Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Shenzhen Textile (Holdings) Co., Ltd.
2017 Annual Report
March 2018
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
I. Important Notice, Table of Contents and Definitions
The Board of Directors , Supervisory Committee, All Directors, Supervisors and Senior executives of the
Company hereby guarantees that there are no misstatement, misleading representation or important omissions in
this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the
contents hereof.
Mr.Zhu Jun, The Company leader, Mr. Zhu Meizhu, Chief financial officer and the Mr.Mu Linying, the person in
charge of the accounting department (the person in charge of the accounting )hereby confirm the authenticity and
completeness of the financial report enclosed in this annual report.
All the directors attended the board meeting for reviewing the Annual Report.
I.Concerning the forward-looking statements with future planning involvedin the Report, they do not constitute a
substantial commitment for investors, investors should be cautious with investment risks .
II. The company has the macroeconomic risks, market competition risks and raw material risks. Investors are
advised to pay attention to investment risks. For details, please refer to the possible risk factors that the company
may face in the “IX Prospects for the future development of the company\" in the “Section IV Discussion and
Analysis of Business Operation”.
III. The company to remind the majority of investors，Securities Time, China Securities Journal, Securities Daily,
Shanghai Securities News , Hongkong Commercial Daily and Juchao Website（http://www.cninfo.com.cn）are the
media for information disclosure appointed by the Company, all information under the name of the Company
disclosed on the above said media shall prevail, and investors are advised to exercise caution of investment risks.
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
This Report has been prepared in both Chinese and English. In case of any discrepancy, the Chinese version shall
prevail.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Table of Contents
I.Important Notice, Table of contents and Definitions
II. Basic Information of the Company and Financial index
III. Outline of Company Business
IV. Management’s Discussion and Analysis
V. Important Events
VI. Change of share capital and shareholding of Principal Shareholders
VII. Situation of the Preferred Shares
VIII. Information about Directors, Supervisors and Senior Executives
IX. Administrative structure
X. Corporate Bond
XI. Financial Report
XII. Documents available for inspection
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Definition
Terms to be defined Refers to Definition
Company/The Company/ Shen Textile Refers to Shenzhen Textile (Holdings) Co., Ltd
Articles of Association Refers to Articles of Association of Shenzhen Textile (Holdings) Co., Ltd
Actual controller / National Assets Regulatory
National Assets Regulatory Commission of Shenzhen Municipal
Commission of Shenzhen Municipal People's Refers to
People's Government
Government
The Controlling shareholder/ Shenzhen
Refers to Shenzhen Investment Holding Co., Ltd.
Investment Holding Co., Ltd.
Shenchao Technology Refers to Shenzhen Shenchao Technology Investment Co., Ltd.
Shengbo Optoelectronic Refers to Shenzhen Shengbo Optoelectronic Technology Co., Ltd.
Jinjiang Group Refers to Hangzhou Jinjiang Group Co., Ltd.
Nitto Denko Refers to Japan Nitto Denko Corporation
Kunshan Chi Mei Refers to Kunshan Chi Mei Materials Technology Co., Ltd.
Jinhang Investment Refers to Hangzhou Jinhang Equity Investment fund Partnership( LP)
Kunshan Jinlin Refers to Kunshan Jinlin Optoelectronic Material Co., Ltd.
Zhejiang Jinhao Refers to Zhejiang Jinhao Optoelectronic Material Co., Ltd.
“CSRC” Refers to China Securities Regulatory Commission
Company Law Refers to Company Law of the People’s Republic of China
Securities Law Refers to Securities Law of the People’s Republic of China
The Report Refers to 2017 Annual Report
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
II. Basic Information of the Company and Financial index
Ⅰ.Company Information
Stock abbreviation Shen Textile A ,Shen Textile B Stock code： 000045、200045
Stock exchange for listing Shenzhen Stock Exchange
Name in Chinese 深圳市纺织(集团)股份有限公司
Chinese abbreviation (If any) 深纺织
English name (If any) SHENZHEN TEXTILE （HOLDINGS） CO.,LTD
English abbreviation (If any) STHC
Legal Representative Zhu Jun
Registered address 6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen
Postal code of the Registered
Address
Office Address 6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen
Postal code of the office
address
Internet Web Site http://www.chinasthc.com
E-mail szfzjt@chinasthc.com
Ⅱ.Contact person and contact manner
Board secretary Securities affairs Representative
Name Jiang Peng Li Zhenyu
6/F, Shenfang Building, No.3 Huaqiang 6/F, Shenfang Building, No.3 Huaqiang
Contact address
North Road, Futian District, Shenzhen North Road, Futian District, Shenzhen
Tel 0755-83776043 0755-83776043
Fax 0755-83776139 0755-83776139
E-mail jiangp@chinasthc.com lizy@chinasthc.com
Ⅲ. Information disclosure and placed
Newspapers selected by the Company for information Securities Times, China Securities, Shanghai Securities Daily ,Securities
disclosure Daily and Hongkong Commercial Daily.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Internet website designated by CSRC for publishing
http://www.cninfo.com.cn
the Annual report of the Company
The place where the Annual report is prepared and
Secretarial office of the Board
placed
Ⅳ.Changes in Registration
Organization Code 19217374-9
In July 2012, The business scope of the company is changed to \"production, textiles
processing, knitwear, clothing, upholstery fabrics, belts, trademark bands, handicrafts
(without restrictions); general merchandise, the special equipment of the textile
Changes in principal business activities industry, textile equipment and accessories, instruments, standard parts, raw textile
since listing (if any) materials, dyes, electronic products, chemical products, mechanical and electrical
equipment, light industrial products, office supplies and domestic trade (excluding the
franchise, the control and the monopoly of goods) ; operation of import and export
business.\" after approval of Shenzhen Market Supervisory Authority .
In October 2004,In accordance with the Decision on Establishing Shenzhen Investment
Holdings Co., Ltd. issued by State-owned Assets Administration Committee of
Shenzhen Municipal People's Government (Shen Guo Zi Wei (2004) No. 223
Changes is the controlling shareholder in
Document), Shenzhen Investment Management Co., Ltd., the controlling shareholder
the past (is any)
of the Company, and Shenzhen Construction Holding Company and Shenzhen
Commerce and Trade Holding Company merged into Shenzhen Investment Holdings
Co., Ltd.
Ⅴ. Other Relevant Information
CPAs engaged
Name of the CPAs Peking Certified Public Accountants（Special Geneaal Partnership）
Office address： 11/F, Zhongtang Building , No.110, Xihimen Street , Beijing
Names of the Certified Public
Li Yong, Lan Tao
Accountants as the signatiries
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
□ Applicable √Not applicable
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
□ Applicable √ Not applicable
VI.Summary of Accounting data and Financial index
May the Company make retroactive adjustment or restatement of the accounting data of the previous years
□ Yes √ No
2017 2016 Changed over last year
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
（％）
Operating income（RMB） 1,475,545,719.72 1,198,200,216.42 23.15% 1,226,746,791.62
Net profit attributable to the
shareholders of the listed company 52,776,101.46 -87,270,604.54 160.47% 8,497,227.40
（RMB）
Net profit after deducting of
non-recurring gain/loss attributable
3,140,446.26 -102,767,648.41 103.06% -92,259,797.61
to the shareholders of listed
company（RMB）
Cash flow generated by business
-28,518,702.31 -55,264,465.84 48.40% 39,584,500.37
operation, net（RMB）
Basic earning per
0.10 -0.17 158.82% 0.02
share(RMB/Share)
Diluted gains per
0.10 -0.17 158.82% 0.02
share(RMB/Share)(RMB/Share)
Net asset earning ratio（%） 2.23% -4.10% 6.33% 0.39%
End of Changed over last year
End of 2017 End of 2015
2016 （％）
Gross assets（RMB） 4,195,746,507.56 4,119,586,266.47 1.85% 2,969,394,978.70
Net assets attributable to
shareholders of the listed company 2,397,474,603.79 2,339,554,176.31 2.48% 2,174,569,545.55
（RMB）
VII.The differences between domestic and international accounting standards
1．Simultaneously pursuant to both Chinese accounting standards and international accounting standards
disclosed in the financial reports of differences in net income and net assets.
□ Applicable□√ Not applicable
Nil
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards.
□ Applicable √Not applicable
Nil
VIII.Main Financial Index by Quarters
In RMB
First quarter Second quarter Third quarter Fourth quarter
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Operating income 272,392,669.11 466,945,087.76 331,001,389.67 405,206,573.18
Net profit attributable to the
4,302,137.37 10,155,704.26 19,241,712.46 19,076,547.37
shareholders of the listed company
Net profit after deducting of
non-recurring gain/loss attributable
-2,285,765.61 -2,000,420.74 10,458,557.56 -3,031,924.95
to the shareholders of listed
company
Net Cash flow generated by
-185,774,958.96 87,598,558.02 -114,731,423.21 184,389,121.84
business operation
Whether significant variances exist between the above financial index or the index with its sum and the financial
index of the quarterly report as well as semi-annual report index disclosed by the Company.
□ Yes √No
IX.Items and amount of non-current gains and losses
√Applicable □Not applicable
In RMB
Items Amount (2017) Amount (2016) Amount (2015) Notes
Non-current asset disposal
gain/loss(including the write-off part for -52,131.44 -138,610.37 -25,108.97
which assets impairment provision is made)
Govemment subsidy recognized in
currentgain and loss(excluding those closely
12,567,426.98 9,578,484.46 21,420,940.38
related to the Company’s business and
granted under the state’s policies)
Gain/loss on entrusting others with
49,885,730.58
investment or asset management
Gain/loss from change of fair value of
transactional financial asset and liabilities,
and investment gains from disposal of
transactional financial assets and liabilities 88,006,690.51
and sellable financial assets other than valid
period value instruments related to the
Company’s common businesses.
Switch back of provision for depreciation of
account receivable which was singly taken 332,073.93 634,628.72 790,775.00
depreciation test.
Net amount of non-operating income and
-1,175,757.59 5,493,881.12 2,465,842.60
expense except the aforesaid items
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Other non-recurring Gains/loss items 23,068,858.53
Less :Influenced amount of income tax 1,828,395.90 71,340.06 11,902,114.51
Influenced amount of minor shareholders’
33,162,149.89
equity (after tax)
Total 49,635,655.20 15,497,043.87 100,757,025.01 --
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Compaines Offering their Securities to the Public-Non-recurring Gains and Losses and
its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure
for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□ Applicable√ Not applicable
None of Non-recurring gain /loss items recorgnized as recurring gain /loss/items as defined by the information
disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
III. Business Profile
Ⅰ.Main Business the Company is Engaged in During the Report Period
Whether the company needs to comply with the disclosure requirements of the particular industry
No
In 2016, the company's main business covered such the high and new technology industry as represented by
LCD polarizer, its own property management business and the retained business of high-end textile and garment
Polarizer is the upstream raw material for liquid crystal panel, also is one of the key materials for flat panel
display industry, and it has been widely used in smart phones, liquid crystal display panel of tablet computers and
TVs and so forth, OLED display panel, instrumentation, sun glasses, filter of photographic equipments and so on
many fields. The company’s five existing production lines of polarizer with mass production have products
covered the fields such as TN, STN, TFT, OLED, 3D, dye plate, optical film for touch screen, and the products
mainly used in TV, NB, navigator, monitor, automotive, industrial control, instrumentation, smart phones,
wearable devices, 3D glasses, sunglasses and so forth products, Since the beginning of this year, the company has
continuously strengthened sales channel expansion and company brand building, and has continuously expanded
its sales channels through various advantages such as market, policy, and geographical location. becoming the
qualified supplier to Huaxing Optoelectronic, BOE, Ivo, Shenchao Optoelectronic ,LGD, Shen Tianma and so
forth panel companies.
During the reporting period, the company firstly improved the operating capability of the polarizer business.
The company promotes the technological level, breaks through the bottleneck of production capacity, optimizes
the product structure, strictly controls the product performance indicators, optimizes the transformation of the
process and equipment, and achieves the simultaneous improvement of the output and quality; secondly, it
actively promotes the construction of the No. 6 line project and completes the installation and commissioning.
Trial production and other work have initially met the conditions for mass production; at the same time, in order
to better undertake the business of large-size polarizer products with higher profits, the company has carried out
the optimization and transformation of host equipment for the second phase 6 line project; the third is the
introduction of global Leading polarizer technology, to build ultra-wide-width production line construction, and
promote the leap-frog development of polarizers' main business; Fourth, implement the requirements of the
municipal SASAC and investment control companies to fully establish a long-term incentive and restraint
mechanism, and benchmark advanced enterprises. With the common practice of the industry and around the
strategic goals of suppliers of optical film products such as international first-class polarizers, we have actively
promoted the formulation and implementation of the 2017 Restricted Stock Incentive Plan, and achieved
Incentives and constraints of technology and business backbones to promote the realization of the company's
\"13th Five-Year Plan\"; In-depth analysis and summarization of the \"12th Five-Year Plan\" business development
experience and existing problems, based on the industry's development attributes, combined with the company's
actual situation, further adjust and improve the \"Thirteenth Five-Year Plan\" strategic development plan; Sixth,
property management enterprises grasp, With heavy service, the rental income steadily increased. During the
reporting period, the company completed the formalities for the completion of the Guan Hua Building project and
completed preparations for the investment promotion of Guan Hua Building. Sixth, it attached great importance to
safety and effectively carried out safety and environmental protection work. Through the establishment of a safety
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
production inspection mechanism, the company eliminates hidden dangers in fire safety, upgrades and upgrades
environmental protection facilities, pursues sustainable development of green health, and actively fulfills its social
responsibilities.
In the dual role of the production line construction and the huge downstream market, the global flat panel
display industry has shifted its focus to mainland China. It is expected that China will become the world's largest
LCD panel production base in 2018, with panel production ranking the top in the world. It is expected that the
domestic panel production capacity will reach 184 million square meters by 2020, which is 2.37 times the 2016
production capacity of 76.8 million square meters, with an average annual growth rate of 27%. Among them, in
the next few years, there will be as many as six or more 10.5/11 generation LCD panel production lines in the
Chinese mainland in volume production, and the newly increased investment will reach more than 300 billion
yuan. It is estimated that by 2020 it will release more than 70 million square meters of 65-inch and larger panel
production capacity, becoming the fastest-growing part of the market demand. The corresponding demand for
domestic polarizers is expected to increase rapidly from 215 million square meters in 2017 to 368 million square
meters in 2020; from 2020 onwards, the demand for large-size polarizers released annually for the
10.5/11-generation LCD panel production line will reach 150 million square meters, and China will become the
world's largest market for new polarizers. Compared with blow-outs market demand for polarizers, the
self-sufficiency rate of polarizers in China is still very low. There is a large gap in the supply of polarizers in
mainland China, and domestic substitution of polarizers has become increasingly strong.
In the future, the company will continue to deepen its strategic cooperation and expand the effect of mixed
reforms, relying on more than 20 years of industrial operation experience and location advantages. By integrating
the industrial resources of polarizers and optical films, the company will further optimize the ownership structure
of Sheng Bo Optoelectronics and improve the production technology and management level; At the same time, we
will accelerate the construction of an ultra-wide polarizer production line and seize high-margin polarizer product
markets for oversized LCD TVs; While trying to do a good job in the polarizer industry, we will also try to realize
a leap-forward development to the optical film industry, and become stronger and better.
Ⅱ.Major Changes in Main Assets
1.Major Changes in Main Assets
Main assets Major changes
Equity assets No major chages
Fixed assets No major chages
Intangible assets
Construction in process at the end of the reporting period increased by RMB202.7659
million compared to the beginning of the period, an increase of 169.25%, which was
Construction in process
mainly due to the increase of investment for the second-phase project of No.6 line of
TFT-LCD polarizer.
Advance account at the end of the reporting period increased by RMB6.9818 million
Advance account
compared to the beginning of the period, an increase of 103.08, Mainly due to the
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
increase in prepayments for purchases of goods and materials.
The interest receivable at the end of the reporting period increased by RMB 9.076
Interest receivable million, a increase of136.42% compared to the beginning of the period, Mainly due to
the increase in interest on structured deposits and trust receivables.
Other account receivable at the end of the reporting period decreased by RMB 54.3466
Other account receivable million, a decrease of 80.79% compared to the beginning of the period, which was
mainly due to the increase of guarantee deposits for customs.
Available for sale of financial assets at the end of the reporting period increased by RMB
Available for sale of financial assets 24.47 million, a increase of 58.87% compared to the beginning of the period，Mainly
due to the purchase of polarizer industry fund shares.
2. Main Conditions of Overseas Assets
□ Applicable √Not applicable
III.Analysis On core Competitiveness
Whether the company needs to comply with the disclosure requirements of the particular industry
No
（1）Technology advantages. Shengbo Optoelectronic is the first domestic national high-tech company which
entered into the R&D and production of the polarizer，We are one of the largest, most technical and professional
polarizer R&D teams in the country and has more than 20 years of operating experience in the polarizer industry.
Products include TN-type, STN-type, IPS-TFT-type, VA-TFT-type, vehicle-mounted industrial display, flexible
display, 3D stereo and polarizer for sunglasses, and optical film for touch screens, etc., We have proprietary
technology for polarizers and new intellectual property rights for various new products. By the end of the
reporting period, the company applied for 79 invention patents and was authorized with 56 items, among which:
16 domestic invention patents(7 patents got authorized); 55 domestic utility model patents(45 patents got
authorized); 1 overseas invention patent(0 patents got authorized); 5 overseas utility model patents(3 patents got
authorized). There were 3 national standards and 2 industrial standards that were developed by the company are
approved and then will be implemented. The company, possessing the two technology platforms “Shenzhen
polarizing materials and engineering laboratory\" and \"Municipal research and development center\", focused on
the R&D and the industrialization of the core production technology of LCD polarizer, the developing and
industrialization of the new products of OLED polarizer and the “domestication” research on the production
materials of polarizer. Through the introduction of various types of sophisticated testing equipments to perfect the
test means of small-scale test and medium-scale test, further by improving the incentive system of research and
development and building the collaborative innovation platform of“Industry-Study-Research-Utilization”and so
forth means, the company comprehensively enhanced the level of research and development.
（2）Talents advantages. The company has the management team and the senior technical team with strong
technical ability, enduring cooperative spirit, rich experience and international vision on the polarizer. The
company had engaged overseas technical personnel who have great experiences on advanced polarizer production
and established the technology management team with its own technical team and complemented by engaging
foreign technical personnel, and via the combination of independent innovation and technology providing by
engaged foreign personnel to accumulate technology, Upon Talents Advantages, the company has established and
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
accumulated the first-mover advantages in terms of brand, technology, operation and management. Through the
improvement of the appraisal and distribution system, the implementation of the reserve talent echelon
management mechanism and the medium and long-term incentive and restraint mechanism, the employee's
interests are deeply tied with the company, and the salaries and incentives focus is shifted to core employees such
as management and research and development, giving full play to the subjective initiative of the talents.
（3）Market advantages. The company has good customer groups not only in domestic market but in foreign
market, compared with foreign advanced counterparts, the biggest advantage lies in the localization for supporting,
close to the panel market, as well as the strong support of the national policy. In terms of market demand, with the
mass production of the 8.5/10.5/11-generation TFT-LCD panel production lines under construction and planned
for the next few years, the production capacity of high-generation TFT-LCD panels in mainland China will
increase significantly in the next few years, the corresponding domestic polaroid film market demand has also
increased, and the domestic market is the most important market for polaroid manufacturers, especially in the
large-size polarizer market. Mainland polarizer manufacturers will usher in important industry opportunities; in
terms of market development, the company takes production material control as the core, technology services as
the guide, customer needs as the focus, organically combines production and sales, establishes a rapid response
mechanism, fully exploits localization advantages, and uses its own accumulated technology and talents, does a
good job of peer-to-peer professional services, forms a stable supply chain and increases market share.
(4) Quality advantages. The company always adhered to the quality policy of \"Satisfying customer demands and
pursuing excellent quality\" and focused on product quality control. The company strictly controls product
performance indicators, standardizes inspection standards for incoming materials, starts with quality improvement
and consumption reduction, and achieves simultaneous increase in output and quality; through the introduction of
a modern quality management system, the products have passed ISO9001 Quality Management System and
ISO14001 Environmental Management System, OHSAS18000 Occupational Health and Safety Management
System, QCO80000 System Certification; the product is tested by SGS and meets the environmental
protection ,The company had increased the automatic detecting and marking equipments in the beginning section
and the ending section, strictly controlled the product quality and improved the product utilization rate and
product management efficiency.
（5）Management advantages. Shengbo Optoelectronic has accumulated rich management experiences in
more than 20 years in the manufacturing of polarizer, possessing the home most advanced control technology of
the production management process of the polarizer and quality management technology and the stable raw
material procurement channel so forth management systems. The company had carried out comprehensive
benchmarking work, organized the management personnel to learn advanced experiences from customers and
peers to force the elevation of management ability, and drew on the foreign company’s management experiences
of polarizer, optimized the company's organizational structure, reduced the managerial hierarchy and further
enhanced the company's management efficiency. After the introduction of the strategic investor, Through close
cooperation with Jinjiang Group, we complement each other's strengths, absorb the vitality of private enterprises,
continue to implement advanced management systems, reasonable incentive mechanisms, etc., improve the
efficiency of decision-making, enhance the speed of market response, improve the research and development
incentive system, and also realize the deep integration of the value of the company and its employees and
stimulates the new vitality of the business.
（6）Policy advantages. Polarizers is an important part of the flat panel display industry. Shengbo
Optoelectronics guarantees the purchase rights of polarizers for domestic panel companies, greatly reduces the
purchase cost of polarizers for domestic panel companies, ensures the safety of the national panel industry, and
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
strengthens the flat panel industry in China, has played a positive role in enhancing the overall competitiveness of
the flat panel display industry chain in China and promoted the coordinated development of the entire industrial
chain of the flat panel display industry cluster in Shenzhen. The company once again passed the national high-tech
enterprise certification and completed the extension of preferential policies on the exemption of tariffs on
domestic self-use production raw materials that could not be produced domestically. The company's polaroid
project has won many national and provincial policies and financial support. At the same time, the company
strengthened supplier management, improved its overall procurement strategy, strictly controlled the number of
suppliers, introduced a competitive mechanism, and introduced price-competitive alternative materials to further
reduce production costs and improve product competitiveness.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
IV. Management’s Discussion and Analysis
Ⅰ.General
In 2017, the company deeply practiced the mixed ownership operation mode, actively explored the road of mixed
reform, established the medium and long-term incentive and restraint mechanism through the implementation of
management and core backbone stock holdings, and stimulated the vitality of the enterprise; actively adjusted the
business strategy of the polarizer industry and optimized the product structure. Accelerate the construction of the
project and realize the overall profitability of the polarizer production enterprises; property leases have steadily
increased, and the dilemma of textile and clothing business has been greatly improved.
In 2017, the company achieved the operating revenue of RMB 1475.5457 million, an year-on-year increase
of 23.15%; total profits of RMB 84.9405 million, an year-on-year increase of 280.92%; net profits attributable to
the owner of the parent company of RMB 52.7761 million, an year-on-year increase of 160.47%. The company
had returned to profitability. The main reasons for the company to achieve profitability in 2017 were: First, the
subsidiary's Shengbo Optoelectronics has improved its production and management of polarizers, increased the
speed of the vehicle, and increased the gross profit margin by introducing new products. Second, he income from
entrusted financial management has increased, and the non-recurring gains and losses have increased over the
same period of last year. Third, the appreciation of the yen has narrowed year-on-year, and the exchange loss has
decreased compared to the same period of last year.
Review of the company's key works carried out in 2017 as follows:
(I) Polarizer's operating capability has been improved
In 2017, the company first promoted the improvement of technology level, broke through the bottleneck of
production capacity, optimized the product structure, strictly controlled the product performance indicators,
optimized the process and equipment transformation, and simultaneously improved the output and quality; the
second was the analysis of the sales model and product structure of peer companies, increased market
development efforts and looked for breakthroughs to increase sales volume; the third was to focus on the
development of ultra-thin polarizers for IPS, polarizers for OLED displays, and optical films for automotive
industrial control functions to enrich product categories, and at the same time promoted new product development
efforts to prepare the market for the production of No. 6 line and tracked the replacement of multiple raw
materials actively and reduced the production costs; the fourth was to actively promote the construction of Line 6
project, complete the work of installation, commissioning and trial production, introduce global leading polarizer
technology, plan to build ultra-wide-width production lines, and promote the leap-forward development of
polarizers' main business; the fifth was to actively strive for industrial policy support, and obtained a total of
75.825 million yuan for policy support funds, among them, the 7th line project successfully applied to the
National Development and Reform Commission for a special financial support of 30 million yuan. At the same
time, Shengbo Optoelectronics completed the AEO certification of the customs, which reduced the clearance rate
of goods and cleared the time and cost of importing raw materials.
At the same time, the company has increased the research and development of independent intellectual
property rights. In the whole year, it applied for 8 patents (including 1 software invention and 7 utility models). In
addition, 1 PCT patent (utility model) entered Korea and Japan respectively. As of December 31, 2017, the
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
company had applied for 79 patents and obtained 56 authorizations, including 16 domestic invention patents (7
authorizations), 55 domestic utility models (45 authorizations), and 1 overseas invention patent ( 0 authorizations);
7 overseas utility models (4 authorizations). The company has studied and formulated 3 national standards and 2
industry standards that have been approved for implementation. The company owns two technical platforms,
“Shenzhen Polarization Materials and Technology Engineering Laboratory” and “Municipal Research and
Development Center”, focusing on the R&D and industrialization of the core production technology of polarizers
for LCD, and the development and industrialization of new products for polarizers for OLEDs, and the
localization of raw materials for polarizer production. Through the introduction of various types of precision test
equipment, completing first-hand test, pilot test methods, improving the R & D incentive system, and building an
collaborative innovation platform of “production, learning, research and application”, and other methods, to
comprehensively improve the level of research and development.
(II) Property management company paid attention to management and service, and rental income steadily raised
In 2017, the company first stepped up its management standards for property companies, and actively
promoted the rectification of safety hazards; the second was to overcome difficulties in leasing operations and
actively take measures to properly increase the leasing price of newly signed property leasing contracts while
safeguarding the old leasing relationship, so as to ensure that leasing income steadily rises, the third was through
the various upgrading and transformation work, realizing safety management, improving property service quality,
and improving customer satisfaction, creating conditions for the continuous improvement of property
management benefits, the fourth was to complete the formalities for the completion of the Guan Hua Building
Project and to prepare for the investment promotion of Guan Hua Building to help it become a new growth point
for the company’s property income.
(III) The company strengthened the construction of talents' team and enhanced the core competitiveness of
enterprises
In 2017, the company focused on internal talent training and selection work. According to the company's
overall strategy, it optimized the internal organizational structure of the company, established a management
mechanism for reserve talents and echelons, provided channels for the promotion of various types of talents, and
promoted the rejuvenation of cadre echelons; the company implemented the requirements of the municipal
SASAC and investment control companies to fully establish a long-term incentive and restraint mechanism,
further establish and improve the company's long-term incentive mechanism, attract and retain outstanding talents,
and fully mobilize the enthusiasm of the company’s core staff. Through the implementation of the reserve talent
echelon management mechanism and the medium and long-term incentive and restraint mechanism, the company
continued to stimulate the spirit of enterprise innovation and vitality, and continuously enhance the company's
core competitiveness and sustainable development capabilities.
(IV) The company continued to improve the \"13th Five-Year Plan\" strategic development plan
In 2017, based on in-depth analysis and summary of the “Twelfth Five-Year Plan” business development
experience and existing problems, the company researched and judged the development environment the company
was facing, and further adjusted and improved the “13th Five-Year Plan” Strategic development planning and
completion of expert review work according to the development attributes of the industry and the company’s
actual conditions. On November 6, 2017, the sixth meeting of the Seventh Board of Directors of the company
reviewed and approved the “Thirteenth Five-Year Plan” strategic development plan. This plan proposed a new
strategic blueprint, clarified the company's development goals, development ideas, development priorities, key
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
measures, and development guarantees in the next five years, highlighted the strategic, forward-looking, guiding,
and enforceable nature of the plan. According to the “13th Five-Year Plan”, the company will arrange relevant
departments to conduct in-depth research and formulate specific measures for follow-up implementation as soon
as possible.
(V) The company actively promoted and completed the equity incentive plan.
To implement the spirit requirements of the Municipal Party Committee and Municipal Government's
Implementation Plan on Deepening the Reform of Municipal State-Owned Enterprises for Development, to
achieve incentives and constraints for middle and senior management personnel and core technology (business)
personnel, and to benchmark common enterprises and industries, based on the strategic objectives of suppliers of
optical film products such as international first-class polarizers, the company formulated the 2017 Restricted
Stock Incentive Plan to issue with A shares of common stock at a price of 5.73 yuan per share to a total of 119
incentive objects, including company directors, senior management personnel, core technology, business, and
management backbones. As of December 27, 2017, 4.7523 million restricted shares granted to the incentive
objects have been registered, becoming the first listed company to implement the equity incentive plan and
complete the implementation of the equity incentive plan in the same period by the SASAC. The implementation
of the company’s equity incentive plan has achieved incentives and constraints for middle and senior management
personnel and technical and business backbones. It can fully mobilize the enthusiasm and creativity of key
personnel and enable employees’ own goals to be closely linked to the value of the company, and will be
beneficial to the realization of the company's \"13th Five-Year \" strategic plan.
(VI) The company always paid attention to safety and environmental protection work, and maintained
harmonious and stable business
In 2017, the company firstly established a self-examination system for corporate safety production,
supplemented by special inspections, routine inspections, and major safety inspections. A total of more than 10
routine safety inspections, 4 safety production inspections, and daily production safety inspections in the period of
the “19th National Congress of the People's Republic of China” were carried out, and 134 safety hazards of
various sizes were identified, the rectification rate was up to 100%; the second was to reorganize and prepare the
safety production emergency plan for the company's headquarters, and passed the evaluation of the emergency
plan review panel composed of the Guangdong emergency experts and the company's local safety authority and
completed the filing approval for the Futian District Safety Supervision Bureau at the end of December; the third
was to upgrade and renovate the fire safety hazards of old properties and completely solve the hidden dangers of
fire safety; the fourth was to start the upgrading of the environmental protection facilities at Longhua and
Pingshan Plants, adding waste water and waste gas treatment equipment, setting up relevant treatment technical
specifications, scientifically setting operating parameters, sending personnel to conduct daily inspections, and
after the supervision and inspection by government departments, the compliance rate of the company's wastewater
and waste gas emissions was 100%, the number of general environmental pollution accidents was 0, the number
of company environmental violations and violations was 0, and the company's social responsibilities are fulfilled.
Ⅱ.Main business analysis
1. General
Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
2. Revenue and cost
(1)Component of Business Income
In RMB
2017
Increase /decrease
Amount Proportion Amount Proportion
Total operating
1,475,545,719.72 100% 1,198,200,216.42 100% 23.15%
revenue
Industry
Domestic and
490,391,227.85 33.23% 335,055,650.00 27.96% 46.36%
foreign trade
Manufacturing 869,112,546.94 58.90% 766,658,201.79 63.98% 13.36%
Lease and
Management of 93,781,583.42 6.36% 92,357,025.54 7.71% 1.54%
Property
Other 22,260,361.51 1.51% 4,129,339.09 0.34% 439.08%
Products
Lease and
Management of 93,781,583.42 6.36% 92,357,025.54 7.71% 1.54%
Property
Textile 41,273,987.57 2.80% 29,011,426.03 2.42% 42.27%
Polarizer sheet 851,531,250.79 57.71% 798,562,759.96 66.65% 6.63%
Trade 466,698,536.43 31.63% 274,139,665.80 22.88% 70.24%
Other 22,260,361.51 1.51% 4,129,339.09 0.34% 439.08%
Area
Domestic 1,103,749,604.72 74.80% 740,115,218.94 61.77% 49.13%
Overseas 371,796,115.00 25.20% 458,084,997.48 38.23% -18.84%
(2)Situation of Industry, Product and District Occupying the Company’s Business Income and Operating
Profit with Profit over 10%
√ Applicable □Not applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
No
In RMB
Increase/decrease Increase/decrease Increase/decrease
Gross profit
Turnover Operation cost of revenue in the of business cost of gross profit
rate(%)
same period of over the same rate over the same
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
the previous period of period of the
year(%) previous year (%) previous year (%)
Industry
Domestic and
490,391,227.85 481,342,760.55 1.85% 46.36% 45.39% 0.66%
foreign trade
Manufacturing 869,112,546.94 786,401,813.99 9.52% 13.36% 2.53% 9.56%
Lease and
Management of 93,781,583.42 26,568,634.40 71.67% 1.54% 2.29% -0.21%
Property
Products
Lease and
Management of 93,781,583.42 26,568,634.40 71.67% 1.54% 2.29% -0.21%
Property
Textile 41,273,987.57 37,280,504.80 9.68% 42.27% 25.29% 12.24%
Polarizer sheet 851,531,250.79 771,786,016.96 9.36% 6.63% -3.16% 9.17%
Trade 466,698,536.43 458,678,052.78 1.72% 70.24% 69.07% 0.68%
Area
Domestic 1,081,489,243.21 937,367,743.11 13.33% 46.94% 40.66% 3.87%
Overseas 371,796,115.00 356,945,465.83 3.99% -18.84% -21.99% 3.89%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main
business based on latest on year’s scope of period-end.
□ Applicable √Not applicable
(3)Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
Classification Items Unit 2017 2016 Changes
(0000’ square
Sales 881.73 866.71 1.70%
meters)
(0000’ square
Polarizer sheet Production 853.29 824.1 3.42%
meters)
(0000’ square
Stock 87.39 115.83 -32.54%
meters)
Sales 0000’ pieces 249 155 37.75%
Knitted clothing Production 0000’ pieces 234 164 29.91%
Stock 0000’ pieces 48 63 -31.25%
Explanation for a year-on –year change of over 30%
□ Applicable √Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
(4)Degree of Performance of the Significant Sales Contract Signed up to this Report Period
□ Applicable √Not applicable
(5)Component of business cost
Industry and product classification
In RMB
2017
Proportion in the Proportion in the Increase/Decrease
Industry Items
Amount operating costs Amount operating costs (%)
(%) (%)
Domestic and Polarizer sheet,
481,342,760.55 37.19% 331,069,725.53 29.45% 45.39%
foreign trade Textile
Polarizer sheet,
Manufacturing 786,401,813.99 60.76% 766,963,524.67 68.23% 2.53%
Knitted clothing
Lease and
Rental，
Management of 26,568,634.40 2.05% 25,973,066.77 2.31% 2.29%
Accommodation
Property
Others Others 22,260,361.51 1.71% 4,129,339.09 0.37% 439.08%
In RMB
2017
Classification of
Proportion in Proportion in Increase/Decrease
products Items
Amount operation Amount operation (%)
costs(%) costs(%)
Polarizer sheet Direct materials 585,570,976.73 45.06% 547,069,141.27 48.49% 7.04%
Polarizer sheet Direct labor 34,391,814.72 2.65% 32,196,752.56 2.85% 6.82%
Polarizer sheet Power costs 28,735,642.71 2.21% 33,374,274.35 2.96% -13.90%
Manufacturing
Polarizer sheet 100,422,875.03 7.73% 124,568,647.78 11.04% -19.38%
costs
Knitted clothing Direct materials 17,539,683.14 1.35% 12,479,774.66 1.11% 40.54%
Knitted clothing Direct labor 8,028,204.05 0.62% 6,486,194.20 0.57% 23.77%
Knitted clothing Power costs 1,720,566.62 0.13% 1,121,172.68 0.10% 53.46%
Manufacturing
Knitted clothing 9,992,050.99 0.77% 9,667,567.17 0.86% 3.36%
costs
Notes
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
(6)Whether Changes Occurred in Consolidation Scope in the Report Period
□Yes √ No
(7)Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in the
Company’s Report Period
□ Applicable √Not applicable
(8)Situation of Main Customers and Main Supplier
Information of Main Customers
Total sales amount to top 5 customers (RMB) 878,811,169.59
Proportion of sales to top 5 customers in the annual
59.65%
sales(%)
Proportion of the sales volume to the top five customers
0.00%
in the total sales to the related parties in the year
Information of the Company’s top 5 customers
No Name Amount9RMB) Proportion(%)
1 Customer 1 331,163,008.11 22.44%
2 Customer 2 239,193,499.55 16.22%
3 Customer 3 160,533,333.31 10.88%
4 Customer 4 94,020,137.88 6.37%
5 Customer 5 53,901,190.74 3.65%
Total -- 878,811,169.59 59.65%
Other Notes :
√Applicable □Not applicable
There exists no the association relations between the top five suppliers and the company, and the directors,
supervisors and senior management, core technical staff, shareholders with holding of more than 5% stocks, actual
controllers and other affiliated parties do not have direct or indirect equity of the major suppliers.
Principal suppliers
Total purchase of top 5 Suppliers（RMB） 590,602,095.57
Percentage of total purchase of top 5 suppliers In total
46.54%
annual purchase(%)
Proportion of purchase amount from the top 5 suppliers in
the total purchase amount from the related parties in the 0.00%
year
Information about the top 5 suppliers
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
No Name Amount（RMB） Proportion
1 Supplier 1 181,584,000.00 14.31%
2 Supplier 2 141,608,149.29 11.16%
3 Supplier 3 136,407,829.45 10.75%
4 Supplier 4 74,919,527.63 5.90%
5 Supplier 5 56,082,589.20 4.42%
Total -- 590,602,095.57 46.54%
Notes
√Applicable □Not applicable
There exists no the association relations between the top five suppliers and the company, and the directors,
supervisors and senior management, core technical staff, shareholders with holding of more than 5% stocks, actual
controllers and other affiliated parties do not have direct or indirect equity of the major suppliers.
3.Expenses
In RMB
Increase/Decrea
2017 2016 Notes
se(%)
Sale expenses 9,940,696.87 10,161,699.85 -2.17%
Administration expenses 114,356,601.65 106,901,733.12 6.97%
First, exchange rate losses have
decreased due to changes in the
Financial expenses -31,171,160.81 -1,678,136.65 1,757.49% exchange rate of the Japanese yen, and
second, interest income from bank
deposits has increased.
4.R& D Expenses
√Applicable □Not applicable
In the year, the research and development department had a total of 12 research and development projects
involving the TV product performance enhancement, performance optimization of polarizers for smart phones and
development of ultra-thin polarizer products, OLED product development, vehicle-mounted industrial control
product development, TN/STN product performance enhancement and new product development, 1# dye-sheet
performance improvement and new product development, advanced technology development, development of IPS
products on Line 4 and development of multi-level suppliers of raw materials. In the report period, a total of 176
new products (measured by product model) were successfully produced, thus the ability of innovation was
significantly improved, the product competitiveness was further enhanced and the market share continued to grow.
Situation of Research and Development Input by the Company
2017 2016 Increase/Decrease(%)
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Number of Research and
105 106 -0.94%
Development persons (persons)
Proportion of Research and
10.20% 8.44% 1.76%
Development persons
Amount of Research and
Development Investment (In 39,036,089.05 39,308,762.42 -0.69%
RMB)
Proportion of Research and
Development Investment of 2.65% 3.28% -0.63%
Operation Revenue
Amount of Research and
Development Investment 0.00 0.00
Capitalization (In RMB)
Proportion of Capitalization
Research and Development
0.00% 0.00% 0.00%
Investment of Research and
Development Investment
The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the
Business Income Year on Year
□ Applicable √ Not applicable
Explanation of the Reason for Substantial Changes in the Research and Development Input’s Capitalization Rate
and Its Reasonableness
□ Applicable √ Not applicable
5.Cash Flow
In RMB
Items 2017 2016 Increase/Decrease(%)
Subtotal of cash inflow received
1,746,560,969.61 1,288,587,823.52 35.54%
from operation activities
Subtotal of cash outflow
received from operation 1,775,079,671.92 1,343,852,289.36 32.09%
activities
Net cash flow arising from
-28,518,702.31 -55,264,465.84 48.40%
operating activities
Subtotal of cash inflow received
3,571,994,746.81 851,568,515.73 319.46%
from investing activities
Subtotal of cash outflow for
3,375,984,019.80 1,880,577,108.61 79.52%
investment activities
Net cash flow arising from 196,010,727.01 -1,029,008,592.88 119.05%
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
investment activities
Subtotal cash inflow received
216,890,764.68 1,581,219,588.81 -86.28%
from financing activities
Subtotal cash outflow for
151,388,307.46 316,577,182.44 -52.18%
financing activities
Net cash flow arising from
65,502,457.22 1,264,642,406.37 -94.82%
financing activities
Net increase in cash and cash
231,125,702.76 181,455,560.97 27.37%
equivalents
Notes to the year-on-year change of the relevant data
√Applicable □Not applicable
（1）The net cash flows from operating activities Increased by RMB26,745,763.53 and 48.40% year on year，
The increase in cash received mainly from sales of polarizer products.
(2) The net cash flows from investing activities increased by RMB1,225,019.89 and 119.05% year on year，
mainly due to the recovery of structured deposits, the trust wealth management principal and the increase in
revenue.
(3) The net cash in-flow from financing activity decreased by RMB1,199,139,949.15 million and 94.82% year on
year，It was mainly due to the introduction of strategic investors by sheng bo optoelectronics, a subsidiary of the
company , and the strategic investor’s payment of capital increase.
Notes to the big difference between cash flow from operating activities and net profit in the reporting year
√Applicable □Not applicable
During the reporting period, the net cash flow from the company's operating activities was RMB -28,518,702.31,
and the net profit for the year was RMB 73,661,677.87. There was a significant difference between the two, which
was mainly due to the following two factors: first, the profit of trust wealth-management and the dividends gained
from the share-participating enterprise (s), which belong to the cash flow from investment activities, accounted for
a high proportion in the net profit; second, the ending balance of accounts payable had decreased significantly
compared with the previous period, and the repayment for the suppliers’ goods payment led to that the outflow of
cash in operating activities increased.
Ⅲ.Analysis of Non-core Business
√ Applicable □Not applicable
In RMB
Proportion in total
Amount Explanation of cause Sustainable (yes or no)
profit
The dividends from the
Obtained the dividends from
share-participating enterprise
the share-participating
and the contracting fees
Investment incme 53,555,819.95 63.05% enterprise, obtained
possess the sustainability, but
contracting fees, and gains
the proceeds from the trust
from trust wealth management
wealth management does not
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
possess the sustainability
Impairment of Loss of inventory price
48,807,727.39 57.46% Have the sustainability
assets falling, loss of bad debts
Non-operating Mainly due to the insurance
787,567.93 0.93% Not sustainable.
income claims
Non-operating Mainly due to the payment of
2,015,456.96 2.37% Not sustainable.
expenses compensation
Other income 12,567,426.98 14.80% Mainly in government grants Sustainable
Ⅳ.Condition of Asset and Liabilities
1.Condition of Asset Causing Significant Change
In RMB
End of 22017 End of 22016 Proportio
Proportion in Proportion in n
Notes to the significant change
Amount the total Amount the total increase/d
assets(%) assets(%) ecrease
1,165,048,108. Structured deposits are due for
Monetary fund 27.77% 933,856,912.73 22.67% 5.10%
83 recovery.
Accounts 192,503,077.7
4.59% 220,222,019.41 5.35% -0.76%
receivable
275,615,176.1
Inventories 6.57% 283,371,714.07 6.88% -0.31%
Investment real 173,105,806.2
4.13% 179,324,547.77 4.35% -0.22%
estate
Long-term equity
20,380,734.56 0.49% 24,849,311.00 0.60% -0.11%
investment
656,133,200.1
Fixed assets 15.64% 723,685,287.56 17.57% -1.93%
Due to the TFT-LCD Polarizer Phase II
Construction 322,570,173.7
7.69% 119,804,231.43 2.91% 4.78% Line 6 project increased investment
inprocess
this period.
Due to the increase in borrowings for
Short-term loans 88,638,181.45 2.11% 12,335,695.77 0.30% 1.81%
the purchase of raw materials.
Long-term loans 40,000,000.00 0.95% 80,000,000.00 1.94% -0.99% Return Shenchao Technology loans.
2.Asset and Liabilities Measured by Fair Value
√ Applicable □Not applicable
In RMB
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Gain/loss on
Cumulative fair Impairment Purchased
fair value Sold amount in
Amount at year value change provisions in amount in the Amount at
Item change in the the reporting
recorded into the reporting reporting
beginning reporting period year end
equity period period
period
Financial assets
3.
Avaliable-for-sa
8,378,730.50 -384,435.87 7,994,294.63
le financial
assets
Subtotal of
8,378,730.50 -384,435.87 7,994,294.63
financial assets
Total 8,378,730.50 -384,435.87 7,994,294.63
Financial
0.00 0.00
Liability
Did great change take place in measurement of the principal assets in the reporting period ?
□ Yes √ No
3. Restricted asset rights as of the end of this Reporting Period
Ⅴ.Investment situation
1. General
□Applicable √Not applicable
2.Condition of Acquiring Significant Share Right Investment during the Report Period
□Applicable √Not applicable
3.Situation of the Significant Non-equity Investment Undergoing in the Report Period
□ Applicable √ Not applicable
4.Investment of Financial Asset
（1）Securities investment
□ Applicable √ Not applicable
Nil
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
（2）Investment in Derivatives
□ Applicable √ Not applicable
Nil
5.Application of the raised capital
√ Applicable □ Not applicable
（1）General application of the raised funds
√ Applicable □ Not applicable
In RMB’0000
Amount of Total
Accumulat Proportion
raised Amount of Amount of
ive amount of raised Use and
Total capital of the the Raised
Total of raised capital of Whereabo
Total Amount of which the Unused Fund with
Year of Way of amount of capital of which the uts of the
raised the Raised purpose Raised over 2
Raising Raising Raised which the purpose Unused
capital Fund Used was Fund at Years’
Funds purpose has been Raised
at the changed in the Idling
has been changed Fund
the report Current
changed (%)
period Period
All
deposited
in the
Non-publi special
2013 96,175.1 14,801.22 20,375.64 0 30,927.22 32.16% 55,742.51
c issue account
for the
raised
funds.
Total -- 96,175.1 14,801.22 20,375.64 0 30,927.22 32.16% 55,742.51 --
Notes to use of raised capital
In the reporting period, the accumulated expenditure of the special account for raised funds was RMB 148.0122 million-which was
all used for the construction of the second-phase project of No.6 line of TFT-LCD polarizer. As of the end of the reporting period,
the accumulated expenditure of the special account for raised funds is RMB 203.7564 million, and the Investment schedule
completion rate is 29.09%.
（2）Promised projects of raised capital
√ Applicable □ Not applicable
In RMB’0000
Committed investment Project Total Total Amount Accumul Investme Date Benefit Has the Has any
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
projects and investment changed(i raised investme inested in ated nt when the realized predicted material
ncluding capital nt after the amount progress project in the result be change
partial invested adjustme reporting invested ended the has reporting realized taken
change) as nt (1) period at the end reporting reached period place in
commited of the period(% the feasibility
reporting )(3)=(2)( predicted
period(2) 1) applicabl
e status
Committed investment projects
Phase-II Not
project of polarizer Yes 96,175.1 70,034 14,801.22 20,375.64 29.09% 0 applicabl Yes
sheet for TFT-LCD e
Subtotal of committeed
-- 96,175.1 70,034 14,801.22 20,375.64 -- -- -- --
investment projects
Subtotal of committeed investment projects
Nil
Total -- 96,175.1 70,034 14,801.22 20,375.64 -- -- 0 -- --
Situation about not
coming up to schemed
progress or expected Not applicable
revenue and the reason
( in specific project)
According to the latest situation of the industry development, the original second phase construction
scheme of the TFT-LCD polarizer was optimized, and then according to the results concluded by the
experts, the company decided to continue to promote the construction of the No.6 line project. At the same
time, in the light of there was a large funds gap between the actual raised capital and the planned raised
Notes to significant
capital for the second phase project, then by comprehensive considerations of the company’s production
change in feasibility of
line scale and the operation pressure, the company decided to terminate the project of No.7 line, and the
the project
corresponding amount of funds of RMB309.2722 million(including interests) for No.7 line project shall be
changed for permanently supplementing the liquidity. The Proposal on Alteration of the Use of Part of the
Raised Capital for the Second Phase Project of TFT-LCD Polarizer was examined and approved in the
2015 annual shareholder meeting on April 21, 2016..
Amount, application Not applicable
and application
progress of the
unbooked proceeds
About the change of Not applicable
the implementation site
of the projects invested
with the proceeds
Adjustment of the Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
implementation way of
investment funded by
raised capital
About the initial Not applicable
investment in the
projects planned to be
invested with the
proceeds and the
replacement
Using the idle proceeds Not applicable
to supplement the
working capital on
temporary basis
Balance of the Not applicable
proceeds in process of
project implementation
and the cause
About application and
As of December 31, 2017, the balance of the raised funds which has not been used was RMB 557.4251
status of the proceeds
million, and the rest was deposited in the special account for raised funds.
unused
Problems existing in
As of December 31, 2017, the cumulative investment for the second-phase project of No.6 line was RMB
application of the
559.9583 million, accounting for 79.96% of total investment of RMB 700.34 million-which had been
proceeds and the
adjusted, The actual payment of investment was 523.4439 million yuan (using raised capital of 203.7564
information disclosure
million yuan, using self-owned funds and government funds of 319.6875 million).
or other issues
（3）Changes of raised funds projects
□ Applicable √ Not applicable
Nil
Ⅵ.Significant Asset and Right Offering
1.Situation of Significant Asset Sale
□ Applicable √ Not applicable
Nil
2.Situation of Substantial Stake Sale
□ Applicable √ Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Ⅶ.Analysis of the Main Share Holding Companies and Share Participating Companies
√ Applicable □ Not applicable
Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company
In RMB
Company Sectors Registered Operating
Company type Total assets Net assets Turnover Net Profit
Name engaged in capital profit
Shenzhen
Lisi Domestic
19,338,735.6 15,942,383.8
Industrial Subsidiary trade, Lease 2,360,000.00 7,734,720.76 3,114,164.89 2,531,052.05
6
Development
Co., Ltd.
Shenzhen Accommodat
10,005,300.0 26,336,009.5 19,466,632.4 10,809,584.1
Huaqiang Subsidiary ion, business 3,687,248.05 2,766,896.73
0 4 3
Hotel center;
Shenfang
Property Property 10,450,718.0 10,048,889.3
Subsidiary 1,600,400.00 3,210,760.64 569,714.28 410,415.93
Management management 3
Co., Ltd.
Production of
Shenzhen
fully
Beauty
electronic 25,000,000.0 40,055,448.8 24,173,280.5 44,953,402.2
Century Subsidiary 596,538.94 586,878.49
jacquard 0 9 6
Garment Co.,
knitting
Ltd.
whole shape
Shenzhen
Shengbo Production
583,333,333. 3,281,963,78 2,793,356,70 847,258,819. 46,006,868.2 45,252,645.2
Opotoelectric Subsidiary and sales of
00 1.51 9.54 36 1
Technology polarizer
Co., Ltd
Shenzhen
Operating
Shenfang
Sub- import and 70,536,538.4 14,060,260.0 466,698,536.
Import & 5,000,000.00 7,654,666.23 5,725,440.64
Subsidiary export 7 7
export Co.,
business
Ltd.
Shengtou
Sub- Sales of 24,833,164.2 115,788,263.
（HK）Co., HKD10,000 5,153,435.95 2,387,366.45 2,324,299.28
Subsidiary polarizer 4
Ltd.
Acquirement and disposal of subsidiaries in the Reporting period
□ Applicable √ Not applicable
Notes
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Ⅷ.Special purpose vehicle controlled by the Company
□ Applicable √ Not applicable
Ⅸ.Prospect for future development of the Company
1. The Development Trend of the Industry
Currently, the growth of global LCD production capacity is mainly from mainland China. Domestic
high-generation LCD production line investment will continue to increase, and global LCD panel production
capacity will continue to be transferred to mainland China. With the mass production of the
8.5/10.5/11-generation TFT-LCD panel production lines under construction and in preparation, it is expected that
Mainland China will become the world's largest LCD panel production base in 2018, with panel production
capacity ranking first in the world. The domestic panel production capacity will reach 184 million square meters
by 2020, which is 2.37 times the 2016 production capacity. It is estimated that the panel production capacity will
exceed 200 million square meters by 2022, and the corresponding demand for the domestic polarizers market is
expected to increase rapidly from 215 million square meters in 2017 to 368 million square meters in 2020 and
reach approximately 400 million square meters in 2022. Among them, the increase in demand for polarizers
mainly comes from the increasing demand for large-size LCDs. Compared with the demand of the vigorous
polarizer market, there is a large gap in the supply of domestic polarizers. It is expected that the supply gap of
TFT-LCD polarizers will reach 180 million square meters in 2020, and the gap will increase to 220 million square
meters by 2022. Therefore, there is a large gap in the supply of domestic polarizers, and there is a serious shortage
of localization matching capabilities for polarizers in the panel industry in China. Localization of polarizers has
become increasingly strong.
Three-year Action Plan for Enhancing the Core Competence of Manufacturing Industry (2018-2020)
clearly proposes the inclusion of polarizers and related film materials into the implementation plan as the key
technology industrialization projects for key new materials, and encourages related companies to introduce
advanced technologies, integrate industrial resources, and reduce manufacturing costs and industrial risks in China
through mergers and acquisitions, joint ventures and cooperation. With the trend of large-scale TFT-LCD panel
size in the world, as well as the improvement of display technology, high-definition, wide-viewing angle,
widening of touch application, and thinner and lighter appearance brought about by the diversification of product
applications, global TFT-LCD industrial development momentum is strong, and large-size panels will increase
with the addition of above 10-generation of TFT-LCD panel production lines in China, and the demand for
large-size polarizers will also grow rapidly. It can be seen that the domestic market is the most important market
for polaroid manufacturers, domestic polarizer manufacturers will usher in important industry opportunities, and
large-size polarizers have huge room for growth.
2.The company's development strategy
In 2017, the company implemented a restrictive stock incentive plan to further establish and improve the
company's long-term incentive mechanism, attract and retain outstanding talents, fully mobilize the enthusiasm of
the company's core employees, and effectively combine the interests of shareholders, the interests of the company,
and the personal interests of the operators, and pay attention to the long-term development of the company, and
work together for it.
During the “Thirteenth Five-Year Plan” period, the company will unwaveringly advance the specialization,
scale, and efficiency of the polarizer industry, seize the good opportunities for the development of the industry,
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
and make full use of the support policies of the country and Shenzhen for the development of the polarizer
industry, to further deepen the reform of mixed ownership, promote industrial integration, accelerate the
construction of ultra-wide-width production lines, vigorously upgrade the production technology and operation
and management level, strengthen the building of talents, give full play to the role of long-term incentive
mechanism, stimulate the vitality of enterprises, and promote the continuous development of company's polarizers
business.
3.Possible risks
1. Macroeconomic Risks
Looking into 2018, China will further deepen supply-side reforms. First, it will de-leverage, and second, it
will guide the economy to be practical. The economic operation has generally stabilized, but the new and old
economic forces and models have been further transformed, and the liquidity contraction is still continuing.
China's manufacturing industry still faces the severe challenge of “bi-directional squeeze” between developed
countries and other developing countries. The country proposes to implement the \"manufacturing power\" strategy
to promote the structural reform of the supply side of China's manufacturing industry. The current building of a
strong manufacturing country is at a critical stage of overrunning and overcoming difficulties and the market is
fiercely competitive. The industry in which the company is located is an important part of the electronic
information industry and will be strongly supported by national policies. However, it cannot be ruled out that
unpredictable fluctuations in the macroeconomic environment may pose risks to the company's performance.
2. Market risks
Due to the characteristics of rapid replacement and upgrading of display end-product, there is higher
requirement for the timely response ability of technology and products, while the price decline-trend also
increasingly squeezes the profit space of upstream polarizer business. China's manufacturing industry has faced a
long-term “lack of cores and screens”. The polarizer industry is an important part of China's future manufacturing
industry, and the process of domestic substitution of polarizers is in progress. Large-scale demand and
corresponding technology requirements are changing with each passing day.If the company's technology and
products cannot timely respond to the needs of the application fields or the market competition leads to lower
prices, the company will get an adverse impact.
3. Raw-material risks
Currently, the key raw materials for producing polarizer, which are PVA film and TAC film, are basically
monopolized by Japanese. There is a constraint on the production line and production technology of upstream
matching raw materials. Compared to the complete industry chain model of “ upstream raw
materials-polarizers-display panel ” from the international manufacturers, the company does not have
corresponding industrial support, and temporarily unable to exert industrial integration effects. The price of
membrane materials is affected by suppliers' production capacity, market demand, and yen exchange rate, which
affects the unit cost of the company's products.
4..The key work in 2018
1. To deepen strategic cooperation and consolidate the results of the strategy introducting
The first is to further stabilize the market sales share, while stabilizing sales prices as much as possible,
increasing the proportion of sales of high-margin models, accelerating the introduction of large-size polarizers,
optimizing customer structure and product structure, and seeking new profit growth points for the market; the
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
second is the introduction of advanced technology, optimization of production line technology, and efforts to
promote the production line transformation and optimization work, improve equipment production performance,
further improve quality and reduce consumption, breakthrough quality and productivity bottlenecks; the third is to
coordinate the construction of Line 7 project, improve the investment and construction program, complete the
project decision-making approval process, start the project construction work in an all-round way, and strive to
complete the project report construction and host equipment procurement contract before the end of 2018; the
fourth is to further deepen the strategic cooperation with Jinjiang Group, integrate the polarizer films and other
related optical film industry resources in Mainland and Taiwan of China, and promote the company to open up the
optical film industry to develop in an extensible manner, and do stronger,bigger and better of Shengbo
Optoelectronics; the fifth is to combine the actual situation of Shengbo Optoelectronics, and gradually build a new
mode of operation of the company's product division to activate its business dynamism and comprehensively
improve the business capability of polarizers.
2. Potential tapping, efficiency improving, innovating and developing of property companies
Property companies should focus on the occupancy rate and fund recovery rate to overcome adverse impacts,
continue to tap potential, increase efficiency, create excellent business environment, further improve service
quality, continue to promote property leasing promotion plans, and earnestly increase rental income, at the same
time complete public leasing related work of Guan Hua Building as soon as possible and do a good job of
customer reserves to ensure the stability of the rental income of Guan Hua Building.
3. To strengthen the construction of talents' team and enhance the core competitiveness of enterprises
The company is in a critical period of transformation and development, its business develops rapidly.
According to the company's future development strategy, in 2018, it is necessary to gradually establish a key
reserve personnel training management mechanism, constantly optimize and improve the company's professional
rank and technical rank appraisal system and incentive system and increase incentives for key reserve talents
through various forms of training, improve the stability and enthusiasm of key reserve talents, and continuously
enhance our core competitiveness and sustainable development capabilities.
4. To exert long-term incentive and restraint effect to stimulate the company's new vitality
The company carried out reform of the property rights system through the introduction of strategic investors
and the implementation of management and core backbone holdings. The company will use property rights reform
as its foundation, corporate governance as its core, selection and employment as the key, incentives and
constraints as guarantees, implement equity incentive plans, and bind shareholders, management, and employees
in order to build a sense of responsibility among employees, and continue to stimulate the spirit of enterprise
innovation and vitality.
5. Pay attention to safe production and maintain the harmonious and stable business
From time to time, the company must tighten the \"string\" of safe production. We must continue to pay close
attention to corporate safety production, energy conservation and emission reduction, and environmental
protection, and fully implement the safety responsibility production system, strengthen the construction of a
long-term mechanism for safety production and the investigation and rectification of safety hazards, ensure that
there are no accidents involving production safety during the year, and ensure that the consicious, systems,
responsibilities and measures of safety production are in place.
6. Strengthen party building work and innovate corporate culture
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
The party committee of the company will continue to carry out the “two studies and one action” special education
campaign, organize all party members to study and implement the spirit of the party’s Nineteenth Congress
through various forms, in order to guide the company’s production and management practices; continue to
strengthen the ranks of party members, do a good job in the development, education, and training of party
members, actively carry out education on honest and clean administration, make arrangements for the activities of
the disciplinary education study month; continue to strengthen the construction of a clean and honest government,
strengthen the supervision and restriction mechanism, and integrate the internal supervision resources of the
company, intervene early in key tasks, and move forward; carry out rich and colorful party building activities,
trade union activities, enhance employee combat effectiveness, cohesion, and centripetal force, and innovate to
Ⅹ.Particulars about researches, visits and interviews received in this reporting period
1.Particulars about researches, visits and interviews received in this reporting period
Applicable √ □ Not applicable
The company did not receive researches, visits and interviews recived in this reporting period.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
V. Important Events
ⅠSpecification of profit distribution of common shares and capitalizing of common reserves
Formulation, implementation and adjustment of profit distribution policy of common shares especially cash
dividend policy during the reporting period
□ Applicable √ Not applicable
The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into
share capital in the past three years(with the reporting period inclusive):
Based on the needs of the construction of TFT-LCD polarizer project and the company business development,
there were no cash dividends and there were no capital reserves converted into share capital in the last three years.
Dividend distribution of the latest three years
In RMB
Net profit
Ratio in net profit
attributable to the Amount of cash Proportion of cash
attributable to the
Cash dividend over of the parent dividends from cash dividends from cash
Year parent company in
(Including Tax) company in the offer to repurchase offer to repurchase
the consolidated
consolidated shares of the funds shares of the funds
financial statements
financial statements
2017 0.00 52,776,101.46 0.00% 0.00 0.00%
2016 0.00 -87,270,604.54 0.00% 0.00 0.00%
2015 0.00 8,497,227.40 0.00% 0.00 0.00%
In the reporting period, both the Company’s profit and the parent company’s retained earnings were positive
however not cash dividend distribution proposal has been put forward.
√ Applicable □ Not applicable
The reason that why the revenues and profits distributed for
common stock holder from the parent company are positive
The usage and using plan of undistributed profit
during reporting period, but the cash bonus distribution plan of
common stock is not proposed
After audited by Peking Certified Public Accountants(Special
General Partnership), the net profit attributable to the
shareholders of the listed company in 2017 was RMB
53,144,005.20, and the parent company realized a net profit of
The company's undistributed profits will be used for daily
RMB 37,914,591.13. The company shall draw RMB
production operations and future strategic development plans.
3,791,459.11 of the net profit realized by the parent company
namely according to 10 % of the net profit realized by the parent
company into the statutory surplus reserve. After adding the
undistributed profits carried forward from previous years, the
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
undistributed profits of the parent company were RMB
461,142,494.13, and the undistributed profits in the consolidated
financial statements were RMB -31,923,282.67. Pursuant to the
“Guidelines for the standardized operation of listed companies
on the Main Board of the Shenzhen Stock Exchange”, the
company shall determine the specific profit distribution ratio
based on the principle of lower profit available for distribution in
the consolidated statement and the report of the parent company.
Therefore, where the undistributed profits of the company's
consolidated statements are still in loss, then the Company does
not have the conditions for cash dividends, so the company’s
proposed 2017 profit-distribution plan will have no cash
dividends, no bonus shares and no capital reserve converted into
share capital.
II.Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable √ Not applicable
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
III.Commitments to fulfill the situation
1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the
reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor,
senior management personnel and other related parities.
√ Applicable □ Not applicable
Time of
Commitment Peiod of
Commitment Type Contents making Fulfillment
maker commitment
commitment
As Shenzhen
Investment
Holdings Co.,
Ltd., the
controlling
Shenzhen
Share shareholder of
Investment August 4, Sustained and Under
Commitment on share reform reduction the company,
Holdings Co., 2006 effective Fulfillment
commitment committed
Ltd.
when the
restricted-for-s
ale shares
from the
shares
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
restructuring
were listed for
circulation in
the market: i.
if they plan to
sell the shares
through the
securities
exchange
system in the
future, and the
decrease of
the shares they
hold reaches
5% within 6
months after
the first
decrease, they
will disclose
an
announcement
indicating the
sale through
the company
within two
trading days
before the first
decrease; ii.
They shall
strictly
observe the
“Guidelines
on Transfer of
Restricted-for-
sale Original
Shares of
Listed
Companies”
and the
provisions of
the relevant
business
principles of
Shenzhen
37
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Stock
Exchange.
Commitment in the acquisition report
or the report on equity changes
The company,
according to
the relevant
provisions of
Measures for
the
Administratio
n of Major
Asset
Restructuring
of Listed
Companies,
No.10
Guidelines for
Business
Handling of
Listed
Companies-
No major Major Asset
Shenzhen
Commitment made upon the assets asset Restructuring December February
Textile(Holdin Fulfilled
replacement restructuring and No.9 19,2016 18,2017
gs) Co., Ltd.
commitments Business
Memorandum
of Main Board
Information
Disclosure-Su
spending
Stock-trading
for Listed
Companies,
committed
that the
company shall
not plan a
major asset
restructuring
matter in 2
months
commenced
from the date
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
of termination
of the major
asset
restructuring
namely the
date of
announcement
on resuming
the company's
stock trading.
Shenzhen
Investment
Holdings Co.,
Ltd. signed a
“Letter of
Commitment
and Statement
on Horizontal
Competition
Avoidance”
when the
company
issued
non-public
Commitments
stocks in
on horizontal
Shenzhen 2009.
competition,
Investment Pursuant to October 9, Sustained and Under
Commitments made upon issuance related
Holdings Co., the Letter of 2009 effective Fulfillment
transaction
Ltd. Commitment
and capital
and Statement,
occupation
Shenzhen
Investment
Holdings Co.,
Ltd. and its
wholly owned
subsidiary,
subsidiaries
under control
or any other
companies
that have
actual control
of it shall not
be involved in
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
the business
the same as or
similar to
those
Shenzhen
Textile
currently or
will run in the
future, or any
businesses or
activities that
may constitute
direct or
indirect
competition
with Shenzhen
Textile; if the
operations of
Shenzhen
Investment
Holdings Co.,
Ltd. and its
wholly owned
subsidiaries,
subsidiaries
under control
or other
companies
that have
actual control
of it compete
with Shenzhen
Textile in the
same industry
or contradict
the interest of
the issuer in
the future,
Shenzhen
Investment
Holdings Co.,
Ltd. shall urge
such
companies to
40
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
sell the equity,
assets or
business to
Shenzhen
Textile or a
third party;
when the
horizontal
competition
may occur due
to the business
expansion
concurrently
necessary for
Shenzhen
Investment
Holdings Co.,
Ltd. and its
wholly owned
subsidiaries,
subsidiaries
under control
or other
companies
that have
actual control
of it and
Shenzhen
Textile,
Shenzhen
Textile shall
have priority.
The
commitments
during the
Commitments
period
on horizontal
Shenzhen non-public
competition,
Investment issuance in July 14, Sustained and Under
related
Holdings Co., 2012: 1. 2012 effective Fulfillment
transaction
Ltd. Shenzhen
and capital
Investment
occupation
Holdings, as
the controlling
shareholder of
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Shenzhen
Textile,
currently
hasn't the
production
and business
activities of
inter-industry
competition
with Shenzhen
Textile or its
share-holding
subsidiary. 2.
Shenzhen
Investment
Holdings and
its
share-holding
subsidiaries or
other
enterprises
owned the
actual control
rights can't be
directly and
indirectly on
behalf of any
person,
company or
unit to engage
in the same or
similar
business in
any districts in
the future by
the form of
share-holding,
equity
participation,
joint venture,
cooperation,
partnership,
contract,
lease, etc., and
42
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
ensure not to
use the
controlling
shareholder's
status to
damage the
legitimate
rights and
interests of
Shenzhen
Textile and
other
shareholders,
or to gain the
additional
benefits. 3. If
there will be
the situation
of
inter-industry
competition
with Shenzhen
Textile for
Shenzhen
Investment
Holdings and
its
share-holding
subsidiaries or
other
enterprises
owned the
actual control
rights in the
future,
Shenzhen
Investment
Holdings will
promote the
related
enterprises to
avoid the
inter-industry
competition
43
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
through the
transfer of
equity, assets,
business and
other ways. 4.
Above
commitments
will be
continuously
effective and
irrevocable
during
Shenzhen
Investment
Holdings as
the controlling
shareholder of
Shenzhen
Textile or
indirectly
controlling
Shenzhen
Textile.
Commitment t
o non-public o
ffering during
the second pha
se project of S
Shenzhen hen Textile sh
Investment Share limited ares subscribe March 25,
2016-03-25 Fulfilled
Holdings Co., commitment d lock handle, 2013
Ltd. locking Shen
Textile non-pu
blic offering o
n the stock ma
rket of 36 mon
ths.
1.The
company
Shenzhen undertakes not
Other November December Under
Equity incentive commitment Textile(Holdin to provide
commitment 27,2017 27,2021 Fulfillment
gs) Co., Ltd. loans, loan
guarantees,
and any other
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
forms of
financial
assistance to
the incentive
objects for
obtaining the
restricted
stocks in the
incentive plan;
2. The
company
undertakes
that there is no
circumstance
that the stock
incentive shall
be prohibited
as stipulated
in the
provisions of
Article 7 of
the “Measures
for the
Management
of Stock
Incentives of
Listed
Companies”.
Other commitments made to minority
shareholders
Executed timely or not? Yes
If the commitments failed to complete
the execution when expired, should
specifically explain the reasons of Not applicable
unfulfillment and the net stage of the
working plan
2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is still
in the forecast period, the company has assets or projects meet the original profit forecast made and the
reasons explained
√Applicable □Not applicable
Asset or Project Start date of End date of the Forecast Actual Reason for less Disclosure date Reference for
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Name of the forecasting forecasting earnings earnings than forecast of the Forecast the Forecast
Earnings period period
Forecast
See on
Subsidiary-Shen
http://www.cni
gbo
December December nfo.com.cn
Optoelecronic January 1,2017 5,000 5,325.05
31,2017 31,2016 announcement
Introducesstrateg
(Announcemen
ic investors
t No.:2016-67)
Commitments made by shareholders or counterparties in reporting annual operating results
√ Applicable □Not applicable
I. Basic Information
In order to improve the operation situation of Shengbo Optoelectronics, By the end of 2016, the company
introduced Hangzhou Jinjiang Group Co., Ltd. (hereinafter referred to as \"Jinjiang group\") as a strategic investor
through the capital increase and share expansion in the Shengbo Optoelectronics. The company, Shengbo
Optoelectronics, Jinjiang Group and Hangzhou Jinhang Equity Investment Fund Partnership (Limited Partnership)
(hereinafter referred to as “Jinhang Investment”)-whose actual controller is Jinjiang Group-jointly signed the
“Shengbo Optoelectronics Technology Co., Ltd Capital Increase Agreement”, of which Jinhang Investment, as
the principal body of the capital increase, subscribed for 40% equity of Shengbo Optoelectronics with that the
increased capital was RMB 1,352,640,000. In order to give full play to the advantages of the private enterprise's
institutional mechanism and state-owned enterprises' resources, the company and the Jinjiang Group reached a
consensus on the future operation, management and development of Shengbo Optoelectronics, and signed the
\"Cooperation Agreement\", whereby the Jinjiang Group made a commitment to the business performance of
Shengbo Optoelectronics in order to achieve better results after the introduction of the strategic investor.
II. Information of Business Performance Commitment and Compensation Arrangements
According to the “Cooperation Agreement”, after Jinjiang Group’s investment in Shengbo Optoelectronics
through Jinhang Investment, Jinjiang Group’s advantages in system, mechanism, industry, management, etc. and
successful experience in industry integration will be fully utilized, and it has made the business performance
commitment to Shengbo Optoelectronics, with details as follow:
The sales revenue and net profits for 2017, 2018 and 2019 shall be not less than RMB 1.5 billion/50 million,
RMB 2 billion/100 million, and RMB 2.5 billion/150 million respectively. In principle, the sales revenue of
polarizers and related optical film products shall account for not less than 70 % of the total revenue in 2017 and
not less than 80 % of the total revenue after 2018. If fail to achieve the above-said business performance, Jinjiang
Group shall make a cash supplement for the difference less than the net profits within 10 days from the
completion of the statistical data of annual sales revenue and annual net profit.
The method of calculating the actual profit for the above-mentioned years shall be based on the current
effective accounting standards in China, and shall be calculated and determined based on the special audit results
issued by a qualified accounting firm engaged by the company.
III. Completion information of business performance commitment
1. Completion information of business performance commitment
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
In 2017, under the leadership of the Jinjiang Group, Shengbo Optoelectronics has conducted comprehensive
business improvement and optimization work. Through the hiring of a team of South Korean experts to provide
technical and management guidance, it has implemented various improvement measures on the production line
speed, technical indicators, raw material structure and so forth to reduce the production cost, and thus the
production operations have been significantly improved. In 2017, Shengbo Optoelectronics achieved an annual
net profit of RMB 53,250,500 and achieved its target, and the annual operating revenue was RMB 1.338 billion, a
year-on-year increase of 24.35%. Although the sales of key products continued to increase during the year, the
sales volume of the products currently is less than expected, and there was about RMB 162 million less than the
performance commitment target of 1.5 billion; the sales revenue of polarizers and related optical film products
accounted for 61.89% of the total revenue, which was 8.11 percentage points less than the 70% of performance
commitment.
The aforesaid performance commitment includes both the net profit index and the sales revenue index, as well
as the ratio of sales revenue of polarizers and related optical film products. Hence, Shengbo Optoelectronics has
not fully realized its performance commitment, but according to the terms of the Cooperation Agreement, Jinjiang
Group only needs to make cash supplement for the difference less than the committed net profits, therefore there
will be no needs of cash compensation.
2. Reasons for why the business performance commitment was not fully realized
The reasons for why the business performance commitment was not fully realized were as follows: firstly, the
introduction of the large-size polarizer was less than expected, and the promotion for the layout of large-size
polarizers was relatively slow, thus not being able to contribute sales revenue in a timely and effective manner;
secondly, the continued decline in sales prices of some kinds of product led to the adjustment of supply, which
had affected the sales volume.
IV.The follow-up solution measures to the not fully achieved in the business performance commitment
Firstly, adjust the company's product mix, better to undertake higher profits oversized Polaroid products, learn
from and absorb advanced polarizing film production technology and management experience, optimize the
complete transformation of Line 6 of the host device as soon as possible; second is to accelerate new The
promotion of products and the introduction of large-size polarizers, sales of large-size polarizers as the
performance growth point; third is to push forward the construction of ultra-wide polarizer production lines, and
to seize the high-margin polarizing film products for oversized LCD TVs. The fourth is to dispose of the
production line of backward equipment and reduce operating costs. Fifth is to integrate the industrial resources of
polarizers and optical films to further optimize the ownership structure of Shengbo Optoelectronics and enhance
its operating capability.
IV.Particulars about the non-operating occupation of funds by the controlling shareholder
□ Applicable √ Not applicable
No non-operating occupation from controlling shareholders and its related party in the period.
V.Explanation of the Supervisory Committee and Independent Directors (If applicable)on the Qualified
Auditor’s Report Issued by the CPAs.
□ Applicable √ Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
VI.Explain change of the accounting policy, accounting estimate and measurement methods as compared
with the financial reporting of last year.
√ Applicable □Not applicable
On April 28, 2017, the Ministry of Finance issued the \"No. 42 Accounting Standard for Business
Enterprises-Non-current Assets for Sale, Disposal Groups, and Termination of Operations\", which will take effect
from May 28, 2017; On May 10, 2017, the Ministry of Finance issued the \"No. 16 Accounting Standards for
Business Enterprises-Government Grants (Revised in 2017)\", which will take effect from June 12, 2017; in 2017,
the Ministry of Finance issued the“Notice on the Issuance of the Revised Format of Financial Statements for
General Enterprises”, which has revised the format for the Financial Statements of General Enterprises, and thus it
shall applied to the financial statements in the year of 2017 and subsequent periods. The above changes in
accounting policies were adopted at the third meeting of the seventh board of directors and the tenth meeting of
the seventh board of directors of the company, therefore the Company began to implement the above provisions in
accordance with the time required by the Ministry of Finance.
The main impact of the Company's implementation of the above three provisions is as follows:
Items Amount
2017
Non-operating income -12,567,426.98
Other income 12,567,426.98
VII.Explain retrospective restatement due to correction of significant accounting errors in the reporting
period
□Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the
period.
VIII.Explain change of the consolidation scope as compared with the financial reporting of last year.
□Applicable √ Not applicable
No changes in consolidation statement’s scope for the Company in the period.
IX. Engagement/Disengagement of CPAs
CPAs currently engaged
Name of the domestic CPAs Peking Certified Public Accountants（Special General Partnership）
Remuneration for domestic accounting firm
(RMB’0000)
Continuous life of auditing service for domestic 7
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
accounting firm
Name of domestic CPA Li Yong, Lan Tao
Has the CPAs been changed in the current period
□ Yes √ No
Description of the CPAs, financial adiver or sponsor engaged for intemal control auditing
√ Applicable □Not applicable
During the reporting period, the company engaged Peking Certified Public Accountants(Special General Partnership) as the
company's internal control audit agency for 2017, with an audit remuneration of RMB 250,000 (including travel
expenses and other expenses).
X.Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly Report
□Applicable √ Not applicable
XI.Bankruptcy reorganization
□Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period.
XII.Significant lawsuits and arbitrations of the Company
□Applicable √ Not applicable
No significant lawsuits and arbitrations occourred in the reporting period.
XIII.Situation of Punishment and Rectification
□Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.
XIV.Credit Condition of the Company and its Controlling Shareholders and Actual Controllers
√Applicable □ Not applicable
During reporting period, there was no effective judgment of a court and large amount of debt maturity that the
company, its controlling shareholders and actual controller failed to perform or pay off.
XV.Implementation Situation of Stock Incentive Plan of the Company, Employee Stock Ownership Plan or
Other Employee Incentive Measures
√Applicable □ Not applicable
(I) Formulation of Restricted Stock Incentive Plan
On November 27,, 2017, the Proposal on the Company's Implementation Measures of Evaluation for the
2017 Restricted Stock Incentive Plan (Draft) and summary and the Proposal on the Company's Implementation
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Measures of Evaluation for the 2017 Restricted Stock Incentive Plan was examined and approved in the 7th board
meeting of the company’s 7th session board of directors, and related proposals agreed to fulfill the relevant
procedures and related proposals agreed to fulfill the relevant procedures
On December 11, 2017, the SASAC agreed in principle to implement the restricted stock incentive plan.
On December 14, 2017, the company held the third extraordinary shareholders' general meeting in 2017,
which reviewed and approved the the Proposal on the Company's Implementation Measures of Evaluation for the
2017 Restricted Stock Incentive Plan (Draft) and summary and Proposal on the Company's Implementation
Measures of Evaluation for the 2017 Restricted Stock Incentive Plan and other issues.
(II) Information on granting the restricted stock
On December 14, 2017, the company held the 8th meeting of the 7th Board of Directors, which reviewed and
approved the “Proposal on Adjusting the List of Incentive Objects and Granting Quantity of the 2017 Restricted
Stock Incentive Plan” and the “Proposal on Granting the Restricted Stocks to Incentive Objects”. The restricted
shares actually granted by this stock incentive plan totaled 4,752,300 shares, and 119 incentive objects were granted,
with the granting price was 5.73 yuan per share.
On December 27, 2017, the company’s restricted stock completed the grant registration formalities at China
Securities Depository and Clearing Corporation Shenzhen Branch.
XVI.Material related transactions
1. Related transactions in connection with daily operation
√Applicable □ Not applicable
Whethe
Trading r over
Principl
limit the Market Index
Subjects e of
Amount price of of
of the pricing Ratio in approve approve Way of Date of
Related Relation Type of Price of of trade similar informa
related the similar paymen disclosu
parties ship trade trade RMB0’ trade tion
transacti related trades d d t re
000 availabl disclos
ons transacti
e ure
ons （RMB limited
’0000） or not
(Y/N)
The
Chairma
n of the
Compan Sale
Tianma
y was products Sales of Market Agreem
Microelec
Vice to polarizer Principl ent 483.59 0.57% 600 No Transfer 483.59
tronic
Chairma related sheet e price
Co., Ltd.
n of parties
the
compan
y
Total -- -- 483.59 -- 600 -- -- -- -- --
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Details of any sales return of a large
Not applicable
amount
Give the actual situation in the report
period where a forecast had been
made for the total amounts of routine Not applicable
related-party transactions by type to
occur in the current period(if any)
Reason for any significant difference
between the transaction price and the Not applicable
market refernce price (if applicable)
2. Related-party transactions arising from asset acquisition or sold
□Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period.
3. Related-party transitions with joint investments
□Applicable √ Not applicable
No main related transactions of joint investment outside for the Company in reporting period.
4. Credits and liabilities with related parties
√Applicable □Not applicable
Was there any non-operating credit or liability with any related party?
√ Yes □No
Due from related parties
Newly
Amount
Does there increased Interest in
Opening recovered in Ending
exist amount in the
Related Relationshi Causes of balance the balance
non-operati the Interest rate reporting
parties p formation (RMB reporting (RMB’0000
on capital reporting period(RM
‘0000) period(RM )
occupancy? period(RM B’0000)
B’0000)
B’0000)
The
Chairman
Shenzhen
of the
Tianma
Company Sale
Microelectr No 25.64 565.8 435.89 155.55
was Vice products
onics Co.,
Chairman
Ltd.
of the
company
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Anhui
Huapeng Sharing
Contract fee No 360 180
Textile Co., company
Ltd.
Shenzhen
Dailishi Sharing
Contract fee No 30 89.45 75.4 44.05
Underwear company
Co., Ltd.
Influence of the related
rights of credit and
liabilities upon the
In the report period,Increase investment income of RMB0.8945 million.
company’s operation
results and financial
position
Due to related parties
Amount
Amount
newly Interest in
Opening repaid in the Ending
Causes of increased in the reporting
Related parties Relationship balance(RM reporting Interest rate balance
formation the reporting period(RMB’
B’0000) period(RMB’ (RMB’0000)
period(RMB’ 0000)
0000)
0000)
Shenzhen
Xinfang Sharing Current
24.48 24.48
Knitting Co., company amount
Ltd.
Shenzhen
Sharing Current
Xiangjiang 4
company amount
Trade Co., Ltd
Shenzhen
Changlianfa
Sharing Current
Printing & 84.65 33.19 117.84
company amount
dyeing Co.,
Ltd.
Shenzhen
Haohao
Sharing Current
Property 495.45 85 410.45
company amount
Leasing Co.,
Ltd
Yehui
Sharing Current
International 121.5 7.96 113.54
company amount
Co., Ltd.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Shengbo（HK）Sharing Current
31.5 31.5
Co., Ltd. company amount
Shenzhen
Shenchao Controlled
Interest
Technology by the same 4,280.54 276.53 4,557.07
payable
Investment party
Co., Ltd.
Indluence of the related
rights of credit and liabilities
upon the company’s In the report period, Increase financial interest expense of RMB2.7653 million.
operation results and
financial position.
5. Other significant related-party transactions
√Applicable □Not applicable
To ensure the construction progress of polarizer with TFT-LCD, Shenzhen Shengbo Optoelectronic Technology
Co., Ltd., Shenzhen Shenchao Technology Investment Co., Ltd. and Shenzhen Development Bank, Shenzhen
Branch, First Tower Subbranch signed “ Contract on Consigned Loan ” , of whose main content is:
Shenzhen Shenchao Technology Investment Co., Ltd applied to the bank for 200 million RMB of construction of
dedicated plant and auxiliary projects for polarizer with TFT-LCD for Shenzhen Shengbo Optoelectronic
Technology Co., Ltd The term of the loan is 108 months from the day when the first installment of entrusted loan
is transferred to the account of the Company. The interest rate of the entrusted loan is the rate of commercial loans
with a term of 5 years quoted by People's Bank of China minus 2%. In case of adjustment of such commercial
loan rate, the rate of commercial loans with a term of 5 years after adjustment minus 2% shall apply as interest
rate of entrusted loan from the first day of the next month after the adjustment of basic interest rate. The term of
the loan is 108 months from the day when the first installment of entrusted loan is transferred to the account of the
Company.As of December 31,2017,The Company actually received a loan of RMB 80 million.
Website for temporary disclosure of the connected transaction
Announcement Date of disclosure Website for disclosure
http//www.cninfo.com.cn. Announcement
Announcement of related Transactions December 12, 2009
No.2009-55
Announcement of Resolutions of the Second http//www.cninfo.com.cn. Announcement
December 30,2009
provisional shareholders’ general meeting No.2009-57
Announcement of related Transactions http//www.cninfo.com.cn. Announcement
July 1, 2010
progress No.2010-26
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
XVII.Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□Applicable √ Not applicable
No trusteeship, contract or leasing for the Company in reporting period.
(2) Contract
□ Applicable √ Not applicable
No any contract for the Company in the reporting period.
(3) Lease
□Applicable √ Not applicable
No any lease for the Company in the reporting period..
2.Guarantees
□Applicable √ Not applicable
No any guarantees for the Company in the reporting period..
3.Situation of Entrusting Others for Managing Spot Asset
(1)Situation of Entrusted Finance
√ Applicable □Not applicable
Overview of entrusted wealth-management during the reporting period
In RMB
Source of funds for The Occurred Amount of
Un-recovered of
Specific type entrusted financial Entrusted Undue balance
overdue amount
management Wealth-management
Bank financial products Self fund 154,000 4,000
Trust financial products Self fund 80,000 80,000
Bank financial products Idle raised funds 159,400 0
Total 393,400 84,000
The detailed information of entrusted wealth-management with significant amount or low safety, poor liquidity or
high risk with no promise of principal
In RMB’0000
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Name of Type of Trustee Product Type Amount Capital Start Date Expiry Funds Method of Reference Expected Actual The actual Amount of Whether Whether Summary of events and
Trustee Organization(or Source Date Allocation Reward Annualized Income profit recovery provision passed there is any related search index (if
Organization Trustee) Determination Rate of (if any) and loss of profit for the entrusted any)
(or Trustee Return during and loss impairment statutory financial
Name) the during the (if any) procedure plan in the
reporting reporting future
period period
Shenzhen Bank Structured 20,800 Idle October April Bank Due payment 2.6% 270.6 270.6 270.6 Yes Not Http://www.cninfo.com.cn :
Science and deposits fund-raising 13,2016 13,2017 financial at a time applicable Announcement No.
Technology products 2017-22)
Branch,
JSBK
Shenzhen Bank Structured 19,000 Idle October April Bank Due payment 3.50% 163.97 163.97 163.97 Yes Not Http://www.cninfo.com.cn:
Textile deposits fund-raising 13,2016 13,2017 financial at a time applicable (Announcement No.
Building products 2017-04)”
Branch of
China
Merchants
Bank Co.,
Ltd.
Shenzhen Bank Structured 80,000 Self fund December January Bank Due payment 1.5% 16.44 16.44 16.44 Yes Not Http://www.cninfo.com.cn:
Textile deposits 29,2016 3,2017 financial at a time applicable (Announcement No.
Building products 2017-04)”
Branch of
China
Merchants
Bank Co.,
Ltd.
Shenzhen Bank Structured 20,000 Self fund December February Bank Due payment 2.1% 57.53 57.53 57.53 Yes Not Http://www.cninfo.com.cn:
Textile deposits 29,2016 17,2017 financial at a time applicable (Announcement No.
Building products 2017-07)”
Branch of
China
Merchants
Bank Co.,
Ltd.
Wanxiang Trust Designated Use 40,000 Self fund January January Trust Due payment 6.00% 2,433.33 2,433.33 2,433.33 Yes Not Http://www.cninfo.com.cn:
Trust Business 13,2017 13,2018 financial at a time applicable (Announcement No.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Company Management products 2018-04)”
Limited Funding Trust
Wanxiang Trust Designated Use 40,000 Self fund January December Trust Due payment 7.50% 2,860.27 Unexpired Yes Not Http://www.cninfo.com.cn:
Trust Business 13,2018 28,2018 financial at a time applicable (Announcement No.
Company Management products 2018-04)”
Limited Funding Trust
Shenzhen Bank Structured 26,000 Self fund January Fubruary Bank Due payment 2.55% 25.43 25.43 25.43 Yes Not Http://www.cninfo.com.cn:
Textile deposits 25,2017 8,2017 financial at a time applicable (Announcement No.
Building products 2017-26)
Branch of
China
Merchants
Bank Co.,
Ltd.
Wanxiang Trust Designated Use 40,000 Self fund February December Trust Due payment 7.50% 5,058.33 Unexpired Yes Not Http://www.cninfo.com.cn:
Trust Business 17,2017 16,2018 financial at a time applicable (Announcement No.
Company Management products 2017-07)
Limited Funding Trust
Shenzhen Bank Structured 19,000 Idle March June Bank Due payment 3.60% 170.53 170.53 170.53 Yes Not Http://www.cninfo.com.cn:
Textile deposits fund-raising 31,2017 30,2017 financial at a time applicable (Announcement No.
Building products 2017-41)
Branch of
China
Merchants
Bank Co.,
Ltd.
Shenzhen Bank Structured 20,800 Idle April July Bank Due payment 3.70% 193.01 193.01 193.01 Yes Not Http://www.cninfo.com.cn:
Science and deposits fund-raising 14,2017 14,2017 financial at a time applicable (Announcement No.
Technology products 2017-41)
Branch,
JSBK
Shenzhen Bank Structured 5,000 Self fund May June Bank Due payment 2.56% 2.45 2.45 2.45 Yes Not Http://www.cninfo.com.cn:
Textile deposits 26,2017 2,2017 financial at a time applicable (Announcement No.
Building products 2018-01)
Branch of
China
Merchants
Bank Co.,
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Ltd.
Shenzhen Bank Structured 13,000 Self fund May June 9, Bank Due payment 3.27% 16.31 16.31 16.31 Yes Not Http://www.cninfo.com.cn:
Textile deposits 26,2017 2017 financial at a time applicable (Announcement No.
Building products 2018-01)
Branch of
China
Merchants
Bank Co.,
Ltd.
Shenzhen Bank Open 2,000 Self fund June 1, September Bank Due payment 3.28% 20.28 20.28 20.28 Yes Not Http://www.cninfo.com.cn:
Science and Financing 2017 22, 2017 financial at a time applicable (Announcement No.
Technology products 2018-01)
Branch,
JSBK
Shenzhen Bank Structured 20,800 Idle July October Bank Due payment 4.10% 215.57 215.57 215.57 Yes Not Http://www.cninfo.com.cn:
Science and deposits fund-raising 17,2017 18, 2017 financial at a time applicable (Announcement No.
Technology products 2017-51)
Branch,
JSBK
Shenzhen Bank Structured 19,000 Idle July October Bank Due payment 3.98% 190.67 190.67 190.67 Yes Not Http://www.cninfo.com.cn:
Textile deposits fund-raising 18,2017 18,2017 financial at a time applicable (Announcement No.
Building products 2017-51)
Branch of
China
Merchants
Bank Co.,
Ltd.
Shenzhen Bank Structured 40,000 Idle November November Bank Due payment 3.37% 51.7 51.7 51.7 Yes Not Http://www.cninfo.com.cn:
Textile deposits fund-raising 1, 2017 15, 2017 financial at a time applicable (Announcement No.
Building products 2018-02)
Branch of
China
Merchants
Bank Co.,
Ltd.
Shenzhen Bank Structured 4,000 Self fund December January 5, Bank Due payment 4.21% 3.23 3.23 3.23 Yes Not Http://www.cninfo.com.cn:
Textile deposits 29,2017 2018 financial at a time applicable (Announcement No.
Building products 2018-04)
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Branch of
China
Merchants
Bank Co.,
Ltd.
Shenzhen Bank Structured 4,000 Self fund December December Bank Due payment 4.21% 6.46 6.46 6.46 Yes Not Http://www.cninfo.com.cn:
Textile deposits 29,2017 1,2018 financial at a time applicable (Announcement No.
Building products 2018-04)
Branch of
China
Merchants
Bank Co.,
Ltd.
Total 433,400 -- -- -- -- -- -- -- -- -- --
11,756.11 3,837.51
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Entrusted financing appears to be unable to recover the principal or there may be other circumstances that
may result in impairment
□ Applicable √ Not applicable
（2）Situation of Entrusted Loans
□ Applicable √ Not applicable
No any Entrusted loans for the Company in the reporting period..
4. Other significant contract
√ Applicable □Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Company Name of Contract Object Contract Book Value of Assessed Appraisal Base Date of Pricing Principle Transaction Whether Connection Execution Date of Disclosu
合同订 Company the Other Party of Signing the Assets Value of the Agency Assessment Price A Relation Condition As Disclosure re Index
Name of the Party the Contract Date Involved by Assets Name (If (if any) (RMB’0000) Related Of The End Of
Making the the Contract Involved by Any) Traction The Reporting
contract (RMB’0000) the Contract Period
(If Any) (RMB’0000)
(If Any)
Shenzhen Hangzhou Jinjiang Nitto Denko Novemb Considering the 86,900 No With no In normal November Http://w
Shengbo Group Co., Ltd., provides polarizer er 6, formulation of market association performance 6, 2017 ww.cnin
Optoelectronic Kunshan CMMT manufacturing 2017 price and technical relationship fo.com.c
Technology Co., Material technology and service period, the with the n:
Ltd. Technology Co., related final transaction price company (Announ
Ltd., Japan Nitto corporation. is based on the cement
Denko commercial No.
Corporation negotiation results of 2018-04
both parties. )on
Novemb
er 7,
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
XVIII. Social responsibilities
1. Performance of poverty relieving responsibilities
(1)The protection of shareholder’s rights and interests
During the reporting period, the company operated with in accordance with laws and strictly conformed to the
requirements of laws and regulations such as The Company Law, The Securities Law and Corporate Governance
Guidelines for Listed Companies, and the company continuously perfected the governance structure and further
standardized the operation of the company. Adhered to the core system constituted by shareholders' meeting,
board of directors, board of supervisors and the independent director system, further improved the corporate
governance structure and the management system, constantly improved the company's internal control system in
the process of business management, adopted effective measures to prevent operational risks and soundly
safeguarded and protected the rights and interests of shareholders to lay a solid foundation for the company's
healthy, sustainable development.
The company strictly enforces information disclosure obligations in accordance with the law, and truthfully,
accurately, completely, timely, and fairly discloses information that has a significant impact on investment
decisions, the disclosure content is concise and easy to understand, and fully reveals risks, facilitates access for all
shareholders. And according to regulatory requirements, the company further sort out and improve relevant
systems and improve the quality of information disclosure.
During the reporting period, the company further improved information disclosure and information
transparency, strictly fulfilled the obligation of information disclosure in accordance with regulatory requirements,
communicated and communicated with investors through multiple channels, answered questions raised by
investors in a timely manner, improved information transparency, and cooperated with regulatory authorities and
at the same time, cooperated with the regulatory authorities to purify the market space, safeguard the interests of
investors, especially small and medium-sized investors, and achieve positive interaction and harmonious
development between investors and listed companies.
(2) The protection of legal right of staff
We value human resource management, uphold “unity, vitality, enterprising” management philosophy,
provide official Labor Contract and various statutory social insurances and welfares according to Labor Law and
related laws and regulations, respect and protect employee’s legitimate interests and aim for harmonious, stable
labor-capital relationship. In 2017,
In 2017, the company revised the Organization Chart, Department Settings and Functional Positions
Preparation, Remuneration Management System, Special Contribution Award Management Measures and other
systems; reorganized the job responsibilities of various departments, gradually formed a work pattern with clear
division of labor, clear responsibilities, and effective collaboration; comprehensively sorted the personnel module
of ERP system to realize the dynamic management of personnel information; combined with the actual
management requirements of the company to further optimize the human resources management authority and
approval process; improved the management of personnel files and promoted the scientific and standardized file
management. In addition, through the optimization and improvement of key enterprises’ recruitment, technical
rank appraisal, training, assessment incentives, remuneration and benefits and other human resources related work,
the company had better mobilized the enthusiasm of employees, and strengthened the company's cohesion.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
(3) The protection of environment
Modern “green enterprise” is company’s long-term goal, which will be achieved by green circulation in all
process of industry chain. In reporting period, no occurrence of severe environmental incident; noise, industrial
wastewater, exhaust emission, etc of production passed environmental protection monitoring and accorded with
related laws and regulations, During the reporting period, the company upgraded the conventional waste gas
treatment process to the world's most advanced rotary RTO treatment process, with a VOC removal rate of over
99%, and further reduced pollutant emissions on the basis of meeting the discharge standards, in order to
effectively fulfill the social responsibility as a listed companies. At the same time, no major environmental
incidents had occurred.Moreover, “green office” is promoted and various educational activities of environmental
protection are carried out to disseminate awareness of energy conservation and emission reduction and coordinate
production and environmental protection.
(4) The protection of consumer rights and interests
The company always sticks to the core values of \"honesty, responsibility first\". As the responsibility to the
customer is the source of enterprise value, the company committed to provide customers with professional,
personalized, full range of products and services.Sustainable customer-oriented service and impeccable product
quality motive our performance and sustainable development and guarantee long-term customers. And our
long-term partnership is established on the basis of initiative attention, quick responding and sincere care to
customers.
2.Overview of the annual targeted poverty alleviation
No follow-up precision poverty alleviation programme.
3. Information on environmental protection
The Listed Company and its subsidiary whether belongs to the key sewage units released from environmental
protection department
Yes
Main
Emission Implemente
Company or pollutant Emission Verified Excessive
Emission Emission port d pollutant Total
subsidiary and specific concentratio total emission
way port number distribution emission emission
name pollutant n emission condition
condition standards
name
The
Shenzhen Exhaust discharge
Shengbo gas:non-m port is
Opotoelectri ethane Altitude located on
1 <100mg/m3 120mg/m3 840kg/d 1728kg/d Nil
c total emission the east side
Technology hydrocarb of the roof
Co., Ltd ons of Building
No. 1
Shenzhen Waste Open 1 Southeast <80mg/L 90mg/L 56kg/d 96kg/d Nil
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Shengbo water：COD channel side of plant
Opotoelectri discharge area
c after
Technology treatment
Co., Ltd
he discharge
Shenzhen Exhaust
port is
Shengbo gas:non-m
arranged at
Opotoelectri ethane Altitude
3 the middle <100mg/m3 120mg/m3 840kg/d 1008kg/d Nil
c total emission
part of the
Technology hydrocarb
roof of the
Co., Ltd ons
building
Prevention and control of pollution facilities construction and operation
Waste gas of Pingshan plant:
The waste gas treatment facility adopted the RTO waste gas regenerative incineration process. The equipment
started construction along with production equipment in 2011, and it was completed and put into use in 2012.
Upon Taiwan Chinachem RTO manufacturer, adopted the three tower regenerative incineration for waste gas
treatment, it has been running for 5 years to date, and the equipment runs stably and the waste gas treatment has a
good effect, which can fully meet the emission requirements of discharge gas. Meanwhile, the equipment adopted
the imported thermal storage material, with the heat storage effect reached 90%, so that the equipment operation
had low energy consumption; after RTO treatment, the exhaust gas produced by the production process can meet
the discharge standard.
Waste gas of Longhua factory:
The waste gas treatment facility of Longhua factory has been running since 2013, and the discharge gas always
meet the requirements of the relevant national laws and regulations. Being a state-owned listed company, the
company has a strong social responsibility, so the company emphasizes the increase in investment of
environmental protection. This year, the conventional waste gas treatment process was upgraded to the world's
advanced rotary RTO process, which further reduced the pollutant emissions upon the basis of the standard
discharge. The Rotary RTO process is the most advanced VOC waste gas treatment process at present. The Japan
Sino-foreign Furnace Company was selected as the supplier for this RTO equipment, and the VOC removal rate of
RTO waste gas of such equipment reached more than 99%, the equipment runs stable and it has a high degree of
automation. The waste gas produced by Longhua factory can be ensured to meet the discharge standard after the
treatment by the system.
Situation of Construction project environmental impact assessment and other environmental protection
administrative licenses
The company complied with the relevant regulations for environmental protection construction “Three
Simultaneities” and obtained environmental approvals at various stages, including: Environmental Impact
Assessment Report, Environmental Assessment Approval, Environmental Protection Acceptance Decision, and
Pollutant Discharge Permit.
Emergency Plan for Emergency Environmental Incidents
According to the actual situation of the company, the preparation of the emergency plan for emergency
environmental incidents was completed, and an emergency environmental emergency plan filing application was
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Environmental Self-Monitoring Program
According to the monitoring requirements issued by the monitoring station, the specific monitoring programs
are as follows: organic exhaust gas is 4 times per year (once per quarter), wastewater discharge is 4 times per year
(once per quarter), boiler exhaust gas is 2 times per year (once every six months), and canteen fume is 2 times per
year (once every six months), the noise at the plant boundary is 2 times per year (once every six months).
Other Environmental Information That Should Be Disclosed
Nil
Other Environmental Related Information
Nil
XIX. Other material events
√ Applicable □ Not applicable
(1) Progress information about the second phase of No.6 line TFT-LCD polarizer project
During the reporting period, the company promoted the construction of the second phase of the No. 6 line as
planned. By the end of December 2017, it had completed the work of installation, commissioning and trial
production, and initially had mass production conditions. In view of the recent declining prices of 32-inch
products in the polarizer market, in order to adjust the product structure and better accept the ultra-large polarizer
products with higher profits, the company recently launched an optimization and transformation of host
equipment on the 6th line. The transformation is expected to be completed in the first quarter of 2018. As of the
end of December 2017, the cumulative investment of the second phase of the 6th line project was 559.9583
million yuan, accounting for 79.96% of the total investment of 700.34 million yuan after the change, of which the
actual paid investment was 523.4439 million yuan (Using 203.7564 million yuan of raised funds, using its own
funds and government funds of 319.6875 million yuan).
(2) Progress in the construction of Guan Hua Building
At the 11th meeting of the fifth session of the Board of Directors of the Company, the \"Proposal about
cooperative development and construction of Guan Hua Building\" was examined and approved, agreed that the
company contributed RMB 42.21 million in cooperation with Hong Kong Qiao Hui Industrial Co., Ltd and
Shenzhen Guan Hua Printing & Dyeing Co., Ltd to develop and construct Guan Hua Building project.
The construction of the project was started on October 15, 2011, and completed the filing and acceptance
procedures of construction project on June 26, 2017.
The 3rd meeting of the 7th Board of Directors of the company reviewed and approved the “Proposal on
Increasing Investment in Guan Hua Building Project” and agreed to increase the total investment of Guan Hua
Building Project from RMB 84.15 million to RMB 122.94 million, of which the company’s share of equity is
50.16%, and the capital contribution is 19.46 million yuan. The actual capital contribution is based on the final
project settlement amount. For details, please refer to the Announcement of 2017-47 on the website of
http://www.cninfo.com.cn.
(III) Progress of Introducing Strategy Investors
In order to improve the operation of its subsidiary, Shengbo Optoelectronics, the company increased its
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
capital and expanded shares at Shengbo Optoelectronics to bring in Jinjiang Group as a strategic investor at the
end of 2016. It injected RMB 1.353 billion yuan in cash for Shengbo Optoelectronics, and Jinhang Investment, as
an actual controller of Jinjiang Group held 40% of the shares. In order to give full play to the advantages of the
private enterprise's system and mechanism and the state-owned enterprises' resource advantages, the company and
the Jinjiang Group have signed a \"cooperation agreement,\" which is led by Jinjiang Group and operated by
Shengbo Optoelectronics. The performance promises for Shengbo Optoelectronics are made. For details, please
refer to the Announcement 2016-67 of the company on the website of http://www.cninfo.com.cn.
In 2017, under the leadership of the Jinjiang Group, Shengbo Optoelectronics conducted a comprehensive
operation improvement and optimization work, and through the hiring of a team of South Korean experts to
provide technical and management guidance, to carry out powerful measures in terms of speed, technical
indicators, raw material optimization, and other aspects to upgrade the technological level, reduce production
costs, and greatly improve production and operation. For details of the completion of the 2017 annual
performance promise of the company’s subsidiary, Shengbo Optoelectronics, please refer to the Special
Explanation on the Completion of the Subsidiary's 2017 Annual Performance Commitment at
http://www.cninfo.com.cn.
XX.Material events of subsidiaries
√ Applicable □Not applicable
(I) Progress of Subsidiaries Signing Cooperation Agreements
The company’s holding subsidiary, Shengbo Optoelectronics, signed a Light Guide Plate Production Line
Project (Phase I) Cooperation Agreement with Kunshan Jinlin on the construction of the light guide plate
production line project (Phase I), and signed the Liquid Crystal Reflective Film Production Line Project (Phase 1)
Cooperation Agreement with Zhejiang Jinhao on the construction of the liquid crystal reflective film production
line(Phase 1). For details, please refer to announcement 2017-29 on the website www.cninfo.com.cn. As of the
end of the reporting period, the agreements with Kunshan Jinlin's light guide plate production line project (Phase 1)
and with Zhejiang Jinhao’s liquid crystal reflective film production line project (Phase I) had been successfully
completed. Shengbo Optoelectronics fulfilled the technical guidance and project management services agreed in
the agreement and received project construction service fees of RMB 15 million and RMB 13 million,
respectively.
(II) Subsidiary and Nitto Denko Sign a Technical Cooperation Contract
In order to introduce the world's leading Japanese polarizer company technology, we will build a wide-width
polarizer production line project for TFT-LCD with a width of 2,500mm. Sheng Bo Optoelectronics will
introduce the East Japan with Jin Jiang Group and Kunshan Chi Mei on November 6, 2017. The related matters of
the 2,500mm polarizer production line technology of the electrician and Nitto Denko signed the \"Technical
Cooperation Contract\". For details, please refer to http://www.cninfo.com.cn \"About Subsidiary Signing the
Announcement of Technical Cooperation Contracts (2017-53). At present, the company is conducting further
communication research with Nitto Denko on the project schedule, plant planning and design, and equipment
specifications.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
VI. Change of share capital and shareholding of Principal Shareholders
Ⅰ.Changes in share capital
1. Changes in share capital
In Shares
Before the change Increase/decrease（+，-） After the Change
Amount Proportio Capitaliza
n tion of
Share Bonus Proportio
common Other Subtotal Quantity
allotment shares n
reserve
fund
1.Shares with conditional
69,750 0.01% 4,752,300 2,250 4,754,550 4,824,300 0.94%
subscription
3.Other domestic shares 69,750 0.01% 4,752,300 2,250 4,754,550 4,824,300 0.94%
Domestic Nature shares 69,750 0.01% 4,752,300 2,250 4,754,550 4,824,300 0.94%
II.Shares with unconditional 506,452,0 506,449,8
99.99% -2,250 -2,250 99.06%
subscription 99
457,021,8 457,021,8
1.Common shares in RMB 90.23% 89.39%
49
2.Foreign shares in domestic 49,430,25 49,428,00
9.76% -2,250 -2,250 9.67%
market 0
506,521,8 511,274,1
III. Total of capital shares 100.00% 4,752,300 4,752,300 100.00%
49
Reasons for share changed
√ Applicable □Not applicable
1. On July 19, 2017, the first meeting of the 7th Board of Directors of the company reviewed and passed the
Proposal on Appointing Deputy General Manager of the Company; appointed Liu Honglei as deputy general
manager of the company, and correspondingly, 75% of the 3,000 shares of the Stock(200045) held by him, that is,
2,250 shares were converted into restricted-sale conditions.Refer to Company Announcement No. 2017-39.on July
20, 2017 at JuChao information network http://www.cninfo.com.cn)
2. The company held the eighth meeting of the Seventh Board of Directors on December 14, 2017 to
consider and approve the Proposal on Granting Restrictive Shares to Incentive Targets , and agreed to grant
4,788,000 shares of restricted stock to 123 incentive objects, and taking December 14, 2017 as the grant date of
restricted stocks. In the process of payment after determining the grant date, the company’s four incentive objects
voluntarily waived the restricted shares to be granted because of personal reasons. The incentive target granted by
the company was actually 119, and the restricted stock granted was actually 4,752,300 shares. The incentive
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
objects actually granted are those publicly disclosed on the company's website, that is, those identified in the
restricted stock incentive plan reviewed and passed at the third temporary general meeting of shareholders in
2017.Refer to Company Announcement No. 2017-69.on December 23, 2017 at JuChao information network
http://www.cninfo.com.cn)
Approval of Change of Shares
√ Applicable □Not applicable
1. On November 27, 2017, the 7th meeting of the 7th Board of Directors of the company reviewed and
approved the Proposal on ‘Restricted Stock Incentive Plan (Draft) and Abstract of Shenzhen Textile (Group) Co.,
Ltd. in 2017’. The independent directors issued independent opinions on the incentives, and the board of
supervisors reviewed the list of incentive objects.Refer to Company Announcement No. 2017-57.on November 27,
2017 at JuChao information network
2. On December 11, 2017, the company received Reply to Implementation of Restricted Stock Incentive Plan
of Shenzhen Textile (Group) Co., Ltd.(Shenzhen State-owned Assets Supervision and Administration
Commission letter [2017] No. 1127) issued by Shenzhen Municipal State-Owned Assets Supervision and
Administration Commission and transmitted by Shenzhen Investment Holdings Co., Ltd., agreeing to implement
the restricted stock incentive plan.Refer to Company Announcement No. 2017-61.on December 11, 2017 at
JuChao information network
3. On December 14, 2017, the company’s third extraordinary general meeting of shareholders examined
and approved the Proposal on ‘Restrictive Stock Incentive Plan (Draft) and Abstract of Shenzhen Textile (Group)
Co., Ltd. In 2017’ and Proposal on ‘ Implementation of the Measures for the Administration of the Restricted
Stock Incentive Plan of Shenzhen Textile (Group) Co., Ltd. in 2017’ and Proposal on ‘Requesting the Board of
Directors to Authorize the Board of Directors to Handle the Relevant Issues relating to the Restricted Stock
Incentive Plan in 2017’. The company's seventh board of supervisors also issued a verification opinion on the list
of incentive objects on the grant date for the company's restricted stock incentive plan in 2017.Refer to Company
Announcement No. 2017-62.and 2017-68 on December 14, 2017 at JuChao information network
4. On December 14, 2017, the 8th meeting of the 7th Board of Directors of the Company reviewed and
approved the Proposal on Adjusting the List of Incentive Targets of Restricted Stock Incentive Plans in 2017 and
the Number of Granted Rights and Interests, and Proposal on Granting Restricted Stock to Incentive Objects, and
the independent directors issued independent opinions on the above matters.Announcement No. 2017-64.and
2017-67 on December 14, 2017 at JuChao information network
Ownership transfer of share changes
√ Applicable □Not applicable
Taking December 14, 2017 as the grant date, the company had granted 4,752,300 restricted shares to 119
incentive objects. On December 27, 2017, the above-mentioned 4,752,300 restricted shares were registered in the
Shenzhen Branch of the China Securities Depository and Clearing Corporation.Announcement No. 2017-69 on
December 23, 2017 at JuChao information network
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to
common shareholders of Company in latest year and period
√ Applicable □Not applicable
After the issuance of this restricted stock, the total share capital of the company was changed from
506,521,849 shares to 511,274,149 shares. The effects of this share change on the financial indicators of the
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
company's most recent year and the most recent period’s basic earnings per share and diluted earnings per share,
net assets per share attributable to common shareholders of the company, are as follows:
Items In 2016 In 2017
Calculated on original share Calculated on new share Calculated on new share
capital capital capital
Basic earnings per share -0.17 -0.17 0.10
(yuan/share)
Diluted earnings per share -0.17 -0.17 0.10
(yuan/share)
Net assets per share (yuan/share) 4.62 4.58 4.69
Other information necessary to disclose for the company or need to disclosed under requirement from security
regulators
□ Applicable √ Not applicable
2. Change of shares with limited sales condition
√ Applicable □ Not applicable
In RMB
Number of
Number of Restricted Shares Date of
Initial Restricted Increased Reason for
Shareholder Name Unrestricted in the End of the Restriction
Shares Restricted Shares Restricted Shares
Shares This Term Term Removal
This Term
Restricted stocks
have a lock-up
period of 2 years
(24 months).
After the lock
expires, they are
Zhu Jun 0 0 137,000 137,000 Equity incentives unlocked in
batches of 4:3:3
in three years.
The first
unlocked date is
December 14,
2019.
135,000 shares of
equity incentives
and 69,750 The same as
Zhu Meizhu 69,750 0 135,000 204,750
shares of locked above
shares of senior
executives
The same as
Ning Maozi 0 0 122,000 122,000 Equity incentives
above
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
The same as
Le Kunjiu 0 0 122,000 122,000 Equity incentives
above
122,000 shares of
equity incentives
and 2,250 shares The same as
Liu Honglei 0 0 124,250 124,250
of locked shares above
of senior
executives
The same as
Li Jiang 0 0 122,000 122,000 Equity incentives
above
The same as
Zhang Yonggang 0 0 105,000 105,000 Equity incentives
above
The same as
Wang Rongyi 0 0 105,000 105,000 Equity incentives
above
The same as
Jiang Peng 0 0 100,000 100,000 Equity incentives
above
The same as
Wang Xuhui 0 0 95,600 95,600 Equity incentives
above
Other equity
The same as
incentive 0 0 3,586,700 3,586,700 Equity incentives
above
employees
Total 69,750 0 4,754,550 4,824,300 --- ---
Ⅱ.Issuing and listing
1.Explanation of the Situation of the Security Issue(No Preferred Shares) in the Report Period
√ Applicable □Not applicable
Stock and
Issue pice Cireculation Approved
derivative Issue date Listing date Date of termination
（Interest rate） figures trading volume
securities
Stock
Equity incentive December December
5.73 yuan/shares 4,752,300 4,752,300
restricted stock 14,2017 27,2017
Convertible Corporate Bonds, Detachable Convertible Bond and Corporate Bonds
Other derivative securities
Notes
A Proposal on Granting Restrictive Stocks to Incentive Objects was passed by discussion on the 8th session of
the 7th board of directors on December 14, 2017, it is agreed in this proposal that 123 incentive objects would be
granted 4, 788, 800 shares of restrictive stocks on December 14, 2017 as the grant date and because some
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
employees failed to subscribe for shares during actual capital contribution, the actual number of shares of
restrictive stock granted is 4, 752, 300. After granting, the sum of corporate shares changed from 506, 521, 849 to
511, 274, 149.Announcement No. 2017-64.and 2017-69 on December 15, 2017 and December 23,2017 at JuChao
information network
2.Change of asset and liability structure caused by change of total capital shares and structure
√ Applicable □Not applicable
A Proposal on Granting Restrictive Stocks to Incentive Objects was passed by discussion on the 8th session
of the 7th board of directors on December 14, 2017, it is agreed in this proposal that 123 incentive objects would
be granted 4, 788, 800 shares of restrictive stocks on December 14, 2017 as the grant date and because some
employees failed to subscribe for shares during actual capital contribution, the actual number of shares of
restrictive stock granted is 4, 752, 300. After granting, the sum of corporate shares changed from 506, 521, 849 to
511, 274, 149.Announcement No. 2017-64.and 2017-69 on December 15, 2017 and December 23 2017at JuChao
information network
3.About the existing employees’ shares
□Applicable√Not applicable
Ⅲ.Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
In Share
Total
preferred shareh
Total number Total The total number o
olders at the end
of common shareholders at f preferred shareho
of the month
shareholders at the end of the lders voting rights
38,243 37,435 0 from the date of
the end of the month from the restored at period-e
disclosing the
reporting date of disclosing nd(if any)(See
annual report(if
period the annual report Notes 8)
any)(See Notes
8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Number Amount Amount Number of share pledged/frozen
Proportio Changes
of shares of of
Shareholders Nature of n of in
held at restricted un-restrict
shareholder shares reporting State of share Amount
period shares ed shares
held（%） period
-end held held
Shenzhen
State-owned legal 234,069,4 234,069,4
Investment 45.78% 0
person 36
Holdings Co., Ltd.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Shenzhen
Shenchao
State-owned 16,129,03 16,129,03
Technology 3.15% 0
Legal person 2
Investment Co.,
Ltd.
Domestic Nature
Lu Ping 1.11% 5,657,200 0 0 5,657,200
person
Domestic Nature
Sun Huiming 0.60% 3,066,567 0 0 3,066,567
person
Domestic Nature
Liu Dongxia 0.30% 1,544,800 0 0 1,544,800
person
Domestic Nature
Zhu Ye 0.26% 1,331,945 0 0 1,331,945
person
Domestic Nature
Wang Mincang 0.25% 1,260,236 0 0 1,260,236
person
Fujiang Bairui
Jiayuan, Asset
Domestic non
Management Co.,
State-owned 0.23% 1,181,535 0 0 1,181,535
Ltd.－Bairui
Legal person
Jiayuan Growth I
Fund
Domestic Nature
Huang Fen 0.20% 1,027,400 0 0 1,027,400
person
Domestic Nature
Zheng Junliang 0.20% 1,006,780 0 0 1,006,780
person
Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned subsidiary of
Shenzhen Investment Holding Co., Ltd. and a person taking concerted action. Except this,
the Company did not whether there is relationship between the top ten shareholders holding
Related or acting-in-concert parties
non-restricted negotiable shares and between the top ten shareholders holding
among shareholders above
non-restricted negotiable shares and the top 10 shareholders or whether they are persons
taking concerted action defined in Regulations on Disclosure of Information about
Shareholding of Shareholders of Listed Companies.
Shareholding of top 10 shareholders of unrestricted shares
Quantity of unrestricted shares held at the end of the Share type
Name of the shareholder
reporting period Share type Quantity
Shenzhen Investment Holdings Co., RMB Common
234,069,436 234,069,436
Ltd. shares
Shenzhen Shenchao Technology RMB Common
16,129,032 16,129,032
Investment Co., Ltd. shares
Lu Ping 5,657,200 RMB Common 5,657,200
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
shares
Foreign shares
placed in
Sun Huiming 3,066,567 3,066,567
domestic
exchange
RMB Common
Liu Dongxia 1,544,800 1,544,800
shares
RMB Common
Zhu Ye 1,331,945 1,331,945
shares
RMB Common
Wang Mincang 1,260,236 1,260,236
shares
Fujiang Bairui Jiayuan, Asset
RMB Common
Management Co., Ltd.－Bairui 1,181,535 1,181,535
shares
Jiayuan Growth I Fund
RMB Common
Huang Fen 1,027,400 1,027,400
shares
RMB Common
Zheng Junliang 1,006,780 1,006,780
shares
Explanation on associated relationship Shenzhen Shenchao Technology Investment Co., Ltd. is a wholly-owned subsidiary of
or consistent action among the top 10 Shenzhen Investment Holdings Co., Ltd. and a person taking concerted action. Except this,
shareholders of non-restricted the Company did not whether there is relationship between the top ten shareholders holding
negotiable shares and that between the non-restricted negotiable shares and between the top ten shareholders holding
top 10 shareholders of non-restricted non-restricted negotiable shares and the top 10 shareholders or whether they are persons
negotiable shares and top 10 taking concerted action defined in Regulations on Disclosure of Information about
shareholders Shareholding of Shareholders of Listed Companies.
The Company Shareholder Lu Ping holds 5,657,200 shares of the Company through stock
account with credit transaction ; The Company Shareholder Liu Dongxia holds 1,544,800
shares of the Company through stock account with credit transaction ; The Company
Shareholder Zhu Ye holds 1,331,945 shares of the Company through stock account with
Explanation on shareholders
credit transaction ; The Company Shareholder Wang Mincang holds 1,260,236 shares of the
participating in the margin trading
Company through stock account with credit transaction ; The Company Shareholder
business(if any )(See Notes 4)
Fujiang Bairui Jiayuan, Asset Management Co., Ltd.－Bairui Jiayuan Growth I Fund
holds 1,181,535 shares of the Company through stock account with credit transaction ; The
Company Shareholder Huang Fen holds 1,027,400 shares of the Company through stock
account with credit transaction.
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a
buy-back agreement dealing in reporting period.
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company
have no buy –back agreement dealing in reporting period.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
2.Controlling shareholder
Nature of Controlling Shareholders: Local state holding
Type of Controlling Shareholders:Legal person
Legal
Name of the Controlling
representative/Leade Date of incorporation Organization code Principal business activities
shareholder
r
Investment and acquisition
of financial and similar
financial stock rights such
as bank, security, insurance,
fund and guarantee; (Ⅱ)
Engage in real estate
development and
management business
within the limit of
legally-acquired land use
right; (Ⅲ) Carry out
investment and service in
the field of strategic
emerging industry; (Ⅳ)
Shenzhen Investment
Wang Yongjian October 13,2004 76756642-1 Carry out investment,
Holdings Co., Ltd.
operation and management
of state-owned stocks of
wholly-owned, holding and
joint-stock company by
reorganization &
integration, capital
operation and asset
disposal; (Ⅴ) Other
businesses undertaken by
authorization of municipal
SASAC(State Asset
Supervision and
Administration
Commission)
Equity of other Shen Property A（000011），Quantity of shares 380.38 million，Shareholding ratio：63.82%； Shenbo
domestic/foreign listed A（000019），Quantity of shares72.25 million，shareholding ratio：16.00%；Shen Real estate
company with share A(000029),Quantity of shares 642.88 million，Shareholding ratio：63.55%；Shen Universe A
controlling and share （000023），Quantity of shares 12.36 million，shareholding ratio：8.91%；Pingan（601318），
participation by Quantity of shares 962.72 million，shareholding ratio：5.27%；Guosen Seurities（002736），Quantity
controlling shareholder in of shares 2749.52 million，shareholding ratio：33.53%；Guotai Junan（601211），Quantity of shares
reporting period 609.42 million，shareholding ratio：6.99%；Telling holding（000829），Quantity of shares 184.65
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
million，shareholding ratio：17.40%；Etop information（834386），Quantity of shares 42 million，
shareholding ratio：60.00%；Inspection test（836325），Quantity of shares：20 million，shareholding
ratio：40.00% and Shenzhen International（00152），Quantity of shares：897.56 million，shareholding
ratio：44.49%.
Change of the actual controller in the reporting period
□Applicable √Not applicable
Nil
3．Information about the controlling shareholder of the Company
Actual controller nature：Local state owned assets management
Actual controller type：Legal person
Legal
Name of the controlling Date of
representative/per Organization code Principal business activities
shareholder establishment
son in charge
Performing the responsibilities
of investors on behalf of the
State-owned Assets Regulatory
state and supervising and
Commission of Shenzhen Peng Haibin July 31,2004 K3172806-7
managing state-owned assets
Municipal People's Government
according to authorization and
law.
Equity of other
domestic/foreign listed Except for Shenzhen Holdings Co., Ltd., the holding shareholder of the company, other domestic
company with share
and foreign listed companies of the equity held by the actual controller haven’t been shown in the
controlling and share
participation by list of the top ten shareholders of the company.
controlling shareholder in
reporting period
Changes of the actual controller in the reporting period
□Applicable √Not applicable
No Changes of the actual controller in the reporting period
Block Diagram of the ownership and control relations between the company and the actual controller
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
The actual controller controls the company by means of trust or managing the assets in other way
□Applicable √Not applicable
4.Particulars about other legal person shareholders with over 10% shareheld
□Applicable √Not applicable
5.Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, Restructuring
Party and Other Commitment Subjects
□Applicable √Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
VII. Situation of the Preferred Shares
□ Applicable √Not applicable
The Company had no preferred shares in the reporting period.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
VIII. Information about Directors, Supervisors and Senior Executives
I. Change ein shares held by directors, supervisors and senior executives
Amount Amount
Shares of shares of shares Shares
Other
Starting Expiry held at increased decreased held at
Office changes
Name Positions Sex Age date of date of the at the at the the
status increase/d
tenure tenure year-begi reporting reporting year-gegi
ecrease
n(share) period(sh period(sh n(share)
are) are)
Board
January July
Zhu Jun chairman, Appoint Male 54 0 0 0 137,000 137,000
16,2015 18,2020
Director
Director,
Zhu July July
General Appoint Male 53 93,000 0 0 135,000 228,000
Meizhu 19,2017 18,2020
Manager
Director,
Deputy
Secretar
y of the
Party
committ
Ning December July
ee and In office Male 42 0 0 0 122,000 122,000
Maozai 14,2017 18,2020
Secretar
y of the
Commis
sion for
Discipli
ne
July July
Huang Yu Director In office Male 43 0 0 0 0
19,2017 18,2020
Director, April July
Di Yan n office Female 47 0 0 0 0
CFO 28,2017 18,2020
May July
Lin Lebo Director In office Male 56 0 0 0 0
20,2015 18,2020
Independ
August July
He Qiang ent In office Male 65 0 0 0 0
16,2013 18,2020
Director
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Independ
He July July
ent In office Male 55 0 0 0 0 0
Zhuowen 19,2017 18,2020
Director
Independ
Cai July July
ent In office Male 48 0 0 0 0 0
Yuanqing 19,2017 18,2020
Director
Chairman
of the
Wang superviso May July
In office Male 49 0 0 0 0 0
Weixing ry 20,2015 18,2020
committe
e
Zou Superviso December July
In office Male 35 0 0 0 0 0
Zhiwei r 14,2017 18,2020
Employee
Zhang August July
superviso In office Male 42 0 0 0 0 0
Xiaodong 9,2013 18,2020
r
Deputy April July
Le Kunjui In office Male 54 0 0 0 122,000 122,000
GM 28,2017 18,2020
Liu Deputy July July
In office Male 53 3,000 0 0 122,000 125,000
Honglei GM 19,2017 18,2020
Secretary
Jiang to the January July
In office Female 47 0 0 0 100,000 100,000
Peng board of 16,2015 18,2020
directors
Wang May August
Director Dimission Male 53 0 0 0 0 0
Yongjian 4,2010 15,2016
Jin Director, August August
Dimission Male 46 0 0 0 0 0
Zhenyuan CFO 16,2013 15, 2016
Independ
Zhang May July
ent Dimission Male 58 0 0 0 0 0
Yong 4,2010 18,2017
Director
Independ
Shi May July
ent Dimission Male 50 0 0 0 0 0
Weihong 4,2010 18,2017
Director
Superviso April July
Li Wei Dimission Male 52 0 0 0 0 0
r 21,2009 18,2017
Feng Deputy July July
Dimission Male 55 0 0 0 0 0
Junbin GM 30,2003 18,2017
Guo Superviso Dimission Male 44 July December 0 0 0 0 0
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Liwei r 19,2017 13,2017
II. Change in shares held by directors, supervisors and senior executives
√ Applicable □Not applicable
Name Positions Types Date Reason
Board chairman, No longer serving as general manager, current served as
Zhu Jun Appoint July 19,2017
Director chairman.
Director,General No longer served as deputy general manager, current
Zhu Meizhu Appoint July 19,2017
Manager served as director and general manager.
Departure on his The board of directors will change its term and the term
Wang Yongjian Director July 18,2017
term of office expires.
Departure on his
Jin Zhenyuan Director, CFO July 18,2017 Job change
term
Independent Departure on his The board of directors will change its term and the term
Zhang Yong July 18,2017
Director term of office expires.
Independent Departure on his The board of directors will change its term and the term
Shi Weihong July 18,2017
Director term of office expires.
Departure on his The board of directors will change its term and the term
Li Wei Supervisor July 18,2017
term of office expires.
Feng Junbin Deputy GM Dismissal July 18,2017 Job change
December
Guo Liwei Supervisor Dismissal Job change
13,2017
III.Posts holding
Professional background, work experience and main duties in the Company of existing directors, supervisors and
senior management
(1) Director
Zhu Jun, Male, Born in 1963, Master degree，senior engineer , member of the Communist party, He served
successively as secretary of Lige Village, Yutai County, Shandong Province, workshop director of Shandong
Jining Cotton Mill, deputy factory director of Jining Chemical Fibre Factory, office director of Jining Textile
Industry Company, deputy county head of Wenshang County, Shandong Province, office director of Shandong
Textile Department, chief of Personnel Education Division, manager, general manager assistant , Deputy General
Manager, General Manager of Enterprise management Dept of the Company. He served as secretary of Party
Committee ,Board Chairman of the Company, Director and Vice Board chairman of Tianma Microelectronic Co.,
Ltd.
Zhu Meizhu, Male, Born in 1964, Master degree, Senior engineer, once served successively as chief Deputy
general Manager of Enterprise Management Dept of the Company, Director of R& D Center, Assistant General
Manager and Deputy General Manager, He serves as director and General Manager of the Company, and Board
Chairman of Shenzhen Shengbo Optoelectronic Technology Co., Ltd.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Ning Maozai, male, born in 1975, bachelor degree, senior administration engineer, Chinese Communist Party
member; he has served successively as the office clerk of Shenzhen Guomao Automobile Industry Co., Ltd, the
clerk, principal staff member, associate director and director of party-mass office of Shenzhen Property
Development (Group) Corp. and hold a concurrent post of deputy human resource Deputy manager and manager;
At present he holds the position of company director, deputy party secretary and secretary of Discipline Inspection
Committee.
Huangyu, male, born in 1974, postgraduate, senior accountant, Chinese Communist Party member; he has
served successively as the manger of audit department Ⅱ of Shenzhen Hengdaxin Accounting Firm and assistant
director, senior staff member of the audit department of Shenzhen Commerce Trading Invest-holding Company,
senior staff member and principal staff member of the social undertaking division of Shenzhen SASAC, principal
staff member of the business division Ⅱ of Shenzhen SASAC, vice minister and minister of the financial budget
department of Shenzhen Investment Holdings Co., Ltd, office director of Shenzhen Investment Holdings Co., Ltd;
At present he holds the position of chief accountant and director of Shenzhen Investment Holdings Co., Ltd.and
director of the Company.
Di Yan, female, born in 1970, postgraduate degree, senior economist, accountant positional title, Chinese
Communist Party member; she has served successively as the cashier, correspondent bank accountant and
integrated accountant of Development Zone Sub-branch, Xi’an Branch, Agricultural Bank of China, manager of
the fund department, chief of the financial management section and chief of the accounting section of financial
department of Shenzhen Airport(Group) Company, capital settlement business manager of the financing plan
department of Shenzhen Airport Co., Ltd, manager of the financial department of Shenzhen Airport International
Express Supervision Center of Shenzhen Airport Co., Ltd, manager of the financial department of Shenzhen
Airport Air Cargo Co., Ltd, finance minister of Shenzhen General Institute of Architectural Design and Research
and chief financial officer of Shenzhen Yuetong Construction Engineering Co., Ltd and hold a concurrent post of
chief financial officer of Shenzhen Zhongye Pipe Gallery Construction Investment Co., Ltd; At present he holds
the position of direcor director and chief financial officer of the Company.
Lin Lebo , Male, born in 1961, Bachelor Degree, auditor, member of communist party. He used to be deputy
director, director, vice President of the union, party branch secretary in Shenzhen Audit bureau;served as director
in shenzhen auditing firm, executive vice President in Shijixingyuan Co., Ltd.,, manager of audit department and
secretary of the party branch in Shenzhen investment management company, manager of asset management
department and secretary of the party branch in Shenzhen investment management company;used to serve as
chairman of the board and party secretary in and shenzhen coptic green industry development co., Ltd., deputy
manager in shenzhen Tongchan industrial co., Ltd., director, general manager, deputy party secretary in shenzhen
Tongchan packaging group co., Ltd., chairman of the supervisory board in inspection group in the southern
electronic product testing (shenzhen) Co., Ltd.. He serve as Chairman of the supervisory committee of the
Compay, Now serve as Executive director ,General Manager of Shenzhen Shenchao Technology Investment Co.,
Ltd. He serves as Director of the Company.
He Qiang , Male, born in 1952, Professor of finance at the Central University of Finance and Economics,
Ph.D. tutor, Director of Securities and Futures Institute, enjoy special government allowances. He was a member
of 11th and 12th CPPCC National Committee, of China Finance Society, the China Investment Association, of
China Economic and Social Council of the other positions. He served as independent director in the Air
Investment Holding Co., Ltd., in Golden State Securities corporation, Dongbei Securities and in the Company. the
Company's independent directors.
He Zuowen, male, born in 1962, MBA, associate professor in accountancy, charted certified accountant and
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
certified tax agent in securities and futures industry. At present he acts as a partner of Da Hua Certified Public
Accountants(Special General Partnership) and secretary of Party General Branch of Shenzhen Branch, meanwhile
he holds the position of chairman of Shenzhen Tianye Certified Tax Agents Limited Corporation, consultancy
expert of Internal Control Standard Committee of the Ministry of Treasury, judge of Guangdong Senior
Accountant Evaluation Committee, member of CPC Shenzhen Social Organization Disciplinary Examination
Committee, deputy secretary & secretary of Discipline Inspection Commission of CPC Shenzhen CPA Industry
Board, director of Shenzhen Certified Tax Agents Association and an independent director of Shenzhen JPT
OPTO-ELECTRONICS Co., Ltd. the Company's independent directors.
Cai Yuanqing, born in 1969, Doctor of Laws of Hiroshima University, professor of Law School of Shenzhen
University, director of Company Law Research Center and GSI(Graduate Student Instructor); Meanwhile, he acts
as an arbitrator of Shenzhen Arbitration Commission, an independent director of ShenZhen O-Film tech . Co., Ltd.
and an independent director of Shenzhen RongDa Photosensitive Science & Technology Co., Ltd. the Company's
independent directors.
（2）Supervisor
Wang Weixing, male, born in 1968, graduate degree, economist, member of Communist Party of China, has
served successively as cadre of Qingdao TV Factory, staff and senior staff member of Shenzhen Administration of
Industry and Commerce (price bureau) Futian, Che Kung Temple branch, senior staff member and principal staff
member of Shenzhen Administration of Industry and Commerce (price bureau) registration sub-office, principal
staff member of Shenzhen General Asset Management Office, deputy director of Shenzhen Asset Management
Office collective enterprise department, deputy director of general office of Shenzhen Asset Management Office,
deputy director of petition acceptance office of Shenzhen Asset Management Office, director, vice-secretary of
CPC and secretary of discipline commission of Shenzhen Tongchan Packaging Group Co., Ltd, director,
vice-secretary of CPC and secretary of discipline commission of Shenzhen Tongchan Group Co., Ltd and
currently takes the post of chairman of supervisory board of the Company.
Zhou Zhiwei, male, born in 1982, bachelor degree and CPC member; he has served successively as a
member of Shenzhen Prison Political Section, office clerk of Luohu District Bureau of Culture, senior staff
member of Publicity and Education Office and principal staff member of 1st-Case Examination Room of
Shenzhen Discipline Inspection Commission, Board Secretary of Shenzhen Stepwell Environmental Protection
Technology Co., Ltd and executive director of Shenzhen Xuriwenhua Investment Consulting Co., Ltd; At present
he acts as the associate director of Office of Discipline Supervision & Investigation of Shenzhen Investment
Holdings Co., Ltd and supervisor of this company.
Zhang Xiaodong, male, born in 1975, postgraduate degree and CPC member. He began to work for this
company in August 1999 and had served successively as the assistant manager and manager of subsidiary of this
company, manager of business management department of this company and manager of Shenzhen Meibainian
Garment Co., Ltd; At present he acts as the employee supervisor of this company and the head of business
management department.
（3）Senior Executives
Le Kunjiu, male, born in 1963, bachelor degree economist professional title and CPC member; he has served
successively as the loan officer of the finance department of Zhejiang Ningbo International Trust and Investment
Corporation, deputy director and director of the finance department of CITIC Group Corporation, Ningbo Branch,
manager of the research department of Hainan Fudao Asset Management Co., Ltd, assistant manager of Shenzhen
Leaguer Venture Capital Co., Ltd, vice president & chief financial officer of Shenzhen Leaguer Digital Television
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Co., Ltd, chairman & general manager of Shenzhen Oriscape Electronic Co., Ltd, vice president of Shenzhen
International Technology Transfer Center, Tsinghua University, associate director of the industrial funds
preparatory office of Shenzhen Investment Holdings Co., Ltd and Deputy general manager of Shentou Education;
At present he acts as the Deputy general manager of the Company.
Liu Honglei, male, born in 1964, he has served as the deputy general manager and general manager of
Shenzhen SAPO Photoelectric Co., Ltd from June 2012 to May 2013 and the head of the party-mass work
department and the manager of the business management department of Shenzhen Textile (Holdings) Co., Ltd; At
present he holds the position of deputy general manager of the company.
Jiang Peng, Female, born in 1970, Bachelor Degree, member of communist party, She served as officer of the
Secretary Office of Shandong Fishery Group Co.,Ltd., Deputy Director of the Secretary office and Securities
affairs Representative of Shandong Zhonglu Oceanic Fisheries Co., Ltd., Securities Representative of Huafu
Holding Co., Ltd., Securities affairs representative and Officer of the Secretariat of the Board of the Company,
now serves as the secretary of the Board of the Company.
Office taking in shareholder companies
√Applicable □Not applicable
Does he /she
Titles
Names of the receive
engaged in Sharting date of Expiry date of
persons in Names of the shareholders remuneration or
the office term office term
office allowance from the
shareholders
shareholder
Chief
Huang Yu Shenzhen Investment Holdings Co., Ltd. March 4,2017 Yes
accountant
Shenzhen Shenchao Technology Executive January
Lin Lebo Yes
Investment Co., Ltd. director, GM 19,2015
Deputy
Director of
discipline
Zou Zhiwei Shenzhen Investment Holdings Co., Ltd. June 16,2017 Yes
Inspection &
Supervision
Office
Description of
the incumbency
Shenzhen Shenchao Science & Technology Investment Co., Ltd is a wholly-owned subsidiary of Shenzhen
in the
Investment Holdings Co., Ltd.
shareholder’s
company
Offices taken in other organizations
□Applicable √Not applicable
Punishments to the current and leaving board directors, supervisors and senior managers during the report period
by securities regulators in the recent three years
□ Applicable √Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
IV. Remuneration to directors, supervisors and senior executives
Decision-making procedures, basis for determination and actual payment of the remuneration to directors ,
supervisors and senior executives
In the report period, The remuneration of directors and senior management paid by the company is determined by
“Director Compensation Management System” and “Executive Compensation Management and Evaluation
System”, the remuneration of independent directors is determined as per the resolution of shareholders’ meeting,
and the remuneration of supervisors paid by the company is determined by their position held in the company.
Remueration to directors, supervisors and senior executives in the reporting period
Unit ：RMB’0000
Total Remuneration
remuneration actually receivect
Name Positions Sex Age Office status
received from the at the end of the
shareholder reporting period
Zhu Jun Board Chairman Male 54 Appoint 65.00 No
Director ,
Zhu Meizhu Male 53 Appoint 67.16 No
DeputyGM
Director, Deputy
Secretary of the
Party committee
Ning Maozai Male 42 In Office 6.93 No
and Secretary of
the Commission
for Discipline
Huang Yu Director Male 43 In office 0.00 Yes
Di Yan Director, CFO Female 47 In Office 51.46 No
Lin Lebo Director Male 56 In office 0.00 Yes
Independent
He Qiang Male 65 In Office 8.90 No
Director
Independent
He Zhuowen Male 55 In office 4.52 No
Director
Independent
Cai Yuanqing Male 48 In Office 4.52 No
Director
Chairman of the
Wang Weixing supervisory Male 49 In office 57.01 No
committee
Zou Zhiwei Supervisor Male 35 In Office 0.00 Yes
Employee
Zhang Xiaodong Male 42 In office 38.19 No
supervisor
Le Kunjiu Deputy GM Male 54 In Office 31.08 No
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Liu Honglei Deputy GM Male 53 In Office 43.85 No
Secretary to the
Jiang Peng Female 47 In office 46.41 No
board of directors
Wang Yongjian Director Male 53 Dimission 0.00 Yes
Jin Zhenyuan Director, CFO Female 46 Dimission 19.10 No
Independent
Zhang Yong Male 58 Dimission 4.39 No
Director
Independent
Shi Weihong Female 50 Dimission 4.39 No
Director
Li Wei Supervisor Male 52 Dimission 0.00 Yes
Feng Junbin Deputy GM Male 55 Dimission 29.59 No
Guo Liwei Supervisor Male 44 Dimission 0.00 Yes
Total -- -- -- -- 482.48 --
Incentive equity to directors, supervisors or/and senior executives in the reporting period
√ Applicable □Not applicable
In shares
Name Position Number of Number of Exercise Market Number of Number of Number of Granting Number of
vested exercise price of price at the restrictive shares newly-awa price of restrictive
shares stocks the end of stock hold unlocked rded restrictive stock hold
during the during the exercise report at the in the restrictive stock at the end
report report stock period beginning current stock (Yuan per of the
period period during the (Yuan per of the period during the share) report
report share) report report period
period period period
(Yuan per
share)
Board
Zhu Jun 0 0 9.75 0 0 137,000 5.73 137,000
Chairman,
Zhu Director,
0 0 9.75 0 0 135,000 5.73 135,000
Meizhu GM
Director,
Deputy
Secretary
of the
Ning Party
0 0 9.75 0 0 122,000 5.73 122,000
Maozai committee
and
Secretary
of the
Commissi
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
on for
Discipline
Deputy
Le Kunjiu 0 0 9.75 0 0 122,000 5.73 122,000
GM
Liu Deputy
0 0 9.75 0 0 122,000 5.73 122,000
Honglei GM
Secretary
to the
Jiang Peng 0 0 9.75 0 0 100,000 5.73 100,000
board of
directors
Total -- 0 0 -- -- 0 0 738,000 -- 738,000
V. Particulars about employees.
1. Staff jobs, education, job title number and proportion refer to the following pie chart:
Number of in-service staff of the parent company（person）
Number of in-service staff of the main subsidiaries（person） 1,290
Total number of the in-service staff（person） 1,335
Total number of staff receiving remuneration in the current
1,335
period（person）
The number of the parent company and the main subsidiary’s
retired staffs who need to bear the cost（person）
Professional
Classified according by Professions Number of persons（person）
Production
Sales
Technical
Financial
Administrative
Total 1,335
Education
Classified according by education background Number of persons（person）
Postgraduate or above
Universities
Colleges
Mid-school or below
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Total 1,335
2. Remuneration policies
In 2017, the Company carried out management for employees’ compensation in strict accordance with the
state’s relevant laws and regulations and guaranteed the fairness and reasonability of the compensation, which
offered relevant rewards and incentives to the employees, accelerate them to jointly develop with the Company ,
and simultaneously reflected humanistic care of the Company.
3.Training pllan
Company targeted to improve professional skills and support company's operations, it required each post to
complete the forms of Training Needs Questionnaire, Internal Training Courses Recommendation Form,
Employee Individual Development Plan, and company formulated personal and company annual training plans in
accordance with these forms, and simultaneously balanced individual with company and internal training with
external training. Company carried out demand investigation and training evaluation, etc when organizing training
projects to safeguard training effectiveness.
The company selected actively in 2017 employees to attend various professional training organized by
Shenzhen Investment Holdings Co., Ltd or external company and meanwhile, series training, such as outward
bound themed as “Go beyond oneself, temper team and pursue win-win situation with great passion”, new
employee orientation series training and special knowledge lecture for liability of asset loss, was held inside the
company to strengthen the managerial capability and professional quality of managerial staff at all levels and
technicians and create high caliber talent group.
4. Outsourcing situation
□ Applicable √ Not applicable
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
IX. Administrative structure
I.Basic state of corporate governance
In the reporting period, the company regulated operations and strengthen risk control in strict accordance with
Securities Law, Corporation Law, the Shenzhen Stock Exchange Standard Operation Instructions for Main-Board
Listed Companies, Corporate Governance Standards for Listed Companies and other related laws and regulations,
to ensure a healthy and stable development. At present, the basically sound governance system, normative
business operation and impeccable corporate governance structure meet the requirements of the normative
documents for regarding corporate governance of listed companies issued by the China Securities Regulatory
Commission.
In 2017, company held a total of 4 general meetings, convened general meetings, standardized voting procedures
to safeguard the effectiveness and legality in strict accordance with the regulations and requirements of
Corporation Law, Articles of Corporation and Rule of Procedure of Shareholders' Meeting. Companies actively
protected the voting rights of minority investors, and general meetings were convened in the form of live network
to adequately assure small investors of their rights to exercise.
In 2017, the board of directors held 12 general meetings, and the convening and voting procedures were all
conducted in strict accordance with the Articles of Corporation and Rule of Procedure of Shareholders' Meeting.
All the directors performed directors ' duties, exercise directors’ rights, attended related meetings and actively
participated in the training and became familiar with relevant laws and regulations with serious, diligent and
honest attitudes. Independent directors independently performed their duties in strict accordance with Articles of
Corporation, The independent director system and other relevant laws and regulations, expressed fully their
independent opinions on corporate operation, decision-making, and important matters, etc. Strategy, audit,
remuneration, evaluation, nomination committees were established under board of directors, all committees
functioned properly, and performed duties such as internal audits, compensation assessment, nomination of senior
management personnel, and provided scientific and professional advisory opinions for board of directors’
decision-making.
In 2017, the board of supervisors held 9 meetings. The board of supervisors strictly followed the requirements
of Articles of Corporation and Rules of procedure of the board of supervisors and other relevant laws and
regulations, supervised the legal compliance of the duties performed by company's financial personnel and
directors, managers and other senior management personnel in the aim of maintaining the legitimate rights and
interests of the company and its shareholders. All the supervisors fulfilled their obligations, exercised their rights
according to the laws. The convening and voting procedures of the board of supervisors were legal, and the
resolutions were legal and valid. The establishment and implementation of board of supervisors played an active
role in improving corporate governance structure and regulating corporate operations.
In 2017, we further increased information transparency, accomplished investors’ protection and
propaganda work. In the reporting period, except disclosing information in a real accurate, timely, fair and
complete manner in accordance with the regulatory requirements,
Moreover, the Company carried out the special work Blue Sky Action according to Notification on
Implementing Special Work where Investors Protect Blue Sky Action published by Shenzhen Securities Bureau to
enhance the quality of information disclosure as the key point, to continuously perfect the communication
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
mechanism and to promote the normative development of the Company. Meanwhile, the Company continued to
perfect the voting mechanism for minority investors. In 2017, the minority investors’ voting was counted
separately at each of the two shareholder’s meetings, and whose result was disclosed at the decision
announcement at the shareholder’s meeting, which fully guaranteed the execution of power of the minority
investors.
Moreover, the Company carried out the special work Blue Sky Action according to Notification on
Implementing Special Work where Investors Protect Blue Sky Action published by Shenzhen Securities Bureau to
enhance the quality of information disclosure as the key point, to continuously perfect the communication
mechanism and to promote the normative development of the Company. various platforms were made full use of,
such as telephone, e-mail, website, especially the interactive platform of investors in Shenzhen Stock Exchange,
solved questions brought by investors, and communicated with medium and small investors interactively, and
ensure all the investors obtained equal opportunities for informal access. Meanwhile, in the aim of improving the
transparency of listed companies, company accepted investors’ on-site investigation to have comprehensive
understandings of the company's business situation through face-to-face communication with management, also
urged the company established a responsibility to return on investors, improved and enhanced the corporate
governance standards. Meanwhile, the Company continued to perfect the voting mechanism for
minority investors. In 2017, the minority investors’ voting was counted separately at each of the 4 shareholder’s
meetings, and whose result was disclosed at the decision announcement at the shareholder’s meeting, which fully
guaranteed the execution of power of the minority investors.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the
relevant provisions of CSRC,
√Yes □No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant
provisions of CSRC.
As the company’s controlling shareholder, Shenzhen Investment Holdings Co., Ltd., is a company directly
controlled by the State-owned Assets Supervision and Administration Commission of Shenzhen and the company
implements the relevant regulations on the management of state-owned assets by the controlling shareholder, the
undisclosed information submitted to the controlling shareholder is mainly: Monthly Express Indicator Indicators
The quarterly reporting period fee schedule, financial assets status table, deposits and financing loan summary
table.In order to strengthen the management of non-public information, the company has strictly controlled the
scope of learners, standardized the process of information delivery and strictly implemented as per the
“Management System on Learner of Insider Information”, took practical measures to prevent inside information
leaks and insider trading.
In addition, there is no difference among the governance of the company, “Company Law” and the relevant
provisions of China Securities Regulatory Commission.
II. Independence and Completeness in business, personnel , assets, organization and finance
The code of conduct of the controlling shareholders of the company did not go beyond the general meetings
directly or indirectly to interfere with the decision-making and business activities, the company had independent
and complete business and autonomous operation capacity , achieved “five point separation” in respect of
personnel, financial, asset, agencies, business.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
III. Competition situations of the industry
□ Applicable √ Not Applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting Period
1.Annual General Meeting
Investor
Sessions Type Meeting Date Disclosure date Disclosure index
participation ratio
The first provisional
Provisional Announcement
shareholders’
shareholders’ 49.42% January 16,2017 January 17,2017 No.2017—05
General meeting in
General Meeting www.cninfo.com.cn
2017
Announcement
Annual Genral Annual General
49.69% June 29,2017 June 30,2017 No.2017—32
Meeting of 2016 Meeting
www.cninfo.com.cn
The second
provisional Provisional Announcement
shareholders’ shareholders’ 49.69% July 19,2017 July 20,2017 No.2017—38
General meeting in General Meeting www.cninfo.com.cn
2017
The third provisional
Provisional Announcement
shareholders’
shareholders’ 49.42% December 14,2017 December 15,2017 No.2017—62
General meeting in
General Meeting www.cninfo.com.cn
2017
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √Not applicable
V. Responsibility performance of independent directors in report period
1. The attending of independent directors to board meetings and shareholders’ general meeting
The attending of independent directors
Number of Failure to
Number of Number of
Board personally
Number of meetings Number of attendance at
Independent meetings Number of attend board
spot attended by attendances by general
Directors necessary to be absence meetings
attendances Communicatio representative meetings of
attended in the successively
n shareholders
reporting twice (Yes/No)
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
period
Zhang Yong 5 2 3 0 0 No
Shi Weihong 5 2 3 0 0 No
He Qiang 13 6 7 0 0 No
He Zhuowen 8 4 4 0 0 No
Cai Yuanqing 8 4 4 0 0 No
Notes to failure to personally attend Board Meetings Successively Twice
Nil
2.Objection of independent directors on some relevant issues
Objection of independent directors on some relevant issues
□ Yes √No
Independent directors proposed no objection against the relevant matters in the reporting period.
3. Other notes to duty performance of independent directors
Has an independent director’s advice to the Company been accepted
√ Yes □No
Explanation on acceptance of or failure to accept an independent director’s advice to the Company.
In the report period, the independent directors of the Company seriously fulfilled duties according to the
requirement of supervision laws and regulations and System of the Company’s Independent Director：
1.The independent directors timely attended the board meeting convened by the Company, and attended
meetings related to the shareholder’s meeting. Beforehand,, we carefully reviewed the information of the meeting.
We fully utilized our own professional advantages and enterprise management experience to put forward
reasonable opinions and suggestions for the proposal and to give independent comment for the related party for its
capital occupation, which fully expressed the guidance and supervision function of the independent directors.
2.The independent directors actively participated in the work of the board’s special committee, and gave
independent comments for events involved with the Company’s periodical report, duty performance and
further employment of annual audit institution, self-assessment report of internal control, compensation
assessment system for senior managers of 2015, which factually maintained the interest of the Company and
the shareholders’, especially the public shareholder’s, and which benefited the board’s core function at
corporate governance.
3. The independent directors kept communicating with the Company’s managements and thoroughly debrief
relevant personnel, and focused on the construction progress of Project Line 6 of TFT-LCD polaroid glass of
Period II as well as the progress of Shengbo Optoelectronic’s capital increment and share expansion for
introducing strategic investors, The company also issued independent opinions on related party capital occupation,
internal control, profit distribution, appointment of auditors, appointment of senior management personnel,
reelection of board of directors, use of idle raised funds, cash management of own funds, and restrictive stock
incentive plans. which enabled the independent directors to timely comprehend and master the progress of the
Company’s significant issues.
（4）In order to ensure the company’s 2017 restrictive stock incentive plan to be approved unanimously at the
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
shareholders meeting and improve the voting percent of minority shareholders at the shareholders meeting, the
independent director of the company, as the solicitor, will solicit publicly among minority shareholders voting
rights, which has maintained practically overall benefits of the company and protected legal interests of a majority
of minority shareholders again infringement.
Refer to the announcement of the http://www.cninfo.com.cn disclosure on March 29, 2018
VI. Duty Performance of Special Committees under the Board of Directors in the Reporting Period
The independent directors of the company are the key members of all professional committees of the Board of
Directors, and are in the majority and the conveners of Audit Committee, Remuneration and Appraisal Committee
and Nomination Committee. Also, all the three independent directors can attend the daily meeting held by every
special committee on time.
(1) Audit Committee: during the reporting period, the Audit Committee has held two meetings, carefully
examined the regular reports of the company and effectively implemented the work schedule of annual reports.
Also, the Audit Committee has reviewed the internal control of the company, supervised the effective
implementation of internal control, the self-assessment of internal control. Before the board meeting for
deliberating annual report was convened, the Company will strengthen the communication with the certified
public accountant for annual audit, carefully review related information,and will learn about and master the
arrangement and progress of accountant’s audit. The Company will interview the accountant for annual audit to
effectively communicate with the accountant about the problems found during the audit progress, will supervise
and examine the disclosed information, will ensure the Company’s situation will be factually reflected by the
audit report, and will make a comprehensive assessment for accountant for the completion situation of the annual
work and the practising quality. In the report period, the Company will convene meeting sand formed solutions
for audit institution recruitment, self-assessment report of internal control and financial final statement
During the reporting period, Proposal on Carry a meeting ficused on hiring audit institutions, self-assessment
report of the internal control, the Final Accounting Report and other matters and reach a resolution.
(2) Remuneration and Appraisal Committee: During the reporting period, the Remuneration and Appraisal
Committee has held one meetings, During the reporting period, Carry a meeting ficused on 2015 performance
appraisal of senior management and reach a resolution.
(3)Nomination committee: The nomination committee has held during the report period. 2 meetings in total at
which the nominated candidates of independent director and hired senior managers are convened and a resolution
is formed.
(4) Strategic Planning Committee: The Strategic Planning Committee has held during the report period 1 meeting
in total, at which the 13th five-year development strategic planning is convened and a resolution is formed. It holds
that the planned business objective is planned reasonably, the finance indicators are budgeted scientifically, the
construction scheme of key investment project is basically reasonable, the management layer of the construction
company actively strives for national policy support, organizes implementation earnestly and improves constantly
based on the company’s reality.
VII. Work of the supervisory Committee
Did the supervisory Committee find any risk existing in performing the supervision activities in the reporting
period
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
□Yes √No
The supervisory Committee has no objection aginst any matters under supervision in the reporting period
VIII. Assessment and incentive Mechanism for Senior executives
The company complies with “Executive Compensation Management and Evaluation System” to conduct the
evaluation for the accomplishment of annual work of the senior executives. The salaries of the senior executives
are determined according to the duty scope, post value, individual ability, wages level on the market, economic
profits of the company and operation goal accomplishment of senior executives with adhering to the principle of
market orientation, responsibility with unified right, and incentive and equal restriction. During the reporting
period, the senior executives are all qualified in 2016 after evaluation. The directors and the general manager have
conducted the feedback on the annual appraisal evaluation for the senior executives in accordance with the
“Executive Compensation Management and Evaluation System” and proposed the recommendation for
improvement.
IX. Internal control situations
1.Specific situations on major defects of internal control discovered during report period
√ Yes □No
About the significant Defects of the internal control found in the internal control self-assessment report in the reporting period
The identification and rectification of deficiency of the internal control:
1. The identification and rectification of deficiency of the internal control in the financial statement
In accordance with above identification standard of deficiency of the internal control in the financial statement, there is no the
serious and important deficiency of internal control in the financial statement during the reporting period.
2.The identification and rectification of deficiency of the internal control except for that of the financial statement in accordance
with above identification standard of deficiency of the internal control except for that of the financial statement, there is no the
serious and important deficiency of internal control except for that of the financial statement during the reporting period.
2.Self-evaluation report on internal control
Disclosure date of appraisal report on
March 29,2018
internal control
Disclosure index of appraisal report on Juchao Website:（http://www.cninfo.com.cn） Selfevaluation report of internal
internal control control
Proportion of total unit assets covered by
appraisal in the total assets of the
100.00%
consolidated financial statements of the
company
Proportion of total unit incomes covered
by appraisal in the total business incomes 100.00%
of the consolidated financial statements of
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
the company
Standards of Defects Evaluation
Category Financial Report Non-financial Report
In the following circumstances, the
company was identified as existing
non-financial –reporting related
significant defects of internal controlling
defects:
The business activities of the company
seriously violated national laws and
regulations; (2) The decision-making
The defects related to financial reports were
process of \"Three-Importance&
divided into general defects, important
One-Large\" were unscientific, leading to
defects and significant defects according to
major decision errors, and causing major
their severity. Significant defects referred to
property loses to the company; (3)
one or multiple combinations of controlling
Massive loss of key posts or technology
defects, which may lead to serious deviation
talents; (4) The controlling system
from the controlling objectives. Important
involving important business fields of the
defects referred to one or multiple
Qualitative standard company failed; (5) It Caused serious
combinations of controlling defects, and
negative effects on business of the
their severity and economic consequences
company, and the effects couldn’t be
were below significant defects, but they
eliminated; (6) The evaluation results of
could still lead to serious deviation from the
internal control were significant defects,
controlling objectives. General defects
and couldn’t get effective rectification.
referred to other internal controlling defects
Important defects referred to one or
which couldn't constitute significant defects
multiple combinations of controlling
or important defects.
defects, and their severity and economic
consequences were below significant
defects, but they could still lead to
serious deviation from the controlling
objectives. General defects referred to
other internal controlling defects which
couldn't constitute significant defects or
important defects.
Misstatement amount of financial statement
fell into the following intervals: significant
defects: Misstatement amount ≥ 1.5% of
total revenue; Misstatement amount ≥
Quantitative criteria 10% of gross profit; Misstatement amount Not applicable
≥ 1% of total asset; Misstatement amount
≥ 5% of net asset. significant defects: 0.5%
of Total revenue ≤Misstatement amount
＜ 1.5% of total revenue; 5% of gross profit
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
≤Misstatement amount ＜ 10% of gross
profit; 0.5% of Total asset ≤Misstatement
amount ＜ 1% of total revenue; 3% of Net
assets ≤Misstatement amount ＜ 5% of
net assets. General defects:0% of total
revenue ＜Misstatement amount＜0.5% of
Total revenue; 2% of gross profitt ＜
Misstatement amount＜5% of total profit;
0% of total assets ＜Misstatement amount
＜0.5 of total assets; 0% of net assets ＜
Misstatement amount＜3% of net assets.
Number of major defects in financial
reporting（a）
Number of major defects in non financial
reporting (a)
Number of important defects in financial
reporting（a）
Number of important defects in non
financial reporting（a）
X. Internal Control audit report
√ Applicable □Not applicable
Review opinions in the internal control audit report
To all shareholders of Shenzhen Textile (Holdings) Co., Ltd.：
According to the relevant requirements of the “Audit Guideline of Enterprise Internal Control” and the Chinese CPA criteria, the
company has audited the effectiveness of internal control of the financial statement of Shenzhen Textile (Holdings) Co., Ltd.
(Shenzhen Textile) at the date of December 31, 2017.
1. The responsibility of enterprise for the internal control. According to the provisions of “Fundamental Norms for Enterprise
Internal Control”, “Operation Guideline of Enterprise Internal Control” and “Evaluation Guideline of Enterprise Internal Control”,
the company has established, perfected and effectively implemented the internal control, and made an evaluation for its
effectiveness, which are the responsibilities of the Board of Directors of Shenzhen Textile.
2. The responsibility of CPA. The company shall be responsible for the expression of audit opinions on the effectiveness of internal
control in the financial statement and the disclosure of serious deficiency of internal control except for the financial statement on
the basis of the implementation of audit.
3. The inherent limitation of internal control. There is the possibility of unpreventable errors. In addition, due to the change of
situation, the inappropriate internal control is maybe shown, or the control policy and the abidance of procedure can be reduced.
Based on the audit results of internal control, the future internal control is expected to have a certain risk.
4. The audit opinions of internal control in the financial statement. The company believes that Shenzhen Textile has maintained the
effective internal control of the financial statement in all the major aspects according to “Fundamental Norms for Enterprise
Internal Control” and the relevant provisions on December 31, 2017.
Peking Certified Public Accountants(Special General Partnership)
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Chinese C.P.A.
Li Yong
Chinese C.P.A.
Lan Tao
March 28, 2018
Disclosure date of audit report
Disclosure
of internal control (full-text)
Index of audit report of
March 29,2018
internal control (full-text)
Juchao Website: （http://www.cninfo.com.cn）;Audit reort of internal control of Peking
Internal audit report’s opinion
Certified Public Accountants (QXSZ(2018)No.：0394
Type of audit report on internal
Unqualified auditor’s report
control
Whether there is significant
No
defectin non-financial report
Has the CPAs issued a qualified auditor’s report of internal control .
□ Yes √No
Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of
Directors
√Yes □No
X. Corporation bonds
Whether or not the Company public offering corporation bonds in stock exchange, which undue or without
payment in full at maturity on the approval date for annual report disclosed
No
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
XI. Financial Report
I. Audit report
Type eof audit opinion
Date for signing the auditor’s report March 27,2018
Peking Certified Public Accountants(Special General
Name of audit firm
Partnership)
The audit report number Qin Xin Zi【2018】No.0393
Name of the certified accountants Li Yong , Lan Tao
Auditors’ Report
Qin Xin Shen Zi (2018)]No. 0393
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, 2017, 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, 2017 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. KeyAudit 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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
1. Description of matters
As indicated in Remark Ⅴ(35) of the financial statement, the revenues of the period of Shenzhen Textile
(Holdings) Co., Ltd is RMB1, 475, 545, 719.72, 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 the company’s operating results and shall be
confirmed as one key item of audit.
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 Remark Ⅴ(7) 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 RMB52, 018, 026.82; 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 2017, 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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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. Li Yong
Chinese C.P.A. Lan Tao
March 27,2018
II. Financial Statements
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated balance sheet
Prepared by: Shenzhen Textile (Holdings) Co., Ltd.
In RMB
Items Notes At the end of term Beginning of term
Current asset：
Monetary fund (1) 1,165,048,108.83 933,856,912.73
Settlement provision
Outgoing call loan
Financial assets measured at fair value with
variations accounted into current income
account
Derivative financial assets
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Bill receivable （2） 44,207,119.00 41,908,315.45
Account receivable （3） 192,503,077.70 220,222,019.41
Prepayments （4） 13,755,152.05 6,773,323.14
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts receivable
Interest receivable （5） 15,728,872.62 6,652,883.11
Dividend receivable
Other account receivable （6） 12,925,984.45 67,272,556.72
Repurchasing of financial assets
Inventories （7） 275,615,176.16 283,371,714.07
Assets held for sales
Non-current asset due in 1 year
Other current asset （8） 1,148,689,874.10 1,428,043,157.76
Total of current assets 2,868,473,364.91 2,988,100,882.39
Non-current assets：
Loans and payment on other’s behalf disbursed
Disposable financial asset （9） 66,035,733.04 41,565,777.96
Expired investment in possess
Long-term receivable
Long term share equity investment （10） 20,380,734.56 24,849,311.00
Property investment （11） 173,105,806.27 179,324,547.77
Fixed assets （12） 656,133,200.19 723,685,287.56
Construction in progress （13） 322,570,173.73 119,804,231.43
Engineering material
Fixed asset disposal
Production physical assets
Gas & petrol
Intangible assets （14） 38,870,673.40 39,698,654.32
R & D petrol
Goodwill （15）
Long-germ expenses to be amortized （16） 1,035,290.08 973,081.68
Deferred income tax asset （17） 1,974,536.90 1,584,492.36
Other non-current asset （18） 47,166,994.48
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Total of non-current assets 1,327,273,142.65 1,131,485,384.08
Total of assets 4,195,746,507.56 4,119,586,266.47
Current liabilities
Short-term loans (19) 88,638,181.45 12,335,695.77
Loan from Central Bank
Deposit received and hold for others
Call loan received
Financial liabilities measured at fair value with
variations accounted into current income
account
Derivative financial liabilities
Bill payable
Account payable (20) 97,104,697.18 175,461,715.72
Advance payment (21) 34,952,567.83 30,297,446.49
Selling of repurchased financial assets
Fees and commissions receivable
Employees’ wage payable (22) 29,503,260.65 27,379,719.86
Tax payable (23) 6,935,262.57 13,995,726.19
Interest payable (24) 45,799,544.04 42,842,605.52
Dividend payable
Other account payable (25) 155,026,799.54 147,108,590.19
Reinsurance fee payable
Insurance contract provision
Entrusted trading of securities
Entrusted selling of securities
Liabilities held for sales
Non-current liability due in 1 year (26) 40,000,000.00 40,000,000.00
Other current liability
Total of current liability 497,960,313.26 489,421,499.74
Non-current liabilities：
Long-term loan (27) 40,000,000.00 80,000,000.00
Bond payable
Including：preferred stock
Sustainable debt
Long-term payable
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Long-term payable employees’s remuneration
Special payable
Expected liabilities
Deferred income (28) 134,767,064.72 110,045,784.62
Deferred income tax liability
Other non-current liabilities
Total non-current liabilities 174,767,064.72 190,045,784.62
Total of liability 672,727,377.98 679,467,284.36
Owners’ equity
Share capital (29) 511,274,149.00 506,521,849.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves (30) 1,866,001,475.17 1,837,205,251.95
Less：Shares in stock （31） 27,230,679.00
Other comprehensive income (32) 2,218,703.87 3,392,222.07
Special reserves
Surplus reserves (33) 77,477,042.19 73,710,682.05
Common risk provision
Undistributed profit (34) -32,266,087.44 -81,275,828.76
Total of owner’s equity belong to the parent
2,397,474,603.79 2,339,554,176.31
company
Minority shareholders’ equity 1,125,544,525.79 1,100,564,805.80
Total of owners’ equity 3,523,019,129.58 3,440,118,982.11
Total of liabilities and owners’ equity 4,195,746,507.56 4,119,586,266.47
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
2. Balance sheet of Parent Company
In RMB
Items Notes XV Year-end balance Year-beginning balance
Current asset：
Monetary fund 413,700,327.95 440,685,610.11
Financial assets measured at fair value with
variations accounted into current income
account
Derivative financial assets
Bill receivable 1,000,000.00
Account receivable (1) 449,536.21 492,974.01
Prepayments 10,000.00 120,000.00
Interest receivable 13,660,866.80 3,218,526.94
Dividend receivable
Other account receivable (2) 5,782,620.63 12,524,256.75
Inventories
Assets held for sales
Non-current asset due in 1 year
Other current asset 120,000,000.00 30,000,000.00
Total of current assets 553,603,351.59 488,041,367.81
Non-current assets：
Disposable financial asset 36,035,733.04 40,065,777.96
Expired investment in possess
Long-term receivable
Long term share equity investment (3) 1,984,849,008.23 1,989,073,077.61
Property investment 165,607,900.07 172,279,313.75
Fixed assets 28,119,990.58 27,403,189.39
Construction in progress
Engineering material
Fixed asset disposal
Production physical assets
Gas & petrol
Intangible assets 1,413,305.67 1,345,846.59
R & D petrol
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Goodwill
Long-germ expenses to be amortized
Differed income tax asset 1,526,871.33 1,919,804.30
Other non-current asset 493,620.44
Total of non-current assets 2,218,046,429.36 2,232,087,009.60
Total of assets 2,771,649,780.95 2,720,128,377.41
Current liabilities
Short-term loans
Financial liabilities measured at fair value with
variations accounted into current income
account
Derivative financial liabilities
Bill payable
Account payable 411,743.57 411,743.57
Advance payment 639,024.58 639,024.58
Employees’ wage payable 8,495,538.21 6,533,138.24
Tax payable 3,247,028.64 4,398,387.25
Interest payable
Dividend payable
Other account payable 134,018,771.57 120,954,892.58
Liabilities held for sales
Non-current liability due in 1 year
Other current liability
Total of current liability 146,812,106.57 132,937,186.22
Non-current liabilities：
Long-term loan
Bond payable
Including：preferred stock
Sustainable debt
Long-term payable
Employees’ wage payable
Special payable
Expected liabilities
Differed income 800,000.00
Deferred income tax liability
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Other non-current liabilities
Total of Non-current liabilities 800,000.00
Total of liability 147,612,106.57 132,937,186.22
Owners’ equity
Share capital 511,274,149.00 506,521,849.00
Other equity instrument
Including：preferred stock
Sustainable debt
Capital reserves 1,599,381,854.96 1,576,547,075.96
Less：Shares in stock 27,230,679.00
Other comprehensive income 2,218,703.87 3,392,222.07
Special reserves
Surplus reserves 77,477,042.19 73,710,682.05
Undistributed profit 460,916,603.36 427,019,362.11
Total of owners’ equity 2,624,037,674.38 2,587,191,191.19
Total of liabilities and owners’ equity 2,771,649,780.95 2,720,128,377.41
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
3.Consolidated Income statement
In RMB
Same period of the previous
Items Notes V Report period
year
I. Income from the key business 1,475,545,719.72 1,198,200,216.42
Incl：Business income (35) 1,475,545,719.72 1,198,200,216.42
Interest income
Insurance fee earned
Fee and commission received
II. Total business cost 1,455,500,581.34 1,296,343,917.53
Incl：Business cost (35) 1,299,603,719.37 1,128,134,488.54
Interest expense
Fee and commission paid
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Insurance discharge payment
Net claim amount paid
Insurance policy dividend paid
Insurance policy dividend paid
Reinsurance expenses
Business tax and surcharge (36) 13,962,996.87 10,337,248.55
Sales expense (37) 9,940,696.87 10,161,699.85
Administrative expense (38) 114,356,601.65 106,901,733.12
Financial expenses (39) -31,171,160.81 -1,678,136.65
Asset impairment loss (40) 48,807,727.39 42,486,884.12
Add：Gains from change of fir value （“-”for
loss）
Investment gain（“-”for loss） (41) 53,555,819.95 5,223,413.76
Incl: investment gains from affiliates 1,101,479.62 1,467,403.29
Gains from currency exchange
Assets dispose loss
Other income (42) 12,567,426.98
III. Operational profit（“-”for loss） 86,168,385.31 -92,920,287.35
Add ：Non-operational income (43) 787,567.93 15,072,447.15
Less：Non business expenses (44) 2,015,456.96 138,691.94
IV.Total profit(“-”for loss) 84,940,496.28 -77,986,532.14
Less：Income tax expenses (45) 11,278,818.41 9,284,072.40
V. Net profit 73,661,677.87 -87,270,604.54
1.Net continuing operating profit 73,661,677.87 -87,270,604.54
2.Termination of operating net profit
Net profit attributable to the owners of parent
52,776,101.46 -87,270,604.54
company
Minority shareholders’ equity 20,885,576.41
VI. Other comprehensive income （46） -1,173,518.20 180,034.72
Net of profit of other comprehensive income att
-1,173,518.20 180,034.72
ributable to owners of the parent company.
（I）Other comprehensive income items that
will not be reclassified into gains/losses in the
subsequent accounting period
1.Re-measurement of defined benefit plans of c
hanges in net debt or net assets
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
2.Other comprehensive income under the equity
method investee can not be reclassified into pro
fit or loss.
（II）
Other comprehensive income that will be reclas -1,173,518.20 180,034.72
sified into profit or loss.
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 av
-288,326.89 -1,256,809.58
ailable for sale financial assets
3.Held-to-maturity investments reclassified to g
ains and losses of available for sale financial ass
ets
4.The effective portion of cash flow hedges and
losses
5.Translation differences in currency financial s
-885,191.31 1,436,844.30
tatements
6.Other
Net of profit of other comprehensive income att
ributable to Minority shareholders’ equity
VII. Total comprehensive income 72,488,159.67 -87,090,569.82
Total comprehensive income attributable to
51,602,583.26 -87,090,569.82
the owner of the parent company
Total comprehensive income attributable
20,885,576.41
minority shareholders
VIII. Earnings per share
（I）Basic earnings per share 0.10 -0.17
(II)Diluted earnings per share 0.10 -0.17
The current business combination under common control, the net profits of the combined party before achieved ne
t profit of RMB 0.00, last period the combined party realized RMB0.00.
Legal Representative: Zhu Jun
Person in charge of accounting：Zhu Meizhu
Accounting Dept Leader: Mu Linying
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
4. Income statement of the Parent Company
In RMB
Notes XV Same period of the previous
Items Report period
year
I. Income from the key business 65,474,614.36 63,923,286.07
Incl：Business cost 14,205,521.55 12,754,930.31
Business tax and surcharge 5,875,973.65 3,823,490.12
Sales expense
Administrative expense 29,587,958.60 28,068,523.83
Financial expenses -13,663,222.04 -12,288,105.49
Asset impairment loss 5,554,598.81 -3,107,155.76
Add：Gains from change of fir value （“-”
for loss）
Investment gain（“-”for loss） 22,719,665.90 4,545,773.24
Incl: investment gains from affiliates 1,101,479.62 1,467,403.29
Assets disposal income
Other income 5,638.35
II. Operational profit（“-”for loss） 46,639,088.04 39,217,376.30
Add ：Non-operational income 1,510.00 23,692.50
Less：Non business expenses 477,949.40 117,153.06
III.Total profit(“-”for loss) 46,162,648.64 39,123,915.74
Less：Income tax expenses 8,499,047.25 7,410,293.85
IV. Net profit（“-”for net loss） 37,663,601.39 31,713,621.89
1.Net continuing operating profit 37,663,601.39 31,713,621.89
2.Termination of operating net profit
V.Net of profit of other comprehensive income -1,173,518.20 180,034.72
（I）Other comprehensive income items that
will not be reclassified into gains/losses in the
subsequent accounting period
1.Re-measurement of defined benefit plans of c
hanges in net debt or net assets
2.Other comprehensive income under the equity
method investee can not be reclassified into pro
fit or loss.
（ II ）
-1,173,518.20 180,034.72
Other comprehensive income that will be reclas
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
sified into profit or loss.
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 av
-288,326.89 -1,256,809.58
ailable for sale financial assets
3.Held-to-maturity investments reclassified to g
ains and losses of available for sale financial ass
ets
4.The effective portion of cash flow hedges and
losses
5.Translation differences in currency financial s
-885,191.31 1,436,844.30
tatements
6.Other
VI. Total comprehensive income 36,490,083.19 31,893,656.61
VII. Earnings per share：
（I）Basic earnings per share
(II)Diluted earnings per share
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
5. Consolidated Cash flow statement
In RMB
Same period of the previous
Items Notes V Report period
year
I.Cash flows from operating activities
Cash received from sales of goods or rending of
1,587,525,262.02 1,151,157,518.74
services
Net increase of customer deposits and capital
kept for brother company
Net increase of loans from central bank
Net increase of inter-bank loans from other
financial bodies
Cash received against original insurance
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
contract
Net cash received from reinsurance business
Net increase of client deposit and investment
Net increase of trade financial asset disposal
Cash received as interest, processing fee and
commission
Net increase of inter-bank fund received
Net increase of repurchasing business
Tax returned 47,028,145.81 69,122,511.24
Other cash received from business operation (47) 112,007,561.78 68,307,793.54
Sub-total of cash inflow 1,288,587,823.52
1,746,560,969.61
Cash paid for purchasing of merchandise and
1,511,459,801.99 1,085,677,364.56
services
Net increase of client trade and advance
Net increase of savings n central bank and
brother company
Cash paid for original contract claim
Cash paid for interest, processing fee and
commission
Cash paid for policy dividend
Cash paid to staffs or paid for staffs 133,551,583.94 129,329,006.02
Taxes paid 77,287,145.15 47,012,479.57
Other cash paid for business activities (47) 52,781,140.84 81,833,439.21
Sub-total of cash outflow from business
1,343,852,289.36
activities 1,775,079,671.92
Cash flow generated by business operation, net -55,264,465.84
-28,518,702.31
II.Cash flow generated by investing
Cash received from investment retrieving 2,366,612.87
Cash received as investment gains 5,921,598.83 3,633,486.12
Net cash retrieved from disposal of fixed assets,
6,740.00 160.00
intangible assets, and other long-term assets
Net cash received from disposal of subsidiaries
or other operational units
Other investment-related cash received (47) 3,566,066,407.98 845,568,256.74
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Sub-total of cash inflow due to investment
3,571,994,746.81 851,568,515.73
activities
Cash paid for construction of
fixed assets, intangible assets 254,484,019.80 114,577,108.61
and other long-term assets
Cash paid as investment 28,500,000.00
Net increase of loan against pledge
Net cash received from subsidiaries and other
operational units
Other cash paid for investment activities (47) 3,093,000,000.00 1,766,000,000.00
Sub-total of cash outflow due to investment
3,375,984,019.80 1,880,577,108.61
activities
Net cash flow generated by investment 196,010,727.01 -1,029,008,592.88
III.Cash flow generated by financing
Cash received as investment 27,230,679.00 1,352,640,000.00
Incl: Cash received as investment from minor
1,352,640,000.00
shareholders
Cash received as loans 189,660,085.68 228,579,582.43
Cash received from bond placing
Other financing –related ash received 6.38
Sub-total of cash inflow from financing
216,890,764.68 1,581,219,588.81
activities
Cash to repay debts 150,340,039.30 315,726,235.45
Cash paid as dividend, profit, or interests 1,048,268.16 850,946.99
Incl: Dividend and profit paid by subsidiaries to
minor shareholders
Other cash paid for financing activities
Sub-total of cash outflow due to financing
151,388,307.46 316,577,182.44
activities
Net cash flow generated by financing 65,502,457.22 1,264,642,406.37
IV. Influence of exchange rate alternation on
-1,868,779.16 1,086,213.32
cash and cash equivalents
V.Net increase of cash and cash equivalents 231,125,702.76 181,455,560.97
Add: balance of cash and cash equivalents at the
930,114,436.57 748,658,875.60
beginning of term
VI ..Balance of cash and cash equivalents at the
1,161,240,139.33 930,114,436.57
end of term
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
6. Cash Flow Statement of the Parent Company
In RMB
Items Notes XV Amount in this period Amount in last period
I.Cash flows from operating activities
Cash received from sales of goods or rending of
66,552,835.48 66,944,479.62
services
Tax returned
Other cash received from business operation 14,836,257.91 104,001,892.47
Sub-total of cash inflow 81,389,093.39 170,946,372.09
Cash paid for purchasing of merchandise and
5,055,450.06 6,013,836.98
services
Cash paid to staffs or paid for staffs 17,811,799.19 17,161,992.17
Taxes paid 18,156,899.52 20,714,808.63
Other cash paid for business activities 7,297,312.65 23,027,843.36
Sub-total of cash outflow from business
48,321,461.42 66,918,481.14
activities
Cash flow generated by business operation, net 33,067,631.97 104,027,890.95
II.Cash flow generated by investing
Cash received from investment retrieving
Cash received as investment gains 5,087,575.52 10,754,224.11
Net cash retrieved from disposal of fixed assets,
1,510.00
intangible assets, and other long-term assets
Net cash received from disposal of subsidiaries
or other operational units
Other investment-related cash received 262,490,733.61 326,615,158.57
Sub-total of cash inflow due to investment
267,579,819.13 337,369,382.68
activities
Cash paid for construction of
fixed assets, intangible assets 4,857,553.44 4,300,131.91
and other long-term assets
Cash paid as investment 208,000,000.00
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Net cash received from subsidiaries and other
operational units
Other cash paid for investment activities 350,000,000.00 60,000,000.00
Sub-total of cash outflow due to investment
354,857,553.44 272,300,131.91
activities
Net cash flow generated by investment -87,277,734.31 65,069,250.77
III.Cash flow generated by financing
Cash received as investment 27,230,679.00
Cash received as loans
Cash received from bond placing
Other financing –related ash received 6.38
Sub-total of cash inflow from financing
27,230,679.00 6.38
activities
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 6.38
IV. Influence of exchange rate alternation on
-5,858.82 5,712.98
cash and cash equivalents
V.Net increase of cash and cash equivalents -26,985,282.16 169,102,861.08
Add: balance of cash and cash equivalents at
440,685,610.11 271,582,749.03
the beginning of term
VI ..Balance of cash and cash equivalents at the
413,700,327.95 440,685,610.11
end of term
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
7. Consolidated Statement on Change in Owners’ Equity
Amount in this period
In RMB
Items Amount in this period
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Owner’s equity Attributable to the Parent Company
Other Equity
Minor
instrument Total of
Other Commo
Share Less: Speciali Attribut shareho
Capital Compre Surplus n risk owners’
Capita prefer Shares zed able lders’
Sustai reserves hensive reserves provisio equity
l red Other in stock reserve profit equity
nable Income n
stock
debt
506,52 1,837,2 1,100,5 3,440,1
I.Balance at the 3,392,2 73,710, -81,275,
1,849. 05,251. 64,805. 18,982.
end of last year 22.07 682.05 828.76
00 95 80 11
Add: Change of
accounting
policy
Correcting of
previous errors
Merger of entities
under common
control
Other
II.Balance at the 506,52 1,837,2 1,100,5 3,440,1
3,392,2 73,710, -81,275,
beginning of 1,849. 05,251. 64,805. 18,982.
22.07 682.05 828.76
current year 00 95 80 11
III.Changed in the 4,752, 28,796, 27,230, -1,173,5 3,766,3 49,009, 24,979, 82,900,
current year 300.00 223.22 679.00 18.20 60.14 741.32 719.99 147.47
（1）Total
-1,173,5 52,776, 20,885, 72,488,
comprehensive
18.20 101.46 576.41 159.67
income
（II）Investment
4,752, 22,762, 27,230, 284,491
or decreasing of
300.00 870.54 679.00 .54
capital by owners
1．Ordinary Share
4,752, 22,478, 27,230,
s invested by share
300.00 379.00 679.00
holders
2 ． Holders of oth
er equity instrume
nts invested capital
3．Amount of
shares paid and 284,491 284,491
accounted as .54 .54
owners’ equity
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
4．Other
（III）Profit 3,766,3 -3,766,3
allotment 60.14 60.14
1.Providing of 3,766,3 -3,766,3
surplus reserves 60.14 60.14
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. Other
(V). Special
reserves
1. Provided this
year
2．Used this term
6,033,3 4,094,1 10,127,
（VI）Other
52.68 43.58 496.26
511,27 1,866,0 1,125,5 3,523,0
IV. Balance at the 27,230, 2,218,7 77,477, -32,266,
4,149. 01,475. 44,525. 19,129.
end of this term 679.00 03.87 042.19 087.44
00 17 79 58
Amount in last year
In RMB
Items Amount in last year
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Owner’s equity Attributable to the Parent Company
Other Equity
Minor
instrument Other Commo Total of
Share Less: Speciali Attribut shareho
Capital Compre Surplus n risk owners’
Capita prefer Shares zed able lders’
reserves hensive reserves provisio equity
Sustai
l red Other in stock reserve profit equity
nable Income n
stock
debt
506,52 1,585,1 2,174,5
I.Balance at the 3,212,1 70,539, 9,166,1
1,849. 30,051. 69,545.
end of last year 87.35 319.86 37.97
00 37
Add: Change of
accounting
policy
Correcting of
previous errors
Merger of entities
under common
control
Other
II.Balance at the 506,52 1,585,1 2,174,5
3,212,1 70,539, 9,166,1
beginning of 1,849. 30,051. 69,545.
87.35 319.86 37.97
current year 00 37
1,100,5 1,265,5
III.Changed in the 252,075 180,034 3,171,3 -90,441,
64,805. 49,436.
current year ,200.58 .72 62.19 966.73
80 56
（1）Total
180,034 -87,270, -87,090,
comprehensive
.72 604.54 569.82
income
（II）Investment 1,100,5 1,352,6
252,075
or decreasing of 64,805. 40,000.
,194.20
capital by owners 80 00
1．Ordinary Share
s invested by share
holders
2 ． Holders of oth
er equity instrume
nts invested capital
3．Allotment to the
owners (or
shareholders)
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
1,100,5 1,352,6
252,075
4．Other 64,805. 40,000.
,194.20
80 00
（III）Profit 3,171,3 -3,171,3
allotment 62.19 62.19
1.Providing of 3,171,3 -3,171,3
surplus reserves 62.19 62.19
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. Other
(V) Special
reserves
1. Provided this
year
2．Used this term
（VI）Other 6.38 6.38
506,52 1,837,2 1,100,5 3,440,1
IV. Balance at the 3,392,2 73,710, -81,275,
1,849. 05,251. 64,805. 18,982.
end of this term 22.07 682.05 828.76
00 95 80 11
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
8.Statement of change in owner’s Equity of the Parent Company
Amount in this period
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
In
RMB
Amount in this period
Other Equity instrument
Other
Less: Attribut Total of
Items Share Capital Compreh Specialize Surplus
preferre Sustain Shares in able owners’
Capital Other reserves ensive d reserve reserves
d stock able stock profit equity
Income
debt
I.Balance at the 506,521, 1,576,547 3,392,222 73,710,68 427,019 2,587,191
end of last year 849.00 ,075.96 .07 2.05 ,362.11 ,191.19
Add: Change of
accounting
policy
Correcting of
previous errors
Other
II.Balance at the
506,521, 1,576,547 3,392,222 73,710,68 427,019 2,587,191
beginning of
849.00 ,075.96 .07 2.05 ,362.11 ,191.19
current year
III.Changed in the 4,752,30 22,834,77 27,230,67 -1,173,51 3,766,360 33,897, 36,846,48
current year 0.00 9.00 9.00 8.20 .14 241.25 3.19
（I）Total
-1,173,51 37,663, 36,490,08
comprehensive
8.20 601.39 3.19
income
(II) Investment or
4,752,30 22,834,77 27,230,67 356,400.0
decreasing of
0.00 9.00 9.00
capital by owners
1．Ordinary Share
4,752,30 22,478,37 27,230,67
s invested by share
0.00 9.00 9.00
holders
2 ． Holders of oth
er equity instrume
nts invested capital
3.Amount of
shares paid and 356,400.0 356,400.0
accounted as 0
owners’ equity
4．Other
（III）Profit 3,766,360 -3,766,3
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
allotment .14 60.14
1.Providing of 3,766,360 -3,766,3
surplus reserves .14 60.14
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. Other
(V) Special
reserves
1. Provided this
year
2．Used this term
（VI）Other
IV. Balance at the 511,274, 1,599,381 27,230,67 2,218,703 77,477,04 460,916 2,624,037
end of this term 149.00 ,854.96 9.00 .87 2.19 ,603.36 ,674.38
Amount in last year
In RMB
Amount in last year
Other Equity instrument
Other
Less: Attribut Total of
Items Share Capital Compreh Specialize Surplus
preferre Sustain Shares in able owners’
Capital Other reserves ensive d reserve reserves
d stock able stock profit equity
Income
debt
I.Balance at the 506,521, 1,576,547 3,212,187 70,539,31 398,477 2,555,297
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
end of last year 849.00 ,069.58 .35 9.86 ,102.41 ,528.20
Add: Change of
accounting
policy
Correcting of
previous errors
Other
II.Balance at the
506,521, 1,576,547 3,212,187 70,539,31 398,477 2,555,297
beginning of
849.00 ,069.58 .35 9.86 ,102.41 ,528.20
current year
III.Changed in the 180,034.7 3,171,362 28,542, 31,893,66
6.38
current year 2 .19 259.70 2.99
（I）Total
180,034.7 31,713, 31,893,65
comprehensive
2 621.89 6.61
income
(II) Investment or
decreasing of
capital by owners
1．Ordinary Share
s invested by share
holders
2 ． Holders of oth
er equity instrume
nts invested capital
3.Amount of
shares paid and
accounted as
owners’ equity
4．Other
（III）Profit 3,171,362 -3,171,3
allotment .19 62.19
1.Providing of 3,171,362 -3,171,3
surplus reserves .19 62.19
2．Allotment to the
owners (or
shareholders)
3．Other
(IV)Internal
transferring of
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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. Other
(V) Special
reserves
1. Provided this
year
2．Used this term
（VI）Other 6.38 6.38
IV. Balance at the 506,521, 1,576,547 3,392,222 73,710,68 427,019 2,587,191
end of this term 849.00 ,075.96 .07 2.05 ,362.11 ,191.19
Legal Representative: Zhu Jun
Person-in-charge of the accounting work：Zhu Meizhu
Person-in -charge of the accounting organ：Mu Linying
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
III. Basic Information of the Company
(1)Co mpa n y P ro file
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 on R&D, production and
marketing of polarizers for liquid crystal display, management of properties in bustling business
districts of Shenzhen and reserved high-class textile and garment business.
3. Approval of the financial statements reported
The financial statements have been authorized for issuance by the Board of Directors of the Group on
March 27,2018.
(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:Shenzhen Shengbo Optoelectronic Technology Co., Ltd., Shenzhen Lisi
Industrial Development Co., Ltd.,Shenzhen Huaqiang Hotel, Shenzhen Shenfang Property
Management Co., Ltd. Shenzhen Beaufity Garments Co., Ltd. ,Shzhen Shenfang Import & Export
Co., Ltd., and Shengtou (Hongkong) Co., Ltd.
2．The scope of consolidated financial statements this period did not change.
IV.Basis for the preparation of financial statements
（1）Basis for the preparation
This company’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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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 Companyin cash or cash equivalents from the purchase
of assets form pocessing 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 same control：
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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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 the Company’s own accounting period or accounting policies. Where a subsidiary was
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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 within shareholders’/ 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 minority shareholders’ portion of the opening balance of shareholders’/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 former subsidiary’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 package deal:①these transactions are considered。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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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 partieshave joint control，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, andobligations for the liabilities, relating
to the arrangement. A joint venture is a joint arrangement whereby the Company has rights to the net
assets of thearrangement.
(2)Co-operation accounting treatment
When the joint venture company for joint operations, confirm the following items and share common
business interests related to:
（1）Confirm individual assets and common assets held based on shareholdings;
（2）Confirm individual liabilities and shared liabilities held based on shareholdings;
（3）Confirm the income from the sales revenue of co-operate business output
（4）Confirm the income from the sales of the co-operate business output based on shareholdings;
（5）Confirm the individual expenditure and co-operate business cost based on shareholdings.
(3)When a company is a joint ventures, joint venture investment will be recognized as long-term equi
ty investments .
8.Recognition Standard of Cash & Cash Equivalents
Cash and cash equivalents of the Company include cash on hand, ready usable deposits and
investments having short holding term (normally will be due within three months from the day of
purchase), with strong liquidity and easy to be exchanged into certain amount of cash that can be
measured reliably and have low risks of change.
9.Foreign Currency Transaction
（1）Foreign Currency Transaction
The approximate shot exchange rate on the transaction date is adopted and translated as RMB amount
when the foreign currency transaction is initially recognized. On the balance sheet date, the monetary
items of foreign currency are translated as per the shot exchange rate on the balance sheet date, the
foreign exchange conversion gap due to the exchange rate, except for the balance of exchange
conversion arising from special foreign currency borrowings capitals and interests for the purchase
and construction of qualified capitalization assets, shall be recorded into the profits and losses of the
current period. The non-monetary items of foreign currency measured at the historical cost shall still
be translated at the spot exchange rate on the transaction date, of which the RMB amount shall not be
changed. The non-monetary items of foreign currency measured at the fair value shall be translated at
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
the spot exchange rate on the fair value recognized date, the gap shall be recorded into the current
profits and losses or other comprehensive incomes.
(2) Translation Method of Foreign Currency Financial Statement
For the assets and liabilities in the balance sheet, the shot exchange rate on the balance sheet date is
adopted as the translation exchange rate. For the owner’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
the owner’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 and liabilities’ fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’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
recent arm’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, the Company’s financial assets are classified into including financial
assets at fair value though profit or loss, held-to maturity investments, loans and receivables and
available-for-trade assets.
（1） Financial assets at fair value through profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit or
loss.Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A. the financial asset is acquired for the purpose of selling it in a short term;
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively
managed, and there is objective evidence indicating that the enterprise recently manages this portfolio
for the purpose of short-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective hedging
instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by
delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair
value cannot be reliably measured. For such kind of financial assets, fair values are adopted for
subsequent measurement.
Financial asset is designated on initial recognition as at fair value through profit or loss only when it
meets one of the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement or
recognition of relevant gains or losses that would otherwise arise from measuring the financial
instruments on different bases.
B. a Group of financial instruments is managed and its performance is evaluated on a fair value basis,
and is reported to the enterprise’s key management personnels. Formal documentation regarding risk
management or investment strategy has prepared。
Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any
gains or losses arising from changes in the fair value and any dividends or interest income earned on
the financial assets are recognized in the profit or loss.
（2）Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments
and fixed maturity that an entity has the positive intention and ability to hold to maturity. Such kind
of financial assets are subsequently measured at amortized cost using the effective interest method.
Gains or losses arising from derecognition, impairment or amortization are recognized in profit or
loss for the current period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through the
expected life of the financial asset or financial liability or, where appropriate, a shorter period to the
net carrying amount of the financial asset or financial liability. When calculating the effective interest
rate, the Company shall estimate future cash flow considering all contractual terms of the financial
asset or financial liability without considering future credit losses, and also consider all fees paid or
received between the parties to the contract giving rise to the financial asset and financial liability that
are an integral part of the effective interest rate, transaction costs, and premiums or discounts, etc.
（3）Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment that are
not quoted in an active market. Financial assets classified as loans and receivables by the Company
include note receivables, account receivables, interest receivable dividends receivable and other
receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest
method. Gain or loss arising from derecognition, impairment or amortization is recognized in profit
or loss.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
（4）Financial assets available-for-trade
Financial assets available-for-trade include non-derivative financial assets that are designated on
initial recognition as available for trade, and financial assets that are not classified as financial assets
at fair value through profit or loss, loans and receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses
arising from changes in the fair value are recognized as other comprehensive income and included in
the capital reserve, except that impairment losses and exchange differences related to amortized cost
of monetary financial assets denominated in foreign currencies are recognized in profit or loss, until
the financial assets are derecognized, at which time the gains or losses are released and recognized in
profit or loss. Interests obtained and dividends declared by the investee during the period in which the
financial assets available-for-trade are held, are recognized in investment gains.
3. Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for
the financial assets that measured by the fair value. If there is objective evidence indicating a
financial asset may be impaired, a provision is provided for the impairment.
The company shall make an independent impairment test on the financial assets with significant
single amounts, and carry out an independent impairment test on the financial assets with
insignificant single amounts, or conduct an impairment-related test after they are included in a
combination of financial assets with similar credit risk features so as to carry out. Where, upon
independent test, the financial asset (including those financial assets with significant single amounts
and those with insignificant amounts) has not been impaired, it shall be included in a combination of
financial assets with similar risk features so as to conduct another impairment test. The financial
assets which have suffered from an impairment loss in any single amount shall not be included in any
combination of financial assets with similar risk features for any impairment test.
（1）Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the
estimated present value of future cash flow. The difference is recorded as impairment loss. If there is
objective evidence to indicate the recovery of value of financial assets after impairment, and it is
related with subsequent event after recognition of loss, the impairment loss recorded originally can be
reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the
amortized cost of the financial assets without provisions of impairment loss on the reserving date.
（2）Impairment loss on available-for-trade financial assets
Where the fair value of the equity instrument investment drops significantly or not contemporarily
according to the integrated relevant factors, an available-for-trade financial asset is impaired. The
\"serious decline\" refers to the cumulative fair value declines more than 30%; \"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 thathad been recognized in capital reserve shall be removed and recognized in profit or loss.
The amount of the cumulative loss that is removed shall be difference between the acquisition cost
with deduction of recoverable amount less amortized cost, current fair value and any impairment loss
on that financial asset previously recognized in profit or loss.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
If, after an impairment loss has been recognized, there is objective evidence that the value of the
financial asset is recovered, and it is objectively related to an event occurring after the impairment
loss was recognized, the initial impairment loss can be reversed and the reserved impairment loss on
available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss on
available-for-trade debt instrument is recorded in the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot
be reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by
delivery of such an unquoted equity instrument shall not be reversed.
4. Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under a
pass-through arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either has
transferred substantially all the risks and rewards of the asset, or has neither transferred norretained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over
the asset, the asset is recognized according to the extent it exists as financial asset, and correspondent
liability is recognized. The extent of existence refers the level of risk by the financial asset changes
the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the carrying
amount of the financial asset transferred; and the sum of the consideration received from the transfer
and any cumulative gain or loss that had been recognized in other comprehensive income, is
recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the
transferred financial asset is allocated between the part that continues to be recognized and the part
that is derecognized, based on the relative fair value of those parts. The difference between (a) the
carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for
the part derecognized and any cumulative gain or loss allocated to the part derecognized which has
been previously recognized in other comprehensive income, is recognized in profit or loss.
The Company uses recourse sale financial assets, or financial assets held endorser, determine almost
all of the risks and rewards of ownership of the financial assets have been transferred if. Has
transferred the ownership of the financial assets of almost all the risks and rewards to the transferee,
the derecognition of the financial asset; retains ownership of the financial assets of almost all of the
risks and rewards of financial assets that are not derecognised; neither transfers nor retains ownership
of the financial assets of almost all of the risks and rewards, then continue to determine whether the
enterprise retains control of the assets and the accounting treatment in accordance with the principles
described in the preceding paragraphs.
5. Classification and measurement of financial liabilities
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair
value through profit or loss and other financial liabilities. For financial liabilities at fair value through
profit or loss, relevant transaction costs are immediately recognized in profit or loss for the current
period, and transaction costs relating to other financial liabilities are included in the initial recognition
amounts.
(1)Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the
initial recognition to be measured by the fair value follows the same criteria as the classification by
which financial assets held-for-trade and financial assets designed at the initial recognition to be
measured by the fair value and their changes are recorded in the current profit or loss.For the
financial liabilities measured by the fair value and changes recorded in the profit or loss, fair values
are adopted for subsequent measurement. All the gains or losses on the change of fair value and the
expenses on dividends or interests related to these financial liabilities are recognized in profit or loss
for the current period.
（2）Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price
in an active market and their fair value cannot be measured reliably, is subsequently measured by cost
Other financial liabilities are subsequently measured at amortized cost using the effective interest
method. Gains or losses arising from derecognition or amortization is recognized in profit or loss for
the current period.
6. Derecognition of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation
(or part of it) is discharged or cancelled or has expired. An agreement between the Company (an
existing borrower) and existing lender to replace original financial liability with a new financial
liability with substantially different terms is accounted for as an extinguishment of the original
financial liability and the recognition of a new liability.
When the Company derecognizes a financial liability or a part of it, it recognizes the difference
between the carrying amount of the financial liability (or part of the financial liability) derecognized
the consideration paid (including any non-cash assets transferred or new financial liabilities assumed)
in profit or loss.
7. Offsetting financial assets and financial liabilities
When the Company has a legal right that is currently enforceable to set off the recognized
financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the
financial asset and settle the financial liability simultaneously, a financial asset and a financial
liability shall be offset and the net amount is presented in the balance sheet. Except for the above
circumstances, financial assets and financial liabilities shall be presented separately in the balance
sheet and shall not be offset.
8. Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company
after deducting all of its liabilities. The consideration received from issuing equity instruments, net of
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
transaction costs, are added to shareholders’ equity. All types of distribution (excluding stock
dividends) made by the Company to holders of equity instruments are deducted from shareholders’
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 amount criterial： 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 debt preparation：
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
Name Recognition Criteria Withdrawing Method
Aging Group Division by Aging Aging Analysis Method
(2)Accounts on age basis in the portfolio：
Aging Rate for receivables(%) Rate for other receivables(%)
Within 1 year（Included 1 year） 5.00 5.00
1－2 years 10.00 10.00
2－3 years 30.00 30.00
Over 3 years 50.00 50.00
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
(3)Account receivable with non-material specific amount but specific bad debt preparation
Reasons of Withdrawing Individual Bad Debt
There is any objective evidence shows that it has been impaired.
Provision
The impairment-related losses shall be recognized according to the gap
Withdrawing Method of Bad Debt Provision
between 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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Low cost and short-lived consumable items are amortized using immediate write-off method。
（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 the company’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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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 the
stockholders’ 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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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 the owner’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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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 investing enterprise’s
interest in the fair values of the investee’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 capital reserves。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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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 the owner’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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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.
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2. Initial Measurement and Subsequent Measurement of the Fixed Assets
The fixed assets shall be book kept as per the acquired actual cost, and the depreciation shall be
withdrawn from the subsequent month after the usable status reserved and achieved.
3．The method for depreciation
The method for Expected useful Estimated residual
Category Depreciation
depreciation life（Year） value
House and Building- Straight-line
35 year 4% 2.74%
Production method
House and Building-Non- Straight-line
method 40 years 4% 2.40%
Production
Straight-line
Decoration of Fixed assets 10 years 10.00%
method
Straight-line
Machinery and equipment 10-14 years 4% 9.60%-6.86%
method
Straight-line
Transportation equipment 8 years 4% 12.00%
method
Straight-line
Electronic equipment 8 years 4% 12.00%
method
Straight-line
Other equipment 8 years 4% 12.00%
method
4．Cognizance evidence and pricing method of financial leasing fixed assets
(1) Recognition Criteria of the Fixed Assets under Financing Lease
The financing lease shall be recognized if the following one or several criteria are met: ① the
ownership of the leasing assets shall be transferred to the tenant when the expiration of lease term. ②
the tenant has the option to purchase the leasing assets, and the made purchase price is expected to be
far less than the fair value of the leasing assets in the implementation of the option. Thus, it can be
reasonably recognized that the tenant will implement the option on the lease date. ③ the ownership
of assets is not transferred, but the lease term shall be the most of the life of the lease assets. ④ the
least present value of the lease payment of the tenant and the least present value of the lease receipts
on the lease date almost equal to the fair value of the leasing assets on the lease date respectively. ⑤
the leasing assets have the special nature, and only the tenant can use if there is no major
modifications.
(2) Valuation of Fixed Assets Acquired under Finance Leases: the fixed assets acquired under finance
leases shall be book kept according to the lower between the fair value of the leasing assets and the
least lease payment on the lease date.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
(3) Depreciation Method of Fixed Assets Acquired under Finance Leases: the depreciation shall be
withdrawn for the fixed assets acquired under finance leases as per the depreciation policy of own
fixed assets.
17.Construction in progress
1. The projects under construction shall be recognized when the economic benefits may flow into and
the cost can be reliably measured. Meanwhile, the projects under construction shall be measured
according to the actual cost occurred before the assets are built to achieve the expected usable
condition.
2. The projects under construction shall be transferred into the fixed assets according to the actual
project costs when the expected usable condition achieved. For the expected usable condition
achieved while the final accounts for completed projects not handled yet, the projects shall be
transferred into the fixed assets as per the estimated value. After the final accounts for completed
projects handled, the original estimated value shall be adjusted as per the actual cost, but the original
withdrawn depreciation shall not be adjusted again.
18.Borrowing costs
1. Recognition principles for capitalizing of loan expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or
production of asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of
related asset. Other borrowing expenses are recognized as expenses according to the occurred amount,
and accounted into gain/loss of current term.
2. Duration of capitalization of Loan costs
(1).When a loan expense satisfies all of the following conditions, it is capitalized:
1. Expenditures on assets have taken place.
2. Loan costs have taken place;
3. The construction or production activities to make assets to reach the intended use or sale of state
have begun.
（2）Capitalization of borrowing costs is suspended during periods in which the acquisition,
construction or production of a qualifying asset is interrupted by activities other than those necessary
to prepare the asset for its intended use or sale, when the interruption is for a continuous period of
more than 3 months. Borrowing costs incurred during these periods recognized as an expense for the
current period until the acquisition, construction or production is resumed.
（3）When the construction or production meets the intended use or sale of state of capitalization
conditions, the Loan costs should stop capitalization.
3. Computation Method for Capitalization Rate and Amount of Borrowing Costs
With regard to the special borrowings for the purchase and construction of qualified assets, the
capitalized interest amount shall be recognized according to the amount of the interest cost for the
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
special borrowings actually occurred during the current period (including the amortization of discount
or premium recognized as per the effective interest method) minus the interest income acquired after
the borrowings deposit in bank or the investment income obtained from the temporary investment.
For the general borrowings for the purchase and construction of qualified assets, the capitalized
interest amount of the general borrowings shall be computed and recognized according to the
weighted average of accumulative asset expense beyond the expense of the special borrowings,
multiplying the capitalization rate of general borrowings.
19.Intangible assets
1. Valuation Method, Service Life and Impairment Test of Intangible Assets
(1) The intangible assets include the land use rights, the professional technology and the software,
which are conducted the initial measurement as per the cost.
(2) The service life of intangible assets is analyzed and judged when of the company acquires the
intangible assets. For the finite service life of the intangible assets, the years of service life or the
quantity of service life formed and the number of similar measurement unit shall be estimated. If the
term of economic benefits of the intangible assets brought for the company is not able to be foreseen,
the intangible assets shall be recognized as that with the indefinite service life.
(3) Estimation Method of Service life of Intangible Assets
1) For the intangible assets with the finite service life, the company shall generally consider the
following factors to estimate the service life: ① the normal service life of products produced with the
assets, and the acquired information of the service life of similar assets. ② the estimation of the
current stage conditions and the future development trends in the aspects of technology and craft. ③
the demand of the products produced by the assets or the offered services in the market. ④ the
expectation of actions adopted by current or potential competitors. ⑤ the expected maintenance
expense for sustaining the capacity to economic benefits brought by the assets and the ability to the
relevant expense expected. ⑥ the relevant law provision or the similar limit to the control term of the
assets, such as the licensed use term and the lease term. ⑦ the correlation with the service life of
other assets held by the company.
2) Intangible Assets with Indefinite Service Life, Judgment Criteria on Indefinite Service Life and
Review Procedure of Its Service Life
The company shall be unable to foresee the term of economic benefits brought by the assets for the
company, or the indefinite term of intangible assets recognized as the indefinite service life of
intangible assets.
The judgment criteria of Indefinite service life: ① as from the contractual rights or other legal rights,
but the indefinite service life of contract provision or legal provisions. ② unable to judge the term of
economic benefits brought by the intangible assets for the company after the integration of
information in the same industry or the relevant expert argumentation.
At the end of every year, the review should be made for the service life of the intangible assets with
the indefinite service life, and the relevant department that uses the intangible assets, shall conduct
the basic review by the method from up to down, in order to evaluate the judgment criteria of the
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
indefinite service life if there is the change.
(4) Amortization Method of Intangible Assets Value
The intangible assets with the finite service life shall be systematically and reasonably amortized
according to the expected implementation mode of the economic benefits related to the intangible
assets during the service life, and the line method shall be adopted to amortize for the intangible
assets unable to reliably recognize the expected implementation mode. The specific service life is as
follows:
Items Amortization life time（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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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 recognized shouldn’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
expense can’t make the benefits for the future accounting period, the amortized value of the
unamortized project shall all be transferred into the current profits and losses.
22.Remuneration
The employee benefits of the company include short-term employee benefits, post-employment
benefits, termination benefits and other long-term employee benefits.
1. Accounting Treatment Method of Short-term Compensation
During the accounting period of service provision of staff, the company shall regard the actual
short-term compensation as the liability and record into the current profits and losses or the relevant
assets cost as per the beneficiary. Of which, the non-monetary welfare shall be measured as per the
fair value.
2. Accounting Treatment Method of Severance Benefit Plans
The severance benefit plans can be divided into the defined contribution plan and the defined benefit
plan according to the risk and obligation borne.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
(1) The Defined Contribution Plan
The contribution deposits that paid to the individual subject for the services provided by the staffs on
the balance sheet date during the accounting period, shall be recognized as the liability, and recorded
into the current profits and losses or the relevant asset costs as per the beneficiary.
(2) The Defined Benefit Plan
The defined benefit plan is the severance benefit plans with the exception of the defined contribution
plans.
1) Based on the expected cumulative welfare unit method, the company shall adopt unbiased and
mutually consistent actuarial assumptions to make evaluation of demographic variables and financial
variables, measure and define the obligations arising from the benefit plan, and determine the period
of the relevant obligations. The company shall discount all the defined benefit plan obligations,
including the obligation within twelve months after the end of the annual report during the expected
services provision of employee. The discount rate adopted in discounting shall be recognized
according to the bonds matched with the defined benefit plan obligation term and the currency at the
balance sheet date or the market return of high-quality corporate bonds in the active market.
2) If there exist the assets for the defined benefit plan, the deficit or surplus arising from the present
value of the defined benefit plan obligations minus the fair value of the defined benefit plan assets are
recognized as the net liability or the net assets of the defined benefit plan. If there exists the surplus of
the defined benefit plan, the lower one between the surplus of the define benefit plan and the upper
limit of assets shall be used to measure the net assets of the defined benefit plan. The upper limit of
assets refers to the present value of economic benefits obtained from the refund of the defined benefit
plans or the reduction of deposit funds of future defined benefit plans.
3) At the end of period, the employee’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 company can’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 company can’t withdraw the rundown suggestion or the
termination of labor relations plans at its side and when the costs relevant to the recombination of
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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 other parties’ 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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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.
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
combination. (2) the transaction doesn’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 transaction doesn’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 the owner’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 the stockholders’ equity, shall be recorded into other
comprehensive incomes or the stockholders’ 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
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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 undetermined fiancéexpense of the difference and the initial direct costs
occurred shall be recorded into the leasing asset value. During each lease period, the current financing
charges shall be measured and recognized by the effective interest method.
When the company is as the leaser, the company shall recognize the sum of minimum lease
receivables and initial direct expense at the lease commencement date as the book value of finance
lease receivables, and record the unguaranteed residual value. Meanwhile, the company shall
recognize the difference between the sums of minimum lease receivables, minimum lease receivables
and unguaranteed minus the sum of the present value as the unrealized financing income. During
each lease period, the current financing charges shall be measured and recognized by the effective
interest method.
29.Change of main accounting policies and estimations
(1)Change of main accounting policies
On April 28, 2017, the Ministry of Finance issued the \"No. 42 Accounting Standard for Business
Enterprises-Non-current Assets for Sale, Disposal Groups, and Termination of Operations\", which
will take effect from May 28, 2017; On May 10, 2017, the Ministry of Finance issued the \"No. 16
Accounting Standards for Business Enterprises-Government Grants (Revised in 2017)\", which will
take effect from June 12, 2017; in 2017, the Ministry of Finance issued the“Notice on the Issuance of
the Revised Format of Financial Statements for General Enterprises”, which has revised the format
for the Financial Statements of General Enterprises, and thus it shall applied to the financial
statements in the year of 2017 and subsequent periods. The above changes in accounting policies
were adopted at the third meeting of the seventh board of directors and the tenth meeting of the
seventh board of directors of the company, therefore the Company began to implement the above
provisions in accordance with the time required by the Ministry of Finance.
The main impact of the Company's implementation of the above three provisions is as follows:
Amount
No Name
2017
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
No Amount
Name
1 Non –operating income -12,567,426.98
2 Other income 12,567,426.98
（2）Change of main accounting estimations
Nil
VI.Taxes of the Company
1. Main taxes categories and tax rate
Taxes Tax references Applicable tax rates
VAT The taxable turnover 17%、5%
Business tax. The taxable turnover 5%
City construction tax Turnover tax to be paid allowances 7%
Education surcharge Turnover tax to be paid allowances 3%
Local education
Turnover tax to be paid allowances 2%
surcharge
Business income tax Taxable income 25%、15%
2. Tax preference and approval file
(1)Shenzhen Shengbo Optoelectronic Technology Co., Ltd., the subsidiary company of our company,
has been qualified as national high-tech enterprise since 2016 ,High-tech and enterprise certificate
No.: GR201644201276 ,The certificate is valid for three years, The enterprise income tax rate of this
year is 15%.
(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), Shenz
hen Shengbo Optoelectronic Technology Co., Ltd. manufactured key materials and parts for the upstr
eam industry of new-type display devices including colorful light filter coating and polarizer sheet tha
t comply with the planning for independent development of domestic industries may enjoy the prefere
ntial policies of exemption from import tariff for the import of raw materials and consumables for the
purpose of self use and production that can not be produced domestically from January 1, 2016 and D
ecember 31, 2020.
VII. Notes of consolidated financial statement
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
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, 2017, and the end of the period is the number of
financial statements as at 31 December 2017. This term refers to January 1, 2017 - December 31,
2017,The same period refers to January 1, 2016 - December 31, 2016.
1.Monetary Capital
Items Year-end balance Year-beginning balance
Cash at hand 17,771.09 22,807.86
Bank deposit 1,163,010,967.65 932,021,522.23
Other monetary funds 2,019,370.09 1,812,582.64
Total 1,165,048,108.83 933,856,912.73
Including : The total amount of deposit 9,044,548.79 23,329,496.78
abroad
Notes :As of December 31, 2017，The fixed-term deposit balance of money fund is RMB
3,807,969.50 , this part will not be treated as closing cash or closing cash equivalent in preparing
cash flow statement. Monetary unit is RMB yuan
2.Bill receivables
(1). Classification Bill receivable
Items Year-end balance Year-beginning balance
Bank acceptance 44,207,119.00 41,908,315.45
Total 44,207,119.00 41,908,315.45
(2). As of December 31, 2016，The company has no Bill receivable pledged.
(3)Notes endorsement or discount and undue on balance sheet date
Items Amount derecognizing at period Amount derecognizing at
–end period-end
Bank acceptance 44,145,469.61
Total 44,145,469.61
(4)．Bill transferred to account receivable for the issuer is not able to execute the liability at the
end of period.
3. Account receivable
(1).Classification account receivables.
Amount in year-end
Classification
Book balance Bad debt provision Book value
Shenzhen Textile(Holdings) Co., Ltd. 2017 Annual Report
Proportion
Amount Amount Proportion(%)
(%)
Accounts receivable of
individual significance and
6,301,057.07 2.97 3,998,803.02 63.46 2,302,254.05
subject to individual
impairment assessment
Accounts receivable subject to
impairment assessment by
199,198,855.51 93.99 10,386,734.84 5.21 188,812,120.67
credit risk characteristics of a
portfolio
Accounts receivable of
individual insignificance but
6,448,803.57 3.04 5,060,100.59 78.47 1,388,702.98
subject to individual
impairment assessment
Total 211,948,716.15
