Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Shenzhen Textile (Holdings) Co., Ltd.
2018 Annual Report
April 2019
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report I. Important Notice, Table of Contents and Definitions
The Board of Directors , Supervisory Committee, All Directors, Supervisors and Senior executives of the Company hereby guarantees that there are no misstatement, misleading representation or important omissions in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof.
Mr.Zhu Jun, The Company leader, Mr. Zhu Meizhu, Person in charge of accounting works, and Ms.Mu Linying, the person in charge of the accounting department (the person in charge of the accounting )hereby confirm the authenticity and completeness of the financial report enclosed in this annual report.
Other directors attending the Meeting for annual report deliberation except for the followed:
|||||
|-|-|-|-|
|Name of director absent|Title for absent director|Reasons for absent|Attorney|
|Zhu Jun|Chairman|Working reason|Zhu Meizhu|

I. Concerning the forward-looking statements with future planning involved in the Report, they do not constitute a substantial commitment for investors, investors should be cautious with investment risks .
II. The company has the macroeconomic risks, market competition risks and raw material risks. Investors are advised to pay attention to investment risks. For details, please refer to the possible risk factors that the company may face in the “IX Prospects for the future development of the company" in the “Section IV Discussion and Analysis of Business Operation”.
III. The company to remind the majority ofinvestors，Securities Time, China Securities Journal, Securities Daily, Shanghai Securities News , Hongkong Commercial Daily and JuchaoWebsit（ehttp://www.cninfo.com.cn） are the media for information disclosure appointed by the Company, all information under the name of the Company disclosed on the above said media shall prevail, and investors are advised to exercise caution of investment risks. This Report has been prepared in both Chinese and English. In case of any discrepancy, the Chinese version shall prevail.
In this report, the Company has described in detail the existing macro-economic risks as well as operation risks. Investors are advised to refer to the contents concerning risk factors possibly to be confronted with and the countermeasures in the IX(3) Company's future development prospect in Section 4 Discussion and Analysis of the Management.
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Table of Contents
I.Important Notice, Table of contents and Definitions
II. Basic Information of the Company and Financial index
III. Outline of Company Business
IV.Management’s Discussion and Analysis
V. Important Events
VI. Change of share capital and shareholding of Principal Shareholders
VII. Situation of the Preferred Shares
VIII. Information about Directors, Supervisors and Senior Executives
IX. Administrative structure
X. Corporate Bond
XI. Financial Report
XII. Documents available for inspection
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Definition
||||
|-|-|-|
|Terms to be defined|Refers to|Definition|
|Company/The Company/ Shen Textile|Refers to|Shenzhen Textile (Holdings) Co., Ltd|
|Articles of Association|Refers to|Articles of Association of Shenzhen Textile (Holdings) Co., Ltd|
|Actual controller / National Assets Regulatory|||
|||National Assets Regulatory Commission of Shenzhen Municipal|
|Commission of Shenzhen Municipal People's|Refers to||
|||People's Government|
|Government|||
|The Controlling shareholder/ Shenzhen|||
||Refers to|Shenzhen Investment Holding Co., Ltd.|
|Investment Holding Co., Ltd.|||
|Shenchao Technology|Refers to|Shenzhen Shenchao Technology Investment Co., Ltd.|
|SAPO Photoelectric|Refers to|Shenzhen SAPO Photoelectric Co., Ltd.|
|Jinjiang Group|Refers to|Hangzhou Jinjiang Group Co., Ltd.|
|Nitto Denko|Refers to|Nitto Denko Corporation|
|Kunshan Zhiqimei|Refers to|Kunshan Zhiqimei Material Technology Co., Ltd.|
|Line 6|Refers to|TFT-LCD polarizer II phase Line 6 project|
|Line 7|Refers to|Industrialization project of polaroid for super large size TV|
|“CSRC”|Refers to|China Securities Regulatory Commission|
|Company Law|Refers to|Company Law of the People’s Republic of China|
|Securities Law|Refers to|Securities Law of the People’s Republic of China|
|The Report|Refers to|2018 Annual Report|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report II. Basic Information of the Company and Financial index
Ⅰ.Company Information
|||||
|-|-|-|-|
|Stock abbreviation|Shen Textile A ,Shen Textile B|Stock code：|000045、200045|
|Stock exchange for listing|Shenzhen Stock Exchange|||
|Name in Chinese|深圳市纺织(集团)股份有限公司|||
|Chinese abbreviation (If any)|深纺织|||
|English name (If any)|SHENZHEN TEXTILE （HOLDINGS） CO.,LTD|||
|English abbreviation (If any)|STHC|||
|Legal Representative|Zhu Jun|||
|Registered address|6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen|||
|Postal code of the Registered||||
||518031|||
|Address||||
|Office Address|6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen|||
|Postal code of the office||||
||518031|||
|address||||
|Internet Web Site|http://www.chinasthc.com|||
|E-mail|szfzjt@chinasthc.com|||

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

Ⅲ. Information disclosure and placed
|||
|-|-|
|Newspapers selected by the Company for information|Securities Times, China Securities, Shanghai Securities Daily ,Securities|
|disclosure|Daily and Hongkong Commercial Daily.|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|Internet website designated by CSRC for publishing||
||http://www.cninfo.com.cn|
|the Annual report of the Company||
|The place where the Annual report is prepared and||
||Secretarial office of the Board|
|placed||

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

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

The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
□ Applicable√Not applicable
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
□ Applicable√ Not applicable
VI.Summary of Accounting data and Financial index
May the Company make retroactive adjustment or restatement of the accounting data of the previous years
□ Yes√ No
|||||
|-|-|-|-|
|2018|2017|Changed over last year|2016|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||
|-|-|-|-|-|
||||（％）||
|Operating income（RMB）|1,272,356,771.34|1,475,545,719.72|-13.77%|1,198,200,216.42|
|Net profit attributable to the|-22,980,624.93|52,776,101.46|||
|shareholders of the listed company|||-143.54%|-87,270,604.54|
|（RMB）|||||
|Net profit after deducting of|||||
|non-recurring gain/loss attributable|||||
||-65,404,429.81|3,140,446.26|-2,182.65%|-102,767,648.41|
|to the shareholders of listed|||||
|company（RMB）|||||
|Cash flow generated by business|-460,494,321.15|-28,518,702.31|||
||||-1,514.71%|-55,264,465.84|
|operation, net（RMB）|||||
|Basic earning per|-0.0449|0.100|||
||||-144.90%|-0.17|
|share(RMB/Share)|||||
|Diluted gains per|-0.0449|0.100|||
||||-144.90%|-0.17|
|share(RMB/Share)(RMB/Share)|||||
|Weighted average ROE(%)|-0.96%|2.23%|-3.19%|-4.10%|
|||End of|Changed over last year||
||End of 2018|||End of 2016|
|||2017|（％）||
|Gross assets（RMB）|4,619,203,416.79|4,195,746,507.56|10.09%|4,119,586,266.47|
|Net assets attributable to|2,373,329,991.86|2,397,474,603.79|||
|shareholders of the listed company|||-1.01%|2,339,554,176.31|
|（RMB）|||||

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

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||
|-|-|-|-|-|
|Operating income|221,307,388.08|252,955,020.49|433,011,400.70|365,082,962.07|
|Net profit attributable to the|||||
||5,616,717.00|4,030,259.15|2,621,782.96|-35,249,384.04|
|shareholders of the listed company|||||
|Net profit after deducting of|||||
|non-recurring gain/loss attributable|||||
||-4,641,384.38|-6,175,930.54|-7,620,712.88|-46,966,402.01|
|to the shareholders of listed|||||
|company|||||
|Net Cash flow generated by|||||
||-35,263,573.85|-93,587,315.59|-269,937,851.60|-61,705,580.11|
|business operation|||||

Whether significant variances exist between the above financial index or the index with its sum and the financial index of the quarterly report as well as semi-annual report index disclosed by the Company.
√ Yes□ No
||||||||||
|-|-|-|-|-|-|-|-|-|
||Operating income||First quarter||Second quarter||Third quarter|1-3 quarter in total|
||Disclosure amount||221,307,388.08|316,980,662.53||533,270,021.4|||
||Audited Confirmed|221,307,388.08||252,955,020.49||433,011,400.7|||
||Amount||||||||
|discrepancy||0||-64,025,642.04||-100,258,620.70|||

 IX.Items and amount of non-current gains and losses
√Applicable□Not applicable
In RMB
||||||
|-|-|-|-|-|
|Items|Amount (2018)|Amount (2017)|Amount (2016)|Notes|
|Non-current asset disposal|-97,477.14||||
|gain/loss(including the write-off part for||-52,131.44|-138,610.37||
|which assets impairment provision is made)|||||
|Govemment subsidy recognized in current|17,228,202.21||||
|gain and loss(excluding those closely related|||||
|||12,567,426.98|9,578,484.46||
|to the Company’s business and granted|||||
|under the state’s policies)|||||
|Gain/loss on entrusting others with|52,271,862.25||||
|||49,885,730.58|||
|investment or asset management|||||
|Switch back of provision for depreciation of|||||
|account receivable which was singly taken||332,073.93|634,628.72||
|depreciation test.|||||
|Net amount of non-operating income and|1,143,552.02||||
|||-1,175,757.59|5,493,881.12||
|expense except the aforesaid items|||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||
|-|-|-|-|-|
|Other non-recurring Gains/loss items||23,068,858.53|||
|Less :Influenced amount of income tax|48,007.18|1,828,395.90|71,340.06||
|Influenced amount of minor shareholders’|28,074,327.28||||
|||33,162,149.89|||
|equity (after tax)|||||
|Total|42,423,804.88|49,635,655.20|15,497,043.87|--|

For theCompany’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason.
□Applicable√ Not applicable
None of Non-recurring gain /loss items recorgnized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non–recurring gain/loss in the report period.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report III. Business Profile
Ⅰ.Main Business the Company is Engaged in During the Report Period
Whether the company needs to comply with the disclosure requirements of the particular industry
No
1. Main Business the Company
The company's main business covered such the high and new technology industry as represented by LCD polarizer, its own property management business and the retained business of high-end textile and garment In the report period, no significant change happened to the main business of the Company. On one hand, the Company focused on promotion of the polarizer operation capacity, wherein it took measures of optimizing production process and product structure, tightening quality control and highlighting technology research& development among others, and shifted its priority from sales to selling profits in a strategically market-oriented way; on the other hand, it completed the construction and optimization of the Line 6 Project as planned, to be specific, in June 2018, it completed the technical transformation and test run of TFT-LCD and OLED polarizer Line 6 Project that was transferred to fixed assets and embarked on a mass production stage. With regard to optimization and promotion of the Line 6 Project, the Company completed the comprehensive acceleration of the first three processes--pre-processing, extension and coating, introduced shape grinding machines in the rear section of the production line in the first half of year and realized regular mass production in the third quarter, filling the Company's gap in the shape polarizer processing; thirdly, the Company took the initiative to boost construction of the jumbo TV polarizer industrialization project (Line 7) and completed the project approval, feasibility study and examination and approval work. Adopted at the General Meeting of Shareholders in August 2018 through deliberation, the Line 7 Project duly embarked on its construction in September 2018 and passed the EIA in December 2018. The plant and equipment design was optimized in the Line 7 Project on the ground of a significant technical support given by Nitto Denko in terms of production technology, plant design, and AGV path optimization among others; fourthly, to enhance management service and increase benefit of property management enterprises, the Company further intensified all the management service ideas of property management enterprises, took the initiative to cope with all the adverse effects of such factors as economic downturn and market depression on property leasing and management and increased the rental income with effort; fifthly, confronted with the sluggish traditional textile industry, the Company took the initiative to overcome such unfavorable effects as a rise in the cost of raw materials and labor and gave priority to order production through optimization of customer and product structure to bring the money-losing textile business into the black; sixthly, the Company tightened safety and environmental protection work, safeguarded enterprise harmony and stability, and kept giving a priority to safe and environment-friendly production to take the initiative to discharge its social responsibility while pursuing a green, health and sustainable development.
As a type of upstream raw materials of LCD panels and one of essential and fundamental materials in the panel display industry, polarizers are widespread used in a variety of areas, LCD panels and OLED panels for smart phones, tablet PCs and TV sets, instruments, apparatuses, sunglasses, and light filters of camera equipment, to name a few. At the moment, the Company has 6 mass polarizer production lines for making products that cover such areas as TN, STN, TFT, OLED, 3D, dye films, and optical films for touch screens and are primarily used in TV, NB, navigators, Monitor, vehicle-mounted, industrial control, instruments, apparatuses, smart phones,
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report wearable equipment, 3D glasses, sunglasses and other products, based on which, the Company has become a qualified supplier to China Star Optoelectronics Technology (CSOT), BOE, Infovision Optoelectronics (IVO), Shenchao Optoelectronic, LGD, Tianma and other major panel enterprises through constant extension of its marketing channels and building of its own brand.
The Company's main products made in each polarizer production line and their application are as follows:
||||||
|-|-|-|-|-|
|Line|Place|Product breadth|Planned capacity|Main products|
|Line 1|Pingshan|500mm|600,000 m2|TN/STN/ dye film|
|Line 2|Longhua|500mm|1.2 million m2|TN/STN/CSTN|
|Line 3|Longhua|650mm|1 million m2|TN/STN/CSTN/TFT|
|Line 4|Pingshan|1490mm|6 million m2|TN/STN/CSTN/TFT|
|Line 5|Pingshan|650mm|2 million m2|TFT|
|Line 6|Pingshan|1490mm|10 million m2|TFT/OLED|
|Line 7(Under construction)|Pingshan|2500mm|32 million m2|TFT/OLED|

(II) Company's business model
The priority of the polarizer industry is gradually shifting from the conventional research& development-production-sales business model to the customer-oriented business model of joint research& development and full service. The Company reduced production links and costs and created value for customers and a win-win situation through cooperation by understanding customers' needs, making high-quality products through joint research& development and high-standard production management and using advanced polarizer rolling and attaching equipment in conjunction with downstream panel manufacturers' production lines.
(III) Major factors for driving the Company's performance
Refer to "III. Analysis on core competitiveness" in this section for details.
(IV) Development stage and periodic characteristics of the industry where the Company is involved and the Company's position in the industry
Refer to "IX. Company's outlook for future development" in Section IV for details.
In the future, the Company will deepen driving the mixed-ownership reform work and strengthen strategic cooperation based on more than 20 years of industrial operation experience and regional advantages. To be specific, the Company will further optimize its equity structure, invigorate its operation and promote its production technology and business management standards through integration of resources in the polarizer and optical film industries; meanwhile, the Company will spare no effort to push forward the construction of an ultra-wide polarizer production line to occupy the highly lucrative jumbo LCD TV polarizer product market; in addition to working on the polarizer industry, the Company will make a leaping development towards the optical film industry to make SAPO Photoelectric a bigger and stronger enterprise.
II.Major Changes in Main Assets
1.Major Changes in Main Assets
|||
|-|-|
|Main assets|Major changes|
|Equity assets|No major changes|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||
|-|-|-|
||Fixed assets at the end of the reporting period increased by RMB331.7430 million||
|Fixed assets|compared to the beginning of the period, an increase of 50.56%, mainly due to the||
||carry-over of fixed assets in the current phase II of the TFT-LCD polarizer. Line 6.||
|Intangible assets|No major changes||
||Construction in process at the end of the reporting period decreased by RMB306.9489||
|Construction in process|million compared to the beginning of the period, a decrease of 95.165%, mainly due to||
||the carry-over of fixed assets in the current phase II of the TFT-LCD polarizer. Line 6.||
||Notes receivable & Account receivable at the end of the reporting period increased by||
|Notes receivable & Account receivable|RMB292.6303 million compared to the beginning of the period, an increase of 123.62%,||
||Mainly due to the increase in trade volume this year.||
||Prepayment at the end of the reporting period increased by RMB215.2736 million||
|Prepayment|compared to the beginning of the period, an increase of 1565.04%,Mainly due to the||
||increase in prepayments for the current period.||
||Other account receivable at the end of the reporting period decreased by RMB13.8079||
|Other account receivable|million compared to the beginning of the period, a decrease of 48.19%，Mainly due to the||
||decrease in interest receivable.||
||Inventories at the end of the reporting period increased by RMB164.1375 million||
||compared to the beginning of the period, an increase of 59.55%，|Mainly due to the|
|Inventories|||
||increase in the production of semi-finished products after the coordinated production of||
||No. 4 and No. 6 production lines, and the increase in raw materials purchased.||

2. Main Conditions of Overseas Assets
□ Applicable√Not applicable
III.Analysis On core Competitiveness
Whether the company needs to comply with the disclosure requirements of the particular industry
No
（1）Technology advantages.
SAPO Photoelectric is the first domestic national high-tech company which entered into theR&D and production of thepolarizer，We are one of the largest, most technical and professional polarizerR&D teams in the country and has more than 20 years of operating experience in the polarizer industry. Products include TN-type, STN-type, IPS-TFT-type, VA-TFT-type,OLED, vehicle-mounted industrial display, flexible display, 3D stereo and polarizer for sunglasses, and optical film for touch screens, etc., We have proprietary technology for polarizers and new intellectual property rights for various new products. By the end of the reporting period, the company applied for 91 invention patents and was authorized with 66 items, among which: 23 domestic invention patents(8 patents got authorized); 61 domestic utility model patents(54 patents got authorized); 1 overseas invention patent(0 patents got authorized); 6 overseas utility model patents(4 patents got authorized). There were
4 national standards and 2 industrial standards that were developed by the company are approved and then will be
implemented. The company, possessing the two technology platforms “Shenzhen polarizing materials and
engineering laboratory" and "Municipal research and development center", focused on theR&D and the
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report industrialization of the core production technology of LCD polarizer, the developing and industrialization of the new products of OLED polarizer and the “domestication” research on the production materials of polarizer. Through the introduction of various types of sophisticated testing equipments to perfect the test means of small-scale test and medium-scale test, further by improving the incentive system of research and development and building the collaborative innovation platform of “Industry-Study-Research-Utilization” and so forth means, the company comprehensively enhanced the level of research and development.
（2）Talents advantages.
The company has the management team and the senior technical team with strong technical ability, enduring cooperative spirit, rich experience and international vision on the polarizer. The company had engaged overseas technical personnel who have great experiences on advanced polarizer production and established the technology management team with its own technical team and complemented by engaging foreign technical personnel, Since the end of 2017,The Company has with the world-class polaroid manufacturers nitto electrical co., LTD established technical cooperation relations, through technical cooperation, learning advanced polaroid production management idea, through independent innovation technology experience, at the same time to improve their core competitiveness, gradually accumulate their own brands, the advantages of the technology, operation management, and through the distribution of perfecting examination system, and the salaries and incentives focus is shifted to core employees such as management and research and development, giving full play to the subjective initiative of the talents.
（3）Market advantages.
The company has good customer groups not only in domestic market but in foreign market, compared with foreign advanced counterparts, the biggest advantage lies in the localization for supporting, close to the panel market, as well as the strong support of the national policy. In terms of market demand, with the mass production of the 10.5/11-generation TFT-LCD panel production lines under construction and planned for the next few years, the production capacity of high-generation TFT-LCD panels in mainland China will increase significantly in the next few years, the corresponding domestic polaroid film market demand has also increased, and the domestic market is the most important market for polaroid manufacturers, especially in the large-size polarizer market. Mainland polarizer manufacturers will usher in important industry opportunities; in terms of market development, the company takes production material control as the core, technology services as the guide, customer needs as the focus, organically combines production and sales, establishes a rapid response mechanism, fully exploits localization advantages, and uses its own accumulated technology and talents, does a good job of peer-to-peer professional services, forms a stable supply chain and increases market share.
(4) Quality advantages.
The company always adhered to the quality policy of "Satisfying customer demands and pursuing excellent quality" and focused on product quality control. The company strictly controls product performance indicators, standardizes inspection standards for incoming materials, starts with quality improvement and consumption reduction, and achieves simultaneous increase in output and quality; through the introduction of a modern quality management system, the products have passed ISO9001 Quality Management System and ISO14001 Environmental Management System, OHSAS18000 Occupational Health and Safety Management System, QCO80000 System Certification; the product is tested by SGS and meets the environmental protection ,The company had increased the automatic detecting and marking equipments in the beginning section and the ending section, strictly controlled the product quality and improved the product utilization rate and product management efficiency.
（5）Management advantages.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report SAPO Photoelectric has accumulated rich management experiences in more than 20 years in the manufacturing of polarizer, possessing the home most advanced control technology of the production management process of the polarizer and quality management technology and the stable raw material procurement channel so forth management systems. The company had carried out comprehensive benchmarking work, organized the management personnel to learn advanced experiences from customers and peers to force the elevation of management ability, and drew on the foreigncompany’s management experiences of polarizer, optimized the company's organizational structure, reduced the managerial hierarchy and further enhanced the company's management efficiency. After the introduction of the strategic investor, Through close cooperation with Jinjiang Group, we complement each other's strengths, absorb the vitality of private enterprises, continue to implement advanced management systems, reasonable incentive mechanisms, etc., improve the efficiency of decision-making, enhance the speed of market response, improve the research and development incentive system, and also realize the deep integration of the value of the company and its employees and stimulates the new vitality of the business.
（6）Policy advantages.
Polarizer is seen as an essential part of the panel display industry and SAPO Photoelectric in its development has promoted the supply capacity of national polarizers, greatly lowered the dependence of national panel enterprises on imported polarizers, and safeguarded the national panel industry, which serves as a good facilitator to enhancing the overall competitiveness of China's panel industry chain and coordinated development of the whole industry chain of the panel display industry cluster in Shenzhen. Recognized as a national high-tech enterprise, the Company is entitled to the preferential policy for duty-free import of own productive raw materials that cannot be produced at home and frequently gained national, provincial and municipal policy and financial support in its polarizer projects. Meanwhile, the Company tightened supplier management, improved its overall purchasing strategy, and downsized suppliers while introducing a competitive mechanism, wherein focus was given to introduction of new materials at a competitive price, to further lower its production cost and improve its product competitiveness.
IV.Management’s Discussion and Analysis
Ⅰ.General
In 2018, the economic environment change was intensified, and the Company was affected by unfavorable factors such as Sino-US trade friction, large exchange rate fluctuations, intensified market competition, high production unit consumption, poor product structure optimization, and the overall increase in production factors prices. The business situation of polarizer production and operation was not up to expectations.
In 2018, the Company realized the operating income of RMB 1,272.3568 million, a decrease of13.77% over the same period of the previous year; the total profit recorded a loss of RMB 53.4231million, a decrease of162.89% over the same period of the previous year; the net profit attributable to owners of the parent company recorded a loss of RMB 22.9806 million, a YOY decline of143.54%. The main reasons for the Company's losses were: first, due to the adverse impact of the decline in the price of the display terminal during the reporting period, the sales price of polarizer for TV products of the Company declined; secondly, the project of Line 6 was still in the climbing stage after the project was put into production, resulting in a fixed cost of the product unit was relatively high, third, in the
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report reporting period, due to the decline of the exchange rate of RMB against the Japanese yen, the purchase cost of imported raw materials increased, and the exchange loss increased; fourth, due to the decline in the selling price of the products during the reporting period, the provision for inventory falling price increased.
Facing the increasingly severe overall operation situation of polarizer and the weakening global economic situation under the trade protectionism, the Company faced up to the difficulties, overcame the difficulties, gave full play to its internal advantages, deepened and promoted the mixed-ownership reform work, and laid a solid foundation for further transformation and development of the Company. It optimized the product structure of traditional textile business to turn loss into profit; strengthened the management services of property-kind enterprises and improved the efficiency.
Review of the company's key works carried out in 2018 as follows:
(I) Polarizer's operating capability has been improved
In 2018, based on market-oriented, the Company optimized the product structure, expanded the panel product to high-value-added orders such as large-size and thin-form product, and shifted the emphasis from sales volume to sales profit, sped up the introduction and start-up of new projects. Meanwhile, it had comprehensively carried out high-profit machine verification work; second, focusing on technology research and development and the overall strategic deployment, it increased the research and development efforts in new products, new materials, production processes, etc.; third, optimized the production processes, improved the quality control, and controlled the inventory quantity by reducing product quality abnormality and improving the inventory turnover; fourth, actively strived for scientific research policy support funds.
Furthermore, the Company increased research& development of independent intellectual property rights. Throughout the year, the Company applied for 10 patents (including 4 invention patents and 6 utility model patents) and imported 1 PCT patent (utility model patent) into South Korea and Japan respectively. Till December 31, 2018, the Company applied for 91 patents in total (66 licensed), including 23 national invention patents (8 licensed), 61 national utility model patents (54 licensed), 1 international invention patent (0 licensed) and 6 international utility model patents (4 licensed). The Company studied and formulated 4 national standards and 2 industrial standards which have been adopted and put into practice. The Company has two technical platforms--"Shenzhen Polarizing Materials and Technology Engineering Lab" and "Municipal Research and Development Center" where focus is given to research& development and industrialization of key LCD polarizer production techniques, research& development and industrialization of new OLED polarizer products and research on localization of polarizer production materials. The Company raised its research& development standard in all respects by taking measures of introducing all types of precision testing equipment, improving methods of preliminary and pilot tests and research& development incentive system and building an "industry-university-research" integrated innovation platform among others.
(II) Enhancement of management services of property management and textile enterprises for the sake of benefit increase
In 2018, the Company further reinforced all the management service ideas of property management enterprises, handled all the adverse effects caused by economic downturn and market depression to property leasing and management in a scientific way, faced up to difficulty with courage, made great efforts in leasing operation to promote services and stabilize customers, carried out standardized management, enhanced correction of potential safety threats, elaborated management process, lowered disbursement and enhanced efficiency to increase the rental income.
Confronted the depression in the traditional textile industry, the Company took the initiative to overcome effects of such unfavorable factors as a rise in the cost of raw materials and labor and gave priority to order production through optimization of customer and product structure to bring the money-losing textile business into
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report the black.
（III) Completion of construction and optimization of Line 6 Project as scheduled
In view of a certain decline in the price of 32-inch products at the polarizer market at the end of 2017, the Company optimized and promoted the main equipment in the Line 6 at the end of 2017, wherein the full acceleration of the first three processes stood out, filling the gap of the Company in shape polarizer processing. In June 2018, the Company completed the optimization, promotion and test run of the Line 6 Project that was transferred to fixed assets and embarked on a mass production stage in the third quarter.
(IV) Facilitated construction of jumbo TV polarizer industrialization project with effort
In 2018, the Company took the initiative to boost construction of the jumbo TV polarizer industrialization project (Line 7). In the first place, project approval, feasibility study and examination and approval were completed. Adopted at the General Meeting of Shareholders in August 2018 through deliberation, the Line 7 Project duly embarked on its construction in September 2018 and passed the EIA in December 2018. Secondly, the plant and equipment design was optimized in the Line 7 Project on the ground of a significant technical support given by Nitto Denko in terms of production technology, plant design, and AGV path optimization among others. Thirdly, a business unit was set up for the Line 7 Project where independent accounting and business management were implemented to push forward project construction with all the efforts.
（V）Tightened safety and environmental protection and safeguarding of enterprise harmony and stability In 2018, the Company kept giving a priority to safe and environment-friendly production by adhering to the philosophy of safety overriding anything else. As always, the Company highlighted the safety and environmental protection work. Throughout the year, the Company invested RMB 18.71 million in adding and maintaining safe and environment-friendly equipment, predominantly completed upgrading and transformation the waste water processing system and updating the RTO waste gas processing equipment in the Line 6 and updating and eliminating high liquor ratio dying equipment for Beauty Century among other work, and fulfilled100% up-to-standard waste water and gas emission, 0 more-than-average environmental pollution accident and 0 environmental protection irregularity to practically perform its social responsibility.
（VI) Constant reinforcement of foundation and strengthening of primary Party building work
On the ground of implementing and putting into practice the spirit of the 19th National Congress of the Communist Party of China, the Company thoroughly carried out the Party's new deployment and demand for seeing Party self-governance exercised fully and with rigor, carefully fulfilled the entity responsibility of the Party Committee and supervision responsibility of the Disciplinary Inspection Commission, reinforced the system of "one post taking a dual responsibility", and implemented the Party Building Responsibility Statement to guarantee that the Party building work was put into practice; it pushed forward Party building system building and raised the standard of the normalization of the Party building work step by step; it took the initiative to explore and drive the Party building work in enterprises involved in mixed-ownership reform and guided corporate business development by Party building work.
Ⅱ.Main business analysis
1. General
Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 2. Revenue and cost
(1)Component of Business Income
In RMB
|||||||
|-|-|-|-|-|-|
||2018||2017|||
||||||Increase /decrease|
||Amount|Proportion|Amount|Proportion||
|Total operating|1,272,356,771.34||1,475,545,719.72|||
|||100%||100%|-13.77%|
|revenue||||||
|On Industry||||||
|Domestic and||||||
||288,744,806.35|22.69%|490,391,227.85|33.23%|-41.12%|
|foreign trade||||||
|Manufacturing|879,409,830.28|69.12%|869,112,546.94|58.90%|1.18%|
|Lease and||||||
|Management of|98,327,018.46|7.73%|93,781,583.42|6.36%|4.85%|
|Property||||||
|Other|5,875,116.25|0.46%|22,260,361.51|1.51%|-73.61%|
|On Products||||||
|Lease and||||||
|Management of|98,327,018.46|7.73%|93,781,583.42|6.36%|4.85%|
|Property||||||
|Textile|47,188,632.17|3.71%|41,273,987.57|2.80%|14.33%|
|Polarizer sheet|832,221,198.11|65.41%|851,531,250.79|57.71%|-2.27%|
|Trade|288,744,806.35|22.69%|466,698,536.43|31.63%|-38.13%|
|Other|5,875,116.25|0.46%|22,260,361.51|1.51%|-73.61%|
|Area||||||
|Domestic|944,994,550.59|74.27%|1,103,749,604.72|74.80%|-13.69%|
|Overseas|327,362,220.75|25.73%|371,796,115.00|25.20%|-11.95%|

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

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||
|-|-|-|-|-|-|-|
|||||the previous|period of|period of the|
|||||year(%)|previous year (%)|previous year (%)|
|On Industry|||||||
|Domestic and|||||||
||288,744,806.35|271,514,631.70|5.97%|-41.12%|-43.59%|4.12%|
|foreign trade|||||||
|Manufacturing|879,409,830.28|839,415,041.00|4.55%|1.18%|6.74%|-4.97%|
|Lease and|||||||
|Management of|98,327,018.46|25,838,344.67|73.72%|4.85%|-2.75%|2.05%|
|Property|||||||
|On Products|||||||
|Lease and|||||||
|Management of|98,327,018.46|25,838,344.67|73.72%|4.85%|-2.75%|2.05%|
|Property|||||||
|Textile|47,188,632.17|41,092,884.63|12.92%|14.33%|10.23%|3.24%|
|Polarizer sheet|832,221,198.11|798,322,156.37|4.07%|-2.27%|3.44%|-5.29%|
|Trade|288,744,806.35|271,514,631.70|5.97%|-38.13%|-40.80%|4.25%|
|Area|||||||
|Domestic|944,994,550.59|824,950,912.58|12.70%|-14.38%|-11.99%|-2.37%|
|Overseas|327,362,220.75|317,299,372.09|3.07%|-11.95%|-11.11%|-0.92%|

 Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on latest onyear’s scope of period-end.
□ Applicable√Not applicable
(3)Whether theCompany’s Physical Sales Income Exceeded Service Income
√ Yes□ No
|||||||
|-|-|-|-|-|-|
|Classification|Items|Unit|2018|2017|Changes|
|||(0000’ square||||
||Sales||1,079.2|881.73|22.40%|
|||meters)||||
|||(0000’ square||||
|Polarizer sheet|Production||1,110.26|853.29|30.12%|
|||meters)||||
|||(0000’ square||||
||Stock||118.45|87.39|35.54%|
|||meters)||||
||Sales|0000’ pieces|295|249|18.47%|
|Knitted clothing|Production|0000’ pieces|296|234|26.50%|
||Stock|0000’ pieces|49|48|2.08%|

Explanation for a year-on–year change of over30%
√Applicable□ Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report The production volume of polarizers was increased by30.12% and the inventory increased by35.54%, mainly du e to the production of the company's polarizer line 6 in 2018, with increased production and sales.
(4)Degree of Performance of the Significant Sales Contract Signed up to this Report Period
□ Applicable√Not applicable
(5)Component of business cost
Industry and product classification
In RMB
||||||||
|-|-|-|-|-|-|-|
|||2018||2017|||
||||Proportion in the||Proportion in the|Increase/Decrease|
|Industry|Items||||||
|||Amount|operating costs|Amount|operating costs|(%)|
||||(%)||(%)||
|Domestic and|Polarizer sheet,||||||
|||271,514,631.70|23.77%|481,342,760.55|37.04%|-43.59%|
|foreign trade|Textile||||||
||Polarizer sheet,||||||
|Manufacturing||839,415,041.00|73.49%|786,401,813.99|60.51%|7.83%|
||Knitted clothing||||||
|Lease and|||||||
||Rental，||||||
|Management of||25,838,344.67|2.26%|26,568,634.40|2.04%|-2.75%|
||Accommodation||||||
|Property|||||||
|Other|Other|5,482,267.30|0.48%|5,290,510.43|0.41%|3.62%|

 In RMB
||||||||
|-|-|-|-|-|-|-|
|||2018||2017|||
|Classification of|||||||
||||Proportion in||Proportion in|Increase/Decrease|
|products|Items||||||
|||Amount|operation|Amount|operation|(%)|
||||costs(%)||costs(%)||
|Polarizer sheet|Direct materials|633,828,818.77|55.49%|585,570,976.73|45.06%|9.54%|
|Polarizer sheet|Direct labor|31,895,556.85|2.79%|34,391,814.72|2.65%|-7.26%|
|Polarizer sheet|Power costs|23,825,672.61|2.09%|28,735,642.71|2.21%|-17.09%|
||Manufacturing||||||
|Polarizer sheet||108,772,108.14|9.52%|100,422,875.03|7.73%|8.31%|
||costs||||||
|Knitted clothing|Direct materials|21,024,776.26|1.84%|17,539,683.14|1.35%|19.87%|
|Knitted clothing|Direct labor|9,321,761.79|0.82%|8,028,204.05|0.62%|16.11%|
|Knitted clothing|Power costs|1,851,454.61|0.16%|1,720,566.62|0.13%|7.61%|
||Manufacturing||||||
|Knitted clothing||8,903,943.69|0.78%|9,992,050.99|0.77%|-10.89%|
||costs||||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Note
(6)Whether Changes Occurred in Consolidation Scope in the Report Period
□Yes√ No
(7)Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in theCompany’s Report Period
□ Applicable√Not applicable
(8)Situation of Main Customers and Main Supplier
Information of Main Customers
|||
|-|-|
|Total sales amount to top 5 customers (RMB)|789,064,703.69|
|Proportion of sales to top 5 customers in the annual||
||62.02%|
|sales(%)||
|Proportion of the sales volume to the top five customers||
||6.88%|
|in the total sales to the related parties in the year||

Information of theCompany’s top 5 customers
|||||
|-|-|-|-|
|No|Name|Amount(RMB)|Proportion(%)|
|1|Customer 1|378,093,076.16|29.72%|
|2|Customer 2|151,566,770.47|11.91%|
|3|Customer 3|107,607,236.64|8.46%|
|4|Customer 4|87,524,774.55|6.88%|
|5|Customer 5|64,272,845.87|5.05%|
|Total|--|789,064,703.69|62.02%|

 Other Note :
√Applicable□Not applicable
In the report period, the Company bore a relation with the fourth biggest client of the top five clients but the Company's directors, supervisors, senior executives, key management and technical personnel, shareholders with more than5% of shares, actual controllers and other related parties had no direct or indirect rights or interests in any key client.
Principal suppliers
|||
|-|-|
|Total purchase of top 5 Suppliers（RMB）|447,712,128.10|
|Percentage of total purchase of top 5 suppliers In total||
||39.20%|
|annual purchase(%)||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|Proportion of purchase amount from the top 5 suppliers in||
|the total purchase amount from the related parties in the|4.27%|
|year||

Information about the top 5 suppliers
|||||
|-|-|-|-|
|No|Name|Amount（RMB）|Proportion|
|1|Supplier 1|166,425,066.85|14.57%|
|2|Supplier 2|105,561,846.29|9.24%|
|3|Supplier 3|72,276,354.70|6.33%|
|4|Supplier 4|54,677,850.65|4.79%|
|5|Supplier 5|48,771,009.61|4.27%|
|Total|--|447,712,128.10|39.20%|

 Other Notes :
√Applicable□Not applicable
There exists no the association relations between the top five suppliers and the company, and the directors, supervisors and senior management, core technical staff, shareholders with holding of more than5% stocks, actual controllers and other affiliated parties do not have direct or indirect equity of the major suppliers.
3.Expenses
In RMB
||||||
|-|-|-|-|-|
||||Increase/Decrea||
||2018|2017||Notes|
||||se(%)||
|Sale expenses|9,636,559.05|9,940,696.87|-3.06%||
|Administration expenses|88,590,439.30|75,320,512.60|17.62%||
||-971,661.37|-31,171,160.81||1. Exchange loss increases due to|
|||||changes in the yen's exchange rate;|
|Financial expenses|||-96.88%||
|||||2.Increase in interest on bank|
|||||borrowings|
|R & D cost|41,951,786.15|39,036,089.05|7.47%||

4.R& D Expenses
√Applicable □Not applicable
This year, theR&D Department worked on a total of 12 development projects, involving development of jumbo VA TV polarizer products, performance optimization of smart phone polarizers& development of ultra-thin polarizer products, development of OLED polarizers, development of vehicle-mounted industrial control products,
development of thinning PVA films, performance improvement and new product development for TNSTN
products, performance improvement and new product development for dye film products, technical development
and research for UV glue, product development at the new production line--Line 6, development of premium IPS
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report products, development, performance improvement and research of pressure sensitive adhesive materials, development of raw materials suppliers at multiple levels, etc. In the report period, the Company successfully made 225 new products in total (by product model), significantly improved its innovation capacity, further promoted its product competitiveness and kept increasing its market share.
Situation of Research and Development Input by the Company
|||||
|-|-|-|-|
||2018|2017|Increase/Decrease(%)|
|Number of Research and||||
||107|105|1.90%|
|Development persons (persons)||||
|Proportion of Research and||||
||10.18%|10.20%|-0.02%|
|Development persons||||
|Amount of Research and||||
|Development Investment (In|41,951,786.15|39,036,089.05|7.47%|
|RMB)||||
|Proportion of Research and||||
|Development Investment of|3.30%|2.65%|0.65%|
|Operation Revenue||||
|Amount of Research and||||
|Development Investment|0.00|0.00|0.00%|
|Capitalization (In RMB)||||
|Proportion of Capitalization||||
|Research and Development||||
||0.00%|0.00%|0.00%|
|Investment of Research and||||
|Development Investment||||

The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the Business Income Year on Year
□ Applicable√ Not applicable
Explanation of the Reason for Substantial Changes in the Research and DevelopmentInput’s Capitalization Rate and Its Reasonableness
□ Applicable√ Not applicable
5.Cash Flow
In RMB
|||||
|-|-|-|-|
|Items|2018|2017|Increase/Decrease(%)|
|Subtotal of cash inflow received|1,573,802,884.38|1,746,560,969.61||
||||-9.89%|
|from operation activities||||
|Subtotal of cash outflow|2,034,297,205.53|1,775,079,671.92||
|received from operation|||14.60%|
|activities||||
|Net cash flow arising from|-460,494,321.15|-28,518,702.31|-1,514.71%|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||
|-|-|-|-|
|operating activities||||
|Subtotal of cash inflow received|4,176,293,175.68|3,571,994,746.81||
||||16.92%|
|from investing activities||||
|Subtotal of cash outflow for|4,006,115,720.59|3,375,984,019.80||
||||18.67%|
|investment activities||||
|Net cash flow arising from|170,177,455.09|196,010,727.01||
||||-13.18%|
|investment activities||||
|Subtotal cash inflow received|630,493,275.82|216,890,764.68||
||||190.70%|
|from financing activities||||
|Subtotal cash outflow for|367,419,548.31|151,388,307.46||
||||142.70%|
|financing activities||||
|Net cash flow arising from|263,073,727.51|65,502,457.22||
||||301.62%|
|financing activities||||
|Net increase in cash and cash|-27,665,904.11|231,125,702.76||
||||-111.97%|
|equivalents||||

Note to the year-on-year change of the relevant data
√Applicable□Not applicable
1. The net cash flow from operating activities decreased by RMB 431,975,618.84 compared with the previous period, a decrease of1,514.71%, mainly due to the increase in pre-payments for the increase in trade volume and the increase in the purchase of raw materials for the production of Line 6.
2. The net cash flow from financing activities increased by 197,571,270.29 yuan from the previous period, a decrease of301.62%, which was mainly due to the increase in short-term borrowings.
Notes to the big difference between cash flow from operating activities and net profit in the reporting year√Applicable□Not applicable
During the reporting period, the net cash flow from the Company's operating activities was -460,494,321.15 yuan, and the net profit for the year was -62,649,374.26 yuan. There were significant differences between the afore-said two, which was mainly due to the increase in pre-payments for the increase in trade volume and the increase in purchases of raw materials for the production Line 6.
Ⅲ.Analysis of Non-core Business
√ Applicable□Not applicable
In RMB
||||||
|-|-|-|-|-|
|||Proportion in total|||
||Amount||Explanation of cause|Sustainable (yes or no)|
|||profit|||
|||||The dividends from theshare-participating enterpriseand the contracting feespossess the sustainability, butthe proceeds from the trustwealth management does not|
||||Obtained the dividends from||
||||the share-participating||
|Investment income|51,793,705.47|-96.95%|enterprise, obtained||
||||contracting fees, and gains||
||||from trust wealth||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||
|-|-|-|-|-|
||||management|possess the sustainability|
|Impairment of|||Loss of inventory price||
||106,348,320.75|-199.07%||Have the sustainability|
|assets|||falling, loss of bad debts||
|Non-operating|||Mainly due to the insurance||
||1,265,178.66|-2.35%||Not sustainable.|
|income|||claims||
|Non-operating|||Mainly due to the payment||
||219,103.78|-0.41%||Not sustainable.|
|expenses|||of compensation||
||||Mainly government||
|Other income|17,228,202.21|-32.04%||Have the sustainability|
||||subsidies||

Ⅳ.Condition of Asset and Liabilities
1.Condition of Asset Causing Significant Change
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of 2018||End of 2017||Proportio||
|||Proportion in|||n||
|||||||Notes to the significant change|
||Amount|the total|||increase/d||
|||assets(%)|||ecrease||
||1,141,759,374.60||1,165,048,108.83|||The increase in total assets in the|
|Monetary fund||24.72%||27.77%|-3.05%|current period has led to a decline in|
|||||||the proportion of monetary funds.|
|Accounts|528,454,015.59||192,503,077.70|||Mainly due to the increase in trade|
|||11.44%||4.59%|6.85%||
|receivable||||||volume this year|
||439,752,718.77||275,615,176.16|||Mainly due to the increase in the|
|||||||production of semi-finished products|
|Inventories||9.52%||6.57%|2.95%|after the coordinated production of No.|
|||||||4 and No. 6 production lines, and the|
|||||||increase in raw materials purchased.|
|Investment real|167,997,941.98||173,105,806.27||||
|||3.64%||4.13%|-0.49%||
|estate|||||||
|Long-term|32,952,085.66||20,380,734.56||||
|equity||0.71%||0.49%|0.22%||
|investment|||||||
||987,876,247.55||656,133,200.19|||The completion of the second phase of|
|||||||the TFT-LCD polarizer project to fixed|
|Fixed assets||21.39%||15.64%|5.75%||
|||||||assets led to an increase in the|
|||||||proportion of fixed assets.|
||15,621,286.64||322,570,173.73|||The second phase of the polarizer for|
|Construction in|||||||
|||0.34%||7.69%|-7.35%|TFT-LCD was completed and|
|process|||||||
|||||||transferred to fixed assets, resulting in|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||
|-|-|-|-|-|-|-|
|||||||a decrease in the proportion of|
|||||||construction in progress.|
|Short-term loans|411,522,111.40|8.91%|88,638,181.45|||The increase in raw materials|
|||||2.11%|6.80%|purchased by the exchange of|
|||||||borrowings.|
|Long-term loans||0.00%|40,000,000.00|||Return Shenchao technology|
|||||0.95%|-0.95%||
|||||||borrowing.|

2.Asset and Liabilities Measured by Fair Value
√ Applicable□Not applicable
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Gain/loss on||||||
||||Cumulative fair|Impairment|Purchased|||
||Amount at year|fair value||||Sold amount in|Amount at|
||||value change|provisions in|amount in the|||
|Item||change in the||||the reporting||
||beginning||recorded into|the reporting|reporting||year end|
|||reporting||||period||
||||equity|period|period|||
|||period||||||
|Financial assets||||||||
|3.||||||||
|Available-for-sa||||||||
||7,994,294.63||-2,874,398.17||||5,119,896.46|
|le financial||||||||
|assets||||||||
|Subtotal of||||||||
||7,994,294.63||-2,874,398.17||||5,119,896.46|
|financial assets||||||||
|Total|7,994,294.63||-2,874,398.17||||5,119,896.46|
|Financial||||||||
||0.00||||||0.00|
|Liability||||||||

Did great change take place in measurement of the principal assets in the reporting period ?
□ Yes√ No
3. Restricted asset rights as of the end of this Reporting Period
Not applicable
Ⅴ.Investment situation
1. General
□Applicable√Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 2.Condition of Acquiring Significant Share Right Investment during the Report Period
□Applicable√Not applicable
3.Situation of the Significant Non-equity Investment Undergoing in the Report Period
□ Applicable√ Not applicable
4.Investment of Financial Asset
（1）Securities investment
□ Applicable√ Not applicable
Nil
（2）Investment in Derivatives
□ Applicable√ Not applicable
Nil
5.Application of the raised capital
√ Applicable□ Not applicable
（1）General application of the raised funds
√ Applicable□ Not applicable
In RMB10,000
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||Amount of|||Total|||
|||||||Accumulat|Proportion||||
|||||||||||Amount of|
||||||raised|||Amount of|||
|||||||ive amount|of raised||Use and||
||||Total||capital of|||the||the Raised|
|||||Total||of raised|capital of||Whereabo||
|||Total|Amount of||which the|||Unused||Fund with|
|Year of|Way of|||amount of||capital of|which the||uts of the||
|||raised|the Raised||purpose|||Raised||over 2|
|Raising|Raising|||Raised||which the|purpose||Unused||
|||capital|Fund Used||was|||Fund at||Years’|
|||||Funds||purpose|has been||Raised||
||||at the||changed in|||the||Idling|
|||||||has been|changed||Fund||
||||||the report|||Current|||
|||||||changed|(%)||||
||||||period|||Period|||
||||||||||All||
||||||||||deposited||
||||||||||in the||
||Non-publi||||||||||
|2013||96,175.1|26,291.36|46,667|0|30,927.22|32.16%|30,333.61|special||
||c issue||||||||||
||||||||||account||
||||||||||for the||
||||||||||raised||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||||funds.||
|Total|--|96,175.1|26,291.36|46,667|0|30,927.22|32.16%|30,333.61|--|0|
|Note to use of raised capital|||||||||||
|During the reporting period, the Company actually used the raised funds of 262.9136 million yuan, and the accumulated use of raised|||||||||||
|funds was 466.67 million yuan, of which 111.9479 million yuan of raised funds was actually used for the second phase of the line 6|||||||||||
|project of TFT-LCD polarizer-and the accumulated use of raised funds for it was 315.7043 million yuan; the actual use of the raised|||||||||||
|funds for the 7th line project was RMB 150.9657 million, with the accumulated use of raised funds for it was RMB 150.9657 million.|||||||||||

（2）Promised projects of raised capital
√ Applicable□ Not applicable
In RMB10,000
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||Date||||
||||||Accumul|Investme|||||
|||Total|||||when the||||
||||||ated|nt||||Has any|
||Project|raised|Total|Amount|||project|Benefit|||
||||||amount|progress|||Has the|material|
||changed(i|capital|investme|invested|||has|realized|||
|Committed investment|||||invested|ended the|||predicted|change|
||ncluding|invested|nt after|in the|||reached|in the|||
|projects and investment|||||at the end|reporting|||result be|taken|
||partial|as|adjustme|reporting|||the|reporting|||
||||||of the|period(%|||realized|place in|
||change)|committe|nt (1)|period|||predicted|period|||
||||||reporting|)(3)=(2)(||||feasibility|
|||d|||||applicabl||||
||||||period(2)|1)|||||
||||||||e status||||
|Committed investment projects|||||||||||
|Phase-II|||||||||Not||
||||||||June||||
|project of polarizer|Yes|96,175.1|70,034|11,194.79|31,570.43|45.08%||-2,445.79|applicabl|Yes|
||||||||7,2018||||
|sheet for TFT-LCD|||||||||e||
|The utilization of the|||||||||Not||
|surplus raised funds|No|||15,096.57|15,096.57||||applicabl|No|
|（Line 7 project）|||||||||e||
|Subtotal of committed|||||||||||
||--|96,175.1|70,034|26,291.36|46,667|--|--|-2,445.79|--|--|
|investment projects|||||||||||
|Subtotal of committed investment projects|||||||||||
|No|||||||||||
|Total|--|96,175.1|70,034|26,291.36|46,667|--|--|-2,445.79|--|--|
|Situation about not|||||||||||
|coming up to schemed|||||||||||
|progress or expected|Not applicable||||||||||
|revenue and the reason|||||||||||
|( in specific project)|||||||||||
|Notes to significant|According to the latest situation of the industry development, the original second phase construction||||||||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|change in feasibility of|scheme of the TFT-LCD polarizer was optimized, and then according to the results concluded by the|
|the project|experts, the company decided to continue to promote the construction of the No.6 line project. At the same|
||time, in the light of there was a large funds gap between the actual raised capital and the planned raised|
||capital for the second phase project, then by comprehensive considerations of the company’s production|
||line scale and the operation pressure, the company decided to terminate the project of No.7 line, and the|
||corresponding amount of funds of RMB309.2722 million(including interests) for No.7 line project shall be|
||changed for permanently supplementing the liquidity. The Proposal on Alteration of the Use of Part of the|
||Raised Capital for the Second Phase Project of TFT-LCD Polarizer was examined and approved in the|
||2015 annual shareholder meeting on April 21, 2016..|
|Amount, application|Not applicable|
|and application||
|progress of the||
|unbooked proceeds||
|About the change of|Not applicable|
|the implementation site||
|of the projects invested||
|with the proceeds||
|Adjustment of the|Not applicable|
|implementation way of||
|investment funded by||
|raised capital||
|About the initial|Not applicable|
|investment in the||
|projects planned to be||
|invested with the||
|proceeds and the||
|replacement||
|Using the idle proceeds|Not applicable|
|to supplement the||
|working capital on||
|temporary basis||
||Applicable|
||On August 31, 2018, in the company's second extraordinary shareholders’ meeting of 2018, the “Proposalon the Use of Surplus Raised Funds to Invest in the Large-scale TV Polarizer Industrialization Project(Line 7)” was reviewed and approved, agreeing to continue to deposit RMB 134.7172 million in theoriginal special account of raised funds for the follow-up expenditure of line 6 project and the remainingsurplus raised funds shall be used for the investment of line 7 project, with the amount shall be subject tothe interest settlement of the bank on the day the funds are transferred out. According to the usearrangement for the surplus raised funds, on November 12, 2018, the Company transferred the surplusraised funds for the No. 6 line project by RMB 405.8311 million to the newly opened special account ofraised funds for project of Line 7, which will be used for the ultra-large-size TV polarizer industrializationproject (Line 7), and as of November 12, 2018, the balance of the special account for raised funds of line 6|
|Balance of the||
|proceeds in process of||
|project implementation||
|and the cause||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
||was RMB 80.3569 million. The reasons for the surplus of the raised funds were as follows: 1. the interestincome and the investment income of the bank wealth management products were generated during thedeposit of the raised funds; 2.to grasp the opportunity of the rapid development of the domestic polarizerindustry and accelerate the construction of the No. 6 line project, the Company had in advance investedsome funds in the second phase of the polarizer project of Line 6, and in view of the fact that the fundsraised at the time were in place, as there was a large funding gap between the actual raised funds and theplanned and the original investment project needed to be re-demonstrated, the Company did not replace theadvance investment in time after the raised funds were received; 3. the second phase of the polarizerproject was subsidized by the National Development and Reform Commission and the ShenzhenMunicipal Government after the project was established ,which had been all put into the projectconstruction according to the requirements, thereby reduced the investment of the raised fundsaccordingly; 4. to ensure the original investment project to have a good market prospect and profitability,the Company optimized the construction plan of the original raised-funds investment project of No. 6 line,and it adopted the cost control, optimized the production process and took other measures to achievereasonable savings under the premise of ensuring the original design and technical conditions of theproject.|
|About application and|As of December 31, 2018, the balance of the raised funds was 303.3361 million yuan, of which 48.3008|
|status of the proceeds|million yuan was deposited in the special account of raised funds for project of the line 6, and the special|
|unused|account of raised funds for project of the line 7 had 255.0353 million yuan.|
||As of December 31, 2018, the accumulated investment for the second phase of Line 6 project was 699.58|
||million yuan, accounting for 99.89% of the total investment of 700.34 million yuan after the change, of|
|Problems existing in||
||which the actual investment payment was 652.4692 million yuan (using the raised funds of 315.7043|
|application of the||
||million yuan, using its own funds and government funds of 336.7649 million yuan). As of December 31,|
|proceeds and the||
||2018, the cumulative investment to the Line 7 project was 819.6749 million yuan, accounting for 41.83%|
|information disclosure||
||of the total investment of 1,959.4984 million yuan, of which the actual investment payment was 344.7704|
|or other issues||
||million yuan (using the raised funds of 150.9657 million yuan, using its own funds and government funds|
||of 193.8047 million yuan).|

（3）Changes of raised funds projects
□ Applicable√ Not applicable
Nil
Ⅵ.Significant Asset and Right Offering
1.Situation of Significant Asset Sale
□ Applicable√ Not applicable
Nil
2.Situation of Substantial Stake Sale
□ Applicable√ Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual ReportⅦ.Analysis of the Main Share Holding Companies and Share Participating Companies
√ Applicable□ Not applicable
Situation of Main Subsidiaries and the Joint-stock Company with over10% net profit influencing to the Company In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Company||Sectors|Registered||||Operating||
||Company type|||Total assets|Net assets|Turnover||Net Profit|
|Name||engaged in|capital||||profit||
|Shenzhen|||||||||
|Lisi||Domestic|||||||
|||||22,569,173.2|19,085,808.6||||
|Industrial|Subsidiary|trade, Lease|2,360,000.00|||8,197,802.35|3,904,801.09|3,150,624.42|
|||||9|9||||
|Development|||||||||
|Co., Ltd.|||||||||
|Shenzhen||Accommodat|||||||
||||10,005,300.0|29,751,081.5|22,913,499.8|11,542,533.5|||
|Huaqiang|Subsidiary|ion, business|||||4,663,088.29|3,456,946.73|
||||0|3|0|2|||
|Hotel||center;|||||||
|Shenfang|||||||||
|Property||Property||10,698,821.8||10,155,195.2|||
||Subsidiary||1,600,400.00||3,483,222.03||470,518.45|291,930.16|
|Management||management||2||9|||
|Co., Ltd.|||||||||
|||Production of|||||||
|Shenzhen|||||||||
|||fully|||||||
|Beauty|||||||||
|||electronic|25,000,000.0|47,678,530.9|27,463,571.6|51,287,550.9|||
|Century|Subsidiary||||||3,440,990.70|3,318,279.36|
|||jacquard|0|6|9|0|||
|Garment Co.,|||||||||
|||knitting|||||||
|Ltd.|||||||||
|||whole shape|||||||
|SAPO||Production|||||||
||||583,333,333.|3,672,595,28|2,693,297,67|953,843,059.|-101,070,513|-99,883,239.|
|Photoelectric|Subsidiary|and sales of|||||||
||||00|8.68|3.78|26|.08|36|
|Co., Ltd.||polarizer|||||||
|Shenzhen|||||||||
|||Operating|||||||
|Shenfang|||||||||
|||import and||94,382,820.2|16,215,190.5|170,532,287.|||
|Import &|Subsidiary||5,000,000.00||||2,891,553.61|2,158,905.18|
|||export||2|0|72|||
|export Co.,|||||||||
|||business|||||||
|Ltd.|||||||||
|Shengtou|||||||||
|||Sales of||21,536,315.9||70,670,771.6|||
|（HK）Co.,|Subsidiary||HKD10,000||5,505,226.90||711,955.39|351,790.95|
|||polarizer||4||7|||
|Ltd.|||||||||

Acquirement and disposal of subsidiaries in the Reporting period
□ Applicable√ Not applicable
Note
The financial data of Shengbo Photoelectric Company mentioned in the table above are the financial
statements data of its parent company and non-consolidated statements data. Shenzhen Shenzhen Textile Import
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report and Export Co., Ltd. and Shengbo Photoelectric Company Limited are Shengbo Photoelectric Company.
The fluctuation of subsidiary Shengbo Optoelectronic Performance and the reasons for its change are described in detail in Section IV Operating Situation Discussions and Analysis and Section V Important Matters. Section III: Performance of Commitments. The commitment made by shareholders and counterparties in reporting annual operating performance.
VIII.Special purpose vehicle controlled by the Company
□ Applicable√ Not applicable
Ⅸ.Prospect for future development of the Company
1. The Development Trend of the Industry
In the wake of price stabilization of LCD panels and capacity release in advanced-line panel production lines in Mainland China, polarizer market demand has risen and major polarizer enterprises around the world have seen a modified profitability as a whole. On a global scale, the shipping area of jumbo panels accounts for more than80% of the total shipping area, indicating that the shipping area of LCD TV panels has remained flat as a whole in recent years. Regarding the industry, jumbo is inevitable and gradual mass production of 10.5-line is bound to steadily increase the supply capacity of jumbo panels and more quickly further popularize jumbo TV sets. The dominance of production at the world's LCD TV panel market has sped up its shift from the 8.5-line to 10.5-line, hence the jumbo will be a focus of competition among manufacturers on market in the future. In the wake of the 10.5-line capacity release, the supply and demand situation in the global LCD panel market is not promising, which will faster drive a variation in the industrial pattern. After hitting the highest growth rate in 2018, the world's panel display area demand is expected to still continue to rise but at a slow growth in 2019-2021. It is estimated that panel manufacturers in Mainland China will account for more than40％ at the world's LCD TV panel market in 2019 in respect of capacity, which will rise to50％+ in 2022. Besides, as polarizer enterprises expand production slower than panel enterprises, it is expected that polarizers will be short of supply in 2019. The polarizer industry shows a certain periodicity. Most panel display terminal products are consumables in a stable annual demand but as electronic products, they are to be substituted by new techniques in 2-3 years in average in the long run. As a result, the polarizer industry will basically keep pace with such products in upgrading.
At the moment, the global polarizer industry mainly comprises three echelons: major manufacturers in Japan and South Korea stand in the first echelon; some famous Japanese and Korean enterprises and enterprises in Taiwan, P. R. China stand in the second echelon; the Company stands in the third echelon and serves as the predominant enterprise of polarizer research& development, production and sales in China.
2.The company's development strategy
In 2018, the Company integrated and utilized its existing assets, optimized allocation of its resources, and improved the total asset operation capacity to give a full support to the development of its main business--polarizers.
In the period of the "13th Five-Year Plan", the Company will keep quickly driving the polarizer industry to go professional, mass and efficient, seize the good opportunity of great development in the industry, make full use of policies of the state and Shenzhen in favor of development of the polarizer industry, further deepen the mixed-ownership reform, boost industrial integration, accelerate ultra-wide production line construction, raise the production technology and business management standards with effort, enhance talent team building, give full
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report play to effects of the long-term incentive mechanism and inspire its vitality to boost a constant growth of its main business--polarizers.
Looking ahead in 2019, the United States will not put an end to the increase of interest rates; affected by the China-US trade friction, though under the instruction of the monetary policy of "handling the relation of stabilizing growth, deleveraging and tightening regulation", China need further relieve its tension of liquidity and recover its macro economy and will sustain increasingly more pressure of a slowdown in economic growth and face a severe challenge of "two-way pressure" inflicted by developed countries and other developing countries in manufacturing. China proposes to implement the strategy of "building a manufacturing power" and drives the structural reform at supply side in manufacturing and right now, it is in a critical period of overcoming difficulties in building a manufacturing power. The industry where the Company is involved is an essential part of the electronic information industry and sees a fierce market competition where world-class giant enterprises from Japan and South Korea are at an advantage with high strengths in raw materials, scientific research and funds among others and highly resistant to macro economic fluctuation risks while the Company may sustain some risks in performance if an unpredictable fluctuation occurs to the macro economy.
3.Possible risks
1. Macroeconomic Risks
Looking ahead in 2019, the United States will not put an end to the increase of interest rates; affected by the China-US trade friction, though under the instruction of the monetary policy of "handling the relation of stabilizing growth, deleveraging and tightening regulation", China need further relieve its tension of liquidity and recover its macro economy and will sustain increasingly more pressure of a slowdown in economic growth and face a severe challenge of "two-way pressure" inflicted by developed countries and other developing countries in manufacturing. China proposes to implement the strategy of "building a manufacturing power" and drives the structural reform at supply side in manufacturing and right now, it is in a critical period of overcoming difficulties in building a manufacturing power. The industry where the Company is involved is an essential part of the electronic information industry and sees a fierce market competition where world-class giant enterprises from Japan and South Korea are at an advantage with high strengths in raw materials, scientific research and funds among others and highly resistant to macro economic fluctuation risks while the Company may sustain some risks in performance if an unpredictable fluctuation occurs to the macro economy.
2. Market risks
Due to the characteristics of rapid replacement and upgrading of display end-product, there is higher requirement for the timely response ability of technology and products, while the price decline-trend also increasingly squeezes the profit space of upstream polarizer business. China's manufacturing industry has faced a long-term “lack of cores and screens”. The polarizer industry is an important part of China's future manufacturing industry, and the process of domestic substitution of polarizers is in progress. With the gradual mass production of the 10.5-generation line, the ultra-large size market will usher in new changes.If the company's technology and products cannot timely respond to the needs of the application fields or the market competition leads to lower prices, the company will get an adverse impact.
3. Raw-material risks
At present, the key raw materials required for the manufacture of polarizer, PVA film and TAC film, are basically monopolized by Japanese companies, making the company constrained in the upstream supporting raw material production line and production technology. Compared with the complete industry chain model of
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report upstream raw materials - polarizer - display panel from international manufacturers, the company does not realize industrial integration effect for the time being due to lack of corresponding supporting material. The price of the main film materials is affected by thesupplier’s production capacity, market demand and the Yen exchange rate, which affects the unit cost of thecompany’s products.
4.The key work in 2019
1. Deepening reform and highlighting the main business to improve the current business situation
Firstly, SAPO Photoelectric will deepen reform, enhance communication, facilitate integration, adjust and optimize implementation paths for cooperation with Jinjiang Group with effort and solve a plurality of contradictions in operation. For that end, the Company will focus on operation of its own main business and promote the profitability of all its niches; secondly, the Company will further deepen industrial collaboration and cooperation, give full play to the advantage of synergy in all respects such as production technology, purchase of raw materials and sales, and take such specific measures as accelerating production lines, improving the product yield, importing new materials, enhancing quality but lowering disbursement to invigorate its operation and promote the operation capacity of its polarizer business in all respects.
2. Driving construction of the Line 7 Project and tightening project's purchasing process supervision
The Company will speed up construction of the Line 7 Project and complete project construction as planned with a guarantee on both quality and quantity. Granted with a construction permit, the project is expected to enter the civil construction stage in April 2019 and lay a foundation for being available for moving equipment in March 2020. During construction, the Company will ensure that routine operation department will well do their work and that the supervision committee and supervision work unit will implement their assignments and carry out corresponding supervision management measures to the letter, and practically tighten the effective supervision of the discipline inspection on engineering construction to guarantee that the new project is an honest project. 3. Driving property management enterprises to promote service quality, guarantee earnings and take the initiative to seek new growth points
Concerning leasing rate and rate of recovery of funds, property management enterprises will take advantage of customer resources accumulated in years to overcome unfavorable effects, further promote service quality, continue to facilitate the property leasing promotion plan and fulfill a reasonable increase in the rental of new contracts concluded to render a solid cash flow support to the Company; work pertaining to leasing of Guanhua Building will be facilitated and good customers will be selected to guarantee a stable return on leasing of Guanhua Building.
4. Enhancing talent echelon building and reinforcing core competitiveness of company
At a critical period of transformation and development, the Company has a rapid business development, hence it is advised to highlight team building of all kinds of talents, adhere to the orientation of employing talents with both morality and professional competence, wherein morality comes first, implement a reform in human resources work, get through the occupational development channel, reserve talents beforehand, continue to optimize the compensation mechanism and system, and stabilize the talent team to keep promoting its core competitiveness and sustainable development capacity.
5. Having a clear picture of the current work safety situation and ensuring no major work safety accident The safety director of each enterprise shall carefully do the work safety work with a highly responsible attitude and take the initiative to put into practice the superior work safety deployment and work safety duties level by level and adopt a work safety assessment.
At all levels, the Company must be vigilant in work safety, continue to handle work safety, energy conservation& emission reduction, and environmental protection among other work in each enterprise, implement the work safety responsibility system in all respects, and tighten the construction of the long-term work
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report safety mechanism and inspection and correction of potential safety threats to guarantee no work safety liability accident throughout the year and fully recognize, and institutionalize work safety, discharge duties and take measures in this respect.
6. Boosting Party building work, cultivating enterprise culture and strengthening construction of the Party conduct and a clean organization
Under the instruction of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Company will thoroughly study and implement the spirit of the 19th National Congress of the Communist Party of China, continue toe boost construction of the enterprise culture, reinforce and fulfill the entity responsibility of the Party Committee and supervision responsibility of the Disciplinary Inspection Commission, enhance construction of the Party conduct and a clean organization and continue to carry out the in-depth special education activity of "studies on the theoretical and practical issues of party building".
7. Elevating risk management standard in all respects and tightening risk control
In 2019, the Company will spare no effort to do the internal control and total risk management work, improve the risk management awareness, hike risk control standard, make an evaluation, study and judgment on major risks, and prepare corresponding risk response measures and solutions to well combine total risk management with routine operation. The Company will further tighten risk control, guarantee the safety of the trading business, decrease capital risks, and assure safety of state-owned assets, wherein as far as financial products are concerned, the Company will follow state-owned asset supervision procedures, give a consideration to risk control methods beforehand, and select low-risk guaranteed financial services to ensure safety in both the principal and return.
Ⅹ.Particulars about researches, visits and interviews received in this reporting period
1.Particulars about researches, visits and interviews received in this reporting period
Applicable√□ Not applicable
The company did not receive researches, visits and interviews received in this reporting period.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report V. Important Events
ⅠSpecification of profit distribution of common shares and capitalizing of common reserves
Formulation, implementation and adjustment of profit distribution policy of common shares especially cash dividend policy during the reporting period
□ Applicable√ Not applicable
The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into share capital in the past three years(with the reporting period inclusive):
Based on the needs of the construction of TFT-LCD polarizer project and the company business development, there were no cash dividends and there were no capital reserves converted into share capital in the last three years. Dividend distribution of the latest three years
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
||||||||Ratio of the|
||||||Ratio of the|||
||||||||total cash|
||||||cash bonus|||
||||||||bonus (other|
||||Ratio of the||by other|||
|||Net profit|||||ways|
||||cash bonus in||ways in net|||
|||attributable to|||||included) in|
||||net profit||profit|||
|||common stock||Proportion for|||net profit|
||||attributable to||attributable|Total cash||
||Amount for|shareholders of||cash bonus by|||attributable|
|Year for|||common stock||to common|bonus(other||
||cash bonus(tax|listed company||other ways(i.e.|||to common|
|bonus shares|||shareholders of||stock|ways||
||included)|in||share|||stock|
||||listed company||shareholders|included)||
|||consolidation||buy-backs)|||shareholders|
||||contained in||of listed|||
|||statement for|||||of listed|
||||consolidation||company|||
|||bonus year|||||company|
||||statement||contained in|||
||||||||contained in|
||||||consolidation|||
||||||||consolidation|
||||||statement|||
||||||||statement|
|2018|0.00|-22,980,624.93|0.00%|0.00|0.00%|0.00|0.00%|
|2017|0.00|52,776,101.46|0.00%|0.00|0.00%|0.00|0.00%|
|2016|0.00|-87,270,604.54|0.00%|0.00|0.00%|0.00|0.00%|

 In the reporting period, both theCompany’s profit and the parentcompany’s retained earnings were positive however not cash dividend distribution proposal has been put forward.
□Applicable√ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable√ Not applicable
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report III. Commitments to fulfill the situation
1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor, senior management personnel and other related parities.
√ Applicable□ Not applicable
||||||||
|-|-|-|-|-|-|-|
|||||Time of|||
||||||Period of||
||Commitm|||making||Fulfillme|
|Commitment||Type|Contents||commitme||
||ent maker|||commitme||nt|
||||||nt||
|||||nt|||
||||As Shenzhen Investment Holdings Co., Ltd., the controlling||||
||||shareholder of the company, committed when the||||
||||restricted-for-sale shares from the shares restructuring were||||
||||listed for circulation in the market: i. if they plan to sell the||||
|||Share|shares through the securities exchange system in the future,||||
||Shenzhen||||||
|Commitment||reductio|and the decrease of the shares they hold reaches 5% within||Sustained|Under|
||Investmen|||August 4,|||
|on share||n|6 months after the first decrease, they will disclose an||and|Fulfillme|
||t Holdings|||2006|||
|reform||commit|announcement indicating the sale through the company||effective|nt|
||Co., Ltd.||||||
|||ment|within two trading days before the first decrease; ii. They||||
||||shall strictly observe the “Guidelines on Transfer of||||
||||Restricted-for-sale Original Shares of Listed||||
||||Companies” and the provisions of the relevant business||||
||||principles of Shenzhen Stock Exchange.||||
|Commitment|||||||
|in the|||||||
|acquisition|||||||
|report or the|||||||
|report on|||||||
|equity changes|||||||
|Commitment|||||||
|made upon the|||||||
|assets|||||||
|replacement|||||||
|||Commit|Shenzhen Investment Holdings Co., Ltd. signed a “Letter of||||
|||ments|Commitment and Statement on Horizontal Competition||||
|||on|Avoidance” when the company issued non-public stocks in||||
||Shenzhen||||||
|Commitments|||||Sustained|Under|
|||horizont|2009. Pursuant to the Letter of Commitment and Statement,||||
||Investmen|||October 9,|||
|made upon||al|Shenzhen Investment Holdings Co., Ltd. and its wholly||and|Fulfillme|
||t Holdings|||2009|||
|issuance||competit|owned subsidiary, subsidiaries under control or any other||effective|nt|
||Co., Ltd.||||||
|||ion,|companies that have actual control of it shall not be||||
|||related|involved in the business the same as or similar to those||||
|||transacti|Shenzhen Textile currently or will run in the future, or any||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||
|-|-|-|-|-|-|-|
|||on and|businesses or activities that may constitute direct or indirect||||
|||capital|competition with Shenzhen Textile; if the operations of||||
|||occupati|Shenzhen Investment Holdings Co., Ltd. and its wholly||||
|||on|owned subsidiaries, subsidiaries under control or other||||
||||companies that have actual control of it compete with||||
||||Shenzhen Textile in the same industry or contradict the||||
||||interest of the issuer in the future, Shenzhen Investment||||
||||Holdings Co., Ltd. shall urge such companies to sell the||||
||||equity, assets or business to Shenzhen Textile or a third||||
||||party; when the horizontal competition may occur due to||||
||||the business expansion concurrently necessary for||||
||||Shenzhen Investment Holdings Co., Ltd. and its wholly||||
||||owned subsidiaries, subsidiaries under control or other||||
||||companies that have actual control of it and Shenzhen||||
||||Textile, Shenzhen Textile shall have priority.||||
||||The commitments during the period non-public issuance in||||
||||2012: 1. Shenzhen Investment Holdings, as the controlling||||
||||shareholder of Shenzhen Textile, currently hasn't the||||
||||production and business activities of inter-industry||||
||||competition with Shenzhen Textile or its share-holding||||
||||subsidiary. 2. Shenzhen Investment Holdings and its||||
||||share-holding subsidiaries or other enterprises owned the||||
|||Commit|||||
||||actual control rights can't be directly and indirectly on||||
|||ments|||||
||||behalf of any person, company or unit to engage in the||||
|||on|||||
||||same or similar business in any districts in the future by the||||
|||horizont|||||
||||form of share-holding, equity participation, joint venture,||||
|||al|||||
||Shenzhen||cooperation, partnership, contract, lease, etc., and ensure||||
|||competit|||Sustained|Under|
||Investmen||not to use the controlling shareholder's status to damage the|July 14,|||
|||ion,|||and|Fulfillme|
||t Holdings||legitimate rights and interests of Shenzhen Textile and|2012|||
|||related|||effective|nt|
||Co., Ltd.||other shareholders, or to gain the additional benefits. 3. If||||
|||transacti|||||
||||there will be the situation of inter-industry competition with||||
|||on and|||||
||||Shenzhen Textile for Shenzhen Investment Holdings and its||||
|||capital|||||
||||share-holding subsidiaries or other enterprises owned the||||
|||occupati|||||
||||actual control rights in the future, Shenzhen Investment||||
|||on|||||
||||Holdings will promote the related enterprises to avoid the||||
||||inter-industry competition through the transfer of equity,||||
||||assets, business and other ways. 4. Above commitments||||
||||will be continuously effective and irrevocable during||||
||||Shenzhen Investment Holdings as the controlling||||
||||shareholder of Shenzhen Textile or indirectly controlling||||
||||Shenzhen Textile.||||
||Shenzhen||1.The company undertakes not to provide loans, loan||||
|Equity||Other||November|December|Under|
||Textile(Ho||guarantees, and any other forms of financial assistance to||||
|incentive||commit||27,2017|27,2021|Fulfillme|
||ldings)||the incentive objects for obtaining the restricted stocks in||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||
|-|-|-|-|-|
|commitment|Co., Ltd.|ment|the incentive plan; 2. The company undertakes that there isno circumstance that the stock incentive shall be prohibitedas stipulated in the provisions of Article 7 of the “Measuresfor the Management of Stock Incentives of ListedCompanies”.|nt|
|Other|||||
|commitments|||||
|made to|||||
|minority|||||
|shareholders|||||
|Executed|||||
||Yes||||
|timely or not?|||||
|If the|||||
|commitments|||||
|failed to|||||
|complete the|||||
|execution|||||
|when expired,|||||
|should|||||
||Not applicable||||
|specifically|||||
|explain the|||||
|reasons of|||||
|unfulfillment|||||
|and the net|||||
|stage of the|||||
|working plan|||||

2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is still in the forecast period, the company has assets or projects meet the original profit forecast made and the reasons explained
√Applicable□Not applicable
|||||||||
|-|-|-|-|-|-|-|-|
|Asset or Project||||||||
||Start date of|End date of the|Forecast|Actual||||
|Name of|||||Reason for less|Disclosure date|Reference for|
||the forecasting|forecasting|earnings(RMB|earnings(RMB||||
|Earnings|||||than forecast|of the Forecast|the Forecast|
||period|period|10,000)|10,000)||||
|Forecast||||||||
|Subsidiary-||||||December31,2016|See on|
|SAPO|||||||http://www.cni|
||||||See on|||
|Photoelectric||December|||||nfo.com.cn|
||January 1,2017||10,000|-9,726.87|http://www.cni|||
|Introduces||31,2018|||||announcement|
||||||nfo.com.cn|||
|strategic|||||||(Announcemen|
|investors|||||||t No.:2016-67)|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Commitments made by shareholders or counterparties in reporting annual operating results
√ Applicable□Not applicable
I. Basic information
In order to improve the operation of Shengbo Optoelectronics, at the end of 2016, the company introduced Jinjiang Group as a strategic investor by increasing capital and shares at Shengbo Optoelectronics level. The company, Shengbo Optoelectronics, Jinjiang Group and Jinjiang Group, a limited partnership established by Jinjiang Group as actual controllers, jointly signed the Capital Increase Agreement of Shenzhen Shengbo Optoelectronics Technology Co., Ltd. and Jinhang Investment as capital increase. The main body subscribes for40% of Shengbo Optoelectronics, with an additional capital of 135.64 million yuan. In order to give full play to the institutional and institutional advantages of private enterprises and the resource advantages of state-owned enterprises, the company signed the "Cooperation Agreement" with Jinjiang Group and Jinhang Investment on the premise of reaching consensus on the future management and development of Shengbo Optoelectronics. Jinjiang Group undertook performance commitment to Shengbo Optoelectronics in order to achieve better results after introducing strategic investors.
II. Performance Commitments and Compensation Arrangements
According to the Cooperation Agreement, Jinjiang Group will give full play to the advantages of Jinjiang Group in system, mechanism, industry, management and successful experience of industry integration after investing in Shengbo Optoelectronics through Jinhang Airlines, and make performance commitments to Shengbo Optoelectronics.
The sales revenue and net profit in 2017, 2018 and 2019 are not less than 1.5 billion yuan/50 million yuan, 2 billion yuan/100 million yuan and 2.5 billion yuan/150 million yuan, respectively. In principle, the sales revenue of polarizers and related optical film products accounted for no less than70% of the total revenue in 2017 and no less than80% after 2018. If the above performance fails to be achieved, Jinjiang Group shall make up the difference of net profit in cash within 10 days from the date of completion of annual sales revenue and annual net profit statistics.
The calculation method of the actual annual earnings is based on the current effective accounting standards in China, and is determined by the results of the special audit issued by the qualified accounting firms hired by the company.
III. Completion of Performance Commitments
1. Achievement of Shengbo Optoelectronics Performance Commitment in 2018
In 2018, Shengbo Optoelectronics Co., Ltd. and Jinjiang Group cooperated actively to cope with many problems, such as fiercer market competition, rising commodity prices leading to high procurement costs of consumables and great changes in internal organizational structure. Through actively adjusting product sales structure, introducing low-cost raw materials, and establishing small and medium-sized business departments, Shengbo Optoelectronics Co., Ltd. was facing severe external conditions. Under the circumstances, to ensure the stable operation of the company and reduce the impact of adverse factors on the company. Audited by Zhongqin Wanxin Accounting Firm (Special General Partnership), Shengbo Optoelectronics realized business income of 1.125 billion yuan in 2018, net profit of - 97.2687 million yuan, and sales revenue of polarizers and related optical film products accounted for74.01% of the total revenue. Therefore, Shengbo Optoelectronics has not fulfilled its performance commitment in 2018.
2. Explanation of Performance Commitment Differences
Although sales of key products continued to increase this year, the sales scale of products was not up to expectations. The difference between the promised sales revenue, net profit and the proportion of sales revenue of
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report polarizers and related optical film products to total revenue was 87,545.9 million yuan, 19,726.87 million yuan and5.99% respectively. According to the "Cooperation Agreement", Jinjiang Group needs to make up the difference of net profit by cash.
3. Reasons for unfulfilled performance commitments
The main reasons for the unfulfilled performance commitment are as follows: firstly, due to the adverse effects of shrinking sales of display terminals and falling prices during the reporting period, the sales price of TV products of the company declined with polarizers; secondly, the project of TFT-LCD Phase II Line 6 is still in the climbing stage after putting into operation, resulting in higher fixed cost per unit of products; thirdly, the occupancy rate of small and medium-sized markets with original profits declined due to the relocation of production lines of Longhua Plant. Fourthly, due to the impact of the falling exchange rate of RMB, the purchase cost of imported raw materials increased and the exchange loss increased during the reporting period. Fifthly, due to the decline in product prices, the preparation for the reduction of inventory prices increased during the reporting period.
IV.Compensation for Performance Commitment and the Measures to be taken in the Follow-up
1. The company and Jinjiang Group have conducted in-depth analysis and frank exchanges on the objective situation and main reasons for the unfulfilled performance commitments in 2018, formulated the objectives and measures for improving the main business in 2019, and further consultation on the follow-up cooperation matters. At the same time, preliminary communication has been conducted on the compensation of performance commitments in 2018. Jinjiang Group has proposed that it should be based on the actual situation and fair and reasonable. Principle and properly handle the issue of performance compensation through consultation. Before the two sides reached an agreement, Jinjiang Group temporarily failed to fulfill its performance commitment compensation obligations under the Cooperation Agreement. At present, the company has not consulted with Jinjiang Group on the compensation of performance commitment, and the two sides have not yet reached a performance compensation scheme.
2. The company will continue to urge Jinjiang Group to fulfil its compensation obligations as stipulated in the Cooperation Agreement. It will continue to pay attention to the progress of the matter and timely fulfill its relevant review procedures and announcement obligations.
3. Whether the company and Jinjiang Group can reach an agreement is still uncertain. The actual amount of compensation for performance and the time of payment for compensation are not yet predictable. If no agreement can be reached, the company will settle the compensation for performance commitment through arbitration according to the agreement of the Cooperation Agreement.
IV. Particulars about the non-operating occupation of funds by the controlling shareholder
□ Applicable√ Not applicable
No non-operating occupation from controlling shareholders and its related party in the period.
V. Explanation of the Supervisory Committee and Independent Directors (If applicable)on the QualifiedAuditor’s Report Issued by the CPAs.
□ Applicable√ Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report VI. Explain change of the accounting policy, accounting estimate and measurement methods as compared with the financial reporting of last year.
√ Applicable□ Not applicable
On June 15, 2018, Ministry of Finance released a Notice on Revision and Issue of 2018 Format of Financial Statements for General Enterprises (Cai Kuai[2018] No.15) to revise the format of financial statements for general enterprises. The Company started to implement the above notice as scheduled by the Ministry of Finance after adopting a proposal at the fifteenth meeting of the seventh board of directors on October 29, 2018.
Before implementing the Notice on Revision and Issue of 2018 Format of Financial Statements for General Enterprises (Cai Kuai[2018] No.15), the Company followed the Accounting Standard for Business Enterprises-Basic Standard, all the particular accounting standards, guides to application of accounting standards for business enterprises, interpretations and announcements of accounting standards for business enterprises and other relevant regulations promulgated by Ministry of Finance. Upon the alteration, the Company started to comply with relevant terms in the Notice on Revision and Issue of 2018 Format of Financial Statements for General Enterprises (Cai Kuai[2018] No.15) released by the Ministry of Finance on June 15, 2018 in its accounting policies. In addition to the above alteration of the accounting policies, others still followed the prior relevant rules, guides, announcements and other relevant terms issued by the Ministry of Finance.
Effects of alteration of accounting policies on the Company's beginning amount of this year and amount of the prior year
|||
|-|-|
|Contents and reasons for the changes ofaccounting policies|Statement items affected|
|Retroactive adjustment||
|"Accounts receivable" and "notes receivable"were incorporated into "accounts receivableand notes receivable" for presentation|Notes receivable|
||Account receivable|
||Notes receivable & Account receivable|
|"Interests receivable", "dividends receivable"and "other receivables" were combined into"other receivables" for presentation|Interest receivable|
||Dividend receivable|
||Other receivable|
|"Accounts payable" and "notes payable" werecombined into "accounts payable and notespayable" for presentation|Notes payable|
||Account Payable|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|Contents and reasons for the changes ofaccounting policies|Statement items affected|
||Notes payable & Account payable|
|"Management expenses" fell into"management expenses" and "R&D expenses"for presentation|Management expenses|
||R & D cost|

 This alteration of accounting policies had no impact on the Company's total assets, total liabilities, net asset and net profit in the current period and before the alteration of accounting policies.
VII. Explain retrospective restatement due to correction of significant accounting errors in the reporting period
□Applicable√ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII. Explain change of the consolidation scope as compared with the financial reporting of last year.□Applicable√ Not applicable
No changes in consolidationstatement’s scope for the Company in the period.
IX. Engagement/Disengagement of CPAs
CPAs currently engaged
|||
|-|-|
||Peking Certified Public Accountants（Special GeneralPartnership）|
|Name of the domestic CPAs||
|Remuneration for domestic accounting firm (RMB10,000)|60|
|Continuous life of auditing service for domestic accounting firm|8|
|Name of domestic CPA|Lan Tao, Liu Ru|
|Continuous fixed number of year for the auditing service||
||5|
|provided by CPA in domestic CPA Firms||

Has the CPAs been changed in the current period
□ Yes√ No
Description of the CPAs, financial adviser or sponsor engaged for internal control auditing
√Applicable□Not applicable
During the reporting period, the company engaged Peking Certified Public Accountants(Special General Partnership) as the
company's internal control audit agency for 2018, with an audit remuneration of RMB 250,000 (including travel
expenses and other expenses).
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report X.Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly Report□Applicable√ Not applicable
XI.Bankruptcy reorganization
□Applicable√ Not applicable
No bankruptcy reorganization for the Company in reporting period.
XII.Significant lawsuits and arbitrations of the Company
□Applicable√ Not applicable
No significant lawsuits and arbitrations occourred in the reporting period.
XIII. Situation of Punishment and Rectification
□Applicable√ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Credit Condition of the Company and its Controlling Shareholders and Actual Controllers
√Applicable□ Not applicable
During reporting period, there was no effective judgment of a court and large amount of debt maturity that the company, its controlling shareholders and actual controller failed to perform or pay off.
XV. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock Ownership Plan or Other Employee Incentive Measures
√Applicable□ Not applicable
(I) Formulation of Restricted Stock Incentive Plan
On November 27, 2017, the Proposal on the Company's Implementation Measures of Evaluation for the 2017 Restricted Stock Incentive Plan (Draft) and summary and the Proposal on the Company's Implementation Measures of Evaluation for the 2017 Restricted Stock Incentive Plan was examined and approved in the 7th board meeting of thecompany’s 7th session board of directors, and related proposals agreed to fulfill the relevant procedures and related proposals agreed to fulfill the relevant procedures
On December 11, 2017, the SASAC agreed in principle to implement the restricted stock incentive plan. On December 14, 2017, the company held the third extraordinary shareholders' general meeting in 2017, which reviewed and approved the Proposal on the Company's Implementation Measures of Evaluation for the 2017 Restricted Stock Incentive Plan (Draft) and summary and Proposal on the Company's Implementation Measures of Evaluation for the 2017 Restricted Stock Incentive Plan and other issues.
(II) Information on granting the restricted stock
On December 14, 2017, the company held the 8th meeting of the 7th Board of Directors, which reviewed and approved the “Proposal on Adjusting the List of Incentive Objects and Granting Quantity of the 2017 Restricted
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Stock Incentive Plan” and the “Proposal on Granting the Restricted Stocks to Incentive Objects”. The restricted shares actually granted by this stock incentive plan totaled 4,752,300 shares, and 119 incentive objects were granted, with the granting price was 5.73 yuan per share.
On December 27, 2017, thecompany’s restricted stock completed the grant registration formalities at China Securities Depository and Clearing Corporation Shenzhen Branch.
XVI. Material related transactions
1. Related transactions in connection with daily operation
√Applicable□ Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Whe|||||
||||||||||ther|||||
|||||||||Tradin|over|||||
|||||||||g limit|the|||||
|||||Princi||||||||||
||||||||||||Marke|||
||||Subjec|ple of||Amou|Rati|approv|appr||t price|||
||||ts of|pricin|||o in|||Way||Date||
|Relate||Type|||Price|nt of|||||of|||
||||the|g the|||simil|ed|oved|of||of|Index of information|
|d|Relationship|of|||of|trade|||||similar|||
||||related|relate|||ar|||pay||disclos|disclosure|
|parties||trade|||trade|RMB1|||||trade|||
||||transac|d|||trade|（RM|limit|ment||ure||
|||||||0,000)|||||availa|||
||||tions|transa|||s|||||||
|||||ctions||||B’000|ed or||ble|||
|||||||||0）|not|||||
||||||||||(Y/|||||
||||||||||N)|||||
||Kunshan|Pur||||||||||||
||Zhiqimei is a|cha|Purch|||||||||||
|Kunsh||||||||||||||
||holding|se|ase of|||||||||||
|an||||||||||||||
||subsidiary of|of|optica|||||||||||
|Zhiqi||||||||||||||
||SAPO|pro|l film|||||||||||
|mei||||Marke||||||||Augus|http://www.cninfo.com.cn|
||Photoelectric,|duct|produ||Agree|||||||||
|Materi||||t||4,877.|71.6|||Tran|4,877.|t|On August 15,|
||wherein the|s|cts||ment|||8,000|No|||||
|als||||Princi||1|3%|||sfer|1|15,201|1018(Announcement|
||Company owns|fro|and||price|||||||||
|Techn||||ple||||||||8|No.2018-35)|
||40% of its|m|releva|||||||||||
|ology||||||||||||||
||equity and|rela|nt|||||||||||
|Co.,||||||||||||||
||Jinjiang Group|ted|mater|||||||||||
|Ltd.||||||||||||||
||is a shareholding|part|ials|||||||||||
||enterprise|ies||||||||||||
|Kunsh|Kunshan|Sale||||||||||||
||||||||||||||http://www.cninfo.com.cn|
|an|Zhiqimei is a|of|Selling|Marke||||||||||
||||||Agree|||||||Augus|On August 15,|
|Zhiqi|holding|good|polariz|t||8,752.|10.6|||Tran|8,752.|||
||||||ment|||21,600|No|||t 15,|1018(Annoucement|
|mei|subsidiary of|s to|ing|Princi||47|6%|||sfer|47|||
||||||price|||||||2018|No.2018-35)|
|Materi|SAPO|relat|film|ple||||||||||
|als|Photoelectric,|ed||||||||||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Techn|wherein the|parti|||||||||||
|ology|Company owns|es|||||||||||
|Co.,|40% of its||||||||||||
|Ltd.|equity and||||||||||||
||Jinjiang Group||||||||||||
||is a shareholding||||||||||||
||enterprise||||||||||||
||||||14,585||||||||
|Total|||--|--||--|30,200|--|--|--|--|--|
||||||.48||||||||
|Details of any sales return of a large|||||||||||||
||||Not applicable||||||||||
|amount|||||||||||||
|Give the actual situation in the report|||||||||||||
|period where a forecast had been|||||||||||||
|made for the total amounts of routine|||Not applicable||||||||||
|related-party transactions by type to|||||||||||||
|occur in the current period(if any)|||||||||||||
|Reason for any significant difference|||||||||||||
|between the transaction price and the|||Not applicable||||||||||
|market reference price (if applicable)|||||||||||||

2. Related-party transactions arising from asset acquisition or sold
□Applicable√ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period.
3. Related-party transitions with joint investments
□Applicable√ Not applicable
No main related transactions of joint investment outside for the Company in reporting period.
4. Credits and liabilities with related parties
√Applicable□Not applicable
Was there any non-operating credit or liability with any related party?
√ Yes□No
Due from related parties
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||Newly|Amount||Interest inthe||
||||Does there|||||||
|||||Opening|increased|recovered in|||Ending|
||||exist|||||||
|Related|Relationshi|Causes of||balance|amount in|the|||balance|
||||non-operati||||Interest rate|reporting||
|parties|p|formation||(RMB|the|reporting|||(RMB10,00|
||||on capital|||||period(RMB10,000)||
|||||10,000)|reporting|period(RM|||0)|
||||occupancy?|||||||
||||||period(RM|B10,000)||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
||||||B’0000)|||
|Shenzhen||||||||
|Dailishi|Sharing|Investment||||||
||||No|44.05|100|102.4|41.64|
|Underwear|company|dividend||||||
|Co., Ltd.||||||||
|Anhui||||||||
|Huapeng|Joint|Investment||||||
||||No|180|||180|
|Textile Co.,|venture|dividend||||||
|Ltd.||||||||
|Kunshan|||||||8,406.26|
||Jingjiang|||||||
|Zhiqimei||||||||
||Group's|Sale||||||
|Materials|||No|0|10,266.4|1,860.14||
||shareholdin|products||||||
|Technology||||||||
||g company|||||||
|Co., Ltd.||||||||
||The|||||||
||Chairman|||||||
|Shenzhen||||||||
||of the|||||||
|Tianma||||||||
||Company|Sale||||||
|Microelectr|||No|155.55|286.78|352.88|89.44|
||was Vice|products||||||
|onics Co.,||||||||
||Chairman|||||||
|Ltd.||||||||
||of the|||||||
||company|||||||
|Influence of the related||||||||
|rights of credit and||||||||
|liabilities upon the||||||||
|||In the report period, Increase investment income of RMB1 million.||||||
|company’s operation||||||||
|results and financial||||||||
|position||||||||

Due to related parties
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Amount|||Interest inthe reportingperiod(RMB10,000)||
||||||Amount||||
|||||newly|||||
||||Opening||repaid in the|||Ending|
|||Causes of||increased in|||||
|Related parties|Relationship||balance(RM||reporting|Interest rate||balance|
|||formation||the reporting|||||
||||B10,000)||period(RMB|||(RMB10,000)|
|||||period(RMB|||||
||||||10,000)||||
|||||10,000)|||||
|Kunshan|||||||||
||Jingjiang||||||||
|Zhiqimei|||||||||
||Group's||||||||
|Materials||Purchase|0|1,740.57||||1,740.57|
||shareholding||||||||
|Technology|||||||||
||company||||||||
|Co., Ltd.|||||||||
|Shenzhen|||||||||
||Sharing|Current|24.48|||||24.48|
|Xinfang|||||||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||
|-|-|-|-|-|-|-|
|Knitting Co.,|company|amount|||||
|Ltd.|||||||
|Shenzhen|||||||
|Changlianfa|||||||
||Sharing|Current|||||
|Printing &|||117.84|||117.84|
||company|amount|||||
|dyeing Co.,|||||||
|Ltd.|||||||
|Shenzhen|||||||
|Haohao|||||||
||Sharing|Current|||||
|Property|||410.45|35||445.45|
||company|amount|||||
|Leasing Co.,|||||||
|Ltd|||||||
|Yehui|||||||
||Sharing|Current|||||
|International|||113.54|5.47||119.01|
||company|amount|||||
|Co., Ltd.|||||||
|SAPO （HK）|Sharing|Current|||||
||||31.5|||31.5|
|Co., Ltd.|company|amount|||||
|Shenzhen|||||||
|Shenchao|Controlled||||||
|||Interest|||||
|Technology|by the same||4,557.07|163.47|1,000|3,720.54|
|||payable|||||
|Investment|party||||||
|Co., Ltd.|||||||
|Influence of the related rights|||||||
|of credit and liabilities upon|||||||
|||In the report period, Increase financial interest expense of RMB 1.6347 million.|||||
|the company’s operation|||||||
|results and financial position.|||||||

5. Guarantee Provided by Related Parties
In February 2018, Jinjiang Group issued a guarantee letter to Shengbo Photoelectric Company, a subsidiary of the company, and made the following commitments on its proposed trade business carried out by Shengbo Photoelectric Company. If any problems (including but not limited to capital or other problems) arise in the course of trade transactions, the full responsibility of Jinjiang Group shall be borne by Jinjiang Group. In January 2019, Henan Fuxin Investment Co., Ltd. pledged10% of its stake in Hualian Development Group Co., Ltd. to Shengbo Photoelectric in accordance with the company's requirements and coordinated by Jinjiang Group, in order to guarantee the performance of Shengbo Photoelectric's above-mentioned trade business creditor's rights.
In addition, Jinjiang Group issued a guarantee letter for the financial products "Wanxiang Trust-Yuquan 204 Single Fund Trust" and "Wanxiang Trust-Yuquan 205 Single Fund Trust" purchased by Shengbo Photoelectric Company. It promised that if Wanxiang Trust could not return Shengbo Photoelectric Principal and Income in time, the principal and Income of Wanxiang Trust should be returned 10 days after the expiration date of the principal and income period. Within one working day, Jinjiang Group will transfer its own funds to Shengbo Photoelectric designated account for repayment of principal and income. As of December 31, 2018, the
principal and income of the above trust funds have been recovered.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 6. Other significant related-party transactions
√Applicable□Not applicable
To ensure the construction progress of polarizer with TFT-LCD, SAPO Photoelectric, Shenzhen Shenchao Technology Investment Co., Ltd. and Shenzhen Development Bank, Shenzhen Branch, First Tower Subbranch signed “Contract on Consigned Loan”, of whose main content is: Shenzhen Shenchao Technology Investment Co., Ltd applied to the bank for 200 million RMB of construction of dedicated plant and auxiliary projects for polarizer with TFT-LCD for SAPO Photoelectric, The term of the loan is 108 months from the day when the first installment of entrusted loan is transferred to the account of the Company. The interest rate of the entrusted loan is the rate of commercial loans with a term of 5 years quoted by People's Bank of China minus2%. In case of adjustment of such commercial loan rate, the rate of commercial loans with a term of 5 years after adjustment minus2% shall apply as interest rate of entrusted loan from the first day of the next month after the adjustment of basic interest rate. The term of the loan is 108 months from the day when the first installment of entrusted loan is transferred to the account of the Company. As of December 31,2018,The Company actually received a loan of RMB 40 million.
Website for temporary disclosure of the connected transaction
||||
|-|-|-|
|Announcement|Date of disclosure|Website for disclosure|
|Announcement of related Transactions||http//www.cninfo.com.cn. Announcement|
||December 12, 2009||
|||No.2009-55|
|Announcement of Resolutions of the Secondprovisional shareholders’ general meeting||http//www.cninfo.com.cn. Announcement|
||December 30,2009||
|||No.2009-57|
|Announcement of related Transactionsprogress||http//www.cninfo.com.cn. Announcement|
||July 1, 2010||
|||No.2010-26|

XVII.Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□Applicable√ Not applicable
No trusteeship, contract or leasing for the Company in reporting period.
(2) Contract
□ Applicable√ Not applicable
No any contract for the Company in the reporting period.
(3) Lease
□Applicable√ Not applicable
No any lease for the Company in the reporting period..
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 2.Guarantees
□Applicable√ Not applicable
No any guarantees for the Company in the reporting period..
3.Situation of Entrusting Others for Managing Spot Asset
(1)Situation of Entrusted Finance
√ Applicable□Not applicable
Overview of entrusted wealth-management during the reporting period
In RMB 10,000
||||||
|-|-|-|-|-|
||Source of funds for|The Occurred Amount of|||
|||||Un-recovered of|
|Specific type|entrusted financial|Entrusted|Undue balance||
|||||overdue amount|
||management|Wealth-management|||
|Bank financial products|Self fund|32,000|0|0|
|Trust financial products|Self fund|120,000|0|0|
|Total||152,000|0|0|

 The detailed information of entrusted wealth-management with significant amount or low safety, poor liquidity or high risk with no promise of principal
√ Applicable□Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report In RMB10,000
||||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Name of|Type of|Produc|Amo|Capital|Start|Expiry|Funds|Method of|Referenc|Expected|Actual profit|The actual|Amount of|Whether|Whether there|Summary of|
|Trustee|Trustee|t Type|unt|Source|Date|Date|Allocati|Reward|e|Income (if|and loss during|recovery of|provision for|passed the|is any|events and|
|Organizati|Organiz||||||on|Determina|Annuali|any)|the reporting|profit and loss|impairment|statutory|entrusted|related|
|on (or|ation(or|||||||tion|zed Rate||period|during the|(if any)|procedure|financial plan|search index|
|Trustee|Trustee)||||||||of|||reporting|||in the future|(if any)|
|Name)|||||||||Return|||period|||||
|||Designa|||||||||||||||
|||ted Use|||||||||||||||
|Wanxiang||Busines|||Janu|||||||||||Http://www.cni|
||||||||Trust|Quarterly|||||||||
|Trust||s|40,0||ary|January||||||||||nfo.com.cn:|
||Trust|||Self fund|||financial|interest|6.00%|2,430.61|2,430.61|2,430.61||Yes|Not applicable||
|Co.,||Manage|00||13,2|13,2018||||||||||(Announcemen|
||||||||products|payments|||||||||
|Ltd.||ment|||017|||||||||||t No. 2017-04)|
|||Funding|||||||||||||||
|||Trust|||||||||||||||
|||Designa|||||||||||||||
|||ted Use|||||||||||||||
|||Busines|||Febr|||||||||||Http://www.cni|
|Wanxiang||||||Decemb|Trust|Quarterly|||||||||
|||s|20,0||uary|||||||||||nfo.com.cn:|
|Trust Co.,|Trust|||Self fund||er|financial|interest|7.50%|2,733.49|2,733.49|2,733.49||Yes|Not applicable||
|||Manage|00||17,2|||||||||||(Announcemen|
|Ltd.||||||17,2018|products|payments|||||||||
|||ment|||017|||||||||||t No. 2017-26)|
|||Funding|||||||||||||||
|||Trust|||||||||||||||
|||Designa|||||||||||||||
|||ted Use|||||||||||||||
|||Busines|||Febr|||||||||||Http://www.cni|
|Wanxiang|||||||Trust|Quarterly|||||||||
|||s|20,0||uary|August||||||||||nfo.com.cn:|
|Trust Co.,|Trust|||Self fund|||financial|interest|7.50%|2,242.3|2,242.3|2,242.3||Yes|Not applicable||
|||Manage|00||20,2|20,2018||||||||||(Announcemen|
|Ltd.|||||||products|payments|||||||||
|||ment|||017|||||||||||t No. 2017-26)|
|||Funding|||||||||||||||
|||Trust|||||||||||||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Designa||||||||||||||
|||ted Use||||||||||||||
|||Busines|||Janu||||||||||Http://www.cni|
|Wanxiang||||||Decemb|Trust|Quarterly||||||||
|||s|40,0||ary||||||||||nfo.com.cn:|
|Trust Co.,|Turst|||Self fund||er|financial|interest|7.50%|2,809.35|2,809.35|2,809.35|Yes|Not applicable||
|||Manage|00||13,2||||||||||(Announcemen|
|Ltd.||||||28,2018|products|payments||||||||
|||ment|||018||||||||||t No. 2018-04)|
|||Funding||||||||||||||
|||Trust||||||||||||||
|Shenzhen|Bank|Structur|||||Bank|Due||||||||
|Textile||ed|||Octo||financial|payment at a||||||||
|Building||deposits|||||products|time||||||||
||||22,0||ber|January||||||||||
|Branch of||||Self fund|||||3.88%|213.19|213.19|213.19|Yes|Not applicable||
|China|||00||9,20|7,2019||||||||||
|Merchants||||||||||||||||
||||||18|||||||||||
|Bank Co.,||||||||||||||||
|Ltd.||||||||||||||||
|Shenzhen|Bank|Structur|||||Bank|Due||||||||
|Textile||ed|||Dece||financial|payment at a||||||||
|Building||deposits|||||products|time||||||||
||||10,0||mber|March||||||||||
|Branch of||||Self fund|||||3.71%|92.71|92.71|92.71|Yes|Not applicable||
|China|||00||14,2|14,2019||||||||||
|Merchants||||||||||||||||
||||||018|||||||||||
|Bank Co.,||||||||||||||||
|Ltd.||||||||||||||||
||||152,|||||||||||||
|Total||||--|--|--|--|--|--|10,521.65|10,521.65|--|--|--|--|
||||000|||||||||||||

Entrusted financing appears to be unable to recover the principal or there may be other circumstances that may result in impairment
□ Applicable√ Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report（2）Situation of Entrusted Loans
□ Applicable√ Not applicable
No any Entrusted loans for the Company in the reporting period..
4. Other significant contract
√ Applicable□Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Compan|Compan|Contract|Contract|Book|Assessed|Apprais|Base Date of|Pricing Principle|Transaction Price|Whether A Related|Connection|Execution Condition|Date of|Disclosure Index|
|y Name|y Name|Object|Signing|Value of|Value of the|al|Assessment||(RMB10,000)|Traction|Relation|As Of The End Of|Disclosure||
|of the|of the||Date|the|Assets|Agency|(if any)|||||The Reporting Period|||
|Party|Other|||Assets|Involved by|Name|||||||||
|Making|Party of|||Involved|the Contract|(If Any)|||||||||
|the|the|||by the|(RMB10,000)||||||||||
|contract|Contract|||Contract|||||||||||
|||||(RMB10,|||||||||||
|||||000) (If|||||||||||
|||||Any)|||||||||||
|SAPO|Hangzh|Nitto|Novem||||||||With no|In normal|November||
|Photoel|ou|Denko|ber 6,|||||Considering|||association|performance|7, 2017||
||Jinjiang|provide|2017||||||||relationship||||
|ectric|Group|s||||||the|||with the||||
||Co.,|polarize||||||formulation of|||company||||
||Ltd.,|r|||||||||||||
|||||||||market price|||||||
||Kunsha|manufa|||||||||||||
|||||||||and technical|||||||
||n|cturing||||||||||||Http://www.cninfo.c|
||Zhiqim|technol||||||service period,||||||om.cn:|
||ei|ogy and||||||the final|||||||
||Materia|related||||No|||86,900|No||||(Announcement No.|
|||||||||transaction|||||||
||l|corpora||||||||||||2017-53)on|
||Technol|tion.||||||price is based|||||||
|||||||||||||||November 7, 2017|
||ogy|||||||on the|||||||
||Co.,||||||||||||||
|||||||||commercial|||||||
||Ltd.,||||||||||||||
|||||||||negotiation|||||||
||Japan||||||||||||||
||Nitto|||||||results of both|||||||
||Denko||||||||||||||
|||||||||parties.|||||||
||Corpor||||||||||||||
||ation||||||||||||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report XVIII. Social responsibilities
1. Performance of poverty relieving responsibilities
(1)The protection ofshareholder’s rights and interests
During the reporting period, the company operated with in accordance with laws and strictly conformed to the requirements of laws and regulations such as The Company Law, The Securities Law and Corporate Governance Guidelines for Listed Companies, and the company continuously perfected the governance structure and further standardized the operation of the company. Adhered to the core system constituted by shareholders' meeting, board of directors, board of supervisors and the independent director system, further improved the corporate governance structure and the management system, constantly improved the company's internal control system in the process of business management, adopted effective measures to prevent operational risks and soundly safeguarded and protected the rights and interests of shareholders to lay a solid foundation for the company's healthy, sustainable development. The company strictly enforces information disclosure obligations in accordance with the law, and truthfully, accurately, completely, timely, and fairly discloses information that has a significant impact on investment decisions, the disclosure content is concise and easy to understand, and fully reveals risks, facilitates access for all shareholders. And according to regulatory requirements, the company further sort out and improve relevant systems and improve the quality of information disclosure.
During the reporting period, the company further improved information disclosure and information transparency, strictly fulfilled the obligation of information disclosure in accordance with regulatory requirements, communicated and communicated with investors through multiple channels, answered questions raised by investors in a timely manner, improved information transparency, and cooperated with regulatory authorities and at the same time, cooperated with the regulatory authorities to purify the market space, safeguard the interests of investors, especially small and medium-sized investors, and achieve positive interaction and harmonious (2) The protection of legal right of staff
(2) The protection of legal right of staff
Subject to the enterprise development strategy, the Company worked out a compliance, legitimate, scientific and reasonable human resources management system. The Company established a labor relation with each employee by concluding an employment contract and made necessary management on employees pursuant to Labor Law and relevant management regulations in the Company. The Company formulated assessment management systems separately geared to senior executives, middle management and regular employees and established a systematic and standardized performance assessment and evaluation system for a comprehensive, objective, fair and accurate assessment on all the employees regarding performance of duties and completion of tasks, results of which were seen as the basis for determination of the employee compensation, reward or punishment and appointment.
In 2018, the Company set up an Employee Business Promotion Channel Management System of Shenzhen Textile (Holdings) Co., Ltd., wherein the business personnel promotion channel management system and value distribution system based on performance and ability evaluation were improved and development channels were opened for employees in all respects; it revised Middle Management Appointment and Dismissal Management System of Shenzhen Textile (Holdings) Co., Ltd., wherein procedures for selection and appointment of the middle management leaders were improved and guaranteed to be compliance and legitimate; it built a Market-oriented Enterprise Management Selection and Hiring Management System of Shenzhen Textile (Holdings) Co., Ltd., wherein procedures and requirements for selecting and hiring enterprise management and contracting
management and exit mechanism were improved. Besides, the Company optimized and modified its talent
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report training system, performance assessment system, hiring management and other HR-related work to raise its HR management standard and further mobilize the initiative of employees at work.
(3) The protection of environment
Building a modern "green enterprise" with effort is a permanent responsibility which the Company keeps taking. For that end, the Company holds firm to building a green and recycled industry chain throughout the entire process to realize green and recycling economy in real means and improves quality of environment surrounding the Company to facilitate its production. In the report period, the Company's out-of-boundary noise, industrial waste water and gas emission passed the surveillance of the environmental protection administration and met standard requirements in relevant laws and regulations. In the report period, through a rotary RTO treatment process, more than99% of VOCs were removed from the Company's organic waste gas and on the ground of up-to-standard emission, the Company further reduced emission of pollutants to practically fulfill the social responsibility as a listed company and inflicted no major environmental protection accident. Furthermore, the Company advocated for green office with effort and carried out environmental protection publicity and education activities in a variety of forms to enhance the energy-saving and emission reduction awareness among employees and coordinate production& operation and environmental protection in production to fulfill its social responsibility literally.
(4) The protection of consumer rights and interests
The company always sticks to the core values of "honesty, responsibility first". As the responsibility to the customer is the source of enterprise value, the company committed to provide customers with professional, personalized, full range of products and services.Sustainable customer-oriented service and impeccable product quality motive our performance and sustainable development and guarantee long-term customers. And our long-term partnership is established on the basis of initiative attention, quick responding and sincere care to customers.
2. Execution of social responsibility of targeted poverty alleviation
(1) Precision poverty alleviation program
(2) Annual precision poverty alleviation
(3) Accuracy of poverty alleviation
||||
|-|-|-|
|Index|Measurement unit|Quantity / Status|
|I. General situation|——|——|
|II. Breakdown Input|——|——|
|1. Poverty alleviation by industrial development|——|——|
|2. Poverty alleviation by transfer employment|——|——|
|3. Poverty alleviation by relocation|——|——|
|4. Educational poverty alleviation|——|——|
|5. Health poverty alleviation|——|——|
|6. Ecological protection poverty alleviation|——|——|
|7. Guarantee of all the details|——|——|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||
|-|-|-|
|8. Social poverty alleviation|——|——|
|9. Other projects|——|——|
|III. Awards (Content and level)|——|——|

（4）Subsequent targeted poverty alleviation program
3. Information on environmental protection
The Listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
Yes
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Main|||||||||
|||||Emission||Implemente||||
|Company or|pollutant||||Emission|||Verified|Excessive|
|||Emission|Emission|port||d pollutant|Total|||
|subsidiary|and specific||||concentratio|||total|emission|
|||way|port number|distribution||emission|emission|||
|name|pollutant||||n|||emission|condition|
|||||condition||standards||||
||name|||||||||
|||||The||||||
||Exhaust|||discharge||||||
||gas:non-m|||port is||||||
|SAPO||||||||||
||ethane|Altitude||located on||||||
|Photoelect|||2||<100mg/m3|120mg/m3|840kg/d|1728kg/d|No|
||total|emission||the east side||||||
|ric||||||||||
||hydrocarb|||of the roof||||||
||ons|||of Building||||||
|||||No. 1||||||
|||Open||||||||
|SAPO||channel||Southeast||||||
||Waste|||||||||
|Photoelect||discharge|1|side of plant|<80mg/L|90mg/L|56kg/d|96kg/d|No|
||water：COD|||||||||
|ric||after||area||||||
|||treatment||||||||

Prevention and control of pollution facilities construction and operation
Waste gas of Pingshan plant:
The waste gas treatment facility adopted the RTO waste gas regenerative incineration process. which can fully meet the emission requirements of discharge gas. The removal rate of organic waste gas VOCs reached more than99%,Meanwhile, the equipment adopted the imported thermal storage material, with the heat storage effect reached90%, so that the equipment operation had low energy consumption; after RTO treatment, the exhaust gas produced by the production process can meet the discharge standard.
Waste Water of Pingshan Plant:
The wastewater treatment facility adopts fenton+ biological method+ physicochemical method+MBR membrane wastewater treatment process. The wastewater treatment system will be expanded with the project of
line 6 in 2018 and put into use with the production equipment of line 6 in 2018. The equipment has the advantages
of stable operation, low energy consumption, low maintenance cost, high degree of automation, good wastewater
treatment effect and strong impact resistance. The waste water produced in the production process can meet the
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report environmental protection requirements of standard discharge after being treated by waste water treatment facilities.
Waste gas of Longhua factory:
The process related to generation of organic waste gas in Longhua Plant was removed as a whole at the end of 2017, indicating that Longhua Plant is generating no organic waste gas.
Situation of Construction project environmental impact assessment and other environmental protection administrative licenses
The Company complied with relevant environmental protection regulations at such three stages as project design, construction and operation and obtained environmental protection approvals needed at each corresponding stage including EIA report, EIA approval, environmental protection acceptance decision and emission permit among others.
Emergency Plan for Emergency Environmental Incidents
According to the actual situation of the company, the preparation of the emergency plan for emergency
environmental incidents was completed, and an emergency environmental emergency plan filing application Environmental Self-Monitoring Program
Surveillance done subject to surveillance requirements made by the surveillance station and operation needs of all systems ofSAPO，the specific monitoring programs are as follows: organic exhaust gas is 8 times per year (2 per quarter), wastewater discharge is 4 times per year (once per quarter), boiler exhaust gas is 2 times per year (once every six months), and canteen fume is 2 times per year (once every six months), the noise at the plant boundary is 2 times per year (once every six months).
Other Environmental Information That Should Be Disclosed
Nil
Other Environmental Related Information
Nil
XIX. Other material events
√ Applicable□ Not applicable
（I）Progress of Renting of Guanhua Building
During the reporting period, the company first reached a common intention with the Hong Kong
shareholder Qiaohui Industrial Co., Ltd. on the external rent of Guanhua Building, and formed a public rent scheme. At present, this work is still in progress; second, the completion of the settlement of Guanhua Building has been completed.
In order to smooth the equity relationship between Shenzhen Guanhua Printing and Dyeing Co., Ltd. and Guanhua Building, the company and Qiaohui Industrial Co., Ltd. signed an equity transfer agreement to transfer5.16% of the shares of Shenzhen Guanhua Printing and Dyeing Co., Ltd. and completed the equity transfer. After the transfer, the company and Qiaohui Industrial Co., Ltd. hold50.16% and49.84% of the shares of Shenzhen Guanhua Printing and Dyeing Co., Ltd. On February 28, 2019, in order to improve the investment obligations of the shareholders of Shenzhen Guanhua Printing and Dyeing Co., Ltd., the company and Qiaohui Industrial Co., Ltd. increased the capital of Shenzhen Guanhua Printing and Dyeing Co., Ltd. according to the proportion of50.16% and49.84% of the rights and interests occupied by the buildings of Guanhua Building, respectively, and
the corresponding evaluation value of the buildings of Guanhua Building was 49.9351 million yuan and 49.616
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report million yuan. Shenzhen Guanhua Printing and Dyeing Co., Ltd. signed the Capital Increase Agreement with Qiaohui Industry Co., Ltd. and Shenzhen Guanhua Printing and Dyeing Co., Ltd. After the capital increase is completed, Shenzhen Guanhua Printing and Dyeing Co., Ltd. is an enterprise jointly controlled by the company and Qiaohui Industry Co., Ltd. See the announcement of Juchao Information Network (http://www.cninfo.com.cn) Co., Ltd. 2019-07. Up to the disclosure date of this report, Shenzhen Guanhua Printing and Dyeing Co., Ltd. has obtained the "Real Property Registration Certificate" of Guanhua Building, and the registration procedures for the change of shareholding rights and the increase of registered capital have been completed.
（II) Progress of the transfer of equity of Union Development Group Co., Ltd.
The Company held the fifteenth meeting of the seventh board of directors and the third extraordinary shareholders, meeting of 2018 on October 29, 2018 and November 14, 2018, respectively, in which the Proposal on the Transfer of Equity of Union Development Group Co. Ltd was reviewed and approved, agreed that the2.8694% equity of
Union Development Group Co., Ltd. held by the Company shall be openly listed for transfer in Shenzhen United Property Exchange at a price not lower than the estimated value of RMB 152.4936 million, with the final listing price not lower than the evaluation result by the state-owned asset management. The matter was file-recorded on November 15, 2018 by the state-owned assets management department, and the evaluation result confirmed by the file-record was 152.4692 million yuan, which was 24, 400 yuan lower than the pre-record evaluation result of 152.4936 million yuan.For details, please refer to the Announcement of 2018-45,2018-48 ,2018-52 and 2018-53 on the website of http://www.cninfo.com.cn.
On December 28, 2018, the Company received the “Description of Purchase Information” from the Shenzhen United Property Exchange. The Company listed its2.8694% holding equity of Union Development Group Co., Ltd on the Shenzhen United Property Exchange for transfer from November 22, 2018 to December 26, 2018, and until the expiration of the listing announcement period, there was no intended transferee filing the application to the Shenzhen United Property Exchange for transfer.For details, please refer to the Announcement of 2018-58 on the website of http://www.cninfo.com.cn.
XX. Material events of subsidiaries
√ Applicable□Not applicable
(I) Matters on the end of capital and share increase and introduction of strategic investors to the subsidiary SAPO Photoelectric
On June 1, 2018, the Company convened the 12th meeting of the seventh board of directors, where it deliberated and adopted the Proposal on Capital and Share Increase and Introduction of Strategic Investors to the Subsidiary Shenzhen SAPO Photoelectric Co., Ltd. and agreed that the subsidiary SAPO Photoelectric would solicit no more than 5 strategic investors in public at Shenzhen United Property and Share Rights Exchange through capital and share increase based on the registered asset evaluation results and determine the final strategic investors through competitive negotiation in compliance with state-owned asset supervision regulations.For details, please refer to the Announcement of 2018-24 on the website of http://www.cninfo.com.cn.
As SAPO Photoelectric was pushing forward matters pertaining to capital and share increase and introduction of strategic investors, the Company took the initiative to negotiate and consult with investors with an intention on matters of capital increase, whereas in the context of fluctuating national investment environment and financial policies, a financial strain in the financial market and a more prudent attitude held by investors, investors with an intention took lots of factors into account regarding conditions of cooperation, indicating that the Company was confronted a great uncertainty in continuing to drive SAPO Photoelectric to increase capital and share and bring in
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report strategic investors. Whereas the Company still failed to come into terms with any investor with an intention on details of cooperation on capital increase, the Company gave a comprehensive consideration to all the above factors to convene the sixteenth meeting of the seventh board of directors on January 29, 2019, where it deliberated and adopted the Proposal on the End of Capital and Share Increase and Introduction of Strategic Investors to the Subsidiary Shenzhen SAPO Photoelectric Co., Ltd. and agreed to end matters of capital and share increase and introduction of strategic shareholders to the subsidiary SAPO Photoelectric.For details, please refer to the Announcement of 2019-02 and 2019-03 on the website of http://www.cninfo.com.cn.
(II) Matters on progress of conclusion of a technical cooperation contract between the subsidiary SAPO Photoelectric and Nitto Denko
In order to bring in techniques of the Japanese polarizer enterprise that takes the lead in the world and prepare for building the 2,500 mm ultra-wide TFT-LCD polarizer production project (Line 7 Project), the Company's holding subsidiary SAPO Photoelectric, together with Jinjiang Group and Kunshan Zhiqimei, entered into a Contract of Technical Cooperation with Nitto Denko on matters pertaining to introduction of techniques of 2,500 mm polarizer production line on November 6, 2017, which was signed on the ground of all the essential cooperation-related conditions specified by Nitto Denko and parties that give a support hereinbefore. In addition to this contract, a technical support contract and appendix are planned to be concluded later. For details, please refer to the Announcement of 2018-53 on the website of http://www.cninfo.com.cn.
To take and bring in ultra-wide polarizer production techniques of Nitto Denko as soon as possible, construction of the Line 7 Project need accelerating. On November 13, 2018, SAPO Photoelectric agreed with Nitto Denko on details of "equipment startup support", "instruction on manufacturing know-how", and "technical support (quality maintenance support)" among others regarding Nitto Denko's offer of ultra-wide polarizer production techniques in Contract of Technical Cooperation (Manufacturing Line 2) (Manufacturing Line 1 refers to the 2,500 mm production line of Kunshan Zhiqimei) which as a technical support contract based on Contract of Technical Cooperation applied to what was specified in the Contract of Technical Cooperation.For details, please refer to the Announcement of 2018-51 on the website of http://www.cninfo.com.cn.
(III)Progress in subsidiaries participating in the establishment of industrial funds
On November 16, 2017, the company's controlling subsidiary SAPO Photoelectric signed the Changxing Junying Equity Investment Partnership (Limited Partnership) Agreement with the fund manager Huizhi Investment Management Co., Ltd, general partner Jinxin Investment Co., Ltd and other limited partners, and co-sponsored the establishment of an industrial fund, focusing on the optical film industry chain related projects related to the company's main business, with a fund size of 50 million yuan. SAPO Photoelectric, as one of the limited partners of the industrial fund, subscribed for a capital contribution of 28.5 million yuan.
For details JuchaoWebsite:（http://www.cninfo.com.cn. (Announcement No.2017--55).
On February 10, 2018, Changxing Junying Equity Investment Partnership completed the industrial and commercial registration and completed the private equity investment fund registration on February 8, 2018. For details JuchaoWebsite:（http://www.cninfo.com.cn. (Announcement No.2018--05).
As of December 31, 2018, Changxing Junying had accumulated 3 investment projects with a total investment of RMB 42 million. The profit during the reporting period was RMB 2,150,943.40
|||||
|-|-|-|-|
||||Fund contribution|
|No|Name|Investment||
||||（RMB 10,000）|
|1|Shenzhen Kaichuang Shijia Technology Co., Ltd.|Optical Film|1,400|
|2|Shenzhen Shenfuyu Electronic Technology Co., Ltd.|Optical Film|1,300|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||
|-|-|-|-|
|3|Shenzhen Hengbaoshun Technology Development Co., Ltd.|Optical Film|1,500|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report VI. Change of share capital and shareholding of Principal Shareholders
Ⅰ.Changes in share capital
1. Changes in share capital
In Shares
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Increase/decrease（+，-）|||||After the Change||
||Amount|Proportio|||Capitaliza|||||
|||n|Share|Bonus|tion of||||Proportio|
||||||common|Other|Subtotal|Quantity||
||||allotment|shares|||||n|
||||||reserve|||||
||||||fund|||||
|1.Shares with conditional||||||||||
||4,824,300|0.94%||||5,250|5,250|4,829,550|0.94%|
|subscription||||||||||
|3.Other domestic shares|4,824,300|0.94%||||5,250|5,250|4,829,550|0.94%|
|Domestic Nature shares|4,824,300|0.94%||||5,250|5,250|4,829,550|0.94%|
|II.Shares with unconditional|506,449,8|||||||506,444,5||
|||99.06%||||-5,250|-5,250||99.06%|
|subscription|49|||||||99||
||457,021,8|||||||457,016,5||
|1.Common shares in RMB||89.39%||||-5,250|-5,250||89.39%|
||49|||||||99||
|2.Foreign shares in domestic|49,428,00|||||||49,428,00||
|||9.67%|||||||9.67%|
|market|0|||||||0||
||511,274,1|||||||511,274,1||
|III. Total of capital shares||100.00%|||||||100.00%|
||49|||||||49||

Reasons for share changed
√ Applicable□Not applicable
On February 9, 2018, February 12, 2018, and February 14, 2018, Zhang Xiaodong, the company's supervisor, purchased 3,000 shares, 3,000 shares, and 1,000 shares of the company's A shares, respectively, for a total of 7,000 shares, of which75% were 5,250 shares. Changed to a restricted sale of shares.
Approval of Change of Shares
□ Applicable√ Not applicable
Ownership transfer of share changes
□ Applicable√ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to
common shareholders of Company in latest year and period
□ Applicable√ Not applicable
Other information necessary to disclose for the company or need to disclosed under requirement from security
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report regulators
□ Applicable√Not applicable
2. Change of shares with limited sales condition
√ Applicable□ Not applicable
In shares
||||||||
|-|-|-|-|-|-|-|
||||Number of||||
|||Number of||Restricted Shares||Date of|
||Initial Restricted||Increased||Reason for||
|Shareholder Name||Unrestricted||in the End of the||Restriction|
||Shares||Restricted Shares||Restricted Shares||
|||Shares This Term||Term||Removal|
||||This Term||||
|||||||The shares|
|||||||transferred|
|||||||annually during|
|||||||the term of office|
|||||||determined|
|||||||during the term|
|||||||of office and|
||||||Supervisors hold|within 6 months|
|Zhang Xiaodong|0|0|5,250|5,250|75% of the shares|after the|
||||||as required|expiration of the|
|||||||term of office|
|||||||shall not exceed|
|||||||25% of the total|
|||||||number of shares|
|||||||of the company|
|||||||held by the|
|||||||company.|
|Total|0|0|5,250|5,250|--|--|

Ⅱ.Issuing and listing
1.Explanation of the Situation of the Security Issue(No Preferred Shares) in the Report Period
□ Applicable√Not applicable
2.Change of asset and liability structure caused by change of total capital shares and structure
□ Applicable√Not applicable
3.About the existingemployees’ shares
□Applicable√Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual ReportⅢ.Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
In Share
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||35,264|||||||Total|||
|||||||||||||preferred shareh|||
|Total number|||Total||||The total number o||||||||
|||||||||||||olders at the end|||
|of common|||shareholders at||||f preferred shareho||||||||
|||||||||||||of the month|||
|shareholders at|||the end of the||||lders voting rights||||||||
||36,891|||||||||0||from the date of||0|
|the end of the|||month from the||||restored at period-e||||||||
|||||||||||||disclosing the|||
|reporting|||date of disclosing||||nd(if any)(See||||||||
|||||||||||||annual report(if|||
|period|||the annual report||||Notes 8)||||||||
|||||||||||||any)(See Notes|||
|||||||||||||8)|||
|Particulars about shares held above 5% by shareholders or top ten shareholders|||||||||||||||
||||||Number|||Amount|Amount||Number of share pledged/frozen||||
|||||Proportio||Changes|||||||||
|Shareholders||Nature of||n of|of shares|in||of|of||||||
||||||held at|||restricted|un-restrict||||||
|||shareholder||shares||reporting|||||State of share||Amount||
||||||period|||shares|ed shares||||||
|||||held（%）||period|||||||||
||||||-end|||held|held||||||
|ShenzhenInvestmentHoldings Co., Ltd.||State-owned legalperson||45.78%|234,069,436|0||0|234,069,436||||||
|ShenzhenShenchaoTechnologyInvestment Co.,Ltd.||State-ownedLegal person||3.15%|16,129,032|0||0|16,129,032||||||
|Fujiang BairuiJiayuan, AssetManagement Co.,Ltd.－BairuiJiayuan Growth IFund||Other||0.77%|3,934,035|-20,700||0|3,934,035||||||
|Sun Huiming||Domestic Natureperson||0.62%|3,192,767|0||0|3,192,767||||||
|Li Songqiang||Domestic Natureperson||0.56%|2,873,078|40,000||0|2,873,078||||||
|Zheng Junsheng||Domestic Natureperson||0.36%|1,830,000|0||0|1,830,000||||||
|Kuang Guowei||Domestic Nature||0.28%|1,457,000|520,800||0|1,457,000||||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
||person||||||||
|Zhu Ye|Domestic Natureperson|0.22%|1,131,945|0|0|1,131,945|||
|Li Zengmao|Domestic Natureperson|0.20%|1,038,800|505,300|0|1,038,800|||
|Hong Fan|Domestic Natureperson|0.20%|1,028,900|0|0|1,028,900|||
|||Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned subsidiary of|||||||
|||Shenzhen Investment Holding Co., Ltd. and a person taking concerted action. Except this,|||||||
|||the Company did not whether there is relationship between the top ten shareholders holding|||||||
|Related or acting-in-concert parties|||||||||
|||non-restricted negotiable shares and between the top ten shareholders holding|||||||
|among shareholders above|||||||||
|||non-restricted negotiable shares and the top 10 shareholders or whether they are persons|||||||
|||taking concerted action defined in Regulations on Disclosure of Information about|||||||
|||Shareholding of Shareholders of Listed Companies.|||||||
|Shareholding of top 10 shareholders of unrestricted shares|||||||||
|||Quantity of unrestricted shares held at the end of the|||||Share type||
|Name of the shareholder|||||||||
|||reporting period|||||Share type|Quantity|
|Shenzhen Investment Holdings Co.,Ltd.||234,069,436|||||Common shares||
|||||||||234,069,436|
||||||||in RMB||
|Shenzhen Shenchao TechnologyInvestment Co., Ltd.||16,129,032|||||Common shares||
|||||||||16,129,032|
||||||||in RMB||
|Fujiang Bairui Jiayuan, AssetManagement Co., Ltd.－BairuiJiayuan Growth I Fund||3,934,035|||||||
||||||||Common shares||
|||||||||3,934,035|
||||||||in RMB||
|Sun Huiming||3,192,767|||||Foreign shares in||
|||||||||3,192,767|
||||||||domestic market||
|Li Songqiang||2,873,078|||||Common shares||
|||||||||2,873,078|
||||||||in RMB||
|Zheng Junsheng||1,830,000|||||Common shares||
|||||||||1,830,000|
||||||||in RMB||
|Kuang Guowei||1,457,000|||||Common shares||
|||||||||1,457,000|
||||||||in RMB||
|Zhu Ye||1,131,945|||||Common shares||
|||||||||1,131,945|
||||||||in RMB||
|Li Zengyin||1,038,800|||||Common shares||
|||||||||1,038,800|
||||||||in RMB||
|Hong Fan||1,028,900|||||Common shares||
|||||||||1,028,900|
||||||||in RMB||
|Explanation on associated relationship||Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned subsidiary of|||||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|or consistent action among the top 10|Shenzhen Investment Holdings Co., Ltd. and a person taking concerted action. Except this,|
|shareholders of non-restricted|the Company did not whether there is relationship between the top ten shareholders holding|
|negotiable shares and that between the|non-restricted negotiable shares and between the top ten shareholders holding|
|top 10 shareholders of non-restricted|non-restricted negotiable shares and the top 10 shareholders or whether they are persons|
|negotiable shares and top 10|taking concerted action defined in Regulations on Disclosure of Information about|
|shareholders|Shareholding of Shareholders of Listed Companies.|
||The Company Shareholder Fujiang Bairui Jiayuan, Asset Management Co., Ltd.－Bairui|
|Explanation on shareholders|Jiayuan Growth I Fund holds 3,954,735 shares of the Company through stock account with|
|participating in the margin trading|credit transaction; The Company Shareholder Li Songqiang holds 2,872,653 shares of the|
|business(if any )(See Notes 4)|Company through stock account with credit transaction ; The Company Shareholder Zhu Ye|
||holds 1,031,945 shares of the Company through stock account with credit transaction.|

 Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period.
□ Yes√ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy–back agreement dealing in reporting period.
2.Controlling shareholder
Nature of Controlling Shareholders: Local state holding
Type of Controlling Shareholders: Legal person
||||||
|-|-|-|-|-|
||Legal||||
|Name of the Controlling|||||
||representative/Leade|Date of incorporation|Organization code|Principal business activities|
|shareholder|||||
||r||||
|||||Investment and acquisition|
|||||of financial and similar|
|||||financial stock rights such|
|||||as bank, security, insurance,|
|||||fund and guarantee; (Ⅱ)|
|||||Engage in real estate|
|||||development and|
|||||management business|
|||||within the limit of|
|Shenzhen Investment|||||
||Wang Yongjian|October 13,2004|76756642-1|legally-acquired land use|
|Holdings Co., Ltd.|||||
|||||right; (Ⅲ) Carry out|
|||||investment and service in|
|||||the field of strategic|
|||||emerging industry; (Ⅳ)|
|||||Carry out investment,|
|||||operation and management|
|||||of state-owned stocks of|
|||||wholly-owned, holding and|
|||||joint-stock company by|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||
|-|-|-|
|||reorganization &|
|||integration, capital|
|||operation and asset|
|||disposal; (Ⅴ) Other|
|||businesses undertaken by|
|||authorization of municipal|
|||SASAC(State Asset|
|||Supervision and|
|||Administration|
|||Commission)|
||Shen Property A（000011），Quantity of shares 380.38 million，Shareholding ratio：63.82%； SPG||
||A（000019），Quantity of shares 642.88 million，shareholding ratio：63.55%；Shen Universe A||
||（000023），Quantity of shares 12.36 million，shareholding ratio：8.91%；Pingan（601318），||
||Quantity of shares 962.72 million，shareholding ratio：5.27%；Guosen Seurities（002736），Quantity||
|Equity of other|of shares 2749.52 million，shareholding ratio：33.53%；Guotai Junan（601211），Quantity of shares||
|domestic/foreign listed|609.24 million，H shareholding ratio：103.37%,Total shareholding ratio :8.18%；Telling holding||
|company with share|（000829），Quantity of shares 195.03 million，shareholding ratio：18.8%；Etop information||
|controlling and share|（834386），Quantity of shares 42 million，shareholding ratio：60.00%；Inspection test（836325）||
|participation by|Quantity of shares：20 million，shareholding ratio：40.00% ,Shenzhen International（00152），||
|controlling shareholder in|Quantity of shares：952.01 million，shareholding ratio：44.81%；Beauty Star（002243），Quantity||
|reporting period|of shares：188 million，shareholding ratio：51.52%； Hopewell Highway (00737），Quantity of||
||shares：2213.45 million，shareholding ratio：71.83%;Infinova（002528），Quantity of shares：225.90||
||million，shareholding ratio：21.35%; Eternal Asia（002183），Quantity of shares：338.45 million||
||shareholding ratio：18.3%；Shen Enerty（000027)，Quantity of shares：5.64 million，shareholding||
||ratio：0.14% and BCM（601328），Quantity of shares：9.52 million，shareholding ratio：0.01%,||

 Change of the actual controller in the reporting period
□Applicable√Not applicable
Nil
3．Information about the controlling shareholder of the Company
Actual controllernature：Local state owned assets management
Actual controllertype：Legal person
||||||
|-|-|-|-|-|
||Legal||||
|Name of the controlling||Date of|||
||representative/per||Organization code|Principal business activities|
|shareholder||establishment|||
||son in charge||||
|||||Performing the responsibilities|
|||||of investors on behalf of the|
|State-owned Assets Regulatory|||||
|||||state and supervising and|
|Commission of Shenzhen|Yu Gang|July 31,2004|K3172806-7||
|||||managing state-owned assets|
|Municipal People's Government|||||
|||||according to authorization and|
|||||law.|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|Equity of other||
||Except for Shenzhen Holdings Co., Ltd., the holding shareholder of the company, other domestic|
|domestic/foreign listed||
|company with share||
||and foreign listed companies of the equity held by the actual controller haven’t been shown in the|
|controlling and share||
|participation by|list of the top ten shareholders of the company.|
|controlling shareholder in||
|reporting period||

Changes of the actual controller in the reporting period
□Applicable√Not applicable
No Changes of the actual controller in the reporting period
Block Diagram of the ownership and control relations between the company and the actual controller
The actual controller controls the company by means of trust or managing the assets in other way
□Applicable√Not applicable
4.Particulars about other legal person shareholders with over10% share held
□Applicable√Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 5.Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, Restructuring Party and Other Commitment Subjects
□Applicable√Not applicable
VII. Situation of the Preferred Shares
□ Applicable√Not applicable
The Company had no preferred shares in the reporting period.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report VIII. Information about Directors, Supervisors and Senior Executives
I. Change in shares held by directors, supervisors and senior executives
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Amount|Amount|||
||||||||Shares|of shares|of shares||Shares|
|||||||||||Other||
||||||Starting|Expiry|held at|increased|decreased||held at|
|||Office||||||||changes||
|Name|Positions||Sex|Age|date of|date of|the|at the|at the||the|
|||status||||||||increase/d||
||||||tenure|tenure|year-begi|reporting|reporting||year-gegi|
|||||||||||ecrease||
||||||||n(share)|period(sh|period(sh||n(share)|
|||||||||are)|are)|||
||Board|||||||||||
||||||January|July||||||
|Zhu Jun|chairman,|Appoint|Male|55|||137,000|0|0|0|137,000|
||||||16,2015|18,2020||||||
||Director|||||||||||
||Director,|||||||||||
|Zhu|||||July|July||||||
||General|Appoint|Male|54|||228,000|0|0|0|228,000|
|Meizhu|||||19,2017|18,2020||||||
||Manager|||||||||||
||Director,|||||||||||
||Deputy|||||||||||
||Secretar|||||||||||
||y of the|||||||||||
||Party|||||||||||
||committ|||||||||||
|Ning|||||December|July||||||
||ee and|In office|Male|43|||122,000|0|0|0|122,000|
|Maozai|||||14,2017|18,2020||||||
||Secretar|||||||||||
||y of the|||||||||||
||Commis|||||||||||
||sion for|||||||||||
||Discipli|||||||||||
||ne|||||||||||
||||||July|July||||||
|Huang Yu|Director|In office|Male|44|||0|0|0|0|0|
||||||19,2017|18,2020||||||
||Director,||||April|July||||||
|Di Yan||In office|Female|48|||0|0|0|0|0|
||CFO||||28,2017|18,2020||||||
|Wang|||||Septembe|July||||||
||Director|In office|Male|46|||0|0|0|0|0|
|Chuan|||||r 1,2018|18,2020||||||
||Independ|||||||||||
||||||August|July||||||
|He Qiang|ent|In office|Male|66|||0|0|0|0|0|
||||||16,2013|18,2020||||||
||Director|||||||||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Independ|||||||||||
|He|||||July|July||||||
||ent|In office|Male|56|||0|0|0|0|0|
|Zhuowen|||||19,2017|18,2020||||||
||Director|||||||||||
||Independ|||||||||||
|Cai|||||July|July||||||
||ent|In office|Male|49|||0|0|0|0|0|
|Yuanqing|||||19,2017|18,2020||||||
||Director|||||||||||
||Chairman|||||||||||
||of the|||||||||||
|Wang|superviso||||May|July||||||
|||In office|Male|50|||0|0|0|0|0|
|Weixing|ry||||20,2015|18,2020||||||
||committe|||||||||||
||e|||||||||||
|Zou|Superviso||||December|July||||||
|||In office|Male|36|||0|0|0|0|0|
|Zhiwei|r||||14,2017|18,2020||||||
||Employee|||||||||||
|Zhang|||||August|July||||||
||superviso|In office|Male|43|||0|7,000|0|0|7,000|
|Xiaodong|||||9,2013|18,2020||||||
||r|||||||||||
||Deputy||||April|July||||||
|Le Kunjui||In office|Male|55|||122,000|0|0|0|122,000|
||GM||||28,2017|18,2020||||||
|Liu|Deputy||||July|July||||||
|||In office|Male|54|||125,000|0|0|0|125,000|
|Honglei|GM||||19,2017|18,2020||||||
||Secretary|||||||||||
|Jiang|to the||||January|July||||||
|||In office|Female|48|||100,000|0|0|0|100,000|
|Peng|board of||||16,2015|18,2020||||||
||directors|||||||||||
|Total|--|--|--|--|--|--|834,000|7,000|0|0|841,000|

 II. Change in shares held by directors, supervisors and senior executives
√ Applicable□Not applicable
||||||
|-|-|-|-|-|
|Name|Positions|Types|Date|Reason|
|Lin Lebo|Director|Dimission|May 24,2018|Job change|
|Zhao Lin|Director|Dimission|July 24,2018|Job change|

III.Posts holding
Professional background, work experience and main duties in the Company of existing directors, supervisors and senior management
(1) Director
Zhu Jun, Male, Born in 1963, Masterdegree，senior engineer , member of the Communist party, He served
successively as secretary of Lige Village, Yutai County, Shandong Province, workshop director of Shandong
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Jining Cotton Mill, deputy factory director of Jining Chemical Fibre Factory, office director of Jining Textile Industry Company, deputy county head of Wenshang County, Shandong Province, office director of Shandong Textile Department, chief of Personnel Education Division, manager, general manager assistant , Deputy General Manager, General Manager of Enterprise management Dept of the Company. He served as secretary of Party Committee ,Board Chairman of the Company, Director and Vice Board chairman of Tianma Microelectronic Co., Ltd.
Zhu Meizhu, Male, Born in 1964, Master degree, Senior engineer, once served successively as chief Deputy general Manager of Enterprise Management Dept of the Company, Director ofR& D Center, Assistant General Manager and Deputy General Manager, He serves as director and General Manager of the Company, and Board Chairman of SAPO Photoelectric Co., Ltd.
Ning Maozai, male, born in 1975, bachelor degree, senior administration engineer, Chinese Communist Party member; he has served successively as the office clerk of Shenzhen Guomao Automobile Industry Co., Ltd, the clerk, principal staff member, associate director and director of party-mass office of Shenzhen Property Development (Group) Corp. and hold a concurrent post of deputy human resource Deputy manager and manager; At present he holds the position of company director, deputy party secretary and secretary of Discipline Inspection Committee.
Huang Yu, male, born in 1974, postgraduate, senior accountant, Chinese Communist Party member; he has served successively as the manger of audit departmentⅡ of Shenzhen Hengdaxin Accounting Firm and assistant director, senior staff member of the audit department of Shenzhen Commerce Trading Invest-holding Company, senior staff member and principal staff member of the social undertaking division of Shenzhen SASAC, principal staff member of the business divisionⅡ of Shenzhen SASAC, vice minister and minister of the financial budget department of Shenzhen Investment Holdings Co., Ltd, office director of Shenzhen Investment Holdings Co., Ltd; At present he holds the position of chief accountant and director of Shenzhen Investment Holdings Co., Ltd.and director of the Company.
Di Yan, female, born in 1970, postgraduate degree, senior economist, accountant positional title, Chinese Communist Party member; she has served successively as the cashier, correspondent bank accountant and integrated accountant of Development Zone Sub-branch,Xi’an Branch, Agricultural Bank of China, manager of the fund department, chief of the financial management section and chief of the accounting section of financial department of Shenzhen Airport(Group) Company, capital settlement business manager of the financing plan department of Shenzhen Airport Co., Ltd, manager of the financial department of Shenzhen Airport International Express Supervision Center of Shenzhen Airport Co., Ltd, manager of the financial department of Shenzhen Airport Air Cargo Co., Ltd, finance minister of Shenzhen General Institute of Architectural Design and Research and chief financial officer of Shenzhen Yuetong Construction Engineering Co., Ltd and hold a concurrent post of chief financial officer of Shenzhen Zhongye Pipe Gallery Construction Investment Co., Ltd; At present he holds the position of director and chief financial officer of the Company.
Mr. Wang Chuan, male, was born in 1972 with a master's degree, economist, engineer, CCP. He had served successively as deputy minister, minister and assistant director to the cooperation and development department of Shenzhen National High-tech Industry Innovation Center, served as chairman and general manager of Shenzhen Innovation Start Technology Co., Ltd., and served as deputy general manager of Shenzhen Tongchan Group Co., Ltd. He is currently the Minister of Industry Management Department of Shenzhen Investment Holdings Co., Ltd and director of the Company.
He Qiang , Male, born in 1952, Professor of finance at the Central University of Finance and Economics, Ph.D.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report tutor, Director of Securities and Futures Institute, enjoy special government allowances. He was a member of 11th and 12th CPPCC National Committee, of China Finance Society, the China Investment Association, of China Economic and Social Council of the other positions. He served as independent director in the Air Investment Holding Co., Ltd., in Hengyi Petrochemical Co., Ltd., in Golden State Securities corporation, Dongbei Securities and in the Company. the Company's independent directors.
He Zuowen, male, born in 1962, MBA, associate professor in accountancy, charted certified accountant and certified tax agent in securities and futures industry. At present he acts as a partner of Da Hua Certified Public Accountants(Special General Partnership) and secretary of Party General Branch of Shenzhen Branch, meanwhile he holds the position of chairman of Shenzhen Tianye Certified Tax Agents Limited Corporation, consultancy expert of Internal Control Standard Committee of the Ministry of Treasury, judge of Guangdong Senior Accountant Evaluation Committee, member of CPC Shenzhen Social Organization Disciplinary Examination Committee, deputy secretary& secretary of Discipline Inspection Commission of CPC Shenzhen CPA Industry Board, director of Shenzhen Certified Tax Agents Association and independent director of Shenzhen JPT OPTO-ELECTRONICS Co., Ltd., Independent director of Shenzhen Yirui Biology Co., Ltd., the Company's independent directors.
Cai Yuanqing, born in 1969, Doctor of Laws of Hiroshima University, professor of Law School of Shenzhen University, director of Company Law Research Center and GSI(Graduate Student Instructor); Meanwhile, he acts as an arbitrator of Shenzhen Arbitration Commission ,independent director of Shenzhen Rongda Photosensitive Science& Technology Co., Ltd., Independent director of Shenzhen Oufei Technology Co., Ltd., the Company's independent directors.
（2）Supervisor
Wang Weixing, male, born in 1968, graduate degree, economist, member of Communist Party of China, has served successively as cadre of Qingdao TV Factory, staff and senior staff member of Shenzhen Administration of Industry and Commerce (price bureau) Futian, Che Kung Temple branch, senior staff member and principal staff member of Shenzhen Administration of Industry and Commerce (price bureau) registration sub-office, principal staff member of Shenzhen General Asset Management Office, deputy director of Shenzhen Asset Management Office collective enterprise department, deputy director of general office of Shenzhen Asset Management Office, deputy director of petition acceptance office of Shenzhen Asset Management Office, director, vice-secretary of CPC and secretary of discipline commission of Shenzhen Tongchan Packaging Group Co., Ltd, director, vice-secretary of CPC and secretary of discipline commission of Shenzhen Tongchan Group Co., Ltd and currently takes the post of chairman of supervisory board of the Company.
Zhou Zhiwei, male, born in 1982, bachelor degree and CPC member; he has served successively as a member of Shenzhen Prison Political Section, office clerk of Luohu District Bureau of Culture, senior staff member of Publicity and Education Office and principal staff member of 1st-Case Examination Room of Shenzhen Discipline Inspection Commission, Board Secretary of Shenzhen Stepwell Environmental Protection Technology Co., Ltd and executive director of Shenzhen Xuriwenhua Investment Consulting Co., Ltd; At present he acts as the associate director of Office of Discipline Supervision& Investigation of Shenzhen Investment Holdings Co., Ltd and supervisor of this company.
Zhang Xiaodong, male, born in 1975, postgraduate degree and CPC member. He began to work for this company in August 1999 and had served successively as the assistant manager and manager of subsidiary of this company, manager of business management department of this company and manager of Shenzhen Meibainian Garment Co., Ltd; At present he acts as the employee supervisor of this company and the head of business management department.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report（3）Senior Executives
Le Kunjiu, male, born in 1963, bachelor degree economist professional title and CPC member; he has served successively as the loan officer of the finance department of Zhejiang Ningbo International Trust and Investment Corporation, deputy director and director of the finance department of CITIC Group Corporation, Ningbo Branch, manager of the research department of Hainan Fudao Asset Management Co., Ltd, assistant manager of Shenzhen Leaguer Venture Capital Co., Ltd, vice president& chief financial officer of Shenzhen Leaguer Digital Television Co., Ltd, chairman& general manager of Shenzhen Oriscape Electronic Co., Ltd, vice president of Shenzhen International Technology Transfer Center, Tsinghua University, associate director of the industrial funds preparatory office of Shenzhen Investment Holdings Co., Ltd and Deputy general manager of Shentou Education; At present he acts as chairman of supervisory board of SAPO Photoelectric Co., Ltd., Board chairman of Shenzhen Guanhua Printing& Dyeing Co., Ltd., Deputy general manager of the Company.
Liu Honglei, male, born in 1964, bachelor degree and CPC member, Senior engineer, He has served Technician , Work director, Deputy director of office of First film factory of Ministry of Chemical Engineering,Director of personnel Education Dept of Education Department of China Lekai Film Group, he has served as the deputy general manager and general manager of SAPO Photoelectric Co., Ltd from June 2012 to May 2013 and the head of the party-mass work department and the manager of the business management department of Shenzhen Textile (Holdings) Co., Ltd; At present he holds the position of deputy general manager of the company.
Jiang Peng, Female, born in 1970, Bachelor Degree, member of communist party, She served as officer of the Secretary Office of Shandong Fishery Group Co.,Ltd., Deputy Director of the Secretary office and Securities affairs Representative of Shandong Zhonglu Oceanic Fisheries Co., Ltd., Securities Representative of Huafu Holding Co., Ltd., Securities affairs representative and Officer of the Secretariat of the Board of the Company, now serves as the secretary of the Board of the Company.
Office taking in shareholder companies
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
||||||Does he /she|
|||Titles||||
|Names of the|||||receive|
|||engaged in|Sharing date of|Expiry date of||
|persons in|Names of the shareholders||||remuneration or|
|||the|office term|office term||
|office|||||allowance from the|
|||shareholders||||
||||||shareholder|
|||Chief||||
|Huang Yu|Shenzhen Investment Holdings Co., Ltd.||March 4,2017||Yes|
|||accountant||||
|||Minister of||||
|||Industry||||
|Wang Chuan|Shenzhen Investment Holdings Co., Ltd.|Manageme|May 23,2018||Yes|
|||nt||||
|||Department||||
|||Deputy||||
|||Director of||||
|Zou Zhiwei|Shenzhen Investment Holdings Co., Ltd.|discipline|June 16,2017||Yes|
|||Inspection &||||
|||Supervision||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|Office|

Offices taken in other organizations
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
||||||Does he/she|
|||Titles||||
|Name of the|||||receive|
|||engaged in|Starting date of|Expiry date of||
|persons in|Name of other organizations||||remuneration or|
|||the other|office term|office term||
|office|||||allowance from|
|||organizations||||
||||||other organization|
|||Vice||||
||Tianma Microelectronic Co., Ltd.||February|||
|Zhu Jun||Chairman ,||June 29,2019|No|
||||28,2013|||
|||Chairman||||
||Shenzhen General Institute of Architectural||October|||
|Huang Yu||Director|||No|
||Design and Research Co. ,Ltd.||12,2009|||
||Shenzhen Kunpeng Equity Investment||December|||
|Huang Yu||Director|||No|
||Management Co., Ltd.||23,2016|||
||Shenzhen City Construction|||||
|Huang Yu||Director|April 7,2017||No|
||Development(Group) Co., Ltd.|||||
|Wang Chuan|Shenzhen Shenfubao(Group) Co., Ltd.|Director|June 21,2018||No|
||Shenzhen Shentou Environment Technology|||||
|Wang Chuan||Director|June 27,2018||No|
||Co., Ltd.|||||
|Wang Chuan|Shenzhen Shentou Education Co., Ltd.|Director|July 27,2018||No|
|Wang Chuan|Shenzhen International Tendering Co., Ltd.|Director|July 27,2018||No|
||||October|||
|Zou Zhiwei|Shenzhen Xinxin Paper Co., Ltd.|Director||||
||||17,2017|||
|||Director of||||
|||the institute||||
|||of securities||||
|He Qiang|Central university of finance and economics|and futures,|July 1,1982||Yes|
|||professor,||||
|||doctoral||||
|||supervisor||||
|||Independent||September||
|He Qiang|Guojin Securities Co., Ltd.||May 25,2016||Yes|
|||director||14,2018||
|||Independent||||
|He Qiang|Northeast Securities Co., Ltd.||March 1,2017||Yes|
|||director||||
||Dahua certified public accountants (special||December|||
|He Zuowen||Partner|||Yes|
||general partnership) Shenzhen branch||1,2002|||
||||December|||
|He Zuowen|Shenzhen Certified Tax Agents Associatio|Chairman||August 30,2020|Yes|
||||1,2008|||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||||
|-|-|-|-|-|-|
|||Independent|October|||
|He Zuowen|Shenzhen Tongyi Industry Co., Ltd.||||Yes|
|||director|11,2018|||
||Shenzhen JPT OPTO-ELECTRONICS Co.,|Independent||||
|He Zuowen|||June 1,2017||Yes|
||Ltd.|director||||
|||Independent||||
|He Zuowen|Shenzhen Yirui Biology Co., Ltd.,||October 1,2017||Yes|
|||director||||
|Cai Yuanqing|Shenzhen University,|Law professor|April 1,2001||Yes|
|Cai Yuanqing|Shenzhen arbitration commission|Arbitrator|April 1,2007||Yes|
||Shenzhen Rongda Photosensitive &|Independent|December|||
|Cai Yuanqing||||August 30,2020|Yes|
||Technology Co.,Ltd.|director|31,2014|||
||Shenzhen Guanhua Printing & Dyeing|||||
|Le Kunjiu||Chairman|June 6,2017||No|
||Co.,Ltd.|||||

Punishments to the current and leaving board directors, supervisors and senior managers during the report period by securities regulators in the recent three years
□ Applicable√Not applicable
IV. Remuneration to directors, supervisors and senior executives
Decision-making procedures, basis for determination and actual payment of the remuneration to directors , supervisors and senior executives
In the report period, The remuneration of directors and senior management paid by the company is determined by “Director Compensation Management System” and “Executive Compensation Management and Evaluation System”, the remuneration of independent directors is determined as per the resolution ofshareholders’ meeting, and the remuneration of supervisors paid by the company is determined by their position held in the company. Remuneration to directors, supervisors and senior executives in the reporting period
In RMB10,000
||||||||
|-|-|-|-|-|-|-|
||||||Total|Remuneration|
||||||remuneration|actually receives|
|Name|Positions|Sex|Age|Office status|||
||||||received from the|at the end of the|
||||||shareholder|reporting period|
|Zhu Jun|Board Chairman|Male|55|Appoint|101.42|No|
|Zhu Meizhu|Director , GM|Male|54|Appoint|76.5|No|
||Director, Deputy||||||
||Secretary of the||||||
||Party committee||||||
|Ning Maozai||Male|43|In Office|46.78|No|
||and Secretary of||||||
||the Commission||||||
||for Discipline||||||
|Huang Yu|Director|Male|44|In office|0|Yes|
|Di Yan|Director, CFO|Female|48|In Office|62.82|No|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||
|-|-|-|-|-|-|-|
|Wang Chuan|Director|Male|46|In office|0|Yes|
||Independent||||||
|He Qiang||Male|66|In Office|10|No|
||Director||||||
||Independent||||||
|He Zhuowen||Male|56|In office|10|No|
||Director||||||
||Independent||||||
|Cai Yuanqing||Male|49|In Office|10|No|
||Director||||||
||Chairman of the||||||
|Wang Weixing|supervisory|Male|50|In Office|65.79|No|
||committee||||||
|Zou Zhiwei|Supervisor|Male|36|In office|0|Yes|
||Employee||||||
|Zhang Xiaodong||Male|43|In Office|39.37|No|
||supervisor||||||
|Le Kunjiu|Deputy GM|Male|55|In office|65.7|No|
|Liu Honglei|Deputy GM|Male|54|In Office|72.14|No|
||Secretary to the||||||
|Jiang Peng||Female|48|In office|45.08|No|
||board of directors||||||
|Lin Lebo|Director|Male|57|Dimission|0|No|
|Zhao Lin|Director|Female|39|Dimission|0|No|
|Total|--|--|--|--|605.6|--|

 Incentive equity to directors, supervisors or/and senior executives in the reporting period
√ Applicable□Not applicable
In shares
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Name|Position|Number of|Number of|Exercise|Market|Number of|Number of|Number of|Granting|Number of|
|||vested|exercise|price of|price at the|restrictive|shares|newly-awa|price of|restrictive|
|||shares|stocks|the|end of|stock hold|unlocked|rded|restrictive|stock hold|
|||during the|during the|exercise|report|at the|in the|restrictive|stock|at the end|
|||report|report|stock|period|beginning|current|stock|(Yuan per|of the|
|||period|period|during the|(Yuan per|of the|period|during the|share)|report|
|||||report|share)|report||report||period|
|||||period||period||period|||
|||||(Yuan per|||||||
|||||share)|||||||
||Board||||||||||
|Zhu Jun||0|0||5.79|137,000|0|0|5.73|137,000|
||Chairman||||||||||
|Zhu|Director ,||||||||||
|||0|0||5.79|135,000|0|0|5.73|135,000|
|Meizhu|GM||||||||||
|Ning|Director,|0|0||5.79|122,000|0|0|5.73|122,000|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Maozai|Deputy||||||||||
||Secretary||||||||||
||of the||||||||||
||Party||||||||||
||committee||||||||||
||and||||||||||
||Secretary||||||||||
||of the||||||||||
||Commissi||||||||||
||on for||||||||||
||Discipline||||||||||
||Deputy||||||||||
|Le Kunjiu||0|0||5.79|122,000|0|0|5.73|122,000|
||GM||||||||||
|Liu|Deputy||||||||||
|||0|0||5.79|122,000|0|0|5.73|122,000|
|Honglei|GM||||||||||
||Secretary||||||||||
||to the||||||||||
|Jiang Peng||0|0||5.79|100,000|0|0|5.73|100,000|
||board of||||||||||
||directors||||||||||
|Total|--|0|0|--|--|738,000|0|0|--|738,000|

 V. Particulars about employees.
1. Staff jobs, education, job title number and proportion refer to the following pie chart:
|||
|-|-|
|Number of in-service staff of the parent company（person）|46|
|Number of in-service staff of the main subsidiaries（person）|1,291|
|Total number of the in-service staff（person）|1,337|
|Total number of staff receiving remuneration in the current||
||1,337|
|period（person）||
|The number of the parent company and the main subsidiary’s||
||0|
|retired staffs who need to bear the cost（person）||
|Professional||
|Classified according by Professions|Number of persons（person）|
|Production|889|
|Sales|26|
|Technical|152|
|Financial|41|
|Administrative|229|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|Total|1,337|
|Education||
|Classified according by education background|Number of persons（person）|
|Postgraduate or above|38|
|Universities|195|
|Colleges|116|
|Mid-school or below|988|
|Total|1,337|

 2. Remuneration policies
In 2018, the Company carried out management foremployees’ compensation in strict accordance with thestate’s relevant laws and regulations and guaranteed the fairness and reasonability of the compensation, which offered relevant rewards and incentives to the employees, accelerate them to jointly develop with the Company , and simultaneously reflected humanistic care of the Company.
3.Training plan
In 2018, the Company founded an "Online College of Shenzhen Textile (Holdings) Co., Ltd.", where employees were encouraged to study by making full use of every minute to further enrich the Company's training management system; the Company launched a "Shenzhen Textile Lecture Program" to normalize lectures in the Company and develop the good spirit of "teaching lessons, helping and leading"; the Company built a reading platform of "theory and practice combination", where a good reading and leaning atmosphere was created and reading sharing activities and indoor team building activities were organized and well recognized by trainees; the Company organized an activity of "learning management from movies" and arranged an in-depth discussion and sharing link in combination with its actual business development situation at the moment to take in correct management experience from development of external enterprises and delivery positive energy to enhance the fighting capacity and cohesion in the Company.
4. Outsourcing situation
□ Applicable√ Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report IX. Administrative structure
I. Basic state of corporate governance
In the reporting period, the company regulated operations and strengthen risk control in strict accordance with Securities Law, Corporation Law, the Shenzhen Stock Exchange Standard Operation Instructions for Main-Board Listed Companies, Corporate Governance Standards for Listed Companies and other related laws and regulations, to ensure a healthy and stable development. At present, the basically sound governance system, normative business operation and impeccable corporate governance structure meet the requirements of the normative documents for regarding corporate governance of listed companies issued by the China Securities Regulatory Commission.
In 2018, company held a total of 4 general meetings, convened general meetings, standardized voting procedures to safeguard the effectiveness and legality in strict accordance with the regulations and requirements of Corporation Law, Articles of Corporation and Rule of Procedure of Shareholders' Meeting. Companies actively protected the voting rights of minority investors, and general meetings were convened in the form of live network to adequately assure small investors of their rights to exercise.
In 2018, the board of directors held 7 general meetings, and the convening and voting procedures were all conducted in strict accordance with the Articles of Corporation and Rule of Procedure of Shareholders' Meeting. All the directors performed directors ' duties, exercisedirectors’ rights, attended related meetings and actively participated in the training and became familiar with relevant laws and regulations with serious, diligent and honest attitudes. Independent directors independently performed their duties in strict accordance with Articles of Corporation, The independent director system and other relevant laws and regulations, expressed fully their independent opinions on corporate operation, decision-making, and important matters, etc. Strategy, audit, remuneration, evaluation, nomination committees were established under board of directors, all committees functioned properly, and performed duties such as internal audits, compensation assessment, nomination of senior management personnel, and provided scientific and professional advisory opinions for board ofdirectors’ decision-making.
In 2018, the board of supervisors held 6 meetings. The board of supervisors strictly followed the requirements of Articles of Corporation and Rules of procedure of the board of supervisors and other relevant laws and regulations, supervised the legal compliance of the duties performed by company's financial personnel and directors, managers and other senior management personnel in the aim of maintaining the legitimate rights and interests of the company and its shareholders. All the supervisors fulfilled their obligations, exercised their rights according to the laws. The convening and voting procedures of the board of supervisors were legal, and the resolutions were legal and valid. The establishment and implementation of board of supervisors played an active role in improving corporate governance structure and regulating corporate operations.
In 2018, we further increased information transparency, accomplishedinvestors’ protection and propaganda work. In the reporting period, except disclosing information in a real accurate, timely, fair and complete manner in accordance with the regulatory requirements,
Moreover, the Company carried out the special work Blue Sky Action according to Notification on Implementing Special Work where Investors Protect Blue Sky Action published by Shenzhen Securities Bureau to
enhance the quality of information disclosure as the key point, to continuously perfect the communication
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report mechanism and to promote the normative development of the Company. Meanwhile, the Company continued to perfect the voting mechanism for minority investors. In 2018, the minorityinvestors’ voting was counted separately at each of the twoshareholder’s meetings, and whose result was disclosed at the decision announcement at theshareholder’s meeting, which fully guaranteed the execution of power of the minority investors.
Moreover, the Company carried out the special work Blue Sky Action according to Notification on Implementing Special Work where Investors Protect Blue Sky Action published by Shenzhen Securities Bureau to enhance the quality of information disclosure as the key point, to continuously perfect the communication mechanism and to promote the normative development of the Company. various platforms were made full use of, such as telephone, e-mail, website, especially the interactive platform of investors in Shenzhen Stock Exchange, solved questions brought by investors, and communicated with medium and small investors interactively, and ensure all the investors obtained equal opportunities for informal access. Meanwhile, in the aim of improving the transparency of listed companies, company acceptedinvestors’ on-site investigation to have comprehensive understandings of the company's business situation through face-to-face communication with management, also urged the company established a responsibility to return on investors, improved and enhanced the corporate governance standards. Meanwhile, the Company continued to perfect the voting mechanism for minority investors. In 2018, the minorityinvestors’ voting was counted separately at each of the 4shareholder’s meetings, and whose result was disclosed at the decision announcement at theshareholder’s meeting, which fully guaranteed the execution of power of the minority investors.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions of CSRC,
√ Yes□No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions of CSRC.
Shenzhen Investment Holdings Co., Ltd., the holding shareholder of the company, is a Shenzhen SASAC enterprise. The company has complied with the relevant provisions on the state-owned asset management of holding shareholders to report non-public information to holding shareholders, mainly including:Letters submitted monthly index table; fee schedule during the reporting, financial assets table, summary quarterly deposits and borrowings and financing.In order to strengthen the management of non-public information, the company has strictly controlled the scope of learners, standardized the process of information delivery and strictly implemented as per the “Management System on Learner of Insider Information”, took practical measures to prevent inside information leaks and insider trading.
In addition, there is no difference among the governance of the company, “Company Law” and the relevant provisions of China Securities Regulatory Commission.
II. Independence and Completeness in business, personnel , assets, organization and finance
The code of conduct of the controlling shareholders of the company did not go beyond the general meetings directly or indirectly to interfere with the decision-making and business activities, the company had independent and complete business and autonomous operation capacity , achieved “five point separation” in respect of personnel, financial, asset, agencies, business.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report III. Competition situations of the industry
□ Applicable√ Not Applicable
IV. Annual General Meeting and ExtraordinaryShareholders’ Meetings in the Reporting Period
1.Annual General Meeting
|||||||
|-|-|-|-|-|-|
|||Investor||||
|Sessions|Type||Meeting Date|Disclosure date|Disclosure index|
|||participation ratio||||
||||||Announcement|
||Provisional|||||
|Annual General|||||No.2018-19|
||shareholders’|48.94%|April 19,2018|April 20,2018||
|Meeting of 2017|||||（http://www.cninfo|
||General Meeting|||||
||||||.com.cn）|
|The first provisional|||||Announcement|
||Provisional|||||
|shareholders’|||||No.2018-27|
||shareholders’|48.95%|June 20,2018|June 21,2018||
|General meeting in|||||（http://www.cninfo|
||General Meeting|||||
|2018|||||.com.cn）|
|The second||||||
||||||Announcement|
|provisional|Provisional|||||
||||||No.2018-41|
|shareholders’|shareholders’|49.01%|August 31,2018|September 1,2018||
||||||（http://www.cninfo|
|General meeting in|General Meeting|||||
||||||.com.cn）|
|2018||||||
|The third provisional|||||Announcement|
||Provisional|||||
|shareholders’|||||No.2018-52|
||shareholders’|48.98%|November 14,2018|November 15,2018||
|General meeting in|||||（http://www.cninfo|
||General Meeting|||||
|2018|||||.com.cn）|

2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable√Not applicable
V. Responsibility performance of independent directors in report period
1. The attending of independent directors to board meetings andshareholders’ general meeting
|||||||||
|-|-|-|-|-|-|-|-|
|The attending of independent directors||||||||
||Number of||Number of|||Failure to|Number of|
||Board|Number of|meetings|Number of||personally|attendance at|
|Independent|||||Number of|||
||meetings|spot|attended by|attendances by||attend board|general|
|Directors|||||absence|||
||necessary to be|attendances|Communicatio|representative||meetings|meetings of|
||attended in the||n|||successively|shareholders|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
||reporting|||||twice (Yes/No)||
||period|||||||
|He Qiang|7|1|6|0|0|No|1|
|He Zuowen|7|2|5|0|0|No|4|
|Cai Yuanqing|7|2|5|0|0|No|3|

 Notes to failure to personally attend Board Meetings Successively Twice
No
2.Objection of independent directors on some relevant issues
Objection of independent directors on some relevant issues
□ Yes√No
Independent directors proposed no objection against the relevant matters in the reporting period.
3. Other notes to duty performance of independent directors
Has an independentdirector’s advice to the Company been accepted
√ Yes□No
Explanation on acceptance of or failure to accept an independentdirector’s advice to the Company.
In the report period, the independent directors of the Company seriously fulfilled duties according to the requirement of supervision laws and regulations and System of theCompany’s IndependentDirector：
1.The independent directors timely attended the board meeting convened by the Company, and attended meetings related to theshareholder’s meeting. Beforehand,, we carefully reviewed the information of the meeting. We fully utilized our own professional advantages and enterprise management experience to put forward reasonable opinions and suggestions for the proposal and to give independent comment for the related party for its capital occupation, which fully expressed the guidance and supervision function of the independent directors. 2.The independent directors actively participated in the work of theboard’s special committee, and gave independent comments for events involved with theCompany’s periodical report, duty performance and further employment of annual audit institution, self-assessment report of internal control, To express opinions on such matters as nomination of candidates for directors, which factually maintained the interest of the Company and theshareholders’, especially the publicshareholder’s, and which benefited theboard’s core function at corporate governance.
3.The independent directors kept communicating with theCompany’s managements and thoroughly debrief relevant personnel, and focused on the construction progress of Project Line 6 of TFT-LCD polaroid glass of Period II as well as the progress of SAPO Photoelectric's capital increment and share expansion for introducing strategic investors,. which enabled the independent directors to timely comprehend and master the progress of theCompany’s significant issues.
（4）The Company checked management and use of funds raised and supervised compensation and performance of duties of directors and senior executives, commitments of the Company and related parties and their
performance to practically safeguard the interest of the Company as a whole and prevent any harm on legitimate
rights and interests of minority shareholders.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Refer to the announcement of the http://www.cninfo.com.cn disclosure on April 27,2019
VI. Duty Performance of Special Committees under the Board of Directors in the Reporting Period The independent directors of the company are the key members of all professional committees of the Board of Directors, and are in the majority and the conveners of Audit Committee, Remuneration and Appraisal Committee and Nomination Committee. Also, all the three independent directors can attend the daily meeting held by every special committee on time.
(1) Audit Committee: during the reporting period, the Audit Committee has held two meetings, carefully examined the regular reports of the company and effectively implemented the work schedule of annual reports. Also, the Audit Committee has reviewed the internal control of the company, supervised the effective implementation of internal control, the self-assessment of internal control. Before the board meeting for deliberating annual report was convened, the Company will strengthen the communication with the certified public accountant for annual audit, carefully review related information,and will learn about and master the arrangement and progress ofaccountant’s audit. The Company will interview the accountant for annual audit to effectively communicate with the accountant about the problems found during the audit progress, will supervise and examine the disclosed information, will ensure theCompany’s situation will be factually reflected by the audit report, and will make a comprehensive assessment for accountant for the completion situation of the annual work and the practising quality. In the report period, the Company will convene meeting sand formed solutions for audit institution recruitment, self-assessment report of internal control and financial final statement
During the reporting period, Proposal on Carry a meeting ficused on hiring audit institutions, self-assessment report of the internal control, the Final Accounting Report and other matters and reach a resolution.
（II) Compensation and Assessment Committee: In the report period, the Compensation and Assessment Committee convened 1 meeting in total on the Company's compensation assessment of senior executives in 2017 with a resolution formed.
(3)Nomination committee: The nomination committee has held during the report period. 2 meetings in total at which the nominated candidates of independent director and hired senior managers are convened and a resolution is formed.
VII. Work of the supervisory Committee
Did the supervisory Committee find any risk existing in performing the supervision activities in the reporting period
□Yes√No
The supervisory Committee has no objection opinion any matters under supervision in the reporting period VIII. Assessment and incentive Mechanism for Senior executives
The company complies with “Executive Compensation Management and Evaluation System” to conduct the evaluation for the accomplishment of annual work of the senior executives. The salaries of the senior executives are determined according to the duty scope, post value, individual ability, wages level on the market, economic profits of the company and operation goal accomplishment of senior executives with adhering to the principle of market orientation, responsibility with unified right, and incentive and equal restriction. During the reporting
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report period, the senior executives are all qualified in 2018 after evaluation. The directors and the general manager have conducted the feedback on the annual appraisal evaluation for the senior executives in accordance with the “Executive Compensation Management and Evaluation System” and proposed the recommendation for improvement.
IX. Internal control situations
1.Specific situations on major defects of internal control discovered during report period
√ Yes□No
||
|-|
|About the significant Defects of the internal control found in the internal control self-assessment report in the reporting period|
|The identification and rectification of deficiency of the internal control:|
|1. The identification and rectification of deficiency of the internal control in the financial statement|
|In accordance with above identification standard of deficiency of the internal control in the financial statement, there is no the|
|serious and important deficiency of internal control in the financial statement during the reporting period.|
|2.The identification and rectification of deficiency of the internal control except for that of the financial statement in accordance|
|with above identification standard of deficiency of the internal control except for that of the financial statement, there is no the|
|serious and important deficiency of internal control except for that of the financial statement during the reporting period.|

2.Self-evaluation report on internal control
||||
|-|-|-|
|Disclosure date of appraisal report on|||
||April 27,2019||
|internal control|||
|Disclosure index of appraisal report on|||
||Juchao Website（: http://www.cninfo.com.cn）, Self-evaluation report of internal control||
|internal control|||
|Proportion of total unit assets covered by|||
|appraisal in the total assets of the|||
||100.00%||
|consolidated financial statements of the|||
|company|||
|Proportion of total unit incomes covered|||
|by appraisal in the total business incomes|||
||100.00%||
|of the consolidated financial statements of|||
|the company|||
|Standards of Defects Evaluation|||
|Category|Financial Report|Non-financial Report|
||The defects related to financial reports were|In the following circumstances, the|
||divided into general defects, important|company was identified as existing|
||defects and significant defects according to|non-financial –reporting related|
|Qualitative standard|their severity. Significant defects referred to|significant defects of internal controlling|
||one or multiple combinations of controlling|defects:|
||defects, which may lead to serious deviation|The business activities of the company|
||from the controlling objectives. Important|seriously violated national laws and|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||
|-|-|-|
||defects referred to one or multiple|regulations; (2) The decision-making|
||combinations of controlling defects, and|process of "Three-Importance&|
||their severity and economic consequences|One-Large" were unscientific, leading to|
||were below significant defects, but they|major decision errors, and causing major|
||could still lead to serious deviation from the|property loses to the company; (3)|
||controlling objectives. General defects|Massive loss of key posts or technology|
||referred to other internal controlling defects|talents; (4) The controlling system|
||which couldn't constitute significant defects|involving important business fields of the|
||or important defects.|company failed; (5) It Caused serious|
|||negative effects on business of the|
|||company, and the effects couldn’t be|
|||eliminated; (6) The evaluation results of|
|||internal control were significant defects,|
|||and couldn’t get effective rectification.|
|||Important defects referred to one or|
|||multiple combinations of controlling|
|||defects, and their severity and economic|
|||consequences were below significant|
|||defects, but they could still lead to|
|||serious deviation from the controlling|
|||objectives. General defects referred to|
|||other internal controlling defects which|
|||couldn't constitute significant defects or|
|||important defects.|
||Misstatement amount of financial statement||
||fell into the following intervals: significant||
||defects: Misstatement amount ≥ 1.5% of||
||total revenue; Misstatement amount ≥ 10%||
||of gross profit; Misstatement amount ≥ 1%||
||of total asset; Misstatement amount ≥ 5% of||
||net asset. significant defects: 0.5% of Total||
||revenue ≤Misstatement amount ＜ 1.5% of||
||total revenue; 5% of gross profit||
||≤Misstatement amount ＜ 10% of gross||
|Quantitative criteria||Not applicable|
||profit; 0.5% of Total asset ≤Misstatement||
||amount ＜ 1% of total revenue; 3% of Net||
||assets ≤Misstatement amount ＜ 5% of net||
||assets. General defects:0% of total revenue||
||＜Misstatement amount＜0.5% of Total||
||revenue; 2% of gross profitt ＜Misstatement||
||amount＜5% of total profit; 0% of total||
||assets ＜Misstatement amount＜0.5 of total||
||assets; 0% of net assets ＜Misstatement||
||amount＜3% of net assets.||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|Number of major defects in financial||
||0|
|reporting（a）||
|Number of major defects in non financial||
||0|
|reporting (a)||
|Number of important defects in financial||
||0|
|reporting（a）||
|Number of important defects in non||
||0|
|financial reporting（a）||

X. Internal Control audit report
√ Applicable□Not applicable
Review opinions in the internal control audit report
To all shareholders of Shenzhen Textile (Holdings) Co.,Ltd.：
According to the relevant requirements of the “Audit Guideline of Enterprise Internal Control” and the Chinese CPA criteria, the company has audited the effectiveness of internal control of the financial statement of Shenzhen Textile (Holdings) Co., Ltd. (Shenzhen Textile) at the date of December 31, 2018.
1. The responsibility of enterprise for the internal control. According to the provisions of “Fundamental Norms for Enterprise Internal Control”, “Operation Guideline of Enterprise Internal Control” and “Evaluation Guideline of Enterprise Internal Control”, the company has established, perfected and effectively implemented the internal control, and made an evaluation for its effectiveness, which are the responsibilities of the Board of Directors of Shenzhen Textile.
2. The responsibility of CPA. The company shall be responsible for the expression of audit opinions on the effectiveness of internal control in the financial statement and the disclosure of serious deficiency of internal control except for the financial statement on the basis of the implementation of audit.
3. The inherent limitation of internal control. There is the possibility of unpreventable errors. In addition, due to the change of situation, the inappropriate internal control is maybe shown, or the control policy and the abidance of procedure can be reduced. Based on the audit results of internal control, the future internal control is expected to have a certain risk.
4. The audit opinions of internal control in the financial statement. The company believes that Shenzhen Textile has maintained the effective internal control of the financial statement in all the major aspects according to “Fundamental Norms for Enterprise Internal Control” and the relevant provisions on December 31, 2018.
Peking Certified Public Accountants(Special General Partnership)
Chinese C.P.A.
(Project partner)
Lan Tao
Chinese C.P.A.
Liu Ru
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report April 25,2019
|||
|-|-|
|Disclosure date of audit report||
||Disclosure|
|of internal control (full-text)||
|Index of audit report of||
||April 27,2019|
|internal control (full-text)||
||Juchao Website: （http://www.cninfo.com.cn）;Audit report of internal control of Peking|
|Internal audit report’s opinion||
||Certified Public Accountants qin xin shen zi 【2019】No.410|
|Type of audit report on internal||
||Unqualified auditor’s report|
|control||
|Whether there is significant||
||No|
|defection non-financial report||

Has the CPAs issued a qualifiedauditor’s report of internal control .
□ Yes√No
Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of Directors
√Yes□No
X. Corporation bonds
Whether or not the Company public offering corporation bonds in stock exchange, which undue or without payment in full at maturity on the approval date for annual report disclosed
No
 Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report XI. Financial Report
I. Audit report
|||
|-|-|
|Type of audit opinion|Standard Unqualified opinion|
|Type of audit opinion|April 25,2019|
||Peking Certified Public Accountants(Special General|
|Name of audit firm||
||Partnership)|
|Name of the certified accountants|Lan Tao , Liu Ru|

Auditors’ Report
To all shareholders of Shenzhen Textile (Holdings) Co.,Ltd.：
I. Opinion
We have audited the financial statements of Shenzhen Textile (Holdings) Co., Ltd . (hereinafter referred to as "the Company"), which comprise the balance sheet as at December 31, 2018, and the income statement, the statement of cash flows and the statement of changes in owners' equity for the year then ended and notes to the financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance with Accounting Standards for Business Enterprises and present fairly the financial position of the Company as at December 31, 2018 and its operating results and cash flows for the year then ended.
II. Basis for Our Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants in China. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. According to the Code of Ethics for Chinese CPA, we are independent of the Company in accordance with the Code of Ethics for Chinese CPA and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
(Ⅰ) Recognition of revenue
1. Description of matters
As indicated in RemarkⅤ(32) of the financial statement, the revenues of the period of Shenzhen Textile (Holdings) Co., Ltd is RMB1,280,018,761.78, which are mainly sourced from sales revenue of diffuser and textiles, rental income and trade income. As the revenue is one KPI of Shenzhen Textile (Holdings) Co., Ltd, appropriate recognition of the revenue will have an effect on thecompany’s operating results and shall be confirmed as one key item of a
2. Response to the audit
The audit process implemented for revenue recognition includes mainly: Test and evaluate the effectiveness of internal control in relation to revenue recognition; re-check on the basis of product and business type the consistency of accounting policy used for various revenue recognition with Accounting Standard for Business Enterprises; perform analytical procedure on the revenue and evaluate the rationality of revenue recognition; sample the recognized revenue and check sales contract, shipping order, sales invoice and other supportive documents to evaluate if the revenue has been recognized according to revenue recognition policy; Sample the revenue recognized before or after the balance sheet date and check relevant supportive documents to evaluate if the revenue has been recognized in an appropriate period; Sample the recognized accounts receivable and revenue, perform confirmation procedure to evaluate the veracity of the revenue.
(Ⅱ) Inventory falling price reserves
1. Description of matters
As indicated in RemarkⅤ(5) of the financial statement, the balance of inventory falling price reserves of Shenzhen Textile (Holdings) Co., Ltd at the end of the report period is RMB87,762,302.32; as the inventory falling price reserves and any variation will play a great influence on the financial statement and the process of confirming net realizable value of inventory will involve major judgment and estimate
of the management, we shall confirm inventory falling price reserves as one key item of audit.
2. Response to the audit
The audit process implemented for inventory falling price reserves includes mainly: Test and evaluate the effectiveness of internal
control in relation to inventory falling price reserves; Supervise inventory taking and check the quantity, condition of inventory; get a
year-end inventory list and conduct analytical review on the conditions of various inventories; get the calculating table for inventory falling
price reserves and check it; Check any changes of the accrual of inventory falling price reserves in this period.
IV. Other information
 Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report The management of the Company is responsible for the other information. The other information comprises information of the Company's annual report in 2018, but excludes the financial statements and our auditor's report.
Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Company's management is responsible for preparing the financial statements in accordance with the requirements of Accounting Standards for Business Enterprises to achieve a fair presentation, and for designing, implementing and maintaining internal control that is necessary to ensure that the financial statements are free from material misstatements, whether due to frauds or errors.
In preparing the financial statements, management of the Company is responsible for assessing the Company's ability to continue as a going concern, disclosing matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the audit standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management of the Company.
(4) Conclude on the appropriateness of using the going concern assumption by the management of the Company, and conclude, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements and bear all liability for the opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit matters, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Peking Certified Public Accountants(Special General Partnership)
Chinese C.P.A. LanTao（Project Partner)
Chinese C.P.A. Liu Ru
April 25,2019
II. Financial Statements
Statement in Financial Notes are carried in RMB/CNY
 Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Consolidated balance sheet
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. December 31,2018 In RMB
|||||
|-|-|-|-|
|Items|Notes V|At the end of term|Beginning of term|
|Current asset：||||
|Monetary fund|(1)|1,141,759,374.60|1,165,048,108.83|
|Financial assets measured at fair value with||||
|variations accounted into current income||||
|account||||
|Derivative financial assets||||
|Notes receivable & Account receivable|（2）|529,340,447.65|236,710,196.70|
|Prepayments|（3）|229,028,791.15|13,755,152.05|
|Other account receivable|（4）|14,846,896.50|28,654,857.07|
|Inventories|（5）|439,752,718.77|275,615,176.16|
|Assets held for sales||||
|Non-current asset due within 1 year||||
|Other current asset|（6）|639,797,959.30|1,148,689,874.10|
|Total of current assets||2,994,526,187.97|2,868,473,364.91|
|Non-current assets：||||
|Available-for-sale financial assets|（7）|45,373,784.87|66,035,733.04|
|Expired investment in possess||||
|Long-term receivable||||
|Long term share equity investment|（8）|32,952,085.66|20,380,734.56|
|Property investment|（9）|167,997,941.98|173,105,806.27|
|Fixed assets|（10）|987,876,247.55|656,133,200.19|
|Construction in progress|（11）|15,621,286.64|322,570,173.73|
|Productive biological assets||||
|Oil and natural gas assets||||
|Intangible assets|（12）|37,880,815.85|38,870,673.40|
|Development expenses||||
|Goodwill|（13）|||
|Long-germ expenses to be amortized|（14）|1,486,209.03|1,035,290.08|
|Deferred income tax asset|（15）|6,036,198.23|1,974,536.90|
|Other non-current asset|（16）|329,452,659.01|47,166,994.48|
|Total of non-current assets||1,624,677,228.82|1,327,273,142.65|
|Total of assets||4,619,203,416.79|4,195,746,507.56|

Legal Representative: Zhu Jun
Person-in-charge of the accountingwork：Zhu Meizhu
Person-in -charge of the accountingorgan：Mu Linying
Consolidated balance sheet(Cont'd)
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. December 31, 2018
In RMB
|||||
|-|-|-|-|
|Items|Note V|At the end of term|Beginning of term|
|Current liabilities||||
|Short-term loans|（17）|411,522,111.40|88,638,181.45|
|Current liabilities||||
|Short-term loans||||
|Notes payable & account payable|（18）|180,239,452.90|97,104,697.18|
|Advance payment|（19）|120,702,951.37|34,952,567.83|
|Employees’ wage payable|（20）|32,506,267.08|29,503,260.65|
|Tax payable|（21）|7,745,128.99|6,935,262.57|
|Other account payable|（22）|229,015,279.98|200,826,343.58|
|Liabilities held for sales||||

 Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||
|-|-|-|-|
|Non-current liability due within 1 year|（23）|40,000,000.00|40,000,000.00|
|Other current liability||||
|Total of current liability||1,021,731,191.72|497,960,313.26|
|Non-current liabilities：||||
|Long-term loan|（24）|-|40,000,000.00|
|Bond payable||-|-|
|Including：preferred stock||||
|Sustainable debt||||
|Long-term payable||||
|Long-term payable employees' remuneration||||
|Expected liabilities||||
|Deferred income|（25）|137,991,698.33|134,767,064.72|
|Deferred income tax liability|（15）|-|-|
|Other non-current liabilities||||
|Total non-current liabilities||137,991,698.33|174,767,064.72|
|Total of liability||1,159,722,890.05|672,727,377.98|
|Owners’ equity||||
|Share capital|（26）|511,274,149.00|511,274,149.00|
|Other equity instruments||||
|Including：preferred stock||||
|Sustainable debt||||
|Capital reserves|（27）|1,865,716,983.63|1,866,001,475.17|
|Less：Shares in stock|（28）|27,230,679.00|27,230,679.00|
|Other comprehensive income|（29）|1,339,208.41|2,218,703.87|
|Special reserves||||
|Surplus reserves|（30）|80,004,803.23|77,477,042.19|
|Common risk provision||||
|Retained profit|（31）|-57,774,473.41|-32,266,087.44|
|Total of owner’s equity belong to the parent company||2,373,329,991.86|2,397,474,603.79|
|Minority shareholders’ equity||1,086,150,534.88|1,125,544,525.79|
|Total of owners’ equity||3,459,480,526.74|3,523,019,129.58|
|Total of liabilities and owners’ equity||4,619,203,416.79|4,195,746,507.56|

 Legal Representative: Zhu Jun
Person-in-charge of the accountingwork：Zhu Meizhu
Person-in -charge of the accountingorgan：Mu Linying
Balance sheet of Parent Company
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. December 31,2018 In RMB
|||||
|-|-|-|-|
|Notes|Notes XV|Year-end balance|Year-beginning balance|
|Current asset：||||
|Monetary fund||85,416,567.74|413,700,327.95|
|Financial assets measured at fair value with variations accountedinto current income account||||
|Derivative financial assets||||
|Notes receivable & account receivable|（1）|541,948.21|449,536.21|
|Prepayments||17,436.00|10,000.00|
|Other account receivable|（2）|13,856,382.02|19,443,487.43|
|Inventories||||
|Assets held for sales||||
|Non-current asset due within 1 year||||
|Other current asset||500,000,000.00|120,000,000.00|
|Total of current assets||599,832,333.97|553,603,351.59|
|Non-current assets：||||

 Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||
|-|-|-|-|
|Available-for-sale financial assets||15,373,784.87|36,035,733.04|
|Held-to-maturity investments||||
|Long-term receivable||||
|Long term share equity investment|（3）|1,997,175,852.27|1,984,849,008.23|
|Property investment||161,053,628.71|165,607,900.07|
|Fixed assets||26,565,399.91|28,119,990.58|
|Construction in progress||-|-|
|Productive biological assets||||
|Oil and natural gas assets||||
|Intangible assets||1,012,374.75|1,413,305.67|
|R & D costs||||
|Goodwill||-|-|
|Long-germ expenses to be amortized||-|-|
|Deferred tax assets||5,818,069.48|1,526,871.33|
|Other non-current asset||-|493,620.44|
|Total of non-current assets||2,206,999,109.99|2,218,046,429.36|
|Total of assets||2,806,831,443.96|2,771,649,780.95|

 Legal Representative: Zhu Jun
Person-in-charge of the accountingwork：Zhu Meizhu
Person-in -charge of the accountingorgan：Mu Linying
Balance sheet of Parent Company(Cont'd)
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. December 31,2018 In RMB
|||||
|-|-|-|-|
|Notes|Notes|Year-end balance|Year-beginning balance|
|Current liabilities||||
|Short-term loans||||
|Financial liabilities measured at fair value with variations accountedinto current income account||||
|Derivative financial liabilities||||
|Notes payable and account payable||411,743.57|411,743.57|
|Advance payment||639,024.58|639,024.58|
|Employees’ wage payable||9,760,306.51|8,495,538.21|
|Tax payable||5,494,627.33|3,247,028.64|
|Other account payable||141,746,352.67|134,018,771.57|
|Liabilities held for sales||||
|Non-current liability due within 1 year||||
|Other current liability||||
|Total of current liability||158,052,054.66|146,812,106.57|
|Non-current liabilities：||||
|Long-term loan||||
|Bond payable||||
|Including：preferred stock||||
|Sustainable debt||||
|Long-term payable||||
|Employees’ wage payable||||

 Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||
|-|-|-|
|Expected liabilities|||
|Deferred income|700,000.00|800,000.00|
|Deferred income tax liability|-|-|
|Other non-current liabilities|||
|Total of Non-current liabilities|700,000.00|800,000.00|
|Total of liability|158,752,054.66|147,612,106.57|
|Owners’ equity|||
|Share capital|511,274,149.00|511,274,149.00|
|Other equity instrument|||
|Including：preferred stock|||
|Sustainable debt|||
|Capital reserves|1,599,025,454.96|1,599,381,854.96|
|Less：Shares in stock|27,230,679.00|27,230,679.00|
|Other comprehensive income|1,339,208.41|2,218,703.87|
|Special reserves|||
|Surplus reserves|80,004,803.23|77,477,042.19|
|Retained profit|483,666,452.70|460,916,603.36|
|Total of owners’ equity|2,648,079,389.30|2,624,037,674.38|
|Total of liabilities and owners’ equity|2,806,831,443.96|2,771,649,780.95|

 Legal Representative: Zhu Jun
Person-in-charge of the accountingwork：Zhu Meizhu
Person-in -charge of the accountingorgan：Mu Linying
Consolidated Income statement
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Year 2018 In RMB
|||||
|-|-|-|-|
|Items|Note|Report period|Same period of the previous|
|I. Income from the key business|（s3 V2）|1,272,356,771.34|year1,475,545,719.72|
|less：Business cost|（32）|1,142,250,284.67|1,299,603,719.37|
|Business tax and surcharge|（33）|8,042,137.62|13,962,996.87|
|Sales expense|（34）|9,636,559.05|9,940,696.87|
|Administrative expense|（35）|88,590,439.30|75,320,512.60|
|R & D costs|（36）|41,951,786.15|39,036,089.05|
|Financial expenses|（37）|-971,661.37|-31,171,160.81|
|Including：Interest expense|（37）|14,179,121.73|4,130,427.79|
|Interest income|（37）|-27,438,299.41|-34,831,809.25|
|Asset impairment loss|（38）|106,348,320.75|48,807,727.39|
|Add：Other income|（39）|17,228,202.21|12,567,426.98|
|Investment gain（“-”for loss）|（40）|51,793,705.47|53,555,819.95|
|Incl: investment gains from affiliates||1,260,154.95|1,101,479.62|
|Changing income of fair value||||
|Income on disposal of assets||||
|II. Operational profit（“-”for loss）||-54,469,187.15|86,168,385.31|
|Add ：Non-operational income|（41）|1,265,178.66|787,567.93|
|Less: Non-operating expense|（42）|219,103.78|2,015,456.96|
|III.Total profit(“-”for loss)||-53,423,112.27|84,940,496.28|
|Less：Income tax expenses|（43）|8,879,595.11|11,278,818.41|
|IV. Net profit||-62,302,707.38|73,661,677.87|

 Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||
|-|-|-|-|
|（I）Classification by business continuity||||
|1.Net continuing operating profit||-62,302,707.38|73,661,677.87|
|2.Termination of operating net profit||||
|（II）Classification by ownership||||
|1.Net profit attributable to the owners of parent company||-22,980,624.93|52,776,101.46|
|2.Minority shareholders’ equity||-39,322,082.45|20,885,576.41|
|VI. Net after-tax of other comprehensive income|（44）|-879,495.46|-1,173,518.20|
|Net of profit of other comprehensive income attributable to owners of the parent company.||-879,495.46|-1,173,518.20|
|（I）Other comprehensive income items that will not be reclassified into gains/losses in the subsequentaccounting 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.||-879,495.46|-1,173,518.20|
|1.Other comprehensive income under the equity method investee can be reclassified into profit or loss.||||
|2.Gains and losses from changes in fair value available for sale financial assets||-1,500,778.50|-288,326.89|
|3.Held-to-maturity investments reclassified to gains and losses of available for sale financial assets||||
|4.The effective portion of cash flow hedges and losses||||
|5.Translation differences in currency financial statements||621,283.04|-885,191.31|
|6.Other||||
|Net of profit of other comprehensive income attributable to Minority shareholders’ equity||||
|V. Total comprehensive income||-63,182,202.84|72,488,159.67|
|Total comprehensive income attributable to the owner of the parent company||-23,860,120.39|51,602,583.26|
|Total comprehensive income attributable minority shareholders||-39,322,082.45|20,885,576.41|
|VI. Earnings per share||||
|（I）Basic earnings per share||-0.04|0.10|
|(II)Diluted earnings per share||-0.04|0.10|

 Legal Representative: Zhu Jun
Person-in-charge of the accountingwork：Zhu Meizhu
Person-in -charge of the accountingorgan：Mu Linying
 Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Income statement of the Parent Company
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Year 2018 In RMB
|||||
|-|-|-|-|
|Items|Notes XV|Report period|Same period of the|
|I. Operating revenue|XV（ 4)|68,327,680.40|previous year65,474,614.36|
|Incl：Business cost|（4)|14,479,527.62|14,205,521.55|
|Business tax and surcharge||2,907,383.37|5,875,973.65|
|Sales expense||-|-|
|Administrative expense||31,726,924.70|29,587,958.60|
|R & D costs||||
|Financial expenses||-16,480,997.63|-13,663,222.04|
|Including：Interest expenses||571,844.26||
|Interest income||-17,084,555.65|-13,653,213.00|
|Asset impairment loss||1,488,429.82|5,554,598.81|
|Add：Other income||107,858.68|5,638.3|
|Investment gain（“-”for loss）|（5）|-3,527,451.56|522,719,665.90|
|Incl: investment gains from affiliates||1,260,154.95|1,101,479.62|
|Gains from change of fir value （“-”for loss）||||
|Assets disposal income||||
|II. Operational profit（“-”for loss）||30,786,819.64|46,639,088.04|
|Add ：Non-operational income||24,597.81|1,510.0|
|Less：Non business expenses||5,061.99|0477,949.40|
|III.Total profit(“-”for loss)||30,806,355.46|46,162,648.64|
|Less：Income tax expenses||5,528,745.08|8,499,047.25|
|IV. Net profit||25,277,610.38|37,663,601.39|
|1.Net continuing operating profit||||
|2.Termination of operating net profit||||
|V. Net after-tax of other comprehensive income||-879,495.46|-1,173,518.20|
|（I）Other comprehensive income items that will not be reclassified into gains/lossesin 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）||-879,495.46|-1,173,518.20|
|Other comprehensive income that will be reclassified into profit or loss.1.Other comprehensive income under the equity method investee can be reclassifiedinto profit or loss.||||
|2.Gains and losses from changes in fair value available for sale financial assets||-1,500,778.50|-288,326.89|
|3.Held-to-maturity investments reclassified to gains and losses of available for sale financial assets||||
|4.The effective portion of cash flow hedges and losses||||
|5.Translation differences in currency financial statements||621,283.04|-885,191.31|
|6.Other||||
|VI. Total comprehensive income||24,398,114.92|36,490,083.19|
|VII. Earnings per share||||
|（I）Basic earnings per share||||
|(II)Diluted earnings per share||||

Legal Representative: Zhu Jun
Person-in-charge of the accountingwork：Zhu Meizhu
Person-in -charge of the accountingorgan：Mu Linying
 Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Consolidated Cash flow statement
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Year 2018 In RMB
|||||
|-|-|-|-|
|Items|Notes V|Report period|Same period of theprevious year|
|I.Cash flows from operating activities||||
|Cash received from sales of goods or rending of services||1,178,134,497.59|1,587,525,262.02|
|Tax returned||96,325,044.45|47,028,145.81|
|Other cash received from business operation|（45）|299,343,342.34|112,007,561.78|
|Sub-total of cash inflow||1,573,802,884.38|1,746,560,969.61|
|Cash paid for purchasing of merchandise and services||1,459,074,751.17|1,511,459,801.99|
|Cash paid to staffs or paid for staffs||146,910,083.29|133,551,583.94|
|Taxes paid||45,580,651.00|77,287,145.15|
|Other cash paid for business activities|（45）|382,731,720.07|52,781,140.84|
|Sub-total of cash outflow from business activities||2,034,297,205.53|1,775,079,671.92|
|Cash flow generated by business operation, net||-460,494,321.15|-28,518,702.31|
|II.Cash flow generated by investing||||
|Cash received from investment retrieving||-|-|
|Cash received as investment gains||5,359,325.16|5,921,598.83|
|Net cash retrieved from disposal of fixed assets, intangible assets, and otherlong-term assets||13,045.98|6,740.00|
|Net cash received from disposal of subsidiaries or other operational units||-|-|
|Other investment-related cash received|（45）|4,170,920,804.54|3,566,066,407.98|
|Sub-total of cash inflow due to investment activities||4,176,293,175.68|3,571,994,746.81|
|Cash paid for construction of fixed assets, intangible assets and other long-termassets||380,415,720.59|254,484,019.80|
|Cash paid as investment||-|28,500,000.00|
|Net cash received from subsidiaries and other operational units||-|-|
|Other cash paid for investment activities|（45）|3,625,700,000.00|3,093,000,000.00|
|Sub-total of cash outflow due to investment activities||4,006,115,720.59|3,375,984,019.80|
|Net cash flow generated by investment||170,177,455.09|196,010,727.01|
|III.Cash flow generated by financing||||
|Cash received as investment||-|27,230,679.00|
|Incl: Cash received as investment from minor shareholders||-|-|
|Cash received as loans||630,493,275.82|189,660,085.68|
|Cash received from bond placing||-|-|
|Other financing –related ash received||-|-|
|Sub-total of cash inflow from financing activities||630,493,275.82|216,890,764.68|
|Cash to repay debts||347,609,345.87|150,340,039.30|
|Cash paid as dividend, profit, or interests||19,810,202.44|1,048,268.16|
|Incl: Dividend and profit paid by subsidiaries to minor shareholders||-|-|
|Other cash paid for financing activities||-|-|
|Sub-total of cash outflow due to financing activities||367,419,548.31|151,388,307.46|
|Net cash flow generated by financing||263,073,727.51|65,502,457.22|
|IV. Influence of exchange rate alternation on cash and cash equivalents||-422,765.56|-1,868,779.16|
|V.Net increase of cash and cash equivalents||-27,665,904.11|231,125,702.76|
|Add: balance of cash and cash equivalents at the beginning of term||1,161,240,139.33|930,114,436.57|
|VI ..Balance of cash and cash equivalents at the end of term||1,133,574,235.22|1,161,240,139.33|

Legal Representative: Zhu Jun
Person-in-charge of the accountingwork：Zhu Meizhu
 Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Person-in -charge of the accountingorgan：Mu Linying
 Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Cash Flow Statement of the Parent Company
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. Year 2018 In RMB
|||||
|-|-|-|-|
|Items|Notes|Report period|Same period of theprevious year|
|I.Cash flows from operating activities||||
|Cash received from sales of goods or rending of services||70,428,184.75|66,552,835.48|
|Tax returned||-|-|
|Other cash received from business operation||22,064,255.92|14,836,257.91|
|Sub-total of cash inflow||92,492,440.67|81,389,093.39|
|Cash paid for purchasing of merchandise and services||5,684,253.84|5,055,450.06|
|Cash paid to staffs or paid for staffs||19,166,726.43|17,811,799.19|
|Taxes paid||15,493,316.47|18,156,899.52|
|Other cash paid for business activities||6,553,493.05|7,297,312.65|
|Sub-total of cash outflow from business activities||46,897,789.79|48,321,461.42|
|Cash flow generated by business operation, net||45,594,650.88|33,067,631.97|
|II.Cash flow generated by investing||||
|Cash received from investment retrieving||-|-|
|Cash received as investment gains||2,310,030.38|5,087,575.52|
|Net cash retrieved from disposal of fixed assets, intangible assets, and other long-termassets||-|1,510.00|
|Net cash received from disposal of subsidiaries or other operational units||-|-|
|Other investment-related cash received||566,305,459.40|262,490,733.61|
|Sub-total of cash inflow due to investment activities||568,615,489.78|267,579,819.13|
|Cash paid for construction of fixed assets, intangible assets and other long-term assets||2,493,900.87|4,857,553.44|
|Cash paid as investment||-|-|
|Net cash received from subsidiaries and other operational units||-|-|
|Other cash paid for investment activities||940,000,000.00|350,000,000.00|
|Sub-total of cash outflow due to investment activities||942,493,900.87|354,857,553.44|
|Net cash flow generated by investment||-373,878,411.09|-87,277,734.31|
|III.Cash flow generated by financing||||
|Cash received as investment||-|27,230,679.00|
|Cash received as loans||-|-|
|Other financing –related ash received||-|-|
|Sub-total of cash inflow from financing activities||-|27,230,679.00|
|Cash to repay debts||-|-|
|Cash paid as dividend, profit, or interests||-|-|
|Other cash paid for financing activities||-|-|
|Sub-total of cash outflow due to financing activities||-|-|
|Net cash flow generated by financing||-|27,230,679.00|
|IV. Influence of exchange rate alternation on cash and cash equivalents||-|-5,858.82|
|V.Net increase of cash and cash equivalents||-328,283,760.21|-26,985,282.16|
|Add: balance of cash and cash equivalents at the beginning of term||413,700,327.95|440,685,610.11|
|VI ..Balance of cash and cash equivalents at the end of term||85,416,567.74|413,700,327.95|

Legal Representative: Zhu Jun
Person-in-charge of the accountingwork：Zhu Meizhu
Person-in -charge of the accountingorgan：Mu Linying
 Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Consolidated Statement on Change inOwners’ Equity
Prepared by: Shenzhen Textile (Holdings) Co., Ltd. In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Amount in this period|||||||||||||
||Owner’s equity Attributable to the Parent Company|||||||||||Minor shareholders’equityt|Total of owners’equity|
||ShareCapital|Other Equity instrument|||Share Capital|Less: Shares instock|Other ComprehensiveIncome|Specializedreserve|Surplus reserves|Common riskprovision|Retained profi|||
|||preferredstock|Sustainabledebt|Other||||||||||
|I.Balance at the end of last year|511,274,149.00|-|-|-|1,866,001,475.17|27,230,679.00|2,218,703.87|-|77,477,042.19|-|-32,266,087.44|1,125,544,525.79|3,523,019,129.58|
|Add: Change of accounting policy|||||||||||||-|
|Correcting of previous errors|||||||||||||-|
|Merger of entities under common control|||||||||||||-|
|Other|||||||||||||-|
|II.Balance at the beginning of current year|511,274,149.00|-|-|-|1,866,001,475.17|27,230,679.00|2,218,703.87|-|77,477,042.19|-|-32,266,087.44|1,125,544,525.79|3,523,019,129.58|
|III.Changed in the current year|-|-|-|-|-284,491.54|-|-879,495.46|-|2,527,761.04|-|-25,508,385.97|-39,393,990.91|-63,538,602.84|
|（1）Total comprehensive income|||||||-879,495.46||||-22,980,624.93|-39,322,082.45|-63,182,202.84|
|（II）Investment or decreasing of capital by owners|-|-|-|-|-284,491.54|-|-|-|-|-|-||-284,491.54|
|1．Ordinary Shares invested by shareholders|-||||||||||||-|
|2．Holders of other equity instruments invested capital|||||-||||||||-|
|3．Amount of shares paid and accounted as owners’ equity|||||-284,491.54||||||||-284,491.54|
|4．Other|||||||||||||-|
|（III）Profit allotment|-|-|-|-|-|-|-|-|2,527,761.04|-|-2,527,761.04|-|-|
|1.Providing of surplus reserves|||||||||2,527,761.04||-2,527,761.04||-|
|2.Providing of common risk provisions|||||||||||||-|
|3．Allotment to the owners (or shareholders)|||||||||||||-|
|4．Other|||||||||||||-|
|(IV) Internal transferring of owners’ equity|-|-|-|-|-|-|-|-|-|-|-|-|-|
|1. Capitalizing of capital reserves (or to capital shares)|||||||||||||-|
|2. Capitalizing of surplus reserves (or to capital shares)|||||||||||||-|
|3．Making up losses by surplus reserves.|||||||||||||-|
|4.Change amount of defined benefit plans that carryforward||||||||||||||
|R5.eOtathineerd earnings|||||||||||||-|
|(V). Special reserves|-|-|-|-|-|-|-|-|-|-|-|-|-|
|1. Provided this year|||||||||||||-|
|2．Used this term|||||||||||||-|
|（VI）Other||||||||||||-71,908.46|-71,908.46|
|IV. Balance at the end of this term|511,274,149.00|-|-|-|1,865,716,983.63|27,230,679.00|1,339,208.41|-|80,004,803.23|-|-57,774,473.41|1,086,150,534.88|3,459,480,526.74|

Legal Representative: Zhu Jun Person-in-charge of the accountingwork：Zhu Meizhu Person-in -charge of the accountingorgan：Mu Linying
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Consolidated Statement on Change inOwners’ Equity
Prepared by: Shenzhen Textile (Holdings) Co., Ltd.
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Amount in last year|||||||||||||
||Owner’s equity Attributable to the Parent Company|||||||||||Minor shareholders’equity|Total of owners’ equity|
||ShareCapital|Other Equity instrument|||Capital reserves|Less: Shares in stock|OtherComprehensiveIncome|Specialized reserve|Surplus reserves|Common riskprovision|Retained profit|||
|||preferred stock|Sustainabledebt|Other||||||||||
|I.Balance at the end of last year|506,521,849.00|-|-|-|1,837,205,251.95|-|3,392,222.07|-|73,710,682.05|-|-81,275,828.76|1,100,564,805.80|3,440,118,982.11|
|Add: Change of accounting policy|||||||||||||-|
|Correcting of previous errors|||||||||||||-|
|Merger of entities under common control|||||||||||||-|
|Other|||||||||||||-|
|II.Balance at the beginning of current year|506,521,849.00|-|-|-|1,837,205,251.95|-|3,392,222.07|-|73,710,682.05|-|-81,275,828.76|1,100,564,805.80|3,440,118,982.11|
|III.Changed in the current year|4,752,300.00|-|-|-|28,796,223.22|27,230,679.00|-1,173,518.20|-|3,766,360.14|-|49,009,741.32|24,979,719.99|82,900,147.47|
|（1）Total comprehensive income|||||||-1,173,518.20||||52,776,101.46|20,885,576.41|72,488,159.67|
|（II）Investment or decreasing of capital by owners|4,752,300.00|-|-|-|22,762,870.54|27,230,679.00|-|-|-|-|-|-|284,491.54|
|1．Ordinary Shares invested by shareholders|4,752,300.00||||22,478,379.00|27,230,679.00|||||||-|
|2．Holders of other equity instruments invested capital|||||-||||||||-|
|3．Amount of shares paid and accounted as owners’ equity|||||284,491.54||||||||284,491.54|
|4．Other|||||||||||||-|
|（III）Profit allotment|-|-|-|-|-|-|-|-|3,766,360.14|-|-3,766,360.14|-|-|
|1.Providing of surplus reserves|||||||||3,766,360.14||-3,766,360.14||-|
|2.Providing of common risk provisions|||||||||||||-|
|3．Allotment to the owners (or shareholders)|||||||||||||-|
|4．Other|||||||||||||-|
|(IV) Internal transferring of owners’ equity|-|-|-|-|-|-|-|-|-|-|-|-|-|
|1. Capitalizing of capital reserves (or to capital shares)|||||||||||||-|
|2. Capitalizing of surplus reserves (or to capital shares)|||||||||||||-|
|3．Making up losses by surplus reserves.|||||||||||||-|
|4.Change amount of defined benefit plans that carryforward||||||||||||||
|Retained earnings5．Other|||||||||||||-|
|(V). Special reserves|-|-|-|-|-|-|-|-|-|-|-|-|-|
|1. Provided this year|||||||||||||-|
|2．Used this term|||||||||||||-|
|（VI）Other|||||6,033,352.68|||||||4,094,143.58|10,127,496.26|
|IV. Balance at the end of this term|511,274,149.00|-|-|-|1,866,001,475.17|27,230,679.00|2,218,703.87|-|77,477,042.19|-|-32,266,087.44|1,125,544,525.79|3,523,019,129.58|

Legal Representative: Zhu Jun Person-in-charge of the accountingwork：Zhu Meizhu Person-in -charge of the accountingorgan：Mu Linying
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Statement of change inowner’s Equity of the Parent Company
Prepared by: Shenzhen Textile (Holdings) Co., Ltd
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Amount in this period|||||||||||
||Owner’s equity Attributable to the Parent Company||||||||||Total of owners’ equity|
||Share Capital|Other Equity instrument|||Capital reserves|Less: Shares in stock|Other Comprehensive Income|Specialized reserve|Surplus reserves|Retained profit||
|||preferred stock|Sustainable debt|Other||||||||
|I.Balance at the end of last year|511,274,149.00|-|-|-|1,599,381,854.96|27,230,679.00|2,218,703.87|-|77,477,042.19|460,916,603.36|2,624,037,674.38|
|Add: Change of accounting policy|||||||||||-|
|Correcting of previous errors|||||||||||-|
|Other|||||||||||-|
|II.Balance at the beginning of current year|511,274,149.00|-|-|-|1,599,381,854.96|27,230,679.00|2,218,703.87|-|77,477,042.19|460,916,603.36|2,624,037,674.38|
|III.Changed in the current year|-|-|-|-|-356,400.00|-|-879,495.46|-|2,527,761.04|22,749,849.34|24,041,714.92|
|（I）Total comprehensive income|||||||-879,495.46|||25,277,610.38|24,398,114.92|
|(II) Investment or decreasing of capital by owners|-|-|-|-|-356,400.00|-|-|-|-|-|-356,400.00|
|1．Ordinary Shares invested by shareholders|||||||||||-|
|2．Holders of other equity instruments invested capital|||||-||||||-|
|3.Amount of shares paid and accounted as owners’ equity|||||-356,400.00||||||-356,400.00|
|4．Other|||||||||||-|
|（III）Profit allotment|-|-|-|-|-|-|-|-|2,527,761.04|-2,527,761.04|-|
|1.Providing of surplus reserves|||||||||2,527,761.04|-2,527,761.04|-|
|2．Allotment to the owners (or shareholders)|||||||||||-|
|3．Other|||||||||||-|
|(IV) Internal transferring of owners’ equity|-|-|-|-|-|-|-|-|-|-|-|
|1. Capitalizing of capital reserves (or to capital shares)|||||||||||-|
|2. Capitalizing of surplus reserves (or to capital shares)|||||||||||-|
|3．Making up losses by surplus reserves.|||||||||||-|
|4.Change amount of defined benefit plans that carry forwardRetained earnings||||||||||||
|5．Other|||||||||||-|
|(V) Special reserves|-|-|-|-|-|-|-|-|-|-|-|
|1. Provided this year|||||||||||-|
|2．Used this term|||||||||||-|
|（VI）Other|||||||||||-|
|IV. Balance at the end of this term|511,274,149.00|-|-|-|1,599,025,454.96|27,230,679.00|1,339,208.41|-|80,004,803.23|483,666,452.70|2,648,079,389.30|

 Legal Representative: Zhu Jun Person-in-charge of the accountingwork：Zhu Meizhu Person-in -charge of the accountingorgan：Mu Linying
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Statement of change inowner’s Equity of the Parent Company
Prepared by: Shenzhen Textile (Holdings) Co., Ltd.
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Amount in last year|||||||||||
||Owner’s equity Attributable to the Parent Company||||||||||Total of owners’equity|
||ShareCapital|Other Equity instrument|||Capital reserves|Less: Shares in stock|OtherComprehensiveIncome|Specialized reserve|Surplus reserves|Retained profit||
|||preferred stock|Sustainabledebt|Other||||||||
|I.Balance at the end of last year|506,521,849.00|-|-|-|1,576,547,075.96|-|3,392,222.07|-|73,710,682.05|427,019,362.11|2,587,191,191.19|
|Add: Change of accounting policy|||||||||||-|
|Correcting of previous errors|||||||||||-|
|Other|||||||||||-|
|II.Balance at the beginning of current year|506,521,849.00|-|-|-|1,576,547,075.96|-|3,392,222.07|-|73,710,682.05|427,019,362.11|2,587,191,191.19|
|III.Changed in the current year|4,752,300.00|-|-|-|22,834,779.00|27,230,679.00|-1,173,518.20|-|3,766,360.14|33,897,241.25|36,846,483.19|
|（I）Total comprehensive income|||||||-1,173,518.20|||37,663,601.39|36,490,083.19|
|(II) Investment or decreasing of capital by owners|4,752,300.00|-|-|-|22,834,779.00|27,230,679.00|-|-|-|-|356,400.00|
|1．Ordinary Shares invested by shareholders|4,752,300.00||||22,478,379.00|27,230,679.00|||||-|
|2．Holders of other equity instruments invested capital|||||-||||||-|
|3.Amount of shares paid and accounted as owners’ equity|||||356,400.00||||||356,400.00|
|4．Other|||||||||||-|
|（III）Profit allotment|-|-|-|-|-|-|-|-|3,766,360.14|-3,766,360.14|-|
|1.Providing of surplus reserves|||||||||3,766,360.14|-3,766,360.14|-|
|2．Allotment to the owners (or shareholders)|||||||||||-|
|3．Other|||||||||||-|
|(IV) Internal transferring of owners’ equity|-|-|-|-|-|-|-|-|-|-|-|
|1. Capitalizing of capital reserves (or to capital shares)|||||||||||-|
|2. Capitalizing of surplus reserves (or to capital shares)|||||||||||-|
|3．Making up losses by surplus reserves.|||||||||||-|
|4.Change amount of defined benefit plans that carryforward||||||||||||
|Retained earnings5．Other|||||||||||-|
|(V) Special reserves|-|-|-|-|-|-|-|-|-|-|-|
|1. Provided this year|||||||||||-|
|2．Used this term|||||||||||-|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|（VI）Other|||||||||||-|
|IV. Balance at the end of this term|511,274,149.00|-|-|-|1,599,381,854.96|27,230,679.00|2,218,703.87|-|77,477,042.19|460,916,603.36|2,624,037,674.38|

 Legal Representative: Zhu Jun Person-in-charge of the accountingwork：Zhu Meizhu Person-in -charge of the accountingorgan：Mu Linying
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report III. 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 April 25,2019.
(2)Scope of consolidated financial statements
1.As of the end of the reporting period, there are 7 subsidiaries companies included in the consolidate d financial statements: SAPO Photoelectric Co., Ltd., Shenzhen Lisi Industrial Development Co., Ltd.,Shenzhen Huaqiang Hotel, Shenzhen Shenfang Property Management Co., Ltd. Shenzhen Beaufity Garments Co., Ltd.,Shzhen Shenfang Import& Export Co., Ltd., and Shengtou (Hongkong) Co., Ltd.
2．The scope of consolidated financial statements this period did not change.
IV.Basis for the preparation of financial statements
（1）Basis for the preparation
Thiscompany’s financial statements is based on going-concern assumption and worked out according to actual transactions and matters, Accounting Standard for Business Enterprises--Basic Standard(issued by No.33 Decree of the Ministry of Finance and revised by No.76 Decree of the Ministry of Finance) issued by the Ministry of Finance, 42 special accounting standards enacted and revised on and after Feb 15, 2006, guideline for application of accounting standard for business enterprises, ASBE interpretations and other relevant regulations(hereinafter collectively referred to as “Accounting Standard for Business Enterprises”) and No.15 of Compilation Rules for Information Disclosure by Companies Offering Securities to the Public-- General Provisions of Financial Reports (revised in 2014) issued by China Securities Regulatory Commission.
(2)Continuation
There will be no such events or situations in the 12 months from the end of the reporting period that will cause material doubts as to the continuation capability of the Company.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report V. Important accounting policies and estimations
1. Statement on complying with corporate accounting standards
The financial statements prepared by the Company comply with the requirements of corporate accounting standards. They truly and completely reflect the financial situations, operating results, equity changes and cash flow, and other relevant information of the company.
2.Fiscal Year
The Company adopts the Gregorian calendar year commencing on January 1 and ending on December 31 as the fiscal year.
3. Operating cycle
Normal business cycle is realized by the Company in cash or cash equivalents from the purchase of assets form processing until. Less than 1 year is for the normal operating cycle in the company.
With regard to less than 1 year for the normal operating cycle, the assets realized or the liabilities repaid at maturity within one year as of the balance sheet date shall be classified into the current assets or the current liabilities.
4. Accounting standard money
The Company takes RMB as the standard currency for bookkeeping.
5. Accounting process method of enterprise consolidation under same and different controlling.
（1）Enterprise merger under 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 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
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report and losses of the current period during the comparative statement.
(2)Business combination involving entities not under common control
A business combination involving enterprises not under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after the business combination. For a business combination not involving enterprises under common control, the party that, on the acquisition date, obtains control of another enterprise participating in the combination is the acquirer, while that other enterprise participating in the combination is the acquiree. Acquisition date is the date on which the acquirer effectively obtains control of the acquiree.
The difference of the merger cost minus the fair value shares of identifiable net assets obtained by the acquiree during the merger on the acquisition date, is recognized as the business reputation. While the merger cost is less than the fair value shares of identifiable net assets obtained by the acquiree during the merger, all the measurement on the identifiable assets, the liabilities, the fair value of liabilities and the merger cost obtained by the acquiree should firstly be rechecked, and the difference shall be recorded into the current profits and costs if the merger cost is still less than the fair value shares of identifiable net assets obtained by the acquiree during the merger after rechecking.
Where the temporary difference obtained by the acquirer was not recognized due to inconformity with the conditions applied for recognition of deferred income tax, if, within the 12 months after acquisition, additional information can prove the existence of related information at acquisition date and the expected economic benefits on the acquisition date arose from deductible temporary difference by the acquiree can be achieved, relevant income tax assets can be recognized, and goodwill offset. If the goodwill is not sufficient, the difference shall be recognized as profit of the current period.
For a business combination not involving enterprise under common control, which achieved in stages that involves multiple exchange transactions, according to “The notice of the Ministry of Finance on the issuance of Accounting Standards Interpretation No. 5” (CaiKuai[2012] No. 19) and Article51 of “Accounting Standards for Business Enterprises No.33 - Consolidated Financial Statements” on the “package deal” criterion, to judge the multiple exchange transations whether they are the"package deal". If it belong to the “package deal” in reference to the preceding paragraphs of this section and “long-term investment” accounting treatment, if it does not belong to the “package deal” to distinguish the individual financial statements and the consolidated financial statements related to the accounting treatment:
In the individual financial statements, the total value of the book valueoftheacquiree's equity investment before the acquisition date and the cost of new investment at the acquisition date, as the initial cost of the investment, the acquiree's equity investment before the acquisition date involved in other comprehensive income, in the disposal of the investment will be in other comprehensive income associated with the use of infrastructure and the acquiree directly related to the disposal of assets or liabilities of the same accounting treatment (that is, except in accordance with the equity method of accounting in the defined benefit plan acquiree is remeasured net changes in net assets or liabilities other than in the corresponding share of the lead, and the rest into the current investment
income).
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report In the combination financial statements, the equity interest in the acquiree previously held before the acquisition date re-assessed at the fair value at the acquisition date, with any difference between its fair value and its carrying amount is recorded as investment income. The previously-held equity interest in the acquiree involved in other comprehensive income and other comprehensive income associated with the purchase of the foundation should be used party directly related to the disposal of assets or liabilities of the same accounting treatment (that is, except in accordance with the equity method of accounting in the acquiree is remeasured defined benefit plans other than changes in net liabilities or net assets due to a corresponding share of the rest of the acquisition date into current investment income).
6.Preparation of the consolidated financial statements
(1)The scope of consolidation
The scope of consolidation for the consolidated financial statements is determined on the basis of control. Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities. The relevant events refer to the activities that have significant influence on the return to the invested party. In accordance with the specific conditions, the relevant events of the invested party should conclude the sale and purchase of goods and services, the management of the financial assets, the purchase and disposal of the assets, the research and development activities, the financing activities and so on.
The scope of consolidation includes the Company and all of the subsidiaries. Subsidiary is an
enterprise or entity under the control of the Company.
Once the change in the relevant facts and circumstances leading to the definition of the relevant
elements involved in the control of the change, the company will be re-evaluated.
( 2)Preparation of the consolidated financial statements.
The Company based on its own and its subsidiaries financial statements, in accordance with other relevant information, to prepare the consolidated financial statements.
For a subsidiary acquired through a business combination not under common control, the operating results and cash flows from the acquisition (the date when the control is obtained) are included in the consolidated income statement and consolidated statement of cash flows, as appropriated; no adjustment is made to the opening balance and comparative figures in the consolidated financial statements. Where a subsidiary and a party being absorbed in a merger by absorption was acquired during the reporting period, through a business combination involving enterprises under common control, the financial statements of the subsidiary are included in the consolidated financial statements. The results of operations and cash flow are included in the consolidated balance sheet and the consolidated income statement, respectively, based on their carrying amounts, from the date that common control was established, and the opening balances and the comparative figures of the consolidated financial statements are restated.
When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Company makes necessary adjustments to the financial statements of the subsidiary based on 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
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report financial statements was reconciliated on the basis of the fair value of identifiable net assets at the date of acquisition.
Intra-Group balances and transactions, and any unrealized profit or loss arising from intra-Group transactions, are eliminated in preparing the consolidated financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Company are presented separately in the consolidated balance sheet 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 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
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 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.
(2)Co-operation accounting treatment
When the joint venture company for joint operations, confirm the following items and share common business interests related to:
（1）Confirm individual assets and common assets held based on shareholdings;
（2）Confirm individual liabilities and shared liabilities held based on shareholdings;
（3）Confirm the income from the sales revenue of co-operate business output
（4）Confirm the income from the sales of the co-operate business output based on shareholdings;（5）Confirm the individual expenditure and co-operate business cost based on shareholdings.
(3)When a company is a joint ventures, joint venture investment will be recognized as long-term equi ty investments .
8.Recognition Standard of Cash& Cash Equivalents
Cash and cash equivalents of the Company include cash on hand, ready usable deposits and investments having short holding term (normally will be due within three months from the day of purchase), with strong liquidity and easy to be exchanged into certain amount of cash that can be measured reliably and have low risks of change.
9.Foreign Currency Transaction
（1）Foreign Currency Transaction
The approximate shot exchange rate on the transaction date is adopted and translated as RMB amount when the foreign currency transaction is initially recognized. On the balance sheet date, the monetary items of foreign currency are translated as per the shot exchange rate on the balance sheet date, the foreign exchange conversion gap due to the exchange rate, except for the balance of exchange conversion arising from special foreign currency borrowings capitals and interests for the purchase and construction of qualified capitalization assets, shall be recorded into the profits and losses of the current period. The non-monetary items of foreign currency measured at the historical cost shall still be translated at the spot exchange rate on the transaction date, of which the RMB amount shall not be changed. The non-monetary items of foreign currency measured at the fair value shall be translated at
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 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 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;
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 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 personnel. 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.
（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.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report（4）Financial assets available-for-trade
Financial assets available-for-trade include non-derivative financial assets that are designated on initial recognition as available for trade, and financial assets that are not classified as financial assets at fair value through profit or loss, loans and receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from changes in the fair value are recognized as other comprehensive income and included in the capital reserve, except that impairment losses and exchange differences related to amortized cost of monetary financial assets denominated in foreign currencies are recognized in profit or loss, until the financial assets are derecognized, at which time the gains or losses are released and recognized in profit or loss. Interests obtained and dividends declared by the investee during the period in which the financial assets available-for-trade are held, are recognized in investment gains.
3. Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for the financial assets that measured by the fair value. If there is objective evidence indicating a financial asset may be impaired, a provision is provided for the impairment.
The company shall make an independent impairment test on the financial assets with significant single amounts, and carry out an independent impairment test on the financial assets with insignificant single amounts, or conduct an impairment-related test after they are included in a combination of financial assets with similar credit risk features so as to carry out. Where, upon independent test, the financial asset (including those financial assets with significant single amounts and those with insignificant amounts) has not been impaired, it shall be included in a combination of financial assets with similar risk features so as to conduct another impairment test. The financial assets which have suffered from an impairment loss in any single amount shall not be included in any combination of financial assets with similar risk features for any impairment test.
（1）Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present value of future cash flow. The difference is recorded as impairment loss. If there is objective evidence to indicate the recovery of value of financial assets after impairment, and it is related with subsequent event after recognition of loss, the impairment loss recorded originally can be reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the amortized cost of the financial assets without provisions of impairment loss on the reserving date.（2）Impairment loss on available-for-trade financial assets
Where the fair value of the equity instrument investment drops significantly or not contemporarily according to the integrated relevant factors, an available-for-trade financial asset is impaired. The "serious decline" refers to the cumulative fair value declines more 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.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report If, after an impairment loss has been recognized, there is objective evidence that the value of the financial asset is recovered, and it is objectively related to an event occurring after the impairment loss was recognized, the initial impairment loss can be reversed and the reserved impairment loss on available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss on available-for-trade debt instrument is recorded in the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot be reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument shall not be reversed.
4. Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under a pass-through arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either has transferred substantially all the risks and rewards of the asset, or has neither transferred norretained substantially all the risks and rewards of the asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over the asset, the asset is recognized according to the extent it exists as financial asset, and correspondent liability is recognized. The extent of existence refers the level of risk by the financial asset changes the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the carrying amount of the financial asset transferred; and the sum of the consideration received from the transfer and any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset is allocated between the part that continues to be recognized and the part that is derecognized, based on the relative fair value of those parts. The difference between (a) the carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for the part derecognized and any cumulative gain or loss allocated to the part derecognized which has been previously recognized in other comprehensive income, is recognized in profit or loss.
The Company uses recourse sale financial assets, or financial assets held endorser, determine almost all of the risks and rewards of ownership of the financial assets have been transferred if. Has transferred the ownership of the financial assets of almost all the risks and rewards to the transferee, the derecognition of the financial asset; retains ownership of the financial assets of almost all of the risks and rewards of financial assets that are not derecognised; neither transfers nor retains ownership of the financial assets of almost all of the risks and rewards, then continue to determine whether the enterprise retains control of the assets and the accounting treatment in accordance with the principles described in the preceding paragraphs.
5. Classification and measurement of financial liabilities
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 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 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
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 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.
2.The accounts receivable of bad debt provisions made by credit risk Group
(1) Recognition Criteria for the Group and Withdrawing Method of Bad Debt Provision
||
|-|
|Recognition Criteria|
|Division by Aging|

(2)Accounts on age basis in theportfolio：
||
|-|
|Rate for receivables(%)|
|5.00|
|10.00|
|30.00|
|50.00|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report (3)Account receivable with non-material specific amount but specific bad debt preparation
|||
|-|-|
|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 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。
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report（2）Packaging materials
Packaging materials are amortized using
13. Available-for-sale non-current asset and disposal group
If the company recovers its book value mainly by sale of non-current asset (including exchange of non-monetary assets of commercial nature and similarly hereinafter) , instead of continued use of one non-current asset or disposal group, which shall be included into available-for-sale. In specific standards, the following conditions shall be met at the same time: One non-current asset or disposal group is available for sale at all times under current status depending on standard practice of selling them in similar transactions; the company has made a resolution on the sale plan and gained definitive purchase commitments; the sale is expected to be finished within one year. In which, the disposal group refers to one set of assets that may be disposed as a whole along with other assets by sale or other ways in one deal and the liability transferred and related directly to such assets. If the asset group or combination of asset group under account title disposal group amortizes the goodwill obtained from business combination in accordance with No.8 of Accounting Standards for Business Enterprises-- Asset Impairment, the disposal group shall include the goodwill amortized to it.
When thecompany’s initial measurement or re-measurement on the balance sheet date is classified into available-for-sale non-current asset and disposal group, the book value shall be written down to the net amount of fair value minus selling expenses if it is higher than the net amount of fair value minus selling expenses, the write-down shall be confirmed as the assets impairment loss and included in current profits and losses, meanwhile the available-for-sale asset depreciation reserves shall be accrued. For the disposal group, the asset impairment loss shall be written off pro rata the book value of each non-current asset that is applicable to No.42 of Accounting Standards for Business Enterprises: Available-for-sale Non-current Assets, Disposal Group and Discontinued Operations (hereinafter referred to as “Available-for-sale rule for measurement”) after deducting the book value of goodwill in it.
If the net amount of the fair value of available-for-sale disposal group minus selling expenses increases after the balance sheet date, the previous write-downs shall be recovered and reversed in asset impairment loss of non-current assets that are applicable to available-for-sale rule for measurement after being included into available-for-sale account title, the amount of reversal shall be included in current profits and losses and increased pro rata its book value based on the proportion of the book value of each non-current asset in the disposal group that is applicable to available-for-sale rule for measurement except for goodwill; the book value of written-off goodwill and the asset impairment loss confirmed before the non-current asset specified in available-for-sale rule for measurement is classified into available-for-sale asset must not be reversed.
The available-for-sale non-current assets or the non-current assets in the disposal group shall not be accrued depreciation or amortization, the interest of debit in available-for-sale disposal group and other expenses shall continue to be confirmed.
The non-current asset will no longer be included into available-for-sale category or will be removed from the available-for-sale disposal group if it or the disposal group has no longer satisfied the conditions for classifying available-for-sale assets and measured as per the lower of: (1) book value of the non-current asset before being classified into available-for-sale asset adjusted on the
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report basis of the depreciation, amortization or impairment that shall be confirmed on the assumption that the non-current asset is not included into available-for-sale account title; (2)Recoverable amount.
14.Long-term equity investments
Long-term equity investments referred to in this section refer to the Company invested entity has control, joint control or significant influence over the long-term equity investments. The Company invested does not have control, joint control or significant influence over the long-term equity investments as financial assets available for sale or at fair value and the changes included financial assets through profit or loss.
Joint control is the Company control over an arrangement in accordance with the relevant stipulations are common, related activities and the arrangement must be after sharing control participants agreed to the decision-making. Significant influence is the Company s financial and operating policies of the entity has the right to participate in decision-making, but can not control or with other parties joint control over those policies.
1. Determination of Investment cost
The cost of a long-term equity investment acquired through business combination under common control is measured at the acquirer's share of the combination date book value of the acquiree's net equity in the ultimate controller's consolidated financial statements. The difference between the cost and book value of cash paid, non-monetary assets transferred and liabilities assumed is adjusted to capital reserves, and to retained earnings if capital reserves is insufficient. If the consideration is transferred by way of issuing equity instruments, the face value of the equity instruments issued is recognised in share capital and the difference between the cost of the face value of the equity instruments issued is adjusted to capital reserves, and to retained earnings if capital reserves is insufficient.The cost of a long-term equity investment acquired through business combination not under common control is the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued. (For the equity of the combined party under common control obtained step-by-step through multiple transactions and the business combination under common control ultimately formed, the company should respectively dispose all the transactions if belong to the package deal. For the package deal, all the transactions will be conducted the accounting treatment as the deal with acquisition of control. For the non-package deal, the shares of the book value of 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.)
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
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report under the same control through gaining the shares of the combined enterprise by multiple steps of deals, it shall deal with it in the following two ways depending on that if it belongs to "a package deal": if it belongs to "a package deal", it shall deal with all the deals as one obtaining the control power; if it does not belong to "a package deal", it shall, on the date of merger, regard the sum of book value of 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 identifiable assets of the fair share of the investment value, do not adjust the initial inve stment cost of long-term equity investment; the initial investment cost is less than the investee unit sh
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report are of identifiable net assets at fair value, the difference is recognized in profit or loss, while the long- term equity investment adjustment costs.
Where the initial investment cost of a long-term equity investment exceeds the 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 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,
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 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 investment, cumulative other comprehensive income relevant to the investment recognised prior to the acquistion is treated in the same manner that the investee disposes the relevant assets or liabilities proportionate to the disposal. The investee's equity movement other than net profit, other comprehensive income and profit distribution is reocgnised in profit or loss proportionate to the disposal.
Where a long-term equity investment is measured at cost both before and after part disposal of the investment, cumulative other comprehensive income relevant to the investment recognised, as a result of accounting by equity method or recognition and measurement principles applicable to financial instruments, prior to the Company's acquisition of control over the investee is treated in the same manner that the investee disposes the relevant assets or liabilities and recognised in profit or loss proportionate to the disposal.The investee's equity movement other than net profit, other comprehensive income and profit distribution, as a result of accounting by equity method, is reocgnised in profit or loss proportionate to the disposal.
Where the Company's control over an investee is lost due to partial disposal of investment in the investee and the Company continues to have significant influence over the investee after the partial disposal, the investment in measured by the equity method in the Company's separate financial statements; where the Company's control over an investee is lost due to partial disposal of investment in the investee and the Company ceases to have significant influence over the investee after the partial disposal, the investment in measured in accordance with the recognition and measurement principles applicable to financial instruments in the Company's separate financialstatements and the difference between the fair value and the book value of the remaining investment at the date of loss of control is recognised in profit or loss. Cumulative other comprehensive income relevant to the investment recognised, as a result of accounting by equity method or recognition and measurement principles applicable to financial instruments, prior to the Company's acquisition of control over the investee is treated in the same manner that the investee disposes the relevant assets or liabilities on the date of loss of control. The investee's equity movement other than net profit, other comprehensive income and profit distribution, as a result of accounting by equity method, is reocgnised in profit or loss when control is lost. Where the remaining investment is measured by equity method, the fore-mentioned other comprehensive income and other equity movement are recognised in profit or loss proportionate to the disposal; Where the remaining investment is measured in accordance with the recognition and measurement principles applicable to financial instruments, the fore-mentioned other comprehensive income and other equity movement are recognised in profit or loss in full.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 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 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
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report The fixed assets shall be book kept as per the acquired actual cost, and the depreciation shall be withdrawn from the subsequent month after the usable status reserved and achieved.
3．The method for depreciation
||||
|-|-|-|
|The method fordepreciation|Expected usefullife（Year）|Estimated residualvalue|
|Straight-linemethod|35 year|4%|
|Straight-linemethod|40 years|4%|
|Straight-linemethod|10 years||
|Straight-linemethod|10-14 years|4%|
|Straight-linemethod|8 years|4%|
|Straight-linemethod|8 years|4%|
|Straight-linemethod|8 years|4%|

4．Cognizance evidence and pricing method of financial leasing fixed assets
(1) Recognition Criteria of the Fixed Assets under Financing Lease
The financing lease shall be recognized if the following one or several criteria are met:① the ownership of the leasing assets shall be transferred to the tenant when the expiration of lease term.② the tenant has the option to purchase the leasing assets, and the made purchase price is expected to be far less than the fair value of the leasing assets in the implementation of the option. Thus, it can be reasonably recognized that the tenant will implement the option on the lease date.③ the ownership of assets is not transferred, but the lease term shall be the most of the life of the lease assets.④ the least present value of the lease payment of the tenant and the least present value of the lease receipts on the lease date almost equal to the fair value of the leasing assets on the lease date respectively.⑤ the leasing assets have the special nature, and only the tenant can use if there is no major modifications.
(2) Valuation of Fixed Assets Acquired under Finance Leases: the fixed assets acquired under finance
leases shall be book kept according to the lower between the fair value of the leasing assets and the
least lease payment on the lease date.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report (3) Depreciation Method of Fixed Assets Acquired under Finance Leases: the depreciation shall be withdrawn for the fixed assets acquired under finance leases as per the depreciation policy of own fixed assets.
17.Construction in progress
1. The projects under construction shall be recognized when the economic benefits may flow into and the cost can be reliably measured. Meanwhile, the projects under construction shall be measured according to the actual cost occurred before the assets are built to achieve the expected usable condition.
2. The projects under construction shall be transferred into the fixed assets according to the actual project costs when the expected usable condition achieved. For the expected usable condition achieved while the final accounts for completed projects not handled yet, the projects shall be transferred into the fixed assets as per the estimated value. After the final accounts for completed projects handled, the original estimated value shall be adjusted as per the actual cost, but the original withdrawn depreciation shall not be adjusted again.
18.Borrowing costs
1. Recognition principles for capitalizing of loan expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or production of asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset. Other borrowing expenses are recognized as expenses according to the occurred amount, and accounted into gain/loss of current term.
2. Duration of capitalization of Loan costs
(1).When a loan expense satisfies all of the following conditions, it is capitalized:
1. Expenditures on assets have taken place.
2. Loan costs have taken place;
3. The construction or production activities to make assets to reach the intended use or sale of state have begun.
（2）Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production of a qualifying asset is interrupted by activities other than those necessary to prepare the asset for its intended use or sale, when the interruption is for a continuous period of more than 3 months. Borrowing costs incurred during these periods recognized as an expense for the current period until the acquisition, construction or production is resumed.
（3）When the construction or production meets the intended use or sale of state of capitalization conditions, the Loan costs should stop capitalization.
3. Computation Method for Capitalization Rate and Amount of Borrowing Costs
With regard to the special borrowings for the purchase and construction of qualified assets, the capitalized interest amount shall be recognized according to the amount of the interest cost for the
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report special borrowings actually occurred during the current period (including the amortization of discount or premium recognized as per the effective interest method) minus the interest income acquired after the borrowings deposit in bank or the investment income obtained from the temporary investment. For the general borrowings for the purchase and construction of qualified assets, the capitalized interest amount of the general borrowings shall be computed and recognized according to the weighted average of accumulative asset expense beyond the expense of the special borrowings, multiplying the capitalization rate of general borrowings.
19.Intangible assets
1. Valuation Method, Service Life and Impairment Test of Intangible Assets
(1) The intangible assets include the land use rights, the professional technology and the software, which are conducted the initial measurement as per the cost.
(2) The service life of intangible assets is analyzed and judged when of the company acquires the intangible assets. For the finite service life of the intangible assets, the years of service life or the quantity of service life formed and the number of similar measurement unit shall be estimated. If the term of economic benefits of the intangible assets brought for the company is not able to be foreseen, the intangible assets shall be recognized as that with the indefinite service life.
(3) Estimation Method of Service life of Intangible Assets
1) For the intangible assets with the finite service life, the company shall generally consider the following factors to estimate the service life:① the normal service life of products produced with the assets, and the acquired information of the service life of similar assets.② the estimation of the current stage conditions and the future development trends in the aspects of technology and craft.③ the demand of the products produced by the assets or the offered services in the market.④ the expectation of actions adopted by current or potential competitors.⑤ the expected maintenance expense for sustaining the capacity to economic benefits brought by the assets and the ability to the relevant expense expected.⑥ the relevant law provision or the similar limit to the control term of the assets, such as the licensed use term and the lease term.⑦ the correlation with the service life of other assets held by the company.
2) Intangible Assets with Indefinite Service Life, Judgment Criteria on Indefinite Service Life and Review Procedure of Its Service Life
The company shall be unable to foresee the term of economic benefits brought by the assets for the company, or the indefinite term of intangible assets recognized as the indefinite service life of intangible assets.
The judgment criteria of Indefinite service life:① as from the contractual rights or other legal rights, but the indefinite service life of contract provision or legal provisions.② unable to judge the term of economic benefits brought by the intangible assets for the company after the integration of information in the same industry or the relevant expert argumentation.
At the end of every year, the review should be made for the service life of the intangible assets with the indefinite service life, and the relevant department that uses the intangible assets, shall conduct the basic review by the method from up to down, in order to evaluate the judgment criteria of the
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 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 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
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 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.
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.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report (1) The Defined Contribution Plan
The contribution deposits that paid to the individual subject for the services provided by the staffs on the balance sheet date during the accounting period, shall be recognized as the liability, and recorded into the current profits and losses or the relevant asset costs as per the beneficiary.
(2) The Defined Benefit Plan
The defined benefit plan is the severance benefit plans with the exception of the defined contribution plans.
1) Based on the expected cumulative welfare unit method, the company shall adopt unbiased and mutually consistent actuarial assumptions to make evaluation of demographic variables and financial variables, measure and define the obligations arising from the benefit plan, and determine the period of the relevant obligations. The company shall discount all the defined benefit plan obligations, including the obligation within twelve months after the end of the annual report during the expected services provision of employee. The discount rate adopted in discounting shall be recognized according to the bonds matched with the defined benefit plan obligation term and the currency at the balance sheet date or the market return of high-quality corporate bonds in the active market.
2) If there exist the assets for the defined benefit plan, the deficit or surplus arising from the present value of the defined benefit plan obligations minus the fair value of the defined benefit plan assets are recognized as the net liability or the net assets of the defined benefit plan. If there exists the surplus of the defined benefit plan, the lower one between the surplus of the define benefit plan and the upper limit of assets shall be used to measure the net assets of the defined benefit plan. The upper limit of assets refers to the present value of economic benefits obtained from the refund of the defined benefit plans or the reduction of deposit funds of future defined benefit plans.
3) At the end of period, 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
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report to the termination of labor relations with staff and shall be recorded into the current profits and losses. Then company shall reasonably predict and recognize the payroll payable arising from the dismission welfare. The dismission welfare, which is expected to finish the payment within twelve months after the end of the annual report recognized, shall apply to the relevant provisions of short-term compensation. The dismission welfare, which is expected to be unfinished for the payment within twelve months after the end of the annual report recognized, shall apply to the relevant provisions of short-term compensation, shall apply to the provisions related to other long-term employee benefits. 4. Accounting Treatment Method of Other Long-term Employee Benefits
If other long-term employee benefits of employees provided by the company meet the conditions of the defined contribution plan, the accounting treatment shall be made in accordance with the defined contribution plan. Except for these, other long-term benefits shall be made the accounting treatment according to the defined benefit plan, but the changes arising from the re-measurement of net liabilities or net assets of other long-term employee benefits shall be recorded into the current profits and losses or the relevant assets costs.
23. Estimated Liabilities
1. Recognition Criteria of Estimated Liabilities
The liabilities shall be recognized when external guarantee, pending litigation or arbitration, product quality assurance, staff reduction plan, loss contract, recombination obligation, disposal obligation of the fixed assets and other pertinent businesses all meet the following requirements:
(1) The obligation is the current obligation borne by the company.
(2) The implementation of the obligation may cause the economic benefits out of the enterprise.
(3) The amount of the obligation can be measured reliably.
2. Measurement Method of Estimated Liabilities
The estimated liabilities shall be made the initial measurement according to the best estimate of the expenditure required to settle the present obligation. There is the continuous scope for the required expenditure, and the best estimate with the same possibilities resulted from various outcomes within the scope shall be recognized as per the intermediate value. The best estimate should be recognize according to the following methods:
(1) The best estimate shall be recognized as per the most possible amount if there are matters involved in the single item.
(2) The best estimate shall be calculated and recognized as per the possible amount if there are matters involved in the multiple item.
If the company pays all the expenses for paying off the estimated liabilities, or partial estimates are compensated by the third party or other parties, the compensation amount should be separately recognized as the assets when the receipt of the compensation amount is basically determined. Meanwhile, the determined compensation amount shall not exceed the book value of the estimated liabilities recognized.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report The company shall make review of the book value of estimated liabilities at the balance sheet date. If there is conclusive evidence that the book value cannot really reflect the current best estimate, the adjustment shall be made for the book value in accordance with the current best estimate.
24. Share payment
1.Accounting Treatment Methods of Share Payment
Share payment is a transaction which is for obtaining the service provided by employees or other parties, where thus the equity instrument is granted , or for bearing the liability confirmed basing on the equity instrument. Share payment is divided into the payment settled by equities and the payment settled by cash.
(1)Shared Payment settled by Equities
The share payment settled by equities, which is used for exchanging the service provided by employees, will be measured according to the fair value of the equity instrument granted to employees on date of grant. The amount of such fair value, under the situation that the rights can only be exercised after the service is finished and the set performance is achieved within the waiting period, and basing on the optimum estimation for the number of equity instrument which exercise rights within the waiting period, will be measured according to straight-line method and counted into relevant costs and expenses. When the rights can be exercised immediately after being granted, the payment will be counted into relevant costs and expenses, and the capital reserve will be increased correspondingly.
On each and every balance sheet date within the waiting period, the Company will make optimum estimations according to the newly-obtained subsequent information after the changes occurred in the number of employees who exercise rights so as to modify the predicted number of the equity instrument of exercising rights. The influence from above-mentioned estimations will be counted into relevant costs and expenses at the current period, and the corresponding adjustment will be made for the capital reserve.
If the fair value of the otherparties’ service can be reliably measured, the share-based payment settled by equities which is used for exchanging the service of other parties will be measured according to that fair value on date of acquisition. If not, but the fair value of the equity instrument can be reliably measured, the payment will be counted according to the fair value of the equity instrument on date of service acquisition, and it will be counted into relevant costs and expenses, and the equity of the shareholders will be increased correspondingly.
(2) Share Payment settled by Cash
The share payment settled by cash will be measured according to the fair value of the liability confirmed basing on the shares borne by the Company and other equity instruments. If the rights can be exercised immediately after being granted, the payment will be counted into relevant costs or expenses and the liability will be increased correspondingly. If the rights can only be exercised after the situation that service within the waiting period is completed and set performance is achieved, the service obtained at the current period, according to the fair value amount of the liability borne by the Company, and basing on the optimum estimation for the condition of exercising rights, will be counted into costs or expenses on each and every balance sheet date during the waiting period, and the liability will be increased correspondingly.
Each and every balance sheet date and settlement before relevant liability settlement, the fair value of liability will be remeasured, of which changes occurred will be counted into the current period.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 2.Relevant Accounting Treatment of Modification and Termination for Share-based Payment Plan
When the Company modifies the share payment plan, if the fair value of the equity instrument granted is increased after the modification, the increase in the service obtained will be correspondingly confirmed according to the increase in the fair value of equity instrument. The increase in the fair value of equity instrument means the balance between the equity instrument before modification and the equity instrument after modification on modification date. If decrease occurred in the total fair value of the equity instrument after the modification or methods which are unbeneficial to employees are adopted in the modification, accounting treatment will still continue to be made for the service obtained, and such changes will be regarded as changes that have never occurred unless the Company has canceled partial or all equity instruments.
During the waiting period, if the granted equity instrument is cancelled, the company will treat the cancelled equity instrument as the accelerated exercise of power, and immediately include the balance that should be recognized in the remaining waiting period into the current profit and loss, and simultaneously confirm the capital reserve. If the employee or other party can choose to satisfy the non-exercisable condition but not satisfied in the waiting period, then the company will treat it as cancellation of the granted equity instrument.
3. Accounting treatment involving the share payment transaction between the Company and the shareholders or the actual controller of the Company
Where involves the share payment transaction between the Company and the shareholders or the actual controller of the Company and one of the parties of the settlement company and the service-accepting company is within the company and the other is not within the company, then the company performs the accounting treatment in the consolidated financial statements of the company according to the following provisions:
(1) If the settlement company settles in its own equity instrument, then it treats the equity payment transaction as the equity-settled equity payment; otherwise, it treats as the cash-settled equity payment.
If the settlement company is an investor to the service-accepting company, it shall be recognized as a long-term equity investment in the service-accepting company in accordance with the fair value of the equity instrument or the fair value of the liability it is assumed to bear on the grant date, and the capital reserve (other capital reserve) or liabilities shall be recognized at the same time.
(2) If the service-accepting company has no settlement obligation or confers its own equity tools on the employees of the company, then such equity payment transaction shall be treated as equity-settled equity payment; if the service-accepting company has the settlement obligation and confers the employees of the company with not its own equity instrument, then such equity payment transaction shall be treated as cash-settled equity payment;
In the case of the equity payment transaction occurs between the companies within the company, and the service-accepting company and the settlement company are not the same company, then the confirmation and measurement of the equity payment transaction shall be carried out respectively in the financial report of the service-accepting company and the settlement company, with the same analogy of the above-said principle.
25. Revenue
1. Recognition Principle of Revenue
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report (1) The Goods for Sale
The revenue of the goods for sale shall be recognized when the following requirements are met simultaneously: the transfer of main risks and rewards on ownership of the goods to the buyers, the continual management rights related to ownership no longer retained by the company and the effective control of the sold goods no longer implemented, the reliable measurement of the revenue amount, the possible inflow of the relevant economic benefits, and the reliable measurement of the relevant costs incurred or to be incurred.
(2) The Service Provision
If the provided services transaction results can be reliably estimated at the balance sheet date (the reliable measurement of the revenue amount, the possible inflow of the relevant economic benefits, the reliable recognition of the completion schedule of transaction, and the reliable measurement of the relevant costs incurred or to be incurred in the transaction), the company shall recognize the relevant service incomes according to the completion percentage method and recognized the completion schedule of the provided service transaction according to the proportion of the costs occurred accounting for the total estimated costs. If the provided services transaction results cannot be reliably estimated at the balance sheet date and the occurred service costs can be expected to have compensation, the company shall recognize to provide the service revenue according to the occurred service cost amount and transfer the service costs as per the same amount. If the occurred service costs cannot be expected to have compensation, the occurred service costs shall be recorded into the current profits and losses and not be recognized as the service revenue.
(3) The Abalienation of the Right to Use Assets
The revenue of abalienation of the right to use assets shall be recognized when the abalienation of the right to use assets meets the requirements of the possible inflow of the relevant economic benefits and the reliable measurement of revenue amount. The interest income shall be calculated and determined according to time and actual interest rate of the monetary capital of the company used by others, and the royalty revenue shall be measured and determined in accordance with the charging time and method appointed in the relevant contract or agree.
2. The Specific Recognition Method of Revenue
The company mainly sells the polaroid, textiles and other products. The revenue of the sale of products in domestic market shall be recognized after the following requirements are met: The company has agreed to deliver the goods to the purchaser under the contract and the revenue amount of product sales has been determined, the payment for goods has been withdrawn or the payment vouchers has been obtained and related economic benefits are likely to inflow, and the costs related to the products can be measured reliably. The revenue of the sale of products in foreign market shall be recognized after the following requirements are met: The company has made customs clearance and departure from port under the contract, the bill of landing has obtained and the revenue of the sale of products has been recognized, the payment for goods has been withdrawn or the payment vouchers has been obtained and related economic benefits are likely to inflow, and the costs related to the products can be measured reliably.
26.Government subsidy
Government grants are monetary assets and non-monetary assets that the company has obtained free of charge from the government and are divided into government grants related to assets and
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report government grants related to income. Asset-related government grants refer to government grants obtained by the company that are used to purchase or construct or otherwise form long-term assets. Income-related government subsidies refer to government subsidies other than government subsidies related to assets.
If there is evidence at the end of the period that the company is able to meet the relevant conditions stipulated in the financial support policy and it is expected to receive financial support funds, the government subsidies shall be recognized according to the amount receivable. In addition, government grants are confirmed upon actual receipt.
Asset-related government grants are recognized as deferred income and are charged to profit or loss for the current period in a reasonable and systematic manner over the useful life of the relevant assets. Revenue-related government subsidies, which are used to compensate for the related costs or losses of the Company in the future period, are recognized as deferred income, and are recognized in the profits and losses of the current period in the period in which the relevant costs, expenses or losses are recognized. The relevant costs, expenses or losses that have been used to compensate the Company have been directly recorded in the current profits and losses. Government grants related to the company's daily activities are included in other income; those unrelated to the daily activities of the company are included in non-operating income.
For the policy-subsidized discounted loans obtained by the company, the accounting treatment is divided into the following two cases: when the finance allocates the interest-subsidy funds to the loan bank and the loan bank provides the company with a policy-based preferential interest rate, the company uses the actual amount of the loan received as the entry value of the loan, and calculates the relevant borrowing costs according to the loan principal and the preferential policy interest rate; if the finance allocates the interest-free funds directly to the company, the company will reduce the relevant borrowing costs by the corresponding discount interest.
27.The Deferred Tax Assets / The deferred Tax Liabilities
1. Temporary Difference
The temporary difference includes the difference of the book value of assets and liabilities and the tax basis, and the difference of the book value and the tax basis that no confirmation of assets and liabilities but able to confirm the tax basis as per the provisions of tax law. The temporary difference can be classified into the taxable temporary difference and the deductible temporary difference.
2. Recognition Basis of Deferred Tax Assets
For the deductible temporary difference, the deductible loss and the tax payment offset, the company shall recognize the deferred tax assets arising from the future taxable income that obtained to deduce the deductible temporary difference, the deductible loss and the tax payment offset.
The deferred tax assets with the following features and arising from the initial recognition of assets or liabilities in the transaction shall not be recognized: (1) the transaction is not the business combination. (2) the 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
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report difference related to the investment of subsidiaries, cooperative enterprises and joint ventures if the following requirements are simultaneously met: (1) the temporary difference is possible to be reversed in the foreseeable future. (2) the taxable income used to offset the deductible temporary difference is possible to be obtained in the future.
3. Recognition Basis of Deferred Tax Liabilities
All the taxable temporary differences shall be recognized as the deferred tax liabilities.
But the company shall not recognize the taxable temporary differences arising from the following transactions as the deferred tax liabilities: (1) the initial recognition of goodwill. (2) the initial recognition of assets or liabilities arising from the transactions with the following features: this transaction is not the business combination, and the 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 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.
28.Lease
1. Accounting Treatment Method of Operating Lease
When the company is as the tenant, the rental within the lease term shall be recorded into the relevant assets cost or recognized as the current profits and losses as per the line method, and the initial direct expense occurred shall be directly recorded into the current profit and loss. The contingent rental shall be recorded into the current profit and loss once the actual occurrence.
When the company is as the leaser, the rental within the lease term shall be recognized as the current
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 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 recognize the difference between the sums of minimum lease receivables, minimum lease receivables and unguaranteed minus the sum of the present value as the unrealized financing income. During each lease period, the current financing charges shall be measured and recognized by the effective interest method.
29.Change of main accounting policies and estimations
(1)Change of main accounting policies
On June 15, 2018, Ministry of Finance released a Notice on Revision and Issue of 2018 Format of Financial Statements for General Enterprises (Cai Kuai[2018] No.15) to revise the format of financial statements for general enterprises. The Company started to implement the above notice as scheduled by the Ministry of Finance after adopting a proposal at the fifteenth meeting of the seventh board of directors on October 29, 2018.
Before implementing the Notice on Revision and Issue of 2018 Format of Financial Statements for General Enterprises (Cai Kuai[2018] No.15), the Company followed the Accounting Standard for Business Enterprises-Basic Standard, all the particular accounting standards, guides to application of accounting standards for business enterprises, interpretations and announcements of accounting standards for business enterprises and other relevant regulations promulgated by Ministry of Finance. Upon the alteration, the Company started to comply with relevant terms in the Notice on Revision and Issue of 2018 Format of Financial Statements for General Enterprises (Cai Kuai[2018] No.15) released by the Ministry of Finance on June 15, 2018 in its accounting policies. In addition to the above alteration of the accounting policies, others still followed the prior relevant rules, guides, announcements and other relevant terms issued by the Ministry of Finance.
Effects of alteration of accounting policies on the Company's beginning amount of this year and
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report amount of the prior year
|||
|-|-|
|Contents and reasons for the changes ofaccounting policies|Statement items affected|
|Retroactive adjustment||
|"Accounts receivable" and "notesreceivable" were incorporated into"accounts receivable and notesreceivable" for presentation|Notes receivable|
||Account receivable|
||Notes receivable & Accountreceivable|
|"Interests receivable", "dividendsreceivable" and "other receivables" werecombined into "other receivables" forpresentation|Interest receivable|
||Dividend receivable|
||Other receivable|
|"Accounts payable" and "notes payable"were combined into "accounts payableand notes payable" for presentation|Notes payable|
||Account Payable|
||Notes payable & Account payable|
|"Management expenses" fell into"management expenses" and "R&Dexpenses" for presentation|Management expenses|
||R & D cost|

 This alteration of accounting policies had no impact on the Company's total assets, total liabilities, net asset and net profit in the current period and before the alteration of accounting policies.
（2）Change of main accounting estimations
Nil
VI. Taxes of the Company
1. Main taxes categories and tax rate
Taxes Tax references Applicable tax rates
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|Tax references|
|The taxable turnover|
|Turnover tax to be paid allowances|
|Turnover tax to be paid allowances|
|Turnover tax to be paid allowances|
|Taxable income|

2. Tax preference and approval file
(1) SAPO Photoelectric Co., Ltd., the subsidiary company of our company, has been qualified as national high-tech enterprise since 2016 ,High-tech and enterprise certificate No.: GR201644201276 ,The certificate is valid for three years, The enterprise income tax rate of this year is15%.
(2).In accordance with relevant provisions of the Notice of Ministry of Finance, General Administrati on of Customs and State Taxation Administration Regarding Tax Preference Policies for Further Supp orting the Development of New-type Display Device Industry (Cai Guan Shui (2016) No. 62), SAPO Photoelectric Co., Ltd. manufactured key materials and parts for the upstream industry of new-type di splay devices including colorful light filter coating and polarizer sheet that comply with the planning for independent development of domestic industries may enjoy the preferential policies of exemption from import tariff for the import of raw materials and consumables for the purpose of self use and pro duction that can not be produced domestically from January 1, 2016 and December 31, 2020.
VII. Notes of consolidated financial statement
Unless otherwise stated, the meaning of "B/f", "C/f", The beginning of the financial statements is the number of financial statements as of January 1, 2018, and the end of the period is the number of financial statements as at 31 December 2018. This term refers to January 1, 2018 - December 31, 2018,The same period refers to January 1, 2017 - December 31, 2017. Monetary unit is RMB yuan 1.Monetary Capital
||
|-|
|Year-end balance|
|13,559.60|
|1,137,431,239.39|
|4,314,575.61|
|1,141,759,374.60|
|9,294,408.13|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Note:① Ending amount of other monetary funds was margin deposit RMB 4,310,530.42 and investment eposit RMB 4,045.19.
②As of December 31,2018，The fixed-term deposit balance of money fund is RMB 8,185,139.38 , this part will not be treated as closing cash or closing cash equivalent in preparing cash flow statement.
（II）Notes receivable& Account receivable
||
|-|
|Year-end balance|
|886,432.06|
|528,454,015.59|
|529,340,447.65|

 1.Notes receivables
(1). Classification Notes receivable
||
|-|
|Year-end balance|
|886,432.06|
|886,432.06|

 (2). As of December 31,2018，The company has no Notes receivable pledged.
(3)Notes endorsement or discount and undue on balance sheet date
||
|-|
|Amount derecognizing at period–end|
|60,485,268.08|
|60,485,268.08|

(4)Notes transferred to account receivable for the issuer is not able to execute the liability at the end of period.
2. Account receivable
(1)Classification account receivables.
Amount in year-end
Classification
|||
|-|-|
|Book balance|Bad debt provision|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||
|-|-|-|-|
|Amount|Proportion(%)|Amount|Proportion(%)|
|6,300,455.84|1.11|3,998,201.79|63.46|
|552,278,688.56|97.66|27,621,586.89|5.00|
|6,933,008.49|1.23|5,438,348.62|78.44|
|565,512,152.89|100.00|37,058,137.30|6.55|

Amount in year-begin
|||||
|-|-|-|-|
|Book balance||Bad debt provision||
|Amount|Proportion(%)||Proportion(%)|
|6,301,057.07|2.97|3,998,803.02|63.46|
|199,198,855.51|93.99|10,386,734.84|5.21|
|6,448,803.57|3.04|5,060,100.59|78.47|
|211,948,716.15|100.00|19,445,638.45|9.17|

(1)Accounts receivable of individual significance and subject to individual impairment assessment. Account receivable Amount in year-end
||||
|-|-|-|
|Account receivable|Bad debtprovision|Proportion(%)|
|1,695,947.73|1,695,947.73|100.00|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||
|-|-|-|
|1,348,965.36|674,482.68|50.00|
|3,255,542.75|1,627,771.38|50.00|
|6,300,455.84|3,998,201.79||

（2）Account receivable on which bad debt provisions are provided on age basis in the group
Balance in year-end
Aging
|||
|-|-|
|Account receivable|Bad debt provision|
|552,152,553.49|27,607,627.64|
|119,406.37|11,940.64|
|6,728.70|2,018.61|
|552,278,688.56|27,621,586.89|

(2)Recognition , recovery or reversal of allowance for baddebt：
（1）The account of allowance for bad debts recognized during the period is RMB17,612,498.85, The amount collected or switches back amounting to RMB0.00.
(3)The company has no account receivables written off this period.
(4)The ending balance of receivable owed by the imputation of the top five parties
|||||
|-|-|-|-|
|Nature|Balance inyear-end|Aging|Proportion(%)|
|Goods|133,592,500.00|Within 1year|23.62|
|Goods|106,136,195.38|Within 1year|18.77|
|Goods|84,062,627.96|Within 1year|14.86|
|Goods|47,287,500.00|Within 1year|8.36|
|Goods|36,375,000.00|Within 1year|6.43|
||407,453,823.34||72.04|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report（5）Account receivable which terminate the recognition owning to the transfer of the financial assets Nil
(6)The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable
Nil
3.Prepayments
(1)Disclosure by age
||||
|-|-|-|
|Balance in year-end|||
|Amount|Proportion（%）|Amount|
|226,726,744.30|98.99|13,705,047.27|
|2,263,886.85|0.99|11,944.78|
|38,160.00|0.02|38,160.00|
|229,028,791.15|100.00|13,755,152.05|

（2）The ending balance of Prepayments owed by the imputation of the top five parties
||
|-|
|Balance in year-end|
|196,426,857.54|
|7,474,329.32|
|4,168,476.05|
|4,095,000.00|
|2,835,000.00|
|214,999,662.91|

 4.Other receivable
||
|-|
|Amount in year-end|
|9,257,192.06|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|Amount in year-end|
|5,589,704.44|
|14,846,896.50|

1.Other receivable
(1)Category of Other receivable
Amount in year-end
|||||
|-|-|-|-|
|Book Balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|13,781,464.60|54.47|13,781,464.60|100.00|
|10,909,282.88|43.12|1,652,090.82|15.14|
|611,820.77|2.41|611,820.77|100.00|
|25,302,568.25|100.00|16,045,376.19|63.41|

 Amount in year-beginning
|||||
|-|-|-|-|
|Book Balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|13,781,464.60|47.54|13,781,464.60|100.00|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Amount in year-beginning
|||||
|-|-|-|-|
|Book Balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|14,596,383.53|50.35|1,670,399.08|11.44|
|611,820.77|2.11|611,820.77|100.00|
|28,989,668.90|100.00|16,063,684.45|55.41|

 (1)Other receivable accounts with large amount and were provided had debt provisions individually at end of period.
Amount in year-end
Other receivable accounts
||||
|-|-|-|
|Other accountreceivable|Bad debtprovision|Withdrawalproportion (%)|
|11,389,044.60|11,389,044.60|100.00|
|1,800,000.00|1,800,000.00|100.00|
|592,420.00|592,420.00|100.00|
|13,781,464.60|13,781,464.60||

(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|
|7,809,057.45|390,452.87|
|663,844.79|66,384.48|
|114,684.29|34,405.29|
|2,321,696.35|1,160,848.18|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|10,909,282.88|1,652,090.82|

2.The current amount of provision for bad debts is RMB-18,308.26, no withdraw or return for bad debts.
( 3)The company has no other receivables written off this period.
(4)Other accounts receivable classified by the nature of accounts
||
|-|
|Year-end balance|
|101,758.24|
|3,140,110.71|
|15,451,643.71|
|1,875,008.00|
|506,154.77|
|4,227,892.82|
|25,302,568.25|

 (5).Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party
|||||
|-|-|-|-|
|Nature|Closing balance|Aging|Proportion ofthe total yearend balance ofthe accountsreceivable(%)|
|Unit account||Over 5 years||
|Export rebate|3,381,960.39|Within 1 year|13.37|
|Unit account|3,140,110.71|Within 1 year|12.41|
|Deposit|1,800,000.00|2-3 years|7.11|
|Deposit|980,461.06|Over 5 years|3.87|
||20,691,576.76||81.77|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report (6) Accounts receivable involved with government subsidies
Nil
(7) Other account receivable which terminate the recognition owning to the transfer of the financial assets Nil
(8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts receivable
Nil
2. Classification of interest receivable
||
|-|
|Balance in year-end|
|1,302,963.56|
|4,286,740.88|
|5,589,704.44|

 5.Inventories
（1）Inventories types
||||||
|-|-|-|-|-|
|Year-end balance|||||
|Book balance|Provision forbad debts|Book value|Book balance|Provision forbad debts|
|164,096,057.16|14,452,368.67|149,643,688.49|134,843,713.96|12,679,234.15|
|3,895,184.01||3,895,184.01|3,234,902.35||
|129,671,772.49|44,801,099.13|84,870,673.36|108,902,736.97|24,036,100.64|
|139,867,237.30|28,508,834.52|111,358,402.78|79,495,655.06|15,302,692.03|
|80,839,399.33|937,486.83|79,901,912.50|||
|10,082,857.63||10,082,857.63|1,156,194.64||
|528,452,507.92|88,699,789.15|439,752,718.77|327,633,202.98|52,018,026.82|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report（2）Inventory Impairment provision
||||||
|-|-|-|-|-|
|Year-beginningbalance|Increased in current period||Decreased in current period||
||Provision|Other|Transferredback|Other|
|12,679,234.15|11,781,266.11||10,008,131.59||
|24,036,100.64|55,567,970.26||34,802,971.77||
|15,302,692.03|18,584,013.93||5,377,871.44||
||937,486.83||||
|52,018,026.82|86,870,737.13||50,188,974.80||

 3. Basis for withdrawal of provision for inventory and reason for recovery or write-off in this year
|||
|-|-|
|Specific basis for withdrawal ofprovision for inventory|Reason forrecovery ofprovision forinventory in thisyear|
|Net realizable value belowinventory cost||
|Net realizable value belowinventory cost||
|Net realizable value belowinventory cost||

 6.Other current assets
||
|-|
|Year-end balance|
|540,000,000.00|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|99,797,959.30|
|639,797,959.30|

 7.Available-for-sale financial assets
(1)Available-for-sale financial assets
||||||
|-|-|-|-|-|
|Year-end balance|||||
|Book balance|Bad debtprovision|Book value|Book balance|Bad debtprovision|
|5,119,896.46||5,119,896.46|7,994,294.63||
|77,210,531.91|36,956,643.50|40,253,888.41|102,620,741.41|44,579,303.00|
|82,330,428.37|36,956,643.50|45,373,784.87|110,615,036.04|44,579,303.00|

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

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report (3) Available-for-sale financial assets measured by cost at the period-end
|||||||||
|-|-|-|-|-|-|-|-|
|Book balance|||Impairment provision||||Shareholdingproportionamong theinvestees|
|Period-begin|Increase||Period-begin|Increase|Decrease|Period-end||
|14,831,681.50||14,831,681.50|14,831,681.50|||14,831,681.50|2.39|
|16,800,000.00||16,800,000.00|16,800,000.00|||16,800,000.00|10.80|
|5,491,288.71||5,491,288.71|5,058,307.01|||5,058,307.01|45.00|
|2,600,000.00||2,600,000.00|||||2.87|
|160,000.00||160,000.00|||||20.00|
|524,000.00||524,000.00|||||20.00|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||
|-|-|-|-|-|-|-|
|2,559,856.26||2,559,856.26||||30.00|
|25,410,209.50|25,410,209.50||7,622,659.50|7,622,659.50|||
|1,500,000.00||1,500,000.00||||9.84|
|4,243,705.44||4,243,705.44|266,654.99||266,654.99|50.00|
|28,500,000.00||28,500,000.00||||57.00|
|102,620,741.41|25,410,209.50|77,210,531.91|44,579,303.00|7,622,659.50|36,956,643.50||

Note：（1）During the reporting period, Shenzhen Delis Underwear Co., Ltd. contracted for foreignoperations.（2）The business license of Shenzhen Xieli Automobile Co., Ltd. whose main assets were land use rights was canceled by industrial and commercial administration and the liquidation team resolved to ask the Hong Kong shareholder to handle this company's asset portfolio but the treatment of this asset portfolio was not yet completed at the end of the period. (3) Former contracting operation of Anhui Huapeng Textile Co., Ltd. In December 2018, this company's board of shareholders resolved to agree on dissolution and liquidation and by the end of period, the liquidation was still ongoing. In December 2018, the Company included net assets of Anhui Huapeng Textile Co., Ltd. into long-term equity investment of RMB 11,784,626.51 by share of fair value, decreased RMB 17,787,550.00 in available-for-sale financial assets and included the balance of RMB 6,002,923.49 into the investment income.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report (4)Changes of the impairment of the available-for-sale financial assets during the reporting period
|||
|-|-|
|Available for sale equityinstruments|Available for sale debtsinstruments|
|44,579,303.00||
|7,622,659.50||
|36,956,643.50||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 8.Long-term equity investment
(1)Long-term equity investment
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Opening balance|Increase/decrease||||||||Closing balance|
||Additionalinvestment|Negativeinvestment|Investmentprofit and lossrecognizedunder theequity method|Adjustment ofothercomprehensive income|Changes ofother equity|Cash bonus orprofitsannounced toissue|Withdrawalofimpairmentprovision|Other||
|5,369,450.56|||671,689.37|||400,000.00|||5,641,139.93|
|||||||||11,784,626.51|11,784,626.51|
|5,369,450.56|||671,689.37|||400,000.00||11,784,626.51|17,425,766.44|
|2,107,155.01|||126,902.18||||||2,234,057.19|
|2,233,902.64|||16,820.96||112,891.10||||2,363,614.70|
|10,670,226.35|||444,742.44||508,391.94|694,713.40|||10,928,647.33|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Opening balance|Increase/decrease||||||||Closing balance|
||Additionalinvestment|Negativeinvestment|Investmentprofit and lossrecognizedunder theequity method|Adjustment ofothercomprehensive income|Changes ofother equity|Cash bonus orprofitsannounced toissue|Withdrawalofimpairmentprovision|Other||
|15,011,284.00|||588,465.58||621,283.04|694,713.40|||15,526,319.22|
|20,380,734.56|||1,260,154.95||621,283.04|1,094,713.40||11,784,626.51|32,952,085.66|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 9.Investment real estate
（1）Measured by the cost of investment in real estate
||||
|-|-|-|
|House, Building|Land use right|Construction in process|
|306,466,721.91|||
|2,767,538.83|||
|309,234,260.74|||
|133,360,915.64|||
|7,875,403.12|||
|7,875,403.12|||
|141,236,318.76|||
|167,997,941.98|||
|173,105,806.27|||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 10. Fixed assets
||
|-|
|Year-end balance|
|987,876,247.55|
|987,876,247.55|

 (1) List of fixed assets
|||||
|-|-|-|-|
|Houses &buildings|Machineryequipment|Transportations|Other|
|492,709,415.27|659,301,895.53|3,691,157.72|22,260,594.58|
|55,874,611.33|354,067,043.30|6,306,557.81|8,369,468.30|
|593,690.94|44,532,824.16|6,306,557.81|2,839,422.96|
|55,280,920.39|309,534,219.14||5,530,045.34|
||2,307,341.57||163,539.08|
||2,307,341.57||163,539.08|
|548,584,026.60|1,011,061,597.26|9,997,715.53|30,466,523.80|
|113,563,999.41|389,901,922.93|3,268,450.66|15,095,489.91|
|17,011,793.27|72,256,353.66|450,578.09|2,035,352.39|
|17,011,793.27|72,256,353.66|450,578.09|2,035,352.39|
||2,237,766.57||122,590.96|
||2,237,766.57||122,590.96|
|130,575,792.68|459,920,510.02|3,719,028.75|17,008,251.34|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||
|-|-|-|-|
|Houses &buildings|Machineryequipment|Transportations|Other|
|1,004,032.85|||6,000.00|
|1,004,032.85|||6,000.00|
|417,004,201.07|551,141,087.24|6,278,686.78|13,452,272.46|
|379,145,415.86|269,399,972.60|422,707.06|7,165,104.67|

Current depreciation is RMB91,754,077.41 .
13.Project under construction
（1）Project under construction
||||||
|-|-|-|-|-|
|Year-end balance|||||
|Book balance|Provision fordevaluation|Book Net value|Book balance|Provision fordevaluation|
||||315,430,810.41||
|9,080,815.92||9,080,815.92|500,168.25||
|6,540,470.72||6,540,470.72|6,639,195.07||
|15,621,286.64||15,621,286.64|322,570,173.73||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report（2）Changes of significant construction in progress
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Budget|Amount at yearbeginning|Increase at thisperiod|Transferred tofixed assets|Otherdecrease|Balance inyear-end|Proportion(%)|Capitalisation of interestaccumulatedbalance|Including：Currentamount ofcapitalizationof interest|Capitalisation of interestratio（%)|
|700.34 million|315,430,810.41|39,520,202.14|354,951,012.55|||||||
|195.50 million|500,168.25|8,580,647.67|||9,080,815.92|||||
|2659.84 million|315,930,978.66|48,100,849.81|354,951,012.55||9,080,815.92|||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 12.Intangible assets
（1）List of intangible assets
||||
|-|-|-|
|Land use right|Proprietarytechnology|Software|
|48,822,064.61|11,825,200.00|2,591,780.00|
|||344,827.54|
|||344,827.54|
|48,822,064.61|11,825,200.00|2,936,607.54|
|11,283,873.79|11,825,200.00|1,259,297.42|
|960,098.73||374,586.36|
|960,098.73||374,586.36|
|12,243,972.52|11,825,200.00|1,633,883.78|
|36,578,092.09||1,302,723.76|
|37,538,190.82||1,332,482.58|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 13.Goodwill
(1)Detail
||||
|-|-|-|
|Balance in year-begin|Increased at thisperiod|.Decreased atthis period|
|2,167,341.21|||
|82,246.61|||
|9,614,758.55|||
|11,864,346.37|||

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

 14. Long term amortize expenses
|||||
|-|-|-|-|
|Balance inyear-begin|Increase in thisperiod|Amortizedexpenses|Other loss|
|841,713.23|361,148.94|217,170.53||
|193,576.85|375,710.06|68,769.52||
|1,035,290.08|736,859.00|285,940.05||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 15. Deferred income tax assets/deferred income tax liabilities
（1）Details of the un-recognized deferred income tax assets
||||
|-|-|-|
|Balance in year-end|||
|Deductibletemporary difference|Deferred income taxassets|Deductibletemporary difference|
|18,197,325.09|4,549,331.27|5,190,838.04|
|2,591,536.27|388,730.44|2,680,650.70|
|3,820,701.85|955,175.46|946,303.68|
|||152,615.37|
|571,844.26|142,961.06||
|25,181,407.47|6,036,198.23|8,970,407.79|

 (2) Details of unrecognized deferred income tax assets
||
|-|
|Balance in year-end|
|128,283,915.49|
|562,435,574.75|
|690,719,490.24|

 Due to the uncertainty which exists in whether sufficient taxable income can be obtained in the future , therefore, delay-tax capital has not been confirmed.
（3）Deductible losses of the un-recognized deferred income tax asset will expire in the following years
|||
|-|-|
|Balance in year-end|Balance in year-begin|
||129,226,944.33|
||148,095,898.11|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|Balance in year-end|Balance in year-begin|
|703,241.36|83,990,395.00|
|3,880,135.73|124,700,902.79|
|129,226,944.33||
|148,095,898.11||
|83,287,153.64||
|120,820,767.06||
|76,421,434.52||
|562,435,574.75|486,014,140.23|

16.Other non-current assets
||
|-|
|Balance in year-end|
|152,688,087.18|
|176,764,571.83|
|329,452,659.01|

 17. Short-term loan
（1）Categories of short-term loans
||
|-|
|Balance in year-end|
|411,522,111.40|
|411,522,111.40|

 Final overdue outstanding short-term borrowing was zero.
18.Notes payable& Account payable
||
|-|
|Balance in year-end|
|180,239,452.90|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|Balance in year-end|
|180,239,452.90|

（1）Account payable
||
|-|
|Balance in year-end|
|177,140,118.37|
|2,059,842.85|
|37,402.40|
|35,075.05|
|281,166.48|
|685,847.75|
|180,239,452.90|

 No Significant accounts payable that aged over one year
19.Advance account
（1）Advance account
In RMB
||
|-|
|Balance in year-end|
|119,293,518.44|
|560,077.61|
|210,330.74|
|639,024.58|
|120,702,951.37|

 Accounts payable with major amount and Not aging of over one year
20.Payable Employee wage
（1）Payable Employee wage
||||
|-|-|-|
|Balance in|Increase in this|Payable in this|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||
|-|-|-|
|year-begin|period|period|
|29,503,260.65|145,744,260.31|142,741,253.88|
||4,635,302.08|4,635,302.08|
||28,356.00|28,356.00|
|29,503,260.65|150,407,918.39|147,404,911.96|

（2）Short-term remuneration
||||
|-|-|-|
|Balance inyear-begin|Increase in thisperiod|Payable in thisperiod|
|27,846,341.48|129,310,803.60|126,362,891.87|
||7,512,572.84|7,512,572.84|
||1,249,692.71|1,249,692.71|
||1,099,519.75|1,099,519.75|
||56,752.81|56,752.81|
||93,420.15|93,420.15|
||5,117,114.44|5,117,114.44|
|1,656,919.17|2,554,076.72|2,498,982.02|
|29,503,260.65|145,744,260.31|142,741,253.88|

（3）Defined contribution plans listed
||||
|-|-|-|
|Balance inyear-begin|Increase in thisperiod|Payable in thisperiod|
||2,937,894.85|2,937,894.85|
||69,674.43|69,674.43|
||1,627,732.80|1,627,732.80|
||4,635,302.08|4,635,302.08|

21.Tax Payable
Items Balance in year-end Balance in year-begin
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|793,392.58|
|54,516.12|
|6,198,704.39|
|160,823.58|
|204,941.07|
|37,825.82|
|294,925.43|
|7,745,128.99|

 22.Other payable
（1）Disclosure by nature
||
|-|
|Balance in year-end|
|189,971,235.59|
|62,574,657.07|
|53,935,705.78|
|25,481,743.17|
|27,802,523.26|
|20,176,606.31|
|39,044,044.39|
|229,015,279.98|

 (2).list of Interest payable
||
|-|
|Balance in year-end|
|37,220,662.08|
|1,823,382.31|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|Balance in year-end|
|39,044,044.39|

 23.Non-current liabilities due within 1 year
||
|-|
|Balance in year-end|
|40,000,000.00|
|40,000,000.00|

 The long-term borrowings at the end of period are the borrowings extended to the Company by Pingan Bank.Shenzhen Jiangsu Building Branch. Entrusted by Shenzhen Shenchao Technology Investment Co.,Ltd.
24.Long-term borrowings
（1）Long-term term borrowings
||
|-|
|Balance in year-end|
|40,000,000.00|
|40,000,000.00|

 The long-term borrowings at the end of period are the borrowings enxtended to the Company by Pingan Bank.Shenzhen Jiangsu Building Branch. Entrusted by Shenzhen Shenchao Technology Investment Co.,Ltd.
25.Deferred income
||||
|-|-|-|
|Balance inyear-begin|Increase at thisperiod|Decrease at thisperiod|
|134,767,064.72|12,131,780.00|8,907,146.39|
|134,767,064.72|12,131,780.00|8,907,146.39|

 Details of Govemmentsubsidy：
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Items|Balance inyear-begin|Newgrantsamount ofthisperiod||Profit|Othertransferamount|Balance inyear-end|Incomerelated toassets||
|||||and loss|||||
|||||amount|||||
|||||recorded|||||
|||||in the|||||
|||||current|||||
|||||period|||||
|Textile special funds|714,285.73||142,857.16|||571,428.57||Relat|
|||||||||ed to|
|||||||||asset|
|||||||||s|
|High-tech Industrialization demonstrationprojects|400,000.00||200,000.00|||200,000.00||Relat|
|||||||||ed to|
|||||||||asset|
|||||||||s|
|National grant fundsfor new flat panel displayindustry|2,000,000.00||1,000,000.00|||1,000,000.00||Relat|
|||||||||ed to|
|||||||||asset|
|||||||||s|
|Grant funds for TFT-LCD polarizer industryproject|5,633,333.34||1,300,000.00|||4,333,333.34||Relat|
|||||||||ed to|
|||||||||asset|
|||||||||s|
|Grant funds for TFT-LCD polarizer narrowline (line 5) project|2,500,000.00||500,000.00|||2,000,000.00||Relat|
|||||||||ed to|
|||||||||asset|
|||||||||s|
|Purchase of imported equipment andtechnology|852,106.98||175,090.20|||677,016.78||Relat|
|||||||||ed to|
|||||||||asset|
|||||||||s|
|Innovation and venture capital for TFT-LCDpolarier I project|250,000.00||50,000.00|||200,000.00||Relat|
|||||||||ed to|
|||||||||asset|
|||||||||s|
|Shenzhen polarizing materials and TechnologyEngineering Laboratory innovation venturecapital|362,500.00||50,000.00|||312,500.00||Relat|
|||||||||ed to|
|||||||||asset|
|||||||||s|
|Shenzzhen Engineering laboratory polarizingmaterial and technical engineeting|3,625,000.00||500,000.00|||3,125,000.00||Relat|
|||||||||ed to|
|||||||||asset|
|||||||||s|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||||
|-|-|-|-|-|-|
|Capital funding for Technology Center|2,175,000.00||300,000.00|1,875,000.00|Relat|
||||||ed to|
||||||asset|
||||||s|
|Subsidy funds to support the introduction of advanced technology|71,940.51||14,388.10|57,552.41|Relat|
||||||ed to|
||||||asset|
||||||s|
|Local supporting funds for TFT-LCD polarizerPhase II Project (line 6)|15,000,000.00||750,000.00|14,250,000.00|Relat|
||||||ed to|
||||||asset|
||||||s|
|State subsidy for TFT-LCD polarizer Phase IIProject (line 6)|10,000,000.00||500,000.00|9,500,000.00|Relat|
||||||ed to|
||||||asset|
||||||s|
|Innovation and venture capital for TFT-LCDpolarizer Phase II Project (line 6)|500,000.00||25,000.00|475,000.00|Relat|
||||||ed to|
||||||asset|
||||||s|
|key technology research and developmentprojects of optical compensation film forpolarizer|4,625,000.00||500,000.00|4,125,000.00|Relat|
||||||ed to|
||||||asset|
||||||s|
|Strategic industries Development fund ofGuangdong Province|25,000,000.00||1,250,000.00|23,750,000.00|Relat|
||||||ed to|
||||||asset|
||||||s|
|Grants of Purchase equipment of TFT-LCDpolarizing film phase II project|30,000,000.00||1,500,000.00|28,500,000.00|Relat|
||||||ed to|
||||||asset|
||||||s|
|Energy saving transformation grant funds|116,101.49||29,642.93|86,458.56|Relat|
||||||ed to|
||||||asset|
||||||s|
|Old elevator renovation fund subsidies|941,796.67|325,380.00|120,168.00|1,147,008.67|Relat|
||||||ed to|
||||||asset|
||||||s|
|Polarization Industrialization Project for SuperLarge-sized TVs (Line 7) Central BudgetInvestment|30,000,000.00|||30,000,000.00|Relat|
||||||ed to|
||||||asset|
||||||s|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Research & development subsidy for keytechnologies of ultra-thin IPS polarizer forsmart phone terminals|||2,000,000.00|||2,000,000.00||Relat|
|||||||||ed to|
|||||||||asset|
|||||||||s|
||Finance committee of Shenzhen municipality||5,000,000.00|||5,000,000.00||Relat|
||(R&D of key technology of high-performance|||||||ed to|
||polarizer for large size display panel of|||||||asset|
||2018N007)|||||||s|
||The ministry of industry and information||4,806,400.00|||4,806,400.00||Relat|
||technology, the ministry of finance, the circ|||||||ed to|
||first batch of new material application|||||||inco|
||insurance compensation|||||||me|
|Total||134,767,0||12,131,78|8,907,14||137,991,6||
|||64.72||0.00|6.39||98.33||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report development in the process of the project of industrialization and the purchase of required software and hardware equipment. On June 2012 and September 2013, the company received the national grants of RMB 10,000,000.00.. According to the Notice of Issuing the Governmental Investment Plan for 2011 Regarding Demonstration Project of High-tech Industrialization Including Specialized Services Such As Disaster Recovery of Financial Information System issued by Shenzhen Development and Reform Commission (Shen Fa Gai (2012) No. 3), the Company received subsidy of RMB 3,000,000.00 for the project of industrialization of polarizer sheet for TFT-LCD in April 2012. Our company will use 10 years as asset depreciation period for amortization in current period. The non-operating income in current period is RMB1,300,000.00. and the balance amount of unfinished final amortization is RMB4,333,333.34.
(4) According to the Notice about the Plan for Supporting the Second Group of Enterprises in Biological, Internet, New Energy and New Material Industries with Special Development Funds (Shen Fa Gai (2011) No. 1782), the Company received subsidy of RMB 5,000,000.00 for the narrow-width line (line 5) of phase-I project of polarizer sheet for TFT-LCD on February 2012. The Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets. The non-operating income in current period is RMB5,000,000.00 and the balance amount of unfinished final amortization is RMB2,000,000.00.
(5) On October 2013, The company received the grants for the purchase of imported equipment and technology in 2012 of RMB 1,750,902.00, the Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets. The non-operating income in current period is RMB50,000.00 and the balance amount of unfinished final amortization is RMB677,016.78. (6) On 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 RMB200,000.00. (7)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 RMB312,500.00. (8) According to the Approval of Application of SAPO Photoelectric Co., Ltd. for Project Funds for Shenzhen Polarization Material and Technology Engineering Laboratory (Shen Fa Gai (2012) No. 1385), Shenzhen Polarization Material and Technology Engineering Laboratory was approved to be established on the strength of SAPO Photoelectric with total project investment of RMB 24,390,000.00. As approved by Shenzhen Municipal People's Government, this project was included in the plan for supporting the fourth group of enterprises with special fund for the development of strategic new industries in Shenzhen in 2012 (new material industry). According to the Notice of Issuing the Plan for Supporting the Fourth Group of Enterprises with Special Fund for Development of Strategic New Industries in Shenzhen in 2012 (Shen Fa Gai (2012) No. 1241), the Company received subsidy of RMB 5,000,000.00 on December 2012 for purchasing instruments and equipment and
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report improving existing technological equipment and test conditions. The fund gap will be filled by the Company through raising funds by itself. the Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets. The non-operating income in current period is RMB500,000.00 and the balance amount of unfinished final amortization is RMB3,125,000.00.
(9)According to the “Announcement on the Identification of Technology Centers of 24 Enterprises including Shenzhen Yuanwanggu Information Technology Joint Stock Company Limited as the Municipal Research and Development Centers (Technical Center)” (SJMXXJS[2013] No.137), the research and development center of SAPO Photoelectric Co., Ltd. has been regarded as 2012 annual 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 other income in current period is RMB300,000.00 and the balance amount of unfinished final amortization is RMB1,875,000.00.
(10)OnMarch 2014 the company received the introduction of advanced technology import subsi dy funds of RMB 143,881.00 from Shenzhen Finance Committee, the Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets. The other income in current period is RMB14,388.09 and the balance amount of unfinished final amortization is RMB57,552.41.
(11)According to the "Shenzhen Municipal Development and Reform Commission Reply for SAPO Photoelectric Co., Ltd. application for local matching funds of TFT-LCD polarizing film II project (Line 6) " (Shenzhen DRC[2013]No. 1771), the company obtained TFT-LCD polarizing film II project (line 6) local matching funds of RMB 15,000,000.00 in April 2014. TFT-LCD polarizer Phase II project (Line 6) hit the expected available state and transferred to fixed assets in June 2018. Amortized by a period of 10 years in depreciation of relevant assets, RMB 750,000.00 was included into other incomes in the current period and the ending outstanding balance was RMB 14,250,000.00. (12)According to "National Development and Reform Commission issued on industrial transformation and upgrading projects (2nd industrial restructuring) notify the central budget for 2014 investment plan" (NDRC Investment[2014] No. 1280), the company obtained TFT- LCD polarizer II project (line 6) state grants of RMB 10,000,000.00 in December 2014. TFT-LCD polarizer Phase II project (Line 6) hit the expected available state and transferred to fixed assets in June 2018. Amortized by a period of 10 years in depreciation of relevant assets, RMB 500,000.00 was included into other incomes in the current period and the ending outstanding balance was RMB 9,500,000.00. (13) In December 2014, the company received innovation venture capital (matching funding category) for Ping Shan District Development and Finance Bureau of TFT-LCD polarizing film II project (line 6) of RMB 500,000.00. TFT-LCD polarizer Phase II project (Line 6) hit the expected available state and transferred to fixed assets in June 2018. Amortized by a period of 10 years in depreciation of relevant assets, RMB 25,000.00 was included into other incomes in the current period and the ending outstanding balance was RMB475,000.00.
(14)On Jan. 2015, the company received RMB 5 million of grants for key technology research and development projects of optical compensation film for polarizer from
Shenzhen Scientific and Technological Innovation Committee. The company has reached the
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report expected date of use of the assets., the Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets. The other income in current period is RMB500,000.00 and the balance amount of unfinished final amortization is RMB4,125,000.00.
(15)According to “Reply on Congregating Development in Emerging Industrial Area Strategic Pilot Implement Scheme of Guangdong Province ”(Reform and Development Office High-Tech[2013] No.2552,On December 2015, the Company received RMB20 million of the pilot project fund( period II project of TFT-LCD polarizer).On October 2016, the Company received RMB 5 million of Shenzhen strategic emerging industries and the future development of industrial matching funds, TFT-LCD polarizer Phase II project (Line 6) hit the expected available state and transferred to fixed assets in June 2018. Amortized by a period of 10 years in depreciation of relevant assets, RMB 1,250,000.00 was included into other incomes in the current period and the ending outstanding balance was RMB 23,750,000.00.
(16). According to Reform and Development Commission of Shenzhen Municipality sending the notice of “Reply of National Reform and Development Office on Investing in Petrifaction and Medicine Project within Central Budget of 2013 for Industry Structure Adjustment Special Project”(Reform and Development Commission of Shenzhen Municipality[2013]No.1449) , the Company received 30 million RMB of new production line of TFT-LCD polarizer project period II and equipment purchase subsidy in August 2015 ,December 2015 and September 2016. TFT-LCD polarizer Phase II project (Line 6) hit the expected available state and transferred to fixed assets in June 2018. Amortized by a period of 10 years in depreciation of relevant assets, RMB 1,500,000.00 was included into other incomes in the current period and the ending outstanding balance was RMB 28,500,000.00.
(17) In 2015 and In 2016, the Company received the subsidy funds of 202,608.00 RMB and 34,535.45 RMB on energy-saving reconstruction, amortized by 8-year depreciation life of the relevant asset, the Other income was RMB 29,642.93 at the current period, the ending balance without amortization was RMB 86,458.56.
(18). In 2017, the company received 1,218,640.00 yuan for the old elevator upgrade subsidy, the company received 160,800.00 yuan for the old elevator upgrade subsidy in 2018,which was apportioned according to the depreciation period of the relevant assets. The current period was included in other income of 115,760.00 yuan, and the unassessed balance at the end of the period was 986,836.67 yuan. Subsidiaries that run property management business were subsidized by RMB 164,580.00 for updating and transforming old and obsolete elevators this year and this subsidy was income-related; RMB 4,408.00 was included into the non-operating income in the current period and the ending outstanding balance was RMB 160,172.00.
(19) According to the Notice of the Ministry of Industry and Information Technology of the National Development and Reform Commission for Releasing the Central Budgetary Investment Plan of the 2017 of the Technical Transformation of the Electronic Information Industry (NDRC Investment{2017} No. 1649), the company received oversize TV for use in November 2017. In November 2017, the company received an central budgetary investment of RMB 30,000,000.00 of the oversized TV polarizer industry project. The company shall transfer the deferred income to the current profit or loss for the period of depreciation from the date when the relevant assets are ready for their intended use.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report (20) In accordance with the development plans and policies of Shenzhen Municipality for Strategic emerging Industries, the Management Measures of Shenzhen City on Funds for Scientific and Technological Research and Development, the Management Measures of Shenzhen City on Science and Technology Plan Project and other relevant documents, Shenzhen Science and Technology Innovation Commission and SAPO Photoelectric completed the development of the key technology of the 20170535 ultra-thin polarizer used in IPS smart phone terminal in the Shenzhen Science and Technology Plan issued by SFG[2017] No. 1447 document. In February 2018, the company received funding from Shenzhen Science and Technology Innovation Commission of 2,000,000 yuan for R& D. The company will transfer the deferred income to the current profit and loss according to the depreciation period from the date when the relevant assets reach the expected usable status.
(21). According to Measures for Management of Science and Technology Research& Development Funds in Shenzhen, Measures for Management of Projects in Shenzhen Municipal Science and Technology Program and other documents concerned, SAPO Photoelectric Co., Ltd. and Shenzhen Science and Technology Innovation Committee entered into a Contract of Projects in Shenzhen Municipal Science and Technology Program through consultation to complete development of key techniques for high-performance polarizers for 2018N007 jumbo display panels in the program delivered in Shen Fa Gai[2018] No.324 document. The Company was granted with a financial subsidy of RMB 5,000,000.00 this year. The Company amortized and transferred the deferred income into the current profit and loss by period of depreciation after relevant assets hit the expected available state.
(22). Compliance with the document spirit of the Notice of Ministry of Industry and Information Technology, Ministry of Finance and China Insurance Regulatory Commission on Piloting an Insurance Compensation Mechanism for the First Batch of Key New Materials (Gong Xin Bu Lian Yuan[2017] No.222 document). In December 2018, the Company received a relevant premium subsidy of RMB 4,806,400.00 from the Ministry of Industry and Information Technology but no relevant premium disbursement was incurred for the moment, hence no amortization was made in the current period.
26.Stock capital
|||||||
|-|-|-|-|-|-|
|Year-beginningbalance|Changed（+，-）|||||
||Issuance ofnew share|Bonusshares|Capitalizationofpublicreserve|Other|Subtotal|
|511,274,149.00||||||

27.Capital reserve
||||
|-|-|-|
|Year-beginningbalance|Increase in thecurrent period|Decrease in thecurrent period|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|1,848,960,987.54||
|17,040,487.63|284,491.54|
|1,866,001,475.17|284,491.54|

 28. Treasury stock
||||
|-|-|-|
|Year-beginningbalance|Increase in thecurrent period|Decrease in thecurrent period|
|27,230,679.00|||
|27,230,679.00|||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 29.Other Comprehensive income
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Items||Year-beginning balance||Amount of current period||||||Year-endbalance|
||||Amount for the period before income tax|||Less：|Less：Incometax|After - tax attributable to the parent company|After - tax attributable to minority shareholders||
|||||||Previously recognized|||||
|||||||in profit or loss in oth|||||
|||||||er comprehensive inc|||||
|||||||ome|||||
||1.Other comprehensive income will be reclassified into||||||||||
||income or loss in the future||||||||||
||Including: Re-measurement Setting Benefit Account Change||||||||||
||Amount||||||||||
||Other Comprehensive Income Which Can't Transfer Loss and||||||||||
||Loss under Equity Law||||||||||
||2. Other comprehensive gains that will be reclassified into|2,218,703.87|621,283.04||1,500,778.50|||-879,495.46||1,339,208.41|
||gains and losses||||||||||
||Including：Other Comprehensive Benefits of Convertible||||||||||
||Profits and Losses under Equity Law||||||||||
||Gains and losses from changes in fair value of financial|1,500,778.50|||1,500,778.50|||-1,500,778.50|||
||assets available for sale||||||||||
||Held-to-maturity investment that is reclassified as financial||||||||||
||assets available for sale||||||||||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Items||Year-beginning balance|||Amount of current period||||||Year-endbalance||
|||||Amount for the period before income tax||Less：|Less：Incometax|After - tax attributable to the parent company||After - tax attributable to minority shareholders|||
|||||||Previously recognized|||||||
|||||||in profit or loss in oth|||||||
|||||||er comprehensive inc|||||||
|||||||ome|||||||
||Effective gains(losses) arising from cash flow hedging||||||||||||
||instruments||||||||||||
||Translation differences of financial statements|717,925.37||621,283.04||||621,283.04|||1,339,208.41||
||denominated||||||||||||
||Total of other comprehensive income||2,218,703.87||621,283.04|1,500,778.50|||-879,495.46|||1,339,208.41|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 30.Surplus reserve
||||
|-|-|-|
|Year-beginningbalance|Increase in thecurrent period|Decrease in thecurrent period|
|77,477,042.19|2,527,761.04||
|77,477,042.19|2,527,761.04||

 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.
31.Retained profits
||
|-|
|Amount of this period|
|-32,266,087.44|
|-32,266,087.44|
|-22,980,624.93|
|2,527,761.04|
|-57,774,473.41|

 32.Business income, Business cost
（1）Business income, Business cost
||
|-|
|Amount of current period|
|1,266,481,655.09|
|5,875,116.25|
|1,272,356,771.34|
|1,136,768,017.37|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|5,482,267.30|
|1,142,250,284.67|

（2）Mainbusiness（Industry）
||||
|-|-|-|
|Amount of current period|||
|Business income|Business cost|Business income|
|278,139,524.35|271,514,631.70|490,391,227.85|
|879,409,830.28|839,415,041.00|869,112,546.94|
|98,327,018.46|25,838,344.67|93,781,583.42|
|10,605,282.00|||
|1,266,481,655.09|1,136,768,017.37|1,453,285,358.21|

（3）Mainbusiness（Production）
||||
|-|-|-|
|Amount of current period|||
|Business income|Business cost|Business income|
|98,327,018.46|25,838,344.67|93,781,583.42|
|47,188,632.17|41,092,884.63|41,273,987.57|
|832,221,198.11|798,322,156.37|851,531,250.79|
|278,139,524.35|271,514,631.70|466,698,536.43|
|10,605,282.00|||
|1,266,481,655.09|1,136,768,017.37|1,453,285,358.21|

（4）MainBusiness（Area）
||||
|-|-|-|
|Amount of current period|||
|Business income|Business cost|Business income|
|939,119,434.34|819,468,645.28|1,081,489,243.21|
|327,362,220.75|317,299,372.09|371,796,115.00|
|1,266,481,655.09|1,136,768,017.37|1,453,285,358.21|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report（5）Operating income from top five clients
||
|-|
|Income|
|378,093,076.16|
|151,566,770.47|
|107,607,236.64|
|87,524,774.55|
|64,272,845.87|
|789,064,703.69|

 33.Business tax and subjoin
||
|-|
|Amount of current period|
|645,044.28|
|462,140.55|
|5,803,460.97|
|1,131,491.82|
|8,042,137.62|

 34.Sales expenses
||
|-|
|Amount of current period|
|3,301,333.20|
|4,246,929.38|
|124,705.56|
|442,238.21|
|659,642.03|
|861,710.67|
|9,636,559.05|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 35.Administrative expenses
||
|-|
|Amount of current period|
|52,311,665.52|
|-356,400.00|
|11,005,866.31|
|3,749,739.12|
|3,857,237.09|
|1,334,685.09|
|1,606,997.78|
|926,011.06|
|1,067,901.96|
|158,490.57|
|2,883,879.67|
|424,962.59|
|26,694.80|
|65,020.00|
|9,171,287.74|
|88,590,439.30|

 36.R& D costs
||
|-|
|Amount of current period|
|13,172,333.89|
|24,537,372.56|
|2,480,311.39|
|835,650.39|
|460,801.83|
|465,316.09|
|41,951,786.15|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 37.Financial Expenses
||
|-|
|Amount of current period|
|14,179,121.73|
|-27,438,299.41|
|10,070,501.67|
|2,217,014.64|
|-971,661.37|

38.Loss of assets impairment
||
|-|
|Amount of current period|
|17,594,190.59|
|86,870,737.13|
|873,360.18|
|1,010,032.85|
|106,348,320.75|

 39.Other income
||
|-|
|Amount of current period|
|17,228,202.21|
|17,228,202.21|

 Governmentsubsidyprojects：
|||||
|-|-|-|-|
||||Assets-related/|
||Amount of this|Amount of last||
|Items|||income|
||period|period||
||||-related|
|Subsidy amortization of the project of TFT-LCD|||Related to|
||1,300,000.00|1,300,000.00||
|polarizer industrialization|||assets|
||||Related to|
|National grant funds for new flat panel display industry|1,000,000.00|1,000,000.00||
||||assets|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||
|-|-|-|-|
|Grant funds for TFT-LCD polarizer narrow line (line 5)|||Related to|
||500,000.00|500,000.00||
|project|||assets|
||||Related to|
|Shenzhen polarizing material and technical engineering|500,000.00|500,000.00||
||||assets|
|Amortization of funds for the Development of key|||Related to|
||500,000.00|375,000.00||
|Technology of Optical compensation Film for Polarizer|||assets|
|Subsidy funds to support the introduction of advanced|||Related to|
||300,000.00|300,000.00||
|technology|||assets|
||||Related to|
|Old Elevator Renovation Fund Subsidy|120,168.00|276,843.33||
||||assets|
||||Related to|
|National grant funds for new flat panel display industry|200,000.00|200,000.00||
||||assets|
||||Related to|
|Imported equipment and technology discount funds|175,090.20|175,090.20||
||||assets|
||||Related to|
|Textile special funds|142,857.16|142,857.15||
||||assets|
|Innovation entrepreneurship fund amortization of||||
|TFT-LCD polarizer period I project for Pingshan New|50,000.00|50,000.00|Related to|
|District Development and Finance Bureau|||assets|
|Shenzhen Engineering laboratory polarizing material and|||Related to|
||50,000.00|50,000.00||
|technical engineering|||assets|
||||Related to|
|Energy saving transformation grant funds amortization|29,642.93|29,642.93||
||||assets|
|Financing aid amortization of introducing advanced|||Related to|
||14,388.10|14,388.09||
|technique|||assets|
|2016 Finance Committee subsidies for productive|||Related to|
|||4,027,500.00||
|utilities|||income|
||||Related to|
|2016 Enterprise R & D funding||2,892,000.00||
||||income|
|Shenzhen Science & Technology Innovation Committee||||
|allocated 2016 annual science and technology award||500,000.00|Related to|
||||income|
||||Related to|
|Stable employment subsidies|237,911.40|189,605.28||
||||income|
||||Related to|
|Patent funding|6,000.00|27,000.00||
||||income|
||||Related to|
|Subsidy of the exhibition||17,500.00||
||||income|
|Amortization of supporting funds for TFT-LCD polarizer|||Related to|
||750,000.00|||
|phase II project (line 6)|||assets|
|Amortization of production plant and equipment subsidy|||Related to|
||2,000,000.00|||
|for line 6|||assets|
|Pingshan new Area development and finance bureau|||Related to|
||25,000.00|||
|special support fund amortization|||assets|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||
|-|-|-|-|
|Shenzhen finance committee second batch of enterprise|||Related to|
||2,430,000.00|||
|research and development subsidy funds|||income|
|Regional agglomeration of strategic emerging industries||||
|development pilot project line 6 subsidy fund|1,250,000.00||Related to|
|amortization|||assets|
|Cost reduction subsidy for industrial and commercial|||Related to|
||4,613,272.07|||
|electricity in Shenzhen in 2018|||income|
||||Related to|
|Shenzhen standard special fund|965,000.00|||
||||income|
|Pingshan science and technology innovation service|||Related to|
||30,000.00|||
|department national high enterprise award|||income|
||||Related to|
|Other|38,872.35|||
||||income|
|Total|17,228,202.21|12,567,426.98||

40. Investment income
(1)．Detail
||
|-|
|Amount of this period|
|1,260,154.95|
|4,264,611.76|
|52,271,862.25|
|-6,002,923.49|
|51,793,705.47|

 (2).Long-term equity investment income by Equity method
||
|-|
|Amount of this period|
|671,689.37|
|126,902.18|
|16,820.96|
|444,742.44|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|Amount of this period|
|1,260,154.95|

 41. Non-Operation income
|||
|-|-|
|Amount of currentperiod|Amount of previousperiod|
||1,510.00|
|1,265,178.66|786,057.93|
|1,265,178.66|787,567.93|

42．Non-current expenses
|||
|-|-|
|Amount of current period|Amount of previousperiod|
|97,477.14|53,641.44|
|121,626.64|1,961,815.52|
|219,103.78|2,015,456.96|

 43.Income tax expenses
(1)Income tax expenses
||||
|-|-|-|
||Amount of current period|Amount of previous period|
|Items|||
||12,440,996.95|11,572,753.97|
|Current income tax expense|||
||-3,561,401.84|-293,935.56|
|Deferred income tax expense|||
||8,879,595.11|11,278,818.41|
|Total|||

(2)Reconciliation of account profit and income taxexpenses：
||||
|-|-|-|
|Items|Amount of current period||
|Total profits|-53,423,112.2|7|
|Income tax computed in accordance with the applicable tax rate|-13,355,778.0|6|
|Effect of different tax rate applicable to the subsidiary Company|10,179,623.1|1|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||
|-|-|-|
|Influence of income tax before adjustment||313,006.35|
|Influence of non taxable income||-843,455.83|
|Impact of non-deductible costs, expenses and losses||493,048.41|
|Affect the use of deferred tax assets early unconfirmed deductible losses||-1,268,754.51|
|The current period does not affect the deferred tax assets recognized deductible|19,884,594.08||
|temporary differences or deductible loss|||
|Impact of additional deductions for R & D expense||-4,719,575.94|
|Other||-1,803,112.50|
|Income tax expense||8,879,595.11|

 44 .Other comprehensive income
(1)．Other comprehensive income items and income tax effects and transferred to profit and loss
||||
|-|-|-|
|Items|Amount of current period|Amount of previous period|
|I. Other Comprehensive Income Which Can't Reclassify|||
|Income and Loss|||
|I. Other Comprehensive Income Which Can't Transfer|||
|Loss and Loss under Equity Law|||
|II. Other comprehensive gains that will be reclassified|-879,495.46|-1,173,518.20|
|into gains and losses|||
|1. Other Comprehensive Benefits of Convertible Profits|||
|and Losses under Equity Law|||
|Less：Previously recognized in other comprehensive|||
|income, Profit or loss in current period|||
|Subtotal|||
|2. The income gains (losses) amount of available for||-384,435.87|
|sale financial assets|||
|Less： Recognized in other comprehensive income that||-96,108.98|
|tax effect amount|||
|Less：Previously recognized in other comprehensive|1,500,778.50||
|income, Profit or loss in current period|||
||-1,500,778.50|-288,326.89|
|Subtotal|||
|3.Translation differences of financial statements|||
||621,283.04|-885,191.31|
|denominated in foreign currencies|||
|Less：Previously recognized in other comprehensive|||
|income, Profit or loss in current period|||
|Subtotal|621,283.04|-885,191.31|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||
|-|-|-|
|III.Total of other comprehensive income|-879,495.46|-1,173,518.20|

 (2).Adjustment process of accounting profit and income tax expense
|||
|-|-|
|Gains and losses fromchanges in fair valueof available for salefinancial assets|Foreign currencytranslationdifferences offinancial statements|
|1,789,105.39|1,603,116.68|
|-288,326.89|-885,191.31|
|1,500,778.50|717,925.37|
|-1,500,778.50|621,283.04|
||1,339,208.41|

 45.Items of Cash flow statement
(1)Other cash received from business operation
||
|-|
|Amount of current period|
|20,452,835.82|
|1,454,781.62|
|28,377,924.90|
|249,057,800.00|
|299,343,342.34|

 (2).Other cash paid related to operating activities
Other cash paid relating to operating activities this period is 382,731,720.07, Mainly for the bulk trade of glycol 333,224,966.85 yuan and expenses of cash.
(3)Other Cash received related to investment activities
||
|-|
|Amount of current period|
|4,170,920,804.54|
|4,170,920,804.54|

(4)Cash paid related to other investment activities
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|Amount of current period|
|3,625,700,000.00|
|3,625,700,000.00|

 46.Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
|||||||
|-|-|-|-|-|-|
|Supplement Information|||Amount of current||Amount of|
||||period||previous period|
||I. Adjusting net profit to cash flow from operating activities|||||
||Net profit||-62,302,707.38||73,661,677.87|
||Add: Impairment loss provision of assets||56,159,345.95||-4,484,259.21|
||Depreciation of fixed assets, oil and gas assets and consumable biological|99,629,480.53||80,633,240.11||
||assets|||||
||Amortization of intangible assets||1,334,685.09||1,276,180.92|
||Amortization of Long-term deferred expenses||285,940.05||310,697.92|
||Loss on disposal of fixed assets, intangible assets and other long-term|||||
||deferred assets|||||
||Loss on scrap of fixed assets||97,477.14||52,131.44|
||Loss on fair value changes|||||
||Financial cost||-727,282.72||-13,705,106.94|
||Loss on investment||-51,793,705.47||-53,555,819.95|
||Decrease in deferred income tax assets||-3,561,401.84||-293,935.56|
||Increased of deferred income tax liabilities|||||
||Decrease of inventories||-200,819,304.94||17,321,781.84|
||Decease of operating receivables||-394,843,085.92||24,700,270.54|
||Increased of operating Payable||96,402,638.36||-165,297,549.09|
||Other||-356,400.00||10,861,987.80|
||Net cash flows arising from operating activities||-460,494,321.15||-28,518,702.31|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||
|-|-|-|
||Amount of current|Amount of|
||period|previous period|
|II. Significant investment and financing activities that without cash flows:|||
|Debt-to-capital conversion|||
|Convertible loan due within 1 year|||
|Fixed assets acquired under financial lease|||
|3．Movement of cash and cash equivalents：|||
|Ending balance of cash|1,133,574,235.22|1,161,240,139.33|
|Less: Beginning balance of cash equivalents|1,161,240,139.33|930,114,436.57|
|Add：Ending balance of cash equivalents|||
|Less: Beginning balance of cash equivalents|||
|Net increase of cash and cash equivalents|-27,665,904.11|231,125,702.76|

 (2)Composition of cash and cash equivalents
||||
|-|-|-|
|Items|Year-end balance|Year-beginning balance|
|I. Cash|1,133,574,235.22|1,161,240,139.33|
|Including：Cash at hand|13,559.60|17,771.09|
|Demand bank deposit|1,133,556,630.43|1,159,202,998.15|
|Demand other monetary funds|4,045.19|2,019,370.09|
|Payments to the central bank for payment|||
|Depositing performs|||
|Loan to performs|||
|II. Cash equivalents|||
|Including：Debt instrument matured within three months|||
|III. Balance of cash and cash equivalents at the period end|1,133,574,235.22|1,161,240,139.33|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 47.Foreign currency monetary items
(1)Foreign currency monetary items
|||
|-|-|
|Closing foreign currencybalance|Exchange rate|
|1,533,045.44|6.86320|
|346,842.37|0.87620|
|1,585,021.00|0.061887|
|4,820,772.82|6.86320|
|278,280.00|0.87620|
|2,888,938.00|0.061887|
|37,399.02|6.86320|
|4,551,505.07|6.86320|
|1,487,770,193.76|0.061887|
|812,419.50|6.86320|
|3,044.46|0.87620|
|132,282,000.00|0.061887|
|148,745.00|7.84730|
|15,506,119.43|6.86320|
|1,060,416,768.20|0.061887|
|157,578.09|6.86320|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|5,429,015.62|0.061887|

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

 (3).Equity in joint venture arrangement or associated enterprise
1．Joint venture or associated enterprise
||||||
|-|-|-|-|-|
|Place ofoperation|Place ofregistration|Nature|Holdingproportion(%)||
||||Directly|Indirectly|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||
|-|-|-|-|
|Shenzhen|Shenzhen|Propertyleasing|50.00|
|Shenzhen|Shenzhen|Propertyleasing|40.25|
|Jordan|Jordan|Manufacturing|35.00|
|Hongkong|Hongkong|Manufacturing|22.75|
|Anhui|Anhui|Manufacturing|50.00|

2.Key financial information of significant joint venture or associated enterprise
||
|-|
|Year-end balance/ Amountof current period|
|17,425,766.44|
|671,689.37|
|671,689.37|
|400,000.00|
|15,526,319.22|
|588,465.58|
|621,283.04|
|1,209,748.62|
|694,713.40|

 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
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 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 credibility. For the receivables, the company has developed the relevant policies to control the credit risk, and set up the corresponding debt and credit limit after the credit status of debtor is evaluated based on financial condition of debtor, credit history, external ratings, possibility of guarantee obtained from the third party. Meanwhile, the company shall regularly monitor thedebtor’s credit history. With regard to the bad credit record for the debtor, the company shall adopt the written reminder, shortening or cancel of credit period to ensure the overall credit risks within the controllable scope.
（II）Market risk
Market risk of financial instrument arises from changes in fair value or future cash flow of financial instruments affected by market price . Market risks includes foreign exchange risk and interest risk. (1) Interest Rate Risk
The interest rate risk faced by the company is mainly from the bank borrowings. The company is faced the interest rate risk of the cash flow due to the financial liability of the floating interest rate, and faced the interest rate risk of the fair value due to the financial liability of the fixed interest rate. The company shall determine the relative proportion in the fixed and floating interest rate contracts. (2) Foreign Exchange Risk
The foreign exchange risks faced by the company are mainly from the financial assets and liabilities based on the price of US dollar and JPY. The company matches the income and expenditure of foreign currency as far as possible in order to reduce the foreign exchange risk.
（III）Liquidity risk
Liquidity risk refers to fund shortage problems when fulfilling obligations settled in cash or other financial assets. The company shall guarantee to have the sufficient funds to repay the debts through monitoring the cash balance, the marketable securities available to be cash and the rolling forecast for the future cash flow.
IX. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Closing fair value
||||
|-|-|-|
|Fir valuemeasurementitems at level 1|Fir valuemeasurementitems at level 2|Fir valuemeasurementitems at level 3|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|5,119,896.46|
|5,119,896.46|
|5,119,896.46|

2. Market price recognition basis for consistent and inconsistent fair value measurement items at level The fair value of financial assets available for sale at the end of period is measured based on the closing price of Shenzhen Stock Exchange on December 29,2017.
X. Related parties and related-party transactions
1.Parent company information of the enterprise
|||||
|-|-|-|-|
|Registered address|Nature|Registeredcapital（RMB10,000)|The parentcompany of theCompany'sshareholdingratio|
|18/F, InvestmentBuilding, ShennanRoad, FutianDistrict, Shenzhen|Equityinvestment ,Real-estateDevelopmentand Guarantee|2,534,900.00|45.78|

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
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
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Chairman of the Board Is the Vice Chairman of the Shenzhen Tianma Microelectronics Co., Ltd.
Company
Shengbo（HK）Co., Ltd. The Company Executives are Director of the company The controlling party of SAPO Photoelectric Hangzhou Jinjiang Group Co., Ltd.
Shareholder
Lan Xi Jinxin Investment Management Co., Ltd. A subsidiary of Hangzhou Jinjiang Group Co., Ltd. Zhejiang Hengjie Industry Co., Ltd. A subsidiary of Hangzhou Jinjiang Group Co., Ltd. Kunshan Zhiqimei Material Technology Co., Ltd. Sharing Company of Hangzhou Jinjiang Group Co., Ltd. Shenzhen Xinfang Knitting Co., Ltd. Sharing Company
Shenzhen Dailishi Underwear Co., Ltd.
Sharing Company
Anhui Huapeng Textile Co., Ltd.
Sharing Company
5. Related transactions.
1．Sales of goods and vendering of services
|||
|-|-|
|Content|Amount of currentperiod|
|Sales polarizer sheet|2,463,750.30|
|Sales polarizer sheet|87,524,774.55|

2. Providing services to related parties
|||
|-|-|
|Contents of relatedtransaction|The amount of thecurrent period (taxincluded)|
|Support film|48,771,009.61|

3. Entrusted loans of related party
In order to carry out TFT-LCD polarizer project construction, the company signed an entrusted loan contract with Shenzhen Shenchao Technology Investment Co., Ltd. and Shenzhen Jiangsu Building Branch of Ping An Bank in 2010. The contract stipulates that Shenzhen Shenchao Science& Technology Investment Co., Ltd. entrusts Shenzhen Jiangsu Building Branch of Ping An Bank to loan 200,000,000.00 yuan to the Company. The term of the loan was 108 months from the date the first entrusted loan was issued to the company's account. The entrusted loan interest rate was lowered by2% based on the 5-year commercial loan interest rate announced and issued by the People's Bank
of China. In case of adjustments to the 5-year commercial loan interest rate of the People's Bank of
China, from the first day of the next month of the benchmark interest rate adjustment, the entrusted
loan interest rate will be lowered by two percentage points according to the adjusted 5-year
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report commercial loan interest rate. As of December 31, 2018, the balance of the company's borrowings was 40 million yuan.
4. Guarantee provided by related parties
In February 2018, Jinjiang Group issued a guarantee letter to Shengbo Photoelectric Company, a subsidiary of the company, and made the following commitments on its proposed trade business carried out by Shengbo Photoelectric Company. If any problems (including but not limited to capital or other problems) arise in the course of trade transactions, the full responsibility of Jinjiang Group shall be borne by Jinjiang Group. In January 2019, Henan Fuxin Investment Co., Ltd. pledged10% of its stake in Hualian Development Group Co., Ltd. to Shengbo Photoelectric in accordance with the company's requirements and coordinated by Jinjiang Group, in order to guarantee the performance of Shengbo Photoelectric's above-mentioned trade business creditor's rights. In addition, Jinjiang Group issued a guarantee letter for the financial products "Wanxiang Trust-Yuquan 204 Single Fund Trust" and "Wanxiang Trust-Yuquan 205 Single Fund Trust" purchased by Shengbo Photoelectric Company. It promised that if Wanxiang Trust could not return Shengbo Photoelectric Principal and Income in time, the principal and Income of Wanxiang Trust should be returned 10 days after the expiration date of the principal and income period. Within one working day, Jinjiang Group will transfer its own funds to Shengbo Photoelectric designated account for repayment of principal and income. As of December 31, 2018, the principal and income of the above trust funds have been recovered.
5. Rewards for the key management personnel
||
|-|
|Amount of current period|
|6.056 \ million|

6. Receivables and payables of related parties
（1）Receivables
|||||
|-|-|-|-|
|Related party|Amount at year end|||
||Balance ofBook|Bad debtProvision|Balance of Book|
|Shenzhen TianmaMicroelectronics Co., Ltd.|894,474.64|44,723.73|1,555,500.44|
|Kunshan Zhiqimei MaterialTechnology Co., Ltd.|84,062,627.96|4,203,131.40||
|Anhui Huapeng TextileCompany|1,800,000.00|1,800,000.00|1,800,000.00|
|Shenzhen Dailishi UnderwearCo., Ltd.|416,464.86|20,823.24|440,508.46|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report（2）Payables
|||
|-|-|
|Related party|Amount at year end|
|Kunshan Zhiqimei MaterialTechnology Co., Ltd.|17,405,753.46|
|Shenzhen Xinfang Knitting Co.,Ltd.|244,789.85|
|Shenzhen Xiangjiang Trade Co.,Ltd.||
|Shenzhen Changlianfa Printingand dyeing Co., Ltd.|1,178,449.95|
|Shenzhen Haohao PropertyLeasing Co., Ltd.|4,454,489.85|
|Yehui International Co.,Ltd.|1,190,070.22|
|SAPO （Hongkong）Co., Ltd.|315,000.00|
|Shenzhen Shenchao TechnologyInvestment Co., Ltd.|37,220,662.08|

XI.Share payment
1. Overall situation of share payment
Items Related content
Total amount of various equity instruments granted by
the company during the current period
Total amount of various equity instruments that the
company exercises during the period
Total amount of various equity instruments that have
expired in the current period
The scope of executive price of thecompany’s
The company issued 4,752,300 restricted stocks at the end outstanding share options at the end of the period and the
of the period, and the grant price was 5.73 yuan/share. remaining term of the contract
Restrictions shall be lifted at the rate of40%,30%, and30% respectively after 12 months, 24 months, and 36 The scope of executive price of thecompany’s other
months after the first transaction date of 24 months after equity instruments at the end of the period and the
the completion of the registration. The period of validity
remaining term of the contract
of the entire plan shall not exceed 60 months from the
date of granting the restricted stock to the date on which
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Items Related content
the restricted stocks granted to the incentive object are all released from restrictions on sale or cancelled by repurchase.
On December 14, 2017, the company's 3rd Extraordinary General Meeting of Shareholders in 2017 passed the Proposal on‘Shenzhen Textile (Group) Co., Ltd. 2017 Restricted Stock Incentive Plan (Draft) andAbstract’; on December 14, 2017, the board of directors of the company reviewed and passed the Proposal on Adjusting the List of Incentive Objects of Restricted Stock Incentive Plans and the Number of Equity Granted of 2017, and the Proposal on Granting Restrictive Shares to Incentive Objects. On December 14, 2017, the company granted 4,752,300 restricted shares to the incentive object, the grant price was 5.73 yuan/share. Restrictions shall be lifted at the rate of40%,30%, and30% respectively after 12 months, 24 months, and 36 months after the first transaction date of 24 months after the completion of the registration. The company's performance assessment for the restricted shares granted each period is as follows:
Restriction lifting period Performance assessment goals
In 2018, the earnings per share shall be no less than 0.07 yuan, and shall not be lower than the 75 fractiles level of the comparable listed companies in the same industry; the growth rate of operating revenue in 2018 compared The first restriction lifting period with 2016 is not less than70%, and is not lower than the 75 fractiles level of comparable listed companies in the same industry; in 2018, the proportion of optical film business such as polarizers to operating revenue is no less than70%.
In 2019, earnings per share shall be no less than 0.08 yuan, and shall not be lower than the 75 fractiles level of the comparable listed companies in the same industry; the growth rate of operating revenue in 2019 compared The second restriction lifting period with 2016 is not less than130%, and is not lower than the 75 fractiles level of comparable listed companies in the same industry; in 2019, the proportion of optical film business such as polarizers to operating revenue is not less than75%.
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report In 2020, the earnings per share shall be no less than 0.20 yuan, and shall not be lower than the 75 fractiles level of comparable listed companies in the same industry; the growth rate of operating revenue in 2020 is not less than The third restriction lifting period 200% compared to 2016, and is not lower than the 75 fractiles level of comparable listed companies in the same industry. In 2020, the proportion of optical film business such as polarizers to operating revenue will be no less than80%.
Note: Earnings pershare=net profit/total capital stock attributable to common shareholders of the Company upon deduction of non-recurring profit and loss.
2. Equity-settled share-based payment
Items Related contents
Determination method of the fair value of equity instruments The closing price of the company's stock on grant date - on the grant date grant price
On each balance sheet date of the waiting period, it is determined based on the latest information such as the Determination basis of the number of vesting equity
change in the number of people that can be released instruments
from restrictions and the completion of performance indicators
Equity-settled share-based payment is included in the
accumulated amount of capital reserve
Total amount of fees confirmed by equity-settled share-based
-356,400.00 payments in the current period
Because the earnings per share after deduction of recurring gains and losses in 2018 is -0.13 yuan per share, which is lower than the performance appraisal target of the first lifting limit period mentioned above. In addition, according to the company's budget for 2019 and rolling business plan for 2019-2021, the company expects that the second lifting limit period and the third lifting limit period performance appraisal target will not be achieved in 2019 and 2020. In the current period, the company charges 356,400.00 yuan for the affirmed share payment, and at the same time charges 571,844.26 yuan for the restricted stock investment according to2.10% interest on the two-year deposit of the People's Bank of China.
XII. Subsequent events
Nil
XIII. Post-balance-sheet events
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report In the report period, Shenzhen SAPO Photoelectric Co., Ltd. had a an import trading business in the pre-paid amount of USD 21,201,000, wherein SAPO Photoelectric failed to deliver to the client as scheduled for the supplier's failure to deliver as scheduled. The client of this trading business agreed on a delayed delivery on April 30, 2019 in the letter and undertook to continue to perform duties of contract and exempt any liability for breach of contract caused by delayed delivery in the master contract. Till the date when the financial statements were approved and issued, the supplier of this trading business gave deliverables to SAPO and compensated losses of RMB 1,791,000 caused to SAPO by discount; SAPO handed over the above deliverables to the client of this trading business. XIV.Other Important matters
According to the cooperation agreement made by and between the Company and Hangzhou Jinjiang Group Co., Ltd.& Hangzhou Jinhang Equity Investment Fund Partnership (Limited Partnership), Hangzhou Jinjiang Group Co., Ltd. gave the following 2018 performance commitment to Shenzhen SAPO Photoelectric Co., Ltd.: in 2018, the sales income and net profit are not lower than RMB 2 billion and RMB 100 million respectively and in principle, the income from sales of polarizers and relevant optical film products accounts for at least80.00% of the total income in 2018. If the above performance commitment is not fulfilled, Jinjiang Group shall supplement the balance of net profit by cash in 10 days after statistics are completed on annual sales income and annual net profit among other data.
SAPO Photoelectric realized RMB 1.125 billion in the operating income and RMB -97.2687million in the net profit in 2018, whose income from sales of polarizers and relevant optical film products accounted for74.01% of the total income. In other words, SAPO Photoelectric failed to fulfill the performance commitment in 2018.
The Company and Jinjiang Group made an in-depth analysis and honest communication on the objective situation and primary reasons for the failure to fulfill the performance commitment in 2018, prepared targets and measures for improvement of main business operation in 2019 and made further negotiation on matters of the follow-up cooperation; besides, the parties made a preliminary communication on matters of compensation for performance commitment in 2018. However, so far the parties have failed to come to terms on any performance compensation plan.
XV. Notes s of main items in financial reports of parent company
(1) Notes receivable& Account receivable
||
|-|
|Year-end balance|
|570,471.80|
|570,471.80|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 1.Classification account receivables.
Amount in year-end
|||||
|-|-|-|-|
|Book balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|570,471.80|100.00|28,523.59|5.00|
|570,471.80|100.00|28,523.59|5.00|

Amount in year-begin
|||||
|-|-|-|-|
|Book balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|473,196.00|100.00|23,659.79|5.00|
|473,196.00|100.00|23,659.79|5.00|

Account receivable on which bad debt provisions are provided on age basis in the group
Aging Balance in year-end
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|Account receivable|Bad debt provision|
|570,471.80|28,523.59|

 (2) Other receivable
||
|-|
|Amount in year-end|
|8,881,582.55|
|4,974,799.47|
|13,856,382.02|

1.Other receivable
(1)Category of Other receivable
Amount in year-end
|||||
|-|-|-|-|
|Book Balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|13,781,464.60|57.27|13,781,464.60|100.00|
|9,971,934.77|41.44|1,090,352.22|10.93|
|311,486.35|1.29|311,486.35|100.00|
|24,064,885.72|100.00|15,183,303.17|63.09|

Classification Amount in year-beginning
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||
|-|-|-|-|
|Book Balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|13,781,464.60|67.70|13,781,464.60|100.00|
|6,262,767.01|30.77|480,146.38|7.67|
|311,486.35|1.53|311,486.35|100.00|
|20,355,717.96|100.00|14,573,097.33|71.59|

 (1)Other receivable accounts with large amount and were provided had debt provisions individually at end of period.
Amount in year-end
Other receivable accounts
||||
|-|-|-|
|Other accountreceivable|Bad debt provision|Withdrawalproportion (%)|
|11,389,044.60|11,389,044.60|100.00|
|1,800,000.00|1,800,000.00|100.00|
|592,420.00|592,420.00|100.00|
|13,781,464.60|13,781,464.60||

(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|
|4,248,226.22|212,411.31|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||
|-|-|
|4,454,759.77|445,475.98|
|1,010,047.30|303,014.19|
|258,901.48|129,450.74|
|9,971,934.77|1,090,352.22|

2.The current amount of provision for bad debts is RMB610,205.84.
(3)Other accounts receivable classified by the nature of accounts
||
|-|
|Year-end balance|
|8,578,542.00|
|15,451,143.71|
|35,200.01|
|24,064,885.72|

(4)Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party
|||||
|-|-|-|-|
|Nature|Year-end balance|Age|Portion in totalotherreceivables(%)|
|Unit account|11,389,044.60|Over 5 years|47.33|
|Internal currentaccount|8,575,600.00|Within 1 yearto Over 5years|35.64|
|Unit account|1,800,000.00|2-3 years|7.48|
|Unit account|783,579.12|Within 1 year,1-2 years|3.26|
|Unit account|592,420.00|Over 5 years|2.46|
||23,140,643.72||96.17|

 2.Interest receivable
||
|-|
|Year-end balance|
|884,141.92|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|Year-end balance|
|4,090,657.55|
|4,974,799.47|

 (3).Long-term equity investment
||||||
|-|-|-|-|-|
|Year-end balance|||||
|Book balance|Bad debtprovision|Book value|Book balance|Bad debtprovision|
|1,980,806,395.91|16,582,629.30|1,964,223,766.61|1,981,050,902.97|16,582,629.30|
|32,952,085.66||32,952,085.66|20,380,734.56||
|2,013,758,481.57|16,582,629.30|1,997,175,852.27|2,001,431,637.53|16,582,629.30|

（1）Investment to the subsidiary
||||||
|-|-|-|-|-|
|Opening balance|Increase|Decrease|Closing balance|Withdrawnimpairmentprovisionin thereportingperiod|
|1,924,842,841.18||179,771.15|1,924,663,070.03||
|8,080,587.80||7,199.55|8,073,388.25||
|30,895,388.23||27,988.23|30,867,400.00||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||||||
|-|-|-|-|-|
|Opening balance|Increase|Decrease|Closing balance|Withdrawnimpairmentprovisionin thereportingperiod|
|15,499,430.44||10,079.36|15,489,351.08||
|1,732,655.32||19,468.77|1,713,186.55||
|1,981,050,902.97||244,507.06|1,980,806,395.91||

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report（2）Investment to joint ventures and associated enterprises
||||||||||
|-|-|-|-|-|-|-|-|-|
|Openingbalance|Increase /decrease in reporting period|||||||Closingbalance|
||Addinvestment||Adjustment ofothercomprehensiveincome|Otherequitychanges|Declaration ofcash dividendsor profit|Withdrawnimpairmentprovision|Other||
|5,369,450.56||671,689.37|||400,000.00|||5,641,139.93|
||||||||11,784,626.51|11,784,626.51|
|5,369,450.56||671,689.37|||400,000.00||11,784,626.51|17,425,766.44|
|2,107,155.01||126,902.18||||||2,234,057.19|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report Printing and
dyeing
Company
|||||||
|-|-|-|-|-|-|
|2,233,902.64|16,820.96|112,891.10|||2,363,614.70|
|10,670,226.35|444,742.44|508,391.94|694,713.40||10,928,647.33|
|15,011,284.00|588,465.58|621,283.04|694,713.40||15,526,319.22|
|20,380,734.56|1,260,154.95|621,283.04|1,094,713.40|11,784,626.51|32,952,085.66|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report 4.Business income and Business cost
（1）Business income and Business cost
||
|-|
|Amount of current period|
|63,874,796.19|
|4,452,884.21|
|68,327,680.40|
|10,026,643.42|
|4,452,884.20|
|14,479,527.62|

（2）Mainbusiness（Industry）
||||
|-|-|-|
|Amount of current period|||
|Business income|Business cost|Business income|
|63,874,796.19|10,026,643.42|61,363,107.31|
|63,874,796.19|10,026,643.42|61,363,107.31|

（3）Mainbusiness（Production）
||||
|-|-|-|
|Amount of current period|||
|Business income|Business cost|Business income|
|63,874,796.19|10,026,643.42|61,363,107.31|
|63,874,796.19|10,026,643.42|61,363,107.31|

（4）Mainbusiness（Area）
||||
|-|-|-|
|Amount of current period|||
|Business income|Business cost|Business income|
|63,874,796.19|10,026,643.42|61,363,107.31|
|63,874,796.19|10,026,643.42|61,363,107.31|

（5）Operating income from top five clients
Name Business Income Proportion(%)
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|30,095,391.34|
|1,891,171.80|
|1,663,348.00|
|1,705,920.00|
|1,690,755.90|
|37,046,587.04|

 5.Investment income
1．Detail
||
|-|
|Amount of current period|
|1,260,154.95|
|1,215,316.98|
|-6,002,923.49|
|-3,527,451.56|

 6. Supplement information of Cash Flow Statement
|||||||
|-|-|-|-|-|-|
|Supplement information|||Amount of||Amount of|
||||current period||previous period|
||I. Adjusting net profit to cash flow from operating activities|||||
||Net profit||25,277,610.38||37,663,601.39|
||Add : Impairment loss provision of assets||1,488,429.82||5,554,598.81|
||Depreciation of fixed assets, oil and gas assets and consumable|9,118,693.34||9,163,495.84||
||biological assets|||||
||Amortization of intangible assets||400,930.92||380,740.92|
||Amortization of long-term deferred expenses|||||
||Loss on disposals of fixed assets, intangible assets and other|||||
||long-term assets(“-“for gains)|||||
||Loss on discard of fixed assets||||15,020.65|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
|||||
|-|-|-|-|
|Supplement information||Amount of|Amount of|
|||current period|previous period|
||Loss on fair value changes|||
||Financial expenses|-9,027,389.20|-3,413,625.17|
||Loss on investment|3,527,451.56|-22,719,665.90|
||Decrease of deferred income tax assets|-3,790,938.66|489,041.95|
||Increase of deferred income tax assets|||
||Decrease in inventories|||
||Decrease of operating receivable|7,120,472.61|-2,355,629.65|
||Increase of operating receivable|11,591,283.05|7,728,160.19|
||Other|-111,892.94|561,892.94|
||Net cash flows arising from operating activities|45,594,650.88|33,067,631.97|
||II. Significant investment and financing activities that without cash|||
||flows|||
||Debt-to –capital conversion|||
||Convertible loan due within 1 year|||
||Fixed assets acquired under financial lease|||
||III. Net Changes of cash and cash equivalents|||
||Ending balance of cash|85,416,567.74|413,700,327.95|
||Less: Beginning balance of cash|413,700,327.95|440,685,610.11|
||Add：End balance of cash equivalents|||
||Less: Beginning balance of cash equivalents|||
||Net increase of cash and cash equivalents|-328,283,760.21|-26,985,282.16|

 XVI. Supplement information
1. Particulars about current non-recurring gains and loss
Items Amount Notes
Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual Report
||
|-|
|-97,477.14|
|17,228,202.21|
|52,271,862.25|
|1,143,552.02|
|70,546,139.34|
|48,007.18|
|28,074,327.28|
|42,423,804.88|

2. Return on net asset and earnngs per share
|||
|-|-|
|Weighted averagereturnee equity(%)||
||Basic earnings pershare(RMB/share）|
|-0.96|-0.04|
|-2.74|-0.13|

Shenzhen Textile(Holdings) Co., Ltd. 2018 Annual ReportXII．Documents Available for Inspection
1.Financial statements bearing the seal and signature of legal representative, General Manaager and financial controller;
2.The original of theauditor’s report bearing the seal of the certified public accountants and the signature of C.P.A.
3.The originals of all theCompany’s documents and the original manuscripts of announcements publicly disclosed on the newspapers designated by China Securities Regulatory Commission in the report period.
The above documents were completely placed at the Office of Secretaries of the Board of Directors of the Company.
The Board of Directors of Shenzhen Textile (Holdings) Co., Ltd. April 27,2019