Shenzhen Textile(Holdings) Co., Ltd. 2016 Annual Report Shenzhen Textile (Holdings) Co., Ltd.
Auditor’s Report
Qin Xin Shen Zi(2017)]No. 1556
Table of contents
Contents Page
Contents
I.Auditor’s Report 1-2
II. Audited Financial Statements
1.Consolidated Balance sheet 3-6
2．Parent company Balance sheet 7- 9
3. Consolidated Income statement 9
4. Parent company Income statement 11
5. Consolidated Cash flow statement 12
6. Parent company Cash flow statement 15
7. Consolidated Statement on Change inOwners’ Equity 17-21
22-26
8. Statement of change inowner’s Equity of the Parent
Company
III. Notes to financial statements 27-121
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
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||1,198,200,216.4|1,226,746,791.|
|Incl：Business income|（33）|21,198,200,216.4|621,226,746,791.|
|Interest income||2|62|
|Insurance fee earned||||
|Fee and commission received||||
|II. Total business cost||1,296,343,917.5|1,302,269,276.|
|Incl：Business cost|（33）|31,128,134,488.5|481,142,511,012.|
|Interest expense||4|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|103,044,704.30|

||||||
|-|-|-|-|-|
||（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 assetsNet cash received from disposal of subsidiaries or other operational||||

||||
|-|-|-|
|Other 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 taflsosewt sd 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
Name Recognition Criteria Withdrawing Method
Aging Group Division by Aging Aging Analysis Method
(2)Accounts on age basis in theportfolio：
Aging Rate forreceivables(%) Rate for otherreceivables(%) Within 1year（Included 1year） 5 5
1－2 years 10 10
2－3 years 30 30
Over 3 years 50 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 for Expected useful Estimated residual
Category Depreciation depreciation life（Year） value
House and Building- Straight-line
35 years 4% 2.74%
Production method
House and Building-Non- Straight-line
40 years 4% 2.40%
method
Production
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements The method for Expected useful Estimated residual
Category Depreciation depreciation life（Year） value
Straight-line
Decoration of Fixed assets 10 years 10.00% method
Straight-line
Machinery and equipment 10-14 years 4% 9.60%-6.86% method
Straight-line
Transportation equipment 8 years 4% 12.00% method
Straight-line
Electronic equipment 8 years 4% 12.00% method
Straight-line
Other equipment 8 years 4% 12.00% method
4．Cognizance evidence and pricing method of financial leasing fixed assets
(1) Recognition Criteria of the Fixed Assets under Financing Lease
The financing lease shall be recognized if the following one or several criteria are met:① the ownership of the leasing assets shall be transferred to the tenant when the expiration of lease term.② the tenant has the option to purchase the leasing assets, and the made purchase price is expected to be far less than the fair value of the leasing assets in the implementation of the option. Thus, it can be reasonably recognized that the tenant will implement the option on the lease date.③ the ownership of assets is not transferred, but the lease term shall be the most of the life of the lease assets.④ the least present value of the lease payment of the tenant and the least present value of the lease receipts on the lease date almost equal to the fair value of the leasing assets on the lease date respectively.⑤ the leasing assets have the special nature, and only the tenant can use if there is no major modifications.
(2) Valuation of Fixed Assets Acquired under Finance Leases: the fixed assets acquired under finance leases shall be book kept according to the lower between the fair value of the leasing assets and the least lease payment on the lease date.
(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
Taxes Tax references Applicable tax rates
VAT The taxable tumover 17%、5%
Business tax. The taxable tumover 5%
City construction tax Turnover tax to be paid allowances 7%
Education surcharge Turnover tax to be paid allowances 3%
Turnover tax to be paid allowances 2%
Local education
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Taxes Tax references Applicable tax rates
surcharge
Business income tax Taxable income 25%、15%
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
Items
Year-end balance Year-beginning balance
Cash at hand 22,807.86 8,872.71 Bank deposit 932,021,522.23 750,353,139.33 Other monetary funds 1,812,582.64 1,952,859.49 Total 933,856,912.73 752,314,871.53 Including : The total amount of deposit
23,329,496.78 31,258,353.11 abroad
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 Bank acceptance 41,908,315.45 18,841,745.16 Trade acceptance
Total 41,908,315.45 18,841,745.16 (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 Amount derecognizing at
Items
–end period-end
Bank acceptance 45,576,485.05
Trade acceptance
Total 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
Classification
Book value Proportion
Amount Amount Proportion(%)
(%)
Accounts receivable of
individual significance and
6,302,912.11 2.61 4,000,658.05 63.47 2,302,254.06 subject to individual
impairment assessment
Accounts receivable subject to
impairment assessment by
228,090,819.33 94.56 11,596,924.13 5.08 216,493,895.20 credit risk characteristics of a
portfolio
Accounts receivable of
individual insignificance but
6,816,189.64 2.83 5,390,319.49 79.08 1,425,870.15 subject to individual
impairment assessment
Total
241,209,921.08 100.00 20,987,901.67 220,222,019.41 Year-beginning balance
Classification
Book balance Bad debt provision Book value
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Proportion
Amount Amount Proportion(%)
(%)
Accounts receivable of
individual significance and
6,373,036.66 3.16 4,035,782.60 63.33 2,337,254.06 subject to individual
impairment assessment
Accounts receivable subject to
impairment assessment by
189,029,540.68 93.74 9,776,480.20 5.17 179,253,060.48 credit risk characteristics of a
portfolio
Accounts receivable of
individual insignificance but
6,259,765.85 3.10 5,083,708.34 81.21 1,176,057.51 subject to individual
impairment assessment
Total 201,662,343.19 100.00 18,895,971.14 182,766,372.05 (1)Accounts receivable of individual significance and subject to individual impairment assessment.
Amount in year-end
Debtor
Account Bad debt
Proportion(%) Reason for allowance receivable provision
It has been included in the list of national courts Dongguan Fair LCD Co., Ltd. 1,698,404.00 1,698,404.00 100.00
dishonest debtor, unlikely to recover.
Beyond the credit period for Guangdong Ruili Baolai
1,348,965.36 674,482.68 50.00 a long time, uncertain Technology Co., Ltd.
recovered.
Beyond the credit period for Dongguan Yaxing
3,255,542.75 1,627,771.37 50.00 a long time, uncertain Semiconductor Co., Ltd.
recovered.
Total 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 Proportion(%)
Within 1 year 227,316,635.47 11,365,831.77 5.00 1-2 years 367,049.73 36,704.98 10.00 2-3 years 45,898.44 13,769.53 30.00
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Balance in year-end
Aging
Account receivable Bad debt provision Proportion(%)
Over 3 years 361,235.69 180,617.85 50.00 Total 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
Balance in Proportion(%) Bad debt Name Nature Aging
year-end provision Within 1
First Goods 87,644,721.94 36.34 4,382,236.10 year
Within 1
Second Goods 31,220,268.30 12.94 1,561,013.42 year
Within 1
Third Goods 14,743,404.82 6.11 737,170.24 year
Within 1
Fourth Goods 10,752,013.06 4.46 537,600.65 year
Within 1
Fifth Goods 8,960,692.93 3.71 448,034.65 year
Total 153,321,101.05 63.56 7,666,055.06 4.Prepayments
(1)Disclosure by age
Balance in year-end Balance in year-begin
Aging
Amount Proportion（%） Amount Proportion（%） Within 1 year 5,108,950.81 75.43 5,027,361.20 64.01 1-2 years 592,795.34 8.75 1,033,416.99 13.16 2-3 years 1,033,416.99 15.26 1,754,880.00 22.34 Over 3 years 38,160.00 0.56 38,160.00 0.49 Total 6,773,323.14 100.00 7,853,818.19 100.00
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements（2）The ending balance of Prepayments owed by the imputation of the top five parties
Name Balance in year-end Proportion
First
1,108,752.04 16.37 Second
1,000,000.00 14.76 Third
951,741.61 14.05 Fourth
454,551.46 6.71 Fifth
430,038.00 6.35 Total 3,945,083.11 58.24 5.Interest receivable
(1).Category of interest receivable
Items Amount in year-end Amount in year-beginning
Fixed deposit interest 4,925,279.45 16,472,409.43 Structure deposit interest 1,599,384.48 13,826,529.37 Other financing product 128,219.18
Total 6,652,883.11 30,298,938.80 6.Other receivable
(1)．Category of Other receivable
Amount in year-end
Book Balance
Classification Bad debt provision
Book value Amount Proportion( Amount Proportion(%)
%)
Other accounts receivable of
individual significance and
11,981,464.60 14.20 11,981,464.60 100.00
subject to individual
impairment assessment
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Amount in year-end
Book Balance
Classification Bad debt provision
Book value Amount Proportion( Amount Proportion(%)
%)
Other accounts receivable
subject to impairment
71,842,367.36 85.19 4,569,810.64 6.36 67,272,556.72 assessment by credit risk
characteristics of a portfolio
Other accounts receivable of
individual insignificance but
511,820.77 0.61 511,820.77 100.00
subject to individual
impairment assessment
Total 84,335,652.73 100.00 17,063,096.01 67,272,556.72 Amount in year-beginning
Book Balance
Classification Bad debt provision
Book value
Amount Proportion( Amount Proportion(%)
%)
Other accounts receivable of
individual significance and
11,981,464.60 19.67 11,981,464.60 100.00
subject to individual
impairment assessment
Other accounts receivable
subject to impairment
48,425,735.21 79.49 3,292,063.11 6.80 45,133,672.10 assessment by credit risk
characteristics of a portfolio
Other accounts receivable of
individual insignificance but
511,820.77 0.84 511,820.77 100.00
subject to individual
impairment assessment
Total 60,919,020.58 100.00 15,785,348.48 45,133,672.10 (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 Reason for allowance receivable proportion(%)
Jiangxi Xuanli String Co., No executable 11,389,044.60 11,389,044.60 100.00
Ltd. property, unlikely to recover.
Shenzhen Tianlong Has been canceled, 592,420.00 592,420.00 100.00
Induatry& Trade Co., Ltd. unlikely to recover Total 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 Withdrawal proportion Within 1 year 66,549,470.75 3,327,473.52 5.00 1-2 years 3,326,586.25 332,658.63 10.00 2-3 years 367,383.45 110,215.03 30.00 Over 3 years 1,598,926.91 799,463.46 50.00 Total 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
Category Year-end balance Year-beginning balance
Customs bond 44,643,087.38
The equity transfer 2,276,015.00 Export rebate 18,179,211.88 37,916,465.75 Unit account 16,812,275.87 16,318,999.87 Deposit 1,858,126.16 2,024,236.32 Reserve fund and staff loans 900,116.01 968,214.01 Other 1,942,835.43 1,415,089.63 Total 84,335,652.73 60,919,020.58
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
Proportion of Bad debt the total year provision Name
Nature Closing balance Aging end balance of
the accounts
Closing balancereceivable(%)
First Customs bond 44,643,087.38 Within 1 year 52.94 2,232,154.37 17,470,183.40 Within 1 year 20.72 873,509.17 Second
Export rebate
Unit account
709,028.48 1-2 years 0.84 70,902.85 Third
Unit account
11,389,044.60 Over 5 years 13.50 11,389,044.60 Within 1
1,800,000.00 2.13 90,000.00 Fourth
years
Unit account
1,800,000.00 1-2 years 2.13 180,000.00 Fifth
Deposit 980,461.06 Over 5 years 1.16 490,230.53 Total 78,791,804.92 93.42 15,325,841.52 7.Inventories
（1）Inventories types
Year-end balance Year-beginning balance
Items
Book balance Provision for Book value Book balance Provision for Book value bad debts bad debts
Raw materials 107,814,144.09 9,148,167.24 98,665,976.85 150,409,810.60 14,406,278.95 136,003,531.65 Processing
4,519,927.47 279,390.02 4,240,537.45 6,871,382.66 493,094.77 6,378,287.89 products
Finished product 139,369,316.72 32,193,843.63 107,175,473.09 128,415,576.27 30,161,550.92 98,254,025.35 Semi-finished
91,137,927.46 19,961,869.86 71,176,057.60 90,791,967.01 22,652,767.02 68,139,199.99 product
Consigned
2,113,669.08 2,113,669.08
processing
Total 344,954,984.82 61,583,270.75 283,371,714.07 376,488,736.54 67,713,691.66 308,775,044.88
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements（2）Inventory Impairment provision
Increased in current period Decreased in current period
Year-beginning Year-end Items
balance
Transferred Transferre
balance Provision Provision
back d back
Raw materials 14,406,278.95 1,579,207.25 6,837,318.96 9,148,167.24 Processing
30,161,550.92 23,702,662.47 21,670,369.76 32,193,843.63 products
Semi-finished
22,652,767.02 12,943,307.86 15,634,205.02 19,961,869.86 product
Finished
493,094.77 892,028.48 1,105,733.23 279,390.02 product
Total 67,713,691.66 39,117,206.06 45,247,626.97 61,583,270.75 8.Other current assets
Items Year-end balance Year-beginning balance
Structural Deposit 428,000,000.00 460,000,000.00 Other financing product 1,000,000,000.00
After the deduction of input VAT 43,157.76 53,553,675.47 Total 1,428,043,157.76 513,553,675.47 9.Available-for-sale financial assets
(1)Available-for-sale financial assets
Year-end balance Year-beginning balance
Items
Bad debt Bad debt
Book balance Book value Book balance Book value provision provision
Available-for-sale
equity
78,255,766.47 36,689,988.51 41,565,777.96 79,931,512.57 36,689,988.51 43,241,524.06 instruments
8,378,730.50 8,378,730.50 10,054,476.60 10,054,476.60 Measured by fair
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Year-end balance Year-beginning balance
Items
Bad debt Bad debt
Book balance Book value Book balance Book value provision provision
value
Measured by cost 69,877,035.97 36,689,988.51 33,187,047.46 69,877,035.97 36,689,988.51 33,187,047.46 Total 78,255,766.47 36,689,988.51 41,565,777.96 79,931,512.57 36,689,988.51 43,241,524.06 (2)Available-for-sale financial assets measured by fair value at the period-end
Items Cost Fair value
Equity instrument available for sale 8,940,598.31 8,378,730.50 Fawer（000030） 8,940,598.31 8,378,730.50 Total 8,940,598.31 8,378,730.50
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
Sharehol
ding
Cash bonus of proportio
Investee the reporting Increas Increas
n among
Period-begin Decrease Period-end Period-begin Decreased Period-end
period e ed
the
investees
Shenzhen Jintian Industry
14,831,681.50 14,831,681.50 14,831,681.50 14,831,681.50 3.68
（Group） Co., Ltd.
Shenzhen Jiafeng Textile Co., ltd. 16,800,000.00 16,800,000.00 16,800,000.00 16,800,000.00 10.80
Shenzhen Guanhua Prnting&
5,491,288.71 5,491,288.71 5,058,307.01 5,058,307.01 45.00
dyeing Co., Ltd.
Shenzhen Union Development
2,600,000.00 2,600,000.00 2.87
Group Co., Ltd
Shenzhen Xiangjiang Trade Co.,
160,000.00 160,000.00 20.00
Ltd.
Shenzhen Xinfang Knitting Co.,
524,000.00 524,000.00 20.00 80,000.00 Ltd.
Shenzhen Dailisi Knitting Co.,
2,559,856.26 2,559,856.26 30.00 837,780.00 Ltd.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
Anhui Huapeng Textile Co., Ltd. 25,410,209.50 25,410,209.50 50.00 1,800,000.00 Shenzhen South Textile Co., Ltd. 1,500,000.00 1,500,000.00 9.84 677,640.52 Total 69,877,035.97 69,877,035.97 36,689,988.51 36,689,988.51 3,395,420.52 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 equity Available for sale debts
Category Total
instruments instruments
Impairment amount at the beginning
period 36,689,988.51 36,689,988.51 Current provision
Including: Transferred from other
comprehensive income
Decreased of this period
Including: Transferred from the
increased fair value
Impairment amount at the end of
period 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
Increase/decrease
Withdra
Closing Opening
Invest Adjustment Chang Cash bonus wal of
Closing balance of Investees
balance
Add ment Gains/loss of of other es of or profits impairm
balance impairment Other
investment decrea Investment comprehens other announced ent
provision sed ive income equity to issue provisio
n
I. Joint venture
Shenzhen Haohao Property
708,646.69 5,106,487.57 4,397,840.88
Leasing Co., Ltd.
Shenzhen Xieli Automobile 181,746.48 4,243,705.44 266,654.99 4,061,958.96
Co., Ltd.
Subtotal 8,459,799.84 890,393.17 9,350,193.01 266,654.99 2. Affiliated Company
Shenzhen Changlianfa
96,981.03 1,968,358.12 Printing& dyeing Company
1,871,377.09
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
Increase/decrease
Withdra
Closing Opening
Invest Adjustment Chang Cash bonus wal of
Closing balance of Investees
balance
Add ment Gains/loss of of other es of or profits impairm
balance impairment Other
investment decrea Investment comprehens other announced ent
provision sed ive income equity to issue provisio
n
-1,007,494.50 197,807.78 2,574,327.77 Jordan Garment Factory
3,384,014.49
1,239,036.5
Hongkong Yehui
1,487,523.59 934,205.65 11,223,087.09 9,430,732.63
2
International Co., Ltd.
Subtotal 577,010.12
1,436,844.3
934,205.65 15,765,772.98 14,686,124.21
0
Total 23,145,924.05 1,467,403.29 1,436,844.3 934,205.65 25,115,965.99 266,654.99 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
Constructio
Land use
Items House, Building n in Total
right
process
I. Original price
1. Balance at period-beginning 252,285,892.54 252,285,892.54 2.Increase in the current period 52,387,990.00 52,387,990.00 3.Decrease in the current period 24,943.63 24,943.63 4 Year-end balance 304,648,938.91 304,648,938.91 II.Total accumulated depreciation
accumulated amortization
1. Year-begin balance 117,895,929.49 117,895,929.49 2.Increase in the current period 7,442,829.04 7,442,829.04 (1).Provision or amortization 7,442,829.04 7,442,829.04 3.Decrease in the current period 14,367.39 14,367.39 4 Year-end balance 125,324,391.14 125,324,391.14 III. Impairment provision
1. Balance at period-beginning
2.Increased amount of the period
3.Decrease in the current period
4. Balance at period-end
IV.Book value
1.Book value at period -end 179,324,547.77 179,324,547.77 2.Book value at period-beginning 134,389,963.05 134,389,963.05（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& Machinery Transportation
Items Other Total
buildings equipment s
I. Original price
1.Opening balance 490,052,012.48 652,172,073.90 3,691,157.72 19,463,252.46 1,165,378,496.56 2.Increased amount of
2,923,339.79 3,554,848.37 1,689,978.04 8,168,166.20 the period
(1) Purchase 2,923,339.79 3,554,848.37 1,689,978.04 8,168,166.20 3,554,848.37
(2) Transferred from co
nstruction in progress 3,554,848.37
3. Decrease in the current
265,937.00 15,883.52 171,521.02 453,341.54 period
（1）Disposal 265,937.00 15,883.52 171,521.02 453,341.54 4. Balance at period-end 492,709,415.27 655,711,038.75 3,691,157.72 20,981,709.48 1,173,093,321.22 II. Accumulated
amortization
1. Balance at
84,904,035.93 275,623,640.07 2,728,973.22 12,102,360.18 375,359,009.40 period-beginning
2. Increase in the current
14,522,258.89 57,950,444.89 286,738.72 1,614,443.36 74,373,885.86 period
(1) Withdrawal 14,522,258.89 57,950,444.89 286,738.72 1,614,443.36 74,373,885.86 3. Decrease in the current
172,782.89 5,960.94 146,117.77 324,861.60 period
（1）Disposal 172,782.89 5,960.94 146,117.77 324,861.60 4. Balance at period-end 99,253,511.93 333,568,124.02 3,015,711.94 13,570,685.77 449,408,033.66
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Houses& Machinery Transportation
Items Other Total
buildings equipment s
III. Impairment provision
1. Balance at
period-beginning
2.Increased amount of
the period
3. Decrease in the current
period
4. Balance at period-end
IV.Book value
1.Book value at period
393,455,903.34 322,142,914.73 675,445.78 7,411,023.71 723,685,287.56 -end
2.Book value at
405,147,976.55 376,548,433.83 962,184.50 7,360,892.28 790,019,487.16 period-beginning
Current depreciation is RMB74,373,885.86 .
13.Project under construction
（1）Project under construction
Year-end balance Year-beginning balance
Book balance Provis Book Net value Book balance Provisio Book Net Items
ion for n for value
devalu devaluat
ation ion
TFT-LCD
116,849,202.46 116,849,202.46 36,212,078.79 36,212,078.79 polarizing film II
project (6 line)
Guanhua Building
39,004,527.58 39,004,527.58 Project
2,955,028.97 2,955,028.97 586,980.33 586,980.33 Other
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Year-end balance Year-beginning balance
Book balance Provis Book Net value Book balance Provisio Book Net Items
ion for n for value
devalu devaluat
ation ion
Total 119,804,231.43 119,804,231.43 75,803,586.70 75,803,586.70
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
（2）Changes of significant construction in progress
Including
Capitalisa
：Current
Transferre Other tion of Capitalisation
Amount at year Increase at this Balance in Proportion( Progress amount of
Name Budget d to fixed decreas interest of interest Source of funds beginning period year-end %) of work capitalizat
assets e accumulat ratio（%)
ion of
ed balance
interest
TFT-LCD RMB
polarizing film II 700.34 36,212,078.79 80,637,123.67 116,849,202.4616.68% 16.68% Collect and Self- project million
Total 36,212,078.79 80,637,123.67 116,849,202.46 Total 75
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 14.Intangible assets
（1）List of intangible assets
Proprietary
Items Land use right Software Total
technology
I. Original price
1.Opening balance 48,765,130.50 11,825,200.00 1,938,280.00 62,528,610.50 2.Increased amount of the
56,934.11 205,300.00 262,234.11 period
(1) Purchase 56,934.11 205,300.00 262,234.11 3.Decreased at thisperiod
4. Balance at period-end 48,822,064.61 11,825,200.00 2,143,580.00 62,790,844.61 II.Accumulated amortization
1. Balance at period-beginning 9,383,309.73 11,825,200.00 693,164.43 21,901,674.16 2. Increase in the current period 940,465.78 250,050.35 1,190,516.13 (1) Withdrawal 940,465.78 250,050.35 1,190,516.13 3.Decreased amount of the period
4. Balance at period-end 10,323,775.51 11,825,200.00 943,214.78 23,092,190.29 III. Impairment provision
1. Balance at period-beginning
2. Increase in the current period
3.Decreased amount of the period
4. Balance at period-end
IV. Book value
1.Book value at period -end 38,498,289.10 1,200,365.22 39,698,654.32 2.Book value at period-beginning 39,381,820.77 1,245,115.57 40,626,936.34
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 15.Goodwill
(1)．General information
Increased at this .Decreased at
Balance in year-begin Balance in year-end Investee
period this period
Shenzhen Beauty Century
Garment Co., Ltd. 2,167,341.21 2,167,341.21 Shenzhen Shenfang Import and
Export Co., Ltd. 82,246.61 82,246.61 Shenzhen Shengbo Optoelectronic
Technology Co., Ltd 9,614,758.55 9,614,758.55 Total
11,864,346.37 11,864,346.37（2）Impairment of goodwill
Increased at this .Decreased at
Balance in year-begin Balance in year-end Investee
period this period
Shenzhen Beauty Century
Garment Co., Ltd. 2,167,341.21 2,167,341.21 Shenzhen Shenfang Import and
Export Co., Ltd. 82,246.61 82,246.61 Shenzhen Shengbo Optoelectronic
Technology Co., Ltd 9,614,758.55 9,614,758.55 Total
11,864,346.37 11,864,346.37
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 16. Long term amortize expenses
Amortized
Balance in Increase in this Balance in expenses
Items Other loss
year-begin period year-end
Renovation fee 349,029.34 686,512.90 299,824.16 735,718.08 Other 284,512.16 47,148.56 237,363.60 Total 633,541.50 686,512.90 346,972.72 973,081.68 17. Deferred income tax assets/deferred income tax liabilities
（1）Details of the un-recognized deferred income tax assets
Balance in year-end Balance in year-begin
Items
Deductible Deferred income tax Deductible Deferred income temporary difference assets temporary difference tax assets
Assets depreciation
4,114,242.48 1,028,560.61 7,334,802.71 1,833,700.67 reserves
Unattained internal sales
2,769,765.25 415,464.80 2,858,879.80 428,831.98 profits
Changes in fair value of
available for sale financial 561,867.81 140,466.95
assets
Total 7,445,875.54 1,584,492.36 10,193,682.51 2,262,532.65 (2)Details of the un-recognized deferred income tax liabilities
Balance in year-end Balance in year-begin
Items
Temporarily Temporarily
Deferred Income Tax Deferred Income Deductable or Deductable or
liabilities Tax liabilities Taxable Difference Taxable Difference
Stock equity disposition of
the temporary taxable
42,291,900.69 10,572,975.17 difference and the taxable
income
Changes in fair value of 1,113,878.29 278,469.57
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Balance in year-end Balance in year-begin
Items
Temporarily Temporarily
Deferred Income Tax Deferred Income Deductable or Deductable or
liabilities Tax liabilities Taxable Difference Taxable Difference
financial assets available
for sale
Total 43,405,778.98 10,851,444.74 (3) Details of unrecognied deferred income tax assets
Items Balance in year-end Balance in year-begin
Deductible temporary difference 85,972,557.55 85,512,740.17 Deductible loss 620,306,699.39 495,605,796.60 Total 706,279,256.94 581,118,536.77 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
Year Balance in year-end Balance in year-begin Remark
2017 134,292,559.16 134,292,559.16
2018 129,226,944.33 129,226,944.33
2019 148,095,898.11 148,095,898.11
2020 83,990,395.00 83,990,395.00
2021 124,700,902.79
Total 620,306,699.39 495,605,796.60
18. Short-term loan
（1）Categories of short-term loans
Items Balance in year-end Balance in year-Beginning Credit loans 12,335,695.77 53,866,521.87
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Items Balance in year-end Balance in year-Beginning Total 12,335,695.77 53,866,521.87 19.Account payable
（1）Account payable
Items Balance in year-end Balance in year-begin
Within 1 year 174,417,235.90 221,732,534.76 1-2 years 57,989.27 339,044.59 2-3 years 300,642.80 64,917.00 3-4 years 37,090.00 187,643.43 4-5 years 161,238.93 38,046.00 Over 5 years 487,518.82 5,166,622.82 Total 175,461,715.72 227,528,808.60 20. Advance account
（1） Advance account
Items Balance in year-end Balance in year-begin
Within 1 year
29,225,153.57
27,505,005.53 1-2 years
433,268.34
45,161.00 2-3 years 10,224.00 Over 5 years
639,024.58
639,024.58 Total
30,297,446.49
28,199,415.11 21.Payable Employee wage
（1）Payable Employee wage
Items Balance in Increase in this Payable in this Balance in year-begin period period year-end
I. Short-term employee benefits 34,557,822.40 122,222,937.59 129,401,040.13 27,379,719.86 II. Post-employment benefits 750,000.00 8,951,131.55 9,701,131.55
III. Termination benefit 57,400.00 57,400.00
Total 35,307,822.40 131,231,469.14 139,159,571.68 27,379,719.86
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements（2）Short-term remuneration
Items Balance in Increase in this Payable in this Balance in year-begin period period year-end
1.Wages, bonuses, allowances and 32,472,129.09 106,310,272.17 112,876,303.08 25,906,098.18 subsidies
2.Employee welfare 6,296,473.40 6,296,473.40
3. Social insurance premiums 2,480,176.29 2,480,176.29
Including：Medical insurance 2,016,036.10 2,016,036.10
Work injury insurance 182,659.21 182,659.21
Maternity insurance 281,480.98 281,480.98
4. Public reserves for housing 520,000.00 4,790,841.50 5,310,841.50
5.Union funds and staff education fee 1,565,693.31 2,345,174.23 2,437,245.86 1,473,621.68 Total 34,557,822.40 122,222,937.59 129,401,040.13 27,379,719.86（3）Defined contribution plans listed
Balance in Increase in this Payable in this Balance in Items
year-begin period period year-end
1. Basic old-age insurance premiums 6,978,513.92 6,978,513.92
2.Unemployment insurance 278,861.14 278,861.14
3. Annuity payment 750,000.00 1,693,756.49 2,443,756.49
Total 750,000.00 8,951,131.55 9,701,131.55
22.Tax Payable
Items At end of term At beginning of term
VAT 6,142,344.63 135,460.12 Business Tax 510,707.45 City Construction tax 523,339.31 31,836.84 Enterprise Income tax 4,152,120.51 12,570,466.83 Individual Income tax 428,263.53 480,334.74 House property Tax 1,538,122.93 750,607.19 Education surcharge 373,812.63 22,964.43 Other 837,722.65 180,265.49
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Items At end of term At beginning of term
Total 13,995,726.19 14,682,643.09 23.Interest Payable
（.1）Interest Payable
Items At end of term At beginning of term
Interest on long-term borrowings payable 42,805,384.31 39,000,625.75 Interest on short-term borrowings 37,221.21 88,262.21 Total 42,842,605.52 39,088,887.96 24.Other payable
（1）Disclosure by nature
Items At end of term At beginning of term
Engineering Equipment fund 46,903,714.95 59,222,758.80 Unit account 49,538,660.22 24,819,916.41 Deposit 24,625,922.69 19,151,806.04 Other 26,040,292.33 22,581,242.55 Total 147,108,590.19 125,775,723.80 25.Non-currentliabilitiesdue within 1 year
Items At end of term At beginning of term
Long-term borrowings due with in 40,000,000.00 40,000,000.00 1year
Total 40,000,000.00 40,000,000.00 The long-term borrowings at the end of period are the borrowings extended to the Company by Pingan Bank.Shenzhen Jiangsu Building Branch. Entrusted by Shenzhen Shenchao Technology Investment Co.,Ltd.
26.Long-term borrowings
（1）Long-term term borrowings
Items At end of term At beginning of term
Credit borrowings 80,000,000.00 120,000,000.00 Total 80,000,000.00 120,000,000.00
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 in Increase at this Decrease at this
Items Balance in year-end year-begin period period
Govemment Subsidy
99,524,165.58 15,034,535.45 4,512,916.41 110,045,784.62 Total
99,524,165.58 15,034,535.45 4,512,916.41 110,045,784.62 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（+，-） Balance in
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements year-begin year-end Issuance Capitalizat
Bonus
of new ion of Other Subtotal
shares
share public
reserve
Total of
capital 506,521,849.00 506,521,849.00 shares
29.Capital reserves
Items Year-beginning Increase in the Decrease in the Year-end balance balance current period current period
Share premium 1,574,407,414.34 252,075,194.20 1,826,482,608.54 Other 10,722,637.03 6.38 10,722,643.41 Total 1,585,130,051.37 252,075,200.58 1,837,205,251.95 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
Items Year-beginning Increase in the Decrease in the Year-end balance balance current period current period
Statutory surplus reserve 70,539,319.86 3,171,362.19 73,710,682.05 Total 70,539,319.86 3,171,362.19 73,710,682.05 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
Items Amount of this period Amount of last period
Before adjustments: Retained profits at
9,166,137.97 6,805,203.33 the period end
Adjustment: Total unappropriated profits
at the beginning of the year
After adjustments: Retained profits at the
9,166,137.97 6,805,203.33 period beginning
Add: Net profit attributable to owners of
-87,270,604.54 8,497,227.40 the Company for the period
Less: Appropriation to statutory surplus
3,171,362.19 6,136,292.76 reserve
Appropriation to discretionary surplus
reserve
Appropriation to Common risk provision
Common stock dividend payable
Common stock dividends
Converted to shares
Retained profits at the period end -81,275,828.76 9,166,137.97 33.Business income, Business cost
（1）Business income
Items Amount of current period Amount of previous period Income from Main Business 1,194,070,877.33 1,220,983,979.24 Other Business income 4,129,339.09 5,762,812.38 Total 1,198,200,216.42 1,226,746,791.62 Main business cost 1,124,006,316.97 1,136,902,952.29
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Other business cost 4,128,171.57 5,608,060.55 Total 1,128,134,488.54 1,142,511,012.84（2）Mainbusiness（Industry）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost Domestic and foreign
434,671,637.06 430,186,062.05 429,639,819.01 423,199,182.16 trade
667,042,214.73 667,847,188.15 700,600,503.65 690,228,637.37 Manufacturing
Property management,
92,357,025.54 25,973,066.77 90,743,656.58 23,475,132.76 leasing
Total
1,194,070,877.33 1,124,006,316.97 1,220,983,979.24 1,136,902,952.29（3）Mainbusiness（Production）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost Property and rental
25,973,066.77
income 92,357,025.54 90,743,656.58 23,475,132.76 Textile income
29,011,426.03 29,754,708.71 25,205,284.70 27,117,500.23 Polaroid income
798,562,759.96 796,982,437.95 803,719,803.87 787,302,128.29 Trade income
274,139,665.80 271,296,103.54 301,315,234.09 299,008,191.01 Total
1,124,006,316.97
1,194,070,877.33 1,220,983,979.24 1,136,902,952.29（4）MainBusiness（Area）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost 666,419,200.41
735,985,879.85 446,846,597.09 396,404,251.87 Domestic
458,084,997.48 457,587,116.56 774,137,382.15 740,498,700.42 Oversea
Total
1,124,006,316.97
1,194,070,877.33 1,220,983,979.24 1,136,902,952.29
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements（5）Operating income from top five clients
Name Income Proportion
First 274,139,665.80 22.88% Second 242,573,489.49 20.24% Third 122,686,975.03 10.24% Fourth 41,355,531.72 3.45% Fifth 40,285,400.68 3.36% Total 721,041,062.72 60.17% 34.Business tax and subjoin
Items Amount of current period Amount of previous period
Business tax 1,715,285.95 4,569,235.38 Urban construction tax 1,661,949.35 456,427.96 Education surcharge 1,189,198.70 282,652.28 House taxes 4,255,454.46 2,005,508.50 Other 1,515,360.09 311,147.64 Total 10,337,248.55 7,624,971.76 35.Sales expenses
Items Amount of current period Amount of previous period Wage 3,526,911.70 3,328,467.06 Transportation changes 3,597,049.16 3,570,014.59 Exhibition fee 144,038.99 214,273.75 Advertising expenses 21,367.52 Business expenses 1,500,682.28 803,058.95 Samples and product loss 658,449.42 153,275.77 Other 734,568.30 3,653,457.09 Total 10,161,699.85 11,743,914.73
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 36.Administrative expenses
Amount of current period Amount of previous period Items
Wage 37,908,622.64 43,599,715.93 482,301.29 531,310.04 Property insurance
588,210.55 1,040,496.65 Repair charge
1,266,522.93 1,436,619.00 Business entertainment
1,263,416.46 1,135,661.35 Travel expenses
1,275,950.04 1,487,998.89 Office expenses
3,691,710.81 3,839,832.91 Water and electricity
2,231,023.75 1,364,877.14 Tax
213,591.27 120,304.55 Lawsuit expenses
3,622,603.75 1,710,285.57 Agency expenses
39,308,762.42 30,867,294.24R& D
66,038.00 65,515.20 Board fees
7,388,191.76 7,945,060.22 Other
6,334,069.36 6,370,639.10 Depreciation of fixed assets
Amortization of intangible assets 1,190,516.13 1,205,966.55 Amortization of long-term deferred
30,966.96 134,803.96 expenses
39,235.00 188,323.00 Low consumables amortization
Total 106,901,733.12 103,044,704.30 37.Financial Expenses
Amount of current period Amount of previous period Items
4,387,599.58 6,843,784.81 Interest expenses
-25,566,161.61 -38,467,889.51 Interest income
Exchange loss 17,779,034.00 6,356,852.45 1,721,391.38 818,934.15 Fees and other
-1,678,136.65 -24,448,318.10 Total
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 38.Loss of assets impairment
Amount of current period Amount of previous period Items
I .Losses for bad debts 3,369,678.06 3,364,121.82 II. Losses for falling price of inventory
39,117,206.06 48,814,110.58 III. Goodwill impairment
9,614,758.55 Total 42,486,884.12 61,792,990.95 39.Investment income
(1).Detail
Items Amount of this period Amount of last period Investment income from the disposal of long-term equity
1,467,403.29 2,431,042.20 investment
Hold the investment income during from
3,756,010.47 4,374,824.87 available-for-sale financial assets
Investment income gain from available for sale financial assets 88,006,690.51 Total 5,223,413.76 94,812,557.58 (2).Long-term equity investment income by Equity method
Amount of current Amount of previous Reason to increase or Name
period period decrease
Shenzhen Haohao Property Leasing
708,646.69 635,434.15
Co., Ltd.
Shenzhen Xieli Automobile Co., Ltd. 181,746.48 386,836.52
Shenzhen Changlianfa Printing and
96,981.03 57,218.31
dyeing Company
Jordan Garment Factory -1,007,494.50 -76,209.23
Yehui International Co., Ltd. 1,487,523.59 1,427,762.45
Total 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
Items Amount of current period Amount of previous Recorded in the amount of the period non-recurring gains and losses Total gains from disposal of
235,533.62
non-current assets
Including：Gains from disposal
235,533.62
of fixed assets
Government Subsidy 9,578,484.46 21,420,940.38 9,578,484.46 Other 5,493,962.69 2,465,865.62 5,493,962.69 Total 15,072,447.15 24,122,339.62 15,072,447.15 (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 previous The amount of non-operating Items
period gains& losses
Total of non-current asset
138,610.37 260,642.59 138,610.37 Disposition loss
Incl: loss of fixed assets
138,610.37 260,642.59 138,610.37 disposition
Other 81.57 23.02 81.57
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Total
138,691.94 260,665.61 138,691.94 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 from Foreign currency
changes in fair value translation
Items Subtotal
of available for sale differences of
financial assets financial statements
I. Beginning balance last year 33,421,401.11 -32,283.65 33,389,117.46 II.Changes in the amount last year -30,375,486.14 198,556.03 -30,176,930.11 III. Beginning balance this year 3,045,914.97 166,272.38 3,212,187.35 IV.Changes in the amount this year -1,256,809.58 1,436,844.30 180,034.72 V.The year-end balance 1,789,105.39 1,603,116.68 3,392,222.07
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements 44.Items of Cash flow statement
(1)Other cash received from business operation
Items Amount of current period Amount of previous period
20,100,103.50 54,399,026.00 Government Subsidy
48,207,690.04 41,127,157.51 Bank deposit interest income and other
Total 68,307,793.54 95,526,183.51 (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 Amount of previous period
Items
Structure deposit and income 819,808,170.47 30,591,780.82 Temporary transfer of Xieli assets 25,760,086.27
Total 845,568,256.74 30,591,780.82 (4)Cash paid related to other investment activities
Amount of current period Amount of previous period
Items
Structure deposit investment 766,000,000.00 490,000,000.00 Other financing product investment 1,000,000,000.00
Total 59,223.58 Total 1,766,000,000.00 490,059,223.58 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 currency Closing convert to RMB Items Exchange rate
balance balance
Monetary funds
Including：USD
3,425,159.19 6.9370 23,760,329.30 JPY
2,356,395.00 0.059591 140,419.93 HKD
109,440.03 0.89451 97,895.20 Account receivable
Including：USD
7,685,136.05 6.9370 53,311,788.78 JPY
7,883,134.00 0.059591 469,763.84 HKD
278,280.00 0.89451 360,698.97 Other receivable
Including：USD
37,399.02 6.9370 259,437.00 HKD
403,236.37 0.89451 357,975.67 Account payable
Including：USD
11,496,790.16 6.9370 79,753,233.34 JPY
1,036,568,811.72 0.059591 61,770,172.06 Other payable
Including：USD
81,000.00 6.9370 561,897.00 HKD
1,469,751.89 0.89451 1,314,707.76 Euro
22,500.00 7.3068 164,403.00 Short–term loans
Including：USD
977,571.28 6.9370 6,781,411.97 JPY
93,206,756.00 0.059591 5,554,283.80 Interest payable
Including：USD
5,200.57 6.937 36,076.35
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements JPY
19,211.63 0.059591 1,144.84 VI. Change in consolidation scope
No change of scope of consolidation from last year.
VII. Equity in other entity
1. Equity in subsidiary
（1）Constitute of enterprise group
Share-holding
ratio
Main Registered Acquir Subsidiary Business nature
operation place
Directl Indirec
ed way y tly
Establi Shenzhen Lishi Industry Domestic trade,
Shenzhen Shenzhen
Development Co., Ltd Property Management
100.00
sh Accommodation,
Establi Shenzhen Huaqiang Hotel Shenzhen Shenzhen restaurants, business
sh center; 100.00
Establi Shenfang Property Management Co.,
Shenzhen Shenzhen Property Management
Ltd.
100.00
sh Production of fully Establi Shenzhen Beauty Century Garment
Shenzhen Shenzhen electronic jacquard 100.00
Co., Ltd. sh knitting whole shape
Purcha Shenzhen Shengbo Ophotoelectric
Shenzhen Shenzhen
Operating import and
Technology Co., Ltd
export business 60.00
se Establi Shenzhen Shenfang Import& export
Shenzhen Shenzhen
Operating import and
Co., Ltd.
export business 100.00
sh Establi Shengtou (Hongkong) Co.,Ltd.
Hongkong Hongkong
Production and sales
of polarizer
100.00
sh（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
Holding
The accounting Place of Place of proportion(%)
treatment of Joint venture or associated enterprise operatio registratio Nature
Direct Indirect
investment in n n
ly ly associates Shenzhen Haohao Property Leasing Co., Shenzhe Property
Shenzhen 50.00 Equity method Ltd. n leasing
Shenzhen Xieli Automobile Co., Ltd. Shenzhe Property Equity method Shenzhen 50.00
n leasing
Shenzhen Changlianfa Printing and Shenzhe Property Equity method Shenzhen 40.25
dyeing Company n leasing
Jordan Garment Factory Manufact Equity method Jordan Jordan 35.00
uring
Hongko Manufact Equity method Yehui International Co., Ltd. Hongkong 22.75
ng uring
2.Key financial information of significant joint venture or associated enterprise
Year-beginning balance/ Year-end balance/ Amount
Amount of previous of current period
period
Jointventure：
Total book value of the investment 9,083,538.02 8,193,144.85 Total amount of the pro rata calculation of the following
items
--Net profit 890,393.17 1,022,270.67 --Other Comprehensive income
--Total comprehensive income 890,393.17 1,022,270.67
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Year-beginning balance/ Year-end balance/ Amount
Amount of previous of current period
period
Dividends received from joint ventures this period
Associatedenterprise：
Total book value of the investment 15,765,772.98 14,686,124.21 Total amount of the pro rata calculation of the following
items
--Net profit 577,010.12 1,408,771.53 --Other Comprehensive income 1,436,844.30 198,556.03 --Total comprehensive income 2,013,854.42 1,607,327.56 Dividends received from joint ventures this period 934,205.65 545,386.50 (4) Significant common operation
Proportion /shareportion Main operating Registration
Name Business nature
place place
Directly Indirectly Guanhua Building 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
Items
Fir value Fir value Fir value
measurement items at measurement items measurement items at Total
level 1 at level 2 level 3
I. Consistent fair value
measurement
(1).Available for sale financial
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Closing fair value
Items
Fir value Fir value Fir value
measurement items at measurement items measurement items at Total
level 1 at level 2 level 3
assets 8,378,730.50 8,378,730.50 1.Equity instrument
investment 8,378,730.50 8,378,730.50 Total of Consistent fair value
measurement 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 The parent
The parent capital company of the
company of the Name Registered address Nature
Company's
Company’s vote（RMB’0000
shareholding
ratio
）
ratio
Equity
Shenzhen 18/F, Investment
investment ,
Investment Building, Shennan
Real-estate 2,158,000.00 46.21 49.39 Holdings
Road, Futian
Development
Co.,Ltd.
District, Shenzhen
and Guarantee
The company is authorized and approved to be state-owned independent company by Shenzhen Government, and it Executes financial contributor function on state-owned enterprise within authorization scope.
The finial control of the Company was 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
Amount of current Amount of previous period Related party Content
period
Shenzhen Tianma
Sales polarizer sheet 1,546,092.92 2,077,019.45 Microelectronics Co., Ltd.
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 Amount of previous period
Items
Rewards for the key management
RMB 3.8905 million RMB 4.3809 million personnel
6. Receivables and payables of related parties
（1）Receivables
Amount at year end Amount at year beginning Name Related party
Balance of Bad debt Bad debt Balance of Book
Book Provision Provision Account Shenzhen Tianma
256,427.69 12,821.38 349,938.59 17,496.93 receivable Microelectronics Co., Ltd.
Other Account Anhui Huapeng Textile
3,600,000.00 270,000.00 3,600,000.00 270,000.00 receivable Company
Other Account Shenzhen Dailishi
300,048.12 15,002.41 277,172.52 13,858.63 receivable Underwear Co., Ltd.
（2）Payables
Name Related party Amount at year end Amount at year beginning Shenzhen Xinfang Knitting Co.,
Other payable 244,789.85 244,789.85 Ltd.
Shenzhen Xiangjiang Trade Co.,
Other payable 40,000.00 40,000.00 Ltd.
Shenzhen Changlianfa Printing
Other payable 846,503.89 916,673.69 and dyeing Co., Ltd.
Shenzhen Haohao Property
Other payable 4,954,489.85 4,179,489.85 Leasing Co., Ltd.
Other payable Yehui International Co.,Ltd. 1,214,994.65 1,137,966.35 Other payable Shengbo（Hongkong）Co., Ltd. 315,000.00 315,000.00 Shenzhen Shenchao Technology
Interest payable 42,805,384.31 39,000,625.75 Investment Co., Ltd.
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
Classification
Book value Proportio Proportion(
Amount Amount
n(%) %)
Accounts receivable of
individual significance and
subject to individual
impairment assessment
Accounts receivable subject to
impairment assessment by
518,920.00 100.00 25,945.99 5.00 492,974.01 credit risk characteristics of a
portfolio
Accounts receivable of
individual insignificance but
subject to individual
impairment assessment
Total 518,920.00 100.00 25,945.99 5.00 492,974.01 Year-beginning
Classification
Book balance Provision for bad debts Book value
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Proportio Proportion(
Amount Amount
n(%) %)
Accounts receivable of
individual significance and
subject to individual
impairment assessment
Accounts receivable subject to
impairment assessment by
862,162.70 100.00 43,108.13 5.00 819,054.57 credit risk characteristics of a
portfolio
Accounts receivable of
individual insignificance but
subject to individual
impairment assessment
Total 862,162.70 100.00 43,108.13 819,054.57 In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
Balance in year-end
Aging
Account receivable Bad debt provision Proportion(%)
Within 1 year 518,920.00 25,945.99 5.00 2.Other receivable
(1)Category of Other receivable
Year-end balance
Book balance Provision for bad debts
Classification
Book value Proportio Proportion(
Amount Amount
n(%) %)
Other Accounts receivable of
individual significance and
11,981,464.60 41.08 11,981,464.60 100.00
subject to individual
impairment assessment
Other Accounts receivable
subject to impairment
16,870,177.62 57.85 4,345,920.87 25.76 12,524,256.75 assessment by credit risk
characteristics of a portfolio
Other Accounts receivable of
individual insignificance but
311,486.35 1.07 311,486.35 100.00
subject to individual
impairment assessment
Total
29,163,128.57 100.00 16,638,871.82 12,524,256.75
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Year-beginning
Book balance Provision for bad debts
Classification
Book value Proportio Proportion(
Amount Amount
n(%) %)
Other Accounts receivable of
individual significance and
11,981,464.60 12.98 11,981,464.60 100.00
subject to individual
impairment assessment
Other Accounts receivable
subject to impairment
79,979,624.27 86.68 7,435,914.49 9.30 72,543,709.78 assessment by credit risk
characteristics of a portfolio
Other Accounts receivable of
individual insignificance but
311,486.35 0.34 311,486.35 100.00
subject to individual
impairment assessment
Total 92,272,575.22 100.00 19,728,865.44 72,543,709.78（1）Other Receivable accounts with large amount individually and bad debt provisions were provided
Balance at year-end
Other receivable（Unit）
Provision for bad
Other receivable Proportion% Reason
debts
Jiangxi Xuanli String Co.,
11,389,044.60 11,389,044.60 100.00 Unable to recover Ltd.
Shenzhen Tianlong Industry Unable to recover 592,420.00 592,420.00 100.00
& Trade Co., Ltd. Unable to recover Total 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 Withdrawal proportion Within 1 year 6,242,595.42 312,129.77 5.00 1-2 years 3,200,000.00 320,000.00 10.00 Over 3 year 7,427,582.20 3,713,791.10 50.00 Total 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
Category Year-end balance Year-beginning balance Internal current account
12,244,280.72
75,889,102.97 Unit account
16,806,675.87
16,251,300.27 Other
112,171.98
132,171.98 Total
29,163,128.57
92,272,575.22 4.The ending balance of other receivables owed by the imputation of the top five parties
Bad debt Year-end Portion in total other
provision Name
Nature Age
balance receivables(%)
Year-end balance Unit Over 3
First
11,389,044.60 39.05 11,389,044.60 account years
Internal
Over 3
Second current
7,168,680.72 24.58 3,584,340.36 years
account
Within 1
3,600,000.00 12.35 180,000.00 year
Unit
Third
1,400,000.00
1-2 years
4.80 140,000.00 account
Over 3
75,600.00 0.26 37,800.00 years
Within 1
1,800,000.00 6.17 90,000.00 Unit
year
Fourth
account
1,800,000.00
1-2 years
6.17 180,000.00 Unit Over 3
Fifth
592,420.00 2.03 592,420.00 account years
Total
27,825,745.32 95.41 16,193,604.96 3.Long-term equity investment
Year-end balance Year-beginning balance
Items
Bad debt Bad debt
Book balance Book value Book balance Book value provision provision
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements Investment to
the
1,980,806,395.91 16,582,629.30 1,964,223,766.61 1,772,806,395.91 16,582,629.30 1,756,223,766.61 subsidiary
Investment to
joint ventures
25,115,965.99 266,654.99 24,849,311.00 23,145,924.05 266,654.99 22,879,269.06 and associated
enterprises
Total 2,005,922,361.90 16,849,284.29 1,989,073,077.61 1,795,952,319.96 16,849,284.29 1,779,103,035.67（1）Investment to the subsidiary
Withdra
wn
impairm Closing ent balance of Name Opening balance Increase Decrease Closing balance
provisio impairment n in the provision reportin
g period
Shenzhen
Shengbo
Optoelectronic 1,716,663,070.03 208,000,000.00 1,924,663,070.03 14,415,288.09 Technology
Co., Ltd.
Shenzhen Lisi
Industrial
8,073,388.25 8,073,388.25
Development
Co., Ltd.
Shenzhen
Beauty Century
30,867,400.00 30,867,400.00 2,167,341.21 Garment Co.,
Ltd.
Shenzhen
15,489,351.08 15,489,351.08
Huaqiang Hotel
Shenfang
Property
1,713,186.55 1,713,186.55
Management
Co., Ltd.
Total 1,772,806,395.91 208,000,000.00 1,980,806,395.91 16,582,629.30
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
（2）Investment to joint ventures and associated enterprises
Increase /decrease in reporting period
Withdra
Closing Decre Adjustment of Other Declaration wn
Opening Closing balance of Name
Add ased Gain/loss of other equity of cash impairm
balance balance impairment Other
investment invest Investment comprehensiv chang dividends or ent
provision ment e income es profit provisio
n
I. Joint ventures
Shenzhen Haohao Property
4,397,840.88 708,646.69 5,106,487.57 Leasing Co., Ltd.
Shenzhen Xieli Automobile
4,061,958.96 181,746.48 4,243,705.44 266,654.99 Co., Ltd.
Subtotal
8,459,799.84 890,393.17 9,350,193.01 266,654.99 II. Associated enterprises
Shenzhen Changlianfa
Printing and dyeing
1,871,377.09 96,981.03 1,968,358.12 Company
Jordan Garnent Factory
3,384,014.49 -1,007,494.50 197,807.78 2,574,327.77 Yehui International Co., Ltd.
Shenzhen Textile (Holdings) Co., Ltd. Notes to financial statements
Increase /decrease in reporting period
Withdra
Closing Decre Adjustment of Other Declaration wn
Opening Closing balance of Name
Add ased Gain/loss of other equity of cash impairm
balance balance impairment Other
investment invest Investment comprehensiv chang dividends or ent
provision ment e income es profit provisio
n
Subtotal
14,686,124.21 577,010.12 1,436,844.30 934,205.65 15,765,772.98 Total
4.Business income and Business cost
（1）Business income
Items Amount of current period Amount of previous period
Income from Main Business
59,795,114.50 59,936,965.65
Other Business income
4,128,171.57 4,536,386.18
Total
63,923,286.07 64,473,351.83
Cost from Main Business
8,626,758.74 7,797,417.08
Other Business cost
4,128,171.57 4,536,386.16
Total
12,754,930.31 12,333,803.24
（2）Mainbusiness（Industry）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Rental industry
59,795,114.50 8,626,758.74 59,936,965.65 7,797,417.08
Total
59,795,114.50 8,626,758.74 59,936,965.65 7,797,417.08
（3）Mainbusiness（Production）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Rental industry 59,795,114.50 8,626,758.74 59,936,965.65 7,797,417.08
Total 59,795,114.50 8,626,758.74 59,936,965.65 7,797,417.08
（4）Mainbusiness（Area）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Shenzhen 59,795,114.50 8,626,758.74 59,936,965.65 7,797,417.08
Total 59,795,114.50 8,626,758.74 59,936,965.65 7,797,417.08
（5）Operating income from top five clients
Name Business Income Proportion(%)
26,527,042.35 41.50% First
1,954,323.81 3.06% Second
1,722,407.62 2.69% Third
1,206,874.64 1.89% Fourth4
1,151,045.52 1.80% Fifth
Total 32,561,693.94 50.94% 5.Investment income
1．Detail
Items Amount of current Amount of previous period period
Income from long-term equity investment measured by adopting
8,048,378.51 the cost method
Income from long-term equity investment measured by adopting
1,467,403.29 2,431,042.20 the Equity method
Investment income arising from disposal of long-term equity
427,368.86 investments
Investment income received from holding of available-for–sale
3,078,369.95 3,030,660.52 financial assets
The investment income procure from the available-for-sale
44,345,614.09 financial assets
Total
4,545,773.24 58,283,064.18 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|

||||
|-|-|-|
|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
1. Particulars about current non-recurring gains and loss
Items Amount Notes
Non-current asset disposal gain/loss
-138,610.37
Government subsidies recognized in current gain
and loss(excluding those closely related to the
9,578,484.46
Company’s business and granted under thestate’s
policies)
Single impairment test for impairment of
634,628.72
receivables transferred back to preparation
Other non-business income and expenditures other
5,493,881.12
than the above
Influenced amount of income tax
-71,340.06
Total
15,497,043.87
2. Return on net asset and earnings per share
EPS
Weighted average
Profit as of reporting period
ROE(%)
EPS-basic EPS-diluted
Net profit attributable to the
Common stock shareholders of -4.10 -0.17 -0.17
Company.
Net profit attributable to the
Common stock shareholders of
-4.82 -0.20 -0.20
Company after deducting of
non-recurring gain/loss.
Shenzhen Textile (Holdings) Co., Ltd.
March 29, 2017