Shenzhen Textile (Holdings) Co., Ltd.
Auditor’s Report
Qin Xin ShenZi[2019]No. 0409
Auditors’ Report
Qin Xin ShenZi[2019]No.0409
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
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
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||||
|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：||||
|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|||
|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|
|（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
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
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
Person-in -charge of the accountingorgan：Mu Linying
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
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’equity|Total of owners’equity|
||ShareCapital|Other Equity instrument|||Share Capital|Less: Shares instock|Other ComprehensiveIncome|Specializedreserve|Surplus reserves|Common riskprovision|Retained profit|||
|||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.eOtatihneerd 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
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
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
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|||||||||||-|

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|（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
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.
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
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).
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
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
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
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;
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.
（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.
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
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
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|

(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。
（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 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 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 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, 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.
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
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.
(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
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
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 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.
(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 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.
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.
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
(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 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 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 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
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 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
||
|-|
|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|

||
|-|
|Year-end balance|
|9,294,408.13|

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
|||||
|-|-|-|-|
|Book balance||Bad debt provision||
|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|

Amount in year-begin
|||||
|-|-|-|-|
|Book balance||Bad debt provision||
|Amount|Proportion(%)||Proportion(%)|
|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|
|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|

（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|

||
|-|
|Balance in year-end|
|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|
|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|

Amount in year-end
|||||
|-|-|-|-|
|Book Balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|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|
|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|
|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 of|

|||||
|-|-|-|-|
||||the 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|

 (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|

||||||
|-|-|-|-|-|
|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|

（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|
|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|

||||||
|-|-|-|-|-|
|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|

(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|

||||||||
|-|-|-|-|-|-|-|
|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.
(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||

8.Long-term equity investment
(1)Long-term equity investment
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|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|

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|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|

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|||

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|

|||||
|-|-|-|-|
|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||

（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|||||

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|

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||

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|

|||
|-|-|
|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|

||
|-|
|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|

||||
|-|-|-|
|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
||
|-|
|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|

||
|-|
|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：
||||||||||
|-|-|-|-|-|-|-|-|-|
|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|

|||||||
|-|-|-|-|-|-|
|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|

||||||||||
|-|-|-|-|-|-|-|-|-|
|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||

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
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
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.
(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|

|||
|-|-|
|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|||

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||||||||||

||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|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|

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|

||
|-|
|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|

（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|

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|

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|

|||||
|-|-|-|-|
|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 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|

||
|-|
|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|-53,423,112.27|
|I|ncome tax computed in accordance with the applicable tax rate|-13,355,778.06|
||Effect of different tax rate applicable to the subsidiary Company|10,179,623.11|

||||
|-|-|-|
|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|

||||
|-|-|-|
|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
||
|-|
|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|

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

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

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|

|||
|-|-|
|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|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
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|

||
|-|
|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
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 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|

（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
remaining term of the contract of the period, and the grant price was 5.73 yuan/share.
The scope of executive price of thecompany’s other Restrictions shall be lifted at the rate of40%,30%, and
Items Related content
equity instruments at the end of the period and the
30% respectively after 12 months, 24 months, and 36 remaining term of the contract
months after the first transaction date of 24 months after the completion of the registration. The period of validity of the entire plan shall not exceed 60 months from the date of granting the restricted stock to the date on which 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%.
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
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|

 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|

Amount in year-begin
|||||
|-|-|-|-|
|Book balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|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
Balance in year-end
Aging
|||
|-|-|
|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|

Amount in year-end
|||||
|-|-|-|-|
|Book Balance||Bad debt provision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|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|

 Amount in year-beginning
|||||
|-|-|-|-|
|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|
|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|
|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||
|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||

（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|

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|

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(%)
||
|-|
|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|

|||||
|-|-|-|-|
|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
||
|-|
|-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.
April 25,2019