：Mu Linying
Statement of change inowner’s Equity of the Parent Company
Prepared by : Shenzhen Textile (Holdings) Co., Ltd. In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Year 2016|||||||||||
||Owner’s equity Attributable to the Parent Company||||||||||Total ofowners’equity|
||Sharecpaital|Other Equity instrusment|||Capitalreserves|Less:Shares instock|OtherComprehensive Income|Specializedreserve|Surplusreserves|Attributableprofit||
|||preferredstock|Sustainable debt|Other||||||||
|I.Balance at the end of last year|506,521,849.00||||1,576,547,069.58||3,212,187.35||70,539,319.86|398,477,102.41|2,555,297,528.20|
|Add: Change of accounting policy||||||||||||
|Correcting of previous errors||||||||||||
|Other||||||||||||

||||||||
|-|-|-|-|-|-|-|
||506,521,849.00|1,576,547,069.58|3,212,187.35|70,539,319.86|398,477,102.41||
|III.Changed in the current year||6.38|180,034.72|3,171,362.19|28,542,259.70|31,893,662.99|
|（1）Total comprehensive income|||180,034.72||31,713,621.89|31,893,656.61|
|（II）Investment or decreasing of capital byowners|||||||
|1．Ordinary Shares invested by shareholders|||||||
|2．Holders of other equity instruments invested capital|||||||
|3．Allotment to the owners (or shareholders)|||||||
|4．Other|||||||
|（III）Profit allotment||||3,171,362.19|-3,171,362.19||
|1.Providing of surplus reserves||||3,171,362.19|-3,171,362.19||
|2．Allotment to the owners (or shareholders)|||||||
|3．Other|||||||
|(IV)Internal transferring of owners’ equity|||||||
|1. Capitalizing of capital reserves (or tocapital shares)|||||||

||||||||
|-|-|-|-|-|-|-|
|3．Making up losses by surplus reserves.|||||||
|4. Other|||||||
|(V) Special reserves|||||||
|1. Provided this year|||||||
|2．Used this term|||||||
|（VI）Other||6.38||||6.38|
|IV. Balance at the end of this term|506,521,849.00|1,576,547,075.96|3,392,222.07|73,710,682.05|427,019,362.11|2,587,191,191.19|

 LegalRepresentative：Zhu Jun Person in charge ofaccounting：Zhu Jun Accounting DeptLeader：Mu Linying
Statement of change inowner’s Equity of the Parent Company
Prepared by : Shenzhen Textile (Holdings) Co., Ltd. In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Year 2015|||||||||||
||Owner’s equity Attributable to the Parent Company||||||||||Total ofowners’equity|
||ShareCapital|Other Equity instrusment|||Capitalreserves|Less:Shares instock|OtherComprehensive Income|Specializedreserve|Surplusreserves|Attributableprofit||
|||preferredstock|Sustainable debt|Other||||||||
|I.Balance at the end of last year|506,521,849.00||||1,576,547,069.58||33,389,117.46|-|64,403,027.10|343,250,467.52|2,524,111,530.66|

|||||||||
|-|-|-|-|-|-|-|-|
|Correcting of previous errors||||||||
|Other||||||||
|II.Balance at the beginning of current year|506,521,849.00|1,576,547,069.58|33,389,117.46|-|64,403,027.10|343,250,467.52|2,524,111,530.66|
|III.Changed in the current year|||-30,176,930.11|-|6,136,292.76|55,226,634.89|31,185,997.54|
|（1）Total comprehensive income|||-30,176,930.11|||61,362,927.65|31,185,997.54|
|（II）Investment or decreasing of capital byowners||||||||
|1．Ordinary Shares invested by Shareholders||||||||
|2．Holders of other equity instruments invested capital||||||||
|3．Allotment to the owners (or shareholders)||||||||
|4．Other||||||||
|（III）Profit allotment|||||6,136,292.76|-6,136,292.76||
|1.Providing of surplus reserves|||||6,136,292.76|-6,136,292.76||
|2．Allotment to the owners (or shareholders)||||||||
|3．Other||||||||
|(IV)Internal transferring of owners’ equity||||||||
|1. Capitalizing of capital reserves (or tocapital shares)||||||||
|2. Capitalizing of surplus reserves (or tocapital shares)||||||||

||||||||
|-|-|-|-|-|-|-|
|4. Other|||||||
|(V) Special reserves|||||||
|1. Provided this year|||||||
|2．Used this term|||||||
|（VI）Other|||||||
|IV. Balance at the end of this term|506,521,849.00|1,576,547,069.58|3,212,187.35|70,539,319.86|398,477,102.41|2,555,297,528.20|

 LegalRepresentative：Zhu Jun Person in charge ofaccounting：Zhu Jun Accounting DeptLeader：Mu Linyin
Shenzhen Textile (Holdings) Co., Ltd.
Notes to financial statements
Year 2016
(Currency unit for the statements in the notes to these financial statements: RMB)
I. Basic Information of the Company
(1)Company Profile
1. Enterprise registration address, organization mode and headquarter address.
The company was previously the Shenzhen Textile Industry Company, on April 13, 1994, approved by the Letter(1994)No.15 issued by Shenzhen Municipal People's Government, the Company was restructured and named as Shenzhen Textile (Holdings) Co., Ltd. In the same year, approved by the (1994) No.19 file of Shenzhenshi, the shares of the company were listed in Shenzhen Stock Exchange. The company now holds a unified social credit code for the 91440300192173749Y business license, Registration address and headquarter address are 6/F,Shenfang Building, No.3 Huaqiang Road. North, Futian District, Shenzhen.
2.Enterprise’s business nature and major business operation.
At present, the Company is mainly engaged in high-tech industry focusing onR&D, production and marketing of polarizers for liquid crystal display, management of properties in bustling business districts of Shenzhen and reserved high-class textile and garment business.
3. Approval of the financial statements reported
The financial statements have been authorized for issuance by the Board of Directors of the Group on March 29,2017. (2)Scope of consolidated financial statements
1.As of the end of the reporting period, there are 7 subsidiaries companies included in the consolidated financial state ments:Shenzhen Shengbo Optoelectronic Technology Co., Ltd., Shenzhen Lisi Industrial Development Co., Ltd.,Shenzhen Huaqiang Hotel, Shenzhen Shenfang Property Management Co., Ltd. Shenzhen Beaufity Garments Co., Ltd. ,Shzhen Shenfang Import& Export Co., Ltd., and Shengtou (Hongkong) Co., Ltd.
2．The scope of consolidated financial statements this period did not change.
II. Basis for the preparation of financial statements
（1）Basis for the preparation
The basis of the financial statements was continuous operation assumption, based on actual transactions, in accordance with the relevant provisions of Accounting Standards for Business Enterprises and in accordance with this Note III, "Significant accounting policies and accounting estimates".
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements (2)Continuation
There will be no such events or situations in the 12 months from the end of the reporting period that will cause
material doubts as to the continuation capability of the Company.
III. Important accounting policies and estimations
1. Statement on complying with corporate accounting standards
The financial statements prepared by the Company comply with the requirements of corporate accounting standards. They truly and completely reflect the financial situations, operating results, equity changes and cash flow, and other relevant information of the company.
2.Fiscal Year
The Company adopts the Gregorian calendar year commencing on January 1 and ending on December 31 as the fiscal year.
3. Operating cycle
Normal business cycle is realized by the Company in cash or cash equivalents from the purchase of assets for processing until. Less than 1 year is for the normal operating cycle in the company.
With regard to less than 1 year for the normal operating cycle, the assets realized or the liabilities repaid at maturity within one year as of the balance sheet date shall be classified into the current assets or the current liabilities.
4. Accounting standard money
The Company takes RMB as the standard currency for bookkeeping.
5. Accounting process method of enterprise consolidation under same and different controlling.
（1）Enterprise merger under samecontrol：
For a business combination involving enterprises under common control, the party that, on the combination date, obtains control of another enterprise participating in the combination is the absorbing party, while that other enterprise participating in the combination is a party being absorbed. Combination date is the date on which the absorbing party effectively obtains control of the party being absorbed.
The assets and liabilities obtained are measured at the carrying amounts as recorded by the enterprise being combined at the combination date. The difference between the carrying amount of the net assets obtained and the carrying amount of consideration paid for the combination (or the total face value of shares issued) is adjusted to the capital premium in the capital reserve. If the balance of the capital premium is insufficient, any excess is adjusted to retained earnings.
The cost of a combination incurred by the absorbing party includes any costs directly attributable to the combination shall be recognized as an expense through profit or loss for the current period when incurred.
Accounting Treatment of the Consolidated Financial Statements:
The long-term equity investment held by the combining party before the combination will change if the relevant profit and loss, other comprehensive income and other owner equity are confirmed between the ultimate control date and the
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements combining date for the combining party and the combined party on the acquirement date, and shall respectively offset the initial retained incomes or the profits and losses of the current period during the comparative statement.
(2)Business combination involving entities not under common control
A business combination involving enterprises not under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after the business combination.For a business combination not involving enterprises under common control, the party that, on the acquisition date, obtains control of another enterprise participating in the combination is the acquirer, while that other enterprise participating in the combination is the acquiree. Acquisition date is the date on which the acquirer effectively obtains control of the acquiree.
The difference of the merger cost minus the fair value shares of identifiable net assets obtained by the acquiree during the merger on the acquisition date, is recognized as the business reputation. While the merger cost is less than the fair value shares of identifiable net assets obtained by the acquiree during the merger, all the measurement on the identifiable assets, the liabilities, the fair value of liabilities and the merger cost obtained by the acquiree should firstly be rechecked, and the difference shall be recorded into the current profits and costs if the merger cost is still less than the fair value shares of identifiable net assets obtained by the acquiree during the merger after rechecking.
Where the temporary difference obtained by the acquirer was not recognized due to inconformity with the conditions applied for recognition of deferred income tax, if, within the 12 months after acquisition, additional information can prove the existence of related information at acquisition date and the expected economic benefits on the acquisition date arose from deductible temporary difference by the acquiree can be achieved, relevant income tax assets can be recognized, and goodwill offset. If the goodwill is not sufficient, the difference shall be recognized as profit of the current period.
For a business combination not involving enterprise under common control, which achieved in stages that involves multiple exchange transactions, according to “The notice of the Ministry of Finance on the issuance of Accounting Standards Interpretation No. 5” (CaiKuai[2012] No. 19) and Article51 of “Accounting Standards for Business Enterprises No.33 - Consolidated Financial Statements” on the “package deal” criterion, to judge the multiple exchange transactions whether they are the"package deal". If it belong to the “package deal” in reference to the preceding paragraphs of this section and “long-term investment” accounting treatment, if it does not belong to the “package deal” to distinguish the individual financial statements and the consolidated financial statements related to the accounting treatment:
In the individual financial statements, the total value of the book value of the acquiree's equity investment before the acquisition date and the cost of new investment at the acquisition date, as the initial cost of the investment, the acquiree's equity investment before the acquisition date involved in other comprehensive income, in the disposal of the investment will be in other comprehensive income associated with the use of infrastructure and the acquiree directly related to the disposal of assets or liabilities of the same accounting treatment (that is, except in accordance with the equity method of accounting in the defined benefit plan acquiree is remeasured net changes in net assets or liabilities other than in the corresponding share of the lead, and the rest into the current investment income).
In the combination financial statements, the equity interest in the acquiree previously held before the acquisition date re-assessed at the fair value at the acquisition date, with any difference between its fair value and its carrying amount is recorded as investment income. The previously-held equity interest in the acquiree involved in other comprehensive
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements income and other comprehensive income associated with the purchase of the foundation should be used party directly related to the disposal of assets or liabilities of the same accounting treatment (that is, except in accordance with the equity method of accounting in the acquiree is remeasured defined benefit plans other than changes in net liabilities or net assets due to a corresponding share of the rest of the acquisition date into current investment income).
6.Preparation of the consolidated financial statements
(1)The scope of consolidation
The scope of consolidation for the consolidated financial statements is determined on the basis of control. Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities. The relevant events refer to the activities that have significant influence on the return to the invested party. In accordance with the specific conditions, the relevant events of the invested party should conclude the sale and purchase of goods and services, the management of the financial assets, the purchase and disposal of the assets, the research and development activities, the financing activities and so on.
The scope of consolidation includes the Company and all of the subsidiaries. Subsidiary is an enterprise or entity under the control of the Company.
Once the change in the relevant facts and circumstances leading to the definition of the relevant elements involved in the control of the change, the company will be re-evaluated.
( 2)Preparation of the consolidated financial statements.
The Company based on its own and its subsidiaries financial statements, in accordance with other relevant information, to prepare the consolidated financial statements.
For a subsidiary acquired through a business combination not under common control, the operating results and cash flows from the acquisition (the date when the control is obtained) are included in the consolidated income statement and consolidated statement of cash flows, as appropriated; no adjustment is made to the opening balance and comparative figures in the consolidated financial statements. Where a subsidiary and a party being absorbed in a merger by absorption was acquired during the reporting period, through a business combination involving enterprises under common control, the financial statements of the subsidiary are included in the consolidated financial statements. The results of operations and cash flow are included in the consolidated balance sheet and the consolidated income statement, respectively, based on their carrying amounts, from the date that common control was established, and the opening balances and the comparative figures of the consolidated financial statements are restated.
When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Company makes necessary adjustments to the financial statements of the subsidiary based on theCompany’s own accounting period or accounting policies. Where a subsidiary was acquired during the reporting period through a business combination not under common control, the financial statements was reconciliated on the basis of the fair value of identifiable net assets at the date of acquisition.
Intra-Group balances and transactions, and any unrealized profit or loss arising from intra-Group transactions, are eliminated in preparing the consolidated financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Company are presented separately in the consolidated balance sheet withinshareholders’/owners’ equity and net profit. Net profit or loss attributable to minority shareholders in the subsidiaries is presented separately as minority interest in the consolidated income
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements statement below the net profit line item.
When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds the minorityshareholders’ portion of the opening balance ofshareholders’/equity of the subsidiary, the excess is allocated against the minority interests.
When the Company loses control of a subsidiary due to the disposal of a portion of an equity investment or other reasons, the remaining equity investment is re-measured at its fair value at the date when control is lost. The difference between 1) the total amount of consideration received from the transaction that resulted in the loss of control and the fair value of the remaining equity investment and 2) the carrying amounts of the interest in the formersubsidiary’s net assets immediately before the loss of the control is recognized as investment income for the current period when control is lost. Other comprehensive income related to the former subsidiary's equity investment, using the foundation and the acquiree directly related to the disposal of the same assets or liabilities are accounted when the control is lost(ie, in addition to the former subsidiary is remeasured at the net defined benefit plan or changes in net assets and liabilities resulting from, the rest are transferred to the current investment income). The retained interest is subsequently measured according to the rules stipulated in the - “Chinese Accounting Standards for Business Enterprises No.2 - Long-term equity investment” or “Chinese Accounting Standards for Business Enterprises No.22 - Determination and measurement of financial instruments”.
The company through multiple transactions step deal with disposal of the subsidiary's equity investment until the loss of control, need to distinguish between equity until the disposal of a subsidiary's loss of control over whether the transaction is package deal. Terms of the transaction disposition of equity investment in a subsidiary, subject to the following conditions and the economic impact of one or more of cases, usually indicates that several transactions should be accounted for as a packagedeal:①these transactions areconsidered。simultaneously, or in the case of mutual influence made,②these transactions as a whole in order to achieve a complete business results;③the occurrence of a transaction depends on occurs at least one other transaction;④a transaction look alone is not economical, but when considered together with other transaction is economical.
If they does not belong to the package deal, each of them separately, as the case of a transaction in accordance with “without losing control over the disposal of a subsidiary part of a long-term equity investments“principles applicable accounting treatment. Until the disposal of the equity investment loss of control of a subsidiary of the transactions belonging to the package deal, the transaction will be used as a disposal of a subsidiary and the loss of control of the transaction. However, before losing control of the price of each disposal entitled to share in the net assets of the subsidiary 's investment corresponding to the difference between the disposal, recognized in the consolidated financial statements as other comprehensive income, loss of control over the transferred together with the loss of control or loss in the period.
7.Joint venture arrangements classification and Co-operation accounting treatment
(1)Joint arrangement
A joint arrangement is an arrangement of which two or more parties have jointcontrol，depending of the rights and obligation of the Company in the joint arrangement. A joint operation is a joint arrangement whereby the Company has rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the Company has rights to the net assets of the arrangement.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements (2)Co-operation accounting treatment
When the joint venture company for joint operations, confirm the following items and share common business interest s related to:
（1）Confirm individual assets and common assets held based on shareholdings;
（2）Confirm individual liabilities and shared liabilities held based on shareholdings;
（3）Confirm the income from the sales revenue of co-operate business output
（4）Confirm the income from the sales of the co-operate business output based on shareholdings;
（5）Confirm the individual expenditure and co-operate business cost based on shareholdings.
(3)When a company is a joint ventures, joint venture investment will be recognized as long-term equity investments . 8.Recognition Standard of Cash& Cash Equivalents
Cash and cash equivalents of the Company include cash on hand, ready usable deposits and investments having short holding term (normally will be due within three months from the day of purchase), with strong liquidity and easy to be exchanged into certain amount of cash that can be measured reliably and have low risks of change.
9.Foreign Currency Transaction
（1）Foreign Currency Transaction
The approximate shot exchange rate on the transaction date is adopted and translated as RMB amount when the foreign currency transaction is initially recognized. On the balance sheet date, the monetary items of foreign currency are translated as per the shot exchange rate on the balance sheet date, the foreign exchange conversion gap due to the exchange rate, except for the balance of exchange conversion arising from special foreign currency borrowings capitals and interests for the purchase and construction of qualified capitalization assets, shall be recorded into the profits and losses of the current period. The non-monetary items of foreign currency measured at the historical cost shall still be translated at the spot exchange rate on the transaction date, of which the RMB amount shall not be changed. The non-monetary items of foreign currency measured at the fair value shall be translated at the spot exchange rate on the fair value recognized date, the gap shall be recorded into the current profits and losses or other comprehensive incomes.
(2) Translation Method of Foreign Currency Financial Statement
For the assets and liabilities in the balance sheet, the shot exchange rate on the balance sheet date is adopted as the translation exchange rate. For theowner’s equity, the shot exchange rate on the transaction date is adopted as the translation exchange rate, with the exception of “undistributed profits”. The incomes and expenses in the income statement shall be translated at the spot exchange rate or the approximate exchange rate on the transaction date. The translation gap of financial statement of foreign currency converted above shall be listed in other comprehensive incomes under theowner’s equity in the consolidated balance sheet.
10.Financial tools
One financial asset or financial liability shall be recognized when the company becomes the party in the financial instrument contract. The financial assets and the financial liabilities are measured at the fair value in the initial
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements recognition. For the financial assets and liabilities that measured at the fair values and the variation included in the current profits and losses, the relative transaction expenses shall be directly recorded into the profits and losses. For the financial assets and liabilities of other categories, the expenses related to transactions are recognized as initial amount.
1 Determination of financial assets andliabilities’ fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in anarm’s length transaction. For a financial instrument which has an active market, the Company uses quoted price in the active market to establish its fair value. The quoted price in the active market refers to the price that can be regularly obtained from exchange market, agencies, industry associations, pricing authorities; it represents the fair market trading price in the actual transaction. For a financial instrument which does not have an active market, the Company establishes fair value by using a valuation technique. Valuation techniques include using recentarm’s length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models.
2. Classification, recognition and measurement of financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. On initial recognition, theCompany’s financial assets are classified into including financial assets at fair value though profit or loss, held-to maturity investments, loans and receivables and available-for-trade assets.
（1） Financial assets at fair value through profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit or loss. Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A. the financial asset is acquired for the purpose of selling it in a short term;
B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively managed, and there is objective evidence indicating that the enterprise recently manages this portfolio for the purpose of short-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair value cannot be reliably measured. For such kind of financial assets, fair values are adopted for subsequent measurement.
Financial asset is designated on initial recognition as at fair value through profit or loss only when it meets one of the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement or recognition of relevant gains or losses that would otherwise arise from measuring the financial instruments on different bases.
B. a Group of financial instruments is managed and its performance is evaluated on a fair value basis, and is reported to theenterprise’s key management personnels. Formal documentation regarding risk management or investment strategy hasprepared。
Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any gains or losses arising from changes in the fair value and any dividends or interest income earned on the financial assets are recognized in the profit or loss.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements（2）Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity. Such kind of financial assets are subsequently measured at amortized cost using the effective interest method. Gains or losses arising from derecognition, impairment or amortization are recognized in profit or loss for the current period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through the expected life of the financial asset or financial liability or, where appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Company shall estimate future cash flow considering all contractual terms of the financial asset or financial liability without considering future credit losses, and also consider all fees paid or received between the parties to the contract giving rise to the financial asset and financial liability that are an integral part of the effective interest rate, transaction costs, and premiums or discounts, etc.
（3）Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment that are not quoted in an active market. Financial assets classified as loans and receivables by the Company include note receivables, account receivables, interest receivable dividends receivable and other receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or loss arising from derecognition, impairment or amortization is recognized in profit or loss.
（4）Financial assets available-for-trade
Financial assets available-for-trade include non-derivative financial assets that are designated on initial recognition as available for trade, and financial assets that are not classified as financial assets at fair value through profit or loss, loans and receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from changes in the fair value are recognized as other comprehensive income and included in the capital reserve, except that impairment losses and exchange differences related to amortized cost of monetary financial assets denominated in foreign currencies are recognized in profit or loss, until the financial assets are derecognized, at which time the gains or losses are released and recognized in profit or loss. Interests obtained and dividends declared by the investee during the period in which the financial assets available-for-trade are held, are recognized in investment gains.
3. Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for the financial assets that measured by the fair value. If there is objective evidence indicating a financial asset may be impaired, a provision is provided for the impairment.
The company shall make an independent impairment test on the financial assets with significant single amounts, and carry out an independent impairment test on the financial assets with insignificant single amounts, or conduct an impairment-related test after they are included in a combination of financial assets with similar credit risk features so as to carry out. Where, upon independent test, the financial asset (including those financial assets with significant single amounts and those with insignificant amounts) has not been impaired, it shall be included in a combination of financial assets with similar risk features so as to conduct another impairment test. The financial assets which have suffered from an impairment loss in any single amount shall not be included in any combination of financial assets
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements with similar risk features for any impairment test.
（1）Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present value of future cash flow. The difference is recorded as impairment loss. If there is objective evidence to indicate the recovery of value of financial assets after impairment, and it is related with subsequent event after recognition of loss, the impairment loss recorded originally can be reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the amortized cost of the financial assets without provisions of impairment loss on the reserving date.
（2）Impairment loss on available-for-trade financial assets
Where the fair value of the equity instrument investment drops significantly or not contemporarily according to the integrated relevant factors, an available-for-trade financial asset is impaired. The "serious decline" refers to the cumulative fair value declines more than30%; "non-temporary decline" refers to the continuous decline in the fair value of time over 12 months.
When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in fair value that had been recognized in capital reserve shall be removed and recognized in profit or loss. The amount of the cumulative loss that is removed shall be difference between the acquisition cost with deduction of recoverable amount less amortized cost, current fair value and any impairment loss on that financial asset previously recognized in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the value of the financial asset is recovered, and it is objectively related to an event occurring after the impairment loss was recognized, the initial impairment loss can be reversed and the reserved impairment loss on available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss on available-for-trade debt instrument is recorded in the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot be reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument shall not be reversed.
4. Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under a pass-through arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either has transferred substantially all the risks and rewards of the asset, or has neither transferred norretained substantially all the risks and rewards of the asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over the asset, the asset is recognized according to the extent it exists as financial asset, and correspondent liability is recognized. The extent of existence refers the level of risk by the financial asset changes the enterprise is facing.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the carrying amount of the financial asset transferred; and the sum of the consideration received from the transfer and any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset is allocated between the part that continues to be recognized and the part that is derecognized, based on the relative fair value of those parts. The difference between (a) the carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for the part derecognized and any cumulative gain or loss allocated to the part derecognized which has been previously recognized in other comprehensive income, is recognized in profit or loss.
The Company uses recourse sale financial assets, or financial assets held endorser, determine almost all of the risks and rewards of ownership of the financial assets have been transferred if. Has transferred the ownership of the financial assets of almost all the risks and rewards to the transferee, the derecognition of the financial asset; retains ownership of the financial assets of almost all of the risks and rewards of financial assets that are not derecognised; neither transfers nor retains ownership of the financial assets of almost all of the risks and rewards, then continue to determine whether the enterprise retains control of the assets and the accounting treatment in accordance with the principles described in the preceding paragraphs.
5. Classification and measurement of financial liabilities
TheGroup’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value through profit or loss and other financial liabilities. For financial liabilities at fair value through profit or loss, relevant transaction costs are immediately recognized in profit or loss for the current period, and transaction costs relating to other financial liabilities are included in the initial recognition amounts.
(1)Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the initial recognition to be measured by the fair value follows the same criteria as the classification by which financial assets held-for-trade and financial assets designed at the initial recognition to be measured by the fair value and their changes are recorded in the current profit or loss.For the financial liabilities measured by the fair value and changes recorded in the profit or loss, fair values are adopted for subsequent measurement. All the gains or losses on the change of fair value and the expenses on dividends or interests related to these financial liabilities are recognized in profit or loss for the current period.
（2）Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price in an active market and their fair value cannot be measured reliably, is subsequently measured by cost Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Gains or losses arising from derecognition or amortization is recognized in profit or loss for the current period.
6. Derecognition of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation (or part of it) is discharged or cancelled or has expired. An agreement between the Company (an existing borrower) and existing lender to replace original financial liability with a new financial liability with substantially different terms is accounted
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements for as an extinguishment of the original financial liability and the recognition of a new liability.
When the Company derecognizes a financial liability or a part of it, it recognizes the difference between the carrying amount of the financial liability (or part of the financial liability) derecognized the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in profit or loss.
7. Offsetting financial assets and financial liabilities
When the Company has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
8. Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. The consideration received from issuing equity instruments, net of transaction costs, are added toshareholders’ equity. All types of distribution (excluding stock dividends) made by the Company to holders of equity instruments are deducted fromshareholders’ equity. The Group does not recognize any changes in the fair value of equity instruments.
11.Accounts Receivable
1.Accounts receivable with material specific amount and specific provisioned bad debt preparation. The Client Identifies single amount of accounts receivable that is not less than RMB 1 million as account receivable that are Judgment criteria or amount standard of material specific individually significant in amount. The Client Identifies single amount or amountcriterial：
amount of accounts receivable that is not less than RMB 0.5 million as account receivable that are individually significant in amount.
Making an independent impairment test. If any objective evidence shows that it has been impaired, the
impairment-related losses shall be recognized according to the gap between its present value of future cash flow less than its Provision method with material specific amount and
book value, and the several shall be determined to withdraw the provision of specific bad debtpreparation：
bad debt provision. If there exists no the impairment after the impairment test, they shall be included in a combination of the receivables with similar risk features so as to withdraw the bad debt provision.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 2.The accounts receivable of bad debt provisions made by credit risk Group
(1) Recognition Criteria for the Group and Withdrawing Method of Bad Debt Provision
||
|-|
|Recognition Criteria|
|Division by Aging|

(2)Accounts on age basis in theportfolio：
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|-|
|Rate for receivables(%)|
|5|
|10|
|30|
|50|

(3)Account receivable with non-material specific amount but specific bad debt preparation
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|-|-|
|Reasons of Withdrawing Individual Bad DebtProvision|There is any objective evidence shows that it has been impaired.|
|Withdrawing Method of Bad Debt Provision|The impairment-related losses shall be recognized according to the gapbetween its present value of future cash flow less than its book value.|

 12.Inventory
1.Investories class
Inventory shall include the finished products or goods available for sale during daily activities, the products in the process of production, the stuff and material consumed during the process of production or the services offered.
2．Valuation method of inventory issued
The company calculates the prices of its inventories according to the weighted averages method
3. Recognition Criteria for the Net Realizable Value of Different Category of Inventory and Withdrawing Method of Inventory Falling Price Reserves
The inventory shall be measured by use of the lower between the cost and the net realizable value and the inventory falling price reserves shall be withdrawn as per the gap of single inventory cost minus the net realizable value at the balance sheet date. The net realizable value refers to the amounts that the estimated sale price of inventory minus the estimated costs ready to happen till the completion of
works, the estimated selling expenses and the relevant expenses of taxation. The company shall
recognize the net realizable value of inventory based on the acquired unambiguous evidence and in
view of the purpose to hold the inventory, the influence of matters after the balance sheet date and
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements other factors.
The net realizable value of inventory directly for sale shall be recognized according to the amounts of the estimated sale price of the inventory minus the estimated sale expenses and the relevant expenses of taxation during the process of normal production and operation. The net realizable value of inventory that required to conduct processing shall be recognized according to the amounts of the estimated sale price of the finished products minus the estimated costs ready to happen till the completion of works, the estimated selling expenses and the relevant expenses of taxation. On the balance sheet date, the net realizable value shall be respectively defined for the partial agreed with the contract price and others without the contract price in the same inventory, and the amounts of the inventory falling price reserves withdrawn or returned shall be respectively recognized in comparison with their corresponding costs.
4. Inventory System: Adopts the Perpetual Inventory System
5．Amortization method for low cost and short-lived consumable items and packaging materials
（1）Low cost and short-lived consumable items
Low cost and short-lived consumable items are amortized using immediate write-offmethod。
（2）Packaging materials
Packaging materials are amortized using
13.Held-for-sale assets
A non-current asset is classified as held-for-sale if all of the following conditions are satisfied:
1.The asset is immediately sellable at its current condition per usual sales term applicable to the type of assets to which itbelongs；
2. the Company's has completed official decision to dispose the asset;
3. the Company has entered into irrevokable sales contract with the purchaser; and
4. the sales will be completed within one year.
Is classified as held for sale and the disposal of non current assets in the group of assets and liabilities, are classified as current assets and current liabilities.
Termination of operation to meet one of the following conditions have been disposed of or classified as held for sale, i n the operation and the preparation of the financial statements to be able to differentiate the components alone in the c ompany within:
1. This part of main business represents an independent or a main business area;
2. This part of the proposed disposal plans for a major business independent or a main business area;
3 . This part is just to sell again and made subsidiary.
For the fixed assets held for sale, the company shall adjust the estimated net residual value of the fixed assets in order to make it reflecting the amount after the disposal costs deducted from the fair value, whichdoesn’t exceed the original book value of the fixed assets when the condition of holding for sale is met. The impairment losses of the assets shall be regarded and recorded into the current
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements profits and losses if the original book value is more than the balance of the estimated net residual value after adjusting.
The assets or the disposal group held for sale no longer meet the recognized requirements of the fixed assets held for sale, the company shall terminate the classification of held-for-sale and measure based on the less one between the following amounts: (1) the amounts after adjusted for the assets or the disposal group classified as the book value before the held-for-sale according to the originally confirmed depreciation, amortization or impairment when supposed that have not classified as the held-for-sale. (2) the returned amounts thatcan’t be re-sold.
The intangible assets and other non-current assets held for sale shall be treated as per above principles.
14.Long-term equity investments
Long-term equity investments referred to in this section refer to the Company invested entity has control, joint control or significant influence over the long-term equity investments. The Company invested does not have control, joint control or significant influence over the long-term equity investments as financial assets available for sale or at fair value and the changes included financial assets through profit or loss.
Joint control is the Company control over an arrangement in accordance with the relevant stipulations are common, related activities and the arrangement must be after sharing control participants agreed to the decision-making. Significant influence is the Company s financial and operating policies of the entity has the right to participate in decision-making, but can not control or with other parties joint control over those policies.
1. Determination of Investment cost
The cost of a long-term equity investment acquired through business combination under common control is measured at the acquirer's share of the combination date book value of the acquiree's net equity in the ultimate controller's consolidated financial statements. The difference between the cost and book value of cash paid, non-monetary assets transferred and liabilities assumed is adjusted to capital reserves, and to retained earnings if capital reserves is insufficient. If the consideration is transferred by way of issuing equity instruments, the face value of the equity instruments issued is recognised in share capital and the difference between the cost of the face value of the equity instruments issued is adjusted to capital reserves, and to retained earnings if capital reserves is insufficient. The cost of a long-term equity investment acquired through business combination not under common control is the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued. (For the equity of the combined party under common control obtained step-by-step through multiple transactions and the business combination under common control ultimately formed, the company should respectively dispose all the transactions if belong to the package deal. For the package deal, all the transactions will be conducted the accounting treatment as the deal with acquisition of control. For the non-package deal, the shares of the book value of thestockholders’equity/owners’ equity of the combined party in the consolidated financial statements of the ultimate control party shall be as the initial investment cost of the long-term equity investment, and the capital reserves shall be adjusted for the difference between the initial investment cost of long-term equity investment and the sum of the book value of long-term equity investment before merging and that of new consideration payment obtained on the merger date, or the retained earnings shall be adjusted if the capital reserves are insufficient to offset. As for the equity investment held before the merger date, the accounting treatment will not be conducted temporarily for other comprehensive income accounted by equity method or confirmed for the financial assets available for sale.)
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements All expenses incurred directly associated with the acquisition by the acquirer, including expenditure of audit, legal services, valuation and consultancy and other administrative expenses, are recognised in profit or loss for the period during which the acquisition occurs. For the merger of enterprises not under the same control through gaining the shares of the combined enterprise by multiple steps of deals, it shall deal with it in the following two ways depending on that if it belongs to "a package deal": if it belongs to "a package deal", it shall deal with all the deals as one obtaining the control power; if it does not belong to "a package deal", it shall, on the date of merger, regard the sum of book value of theowner’s original equity of the merged enterprise and the newly increased investment cost as the initial cost of the long-term equity investment. For the shares originally held by this enterprise accounted for by weighted equity method, the relevant other comprehensive income shall not be accounted for temporarily. If the equity investment held originally can be classified as the financial assets for sale, the difference between the fair value and the book value, and the variation in the accumulative fair value of other comprehensive returns recorded originally will be transferred into the current profits and losses.
All expenses incurred directly associated with the acquisition by the acquirer, including expenditure of audit, legal services, valuation and consultancy and other administrative expenses, are recognised in profit or loss for the period during which the acquisition occurs.
Long-term equity investments acquired not through business combination are measured at cost on initial recognition. Depending on the way of acquisition, the cost of acquisition can be the total cash paid, the fair value of equity instrument issued, the contract price, the fair value or book value of the assets given away in the case of non-monetary asset exchange, or the fair value of the relevant long-term equity investments. The cost of acquisition of a long-term equity investment acquired not through business combination also includes all directly associated expenses, applicable taxes and fees, and other necessary expenses. When the significant impact or the joint control but non-control on the invested party can be implemented due to the additional investment, the long-term equity investment cost is the sum of the fair value of the equity investment originally held and the new investment costs based on the recognition of “Accounting Standards for Enterprises No.22– Recognition and Measurement of Financial Instruments”.
2. Subsequent Measurement
To be invested joint control ( except constitute common operator ) or long-term equity investments significant influence are accounted for using the equity method. In addition, the Company's financial statements using the cost method of accounting for long-term equity can exercise control over the investee.
(1)Cost method of accounting for long-term equity investments
Under the cost method, a long-term equity investment is measured at initial investment cost. Except for cash dividends or profits declared but not yet paid that are included in the price or consideration actually paid upon acquisition of the long-term equity investment, investment income is recognized in the period in accordance with the attributable share of cash dividends or profit distributions declared by the investee.
(2)Equity method of accounting for long-term equity investments
When using the equity method, the initial investment cost of long-term equity investment exceeds the investor's net ide ntifiable assets of the fair share of the investment value, do not adjust the initial investment cost of long-term equity in vestment; the initial investment cost is less than the investee unit share of identifiable net assets at fair value, the differ ence is recognized in profit or loss, while the long-term equity investment adjustment costs.
Where the initial investment cost of a long-term equity investment exceeds the investingenterprise’s interest in the fair values of theinvestee’s identifiable net assets at the time of acquisition, no adjustment shall be made to the initial
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements investment cost. The carrying amount of an long-term equity investment measured using the equity method is adjusted by the Company's share of the investee's net profit and other comprehensive income, which is recognised as investment income and other comprehensive income respectively. The carrying amount of an long-term equity investment measured using the equity method is reduced by profit distribution or cash dividends announced by the investee. The carrying amount of an long-term equity investment measured using the equity method is also adjusted by the investee's equity movement other than net profit, other comprehensive income and profit distribution, which is adjusted to capitalreserves。The net profit of the investee is adjusted by the fair value of the investee's identifiable assets as at acquistion. The financial statements and hence the net profit and other comprehensive income of an investee which does not adopt accounting policies or accounting period uniform with the Company is adjusted by the Company's accounting policies and accounting period. The Company's share of unrealised profit or loss arising from related party transactions between the Company and an associate or joint venture is deducted from investment income. Unrealised loss arising from related party transactions between the Company and an associate or joint venture which is associated with asset impairment is not adjusted. Where assets transferred to an associate or joint venture which form part of the Company's investment in the investee but which does not enable the Company obtain control over the investee, the cost of the additional investment acquired is measured at the fair value of assets transferred and the difference between the cost of the additional investment and the book value of the assets transferred is recognised in profit or loss. Where assets transferred to an associate or joint venture form an operation, the difference between the consideration received and the book value of the assets transferred in recognised in profit or loss. Where assets transferred from an associate or joint venture form an operation, the transaction is accounted for in accordance with CAS 20 - Business Combination, any gain or loss is reocgnised in profit or loss.
The Company's share of an investee's net loss is limited by the sum of the book value of the long-term equity investment and other net long-term investments in the investees. Where the Company has obligation to share additional net loss of the investee, the estimatedshare of loss recognised as accrued liabilities and investment loss. Where the Company has unrecognised share of loss of the investee when the investee generates net profit, the Company's unrecognised share of loss is reduced by the Company's share of net profit and when the Company's unrecognised share or loss is eliminated in full, the Company's share of net profit, if any, is recognised as investment income.
(3)Acquisition of minority interest
The difference between newly increased equity investment due to acquisition of minority interests and portion of net asset cumulatively calculated from the acquisition date is adjusted as capital reserve. If the capital reserve is not sufficient to absorb the difference, the excess are adjusted against returned earnings.
(4)Disposal of long-term equity investment
Where the parent company disposes long-term investment in a subsidiary without a change in control, the difference in the net asset between the amount of disposed long-term investment and the amount of the consideration paid or received is adjusted to theowner’s equity. If the disposal of long-term investment in a subsidiary involves loss of control over the subsidiary, the related accounting policies in Note applies. For disposal of long-term equity investments in any situation other than the fore-mentioned situation, the difference between the book value of the investment disposed and the consideration received is recognised in profit or loss.
The investee's equity movement other than net profit, other comprehensive income and profit distribution is reocgnised in profit or loss proportionate to the disposal.
Where a long-term equity investment is measured by the equity method both before and after part disposal of the
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements investment, cumulative other comprehensive income relevant to the investment recognised prior to the acquistion is treated in the same manner that the investee disposes the relevant assets or liabilities proportionate to the disposal. The investee's equity movement other than net profit, other comprehensive income and profit distribution is reocgnised in profit or loss proportionate to the disposal.
Where a long-term equity investment is measured at cost both before and after part disposal of the investment, cumulative other comprehensive income relevant to the investment recognised, as a result of accounting by equity method or recognition and measurement principles applicable to financial instruments, prior to the Company's acquisition of control over the investee is treated in the same manner that the investee disposes the relevant assets or liabilities and recognised in profit or loss proportionate to the disposal. The investee's equity movement other than net profit, other comprehensive income and profit distribution, as a result of accounting by equity method, is reocgnised in profit or loss proportionate to the disposal.
Where the Company's control over an investee is lost due to partial disposal of investment in the investee and the Company continues to have significant influence over the investee after the partial disposal, the investment in measured by the equity method in the Company's separate financial statements; where the Company's control over an investee is lost due to partial disposal of investment in the investee and the Company ceases to have significant influence over the investee after the partial disposal, the investment in measured in accordance with the recognition and measurement principles applicable to financial instruments in the Company's separate financial statements and the difference between the fair value and the book value of the remaining investment at the date of loss of control is recognised in profit or loss. Cumulative other comprehensive income relevant to the investment recognised, as a result of accounting by equity method or recognition and measurement principles applicable to financial instruments, prior to the Company's acquisition of control over the investee is treated in the same manner that the investee disposes the relevant assets or liabilities on the date of loss of control. The investee's equity movement other than net profit, other comprehensive income and profit distribution, as a result of accounting by equity method, is reocgnised in profit or loss when control is lost. Where the remaining investment is measured by equity method, the fore-mentioned other comprehensive income and other equity movement are recognised in profit or loss proportionate to the disposal; Where the remaining investment is measured in accordance with the recognition and measurement principles applicable to financial instruments, the fore-mentioned other comprehensive income and other equity movement are recognised in profit or loss in full.
Where the Company's joint control or significant influence over an investee is lost due to partial disposal of investment in the investee,the remaining investment in the investee is measured in accordance with the recognition and measurement principles applicable to financial instruments, the difference between the fair value and the book value of the remaining investment at the date of loss of joint control or significant influence is recognised in profit or loss. Cumulative other comprehensive income relevant to the investment recognised, as a result of accounting by equity method, prior to the partial disposal is treated in the same manner that the investee disposes the relevant assets or liabilities on the date of loss of joint control or significant influence. The investee's equity movement other than net profit, other comprehensive income and profit distribution is reocgnised in profit or loss when joint control or significant influence is lost.
Where the Company's control over an investee is lost through multiple disposals and the multiple disposals shall be viewed as one single transaction, the multiple disposals is accounted for one single transaction which result in the
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Company's loss of control over the investee. Each difference between the consideration received and the book value of the investment disposed is recognised in other comprehensive income and reclassified in full to profit or loss at the time when control over the investee is lost.
15.Investment property
1．The measurement mode of investment property
The investment property of the company includes the leased land use rights, the leased buildings, the land use rights held and prepared to transfer after appreciation.
The company shall adopt the cost mode to measure the investment property.
2. Depreciation or Amortization Method by Use of Cost Mode
The leased buildings of the investment property in the company shall be withdrawn the depreciation by the service life average method, and the depreciation policy is the same with that of the fixed assets. The land use rights held and prepared to transfer after appreciation in the investment property shall be amortized by the line method, and the specific accounting policy is same with that of the intangible assets.
16.Fixed assets
1．The conditions of recognition
Fixed assets refers to the tangible assets that are held for the sake of producing commodities, rendering labor service, renting or business management and their useful life is in excess of one fiscal year. The fixed assets can be recognized when the following requirements are all met: (1) the economic benefits relevant to the fixed assets will flow into the enterprise. (2) the cost of the fixed assets can be measured reliably.
The fixed assets of the company include the houses and buildings, the decoration of the fixed assets, the machinery equipment, the transportation equipment, the electronic instrument and other devices.
2. Initial Measurement and Subsequent Measurement of the Fixed Assets
The fixed assets shall be book kept as per the acquired actual cost, and the depreciation shall be withdrawn from the subsequent month after the usable status reserved and achieved.
3．The method for depreciation
||||
|-|-|-|
|The method fordepreciation|Expected usefullife（Year）|Estimated residualvalue|
|Straight-linemethod|35 years|4%|
|Straight-linemethod|40 years|4%|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
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|-|-|-|
|The method fordepreciation|Expected usefullife（Year）|Estimated residualvalue|
|Straight-linemethod|10 years||
|Straight-linemethod|10-14 years|4%|
|Straight-linemethod|8 years|4%|
|Straight-linemethod|8 years|4%|
|Straight-linemethod|8 years|4%|

4．Cognizance evidence and pricing method of financial leasing fixed assets
(1) Recognition Criteria of the Fixed Assets under Financing Lease
The financing lease shall be recognized if the following one or several criteria are met:① the ownership of the leasing assets shall be transferred to the tenant when the expiration of lease term.② the tenant has the option to purchase the leasing assets, and the made purchase price is expected to be far less than the fair value of the leasing assets in the implementation of the option. Thus, it can be reasonably recognized that the tenant will implement the option on the lease date.③ the ownership of assets is not transferred, but the lease term shall be the most of the life of the lease assets.④ the least present value of the lease payment of the tenant and the least present value of the lease receipts on the lease date almost equal to the fair value of the leasing assets on the lease date respectively.⑤ the leasing assets have the special nature, and only the tenant can use if there is no major modifications.
(2) Valuation of Fixed Assets Acquired under Finance Leases: the fixed assets acquired under finance leases shall be book kept according to the lower between the fair value of the leasing assets and the least lease payment on the lease date.
(3) Depreciation Method of Fixed Assets Acquired under Finance Leases: the depreciation shall be withdrawn for the fixed assets acquired under finance leases as per the depreciation policy of own fixed assets.
17.Construction in progress
1. The projects under construction shall be recognized when the economic benefits may flow into and the cost can be reliably measured. Meanwhile, the projects under construction shall be measured according to the actual cost occurred before the assets are built to achieve the expected usable condition.
2. The projects under construction shall be transferred into the fixed assets according to the actual
project costs when the expected usable condition achieved. For the expected usable condition
achieved while the final accounts for completed projects not handled yet, the projects shall be
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements transferred into the fixed assets as per the estimated value. After the final accounts for completed projects handled, the original estimated value shall be adjusted as per the actual cost, but the original withdrawn depreciation shall not be adjusted again.
18.Borrowing costs
1. Recognition principles for capitalizing of loan expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or production of asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset. Other borrowing expenses are recognized as expenses according to the occurred amount, and accounted into gain/loss of current term. 2. Duration of capitalization of Loan costs
(1).When a loan expense satisfies all of the following conditions, it is capitalized:
1. Expenditures on assets have taken place.
2. Loan costs have taken place;
3. The construction or production activities to make assets to reach the intended use or sale of state have begun.
（2）Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production of a qualifying asset is interrupted by activities other than those necessary to prepare the asset for its intended use or sale, when the interruption is for a continuous period of more than 3 months. Borrowing costs incurred during these periods recognized as an expense for the current period until the acquisition, construction or production is resumed.
（3）When the construction or production meets the intended use or sale of state of capitalization conditions, the Loan costs should stop capitalization.
3. Computation Method for Capitalization Rate and Amount of Borrowing Costs
With regard to the special borrowings for the purchase and construction of qualified assets, the capitalized interest amount shall be recognized according to the amount of the interest cost for the special borrowings actually occurred during the current period (including the amortization of discount or premium recognized as per the effective interest method) minus the interest income acquired after the borrowings deposit in bank or the investment income obtained from the temporary investment. For the general borrowings for the purchase and construction of qualified assets, the capitalized interest amount of the general borrowings shall be computed and recognized according to the weighted average of accumulative asset expense beyond the expense of the special borrowings, multiplying the capitalization rate of general borrowings.
19.Intangible assets
1. Valuation Method, Service Life and Impairment Test of Intangible Assets
(1) The intangible assets include the land use rights, the professional technology and the software, which are conducted the initial measurement as per the cost.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements (2) The service life of intangible assets is analyzed and judged when of the company acquires the intangible assets. For the finite service life of the intangible assets, the years of service life or the quantity of service life formed and the number of similar measurement unit shall be estimated. If the term of economic benefits of the intangible assets brought for the company is not able to be foreseen, the intangible assets shall be recognized as that with the indefinite service life.
(3) Estimation Method of Service life of Intangible Assets
1) For the intangible assets with the finite service life, the company shall generally consider the following factors to estimate the service life:① the normal service life of products produced with the assets, and the acquired information of the service life of similar assets.② the estimation of the current stage conditions and the future development trends in the aspects of technology and craft.③ the demand of the products produced by the assets or the offered services in the market.④ the expectation of actions adopted by current or potential competitors.⑤ the expected maintenance expense for sustaining the capacity to economic benefits brought by the assets and the ability to the relevant expense expected.⑥ the relevant law provision or the similar limit to the control term of the assets, such as the licensed use term and the lease term.⑦ the correlation with the service life of other assets held by the company.
2) Intangible Assets with Indefinite Service Life, Judgment Criteria on Indefinite Service Life and Review Procedure of Its Service Life
The company shall be unable to foresee the term of economic benefits brought by the assets for the company, or the indefinite term of intangible assets recognized as the indefinite service life of intangible assets.
The judgment criteria of Indefinite service life:① as from the contractual rights or other legal rights, but the indefinite service life of contract provision or legal provisions.② unable to judge the term of economic benefits brought by the intangible assets for the company after the integration of information in the same industry or the relevant expert argumentation.
At the end of every year, the review should be made for the service life of the intangible assets with the indefinite service life, and the relevant department that uses the intangible assets, shall conduct the basic review by the method from up to down, in order to evaluate the judgment criteria of the indefinite service life if there is the change.
(4) Amortization Method of Intangible Assets Value
The intangible assets with the finite service life shall be systematically and reasonably amortized according to the expected implementation mode of the economic benefits related to the intangible assets during the service life, and the line method shall be adopted to amortize for the intangible assets unable to reliably recognize the expected implementation mode. The specific service life is as follows:
Items Amortization lifetime（Year）
Land use right 50 years
Proprietary technology 15 years
Software 5 years
The intangible assets with the indefinite service life shall not be amortized, and the company shall
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements make the review of the service life of the intangible assets during every accounting period.
(5) If there is the impairment for the intangible assets with the definite service life on the balance sheet date, the corresponding impairment provision shall be withdrawn according to the difference between the book value and the recoverable amount. The intangible assets with the indefinite service life and without the usable condition shall be conducted the impairment test every year whether the impairment exists.
2. Accounting Policy of Internal Research and Development Expenditure
The expenditure for internal research and development project in the study stage shall be recorded into the current profits and losses when occurring. The expenditure for internal research and development project in the development stage shall be recognized as the intangible assets when the following requirements are simultaneously met: (1) the completion of the intangible assets is available for use or sale, and feasible in the technology. (2) the intention to complete the intangible assets and use or sale. (3) the method for the economic benefits produced by the intangible assets, including the evidence that shows there exists the market for the products generated from the intangible assets or the intangible assets have the market. The intangible assets are used internally which shows the serviceability. (4) there are sufficient technology, financial resources and other resources to support the completion of the development of the intangible assets, and there is ability to use or sell the intangible assets. (5) the expenditure belong to the development stage of the intangible assets can be reliably measured.
The specific criteria for the division of the internal research and development projects at the research stage and the development stage of the company is as follows: (1) the investigation stage planned to obtain the new technology and knowledge, shall be recognized as the research stage, which has the features of planning and exploration. (2) before the commercial manufacture and use, the research results or other knowledge should be applied for the plan or design, in order to produce the new or improved stages with substantial materials, devices and products, which should be recognized as the development stage, and this stage has the features of pertinence and more possibility to create the achievement.
20.Long-term Assets Impairment
The company shall make judgment of the long-term assets including the long-term equity investment, the investment property measured by the cost mode, the fixed assets and the projects under construction if there is possible impairment on the balance sheet date. If there exists the evidence shows that the long-term assets have the impairment, the impairment test should be conducted, and the recoverable amount should be estimated. The impairment shall be confirmed if there exists after the comparison of the estimated recoverable amount of the assets and its book value, and if the assets impairment provision shall be withdrawn to recognize the corresponding impairment losses. The estimation of the recoverable amount of assets should be confirmed according to the higher one between the net amount of the fair value minus the disposal costs and the present value of the cash flow of assets expected in the future.
The company shall conduct the impairment test at least every year for the goodwill established by the business combination and the intangible assets with the indefinite service life whether there exists the impairment.
The impairment loss of long-term assets after recognizedshouldn’t be reversed in the future accounting period.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 21.Long-term amortizable expenses
Deferred charges represent expenses incurred that should be borne and amortized over the current and subsequent
period (together of more than one year).
The long-term unamortized expense shall be bookkept as per the actual amount occurred, and shall be averagely amortize within the benefit period or the specified period. If the long-term unamortized expensecan’t make the benefits for the future accounting period, the amortized value of the unamortized project shall all be transferred into the current profits and losses.
22.Remuneration
The employee benefits of the company include short-term employee benefits, post-employment benefits, termination benefits and other long-term employee benefits.
1. Accounting Treatment Method of Short-term Compensation
During the accounting period of service provision of staff, the company shall regard the actual short-term compensation as the liability and record into the current profits and losses or the relevant assets cost as per the beneficiary. Of which, the non-monetary welfare shall be measured as per the fair value.
2. Accounting Treatment Method of Severance Benefit Plans
The severance benefit plans can be divided into the defined contribution plan and the defined benefit plan according to the risk and obligation borne.
(1) The Defined Contribution Plan
The contribution deposits that paid to the individual subject for the services provided by the staffs on the balance sheet date during the accounting period, shall be recognized as the liability, and recorded into the current profits and losses or the relevant asset costs as per the beneficiary.
(2) The Defined Benefit Plan
The defined benefit plan is the severance benefit plans with the exception of the defined contribution plans.
1) Based on the expected cumulative welfare unit method, the company shall adopt unbiased and mutually consistent actuarial assumptions to make evaluation of demographic variables and financial variables, measure and define the obligations arising from the benefit plan, and determine the period of the relevant obligations. The company shall discount all the defined benefit plan obligations, including the obligation within twelve months after the end of the annual report during the expected services provision of employee. The discount rate adopted in discounting shall be recognized according to the bonds matched with the defined benefit plan obligation term and the currency at the balance sheet date or the market return of high-quality corporate bonds in the active market.
2) If there exist the assets for the defined benefit plan, the deficit or surplus arising from the present value of the defined benefit plan obligations minus the fair value of the defined benefit plan assets are recognized as the net liability or the net assets of the defined benefit plan. If there exists the surplus of the defined benefit plan, the lower one between the surplus of the define benefit plan and the upper
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements limit of assets shall be used to measure the net assets of the defined benefit plan. The upper limit of assets refers to the present value of economic benefits obtained from the refund of the defined benefit plans or the reduction of deposit funds of future defined benefit plans.
3) At the end of period, theemployee’s payroll costs arising from the defined benefit plan are recognized as the service costs, the net interests on the net liabilities or the net assets of the defined benefit plan, and the changes caused by the net liabilities and the net assets of the defined benefit plan that re-measured. Of which, the service costs and the net interests on the net liabilities or the net assets of the defined benefit plan shall be recorded into the current profits and losses or the relevant assets costs, the changes caused by the net liabilities and the net assets of the defined benefit plan that re-measured shall be recorded into other comprehensive incomes, which should not be switched back to the profits and losses during the subsequent accounting period, but the amount recognized from other comprehensive incomes can be transferred within the scope of the rights and interests.
4) The profit or loss of one settlement shall be recognized when settling the defined benefit plan.
3. Accounting Treatment Method of Demission Welfare
The employee compensation liabilities generated by the demission welfare shall be recognized on the early date and recorded into the current profits and losses: (1) when the companycan’t withdraw the demission welfare provided due to the rundown suggestion or the termination of labor relations plans. (2) when the company recognizes the costs or the expenses related to the reorganization of demission welfare payment.
The earlier one between when the companycan’t withdraw the rundown suggestion or the termination of labor relations plans at its side and when the costs relevant to the recombination of dismission welfare payment, shall be recognized as the liabilities arising from the compensation due to the termination of labor relations with staff and shall be recorded into the current profits and losses. Then company shall reasonably predict and recognize the payroll payable arising from the dismission welfare. The dismission welfare, which is expected to finish the payment within twelve months after the end of the annual report recognized, shall apply to the relevant provisions of short-term compensation. The dismission welfare, which is expected to be unfinished for the payment within twelve months after the end of the annual report recognized, shall apply to the relevant provisions of short-term compensation, shall apply to the provisions related to other long-term employee benefits.
4. Accounting Treatment Method of Other Long-term Employee Benefits
If other long-term employee benefits of employees provided by the company meet the conditions of the defined contribution plan, the accounting treatment shall be made in accordance with the defined contribution plan. Except for these, other long-term benefits shall be made the accounting treatment according to the defined benefit plan, but the changes arising from the re-measurement of net liabilities or net assets of other long-term employee benefits shall be recorded into the current profits and losses or the relevant assets costs.
23. Estimated Liabilities
1. Recognition Criteria of Estimated Liabilities
The liabilities shall be recognized when external guarantee, pending litigation or arbitration, product quality assurance, staff reduction plan, loss contract, recombination obligation, disposal obligation of the fixed assets and other pertinent
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements businesses all meet the following requirements:
(1) The obligation is the current obligation borne by the company.
(2) The implementation of the obligation may cause the economic benefits out of the enterprise.
(3) The amount of the obligation can be measured reliably.
2. Measurement Method of Estimated Liabilities
The estimated liabilities shall be made the initial measurement according to the best estimate of the expenditure required to settle the present obligation. There is the continuous scope for the required expenditure, and the best estimate with the same possibilities resulted from various outcomes within the scope shall be recognized as per the intermediate value. The best estimate should be recognize according to the following methods:
(1) The best estimate shall be recognized as per the most possible amount if there are matters involved in the single item.
(2) The best estimate shall be calculated and recognized as per the possible amount if there are matters involved in the multiple item.
If the company pays all the expenses for paying off the estimated liabilities, or partial estimates are compensated by the third party or other parties, the compensation amount should be separately recognized as the assets when the receipt of the compensation amount is basically determined. Meanwhile, the determined compensation amount shall not exceed the book value of the estimated liabilities recognized.
The company shall make review of the book value of estimated liabilities at the balance sheet date. If there is conclusive evidence that the book value cannot really reflect the current best estimate, the adjustment shall be made for the book value in accordance with the current best estimate.
24. Revenue
1. Recognition Principle of Revenue
(1) The Goods for Sale
The revenue of the goods for sale shall be recognized when the following requirements are met simultaneously: the transfer of main risks and rewards on ownership of the goods to the buyers, the continual management rights related to ownership no longer retained by the company and the effective control of the sold goods no longer implemented, the reliable measurement of the revenue amount, the possible inflow of the relevant economic benefits, and the reliable measurement of the relevant costs incurred or to be incurred.
(2) The Service Provision
If the provided services transaction results can be reliably estimated at the balance sheet date (the reliable measurement of the revenue amount, the possible inflow of the relevant economic benefits, the reliable recognition of the completion schedule of transaction, and the reliable measurement of the relevant costs incurred or to be incurred in the transaction), the company shall recognize the relevant service incomes according to the completion percentage method and recognized the completion schedule of the provided service transaction according to the proportion of the costs occurred accounting for the total estimated costs. If the provided services transaction results cannot be reliably
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements estimated at the balance sheet date and the occurred service costs can be expected to have compensation, the company shall recognize to provide the service revenue according to the occurred service cost amount and transfer the service costs as per the same amount. If the occurred service costs cannot be expected to have compensation, the occurred service costs shall be recorded into the current profits and losses and not be recognized as the service revenue.
(3) The Abalienation of the Right to Use Assets
The revenue of abalienation of the right to use assets shall be recognized when the abalienation of the right to use assets meets the requirements of the possible inflow of the relevant economic benefits and the reliable measurement of revenue amount. The interest income shall be calculated and determined according to time and actual interest rate of the monetary capital of the company used by others, and the royalty revenue shall be measured and determined in accordance with the charging time and method appointed in the relevant contract or agree.
2. The Specific Recognition Method of Revenue
The company mainly sells the polaroid, textiles and other products. The revenue of the sale of products in domestic market shall be recognized after the following requirements are met: The company has agreed to deliver the goods to the purchaser under the contract and the revenue amount of product sales has been determined, the payment for goods has been withdrawn or the payment vouchers has been obtained and related economic benefits are likely to inflow, and the costs related to the products can be measured reliably. The revenue of the sale of products in foreign market shall be recognized after the following requirements are met: The company has made customs clearance and departure from port under the contract, the bill of landing has obtained and the revenue of the sale of products has been recognized, the payment for goods has been withdrawn or the payment vouchers has been obtained and related economic benefits are likely to inflow, and the costs related to the products can be measured reliably.
25.Government subsidy
1. Judgment Basis and Accounting Treatment Method of Government Grants related to Assets
The government grants of long-term assets that obtained, used for construction or formed by other ways, shall be recognized as the government subsidy related to the assets. The government grants related to assets are recognized as the deferred income, equally distributed within the service life of the relevant assets, and recorded into the current profits or losses.
2. Judgment Basis and Accounting Treatment Method of Government subsidy related to Income
The government subsidy other than that related to income acquired by the company shall be recognized as the government subsidy related to income.
If the grant objects are not explicitly stipulated in the government files, the government subsidy shall be divided into that related to assets and that related to income, and the judgment basis is that:① if the specific purpose of subsidy is stipulated in the government document, the review and necessary change shall be made at the balance sheet date for the proportion of division according to the relative proportion of assets expense amount and expense amount recorded in the budget of the special item.② only general expression is made in the government documents, and the government subsidy related to income should be made for the non-particular items.
The government subsidy related to income that used for the compensation of the related expenses or losses in
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements subsequent period, shall be recognized as the deferred income and recorded into the current profits and losses during the period of the confirmation of relevant expenses. The relevant expenses or losses occurred for the purpose of compensation shall be directly recorded into the current profits and losses.
3. Recognition Time of Government subsidy
If there is evidence shows that the company can meet the financial support policies and regulations at the end of period, and the support funds can be expected to receive, the government grants shall be recognized as per the receivable amount. In addition, the government subsidy should be recognized when actually received.
4. Accounting Method of Government subsidy
The government subsidy shall be measured as per the received or receivable amount if the grants are as the monetary assets. The government subsidy shall be measured as per the fair value if the grants are as the non-monetary assets, and shall be measured as per the nominal amount if the fair value cannot be reliably obtained.
26.The Deferred Tax Assets / The deferred Tax Liabilities
1. Temporary Difference
The temporary difference includes the difference of the book value of assets and liabilities and the tax basis, and the difference of the book value and the tax basis that no confirmation of assets and liabilities but able to confirm the tax basis as per the provisions of tax law. The temporary difference can be classified into the taxable temporary difference and the deductible temporary difference.
2. Recognition Basis of Deferred Tax Assets
For the deductible temporary difference, the deductible loss and the tax payment offset, the company shall recognize the deferred tax assets arising from the future taxable income that obtained to deduce the deductible temporary difference, the deductible loss and the tax payment offset.
The deferred tax assets with the following features and arising from the initial recognition of assets or liabilities in the transaction shall not be recognized: (1) the transaction is not the business combination. (2) the transactiondoesn’t influence the accounting profits and the taxable incomes (or the deductible losses).
The company shall recognize the corresponding deferred tax assets for the deductible temporary difference related to the investment of subsidiaries, cooperative enterprises and joint ventures if the following requirements are simultaneously met: (1) the temporary difference is possible to be reversed in the foreseeable future. (2) the taxable income used to offset the deductible temporary difference is possible to be obtained in the future.
3. Recognition Basis of Deferred Tax Liabilities
All the taxable temporary differences shall be recognized as the deferred tax liabilities.
But the company shall not recognize the taxable temporary differences arising from the following transactions as the deferred tax liabilities: (1) the initial recognition of goodwill. (2) the initial recognition of assets or liabilities arising from the transactions with the following features: this transaction is not the business combination, and the transactiondoesn’t influence the accounting profits and the taxable incomes (or the deductible losses).
The company shall recognize the corresponding deferred tax liabilities for the taxable temporary difference related to the investment of subsidiaries, cooperative enterprises and joint ventures. Except that the following requirements are
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements simultaneously met: (1) the investment enterprise can control the reversal time of the temporary difference. (2) the temporary difference is possible to not be reversed in the foreseeable future.
4. Impairment of Deferred Tax Assets
The company shall review the book value of the deferred tax assets at the balance sheet date. If it is not possible to obtain sufficient taxable income for the reduction of the benefit of the deferred tax assets in the future, the book value of the deferred tax assets shall be deduced. Except that the deferred tax assets and the reduction amount are recorded into theowner’s equity when the original recognition, others shall be recorded into the current income tax expense. The book value of the deferred tax assets reduced can be recovered when sufficient taxable income is possibly obtained.
5. Income Tax Expense
The income tax expense should include the current income tax and the deferred income tax.
Other comprehensive income or the current income tax and the deferred income tax related to the transactions and items directly recorded into thestockholders’ equity, shall be recorded into other comprehensive incomes or thestockholders’ equity, and the book value of goodwill shall be adjusted by the deferred income tax arising from the business combination, but the rest of the current income tax and the deferred income tax expense or income shall be recorded into the current profits and losses.
27.Lease
1. Accounting Treatment Method of Operating Lease
When the company is as the tenant, the rental within the lease term shall be recorded into the relevant assets cost or recognized as the current profits and losses as per the line method, and the initial direct expense occurred shall be directly recorded into the current profit and loss. The contingent rental shall be recorded into the current profit and loss once the actual occurrence.
When the company is as the leaser, the rental within the lease term shall be recognized as the current profits and losses as per the line method, and the initial direct expense occurred shall be directly recorded into the current profit and loss, except that the large amounts are capitalized and recorded into the profit and loss by stages. The contingent rental shall be recorded into the current profit and loss once the actual occurrence.
2. Accounting Treatment Method of Finance Lease
When the company is as the tenant, the company shall recognize the less one between the fair value of leasing assets and the present value of minimum lease payment at the lease commencement date as the book value of rented assets, recognize the minimum lease payment as the book value of the long-term payables, and the undeterminedfiancé expense of the difference and the initial direct costs occurred shall be recorded into the leasing asset value. During each lease period, the current financing charges shall be measured and recognized by the effective interest method.
When the company is as the leaser, the company shall recognize the sum of minimum lease receivables and initial direct expense at the lease commencement date as the book value of finance lease receivables, and record the unguaranteed residual value. Meanwhile, the company shall
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements recognize the difference between the sums of minimum lease receivables, minimum lease receivables and unguaranteed minus the sum of the present value as the unrealized financing income. During each lease period, the current financing charges shall be measured and recognized by the effective interest method.
28.Change of main accounting policies and estimations
(1)Change of main accounting policies
According to the Provisions on the Accounting Treatment of VAT (No. 22-CaiKuai[2016]), the amounts of debt, affecting assets, transactions and others related to VAT occurred after May 1, 2016 shall be adjusted with in accordance with the provisions. The Business taxes and surcharges in the profit statement are adjusted to the item of "Taxes and surcharges ", while the property tax, land use tax, vehicle and vessel usage tax, stamp duty and other taxes that were previously included in taxes related to the management fees are adjusted to be included in " Taxes and surcharges" since May 1, 2016.
Items Amount
Taxes and surcharges 3,469,318.93 Management fee -3,469,318.93 The above changes in accounting policies were examined and approved in the 33th meeting of the sixth term board of directors.
（2）Change of main accounting estimations
Nil
IV. Taxes of the Company
1. Main taxes categories and tax rate
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|Tax references|
|The taxable tumover|
|The taxable tumover|
|Turnover tax to be paid allowances|
|Turnover tax to be paid allowances|
|Turnover tax to be paid allowances|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
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|Tax references|
|Taxable income|

2. Tax preference and approval file
(1)Shenzhen Shengbo Optoelectronic Technology Co., Ltd., the subsidiary company of our company, has been qualified as national high-tech enterprise since 2016 ,High-tech and enterprise certificate No.: GR201644201276 ,The certificate is valid for three years, The enterprise income tax rate of this year is15%.
(2).In accordance with relevant provisions of the Notice of Ministry of Finance, General Administration of Customs an d State Taxation Administration Regarding Tax Preference Policies for Further Supporting the Development of New-ty pe Display Device Industry (Cai Guan Shui (2016) No. 62), Shenzhen Shengbo Optoelectronic Technology Co., Ltd. manufactured key materials and parts for the upstream industry of new-type display devices including colorful light fil ter 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 that can not be produced domestically from January 1, 2016 and December 31, 202 0.
V. Notes of consolidated financial statement
Unless otherwise stated, the meaning of "B/f", "C/f", The beginning of the financial statements is the number of financial statements as of January 1, 2016, and the end of the period is the number of financial statements as at 31 December 2016. This term refers to January 1, 2016 - December 31, 2016,The same period refers to January 1, 2015 - December 31, 2015.
1.Monetary Capital
||
|-|
|Year-end balance|
|22,807.86|
|932,021,522.23|
|1,812,582.64|
|933,856,912.73|
|23,329,496.78|

Notes :As of December 31,2016，The fixed-term deposit balance of money fund is RMB 3,742,476.16 , this part will not be treated as closing cash or closing cash equivalent in preparing cash flow statement.
2.Bill receivables
(1). Classification Bill receivable
Items Year-end balance Year-beginning balance
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||
|-|
|41,908,315.45|
|41,908,315.45|

 (2). As of December 31,2016，The company has no Bill receivable pledged.
(3)．Notes endorsement or discount and undue on balance sheet date
||
|-|
|Amount derecognizing at period|
|–end45,576,485.05|
|45,576,485.05|

(4)Bill transferred to account receivable for the issuer is not able to execute the liability at the end of period.
3. Account receivable
(1).Classification account receivables.
Amount in year-end
|||||
|-|-|-|-|
|Book balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|6,302,912.11|2.61|4,000,658.05|63.47|
|228,090,819.33|94.56|11,596,924.13|5.08|
|6,816,189.64|2.83|5,390,319.49|79.08|
|241,209,921.08|100.00|20,987,901.67||

Year-beginning balance
Classification
|||
|-|-|
|Book balance|Bad debt provision|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
|||||
|-|-|-|-|
|Amount|Proportion(%)|Amount|Proportion(%)|
|6,373,036.66|3.16|4,035,782.60|63.33|
|189,029,540.68|93.74|9,776,480.20|5.17|
|6,259,765.85|3.10|5,083,708.34|81.21|
|201,662,343.19|100.00|18,895,971.14||

 (1)Accounts receivable of individual significance and subject to individual impairment assessment.
Amount in year-end
||||
|-|-|-|
|Accountreceivable|Bad debtprovision|Proportion(%)|
|1,698,404.00|1,698,404.00|100.00|
|1,348,965.36|674,482.68|50.00|
|3,255,542.75|1,627,771.37|50.00|
|6,302,912.11|4,000,658.05||

（2）Account receivable on which bad debt provisions are provided on age basis in the group
Balance in year-end
Aging
|||
|-|-|
|Account receivable|Bad debt provision|
|227,316,635.47|11,365,831.77|
|367,049.73|36,704.98|
|45,898.44|13,769.53|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Balance in year-end
Aging
|||
|-|-|
|Account receivable|Bad debt provision|
|361,235.69|180,617.85|
|228,090,819.33|11,596,924.13|

(2)Recognisation , recovery or reversal of allowance for baddebt：
（1）The account of allowance for bad debts recognised during the period is RMB2,726,559.25, The amount collected or switches back amounting to 634,628.72.
(3)．The company has no account receivables written off this period.
(4).The ending balance of receivable owed by the imputation of the top five parties
|||||
|-|-|-|-|
|Nature|Balance inyear-end|Aging|Proportion(%)|
|Goods|87,644,721.94|Within 1year|36.34|
|Goods|31,220,268.30|Within 1year|12.94|
|Goods|14,743,404.82|Within 1year|6.11|
|Goods|10,752,013.06|Within 1year|4.46|
|Goods|8,960,692.93|Within 1year|3.71|
||153,321,101.05||63.56|

 4.Prepayments
(1)Disclosure by age
||||
|-|-|-|
|Balance in year-end|||
|Amount|Proportion（%）|Amount|
|5,108,950.81|75.43|5,027,361.20|
|592,795.34|8.75|1,033,416.99|
|1,033,416.99|15.26|1,754,880.00|
|38,160.00|0.56|38,160.00|
|6,773,323.14|100.00|7,853,818.19|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements（2）The ending balance of Prepayments owed by the imputation of the top five parties
||
|-|
|Balance in year-end|
|1,108,752.04|
|1,000,000.00|
|951,741.61|
|454,551.46|
|430,038.00|
|3,945,083.11|

 5.Interest receivable
(1).Category of interest receivable
||
|-|
|Amount in year-end|
|4,925,279.45|
|1,599,384.48|
|128,219.18|
|6,652,883.11|

 6.Other receivable
(1)．Category of Other receivable
Amount in year-end
|||||
|-|-|-|-|
|Book Balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|11,981,464.60|14.20|11,981,464.60|100.00|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Amount in year-end
|||||
|-|-|-|-|
|Book Balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|71,842,367.36|85.19|4,569,810.64|6.36|
|511,820.77|0.61|511,820.77|100.00|
|84,335,652.73|100.00|17,063,096.01||

 Amount in year-beginning
|||||
|-|-|-|-|
|Book Balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|11,981,464.60|19.67|11,981,464.60|100.00|
|48,425,735.21|79.49|3,292,063.11|6.80|
|511,820.77|0.84|511,820.77|100.00|
|60,919,020.58|100.00|15,785,348.48||

 (1)Other receivable accounts with large amount and were provided had debt provisions individually at end of period.
Amount in year-end
Debtor
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||||
|-|-|-|
|Other account|Bad debt provision|Withdrawal|
|receivable11,389,044.60|11,389,044.60|proportion (%)100.00|
|592,420.00|592,420.00|100.00|
|11,981,464.60|11,981,464.60||

(2)Other receivable accounts in Group on which bad debt provisions were provided on age analyzebasis：
Amount in year-end
Aging
|||
|-|-|
|Other receivable|Bad debt provision|
|66,549,470.75|3,327,473.52|
|3,326,586.25|332,658.63|
|367,383.45|110,215.03|
|1,598,926.91|799,463.46|
|71,842,367.36|4,569,810.64|

2.The current amount of provision for bad debts is RMB1,277,747.53, no withdraw or return for bad debts.
(3)．The company has no other receivables written off this period.
(4).Other accounts receivable classified by the nature of accounts
||
|-|
|Year-end balance|
|44,643,087.38|
|18,179,211.88|
|16,812,275.87|
|1,858,126.16|
|900,116.01|
|1,942,835.43|
|84,335,652.73|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements (5).Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party
|||||
|-|-|-|-|
|Nature|Closing balance|Aging|Proportion ofthe total yearend balance ofthe accountsreceivable(%)|
|Customs bond|44,643,087.38|Within 1 year|52.94|
|Export rebateUnit account|17,470,183.40|Within 1 year|20.72|
||709,028.48|1-2 years|0.84|
|Unit account|11,389,044.60|Over 5 years|13.50|
|Unit account|1,800,000.00|Within 1years|2.13|
||1,800,000.00|1-2 years|2.13|
|Deposit|980,461.06|Over 5 years|1.16|
||78,791,804.92||93.42|

 7.Inventories
（1）Inventories types
||||||
|-|-|-|-|-|
|Year-end balance|||||
|Book balance|Provision forbad debts|Book value|Book balance|Provision forbad debts|
|107,814,144.09|9,148,167.24|98,665,976.85|150,409,810.60|14,406,278.95|
|4,519,927.47|279,390.02|4,240,537.45|6,871,382.66|493,094.77|
|139,369,316.72|32,193,843.63|107,175,473.09|128,415,576.27|30,161,550.92|
|91,137,927.46|19,961,869.86|71,176,057.60|90,791,967.01|22,652,767.02|
|2,113,669.08||2,113,669.08|||
|344,954,984.82|61,583,270.75|283,371,714.07|376,488,736.54|67,713,691.66|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements（2）Inventory Impairment provision
||||||
|-|-|-|-|-|
|Year-beginningbalance|Increased in current period||Decreased in current period||
||Provision|Transferredback|Provision|Transferred back|
|14,406,278.95|1,579,207.25||6,837,318.96||
|30,161,550.92|23,702,662.47||21,670,369.76||
|22,652,767.02|12,943,307.86||15,634,205.02||
|493,094.77|892,028.48||1,105,733.23||
|67,713,691.66|39,117,206.06||45,247,626.97||

 8.Other current assets
||
|-|
|Year-end balance|
|428,000,000.00|
|1,000,000,000.00|
|43,157.76|
|1,428,043,157.76|

 9.Available-for-sale financial assets
(1)Available-for-sale financial assets
||||||
|-|-|-|-|-|
|Year-end balance|||||
|Book balance|Bad debtprovision|Book value|Book balance|Bad debtprovision|
|78,255,766.47|36,689,988.51|41,565,777.96|79,931,512.57|36,689,988.51|
|8,378,730.50||8,378,730.50|10,054,476.60||

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||||||
|-|-|-|-|-|
|Year-end balance|||||
|Book balance|Bad debtprovision|Book value|Book balance|Bad debtprovision|
|69,877,035.97|36,689,988.51|33,187,047.46|69,877,035.97|36,689,988.51|
|78,255,766.47|36,689,988.51|41,565,777.96|79,931,512.57|36,689,988.51|

 (2)Available-for-sale financial assets measured by fair value at the period-end
||
|-|
|Cost|
|8,940,598.31|
|8,940,598.31|
|8,940,598.31|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
(3) Available-for-sale financial assets measured by cost at the period-end
||||||||||
|-|-|-|-|-|-|-|-|-|
|Book balance||||Impairment provision||||Shareholdingproportion amongtheinvestees|
|Period-begin|Increase|Decrease|Period-end|Period-begin|Increased|Decreased|Period-end||
|14,831,681.50|||14,831,681.50|14,831,681.50|||14,831,681.50|3.68|
|16,800,000.00|||16,800,000.00|16,800,000.00|||16,800,000.00|10.80|
|5,491,288.71|||5,491,288.71|5,058,307.01|||5,058,307.01|45.00|
|2,600,000.00|||2,600,000.00|||||2.87|
|160,000.00|||160,000.00|||||20.00|
|524,000.00|||524,000.00|||||20.00|
|2,559,856.26|||2,559,856.26|||||30.00|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||||||
|-|-|-|-|-|
|25,410,209.50|25,410,209.50|||50.00|
|1,500,000.00|1,500,000.00|||9.84|
|69,877,035.97|69,877,035.97|36,689,988.51|36,689,988.51||

 In the reporting period, Shenzhen Dailisi Knitting Co., Ltd. and Anhui Huapeng Textile Co., Ltd. provided foreign contract in the current period.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements (4)Changes of the impairment of the available-for-sale financial assets during the reporting period
|||
|-|-|
|Available for sale equityinstruments|Available for sale debtsinstruments|
|36,689,988.51||
|36,689,988.51||

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
10.Long-term equity investment
(1)Long-term equity investment
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Openingbalance|Increase/decrease||||||||Closingbalance|
||Addinvestment|Investmentdecreased|Gains/loss ofInvestment|Adjustmentof othercomprehensive income|Changes ofotherequity|Cash bonusor profitsannouncedto issue|Withdrawal ofimpairmentprovision|Other||
|4,397,840.88|||708,646.69||||||5,106,487.57|
|4,061,958.96|||181,746.48||||||4,243,705.44|
|8,459,799.84|||890,393.17||||||9,350,193.01|
|1,871,377.09|||96,981.03||||||1,968,358.12|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Openingbalance|Increase/decrease||||||||Closingbalance|
||Addinvestment|Investmentdecreased|Gains/loss ofInvestment|Adjustmentof othercomprehensive income|Changes ofotherequity|Cash bonusor profitsannouncedto issue|Withdrawal ofimpairmentprovision|Other||
|3,384,014.49|||-1,007,494.50|197,807.78|||||2,574,327.77|
|9,430,732.63|||1,487,523.59|1,239,036.52||934,205.65|||11,223,087.09|
|14,686,124.21|||577,010.12|1,436,844.30||934,205.65|||15,765,772.98|
|23,145,924.05|||1,467,403.29|1,436,844.3||934,205.65|||25,115,965.99|

 0
Shenzhen Xieli Automobile Co., Ltd. Business license has been revoked the business sector.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 11.Investment real estate
（1）Measured by the cost of investment in real estate
||||
|-|-|-|
|House, Building|Land useright|Construction inprocess|
|252,285,892.54|||
|52,387,990.00|||
|24,943.63|||
|304,648,938.91|||
|117,895,929.49|||
|7,442,829.04|||
|7,442,829.04|||
|14,367.39|||
|125,324,391.14|||
|179,324,547.77|||
|134,389,963.05|||

（2）Investment real estate without certificate of ownership
Items Book value Reason for certificate not granted
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Guanhua Building
51,183,483.36
Need to improve the relevant accreditation information
12. Fixed assets
（1）Fixed assets
|||||
|-|-|-|-|
|Houses &buildings|Machineryequipment|Transportations|Other|
|490,052,012.48|652,172,073.90|3,691,157.72|19,463,252.46|
|2,923,339.79|3,554,848.37||1,689,978.04|
|2,923,339.79|3,554,848.37||1,689,978.04|
||3,554,848.373,554,848.37|||
|265,937.00|15,883.52||171,521.02|
|265,937.00|15,883.52||171,521.02|
|492,709,415.27|655,711,038.75|3,691,157.72|20,981,709.48|
|84,904,035.93|275,623,640.07|2,728,973.22|12,102,360.18|
|14,522,258.89|57,950,444.89|286,738.72|1,614,443.36|
|14,522,258.89|57,950,444.89|286,738.72|1,614,443.36|
|172,782.89|5,960.94||146,117.77|
|172,782.89|5,960.94||146,117.77|
|99,253,511.93|333,568,124.02|3,015,711.94|13,570,685.77|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
|||||
|-|-|-|-|
|Houses &buildings|Machineryequipment|Transportations|Other|
|393,455,903.34|322,142,914.73|675,445.78|7,411,023.71|
|405,147,976.55|376,548,433.83|962,184.50|7,360,892.28|

Current depreciation is RMB74,373,885.86 .
13.Project under construction
（1）Project under construction
||||||
|-|-|-|-|-|
|Year-end balance|||||
|Book balance|Provision fordevaluation|Book Net value|Book balance|Provision fordevaluation|
|116,849,202.46||116,849,202.46|36,212,078.79||
||||39,004,527.58||
|2,955,028.97||2,955,028.97|586,980.33||

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||||||
|-|-|-|-|-|
|Year-end balance|||||
|Book balance|Provision fordevaluation|Book Net value|Book balance|Provision fordevaluation|
|119,804,231.43||119,804,231.43|75,803,586.70||

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
（2）Changes of significant construction in progress
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Budget|Amount at yearbeginning|Increase at thisperiod|Transferred to fixedassets|Otherdecrease|Balance inyear-end|Proportion(%)|Progressof work|Capitalisation ofinterestaccumulated balance|Including：Currentamount ofcapitalization ofinterest|Capitalisationof interestratio（%)|
|RMB700.34million|36,212,078.79|80,637,123.67|||116,849,202.46|16.68%|16.68%||||
||36,212,078.79|80,637,123.67|||116,849,202.46||||||

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 14.Intangible assets
（1）List of intangible assets
||||
|-|-|-|
|Land use right|Proprietarytechnology|Software|
|48,765,130.50|11,825,200.00|1,938,280.00|
|56,934.11||205,300.00|
|56,934.11||205,300.00|
|48,822,064.61|11,825,200.00|2,143,580.00|
|9,383,309.73|11,825,200.00|693,164.43|
|940,465.78||250,050.35|
|940,465.78||250,050.35|
|10,323,775.51|11,825,200.00|943,214.78|
|38,498,289.10||1,200,365.22|
|39,381,820.77||1,245,115.57|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 15.Goodwill
(1)．General information
||||
|-|-|-|
|Balance in year-begin|Increased at thisperiod|.Decreased atthis period|
|2,167,341.21|||
|82,246.61|||
|9,614,758.55|||
|11,864,346.37|||

（2）Impairment of goodwill
||||
|-|-|-|
|Balance in year-begin|Increased at thisperiod|.Decreased atthis period|
|2,167,341.21|||
|82,246.61|||
|9,614,758.55|||
|11,864,346.37|||

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 16. Long term amortize expenses
|||||
|-|-|-|-|
|Balance inyear-begin|Increase in thisperiod|Amortizedexpenses|Other loss|
|349,029.34|686,512.90|299,824.16||
|284,512.16||47,148.56||
|633,541.50|686,512.90|346,972.72||

 17. Deferred income tax assets/deferred income tax liabilities
（1）Details of the un-recognized deferred income tax assets
||||
|-|-|-|
|Balance in year-end|||
|Deductibletemporary difference|Deferred income taxassets|Deductibletemporary difference|
|4,114,242.48|1,028,560.61|7,334,802.71|
|2,769,765.25|415,464.80|2,858,879.80|
|561,867.81|140,466.95||
|7,445,875.54|1,584,492.36|10,193,682.51|

 (2)Details of the un-recognized deferred income tax liabilities
||||
|-|-|-|
|Balance in year-end|||
|TemporarilyDeductable orTaxable Difference|Deferred Income Taxliabilities|TemporarilyDeductable orTaxable Difference|
|||42,291,900.69|
|||1,113,878.29|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||||
|-|-|-|
|Balance in year-end|||
|TemporarilyDeductable orTaxable Difference|Deferred Income Taxliabilities|TemporarilyDeductable orTaxable Difference|
|||43,405,778.98|

 (3) Details of unrecognied deferred income tax assets
||
|-|
|Balance in year-end|
|85,972,557.55|
|620,306,699.39|
|706,279,256.94|

 Due to the uncertainty which exists in whether sufficient taxable income can be obtained in the future , therefore, delay-tax capital has not been confirmed.
（4）Deductible losses of the un-recognized deferred income tax asset will expire in the following years
|||
|-|-|
|Balance in year-end|Balance in year-begin|
|134,292,559.16|134,292,559.16|
|129,226,944.33|129,226,944.33|
|148,095,898.11|148,095,898.11|
|83,990,395.00|83,990,395.00|
|124,700,902.79||
|620,306,699.39|495,605,796.60|

18. Short-term loan
（1）Categories of short-term loans
||
|-|
|Balance in year-end|
|12,335,695.77|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||
|-|
|Balance in year-end|
|12,335,695.77|

 19.Account payable
（1）Account payable
||
|-|
|Balance in year-end|
|174,417,235.90|
|57,989.27|
|300,642.80|
|37,090.00|
|161,238.93|
|487,518.82|
|175,461,715.72|

 20. Advance account
（1） Advance account
||
|-|
|Balance in year-end|
|29,225,153.57|
|433,268.34|
|639,024.58|
|30,297,446.49|

 21.Payable Employee wage
（1）Payable Employee wage
||||
|-|-|-|
|Balance in|Increase in this|Payable in this|
|year-begin34,557,822.40|period122,222,937.59|period129,401,040.13|
|750,000.00|8,951,131.55|9,701,131.55|
||57,400.00|57,400.00|
|35,307,822.40|131,231,469.14|139,159,571.68|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements（2）Short-term remuneration
||||
|-|-|-|
|Balance in|Increase in this|Payable in this|
|year-begin32,472,129.09|period106,310,272.17|period112,876,303.08|
||6,296,473.40|6,296,473.40|
||2,480,176.29|2,480,176.29|
||2,016,036.10|2,016,036.10|
||182,659.21|182,659.21|
||281,480.98|281,480.98|
|520,000.00|4,790,841.50|5,310,841.50|
|1,565,693.31|2,345,174.23|2,437,245.86|
|34,557,822.40|122,222,937.59|129,401,040.13|

（3）Defined contribution plans listed
||||
|-|-|-|
|Balance inyear-begin|Increase in thisperiod|Payable in thisperiod|
||6,978,513.92|6,978,513.92|
||278,861.14|278,861.14|
|750,000.00|1,693,756.49|2,443,756.49|
|750,000.00|8,951,131.55|9,701,131.55|

22.Tax Payable
||
|-|
|At end of term|
|6,142,344.63|
|523,339.31|
|4,152,120.51|
|428,263.53|
|1,538,122.93|
|373,812.63|
|837,722.65|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||
|-|
|At end of term|
|13,995,726.19|

 23.Interest Payable
（.1）Interest Payable
||
|-|
|At end of term|
|42,805,384.31|
|37,221.21|
|42,842,605.52|

 24.Other payable
（1）Disclosure by nature
||
|-|
|At end of term|
|46,903,714.95|
|49,538,660.22|
|24,625,922.69|
|26,040,292.33|
|147,108,590.19|

 25.Non-currentliabilitiesdue within 1 year
||
|-|
|At end of term|
|40,000,000.00|
|40,000,000.00|

 The long-term borrowings at the end of period are the borrowings extended to the Company by Pingan Bank.Shenzhen Jiangsu Building Branch. Entrusted by Shenzhen Shenchao Technology Investment Co.,Ltd.
26.Long-term borrowings
（1）Long-term term borrowings
||
|-|
|At end of term|
|80,000,000.00|
|80,000,000.00|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements The long-term borrowings at the end of period are the borrowings enxtended to the Company by Pingan Bank.Shenzhen Jiangsu Building Branch. Entrusted by Shenzhen Shenchao Technology Investment Co.,Ltd.
27.Deferred income
||||
|-|-|-|
|Balance inyear-begin|Increase at thisperiod|Decrease at thisperiod|
|99,524,165.58|15,034,535.45|4,512,916.41|
|99,524,165.58|15,034,535.45|4,512,916.41|

 Details of govemmentsubsidy：
|||||||
|-|-|-|-|-|-|
||||The|||
|||New grants|||Income|
||Balance in||non-operating|Balance in||
|Items||amount of this|||related to|
||year-begin||revenue amount|year-end||
|||period|||assets|
||||of this period|||
||||||Related to|
|Textile special funds||||||
||1,000,000.02||142,857.14|857,142.88|assets|
|High-tech Industrialization|||||Related to|
|demonstration projects|800,000.00||200,000.00|600,000.00|assets|
|National grant funds for||||||
||||||Related to|
|new flat panel display||||||
||||||assets|
|industry|4,000,000.00||1,000,000.00|3,000,000.00||
||||||Related to|
|Borrowing discount||||||
||967,777.64||241,944.44|725,833.20|assets|
|Grant funds for TFT-LCD|||||Related to|
|polarizer industry project|8,233,333.34||1,300,000.00|6,933,333.34|assets|
|Grant funds for TFT-LCD||||||
||||||Related to|
|polarizer narrow line (line||||||
||||||assets|
|5) project|3,500,000.00||500,000.00|3,000,000.00||
|Purchase of imported|||||Related to|
|equipment and technology|1,202,287.38||175,090.20|1,027,197.18|assets|
|Innovation and venture||||||
||||||Related to|
|capital for TFT-LCD||||||
||||||assets|
|polarizer I project|350,000.00||50,000.00|300,000.00||
|Shenzhen polarizing||||||
|materials and Technology|||||Related to|
|Engineering Laboratory|||||assets|
|innovation venture capital|462,500.00||50,000.00|412,500.00||
|Shenzzhen Engineering||||||
|laboratory polarizing|||||Related to|
|material and technical|||||assets|
|engineering|4,625,000.00||500,000.00|4,125,000.00||
|Capital funding for|2,775,000.00||300,000.00|2,475,000.00|Related to|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
|||||||
|-|-|-|-|-|-|
|Technology Center|||||assets|
|Subsidy funds to support th||||||
||||||Related to|
|e introduction of advanced t||||||
||||||assets|
|echnology|100,716.70||14,388.10|86,328.60||
|Grant funds for TFT-LCD||||||
||||||Related to|
|polarizer narrow line (line||||||
||||||assets|
|6) project|15,000,000.00|||15,000,000.00||
|Grant funds for TFT-LCD||||||
||||||Related to|
|polarizer narrow line (line||||||
||||||assets|
|6) project|10,000,000.00|||10,000,000.00||
|Grant funds for TFT-LCD||||||
||||||Related to|
|polarizer narrow line (line||||||
||||||assets|
|6) project|500,000.00|||500,000.00||
|Imported equipment and||||||
||||||Related to|
|technology of discount||||||
||||||assets|
|interest funds|857,705.00|||857,705.00||
|key technology||||||
|research and development||||||
||||||Related to|
|projects of optical||||||
||||||assets|
|compensation film for||||||
|polarizer|5,000,000.00|||5,000,000.00||
|Strategic industries||||||
||||||Related to|
|Development fund of||||||
||||||assets|
|Guangdong Province|20,000,000.00|5,000,000.00||25,000,000.00||
|Grants of Purchase||||||
|equipment of TFT-LCD|||||Related to|
|polarizing film phase II|||||assets|
|project|20,000,000.00|10,000,000.00||30,000,000.00||
|Energy saving|||||Related to|
|transformation grant funds|149,845.50|34,535.45|38,636.53|145,744.42|assets|
|Total|99,524,165.58|15,034,535.45|4,512,916.41|110,045,784.62||

(1).According to the "Notice on National Development and Reform Commission to the General Office of the textile project management of the special funds" (Faigaiban[2006]2841), on December 22, 2006, the Company received "Textile special" funds RMB 2,000,000.00 from Shenzhen Finance Bureau. The company will use 14 years as asset depreciation period for amortization with the corresponding equipment in current period. The amortization in accordance with the corresponding equipment, The non-operating income in current period is RMB142,857.14, the ending balance of uncompleted amortization is RMB 857,142.88 .
(2).According to the document of Shenzhen Municipal Development and Reform Commission【2009】 No. 416 that "The Notice On issued the Governmental Investment Plan in 2009 on Zhong Ke New Industrial Internet Security
Audit System and Other High-tech Industrialization Demonstration Project and the Public Testing and Consultation
Service of Information Security Industry and other National High-tech Industrial Base Platform Projects”, on May
2009, the company received the Shenzhen Municipal Development and Reform Commission high-tech
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements industrialization demonstration project supporting Capital RMB 2 million allocated by Shenzhen City Bureau of Finance for the construction of “The Project of the Construction Line of Polaripiece for TFT-LCD”.Our company will use 10 years as asset depreciation period for amortization in current period. The non-operating income in current period is RMB 200,000.00 and the balance amount of unfinished final amortization is RMB 600,000.00.
(3) According to the document of the Office of the State Development and Reform Commission on "The Office of the State Development and Reform Commission on the Reply of New Flat-Panel Display Industrialization Special Project” (Development and Reform OfficeHigh-Tech【2008】No. 2104), the company obtained the state subsidies RMB 10,000,000.00 from the State Development and Reform Commission New Flat-Panel Display Industrialization Special Project for the construction of “The Project of Polaripiece Industrialization for TFT-LCD”. On June 2009, December 2009 and April 2010, the company received the special subsidies of State Development and Reform Commission RMB 10,000,000.00. Our company will use 10 years as asset depreciation period for amortization. The non-operating income in current period is RMB100,000.00, the balance amount of unfinished final amortization is RMB3,000,000.00.
(4)On December 2009 ,June 2011 and February 2013, the Company received a loan interest discount funds of RMB 992,000.00, RMB 850,000.00 and RMB 483,000.00 allocated by Shenzhen Bureau of Finance for phase-II alteration project. Our company will use 10 years as asset depreciation period for amortization in current period. The non-operating income in current period is RMB 241,944.44 and the balance amount of unfinished final amortization is RMB725,833.20.
(5)In accordance with the Notice of Forwarding the Reply of General Office of State Development and Reform Commission Regarding Special Plan for Strategic Transformation and Industrialization of Color TV Industry issued by Shenzhen Development and Reform Commission (Shen Fa Gai (2011) No. 823), State Development and Reform Commission approved including the project of industrialization of polarizer sheet for TFT-LCD of Shengbo Optoelectronic Company into the special plan for strategic transformation and industrialization of color TV industry in 2010 and appropriated national aid of RMB 10,000,000.00 to Shengbo Optoelectronic Company for the research and development in the process of the project of industrialization and the purchase of required software and hardware equipment. On June 2012 and September 2013, the company received the national grants of RMB 10,000,000.00.. According to the Notice of Issuing the Governmental Investment Plan for 2011 Regarding Demonstration Project of High-tech Industrialization Including Specialized Services Such As Disaster Recovery of Financial Information System issued by Shenzhen Development and Reform Commission (Shen Fa Gai (2012) No. 3), the Company received subsidy of RMB 3,000,000.00 for the project of industrialization of polarizer sheet for TFT-LCD in April 2012. Our company will use 10 years as asset depreciation period for amortization in current period.The non-operating income in current period is RMB1,300,000.00. and the balance amount of unfinished final amortization is RMB6,933,333.34.
(6)According to the Notice about the Plan for Supporting the Second Group of Enterprises in Biological, Internet, New Energy and New Material Industries with Special Development Funds (Shen Fa Gai (2011) No. 1782), the Company received subsidy of RMB 5,000,000.00 for the narrow-width line (line 5) of phase-I project of polarizer sheet for TFT-LCD on February 2012. The Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets. The non-operating income in current period is RMB5,000,000.00 and the balance amount of unfinished final amortization is RMB3,000,000.00.
(7)On October 2013, The company received the grants for the purchase of imported equipment and technology in 2012 of RMB 1,750,902.00, the Company planned to amortize the subsidy over 10 years according to the depreciation
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements period of relevant assets. The non-operating income in current period is RMB175,090.20 and the balance amount of unfinished final amortization is RMB1,027,197.18.
(8)On December2013，The company received the funds for innovation and entrepreneurship of of TFT-LCD polarizing project from Pingshan New District Development and Finance Bureau of RMB 500,000.00(matching funding category),the Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets. The non-operating income in current period is RMB50,000.00 and the balance amount of unfinished final amortization is RMB300,000.00.
(9) On December2013，The company received the funds for innovation and entrepreneurship of of TFT-LCD polarizing project from Pingshan New District Development and Finance Bureau of RMB 500,000.00(matching funding category),the Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets. The non-operating income in current period is RMB37,500.00 and the balance amount of unfinished final amortization is RMB412,500.00.
(10)According to the Approval of Application of Shenzhen Shengbo Optoelectronic Technology Co., Ltd. for Project Funds for Shenzhen Polarization Material and Technology Engineering Laboratory (Shen Fa Gai (2012) No. 1385), Shenzhen Polarization Material and Technology Engineering Laboratory was approved to be established on the strength of Shengbo Optoelectronic with total project investment of RMB 24,390,000.00. As approved by Shenzhen Municipal People's Government, this project was included in the plan for supporting the fourth group of enterprises with special fund for the development of strategic new industries in Shenzhen in 2012 (new material industry). According to the Notice of Issuing the Plan for Supporting the Fourth Group of Enterprises with Special Fund for Development of Strategic New Industries in Shenzhen in 2012 (Shen Fa Gai (2012) No. 1241), the Company received subsidy of RMB 5,000,000.00 on December 2012 for purchasing instruments and equipment and improving existing technological equipment and test conditions. The fund gap will be filled by the Company through raising funds by itself. the Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets. The non-operating income in current period is RMB375,000.00 and the balance amount of unfinished final amortization is RMB4,125,000.00.
(11)According to the “Announcement on the Identification of Technology Centers of 24 Enterprises including Shenzhen Yuanwanggu Information Technology Joint Stock Company Limited as the Municipal Research and Development Centers (Technical Center)” (SJMXXJS[2013] No.137), the research and development center of Shenzhen SAPO Photoelectric Co., Ltd. has been regarded as 2012 annual municipalR&D center. In December 2013, the company has received the funding subsidy of RMB3 million for the construction of the technical center. the Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets. The non-operating income in current period is RMB300,000.00 and the balance amount of unfinished final amortization is RMB2,475,000.00.
(12)On March 2014 the company received the introduction of advanced technology import subsidy funds of RMB 143 ,881.00 from Shenzhen Finance Committee, the Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets. The non-operating income in current period is RMB14,388.10 and the balance amount of unfinished final amortization is RMB86,328.60.
(13). According to the "Shenzhen Municipal Development and Reform Commission Reply for Shenzhen Shengbo Optoelectronic Technology Co., Ltd. application for local matching funds of TFT-LCD polarizing film II project (Line 6) " (Shenzhen DRC[2013]No. 1771), the company obtained TFT-LCD polarizing film II project (line 6) local
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements matching funds of RMB 15,000,000.00 in April 2014.The fund gap will be filled by the Company through raising funds by itself. The subsidy will be amortized over the depreciation period from the day when relevant assets get ready for intended use.
(14)According to "National Development and Reform Commission issued on industrial transformation and upgrading projects (2nd industrial restructuring) notify the central budget for 2014 investment plan" (NDRC Investment[2014] No. 1280), the company obtained TFT- LCD polarizer II project (line 6) state grants of RMB 10,000,000.00 in December 2014.The fund gap will be filled by the Company through raising funds by itself. The subsidy will be amortized over the depreciation period from the day when relevant assets get ready for intended use.
(15)In December 2014, the company received innovation venture capital (matching funding category) for Ping Shan District Development and Finance Bureau of TFT-LCD polarizing film II project (line 6) of RMB 500,000.00.The fund gap will be filled by the Company through raising funds by itself. The subsidy will be amortized over the depreciation period from the day when relevant assets get ready for intended use;
(16)On September2014，The company received a discount of imported equipment and technology funds of RMB 857,705.00.The fund gap will be filled by the Company through raising funds by itself. The subsidy will be amortized over the depreciation period from the day when relevant assets get ready for intended use.
(17)On Jan. 2015, the company received RMB 5 million of grants for key technology research and development projects of optical compensation film for polarizer from Shenzhen Scientific and Technological Innovation Committee. The company will defer income share transferred in the current profit and loss on the basis of depreciation life as of the date of the predetermined workability state the related assets reach.
(18)According to “Reply on Congregating Development in Emerging Industrial Area Strategic Pilot Implement Scheme of Guangdong Province ”(Reform and Development Office High-Tech[2013] No.2552,On December 2015, the Company received RMB 20 million of the pilot project fund( period II project of TFT-LCD polarizer).On October 2016, the Company received RMB 5 million of Shenzhen strategic emerging industries and the future development of industrial matching funds, The company will defer income share transferred in the current profit and loss on the basis of depreciation life as of the date of the predetermined workability state the related assets reach.
(19)According to Reform and Development Commission of Shenzhen Municipality sending the notice of “Reply of National Reform and Development Office on Investing in Petrifaction and Medicine Project within Central Budget of 2013 for Industry Structure Adjustment Special Project”(Reform and Development Commission of Shenzhen Municipality[2013]No.1449) , the Company received RMB 30 million of new production line of TFT-LCD polarizer project period II and equipment purchase subsidy in August 2015 ,December 2015 and September 2016.The company will defer income share transferred in the current profit and loss on the basis of depreciation life as of the date of the predetermined workability state the related assets reach.
(20)In 2015 and In 2016, the Company received the subsidy funds of RMB 202,608.00 and RMB 34,535.45 on energy-saving reconstruction, amortized by 8-year depreciation life of the relevant asset, the no business income was RMB 38,636.53 at the current period, the ending balance without amortization was RMB 145,744.42.
28.Stock capital
|||
|-|-|
|Balance in|Changed（+，-）|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||||||||
|-|-|-|-|-|-|-|
|year-begin|Issuanceof newshare|Bonusshares|Capitalization ofpublicreserve|Other|Subtotal|year-end|
|506,521,849.00|||||||

29.Capital reserves
||||
|-|-|-|
|Year-beginningbalance|Increase in thecurrent period|Decrease in thecurrent period|
|1,574,407,414.34|252,075,194.20||
|10,722,637.03|6.38||
|1,585,130,051.37|252,075,200.58||

 The increase of the capital reserve in the current period includes: the introduction of strategic investors by Shenzhen Shengbo Optoelectronic Technology Co.,Ltd led to the capital increase by the strategic investors, resulted in capital increase of RMB 252,075,194.20; The sale of the company's fractional shares was included in the capital reserve, resulted in capital reserve including RMB 6.38.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
30.Other Comprehensive income
|||||||||
|-|-|-|-|-|-|-|-|
|||Amount of current period||||||
||||Less：|||||
||Year-beginnin||||||Year-end|
|||||||After - tax attr||
|Items||Amount for the pe|Previously recognized||After - tax attrib|||
||g balance|||Less：Income||ibutable to mi|balance|
|||riod before incom|in profit or loss in oth||utable to the par|||
|||||tax||nority shareho||
|||e tax|er comprehensive inc||ent company|||
|||||||lders||
||||ome|||||
|1.Other comprehensive income will be reclassified into||||||||
|income or loss in the future||||||||
|Including: Remeasurement of net assets or net liabilities of||||||||
|defined benefit plans||||||||
|Share of other comprehensive income of the investee that||||||||
|cannot be transferred to profit or loss accounted for using the||||||||
|equity method||||||||
|2.Other comprehensive income reclassifiable to profit or loss||||||||
||3,212,187.35|-238,901.80||-418,936.52|||3,392,222.07|
|in subsequent periods||||||||
|Including：Share of other comprehensive income of the||||||||
|investee that cannot be transferred to profit or loss||||||||
|accounted for using the equity method||||||||
|Gains and losses from changes in fair value of financial||||||||
||3,045,914.97|-1,675,746.10||-418,936.52|||1,789,105.39|
|assets available for sale||||||||

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
|||||||||
|-|-|-|-|-|-|-|-|
|||Amount of current period||||||
||||Less：|||||
||Year-beginnin||||||Year-end|
|||||||After - tax attr||
|Items||Amount for the pe|Previously recognized||After - tax attrib|||
||g balance|||Less：Income||ibutable to mi|balance|
|||riod before incom|in profit or loss in oth||utable to the par|||
|||||tax||nority shareho||
|||e tax|er comprehensive inc||ent company|||
|||||||lders||
||||ome|||||
|Held-to-maturity investment that is reclassified as financial||||||||
|assets available for sale||||||||
|Effective gains(losses) arising from cash flow hedging||||||||
|instruments||||||||
|Translation differences of financial statements||||||||
||166,272.38|1,436,844.30|||||1,603,116.68|
|denominated||||||||
|Total of other comprehensive income|3,212,187.35|-238,901.80||-418,936.52|||3,392,222.07|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 31.Surplus reserve
||||
|-|-|-|
|Year-beginningbalance|Increase in thecurrent period|Decrease in thecurrent period|
|70,539,319.86|3,171,362.19||
|70,539,319.86|3,171,362.19||

 The increase in the surplus reserves for the current period is caused by the legal surplus reserves withdrawn as per10% of the net profits of the parent company.
32.Retained profits
||
|-|
|Amount of this period|
|9,166,137.97|
|9,166,137.97|
|-87,270,604.54|
|3,171,362.19|
|-81,275,828.76|

 33.Business income, Business cost
（1）Business income
||
|-|
|Amount of current period|
|1,194,070,877.33|
|4,129,339.09|
|1,198,200,216.42|
|1,124,006,316.97|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||
|-|
|4,128,171.57|
|1,128,134,488.54|

（2）Mainbusiness（Industry）
||||
|-|-|-|
|Amount of current period|||
|Business income|Business cost|Business income|
|434,671,637.06|430,186,062.05|429,639,819.01|
|667,042,214.73|667,847,188.15|700,600,503.65|
|92,357,025.54|25,973,066.77|90,743,656.58|
|1,194,070,877.33|1,124,006,316.97|1,220,983,979.24|

（3）Mainbusiness（Production）
||||
|-|-|-|
|Amount of current period|||
|Business income|Business cost|Business income|
|92,357,025.54|25,973,066.77|90,743,656.58|
|29,011,426.03|29,754,708.71|25,205,284.70|
|798,562,759.96|796,982,437.95|803,719,803.87|
|274,139,665.80|271,296,103.54|301,315,234.09|
|1,194,070,877.33|1,124,006,316.97|1,220,983,979.24|

（4）MainBusiness（Area）
||||
|-|-|-|
|Amount of current period|||
|Business income|Business cost|Business income|
|735,985,879.85|666,419,200.41|446,846,597.09|
|458,084,997.48|457,587,116.56|774,137,382.15|
|1,194,070,877.33|1,124,006,316.97|1,220,983,979.24|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements（5）Operating income from top five clients
||
|-|
|Income|
|274,139,665.80|
|242,573,489.49|
|122,686,975.03|
|41,355,531.72|
|40,285,400.68|
|721,041,062.72|

 34.Business tax and subjoin
||
|-|
|Amount of current period|
|1,715,285.95|
|1,661,949.35|
|1,189,198.70|
|4,255,454.46|
|1,515,360.09|
|10,337,248.55|

 35.Sales expenses
||
|-|
|Amount of current period|
|3,526,911.70|
|3,597,049.16|
|144,038.99|
|1,500,682.28|
|658,449.42|
|734,568.30|
|10,161,699.85|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 36.Administrative expenses
||
|-|
|Amount of current period|
|37,908,622.64|
|482,301.29|
|588,210.55|
|1,266,522.93|
|1,263,416.46|
|1,275,950.04|
|3,691,710.81|
|2,231,023.75|
|213,591.27|
|3,622,603.75|
|39,308,762.42|
|66,038.00|
|7,388,191.76|
|6,334,069.36|
|1,190,516.13|
|30,966.96|
|39,235.00|
|106,901,733.12|

 37.Financial Expenses
||
|-|
|Amount of current period|
|4,387,599.58|
|-25,566,161.61|
|17,779,034.00|
|1,721,391.38|
|-1,678,136.65|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 38.Loss of assets impairment
||
|-|
|Amount of current period|
|3,369,678.06|
|39,117,206.06|
|42,486,884.12|

 39.Investment income
(1).Detail
||
|-|
|Amount of this period|
|1,467,403.29|
|3,756,010.47|
|5,223,413.76|

 (2).Long-term equity investment income by Equity method
|||
|-|-|
|Amount of currentperiod|Amount of previousperiod|
|708,646.69|635,434.15|
|181,746.48|386,836.52|
|96,981.03|57,218.31|
|-1,007,494.50|-76,209.23|
|1,487,523.59|1,427,762.45|
|1,467,403.29|2,431,042.20|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 40. Non-Operation income
(1)．Non-Operation income
|||
|-|-|
|Amount of current period|Amount of previousperiod|
||235,533.62|
||235,533.62|
|9,578,484.46|21,420,940.38|
|5,493,962.69|2,465,865.62|
|15,072,447.15|24,122,339.62|

 (2)Government subsidy reckoned into current gains/losses
|||||
|-|-|-|-|
||||Assets-related/|
||Amount of this|Amount of last||
|Items|||income|
||period|period||
||||-related|
|Grant funds for TFT-LCD polarizer narrow line (line 5)|||Related to|
||500,000.00|500,000.00||
|project|||assets|
||||Related to|
|Purchase of imported equipment and technology|175,090.20|175,090.20||
||||assets|
||||Related to ass|
|Textile special funds|142,857.14|142,857.14||
||||ets|
||||Related to inc|
|Government R & D subsidies||7,909,980.00||
||||ome|
||||Related to ass|
|High-tech Industrialization demonstration projects|200,000.00|200,000.00||
||||ets|
||||Related to|
|National grant funds for new flat panel display industry|1,000,000.00|1,000,000.00||
||||assets|
|Loan subsidy interest allocated by Finance Commission|||Related to|
||241,944.44|241,944.44||
|of Shenzhen Municipality|||assets|
|Subsidy amortization of the project of TFT-LCD|||Related to|
||1,300,000.00|1,300,000.00||
|polarizer industrialization|||assets|
|Innovation entrepreneurship fund amortization of||||
|TFT-LCD polarizer period I project for Pingshan New|50,000.00|50,000.00|Related to|
|District Development and Finance Bureau|||assets|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
|||||
|-|-|-|-|
|Financing aid amortization of introducing advanced|||Related to|
||14,388.10|14,388.10||
|technique|||assets|
|Innovation entrepreneurship subsidy of Pingshan New|||Related to inc|
||177,600.00|590,000.00||
|District Development and Finance Bureau|||ome|
||||Related to inc|
|Stable employment subsidies|770,617.05|||
||||ome|
|Special fund subsidy of industry development of Futian|||Related to inc|
|||63,000.00||
|District|||ome|
|Financing aid of Finance Commission of Shenzhen||||
|Municipality for optimizing foreign trade export||74,623.00|Related to|
|structure|||income|
||||Related to|
|Longgang Bureau of subsidies|20,000.00|||
||||income|
||||Related to|
|Subsidy of the exhibition|27,300.00|93,543.00||
||||income|
||||Related to|
|Interest subsidy|38,851.00|88,152.00||
||||income|
||||Related to|
|Patent funding|2,000.00|||
||||income|
||||Related to|
|Financial subsidy funds for recycling projects in the park|89,000.00|||
||||income|
||||Related to|
||3,940,200.00|8,287,100.00||
|High-tech major projects Special funds|||income|
|Shenzhen Engineering laboratory polarizing material and|||Related to ass|
||50,000.00|37,500.00||
|technical engineering|||ets|
||||Related to ass|
|Shenzhen polarizing material and technical engineering|500,000.00|375,000.00||
||||ets|
||300,000.00|225,000.00||
|Capital funding for Technology Center|||Related assets|
|Energy saving transformation grant funds amortization|38,636.53|52,762.50||
||||Related assets|
|Total||||
||9,578,484.46|21,420,940.38||

41．Non-current expenses
|||
|-|-|
|Amount of current period|Amount of previousperiod|
|138,610.37|260,642.59|
|138,610.37|260,642.59|
|81.57|23.02|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
|||
|-|-|
|138,691.94|260,665.6|

 42.Income tax expenses
(1)Income tax expenses
||||
|-|-|-|
||Amount of current period|Amount of previous period|
|Items|||
||8,465,565.16||
|Current income tax expense||24,352,326.20|
||818,507.24||
|Deferred income tax expense||10,302,193.13|
||9,284,072.40||
|Total||34,654,519.33|

 (2)Reconciliation of account profit and income taxexpenses：
|||
|-|-|
|Items|Amount of current period|
|Total profits||
||-77,986,532.14|
|Income tax computed in accordance with the applicable tax rate||
||-19,496,633.03|
|Effect of different tax rate applicable to the subsidiary Company||
||107,992.02|
|Influence of income tax before adjustment||
||-2,436,926.15|
|Influence of non taxable income||
||-537,127.16|
|Impact of non-deductible costs, expenses and losses||
||356,586.69|
|Affect the use of deferred tax assets early unconfirmed deductible||
|losses||
|The current period does not affect the deferred tax assets||
||31,290,180.04|
|recognized deductible temporary differences or deductible loss||
|Income tax expense||
||9,284,072.40|

 43.Other comprehensive income
(1)．Other comprehensive income items and income tax effects and transferred to profit and loss
||||
|-|-|-|
|Items|Amount of current period|Amount of previous period|
|. Net amount included in other comprehensive income|||
|hat cannot be transferred to profit or loss in the future|||
|.Share of other comprehensive income of the investee|||
|hat cannot be transferred to profit or loss accounted for|||
|using the equity method|||
|I. Net amount included in other comprehensive income|180,034.72|-30,176,930.11|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||||
|-|-|-|
|Items|Amount of current period|Amount of previous period|
|that can be transferred to profit or loss in the future|||
|1.Share of other comprehensive income of the investee|||
|that can be transferred to profit or loss accounted for|||
|using the equity method|||
|Less：Previously recognized in other comprehensive|||
|income, Profit or loss in current period|||
|Subtotal|||
|2. The income gains (losses) amount of available for|||
||-1,675,746.10|1,725,032.75|
|sale financial assets|||
|Less： Recognized in other comprehensive income that|||
||-418,936.52|431,258.19|
|tax effect amount|||
|Less：Previously recognized in other comprehensive|||
|||31,669,260.70|
|income, Profit or loss in current period|||
|Subtotal|-1,256,809.58|-30,375,486.14|
|3.Translation differences of financial statements|||
||1,436,844.30|198,556.03|
|denominated in foreign currencies|||
|Less：Previously recognized in other comprehensive|||
|income, Profit or loss in current period|||
|Subtotal|||
||1,436,844.30|198,556.03|
|III.Total of other comprehensive income|||
||180,034.72|-30,176,930.11|

 (2).Adjustment process of accounting profit and income tax expense
|||
|-|-|
|Gains and losses fromchanges in fair valueof available for salefinancial assets|Foreign currencytranslationdifferences offinancial statements|
|33,421,401.11|-32,283.65|
|-30,375,486.14|198,556.03|
|3,045,914.97|166,272.38|
|-1,256,809.58|1,436,844.30|
|1,789,105.39|1,603,116.68|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 44.Items of Cash flow statement
(1)Other cash received from business operation
||
|-|
|Amount of current period|
|20,100,103.50|
|48,207,690.04|
|68,307,793.54|

 (2)Other cash paid related to operating activities
Other cash paid relating to operating activities this period was RMB81,833,439.21, mainly for the payment of the cost of sales and administration expenses and Customs bond.
(3)Other Cash received related to investment activities
||
|-|
|Amount of current period|
|819,808,170.47|
|25,760,086.27|
|845,568,256.74|

 (4)Cash paid related to other investment activities
||
|-|
|Amount of current period|
|766,000,000.00|
|1,000,000,000.00|
|1,766,000,000.00|

 45.Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
||||
|-|-|-|
|Supplement Information|Amount of|Amount of|
||current period|previous period|
|I. Adjusting net profit to cash flow from operating activities|||
|Net profit|-87,270,604.54|8,497,227.40|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||||
|-|-|-|
|Supplement Information|Amount of|Amount of|
||current period|previous period|
|Add: Impairment loss provision of assets|-2,760,742.85|15,178,431.93|
|Depreciation of fixed assets, oil and gas assets and consumable biological|||
||81,816,714.90|80,299,389.88|
|assets|||
|Amortization of intangible assets|1,190,516.13|1,205,966.55|
|Amortization of Long-term deferred expenses|346,972.72|292,639.56|
|Loss on disposal of fixed assets, intangible assets and other long-term|||
|deferred assets|||
|Loss on scrap of fixed assets|138,610.37|25,108.97|
|Loss on fair value changes|||
|Financial cost|-746,916.53|-12,222,940.66|
|Loss on investment|-5,223,413.76|-94,812,557.58|
|Decrease in deferred income tax assets|818,507.24|192,322.96|
|Increased of deferred income tax liabilities||10,572,975.17|
|Decrease of inventories|31,533,751.72|-80,315,474.20|
|Decease of operating receivables|-76,300,478.05|11,626,183.95|
|Increased of operating Payable|1,192,616.81|99,045,226.44|
|Other|||
|Net cash flows arising from operating activities|-55,264,465.84|39,584,500.37|
|II. Significant investment and financing activities that without cash flows:|||
|Debt-to-capital conversion|||
|Convertible loan due within 1 year|||
|Fixed assets acquired under financial lease|||
|3．Movement of cash and cash equivalents：|||
|Ending balance of cash|930,114,436.57|748,658,875.60|
|Less: Beginning balance of cash equivalents|748,658,875.60|1,098,232,359.02|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||||
|-|-|-|
|Supplement Information|Amount of|Amount of|
||current period|previous period|
|Add：Ending balance of cash equivalents|||
|Less: Beginning balance of cash equivalents|||
|Net increase of cash and cash equivalents|181,455,560.97|-349,573,483.42|

 (2)Composition of cash and cash equivalents
||||
|-|-|-|
|Items|Year-end balance|Year-beginning balance|
|I. Cash|930,114,436.57|748,658,875.60|
|Including：Cash at hand|22,807.86|8,872.71|
|Demand bank deposit|928,279,046.07|746,697,143.40|
|Demand other monetary funds|1,812,582.64|1,952,859.49|
|Payments to the central bank for payment|||
|Depositing performs|||
|Loan to performs|||
|II. Cash equivalents|||
|Including：Debt instrument matured within three months|||
|III. Balance of cash and cash equivalents at the period end|930,114,436.57|748,658,875.60|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 46.Foreign currency monetary items
(1)Foreign currency monetary items
|||
|-|-|
|Closing foreign currencybalance|Exchange rate|
|3,425,159.19|6.9370|
|2,356,395.00|0.059591|
|109,440.03|0.89451|
|7,685,136.05|6.9370|
|7,883,134.00|0.059591|
|278,280.00|0.89451|
|37,399.02|6.9370|
|403,236.37|0.89451|
|11,496,790.16|6.9370|
|1,036,568,811.72|0.059591|
|81,000.00|6.9370|
|1,469,751.89|0.89451|
|22,500.00|7.3068|
|977,571.28|6.9370|
|93,206,756.00|0.059591|
|5,200.57|6.937|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
|||
|-|-|
|19,211.63|0.059591|

 VI. Change in consolidation scope
No change of scope of consolidation from last year.
VII. Equity in other entity
1. Equity in subsidiary
（1）Constitute of enterprise group
||||||
|-|-|-|-|-|
|Mainoperation|Registeredplace|Business nature|Share-holdingratio||
||||Directly|Indirectly|
|Shenzhen|Shenzhen|Domestic trade,Property Management|100.00||
|Shenzhen|Shenzhen|Accommodation,restaurants, businesscenter;|100.00||
|Shenzhen|Shenzhen|Property Management|100.00||
|Shenzhen|Shenzhen|Production of fullyelectronic jacquardknitting whole shape|100.00||
|Shenzhen|Shenzhen|Operating import andexport business|60.00||
|Shenzhen|Shenzhen|Operating import andexport business||100.00|
|Hongkong|Hongkong|Production and salesof polarizer||100.00|

（2）Transaction with changes in the share of owners' equity of the subsidiary but still controlling the subsidiary According to Capital Increase Agreement of Shenzhen Shengbo Optoelectronic Technology Co.,Ltd jointly signed by the company, Shenzhen Shengbo Optoelectronic Technology Co.,Ltd, Hangzhou Jinjiang Group Co., Ltd and Hangzhou Jin Hang Equity Investment Fund Partnership (limited partnership)-which was set up by Hangzhou
Jinjiang Group Co., Ltd and Hangzhou Jinjiang Group Co., Ltd is the actual controller, Jin Hang Equity Investment-as
the main capital increase body-subscribed40% stake of Shenzhen Shangbo Optoelectronic Technology Co.,Ltd, and
the amount of capital increase was RMB 1,352,640,000.00, and such amount of capital increase was received in the
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements account before December 27, 2016. After this capital increase, the stake of Shengbo Optoelectronic Technology Co.,Ltd held by the company was down to60.00% from100%.
After the capital increase, the minority shareholders' interests calculated according to the net assets of Shenzhen Shengbo Optoelectronic Technology Co.,Ltd is RMB 1,100,564,805.80(based on the data of December 31, 2016), and the difference of the above-said amount of capital increase is adjusted for the consolidated statement with capital reserve of RMB 252,075,194.20.
(3).Equity in joint venture arrangement or associated enterprise
1．Joint venture or associated enterprise
||||||
|-|-|-|-|-|
|Place ofoperation|Place ofregistration|Nature|Holdingproportion(%)||
||||Directly|Indirectly|
|Shenzhen|Shenzhen|Propertyleasing|50.00||
|Shenzhen|Shenzhen|Propertyleasing|50.00||
|Shenzhen|Shenzhen|Propertyleasing|40.25||
|Jordan|Jordan|Manufacturing|35.00||
|Hongkong|Hongkong|Manufacturing|22.75||

2.Key financial information of significant joint venture or associated enterprise
||
|-|
|Year-end balance/ Amountof current period|
|9,083,538.02|
|890,393.17|
|890,393.17|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||
|-|
|Year-end balance/ Amountof current period|
|15,765,772.98|
|577,010.12|
|1,436,844.30|
|2,013,854.42|
|934,205.65|

 (4) Significant common operation
|||||
|-|-|-|-|
|Main operatingplace|Registrationplace|Business nature||
||||Directly|
|Shenzhen|Shenzhen|Cooperate|50.16|

According to the company along with Hongkong Qiaohui Industries Co.,Ltd. signed "Agreemen t on cooperative development and construction of Guanhua building", jointly developed Guanhua buil ding construction, the company invested50.16%, Hong Qiao Hui Industrial Co., Ltd. invested 49.84%, the two sides need to agree matters affecting the cooperation projects.
Guanhua Building project has been completed in the current reporting period, and the two parities carried out the split according to the actual investment ratio of50.16% and49.84%.
VIII. Risks Related to Financial Instruments
The company has the main financial instruments, such as bank deposits, receivables and payables, investments, loans and so on. Please refer to the relevant disclosure in Notes for the details. The risks associated with these financial instruments mainly include credit risk, market risk and liquidity risk. Thecompany’s management shall manage and monitor these risks and ensure above risks to be controlled within certain scope.
（I）Credit Risk
The credit risk of the company is primarily attributable to bank deposits and receivables. Of which,
the bank deposits are mainly deposited in the medium and large commercial banks with strength, high
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements credibility. For the receivables, the company has developed the relevant policies to control the credit risk, and set up the corresponding debt and credit limit after the credit status of debtor is evaluated based on financial condition of debtor, credit history, external ratings, possibility of guarantee obtained from the third party. Meanwhile, the company shall regularly monitor thedebtor’s credit history. With regard to the bad credit record for the debtor, the company shall adopt the written reminder, shortening or cancel of credit period to ensure the overall credit risks within the controllable scope.
（II）Market risk
Market risk of financial instrument arises from changes in fair value or future cash flow of financial instruments affected by market price . Market risks includes foreign exchange risk and interest risk. (1) Interest Rate Risk
The interest rate risk faced by the company is mainly from the bank borrowings. The company is faced the interest rate risk of the cash flow due to the financial liability of the floating interest rate, and faced the interest rate risk of the fair value due to the financial liability of the fixed interest rate. The company shall determine the relative proportion in the fixed and floating interest rate contracts. (2) Foreign Exchange Risk
The foreign exchange risks faced by the company are mainly from the financial assets and liabilities based on the price of US dollar and JPY. The company matches the income and expenditure of foreign currency as far as possible in order to reduce the foreign exchange risk.
（III）Liquidity risk
Liquidity risk refers to fund shortage problems when fulfilling obligations settled in cash or other financial assets. The company shall guarantee to have the sufficient funds to repay the debts through monitoring the cash balance, the marketable securities available to be cash and the rolling forecast for the future cash flow.
IX. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Closing fair value
||||
|-|-|-|
|Fir valuemeasurement items atlevel 1|Fir valuemeasurement itemsat level 2|Fir valuemeasurement items atlevel 3|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Closing fair value
||||
|-|-|-|
|Fir valuemeasurement items atlevel 1|Fir valuemeasurement itemsat level 2|Fir valuemeasurement items atlevel 3|
|8,378,730.50|||
|8,378,730.50|||
|8,378,730.50|||

 2. Market price recognition basis for consistent and inconsistent fair value measurement items at level The fair value of financial assets available for sale at the end of period is measured based on the closing price of Shenzhen Stock Exchange on December 31,2016.
X. Related parties and related-party transactions
1.Parent company information of the enterprise
|||||
|-|-|-|-|
|Registered address|Nature|Registeredcapital（RMB’0000）|The parentcompany of theCompany'sshareholdingratio|
|18/F, InvestmentBuilding, ShennanRoad, FutianDistrict, Shenzhen|Equityinvestment ,Real-estateDevelopmentand Guarantee|2,158,000.00|46.21|

The company is authorized and approved to be state-owned independent company by Shenzhen Government, and it Executes financial contributor function on state-owned enterprise within authorization scope.
The finial control of the Company was ShenzhenPeople’s Govemment state owned assets supervision& Administration Commission.
2.Subsidiaries of the Company
Details refer to the Note VII-1, Interest in the subsidiary
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 3. Information on the joint ventures and associated enterprises of the Company
Details refer to the Note VII-2, Interests in joint ventures or associates
4.Other Related parties information
Other related party Relationship to the Company
Shenzhen Shenchao Technology Investment Co., Ltd. Subject to the same party controls
Chairman of the Board Is the Vice Chairman of the Shenzhen Tianma Microelectronics Co., Ltd.
Company
Shengbo（HK）Co., Ltd. The Company Executives are Director of the company Shenzhen Xiangjiang Trade Co., Ltd. Sharing Company
Shenzhen Xinfang Knitting Co., Ltd. Sharing Company
Shenzhen Dailishi Underwear Co., Ltd. Sharing Company
Anhui Huapeng Textile Co., Ltd. Sharing Company
5. Related transactions.
1．Sales of goods and vendering of services
|||
|-|-|
|Content|Amount of currentperiod|
|Sales polarizer sheet|1,546,092.92|

2．Entrusted loans to related parties
For the construction of the project of polarizer sheet for TFT-LCD, the Company signed Entrusted Loan Contract with Shenzhen Shenchao Technology Investment Co., Ltd. and Shenzhen Jiangsu Building Sub-branch of Shenzhen Development Bank Co., Ltd. in 2010. According to the contract, Shenzhen Shenchao Technology Investment Co., Ltd. entrusted Shenzhen Jiangsu Building Sub-branch of Shenzhen Development Bank Co., Ltd. to extend a loan of RMB 200 million to the Company. The term of the loan is 108 months from the day when the first installment of entrusted loan is transferred to the account of the Company. The interest rate of the entrusted loan is the rate of commercial loans with a term of 5 years quoted by People's Bank of China minus2%. In case of adjustment of such commercial loan rate, the rate of commercial loans with a term of 5 years after adjustment minus2% shall apply as interest rate of entrusted loan from the first day of the next month after the adjustment of basic interest rate. As of December 31, 2016, The Company actually received a loan of RMB 120 million.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 3. Rewards for the key management personnel
||
|-|
|Amount of current period|
|RMB 3.8905 million|

6. Receivables and payables of related parties
（1）Receivables
|||||
|-|-|-|-|
|Related party|Amount at year end|||
||Balance ofBook|Bad debtProvision|Balance of Book|
|Shenzhen TianmaMicroelectronics Co., Ltd.|256,427.69|12,821.38|349,938.59|
|Anhui Huapeng TextileCompany|3,600,000.00|270,000.00|3,600,000.00|
|Shenzhen DailishiUnderwear Co., Ltd.|300,048.12|15,002.41|277,172.52|

（2）Payables
|||
|-|-|
|Related party|Amount at year end|
|Shenzhen Xinfang Knitting Co.,Ltd.|244,789.85|
|Shenzhen Xiangjiang Trade Co.,Ltd.|40,000.00|
|Shenzhen Changlianfa Printingand dyeing Co., Ltd.|846,503.89|
|Shenzhen Haohao PropertyLeasing Co., Ltd.|4,954,489.85|
|Yehui International Co.,Ltd.|1,214,994.65|
|Shengbo （Hongkong）Co., Ltd.|315,000.00|
|Shenzhen Shenchao TechnologyInvestment Co., Ltd.|42,805,384.31|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements XI. Subsequent events
Nil
XII. Post-balance-sheet events
1. According to the dividend distribution preplan made by the board of directors of the Company, the Company will neither distribute profits nor capitalize capital surplus for the current period.
2. On January 11, 2017, Shenzhen Shengbo Optoelectronic Technology Co., Ltd. completed the registration procedure of industrial and commercial change after the introduction of strategic investors, and the registered capital of the Company was RMB 583,333,333.00. The details of this capital increase are set out in Note VII(2) The share of the owner's equity in the subsidiary changes and controls the trading of the subsidiary.
XIII. Notes s of main items in financial reports of parent company
（1）Account receivable
1.Classification account receivables.
Year-end balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|Proportion(%)|Amount|Proportion(%)|
|518,920.00|100.00|25,945.99|5.00|
|518,920.00|100.00|25,945.99|5.00|

 Year-beginning
Classification
|||
|-|-|
|Book balance|Provision for bad debts|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
|||||
|-|-|-|-|
|Amount|Proportion(%)|Amount|Proportion(%)|
|862,162.70|100.00|43,108.13|5.00|
|862,162.70|100.00|43,108.13||

 In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
Balance in year-end
Aging
|||
|-|-|
|Account receivable|Bad debt provision|
|518,920.00|25,945.99|

 2.Other receivable
(1)Category of Other receivable
Year-end balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|Proportion(%)|Amount|Proportion(%)|
|11,981,464.60|41.08|11,981,464.60|100.00|
|16,870,177.62|57.85|4,345,920.87|25.76|
|311,486.35|1.07|311,486.35|100.00|
|29,163,128.57|100.00|16,638,871.82||

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Year-beginning
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|Proportion(%)|Amount|Proportion(%)|
|11,981,464.60|12.98|11,981,464.60|100.00|
|79,979,624.27|86.68|7,435,914.49|9.30|
|311,486.35|0.34|311,486.35|100.00|
|92,272,575.22|100.00|19,728,865.44||

（1）Other Receivable accounts with large amount individually and bad debt provisions were provided
Balance at year-end（Unit）
||||
|-|-|-|
|Other receivable|Provision for baddebts|Proportion%|
|11,389,044.60|11,389,044.60|100.00|
|592,420.00|592,420.00|100.00|
|11,981,464.60|11,981,464.60||

（2）In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
Amount in year-end
Aging
|||
|-|-|
|Other receivable|Bad debt provision|
|6,242,595.42|312,129.77|
|3,200,000.00|320,000.00|
|7,427,582.20|3,713,791.10|
|16,870,177.62|4345920.87|

2.The amount of allowance for bad debt recovered or reversed during the current year is RMB-3,089,993.62.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 3.Other accounts receivable classified by the nature of accounts
||
|-|
|Year-end balance|
|12,244,280.72|
|16,806,675.87|
|112,171.98|
|29,163,128.57|

 4.The ending balance of other receivables owed by the imputation of the top five parties
|||||
|-|-|-|-|
|Nature|Year-endbalance|Age|Portion in total otherreceivables(%)|
|Unitaccount|11,389,044.60|Over 3years|39.05|
|Internalcurrentaccount|7,168,680.72|Over 3years|24.58|
|Unitaccount|3,600,000.00|Within 1year|12.35|
||1,400,000.00|1-2 years|4.80|
||75,600.00|Over 3years|0.26|
|Unitaccount|1,800,000.00|Within 1year|6.17|
||1,800,000.00|1-2 years|6.17|
|Unitaccount|592,420.00|Over 3years|2.03|
||27,825,745.32||95.41|

 3.Long-term equity investment
||||||
|-|-|-|-|-|
|Year-end balance|||||
|Book balance|Bad debtprovision|Book value|Book balance|Bad debtprovision|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||||||
|-|-|-|-|-|
|1,980,806,395.91|16,582,629.30|1,964,223,766.61|1,772,806,395.91|16,582,629.30|
|25,115,965.99|266,654.99|24,849,311.00|23,145,924.05|266,654.99|
|2,005,922,361.90|16,849,284.29|1,989,073,077.61|1,795,952,319.96|16,849,284.29|

（1）Investment to the subsidiary
||||||
|-|-|-|-|-|
|Opening balance|Increase|Decrease|Closing balance|Withdrawnimpairmentprovision in thereporting period|
|1,716,663,070.03|208,000,000.00||1,924,663,070.03||
|8,073,388.25|||8,073,388.25||
|30,867,400.00|||30,867,400.00||
|15,489,351.08|||15,489,351.08||
|1,713,186.55|||1,713,186.55||
|1,772,806,395.91|208,000,000.00||1,980,806,395.91||

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
（2）Investment to joint ventures and associated enterprises
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Openingbalance|Increase /decrease in reporting period||||||||Closingbalance|
||Addinvestment|Decreasedinvestment|Gain/loss ofInvestment|Adjustment ofothercomprehensive income|Otherequitychanges|Declarationof cashdividends orprofit|Withdrawnimpairmentprovision|Other||
|4,397,840.88|||708,646.69||||||5,106,487.57|
|4,061,958.96|||181,746.48||||||4,243,705.44|
|8,459,799.84|||890,393.17||||||9,350,193.01|
|1,871,377.09|||96,981.03||||||1,968,358.12|
|3,384,014.49|||-1,007,494.50|197,807.78|||||2,574,327.77|
|9,430,732.63|||1,487,523.59|1,239,036.52||934,205.65|||11,223,087.09|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Openingbalance|Increase /decrease in reporting period||||||||Closingbalance|
||Addinvestment|Decreasedinvestment|Gain/loss ofInvestment|Adjustment ofothercomprehensive income|Otherequitychanges|Declarationof cashdividends orprofit|Withdrawnimpairmentprovision|Other||
|14,686,124.21|||577,010.12|1,436,844.30||934,205.65|||15,765,772.98|
|23,145,924.05|||1,467,403.29|1,436,844.30||934,205.65|||25,115,965.99|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
4.Business income and Business cost
（1）Business income
||
|-|
|Amount of current period|
|59,795,114.50|
|4,128,171.57|
|63,923,286.07|
|8,626,758.74|
|4,128,171.57|
|12,754,930.31|

（2）Mainbusiness（Industry）
||||
|-|-|-|
|Amount of current period|||
|Business income|Business cost|Business income|
|59,795,114.50|8,626,758.74|59,936,965.65|
|59,795,114.50|8,626,758.74|59,936,965.65|

（3）Mainbusiness（Production）
||||
|-|-|-|
|Amount of current period|||
|Business income|Business cost|Business income|
|59,795,114.50|8,626,758.74|59,936,965.65|
|59,795,114.50|8,626,758.74|59,936,965.65|

（4）Mainbusiness（Area）
||||
|-|-|-|
|Amount of current period|||
|Business income|Business cost|Business income|
|59,795,114.50|8,626,758.74|59,936,965.65|
|59,795,114.50|8,626,758.74|59,936,965.65|

（5）Operating income from top five clients
Name Business Income Proportion(%)
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||
|-|
|26,527,042.35|
|1,954,323.81|
|1,722,407.62|
|1,206,874.64|
|1,151,045.52|
|32,561,693.94|

 5.Investment income
1．Detail
||
|-|
|Amount of currentperiod|
|1,467,403.29|
|3,078,369.95|
|4,545,773.24|

 6. Supplement information of Cash Flow Statement
||||
|-|-|-|
|Supplement information|Amount of|Amount of|
||current period|previous period|
|I. Adjusting net profit to cash flow from operating activities|||
|Net profit|31,713,621.89|61,362,927.65|
|Add : Impairment loss provision of assets|-3,107,155.76|14,939,945.14|
|Depreciation of fixed assets, oil and gas assets and consumable|||
||8,930,779.65|8,301,759.87|
|biological assets|||
|Amortization of intangible assets|295,076.13|310,526.55|

Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
||||
|-|-|-|
|Supplement information|Amount of|Amount of|
||current period|previous period|
|Amortization of long-term deferred expenses|||
|Loss on disposals of fixed assets, intangible assets and other|||
|long-term assets(“-“for gains)|||
|Loss on discard of fixed assets|117,153.06|-222,212.70|
|Loss on fair value changes|||
|Financial expenses|-3,555,607.51|-8,307,625.26|
|Loss on investment|-4,545,773.24|-58,283,064.18|
|Decrease of deferred income tax assets|776,788.94|352,502.39|
|Increase of deferred income tax assets|||
|Decrease in inventories|||
|Decrease of operating receivable|75,279,729.66|-4,280,901.95|
|Increase of operating receivable|-1,876,721.87|17,119,385.28|
|Other|||
|Net cash flows arising from operating activities|104,027,890.95|31,293,242.79|
|II. Significant investment and financing activities that without cash|||
|flows|||
|Debt-to –capital conversion|||
|Convertible loan due within 1 year|||
|Fixed assets acquired under financial lease|||
|III. Net Changes of cash and cash equivalents|||
|Ending balance of cash|440,685,610.11|271,582,749.03|
|Less: Beginning balance of cash|271,582,749.03|457,379,886.16|
|Add：End balance of cash equivalents|||
|Less: Beginning balance of cash equivalents|||
|Net increase of cash and cash equivalents|169,102,861.08|-185,797,137.13|

XIV. Supplement information
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
1. Particulars about current non-recurring gains and loss
||
|-|
|Amount|
|-138,610.37|
|9,578,484.46|
|634,628.72|
|5,493,881.12|
|-71,340.06|
|15,497,043.87|

2. Return on net asset and earnings per share
|||
|-|-|
|Weighted averageROE (%)||
||EPS-basic|
|-4.10|-0.17|
|-4.82|-0.20|

XII．Documents Available for Inspection
1.Financial statements bearing the seal and signature of legal representative, General Manaager and financial controller;
2.The original of theauditor’s report bearing the seal of the certified public accountants and the signature of C.P.A.
3.The originals of all theCompany’s documents and the original manuscripts of announcements publicly disclosed on the newspapers designated by China Securities Regulatory Commission in the report period.
The above documents were completely placed at the Office of Secretaries of the Board of Directors of the Company.
The Board of Directors of Shenzhen Textile (Holdings) Co., Ltd. March 31, 2017