Shenzhen Textile (Holdings) Co., Ltd.
2023 Annual Report
March 2024
I. Important Notice, Table of Contents and DefinitionsThe Board of Directors，the Supervisory Committee, the directors, the supervisors, and executives of theCompany guarantee that there are no significant omissions, fictitious or misleading statements carried in theReport and we will accept individual and joint responsibilities for the truthfulness, accuracy and completenessof the Report.Mr.Yin Kefei, The Company leader, Ms. Liu Yu, Chief financial officer and Mr. Huang Min,the person incharge of the accounting department (the person in charge of the accounting )hereby confirm the authenticityand completeness of the financial report enclosed in this annual report.All the directors attended the board meeting for the review of this Report.Concerning the forward-looking statements with future planning involved in the Report, they do not constitute asubstantial commitment for investors, Investors and related persons shall keep sufficient risk awareness, andshall understand the differences between plans, forecasts and commitments, and remind investors of investmentrisks.The company has the macroeconomic risks, market competition and technological risks, raw material risks andintensified competition risks. Investors are advised to pay attention to investment risks. For details, please referto the possible risk factors that the company may face in the XI "Risks facing the Company andcountermeasures " in the Section III "Management Discussion & Analysis".The company’s profit distribution plan approved by the board of directors this time is: based on506,521,849 shares, a cash dividend of 0.65 yuan (tax included) will be distributed to all shareholders for every10 shares, and 0 shares (tax included) will be given as bonus shares. The capital reserve will not be convertedinto share capital.This Report has been prepared in both Chinese and English. In case of any discrepancy, the Chinese versionshall prevail.
Table of Contents
I.Important Notice, Table of contents and DefinitionsII. Company Profile & Financial Highlights.III. Management Discussion & AnalysisIV. Corporate GovernanceV. Environmental & Social ResponsibilityVI. Important EventsVII. Change of share capital and shareholding of Principal ShareholdersVIII. Situation of the Preferred SharesIX. Corporate BondX. Financial Report
Documents available for inspection
1. Accounting statements carried with personal signatures and seals of legal representative, General Manager, ChiefFinancial officer.
2. Original of Auditors’ Report carried with the seal of Certified Public Accountants as well as personal signatures ofcertified Public accountants.
3. The texts of all the Company's documents publicly disclosed on the newspapers and periodicals designated by ChinaSecurities Regulatory Commission in the report period.The above documents were completely placed at the Office of Secretaries of the Board of Directors of the Company.
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 Commission of Shenzhen Municipal People's Government | Refers to | National Assets Regulatory Commission of Shenzhen Municipal People's Government |
| The Controlling shareholder/ Shenzhen Investment Holdings Co., Ltd. | Refers to | Shenzhen Investment Holdings Co., Ltd. |
| Shenchao Technology | Refers to | Shenzhen Shenchao Technology Investment Co., Ltd. |
| SAPO Photoelectric | Refers to | Shenzhen SOPO Photoelectric Co., Ltd. |
| Beauty Century | Refers to | Shenzhen Beauty Century Garment Co., Ltd. |
| Huaqiang Hotel | Refers to | Shenzhen Huaqiang Hotel Co., Ltd |
| Shenzhen Xieli | Refers to | Shenzhen Xieli Automobile Co., Ltd. |
| Hengmei Photoelectric | Refers to | Hengmei Photoelectric Co., Ltd. |
| Qimei Material | Refers to | Qimei Material Technology Co., Ltd. |
| Haosheng Danyang | Refers to | Haosheng（Danyang）Investment Management Co., Ltd. |
| Danyang Nuoyan | Refers to | Danyang Nuoyan Tianxin Investment Partnership（LP) |
| Xiamen Nuoyan | Refers to | Xiamen Nuoyan Private Equity Fund Management Co., Ltd. |
| Fuzhou New Investment | Refers to | Fuxhou New Area Development & Investment Group Co., Ltd. |
| Hefei Beicheng | Refers to | Hefei Beicheng No.2 Photoelectric industry investment partnership(LP) |
| Hangzhou Rencheng | Refers to | Hangzhou Rencheng Trade Partnership(LP) |
| KSGC | Refers to | Kunshan Guochuang Investment Group Co., Ltd. |
| Xinghe Technology | Refers to | Shenzhen Xinghe Hard Technology Private Equity Investment Fund Partnership (limited partnership) |
| Lishui Huahui | Refers to | Lishui Huahui Equity Investment Partnership(LP) |
| Huzhou Pinuohuacai | Refers to | Huzhou Pinuohuacai Equity Investment Parnership（LP） |
| Lishui Tengbei | Refers to | Lishui Tengbei Mingcheng Equity Investment Partnership(LP) |
| Fuzhou Investment | Refers to | Fuzhou Investment Management Co., Ltd. |
| Xiamen Zhifeng | Refers to | Xiamen Zhifeng Equity Investment Partnership(LP) |
| Jiaxing Painuo | Refers to | Jiaxing Painuo Xiancai quity Investment Partnership(LP) |
| HuzHOU Zhekuang | Refers to | Huzhou Zhekuang Equity Investment Partnership(LP) |
| Guangdong Xingzhi | Refers to | Guangdong Xingzhi Venture Investment Partnership(LP) |
| Guangzhou Boyue | Refers to | Guangzhou Boyue Venture Investment Partnership(LP) |
| Jinhang Investment | Refers to | Hangzhou Jinhang Investment Fund Partnership（LP） |
| Line 4 | Refers to | T TFT-LCD polarizer II phase Line 4 project |
| Line 5 | Refers to | TFT-LCD polarizer II phase Line 5 project |
| Line 6 | Refers to | TFT-LCD polarizer II phase Line 6 project |
| Line 7 | Refers to | Industrialization project of polaroid for super large size TV |
| “CSRC” | Refers to | China Securities Regulatory Commission |
| The Report | Refers to | 2023 Annual Report |
II. Company Profile & Financial Highlights
1.Company Profile
| Stock abbreviation | Shen Textile A ,Shen Textile B | Stock code | 000045,200045 |
| Modified stock ID (if any) | No | ||
| 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 | Yin Kefei | ||
| Registered address | 708M, Building 8, Qianhai Excellence Financial Center (Phase I), No.5033 Menghai Avenue, Nanshan Street, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen | ||
| Postal code of the Registered Address | 518052 | ||
| Historical change of the company's registered address | On April 27, 2023, the Company completed the industrial and commercial change registration, and its registered address was changed from "6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen" to "708M, Building 8, Qianhai Excellence Financial Center (Phase I), No.5033 Menghai Avenue, Nanshan Street, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen". | ||
| Office Address | 6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen | ||
| Postal code of the office address | 518031 | ||
| Internet Web Site | http://www.chinasthc.com | ||
| szfzjt@chinasthc.com | |||
2. Contact person and contact manner
| Board secretary | Securities affairs Representative | |
| Name | Jiang Peng | Li Zhenyu |
| Contact address | 6/F, Shenzhen Textile Building, No.3 Huaqiang North Road, Futian District, Shenzhen | 6/F, Shenzhen Textile Building, No.3 Huaqiang North Road, Futian District, Shenzhen |
| Tel | 0755-83776043 | 0755-83776043 |
| Fax | 0755-83776139 | 0755-83776139 |
| jiangp@chinasthc.com | lizy@chinasthc.com |
3. Information disclosure and placed
| Internet website designated by CSRC for publishing the Annual report of the Company | www.cninfo.com.cn |
| Newspapers selected by the Company for information disclosure | Securities Times, China Securities Journal, Shanghai Securities Daily,Securities News and www.cninfo.com.cn |
| Internet website designated by CSRC for publishing the Annual report of the Company | www.cninfo.com.cn |
| The place where the Annual report is prepared and placed | Office of the Board of directors |
4.Changes in Registration
| Unified social credit code | 91440300192173749Y |
| Changes is the controlling shareholder in the past (is any) | In October 2004,In accordance with the Decision on |
Establishing Shenzhen Investment Holdings Co., Ltd. issued byState-owned Assets Administration Committee of ShenzhenMunicipal People's Government (Shen Guo Zi Wei (2004) No.223 Document), Shenzhen Investment Management Co., Ltd.,the controlling shareholder of the Company, and ShenzhenConstruction Holding Company and Shenzhen Commerce andTrade Holding Company merged into Shenzhen InvestmentHoldings Co., Ltd.
5. Other Relevant Information
CPAs engaged
| Name of the CPAs | Deloitte Touche Tohmatsu CPA Ltd.(special general partnership) |
| Office address： | 30/F, No.222,Yanan East Road, Qingpu District, Shanghai |
| Names of the Certified Public Accountants as the signatories | Huang Tianyi, Chen Jun Heng |
The sponsor performing persistent supervision duties engaged by the Company in the reporting period.
□ Applicable√ Not applicable
The Financial advisor performing persistent supervision duties engaged by the Company in the reporting period
□ Applicable√ Not applicable
6. 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
| 2023 | 2022 | Changes of this period over same period of Last year(%) | 2021 | |
| Operating income（Yuan） | 3,079,678,375.45 | 2,837,988,264.36 | 8.52% | 2,330,061,681.00 |
| Net profit attributable to the shareholders of the listed company（Yuan） | 79,268,250.45 | 73,309,182.94 | 8.13% | 55,733,468.82 |
| Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company（Yuan） | 62,328,667.73 | 61,951,894.68 | 0.61% | 41,288,192.98 |
| Cash flow generated by business operation, net（Yuan） | 184,766,739.80 | 490,238,550.60 | -62.31% | -4,436,980.35 |
| Basic earning per share(Yuan/Share) | 0.16 | 0.14 | 14.29% | 0.11 |
| Diluted gains per share(Yuan/Share) | 0.16 | 0.14 | 14.29% | 0.11 |
| Weighted average ROE(%) | 2.77% | 2.59% | 0.18% | 2.00% |
| End of2023 | End of2022 | Changed over last year（％） | End of2021 | |
| Gross assets（Yuan） | 5,649,822,363.44 | 5,617,137,367.90 | 0.58% | 5,563,539,326.16 |
| Net assets attributable to shareholders of the listed company（Yuan） | 2,882,152,266.22 | 2,849,264,555.21 | 1.15% | 2,811,366,974.46 |
The lower of the company’s net profit before and after the deduction of non-recurring gains and losses in
the last three fiscal years is negative, and the auditor's report of the previous year shows that the Company’sgoing concern ability is uncertain.
□ Yes √No
The lower of the net profit before and after the deduction of the non-recurring gains and losses is negative.
□ Yes √No
7.The differences between domestic and international accounting standards1）Simultaneously pursuant to both Chinese accounting standards and international accounting standardsdisclosed in the financial reports of differences in net income and net assets.
□ Applicable□√ Not applicable
None2） Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chineseaccounting standards.
□ Applicable √Not applicable
None
8.Main Financial Index by Quarters
In RMB
| First quarter | Second quarter | Third quarter | Fourth quarter | |
| Operating income | 679,306,013.14 | 810,789,656.41 | 827,289,643.21 | 762,293,062.69 |
| Net profit attributable to the shareholders of the listed company | 13,108,613.21 | 23,198,549.76 | 30,277,434.06 | 12,683,653.42 |
| Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company | 7,600,013.36 | 16,086,591.17 | 28,366,690.84 | 10,275,372.36 |
| Net Cash flow generated by business operation | 2,240,056.33 | 12,162,917.27 | 50,337,535.36 | 120,026,230.84 |
Whether significant variances exist between the above financial index or the index with its sum and thefinancial index of the quarterly report as well as semi-annual report index disclosed by the Company.
□Yes ?No
9.Items and amount of non-current gains and losses
√Applicable □Not applicable
In RMB
| Items | Amount (2023) | Amount (2022) | Amount (2021) | Notes |
| Non-current asset disposal gain/loss(including the write-off part for which assets impairment provision is made) | 1.72 | 31,264.60 | -961,982.35 |
| Government subsidy recognized in current gain and loss(excluding those closely related to the Company’s business and granted under the state’s policies) | 19,927,836.02 | 11,048,569.36 | 7,747,114.25 | Mainly for the government subsidies. |
| Except for effective hedging business related to the normal operation of the company, the fair value gains and losses arising from the holding of financial assets and financial liabilities by non-financial enterprises, as well as the gains and losses arising from the disposal of financial assets and financial liabilities | 2,151,780.82 | |||
| Reverse of the provision for impairment of accounts receivable undergoing impairment test individually | 15,031,480.15 | 989,313.04 | ||
| Net amount of non-operating income and expense except the aforesaid items | -6,755,922.25 | 7,516,025.10 | 19,964,046.87 | |
| Other non-recurring Gains/loss items | 0.00 | 0.00 | 0.00 | |
| Less :Influenced amount of income tax | 3,478,333.83 | 3,294,064.39 | 4,241,451.36 | |
| Influenced amount of minor shareholders’ equity (after tax) | 9,937,259.91 | 3,944,506.41 | 9,051,764.61 | |
| Total | 16,939,582.72 | 11,357,288.26 | 14,445,275.84 | -- |
Details of other profit and loss items that meet the non-recurring profit and loss definition
√Applicable□ Not applicable
Due to the special nature of the impairment provision for management and maintenance expenses advanced bythe Guangzhou-Foshan Expressway to be clarified, it will affect the normal judgment of the Company'soperating performance and profitability by the user of the report.NoneFor the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 oninformation disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Lossesand its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on informationDisclosure for Companies offering their securities to the public-non-recurring Gains and losses which have beendefined 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 informationdisclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period.
III. Management Discussion & Analysis
I. Industry information of the Company during the reporting periodPolarizers are also known as polaroid, which can control the polarization direction of specific light beams.When natural light passes through the polarizer, the light whose vibration direction is perpendicular to thetransmission axis of the polarizer will be absorbed, leaving only polarized light whose vibration direction isparallel to the transmission axis of the polarizer. The downstream polarizer is mainly used in the panel industry.According to different panel types, polarizers mainly include TN, STN, TFT and OLED. Currently, the globalpolarizer market is dominated by polarizers for TFT-LCD panels. Each LCD panel requires two polarizers.The high-quality development of the polarizer industry has a profound impact on the entire display industry. Asone of the three core raw materials for display panels, the demand for polarizers is directly affected by thefluctuations in the display panel market. In recent years, with the accelerated transfer of the global display panelindustry to Chinese Mainland, China's polarizer industry has ushered in a stage of rapid development. Thecapacity scale and process technology level of domestic polarizer manufacturers have continued to rise. The statusand influence of China's polarizer industry in the global market have significantly improved, and ChineseMainland has become the world's largest polarizer production base.The company is one of the main domestic polarizer research and development, production, and salesenterprises. It is a pioneer in the polarizer industry in China and has now developed into a leading enterprise inthe domestic polarizer industry, becoming an important supplier of mainstream panel enterprises worldwide. In2023, affected by the severe and complex global economic and political situation, global demand for displaypanels and terminal markets has slowly recovered. However, polarizer companies still face significantoperational pressures such as intensified market competition, declining sales prices, and rising raw materialcosts.II.Main Business the Company is Engaged in During the Report Period
1.The company's main business
The company's main business covered such the high and new technology industry as represented by LCDpolarizer, its own property management business and the retained business of high-end textile and garment.During the reporting period, the Company's main business has not changed significantly.First, the Company actively adjusts the product structure, implements the product differentiation strategy,further optimizes the product structure, increases the proportion of large-size products, increases the marketshare of high-value products, implements the policy of "ensuring utilization" and seizes market share; Second, itcarries out lean management in depth, continuously strengthens efficiency improvement, significantly reducesproduction line switching time, reduces production costs and strengthens production management by unifyingproduction technology, to continuously reduce the loss rate of main raw materials, and increase the productyield rate to a higher level in the industry; Third, it strengthens the guidance of innovation, accelerates theconstruction of a market-oriented and professional R&D management system, focuses on key technologies andproduct research, completes the process optimization and upgrading of No.4 wide production line, realizes themass production delivery of 55-inch and 65-inch high-transmittance OLED TV polarizers, and completes thedevelopment of high alkali-resistant fixed-curvature OLED mobile phone polarizers; Fourth, it activelypromotes the elimination of enterprises with "non-main business assets non-dominant business assets,
inefficient assets and ineffective assets", steadily promotes the survival of the fittest, promotes the concentrationof resources from non-non-main business to main business, and improves the efficiency of resource allocation;Fifth, it strengthens supervision and management, well ensures work safety, formulates safety managementsystem, strengthens safety training and education, carries out safety risk management and control, investigatesand rectifies hidden dangers, consolidates weak links and prevents accidents; Sixth, it continues to well ensurethe lease of its own property, improves service quality, and carries out the improvement of textile businessoperation; Seventh, it promotes major asset restructuring, and actively promotes the audit, evaluation, duediligence and other work involved in this transaction with relevant parties.
2.Main products and their purposes
Currently, the Company has 7 mass production lines for polarizers, covering TN, STN, TFT, OLED, 3D, dyesheet, optical film for touch screen and other fields, It is mainly used in TV, laptops, navigators, monitors, on-board equipment, industrial control, instrumentation, smart phones, wearable devices, 3D glasses, sunglassesand other products.the company has become a mainstream panel company such as Huaxing Optoelectronics, BOE, Sharp, LGD,Shenzhen Tianma, Huike, etc. by continuously strengthening sales channel expansion and building its ownbrand. Qualified suppliers.The Company's main products made in each polarizer production line and their application are as follows:
| Line | Place | Product breadth | Planned capacity | Main projuct |
| Line 1 | Pingshan | 500mm | 600，000 m2 | TN/STN/ Dye sheet |
| Line 2 | Pingshan | 500mm | 1.2 million m2 | TN/STN/CSTN |
| Line 3 | Pingshan | 650mm | 1 million m2 | TFT |
| Line 4 | Pingshan | 1490mm | 6 million m2 | TFT/OLED |
| Line 5 | Pingshan | 650mm | 2 millin m2 | TFT/OLED |
| Line 6 | Pingshan | 1490mm | 10 million m2 | TFT/OLED |
| Line 7 | Pingshan | 2500mm | 32 millin m2 | TFT/OLED |
3.Company's business model
The polarizer industry has gradually shifted from a traditional business model of R&D, production, and sales to acustomer-centric, joint research and development, and comprehensive service business model. By understandingcustomer needs, joint research and develop, manage high-standard production, manufacture high-quality products,use advanced polarizer roll and attaching equipment to cooperate with downstream panel manufacturers'production lines, reduce production links, reduce production and transportation costs, and create value forcustomers, win-win.
4. Major factors for driving the Company's performance
Refer to "III. Analysis on core competitiveness" in this section for details.
5. Market position of company products
The company is one of the main polarization film research and development, production, and sales enterprisesin China. It began to engage in polarization film business in 1995 and achieved mass production of the firstpolarization film in China in 1998. It is a pioneer in the polarization film industry in China and has nowmastered the core technology of TN/STN, TFT-LCD, OLED display polarization film research and production.It is one of the few polarization film manufacturers in China with the ability to produce a full range of large,medium, and small size polarization film products. It is the first to achieve mass production of polarizationfilms for OLED TVs and OLED phones, filling the domestic gap.
The company mainly produces polarizing film products for medium and large-sized TFT-LCD. The company'sLine 7 is one of the few 2500mm ultra wide polarizing film production lines in the world, which can meet theneeds of higher generation panel production lines such as the 8.5/8.6/10.5/11 generation globally. Especiallymatching the 10.5/11 generation line has the best economic production efficiency, and has industry-leadingadvantages in the technical level and production capacity of ultra large and large-sized products.
6. Advantages and disadvantages in competition
(1) Competitive edge
See "III. Analysis of core competitiveness" in this chapter for details.
(2) Competitive disadvantage
See "XI. Future development prospect of the Company (III) Possible risks" in this chapter for details.III. Analysis On core Competitiveness(I) Technology advantages. SAPO Photoelectric is the first domestic national high-tech company which enteredinto the R&D and production of the polarizer，We are one of the largest, most technical and professionalpolarizer R&D teams in the country，With 28 years of operating experience in the polarizer industry, itsproducts cover mainstream display applications such as TN type, STN type, TFT type, OLED type, etc., and hasa complete set of proprietary technology of polarizer that can meet customer needs and has independentintellectual property rights of various new products. As of the end of the reporting period, SAPO Photoelectrichas obtained a total of 104 patent authorizations, including 18 domestic invention patents, 82 domestic utilitymodel patents, and 4 overseas utility model patents. 6 national standards and 2 industry standards independentlydrafted and formulated by SAPO Photoelectric are implemented through examination and approval; In addition,1 industry standard that it participated in the drafting and formulation passed the approval and implementation.
SAPO Photoelectric has three innovative platforms: Guangdong Engineering Technology Research Center,Shenzhen Polarizing Materials and Technology Engineering Laboratory and Shenzhen Enterprise TechnologyCenter. It focuses on the R&D and industrialization of OLED and LCD polarizer core production technology,and the localization research of polarizer raw materials, among which, mass production has been achieved forthe polarizer projects for OLED TV and OLED mobile phones successfully, filling the domestic gap. Based onthe successful development of OLED polarizer products, the Company's "A Polarizer for Improving theContrast of OLED Display" was granted a national patent in 2023. Through in-depth research and meticulousdesign of the material structure and optical path of OLED polarizer, the patent successfully solved the keytechnical problems in the industry and promoted the technical progress in the field of OLED polarizer, whichhas high commercial value and application prospects.
（II）Talents advantages.
The Company emphasizes independent innovation and has established its own R&D management system.At present, it has a polarizer management team and a team of senior technicians with strong technical ability,rich experience and international vision. In order to adapt to the Company's high-quality development trend, theCompany continues to strengthen the construction of talent team, enhance the core competitiveness ofenterprise talents by stimulating the potential and vitality of existing talents, and lay a solid foundation for thetransformation and upgrading of the Company's strategy .First, the Company attaches great importance topersonnel training and team building, and strives to build an efficient, collaborative and creative technical team,which team can quickly gain insight into market trends, accurately grasp the technical direction, overcometechnical difficulties, and successfully launch a number of influential innovative products such as ultra-large
size TV polarizers and OLED TV/mobile phone polarizers; Second, it further enriches the ranks of middle-levelcadres and core talents, and supplements them with core talents through market-oriented recruitment, socialrecruitment and internal introduction of subordinate enterprises; Third, it strengthens the exchange and study ofinternal personnel, combined with the actual situation of the Group, after full communication and brewing, itcontinuously carried out the two-way exchange and training activities of cadres and talents of the Group and itsaffiliated enterprises in 2023, which strengthened the communication and exchange of talents between theGroup headquarters and its affiliated enterprises, enhanced the comprehensive ability and performance ability ofemployees, and stimulated the vitality of cadres; Fourth, according to the principle of "strategic leading,performance-orientation, fairness and justice", the Company has established a performance-based salaryassessment and distribution mechanism of "efficiency first, fairness emphasized, rewarding the excellent andpunishing the poor, allowing both high and low based on performance, and combining incentives andconstraints", reasonably determining the salary structure and level, and forming an incentive and constraintmechanism in which value creation determines value distribution.
(III).Market advantages.The Company has a good market customer base at home and abroad. Compared with advanced foreignpeers, its biggest advantage lies in the localization supporting ability close to the panel market and the strongsupport of the national industrial policy.In terms of market demand, with the continuous mass production ofdomestic 10.5/11 generation TFT-LCD panel production lines, the domestic polarizer market demand has alsoincreased; And with the further acceleration of the development of large-size panels, mainland manufacturerswith large-size polarizers have ushered in important industry opportunities. In terms of market development, theCompany focuses on customer demand, constantly optimizes production technology and product structure,improves quality control, organically combines production and sales, establishes a rapid response mechanism,gives full play to localization advantages, and earnestly provides peer-to-peer professional services. Around theoverall strategic deployment, it promotes the verification of various models, forms a stable supply chain, andcontinuously increases market share.At the same time, it utilizes the capital market for asset restructuring,implements its development strategy, and seizes the important market opportunity of becoming better andstronger.(IV). Quality advantages.
The Company always adheres to the quality policy of "meeting customers' needs, pursuing excellent quality,promoting green manufacturing and realizing continuous improvement", pays attention to product qualitycontrol, and its products comply with international quality standards. The Company strictly controls productperformance indicators, standardizes incoming inspection standards, and takes quality improvement andconsumption reduction as the starting point to achieve simultaneous improvement of output and quality; Itintroduces modern management system, and passes ISO9001 quality management system, ISO14001environmental management system, ISO450001 occupational health and safety management system,QCO80000 hazardous substance management system and ISO50001 energy management system certification;Its products have passed CTI testing, and meet the RoHS directive environmental protection requirements,realizing the standardized management of the whole process from raw material supply, manufacturing,marketing to customer service, thus ensuring the stability of product quality.
(V).Management advantages. SAPO Photoelectric has accumulated rich management experiences in morethan 20 years in the manufacturing of polarizer, possessing the home most advanced control technology of theproduction management process of the polarizer and quality management technology and the stable raw
material procurement channel so forth management systems；The Company continues to implement advancedmanagement system and reasonable incentive mechanism, etc., to improve decision-making efficiency, speedup market reaction, refine the R&D reward system, and in the meantime to realize the in-depth integration ofenterprise and employee values and stimulate new business vitality; It formulates the work plan for improvingthe operation of subordinate companies, set up the operation improvement working group, comprehensively sortout the Company's operation, and carry out business optimization, cost control and cash flow improvement in asteady and orderly manner to help improve the Company's production and operation; It strengthens the on-sitetechnical management level of subordinate companies, enhances the production stability, sets up a film breakingimprovement task team, and the film breaking improvement results of each production line are remarkable;
Through the implementation of the key work management list of "Solid Party Building +, Lean PromotesDevelopment", it used the lean means to achieve continuous cost reduction and efficiency increase; Through theimplementation of the "Amoeba Business Model" project and segmenting small independent accounting unit toenable grassroots backbone employees can participate in production and operation activities.
(VI)6.Policy advantages. Polarizer is seen as an essential part of the panel display industry and SAPOPhotoelectric in its development has promoted the supply capacity of national polarizers, greatly lowered thedependence of national panel enterprises on imported polarizers, and safeguarded the national panel industry, Ithas promoted the coordinated development of the entire industrial chain of Shenzhen "20+8" ultra-high definitionvideo display industry cluster. the Company tightened supplier management, improved its overall purchasingstrategy, and downsized suppliers while introducing a competitive mechanism, wherein focus was given tointroduction of new materials at a competitive price, to further lower its production cost and improve its productcompetitiveness.
IV. Main business analysisⅠ.General
The year of 2023 is the first year of a new round of state-owned enterprise reform, and it is also the yearwhen the Company continues to deepen reform, strengthen independent innovation and improve the quality ofoperation.Over the past year, faced with the severe and complicated economic situation, under the strongleadership of the Board of Directors of the Company, the whole Company has been firmly confident, united andhard-working. Focusing on the "Tenth Five-Year Plan" strategic plan, it has persisted in deepening the mainbusiness of polarizers, made every effort to promote the continuous improvement of production capacity andtechnical level and the continuous breakthrough and innovation of cutting-edge technologies, steadily promotedmajor asset restructuring, strived to turn challenges into opportunities, continuously optimized its businessquality and steadily improved its operating efficiency, thus achieving a better overall operation situation andlaying a solid foundation for further transformation and development for the Company.During the reporting period, the Company achieved an operating income of RMB 3.08 billion, with a year-on-year increase of 8.52% and a net profit attributable to shareholders of listed companies of RMB 79,268,300,with an year-on-year increase of 8.13%.Review of the company's key works carried out in 2023 as follows:
(I) Enhance the operational capability of polarizer business and implement the differentiated developmentstrategy.
In 2023, first, the Company actively optimized the product structure, increased the proportion of ultra-largepolarizer products, implemented the policy of "ensuring utilization" and seized market share; Second, itstrengthened the guidance of innovation, accelerated the construction of a market-oriented and professionalR&D management system, focused on promotion of key technologies and product research, completed theprocess optimization and upgrading of No.4 wide production line, completed the new product development andmass production of 55-inch and 65-inch high-transmittance OLED TV polarizers, and achieved a majorbreakthrough in the supply chain system of high-end OLED TV terminal brand manufacturers; Third, itstrengthened technical research, completed the development of high alkali-resistant fixed-curvature OLEDmobile phone polarizer, passed the strict test and verification of mainstream panel manufacturers, entered thesupply chain system of domestic smart phone brand terminal manufacturers and achieve massed production;Fourth, it carried out in-depth refined management, continuously improved production capacity and yield,reduced losses, and thus improved comprehensive production efficiency, in which product yield was raised to ahigher level in the industry; Fifth, it continuously improved the level of production technology, activelypromoted cost reduction and quality improvement, strengthened the on-site management level, set up a filmbreaking improvement task team, effectively solving the problem of film breaking in production, and achievingremarkable results in film breaking improvement in various production lines; Sixth, it improved productperformance, promoted the performance of glue materials to improve product durability, and greatly reducedinventory pressure and customer complaint risk.
It completed the application for 10 new patents in 2023, including 5 invention patents and 5 utility modelpatents; And it was granted with 7 authorized patents, including 1 invention patent and 6 utility modelpatents.By the end of 2023, the Company was granted with 104 authorized patents, including 18 inventionpatents and 86 utility model patents.
The Company has three innovative platforms: Guangdong Engineering Technology Research Center,Shenzhen Polarizing Materials and Technology Engineering Laboratory and Shenzhen Enterprise TechnologyCenter. It focuses on the R&D and industrialization of OLED and LCD polarizer core production technology,and the localization research of polarizer raw materials, among which, mass production has been achieved forthe OLED TV polarizers and OLED mobile phone polarizers successfully, filling the domestic gap.Based on thesuccessful development of OLED polarizer products, the Company's "A Polarizer for Improving the Contrast ofOLED Display" was granted a national patent in 2023. Through in-depth research and meticulous design of thematerial structure and optical path of OLED polarizer, the patent successfully solved the key technical problemsin the industry and promoted the technical progress in the field of OLED polarizer, which has high commercialvalue and application prospects.
(II) Cooperate with upstream and downstream manufacturers on technical research and create an innovationecosystem
In 2023, the Company paid attention to multi-party collaboration, cooperated with upstream anddownstream manufacturers in the new display industry chain, worked together to build an innovation ecosystemand achieved outstanding results in many fields.First, it worked with the upstream optical module materialmanufacturers and downstream panel enterprises to carry out technical research on the project of OLED circularpolarizers and optical compensation films, and obtained state funding. The project is expected to makeimportant contributions to the localization of key materials of OLED polarizers and the industrialization ofdomestic OLED polarizers.Second, it cooperated with the leading manufacturers in the touch panel industry tocarry out technical research on nano-silver touch integrated polarizer, and completed the development andcustomer verification of nano-silver touch integrated OLED polarizer.Third, it cooperated with panel
manufacturers to develop car polarizers, and the "Research and Development of Key Technologies of Polarizersfor Car Display" won the policy support from Shenzhen.(III) Stabilize property leasing and management business and maintain sufficient cash flowIn 2023, facing the grim situation of the downturn in the leasing market, property companies continued toimprove their management and made steady progress in their business development. First, it actively carried outmarket research to analyze the needs of potential customers and judge the future development trend of theleasing market, and formulated a refined annual leasing plan; Second, it strengthened management, designedflexible lease terms and flexible payment methods to ensure the implementation and landing of the annual leaseplan; Third, it actively responded to the needs of tenants, steadily improved service quality and enhanced tenantsatisfaction; Fourth, it carried out refined and standardized management to improve the comprehensive abilityof property management.The revenue and total profit of property leasing and management business continued togrow throughout the year, which provided sufficient cash flow for the Company's business development.(IV) Orderly carry out the operation improvement work of textileIn 2023, the textile business faced significant operational pressure due to factors such as decliningconsumer demand and market contraction. Based on the actual operating conditions, the company formulates animprovement work plan, establishes a working group, steadily and orderly carries out business optimization,cost control and other work, continuously optimizes personnel, revitalizes existing assets, strengthens fundcontrol, and promotes the improvement of Meibai Nian Company's operation.(V) Actively promote the disposal of "two non two assets" and promote the concentration of resourcestowards the main businessIn 2023, in order to revitalize idle assets, optimize resource allocation, and promote high-qualitydevelopment, the company will plan and grasp key points in accordance with the requirements for the clearanceof "two non two assets", and orderly promote the clearance work. One is to complete the cancellation andremoval of Shenzhen Shengjinlian Technology Co., Ltd; The second is to complete the deregistration andretirement of the joint venture company Yehui (Jordan) Clothing Factory Co., Ltd; Thirdly, the liquidation andcancellation work of Shenzhen Huaqiang Hotel Co., Ltd. will be initiated within the year.
(VI) Carry out major asset restructuring in depth and promote industrial integrationIn 2023, the Company continued to promote the acquisition of 100% equity of Hengmei OptoelectronicsCo., Ltd. (hereinafter referred to as "this restructuring") by issuing shares and paying cash, and simultaneouslycarried out related work of raising supporting funds.Due to the changes in the shareholder composition andshareholding ratio of the target company Hengmei Optoelectronics during the reorganization, it is necessary toadjust the counterparty of this restructuring and the transaction plan according to the requirements of therelevant rules of the registration system. At present, while intermediaries continue to promote the overtime audit,evaluation and supplementary due diligence of the target company, the Company further negotiates thetransaction details with the counterparty to consolidate the restructuring transaction plan.After the transactionplan is determined and the state-owned assets examination and approval procedures are fulfilled, the Companywill convene the meeting of the Board of Directors again to consider matters related to this transaction.This restructuring is the adjustment and optimization of the Company's main polarizer business in the faceof the rapidly developing new display industry environment. Through the integration of high-quality resourcesin the same industry and the realization of large-scale development, the restructuring will help the Company tooptimize the industrial chain layout in the polarizer industry, deepen the depth of technical reserves, enhance itscore competitiveness, enhance its overall profitability, give full play to the synergistic effect, and help it becomea bigger and stronger listed company.
(VII) Strengthen safety awareness and earnestly well ensure safety and environmental protectionIn 2023, the Company adhered to the work safety policy of "safety first, prevention foremost andcomprehensive treatment", firmly established the concept of safety development, continuously consolidated theCompany's work safety foundation, made great efforts to improve the safety management level and strive tocreate a good safety environment. First, improve the safety production responsibility system, and subordinateenterprises implement the safety target responsibility letter signed at different levels as required, consolidate themain responsibility of work safety, and ensure that the safety responsibility is implemented "horizontally toedge and vertically to the bottom"; Second, improve the safety management system, compile the safetymanagement system, strengthen the on-site safety inspection for the engineering projects of the affiliatedenterprises, standardize the punishment standards for work safety accidents, and increase the punishment forsafety accidents; Third, carry out safety education and training, organize emergency drills, and improveemergency handling of safety incidents and safety management; Fourth, actively implement the environmentalprotection upgrading and transformation, practice the sustainable development production concept of greenenvironmental protection, energy conservation and consumption reduction, and continue to save energy andreduce emissions.
(VIII) Improve the quality of party building and lead the healthy development of the enterpriseIn 2023, the company will strengthen the construction of party conduct and clean governance, conduct solidresearch on party building topics, deeply analyze the problems and difficulties faced by the company's currentbusiness management, and lead the company's high-quality development with high-quality party building. Byguiding party members to tackle key technical difficulties, party building empowers and promotes businessdevelopment more effectively. The problem of PVA film breakage on the production line has been significantlyimproved, resulting in a cumulative cost savings of over 30 million yuan.
2. Revenue and cost
(1) Component of Business Income
In RMB
| 2023 | 2022 | Increase /decrease | |||
| Amount | Proportion | Amount | Proportion | ||
| Total operating revenue | 3,079,678,375.45 | 100% | 2,837,988,264.36 | 100% | 8.52% |
| On Industry | |||||
| Manufacturing | 2,968,884,717.77 | 96.40% | 2,722,034,654.94 | 95.91% | 9.07% |
| Lease and Management of Property | 110,793,657.68 | 3.60% | 115,953,609.42 | 4.09% | -4.45% |
| On Products | |||||
| Polarizer sheet | 2,885,625,542.77 | 93.70% | 2,693,787,636.62 | 94.92% | 7.12% |
| Lease and Management of Property | 194,052,832.68 | 6.30% | 144,200,627.74 | 5.08% | 34.57% |
| Area | |||||
| Domestic | 2,963,091,439.22 | 96.21% | 2,722,632,231.25 | 95.94% | 8.83% |
| Overseas | 116,586,936.23 | 3.79% | 115,356,033.11 | 4.06% | 1.07% |
| Sub-sale model | |||||
| Credit | 2,948,168,591.89 | 95.73% | 2,642,221,654.15 | 93.10% | 11.58% |
| Cash on sale | 131,509,783.56 | 4.27% | 195,766,610.21 | 6.90% | -32.82% |
(2)Situation of Industry, Product and District Occupying the Company’s Business Income and Operating Profitwith Profit over 10%
√ Applicable □Not applicable
In RMB
| Turnover | Operation cost | Gross profit rate(%) | Increase/decrease of revenue in the same period of the previous year(%) | Increase/decrease of business cost over the same period of previous year (%) | Increase/decrease of gross profit rate over the same period of the previous year (%) | |
| On Industry | ||||||
| Manufacturing | 2,968,884,717.77 | 2,539,763,710.92 | 14.45% | 9.07% | 8.03% | 0.82% |
| On Products | ||||||
| Polarizer sheet | 2,885,625,542.77 | 2,499,416,729.45 | 13.38% | 7.12% | 7.84% | -0.58% |
| Area | ||||||
| Domestic | 2,963,091,439.22 | 2,469,125,834.03 | 16.67% | 8.83% | 8.35% | 0.37% |
| Sub-sale model | ||||||
| Credit | 2,948,168,591.89 | 2,500,093,866.48 | 15.20% | 11.58% | 13.82% | -1.67% |
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted mainbusiness 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 | 2023 | 2022 | Changes |
| Polarizer sheet | Sales | 10,000 square meters | 4,067.17 | 3,537.08 | 14.99% |
| Production | 10,000 square meters | 4.059.98 | 3,518.80 | 15.38% | |
| Stock | 10,000 square meters | 105.22 | 112.41 | -6.40% |
Explanation for a year-on –year change of over 30%
□ Applicable √ Not applicable
(4)Degree of Performance of the Significant Sales Contract Signed up to this Report Period
□ Applicable √Not applicable
(5)Component of business cost
Industry category
In RMB
| Industry classification | Items | 2023 | 2022 | Increase/Decrease (%) | ||
| Amount | Proportion in the operating costs (%) | Amount | Proportion in the operating costs (%) | |||
| Manufacturing | Polarizer sheet, Knitted clothing | 2,539,763,710.92 | 99.15% | 2,350,898,811.44 | 99.03% | 8.03% |
| Lease of Property and others | Lease of Property and others | 21,868,133.61 | 0.85% | 23,107,084.99 | 0.97% | -5.36% |
Product category
In RMB
| Industry classification | Items | 2023 | 2022 | Increase/Decrease (%) | ||
| Amount | Proportion in the operating costs (%) | Amount | Proportion in the operating costs (%) | |||
| Polarizer sheet | Direct materials | 2,037,672,150.22 | 81.53% | 1,825,615,761.47 | 76.90% | 11.62% |
| Polarizer sheet | Direct labor | 56,414,151.28 | 2.26% | 61,855,540.37 | 2.61% | -8.80% |
| Polarizer sheet | Power cost | 74,399,845.18 | 2.98% | 68,806,666.73 | 2.90% | 8.13% |
| Polarizer sheet | Manufacturing and cost | 330,930,582.77 | 13.23% | 361,515,128.87 | 15.23% | -8.46% |
Note
(6)Whether Changes Occurred in Consolidation Scope in the Report Period
□ Yes √ No
(7)Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in theCompany’s Report Period
□ Applicable √Not applicable
(8)Situation of Main Customers and Main Supplier
Information of Main Customers
| Total sales amount to top 5 customers (RMB) | 2,151,239,401.31 |
| Proportion of sales to top 5 customers in | 69.85% |
| Proportion of the sales volume to the top five customers in the total sales to the related parties in the year | 0.00% |
Information of the Company’s top 5 customers
| No | Name | Amount（RMB） | Proportion(%) |
| 1 | Customer 1 | 943,955,872.82 | 30.65% |
| 2 | Customer 2 | 413,109,606.84 | 13.41% |
| 3 | Customer 3 | 338,699,601.68 | 11.00% |
| 4 | Customer 4 | 280,667,500.69 | 9.11% |
| 5 | Customer 5 | 174,806,819.28 | 5.68% |
| Total | -- | 2,151,239,401.31 | 69.85% |
Other note
□ Applicable √ Not applicable
Principal suppliers
| Total purchase of top 5 Suppliers（RMB） | 936,958,039.17 |
| Percentage of total purchase of top 5 suppliers In total annual purchase(% | 39.02% |
| Proportion of purchase amount from the top 5 suppliers in the total purchase amount from the related parties in the year | 0.00% |
Information about the top 5 suppliers
| No | Name | Amount（RMB） | Proportion(%) |
| 1 | Supplier 1 | 272,540,426.36 | 11.35% |
| 2 | Supplier 2 | 258,042,882.44 | 10.75% |
| 3 | Supplier 3 | 232,584,736.46 | 9.69% |
| 4 | Supplier 4 | 110,044,625.22 | 4.58% |
| 5 | Supplier 5 | 63,745,368.69 | 2.65% |
| Total | -- | 936,958,039.17 | 39.02% |
Other note
□ Applicable √Not applicable
3.Expenses
In RMB
| 2023 | 2022 | Increase/Decrease(%) | Notes | |
| Sale expenses | 34,195,670.61 | 35,962,529.35 | -4.91% | |
| Administrative expenses | 134,371,410.53 | 128,388,940.29 | 4.66% | |
| Financial expenses | 24,399,501.16 | 12,943,606.57 | 88.51% | It was mainly due to the fluctuation of foreign currency exchange rate. |
| R & D expenses | 104,653,040.92 | 80,520,155.54 | 29.97% | It was mainly due to the increase in R&D investment. |
4. Research and Development
√ Applicable □ Not applicable
| Name of main R&D project | Project purpose | Project progress | Goal to be achieved | Expected impact on the future development of the Company |
| Development of MNT polarizer with high transmittance and high polarization | High-end model of layout | Completed | Achieve mass production and supply of clients. | Provide new market growth points and product competitiveness. |
| Development of 1,540mm wide OLED circular polarizer | Development of large-size OLED TV products | Completed | Import large-size products successfully into the client to achieve mass production delivery. | Increase the order volume of OLED TV polarizers and enhance the Company's competitiveness in the field of OLED TV polarizers |
| Key technic development of AMOLED polarizer | Improve product performance and lay out the brand mobile phone market | Completed | Solve the artificial alkaline sweat resistance, and pass the brand mobile phone terminal verification. | As the Company's first iterative product for mass production of OLED mobile phone polarizers, extend its promotion on high-end brand mobile phones to solve the problem in industrial chain. |
| Development of TV polarizer with high transmittance and high polarization | Requirements of industry technology development trend | Completed | Through customer verification, the volume verification is completed. | Ensure the company's ability to take orders. |
| Research on extension core technology of ultra-wide polarizer | Requirements for improving quality, reducing consumption and controlling cost. | Completed | Reduce switching. | Reduce waste cost of chemical materials. |
| Development of high performance polarizer for IPS mobile consumer electronic products | Requirements for terminal brand models. | Partially completed | IPS high-transmittance products can meet the reliability requirements of 65°C* 95%RH*14 days | Improve the product performance and competitiveness, and at the same time effectively increase the market share. |
Company's research and development personnel situation
| 2023 | 2022 | Increase /decrease | |
| Number of Research and Development persons (persons) | 178 | 184 | -3.26% |
| Proportion of Research and Development persons | 12.57% | 12.00% | 0.57% |
The Company's R & D investment situation
| 2023 | 2022 | Increase /decrease | |
| Amount of Research and Development Investment (In RMB) | 104,653,040.92 | 80,520,155.54 | 29.97% |
| Proportion of Research and Development Investment of Operation Revenue | 3.40% | 2.84% | 0.56% |
| Amount of Research and Development Investment Capitalization (In RMB) | 0.00 | 0.00 | 0.00% |
| Proportion of Capitalization Research and Development Investment of Research and Development Investment | 0.00% | 0.00% | 0.00% |
Reasons and influence of significant changes in R&D personnel composition of the Company
□ Applicable √Not applicable
The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying theBusiness Income Year on Year
□ Applicable √Not applicable
Reasons for the drastic change of capitalization rate of R&D investment and its rationality explanation
□ Applicable √Not applicable
5.Cash Flow
In RMB
| Items | 2023 | 2022 | Increase/Decrease(%) |
| Subtotal of cash inflow received from operation activities | 3,078,145,063.09 | 3,378,370,114.97 | -8.89% |
| Subtotal of cash outflow received from operation activities | 2,893,378,323.29 | 2,888,131,564.37 | 0.18% |
| Net cash flow arising from operating activities | 184,766,739.80 | 490,238,550.60 | -62.31% |
| Subtotal of cash inflow received from investing activities | 1,467,781,075.59 | 1,362,677,014.25 | 7.71% |
| Subtotal of cash outflow for investment activities | 1,904,569,967.97 | 1,263,644,263.66 | 50.72% |
| Net cash flow arising from investment activities | -436,788,892.38 | 99,032,750.59 | -541.05% |
| Subtotal cash inflow received from financing activities | 8,000,000.00 | 73,230,492.79 | -89.08% |
| Subtotal cash outflow for financing activities | 169,488,356.86 | 92,382,872.47 | 83.46% |
| Net cash flow arising from financing activities | -161,488,356.86 | -19,152,379.68 | -743.18% |
| Net increase in cash and cash equivalents | -413,054,377.13 | 572,066,400.74 | -172.20% |
Notes to the year-on-year change of the relevant data
√ Applicable □ Not applicable
The net cash flow from investment activities increased by -541.05% year-on-year, mainly due to the purchase ofstructured deposits and bank wealth management products during the reporting period;The net cash flow generated by fund-raising activities increased by -743.18% year-on-year, mainly due to therepayment of loanThe net increase in cash and cash equivalents was -172.20% year-on-year, mainly due to the purchase ofstructured deposits and bank wealth management products during the reporting period.Reasons of major difference between the cash flow of operation activity in report period and net profit of theCompany
□ Applicable √ Not applicable
V.Analysis of Non-core Business
√ Applicable □Not applicable
In RMB
| Amount | Proportion in total profit | Explanation of cause | Sustainable (yes or no) | |
| Investment income | 10,828,635.56 | 7.39% | It was mainly the income obtained by the Company from purchasing the unexpired part of wealth management products during the reporting period. | Have the sustainability |
| Gains and losses on changes in fair value | 2,151,780.82 | 1.47% | It was mainly the income obtained by the Company from purchasing the unexpired part of wealth management products during the reporting period. | Not sustainable. |
| Impairment of assets | -126,089,709.42 | -86.04% | It was mainly due to the Company's inventory depreciation provision in accordance with accounting policies during the reporting period. | Have the sustainability |
| Non-operating income | 1,449,879.26 | 0.99% | It was mainly due to the Company's receipt of liquidated damages | Not sustainable. |
| during the reporting period. | ||||
| Non-operating expense | 8,205,801.51 | 5.60% | It was mainly due to the Company's payment for quality claims during the reporting period. | Not sustainable. |
| Other income | 50,740,363.91 | 34.62% | It was mainly due to the fact that the Company received government subsidies and enjoyed preferential policies of value-added tax deduction during the reporting period. | Have the sustainability |
VI.Condition of Asset and Liabilities
1.Condition of Asset Causing Significant Change
In RMB
| End of 2023 | End of 2022 | Proportion increase/decrease | Notes to the significant change | |||
| Amount | Proportion in the total assets(%) | Amount | Proportion in the total assets(%) | |||
| Monetary fund | 472,274,448.00 | 8.36% | 991,789,968.19 | 17.66% | -9.30% | Mainly due to the purchase of wealth management products |
| Accounts receivable | 820,134,833.95 | 14.52% | 636,583,469.93 | 11.33% | 3.19% | It was mainly due to the Company's income growth during the reporting period and the extension of some customers' account periods. |
| Inventories | 736,392,172.27 | 13.03% | 558,447,648.77 | 9.94% | 3.09% | It was mainly due to the Company's stocking during the reporting period. |
| Investment real estate | 125,603,207.18 | 2.22% | 126,315,834.76 | 2.25% | -0.03% | |
| Long-term equity investment | 127,682,020.70 | 2.26% | 134,481,835.74 | 2.39% | -0.13% | |
| Fixed assets | 2,066,006,237.73 | 36.57% | 2,240,221,656.36 | 39.88% | -3.31% | Mainly due to depreciation. |
| Construction in process | 31,307,060.74 | 0.55% | 38,061,619.60 | 0.68% | -0.13% | |
| Use right assets | 11,999,466.57 | 0.21% | 15,365,393.88 | 0.27% | -0.06% | |
| Short-term borrowing | 8,000,000.00 | 0.14% | 7,000,000.00 | 0.12% | 0.02% | |
| Contract liabilities | 1,436,943.34 | 0.03% | 4,274,109.40 | 0.08% | -0.05% | |
| Long-term borrowing | 505,578,314.56 | 8.95% | 607,421,585.00 | 10.81% | -1.86% | It was mainly due to the Company's stocking during the reporting period. |
| Lease liabilities | 6,687,317.22 | 0.12% | 8,628,672.71 | 0.15% | -0.03% | |
| Transaction financial assets | 821,946,114.68 | 14.55% | 319,605,448.44 | 5.69% | 8.86% | Mainly due to the purchase of wealth management products |
| Other payable | 184,528,344.55 | 3.27% | 197,345,455.37 | 3.51% | -0.24% |
Overseas assets account for a relatively high proportion.
□ Applicable √ Not applicable
2.Asset and Liabilities Measured by Fair Value
√Applicable □ Not applicable
In RMB
| Items | Opening amount | Gain/Loss on fair value change in the reporting period | Cumulative fair value change recorded into equity | Impairment provisions in the reporting period | Purchased amount in the reporting period | Sold amount in the reporting period | Other changes | Closing amount |
| Financial assets | ||||||||
| 1. Financial assets measured at fair value through profit or loss (excluding derivative financial assets) | 319,605,448.44 | 2,151,780.82 | 0.00 | 0.00 | 1,690,500,000.00 | 1,195,000,000.00 | 4,688,885.42 | 821,946,114.68 |
| 2. Derivative financial assets | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 3.Other creditor's right investment | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 4．Other equity | 167,678,283.27 | 0.00 | -21,689,383.27 | 0.00 | 0.00 | 0.00 | 0.00 | 145,988,900.00 |
| Instrument Investment | ||||||||
| 5.Other Non-current Financial assets | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal of financial assets | 487,283,731.71 | 2,151,780.82 | -21,689,383.27 | 0.00 | 1,690,500,000.00 | 1,195,000,000.00 | 4,688,885.42 | 967,935,014.68 |
| Real Estate investment | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Productive biological assets | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Other | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total | 487,283,731.71 | 2,151,780.82 | -21,689,383.27 | 0.00 | 1,690,500,000.00 | 1,195,000,000.00 | 4,688,885.42 | 967,935,014.68 |
| Financial Liability | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Other changesNoneDid 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
The restricted assets as at the end of the reporting period are monetary funds, notes receivable, fixed assets andintangible assets, including:
(1) The restricted monetary funds mainly include the restricted funds equivalent to RMB 3,400,000.00 due tothe freezing of the account, And the Note margin of RMB 5,905,118.06 .and RMB 115,719,927.09 of the principal and interest of the deposit due more than three months from the dateof purchase
(2) Restricted notes receivable shall be notes receivable endorsed or discounted by the Company and not yetdue on the balance sheet date.
(3) limited fixed assets and intangible assets are mainly subsidiary SAPO photoelectric with its part of selfsustaining property to the bank of communications co., Ltd. Shenzhen branch as the lead of syndicatedapplication for mortgage loans, and the company for the mortgage guarantee, see the tide of informationnetwork (http://www.cninfo.com.cn) company on the company for subsidiary bank mortgage guaranteeannouncement (2020-19), the announcement of the progress of the company for the subsidiary guarantee (2020-
46).
VII. 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
（2）Investment in Derivatives
□ Applicable √ Not applicable
The Company had no investment in derivatives in the reporting period.
5.Application of the raised capital
□ Applicable √ Not applicable
The Company had no application of the raised capital in the reporting period.VIII. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
2.Sales of major equity
□ Applicable √ Not applicable
IX. 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 theCompany
In RMB
| Company name | Type | Main business | Registered capital | Total assets | Net assets | Turnover | Operating profit | Net Profit |
| Shenzhen Lisi Industrial Co., Ltd. | Subsidiary | Property lease | 2,360,000.00 | 32,343,767.34 | 26,091,145.71 | 7,618,402.63 | 2,984,011.62 | 3,072,437.36 |
| Shenzhen Huaqiang Hotel | Subsidiary | Property lease | 10,005,300.00 | 21,117,565.97 | 20,587,426.97 | 0.00 | -200,059.11 | -200,972.20 |
| Shenzhen Shenfang Real Estate Management Co., Ltd. | Subsidiary | Property management | 1,600,400.00 | 12,048,598.90 | 6,502,114.60 | 15,337,604.85 | 1,761,604.56 | 1,661,756.99 |
| Shenzhen Beauty Century Garment | Subsidiary | Production of fully electronic jacquard | 13,000,000.00 | 16,559,745.28 | -12,819,020.61 | 35,017,435.14 | -22,850,886.49 | -22,846,931.63 |
| Co., Ltd. | knitting whole shape | |||||||
| SAPO Photoelectric | Subsidiary | Production and sales of polarizer | 583,333,333.00 | 4,434,012,261.90 | 3,062,504,373.22 | 2,944,147,907.27 | 135,338,212.80 | 119,242,465.54 |
| Shengtou（HK）Co., Ltd. | Subsidiary | Sales of polarizer | HKD10,000 | 6,638,056.16 | 6,547,620.59 | 0.00 | 428,104.79 | 428,104.79 |
| Shenzhen Shenfang Sungang Real Estate Management Co., Ltd. | Subsidiary | Property management | 1,000,000 | 11,737,482.85 | 9,367,913.27 | 4,962,787.60 | 2,752,677.73 | 2,584,909.35 |
| Shenzhen Shengjinlian Technology Co., Ltd. | Subsidiary | Production and sales of polarizer | 1,000,000 | 0.00 | 0.00 | 0.00 | 2,984,011.62 | 0.00 |
Subsidiaries obtained or disposed in the reporting period
√ Applicable □ Not applicable
| Company name | Method of obtained or disposed of subsidiaries in the reporting period | The impact on overall production, operation, and performance |
| Shenzhen Shengjinlian Technology Co., Ltd. | deregistered | Complies with the company's strategic planning and has not had a significant impact on the overall production, operation, and performance of the company. |
Description of the main holding and equity participation companiesThe financial data of SAPO Photoelectric mentioned in the table above are the financial statements data of itsparent company and non-consolidated statements data. Shengtou（HK）Co., Ltd. and Shenzhen ShengjinlianTechnology Co., Ltd. are subsidiaries of SAPO Photoelectric.For details of the fluctuation of subsidiary SAPO Photoelectric's performance and the reasons for the change,please refer to "IV. Analysis of main business" in Section III Management Discussion and AnalysisX．Structured vehicle controlled by the Company
□ Applicable √ Not applicable
XI. Prospect for future development of the Company（I）The Development Trend of the Industry
1. Industry competition pattern
Polarizer industry is a highly concentrated industry. Currently, there are about 10 major polarizermanufacturers worldwide, mainly in mainland China, Japan, South Korea and Taiwan Province of China.Withthe transfer of production capacity and the expansion of Chinese mainland manufacturers, mainland China hasbecome the largest polarizer production base in the world. According to Omdia data, by the end of 2023, theglobal share of Chinese Mainland's polarizer capacity scale is about 54.91%. It is estimated that by 2027, theshare of Chinese Mainland's polarizer capacity scale will further increase to 69.66%. In the competition of ultrawide polarizer production line brought about by the rapid growth of demand for 65 inch and above large-sizedisplay products, Chinese Mainland is in the forefront of the industry. According to Omdia data, by the end of
2023, there are 12 ultra wide production lines with a length of 2.3 meters or more in the world, of which 11have been built in Chinese Mainland. Polarizer enterprises with good production and operation capacity of ultrawide production lines will occupy a favorable position in the market competition.
2. Industry trends
With the gradual recovery of the global consumer electronics market and the increasing maturity ofdifferent display technologies and products in multiple scenarios, the global display industry is entering arecovery and upward trend. With the successive launch of international major events such as the Olympics andthe European Cup, a new cycle of display product replacement has begun. The global demand for display panelsis expected to further stabilize and accelerate its release in 2024. As one of the key upstream raw materials fordisplay panels, polarizers are expected to fully benefit from the industry's recovery and enter a new round ofdemand growth.In recent years, due to the continuous expansion of production capacity of major panel manufacturers inChinese Mainland, the domestic polarizer market demand has grown rapidly. Overseas polarizer manufacturershave chosen to gradually shrink and exit, and there is significant room for domestic substitution, which hasbrought good development opportunities for mainland polarizer manufacturers with market advantages, policyadvantages, and geographical advantages.With the upgrading of consumption, the demand for large-sized televisions of 65 inches and above isconstantly increasing, bringing huge demand for ultra wide polarization film products. Market institution Omdiapredicts that from 2022 to 2027, the global demand for polarizers 65 inches and above will have a compoundannual growth rate of about 15%. It is expected that by 2027, the demand for large-sized panels 65 inches andabove will increase to 96 million square meters, corresponding to a demand for ultra wide polarizers exceeding200 million square meters. At the same time, with the trend of OLED displays accelerating their penetrationinto mid to large sizes on the basis of high penetration rates in mobile phone products, the demand for multiplescreens brought about by automotive intelligence and electrification, and the promotion of Apple's promotionplan for OLED IT products, the demand for high-end products such as OLED and car polarizers is rapidlygrowing, becoming a blue ocean market that polarizer companies are competing for. Manufacturers with large-sized polarizer products, as well as high-end cutting-edge polarizer technology reserves and mass productioncapabilities such as OLED and automotive, will have a greater competitive advantage.(II) Company development strategyRelying on the existing business foundation, the Company will actively plan for business innovation andupgrading through two paths of tapping the potential of stock business and increasing business investment andempowerment, vigorously implement the "polarizer+" strategy, promote the core business of polarizers tobecome better and stronger, and meanwhile, choose the right opportunity to extend to upstream raw materials,promote the development of polarizer integration business, actively expand other advanced new material fields,and strive to build a world-class new material technology group.(III) Possible risks
1. Macroeconomic risks
At present, the vitality of the market economy has gradually recovered, but the foundation of economicrecovery is still not solid, and residents' consumption is still restricted. As a member of the upstreammanufacturers of the display market, the Company cannot rule out the risk that unpredictable macroeconomicfluctuations may affect the Company's performance.
2. Market risk
The polarizer industry is an important part in the China's future manufacturing development, the demand fordisplay panels and the development of corresponding technologies have been changing day by day, and thedomestic substitution process of polarizer industry is underway. With the gradual mass production of the 10.5generation line, the super-large size market will usher in new changes. Where the Company's technology andproducts can not respond to the needs of the application field in time, the wide polarizer products or itsapplications are not as expected, or the market competition intensifies leading to the price of display productsdeclining, or the price reduction pressure transits to the polarizer market, then those will adversely affect theCompany.
3. Raw material risk
As the core production technology of polarizer upstream materials has high barriers, it is basicallymonopolized by foreign manufacturers and the localization rate is not high. At present, the key raw materialsrequired to manufacture polarizers, such as PVA film and TAC film, are monopolized by Japanese enterprises,and the supply of key raw materials is constrained by Japan, while the prices of major film materials areaffected by suppliers' capacity, market demand and yen exchange rate, thus affecting the Company's productcosts.
4. Risk of intensified competition
With major domestic polarizer manufacturers accelerating the construction and expansion of productionlines in recent years, the production capacity of polarizers, especially large-sized polarizers, will continue togrow in the future. If the downstream consumer market recovers less than expected, the competition in thepolarizer industry will further intensify.(IV) Key Work in 2024
1. Expand sales, improve quality and efficiency, and promote the steady improvement of polarizer business
In terms of market, grab orders, ensure utilization and adjust the structure, and reduce costs; In terms ofoperation, improve efficiency and quality, and promote the steady improvement of polarizer businessoperation.First, seek for project increment, follow up the opening of new projects of customers, and improve theutilization of production lines; Second, upgrade the production line process capacity, improve the on-sitemanufacturing environment, improve the AOI detection accuracy and speed; Third, continue to reduce costs andincrease efficiency, focus on key indicators such as product yield, material loss, procurement unit price, energyconsumption, R&D investment, and improve cost-output benefits; Fourth, well ensure importing domesticmaterials, reduce material loss and save production costs by combining new technology.
2. Actively promote major asset restructuring and promote the investment layout of the industrial chain
Promote the major asset restructuring in an orderly manner, ensure the completion of this major assetrestructuring project on schedule, realize the strong cooperation in the polarizer industry, rapidly increase theproduction scale of polarizers, optimize the layout of industrial chain, and deepen the depth of technicalreserves, so as to make the Company move towards a new level of high-quality development. This major assetrestructuring is in line with the relevant development strategies of the state and Shenzhen, and is of positivesignificance to ensuring the safety of the national new display supply chain.
3. Strengthen innovation leadership and create differentiated competitive advantages
We will firmly pursue the path of innovative development, strengthen research and development investment,accelerate the development process and mass production scale of cutting-edge products and technologies suchas mid to high end OLED TVs, OLED phones, and car mounted products, further seize market opportunities,
and create a competitive advantage in technology and product differentiation with other domestic polarizermanufacturers in the field of cutting-edge products.
4. Ensure the steady growth of property leasing business and provide effective support for the developmentof the Company
The property enterprises actively carry out market research, combine the market and the company'ssituation, formulate a refined annual lease plan, further optimize the working mechanism, continue toimplement refined management, innovate and tap potential, increase revenue and reduce expenditure, improvethe service quality and management level of property enterprises, and enhance operating efficiency.
5. Activate existing assets and lay a solid foundation for the development of the main business
Actively activate the existing assets of the property, optimize asset allocation, improve asset operationefficiency, and accelerate the cancellation and clearance work of Huaqiang Hotel to enrich the company's cashflow, laying a solid foundation for the company to focus on the main business of polarizing film and seektransformation and development.
6. Strengthen the construction of talent team and ensure development with talent-driven innovation
Strengthen the echelon construction of reserve talents in the headquarters of the Company Group, improvethe working mechanism of reserve talents training and assessment, and scientifically plan and design thedimension and content of reserve talents training. Introduce talents with core competitiveness, especiallymiddle- and high-end technical talents and industrial management talents, in order to thoroughly implement thestrategy of strengthening enterprises through talents, mobilize resources from all sides and broaden the channelsfor introducing core talents.
7. Well ensure work safety and maintain the harmony and stability of the enterprise
Always adhere to the work safety policy of "safety first, prevention foremost and comprehensive treatment",firmly establish the concept of safety development, constantly improve and refine the Company's safetymanagement system, establish and improve various safety management system standards, further strengthen on-site safety supervision and rewards and punishments, vigorously carry out safety education and training,continuously improve the safety awareness and professional skills of all employees, and build a solid line ofdefense for the Company's work safety.
8. Enhance the ability to operate in compliance with laws and regulations, and improve the ability ofcomprehensive risk prevention and control
Build a compliance management organization and leadership mechanism, improve the risk controlcompliance management system, implement the risk control compliance management operation mechanism,and build a four-in-one prevention and control system with full participation, whole-process monitoring andfull-field coverage, with leading by improving the core competitiveness of the enterprise as the traction,focusing on self-prevention, self-supervision and self-restraint, and aiming at effectively resolving risks andoperating in compliance with laws and regulations.
9. Strengthen party building leadership and innovate enterprise culture
Adhere to the guidance of Xi Jinping's new era socialism with Chinese characteristics, thoroughly study andimplement the spirit of the 20th Party Congress, comprehensively implement the important exposition ofGeneral Secretary Xi Jinping on the reform and development of state-owned enterprises and party building,continuously strengthen party building, further strengthen the ideological foundation, and lay a solid foundationand provide guarantee for the healthy development of the Company.
XII. Particulars about researches, visits and interviews received in this reporting periodApplicable √ □ Not applicableThe company did not receive researches, visits and interviews received in this reporting period.
XIII. The implementation of the action plan of "Double improvement of quality and return".Whether the Company has disclosed the action plan of "Double improvement of quality and return".
□Yes ?No
IV. Corporate Governance
I. General situationDuring the reporting period, the Company operated in strict accordance with the requirements of relevantlaws, regulations and normative documents, such as Securities Law, Company Law, Governance Guidelines forListed Companies, Guidelines for Self-discipline Supervision of Listed Companies in Shenzhen Stock ExchangeNo.1-Standard Operation of Listed Companies on Main Board, and strengthened risk management and control toensure the healthy and stable development of the Company. At present, the Company is with basically soundgovernance systems, standardized operation, and refined corporate governance structure, which meets therequirements of the normative documents on the governance of listed companies issued by China SecuritiesRegulatory Commission.In 2023, company held a total of 3 general meetings, convened general meetings, standardized voting
procedures to safeguard the effectiveness and legality in strict accordance with the regulations and requirementsof Corporation Law, Articles of Corporation and Rule of Procedure of Shareholders' Meeting. Companies activelyprotected the voting rights of minority investors, and general meetings were convened in the form of live networkto adequately assure small investors of their rights to exercise.
In 2023, the board of directors held 7 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 thedirectors performed directors ' duties, exercise directors ’ rights, attended related meetings and activelyparticipated in the training and became familiar with relevant laws and regulations with serious, diligent andhonest attitudes. Independent directors independently performed their duties in strict accordance with Articles ofCorporation, The independent director system and other relevant laws and regulations, expressed fully theirindependent opinions on corporate operation, decision-making, and important matters, etc. Strategy, audit,remuneration, evaluation, nomination committees were established under board of directors, all committeesfunctioned properly, and performed duties such as internal audits, compensation assessment, nomination of seniormanagement personnel, and provided scientific and professional advisory opinions for board of directors ’decision-making.
In 2023, the board of supervisors held 5 meetings. The board of supervisors strictly followed therequirements of Articles of Corporation and Rules of procedure of the board of supervisors and other relevantlaws and regulations, supervised the legal compliance of the duties performed by company's financial personneland directors, managers and other senior management personnel in the aim of maintaining the legitimate rightsand interests of the company and its shareholders. All the supervisors fulfilled their obligations, exercised theirrights according to the laws. The convening and voting procedures of the board of supervisors were legal, and theresolutions were legal and valid. The establishment and implementation of board of supervisors played an activerole in improving corporate governance structure and regulating corporate operations.In 2023, in order to promote the standardized operation of the company, ensure the independent exercise ofpowers by independent directors in accordance with the law, and fully leverage the role of independent directorsin corporate governance, the board of directors of the company revised the company's articles of association, rulesof procedure for shareholder meetings, rules of procedure for board meetings, and independent director worksystem in accordance with current laws, regulations, and normative documents such as the Company Law,Securities Law, Measures for the Administration of Independent Directors of Listed Companies, Shenzhen StockExchange Listing Rules, and Shenzhen Stock Exchange Self regulatory Guidelines No. 1- Standardized Operation
of Main Board Listed Companies, further improving the company's governance structure.In 2023Moreover, the Company carried out the special work Blue Sky Action according to Notification onImplementing Special Work where Investors Protect Blue Sky Action published by Shenzhen Securities Bureau toenhance the quality of information disclosure as the key point, to continuously perfect the communicationmechanism 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, andensure all the investors obtained equal opportunities for informal access. Meanwhile, in the aim of improving thetransparency of listed companies, company accepted investors’ on-site investigation to have comprehensiveunderstandings of the company's business situation through face-to-face communication with management, alsourged the company established a responsibility to return on investors, improved and enhanced the corporategovernance standards. Meanwhile, the Company continued to perfect the voting mechanism for minority investors.In 2023, the minority investors’ voting was counted separately at each of the 3 shareholder’ s meetings, and whoseresult was disclosed at the decision announcement at the shareholder’s meeting, which fully guaranteed theexecution of power of the minority investorsDoes there exist any difference in compliance with the corporate governance , the PRC Company Law and therelevant provisions of CSRC
□ Yes √No
There exist no difference in compliance with the corporate governance , the PRC Company Law and therelevant provisions of CSRC.II. Independence and Completeness in business, personnel , assets, organization and financeThe code of conduct of the controlling shareholders of the company did not go beyond the general meetingsdirectly or indirectly to interfere with the decision-making and business activities, the company had independentand complete business and autonomous operation capacity , achieved “five point separation” in respect ofpersonnel, financial, asset, agencies, business.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
| Sessions | Type of meeting | Investor participation ratio | Meeting Date | Disclosure date | Disclosure index |
| The First provisional shareholders’ General meeting of 2023 | Provisional shareholders’ General meeting | 49.58% | March 22,2023 | March 23,2023 | Juchao Website （http://www.cninfo.com.cn）Announcement No.: 2023-09 |
| 2022 Shareholders’ general meeting | Annual Shareholders’ General Meeting | 49.57% | May 26,2023 | May 27,2023 | Juchao Website （http://www.cninfo.com.cn）Announcement No.: 2023-25 |
| The Second provisional shareholders’ General meeting of 2023 | Provisional shareholders’ General meeting | 49.53% | December 25,2023 | December 26,2023 | Juchao Website （http://www.cninfo.com.cn）Announcement No.: 2023-56 |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √Not applicable
V. Information about Directors, Supervisors and Senior Executives
1.Basic situation
| Name | Sex | Age | Positions | Office status | Starting date of tenure | Expiry date of tenure | Shares held at the year-begin(share) | The number of shares held in the current period(shares) | Number of shares reduced in the current period(shares) | Other changes(shares) | Number of shares held at the end of the period(shares) | Reasons for increase or decrease of shares |
| Yin Kefei | Male | 49 | Board chairman n， Secretary y of the party committ ee | In office | February 10,2021 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Zhu Meizhu | Male | 59 | Deputy Secretary of the Party commi ttee， Director, Genera l Mange r | In office | July 19,2017 | 93,000 | 0 | 0 | 0 | 93,000 | 0 | |
| Ning Maozai | Male | 48 | Director ,Deputy Secretary of the Party committee | In office | December 14,2017 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Wang Chuan | Male | 52 | Director, Deputy | In office | October 28,2022 | 0 | 0 | 0 | 0 | 0 | 0 |
| General Manager | ||||||||||||
| Liu Yu | Female | 52 | Director ,CFO | In office | February 28,2024 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Sun Minghui | Male | 42 | Director | In office | February 10,2021 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Wu Guangquan | Male | 61 | Independent Director | In office | December 25,2023 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Yang Gaoyu | Male | 56 | Independent Director | In office | December 25,2023 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Wang Kai | Male | 40 | Independent Director | In office | January 16,2020 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Ma Yi | Male | 57 | Chairman of the supervisory committee, Secretary of the Commission for Discipline Inspection | In office | January 16,2020 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Yuan Shuwen | Male | 43 | Employee supervisor | In office | January 16,2020 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Zhan Lumei | Female | 54 | Employee supervisor | In office | February 10,2021 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Liu Hong | Male | 59 | Deputy GM | In office | January 19,2017 | 3,000 | 0 | 0 | 0 | 3,000 | 0 | |
| Jiang Peng | Female | 53 | Secretary to the board of | In office | January 16,2015 | 0 | 0 | 0 | 0 | 0 | 0 |
| directors | ||||||||||||
| Guan Fei | Male | 38 | Deputy GM | Dimission | September 22,2021 | October 10,2023 | 0 | 0 | 0 | 0 | 0 | 0 |
| He Fei | Male | 46 | Director ,CFO | Dimission | January 16,2020 | February 7,2024 | 0 | 0 | 0 | 0 | 0 | 0 |
| He Zuowen | Male | 61 | Independent Director | Dimission | July 19,2017 | December 25,2023 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cai Yuanqing | Male | 54 | Independent Director | Dimission | July 19,2017 | December 25,2023 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | -- | -- | -- | -- | -- | -- | 96,000 | 0 | 0 | 0 | 96,000 | -- |
During the reporting period, whether there is dismissal of directors and supervisors and recruitment of seniormanagers
√Yes □ No
1.Guan Fei, the former deputy general manager of the Company, resigned on October 10, 2023. For details,please refer to the Announcement on the Resignation of the Deputy General Manager of the Company onCNINF (http://www.cninfo.com.cn)（2023-14）
2.The former independent directors of the company, He Zuowen and Cai Yuanqing, left their posts upon theexpiration of their terms.On November 17, 2023, the Company held the 25th meeting of the Eighth Board ofDirectors, and agreed to nominate Yang Gaoyu and Wu Guangquan as candidates for independent directors ofthe Eighth Board of Directors. For details, please refer to the Announcement on the Expiration of IndependentDirectors' Term and By-election of Independent Directors on CNINF (http://www.cninfo.com.cn).（2023-484）On December 25, 2023, the Company held the Second Extraordinary General Meeting of Shareholders in 2023,and agreed to add Yang Gaoyu and Wu Guangquan as independent directors of the Eighth Board of Directors ofthe Company. For details, please refer to the Announcement on Resolutions of the Second ExtraordinaryGeneral Meeting of Shareholders in 2023 on CNINF (http://www.cninfo.com.cn).（2023-56））
3.He Fei, the Company's Director and Chief Financial Officer, left his post on February 7, 2024.On February 7,2024, the Company held the 27th meeting of the Eighth Board of Directors, and agreed to employ Liu Yu as theCompany's Chief Financial Officer and the Company's Financial Controller, and agreed to nominate Ms. Liu Yuas a candidate for non-independent directors of the Eighth Board of Directors. For details, please refer to theAnnouncement on Adjusting the Chief Financial Officer and Nominating Directors Candidates on CNINF(http://www.cninfo.com.cn) (No.2024-04). On February 28, 2024, the Company held the First ExtraordinaryGeneral Meeting of Shareholders in 2024, and agreed to elect Liu Yu as a Non-independent Director of theCompany. For details, please refer to the Announcement of Resolutions of the First Extraordinary GeneralMeeting of Shareholders in 2024 on CNINF (http://www.cninfo.com.cn).（2024-06））As of the disclosure date of this report, except for the above changes, other directors, supervisors and seniormanagers of the Company have not changed
Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
| Name | Positions | Types | Date | Reason |
| Wu Guangquan | Independent Director | Elected | December 25,2023 | The original Independent director resigned |
| Yang Gaoyu | Independent Director | Elected | December 25,2023 | The original Independent director resigned |
| Liu Yu | Director ,CFO | Elected | February 28,2024 | The original director and CFO RESIGNED |
| Guan Fei | Deputy | Dimission | October 10,2023 | Resign |
| He Fei | Director ,CFO | Dimission | February 7,2024 | Job adjustment |
| He Zuowen | Independent Director | Left for term expiration | December 25,2023 | Left for term expiration |
| Cai Yuanqing | Independent Director | Left for term expiration | December 25,2023 | Left for term expiration |
2.Posts holding
Professional background, work experience and main duties in the Company of existing directors, supervisorsand senior management
(1) Director
Yin Kefei, male, born in July 1974, master degree, engineer, member of the Communist Party of China. Hehas served as Technician and Deputy Director of Customer Service Center of Pipeline Gas Branch of ShenzhenGas Group Co., Ltd.; Deputy Director, Director of Civil Service Department and Director of General Office ofPipeline Gas Customer Service Branch of Shenzhen Gas Group Co., Ltd.; Deputy General Manager of ShenzhenGas Group Co., Ltd. Ganzhou Shenran Natural Gas Co., Ltd.; Member of the Party Group and Deputy Director ofthe State-owned Assets Supervision and Administration Commission of Dongguan City, Guangdong Province,and concurrently the Vice Chairman of Dongguan Water Investment Group Co., Ltd.; Deputy Secretary-Generalof Dongguan Municipal Government of Guangdong Province, Party Secretary and Director of DongguanMunicipal Government Liaison Office in Beijing, and concurrently Chairman of the Board of Supervisors ofDongguan Biotechnology Industry Development Co., Ltd.; Deputy Secretary of the Party Committee, Directorand General Manager of Dongguan Financial Holding Group Co., Ltd., concurrently Director of Dongguan Bankand Director of Dongguan Asset Management Company; He is currently the Deputy General Manager ofShenzhen Investment Holdings Co., Ltd. and Board chairman ， Secretary of the party committee of theCompany.
Zhu Meizhu, Male, Born in November 1964, Master degree, Senior engineer, once served successively aschief 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 Vice Secretary of the partycommittee ,director and General Manager of the Company..
Ning Maozai, male, born in July 1975, bachelor degree, senior administration engineer, Chinese CommunistParty 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 PropertyDevelopment (Group) Corp. and hold a concurrent post of deputy human resource Deputy manager and manager;At present he holds the position of company director and Vice Secretary of the party committee of the Company.
Wang Chuan, male, born in March 1972, \master's degree, economist and engineer, CPC party member. He hasserved as deputy department director, department director and assistant director of the CooperativeDevelopment Department of Shenzhen National High-tech Industry Innovation Center, Director, GeneralManager and Chairman of Shenzhen Qidian Innovation Technology Co.,Ltd., and Deputy General Manager ofShenzhen Tongchan Group Co., Ltd. He is currently the Director of Industrial Management Department ofShenzhen Investment Holding Co., Ltd., member of the Party Committee, Director and Deputy GeneralManager of the Company, and concurrently the Chairman of Shenzhen SAPO Photoelectric Technology Co.,Ltd.
Liu Yu, female, born in November 1971, bachelor degree, senior accountant, certified public accountant inChina, member of Communist Party of China. She has served as the financial director of Shenzhen Women'sNewspaper Magazine, the vice president of Shenzhen Women's Newspaper Magazine, and the director andchief financial officer of Shenzhen Wuzhou Hotel Group Co., Ltd. She is currently the Director and ChiefFinancial Officer of the Company.
Sun Minghui, male, born in September 1981, master degree, accountant, member of the Communist Party ofChina. He has served as Staff Member of the Finance Department of Shenzhen Energy Finance Co., Ltd. and theFinancial Management Department of Shenzhen Energy Group Co., Ltd., Finance Management Director of theFinancial Budget Department of Shenzhen Investment Holdings Co., Ltd., Senior Director of the FinanceDepartment and the Board Office, and Deputy Director of the Finance Department (Settlement Center). He iscurrently the Chief Accountant of Shenzhen Investment Holdings Co., Ltd., concurrently serving as the Directorof the Finance Department (Settlement Center), and Director of the Company
Wu Guangquan, male, born in May 1962, Master of Tongji University, member of Communist Party ofChina. He used to be the accountant, assistant manager of Finance Department, deputy manager, manager,deputy chief accountant, deputy general manager, general manager and chairman of China National AERO-TECHNOLOGY Shenzhen Company Limited; Chairman of Jiangxi Jiangnan Trust and Investment Co., Ltd.;Party secretary, chairman and general manager of China Aviation Technology International Holdings Co., Ltd.;Special officer of Aviation Industry Corporation of China; Party secretary and chairman of AVIC GeneralAircraft Co., Ltd.; He once served as chairman and legal representative of Fiyta Precision Technology Co., Ltd.,chairman and legal representative of Tianma Microelectronics Co., Ltd., chairman and legal representative ofTianhong Shuke Commercial Co., Ltd., chairman and legal representative of AVIC Real Estate Co., Ltd. (nowrenamed as China Merchants Surplus Industry Operation Service Co., Ltd.), chairman of Shennan Circuit Co.,Ltd., executive director of China South City Holdings Limited and chairman of the board of ContinentalAerospace Technologies Holding Limited.He is currently the president of Federation of Shenzhen Industries,the chairman of the presidium of China Federation of Industrial Economics and the director of Global IndustrialResearch Center, the chairman of Shenzhen Jinling Times Technology Co., Ltd., the chairman of ShenzhenFanjing Investment Co., Ltd., the chairman of Shenzhen Fanjing Smart Enterprise Management Consulting Co.,Ltd., the independent director of Zhongchuang Xinhang Technology Group Co., Ltd., the independent directorof Shenzhen Lihe Kechuang Co., Ltd. and the independent director of the Company.
Yang Gaoyu, male, born in February 1968, master degree in business administration at New York Instituteof Technology in the United States, certified public accountant in China, certified tax accountant in China, andforensic accountant appraiser, member of China Zhi Gong Party.He used to be the accountant of Shenzhen A-Fontane Fabric Co., Ltd. and the auditor, audit manager, partner and chief partner of Shenzhen Great WallCertified Public Accountants Co., Ltd.He is currently the director of Shenzhen Branch of Zhongzheng TiantongCertified Public Accountants (Special General Partnership), the executive director and general manager of
Zhongtian Dexiang Tax Agency (Shenzhen) Co., Ltd., At the same time, he is the director of the 7th Council ofChinese Certified Tax Agents Association, the executive director of Shenzhen Tax Agents Association, the vicepresident of Shenzhen Futian Accounting Association, the visiting professor of Accounting College of JiangxiUniversity of Finance and Economics, the distinguished professor of Modern Economics and ManagementSchool of Jiangxi University of Finance and Economics, the part-time tutor of Shenzhen Research Institute ofJiangxi University of Finance and Economics, the entrepreneurial tutor of Shenzhen Research InstituteInnovation and Entrepreneurship Center of Jiangxi University of Finance and Economics, the off-campus tutorof MPAcc of Shenzhen University School of Economics, the independent director of Shenzhen EXC-LEDTechnology Co.,Ltd., the independent director of Shenzhen New Trend International Logis-tech Co.,Ltd., andthe independent director or the Company.
Wang Kai, male, born in 1983, Ph.D. of Huazhong University of Science and Technology, Member of theCommunist Party of China, associate professor and researcher of Southern University of Science and TechnologyDepartment of Electronic and Electrical Engineering, and Outstanding Young Man of Guangdong Province. Hehas served as a member of the Technical Committee of Beijing Branch of Society for Information Display (SID),a member of the National Standardization Technical Committee of Flat Panel Display Devices, Deputy Directorof the Key Laboratory of Energy Conversion and Storage Technology of the Ministry of Education, and DeputyDirector of the Key Laboratory of Quantum Dot Advanced Display and Lighting in Guangdong Universities, andindependent director of the Company.
（2）Supervisor
Ma Yi, male, born in August 1966, bachelor's degree, member of Communist Party of China, assistanteconomist. He has successively served as a cadre of the automobile manufacturing and distribution plant ofHainan automobile transportation corporation, director of the Business Department, assistant to the generalmanager and manager of the Transportation Department of Shenzhen Shenjiu International Logistics Co., Ltd.Guangzhou Branch, operation director of Cosco Logistics Guangzhou Antaida Logistics Co., Ltd., generalmanager of Shenzhen Shenjiu International Logistics Co., Ltd. Guangzhou Branch, director of Planning andDevelopment Department, director assistant, chief of Futian station, deputy secretary of the Party Committee,director and general manager of Shenzhen highway passenger and freight transportation service center. He is thecurrent chairman of the board of supervisors and secretary of Discipline Inspection Committee of the Company..
Yuan Shuwen, male, born in May 1980, master's degree. He has successively served as chief of Shigumanagement station of Hengshan county rural management bureau, financial director of Shenzhen FengchengIron Wire Products Co., Ltd., project manager of Shenzhen branch of BDO Accounting Firm Co., Ltd., generalledger accountant of Shenzhen Zhenye (Group) Co., Ltd., director of Financial Budget Department and seniordirector of Assessment and Distribution Department of Shenzhen Investment Holding Co., Ltd. Currently, he isvice director of Assessment and Distribution Department of Shenzhen Investment Holding Co., Ltd. andsupervisor of the Company
Zhan Lumei, female, born in June 1969, college degree, Senior Labor Relations Coordinator, Senior CareerInstructor, member of the Communist Party of China. She has served as the Administrative Personnel Director ofShenzhen Hualang Garment Co., Ltd., Director and Manager of the Human Resources Department of theCompany. Currently, she is the vice chairman of the Federation of Trade Unions, Director of the Party-mass WorkDepartment, and Chairman of the Trade Union and the Employee Supervisor of the Company.
(3)Senior management
Liu Honglei, male, born in May 1964, bachelor degree and CPC member, Senior engineer, He has servedTechnician , Work director, Deputy director of office of First film factory of Ministry of ChemicalEngineering,Director of personnel Education Dept of Education Department of China Lekai Film Group, he hasserved as the deputy general manager and general manager of SAPO Photoelectric Co., Ltd from June 2012 toMay 2013 and the head of the party-mass work department and the manager of the business managementdepartment of Shenzhen Textile (Holdings) Co., Ltd; At present he holds the position of deputy general managerof the company.
Jiang Peng, Female, born in October 1970, Bachelor Degree, member of communist party, She has served asa Clerk and Deputy Section Chief of the office of Shandong Aquatic Enterprise Group Corporation, Section Chiefof the Office of the Board of Directors of Shandong Zhonglu Ocean Fishery Co., Ltd., Deputy Director andSecurities Affairs Representative. 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 OceanicFisheries Co., Ltd., Securities Representative of Huafu Holding Co., Ltd., Securities affairs representative andOfficer of the Secretariat of the Board of the Company, now serves as the secretary of the Board of the Companyand Director of SAPO Photoelectric Co., LtdOffice taking in shareholder companies
√Applicable □Not applicable
| Names of the persons in office | Names of the shareholders | Titles engaged in the shareholders | Sharing date of office term | Expiry date of office term | Does he /she receive remuneration or allowance from the shareholder |
| Yin Kefei | Shenzhen Investment Holdings Co., Ltd. | Deputy GM | January 11,2021 | Yes | |
| Wang Chuan | Shenzhen Investment Holdings Co., Ltd. | Director of the Industry Management Department | May 23,2018 | No | |
| Sun Minghui | Shenzhen Investment Holdings Co., Ltd. | Director of Financial Dept( Clearing centre） | November 11,2020 | Yes | |
| Sun Minghui | Shenzhen Investment Holdings Co., Ltd. | Chief Accountant | March 14, 2024 | Yes | |
| Yuan Shuwen | Shenzhen Investment Holdings Co., Ltd. | Deputy minister of the Assessment and distribution Department | September 18,2017 | Yes |
Offices taken in other organizations
√Applicable □Not applicable
| Name of the persons in office | Name of other organizations | Titles engaged in the other organizations | Starting date of office term | Expiry date of office term | Does he/she receive remuneration or allowance from other organization |
| Yin Kefei | Research Institute of Tsinghua University in Shenzhen | Director | March 17,2023 | No |
| Yin Kefei | Shenzhen Environmental Technology Group Co., Ltd. | Director | April 23,2021 | No | |
| Yin Kefei | Shenzhen international Chamber | Vice chairman | July 24,2023 | No | |
| Yin Kefei | ULTRARICH INTERNATIONAL LIMITED | Director | September 4,2023 | No | |
| Yin Kefei | Shenzhen International Investment Promotion Federation | The candidate for the second president | January 20,2022 | No | |
| Wang Chuan | Shezhen Shenfubao（Group）Co., Ltd. | Director | June 21,2018 | No | |
| Wang Chuan | ULTRARICH INTERNATIONAL LIMITED | Director | June 27,2018 | No | |
| Wang Chuan | Shenzhen Tongchan Group Co., Ltd. | Director | December 17,2020 | No | |
| Sun Minghui | China Nanshan Development (Group) Co., Ltd. | Supervisor | October 17,2017 | No | |
| Sun Minghui | Shenzhen Highway Passenger & Cargo Transportation Service Center Co., Ltd. | Supervisor | June 16,2017 | No | |
| Sun Minghui | ULTRARICH INTERNATIONAL LIMITED | Director | November 11,2020 | No | |
| Sun Minghui | Shenzhen Special Economic Zone Real Estate | Director | November 11,2020 | No | |
| Sun Minghui | Hubei Shentoukong Investment Development Co., Ltd | Director | November 11,2020 | No | |
| Sun Minghui | Guotai Junan Securities Co., Ltd. | Director | October 26,2023 | No | |
| Sun Minghui | Guotai Junan Investment Management Co., Ltd. | Director | October 26,2023 | No | |
| Sun Minghui | Shenzhen Chiwan Development Co., Ltd. | Supervisor | June 30,2021 | No | |
| Yuan Shuwen | Shenzhen Water Planning & Design Institute Co., Ltd. | Supervisor | February 20,2023 | No | |
| Description of his position in other | No | ||||
units
Punishments to the current and leaving board directors, supervisors and senior managers during the reportperiod by securities regulators in the recent three years
□ Applicable √Not applicable
3. 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 managementpaid by the company is determined by “Director Compensation Management System” and “ExecutiveCompensation Management and Evaluation System ” , the remuneration of independent directors is determinedas per the resolution of shareholders’ meeting, and the remuneration of supervisors paid by the company isdetermined by their position held in the company.Remuneration to directors, supervisors and senior executives in the reporting periodIn RMB10,000
| Name | Sex | Age | Positions | Office status | Total remuneration received from the Company | Whether to get paid in the company related party |
| Yin Kefei | Male | 49 | Director,Board chairman ， Secretary of the party committee | In office | 0 | Yes |
| Zhu Meizhu | Male | 59 | Deputy Secretary of the Party committee， Director, General Manger | In office | 101.68 | No |
| Ning Maozai | Male | 48 | Director ,Deputy Secretary of the Party committee | In office | 95.75 | No |
| Wang Chuan | Male | 52 | Director, Deputy GM | In office | 78.75 | No |
| Liu Yu | Female | 52 | Director ,CFO | In office | 0 | Yes |
| Sun Minghui | Male | 42 | Director | In office | 0 | Yes |
| Wu Guangquan | Male | 61 | Independent Director | In office | 0.24 | No |
| Yang Gaoyu | Male | 56 | Independent Director | In office | 0.24 | No |
| Wang Kai | Male | 40 | Independent Director | In office | 12 | No |
| Ma Yi | Male | 57 | Chairman of the supervisory committee, Secretary of the Commission for Discipline | In office | 112.14 | No |
| Inspection | ||||||
| Yuan Shuwen | Male | 43 | Supervisor | In office | 0 | Yes |
| Zhan Lumei | Female | 54 | Employee supervisor | In office | 58.64 | No |
| Liu Honglei | Male | 59 | Deputy GM | In office | 92.87 | No |
| Jiang Peng | Female | 53 | Secretary to the board of directors | In office | 102.89 | No |
| He Fei | Male | 46 | Original Director and CFO | Dimission | 99.74 | No |
| Guan Fei | Male | 38 | Original Deputy GM | Dimission | 77.28 | No |
| He Zuowen | Male | 61 | Original Independent director | Dimission | 11.76 | No |
| Cai Yuanqing | Male | 54 | Original Independent director | Dimission | 11.76 | No |
| Total | -- | -- | -- | -- | 855.74 | -- |
Other note
□Applicable ?Not applicable
VI. Performance of directors' duties during the reporting period
1. Information of the board meetings during the reporting period
| Session | Convening date | Disclosure date | Meeting resolution |
| The 20th meeting of the Eighth Board of Directors | March 6,2023 | March 7,2023 | Juchao Website （http://www.cninfo.com.cn）Announcement No.:2023-06 |
| The 21st meeting of the Eighth Board of Directors | April 1,2023 | April 4,2023 | Juchao Website （http://www.cninfo.com.cn）Announcement No.:2023-11 |
| The 22nd meeting of the Eighth Board of Directors | April 27,2023 | April 29,2023 | Juchao Website （http://www.cninfo.com.cn）Announcement No.:2023-20 |
| The 23rd meeting of the Eighth Board of Directors | August 22,2023 | August 24,2023 | Juchao Website （http://www.cninfo.com.cn）Announcement No.:2023-32 |
| The 24th meeting of the Eighth Board of Directors | October 26,2023 | October 28,2023 | Juchao Website （http://www.cninfo.com.cn）Announcement No.:2023-38 |
| The 25th meeting of the Eighth Board of Directors | November 17,2023 | November 17,2023 | Juchao Website （http://www.cninfo.com.cn）Announcement No.:2023-44 |
| The 26th meeting of the Eighth Board of Directors | December 8,2023 | December 8,2023 | Juchao Website （http://www.cninfo.com.cn）Announcement No.:2023-54 |
2. Attendance of directors at the board meetings and the general meeting of shareholders
| Attendance of directors at the board meetings and the general meeting of shareholders | |||||||
| Name of director | Number of board meetings attended during the reporting period | Number of board meetings attended in person | Number of board meetings attended by means of communication | Number of board meetings attended by proxy | Number of board meetings absent from | Whether to attend the board meeting in person twice in a row | General meetings of shareholders attended |
| Yin Kefei | 7 | 6 | 1 | 0 | 0 | No | 3 |
| Zhu Meizhu | 7 | 6 | 1 | 0 | 0 | No | 3 |
| Ning Maozai | 7 | 6 | 1 | 0 | 0 | No | 3 |
| Wang Chuan | 7 | 5 | 1 | 1 | 0 | No | 3 |
| He Fei | 7 | 6 | 1 | 0 | 0 | No | 3 |
| Sun Minghui | 7 | 5 | 1 | 1 | 0 | No | 1 |
| He Zhuowen | 7 | 1 | 6 | 0 | 0 | No | 3 |
| Cai Yunqing | 7 | 1 | 6 | 0 | 0 | No | 3 |
| Wang Kai | 7 | 0 | 6 | 1 | 0 | No | 3 |
Explanation of failure to attend the board meeting in person twice in a rowNone
3. Directors' objections to related matters of the Company
Whether the director raises any objection to the relevant matters of the Company
□ Yes √ No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company.
4. Other descriptions of directors' performance of duties
Whether the directors' suggestions on the Company have been adopted
√Yes □ No
The director's statement on whether the relevant suggestions of the Company have been adopted or notDuring the reporting period, all directors of the Company worked diligently and conscientiously in strict
accordance with the relevant regulations of China Securities Regulatory Commission and Shenzhen Stock
Exchange, the Articles of Association, the Rules of Procedure of the Board of Directors and other systems
of the Company, paid close attention to the Company's standardized operation and business situation, put
forward relevant opinions on the Company's major governance and business decisions according to the
actual situation of the Company, reached a consensus after full communication and discussion, and
resolutely supervised and promoted the implementation of the resolutions of the Board of Directors, so as
to ensure scientific, timely and efficient decision-making, and protect the legitimate rights and interests of
the Company and all shareholders.VII. Situation of special committees under the Board of Directors during the reporting period
| Committee name | Member information | Number of meetings convened | Convening date | Meeting content | Put forward important opinions and suggestions | Other information of duty performance | Details of objections (if any) |
| Nomination Committee of the Board | Cai Yuanqing, He Zhuowen, | 2 | October 16,2023 | To review matters concerning | It is suggested that the | No | No |
| of Directors | Wang Kai | the resignation of the Company's deputy general manager. | Board of Directors of the Company agree to the resignation of the deputy general manager. | ||||
| Nomination Committee of the Board of Directors | Cai Yuanqing, He Zhuowen, Wang Kai | 2 | November 14,2023 | To review matters concerning the addition of independent directors to the Eighth Board of Directors. | It is agreed to nominate Yang Gaoyu and Wu Guangquan as candidates for independent directors of the Eighth Board of Directors of the Company and submit it to the Board of Directors of the Company for review. | No | No |
| Remuneration and Appraisal Committee | He Zuowen , Wang Kai, He Fei | 2 | October 13,2023 | To review matters concerning the formulation of the 2022 annual business performance appraisal and salary management plan for senior managers. | It is agreed that the Company should formulate the Annual Operating Performance Appraisal and Salary Management Plan for Senior Managers of Shenzhen Textile (Group) Co.,Ltd. in 2022 according to the operation and management requirements. | No | No |
| Remuneration and Appraisal Committee | He Zuowen, Wang Kai, He Fei | 2 | December 5,2023 | To review the salary assessment of the Company's senior managers in | It is agreed to the performance appraisal results of the Company's | No | No |
| 2022. | senior managers in 2022 and the Company's senior managers' salary in 2022. | ||||||
| Audit committee | He Zhuowen, Cai Yuanqing, He Fei | 6 | January 13,2023 | To review the internal audit summary in 2022 and the audit plan in 2024, and communicate with the annual audit accounting firm about the audit matters of the annual report. | It is suggested that the accounting firm should complete the annual audit as planned and report the audit progress and problems found in the audit to the Audit Committee in time. | No | No |
| Audit committee | He Zhuowen, Cai Yuanqing, He Fei | 6 | March 31,2023 | To communicate the audit progress and problems found in the audit process with the annual audit accountant; To report on the performance of the Audit Committee in 2022; To review seven proposals including the 2022 Annual Report and the 2022 Internal Control Self-evaluation Report. | It is agreed to approve the seven proposals including the 2022 Annual Report and the 2022 Internal Control Self-evaluation Report. | No | No |
| Audit committee | He Zhuowen, Cai Yuanqing, He Fei | 6 | April 27,2023 | The Audit Department reports the internal audit work in the 1st quarter and the work | It is agreed to the Company's Work Report on Internal Control System in | No | No |
| plan in the 2nd quarter to the Audit Committee; expresses opinions on the effectiveness of internal control in the 1st quarter of the Company; and reviews the Company's Work Report on Internal Control System in 2022 and Report on Major Risk Assessment in 2023. | 2022 and Major Risk Assessment Report in 2023. | ||||||
| Audit committee | He Zhuowen, Cai Yuanqing, He Fei | 6 | August 18,2023 | The Audit Department reports the internal audit work in the 2nd quarter and the work plan in the 3rd quarter to the Audit Committee; expresses opinions on the effectiveness of internal control in the 2nd quarter of the Company; and reviews two proposals, including the Company's 2023 Semi-annual Report. | It is agreed to approve two proposals, including the Company's 2023 Semi-annual Report. | No | No |
| Audit committee | He Zhuowen, Cai Yuanqing, He Fei | 6 | October 26,2023 | The Audit Department reports the internal audit work in the | It is agreed to approve two proposals, including the Company's | No | No |
| 2nd quarter and the work plan in the 3rd quarter to the Audit Committee; expresses opinions on the effectiveness of the Company's internal control in the 3rd quarter; and reviews two proposals, including the Company's Report on the Third Quarter of 2023. | Report on the Third Quarter of 2023. | ||||||
| Audit committee | He Zhuowen, Cai Yuanqing, He Fei | 6 | November 16,2023 | To review the Proposal on Hiring Audit Institutions in 2023 of the Company. | It agreed to approve the Proposal on Hiring Audit Institutions in 2023 of the Company. | No | No |
VIII.The working status of the board of supervisorsThe board of supervisors finds out whether the company has risks during the monitoring activities during the reporting period
□ Yes √ No
The Supervisory Committee has no objection to the supervision matters during the reporting period.IX. Particulars about employees.
1.Number of staff, professional structure and educational background
| Number of in-service staff of the parent company(person) | 55 |
| Number of in-service staff of the main subsidiaries(person) | 1,361 |
| The total number of the in-service staff(person) | 1,416 |
| The total number of staff receiving remuneration in the current period(person) | 1,416 |
| Retired staff with charges paid by the parent company and main subsidiaries (person) | 0 |
| Professional | |
| Category | Number of persons（person） |
| Production | 1,005 |
| Sales | 17 |
| Technical | 180 |
| Financial | 29 |
| Administrative | 185 |
| Total | 1,416 |
| Education | |
| Category | Number of persons（person） |
| Holders of master’s degree or above | 42 |
| Graduates of regular university | 218 |
| Colleges | 150 |
| Mid-school or below | 1,006 |
| Total | 1,416 |
2. Remuneration policies
In 2023, the Company carried out management for employees’ compensation in strict accordance with the state’srelevant laws and regulations and guaranteed the fairness and reasonability of the compensation, which offeredrelevant rewards and incentives to the employees, accelerate them to jointly develop with the Company , andsimultaneously reflected humanistic care of the Company.
3.Training plan
Combined with the Company's development strategy, continue to improve the Company's talent training systemand strengthen the exchange and learning of personnel in the Shenzhen Textile system. First, combining withthe work of the department and the actual situation of employees, and according to the existing network collegeresources, allocate appropriate courses for employees, including general management courses and professionalcourses. During the year, it further improved the professional level and comprehensive quality of employeesthrough internal and external training courses; Second, continue to create an atmosphere of "reading after actualpractices" and encourage employees to love reading and read good books; Third, according to the needs of theCompany's business development and the actual work of various departments, organize key employees toparticipate in professional training arranged by superior units and professional institutions to further enhancetheir comprehensive ability, professional skills and professionalism.
4.Outsourcing situation
□ Applicable √ No Applicable
X. Specification of profit distribution and capitalizing of common reservesFormulation, implementation or adjustment of the profit distribution policy, especially the cash dividend policyduring the reporting period
√ Applicable □ Not applicable
On May 26, 2023, the Company held the 2022 annual general meeting of shareholders to deliberate and pass the2022 profit distribution plan. The 2022 profit distribution plan of the Company is as follows: based on the profitavailable for distribution in the consolidated statement, with the total share capital of 506,521,849 shares as thebase as of December 31, 2022, a cash dividend of RMB 0.60 (including tax) will be distributed to allshareholders for every 10 shares, with a total cash dividend of RMB 30,391,310.94 (including tax), theremaining undistributed profits will be carried forward to the next year; No bonus shares will be given, and nocapital reserve will be used to increase capital.
If the total share capital of the Company changes before the implementation of the distribution plan, thetotal distribution amount will be adjusted based on the total share capital of date of record when the distributionplan is implemented in the future, and with the above distribution ratio remained unchanged. The specificamount will be subject to the actual distribution.
| Special description of cash dividend policy | |
| Whether it meets the requirements of the Articles of Association or the resolution of the general meeting of shareholders: | Yes |
| Whether the dividend standard and proportion are explicit and clear: | Yes |
| Whether the relevant decision-making procedures and mechanisms are complete: | Yes |
| Whether the independent directors have performed their duties and played their due role: | Yes |
| If the Company does not distribute cash dividends, specific reasons, as well as the measures to be taken to enhance investor returns should be disclosed: | Not applicable |
| Whether the minority shareholders have the opportunity to fully express their opinions and demands, and whether their legitimate rights and interests have been fully protected: | Yes |
| Whether the cash dividend policy is adjusted or changed, and whether the conditions and procedures are compliant and transparent: | Not applicable |
During the reporting period, the Company made a profit and the profit available to shareholders of the parentcompany was positive, but no cash dividend distribution plan was put forward.
□ Applicable √ Not applicable
Profit distribution and capitalization of capital reserve during the reporting period
√ Applicable □ Not applicable
| Bonus shares for every ten shares(Shares) | 0 |
| Cash dividend for every ten shares (Yuan)(Tax-included) | 0.65 |
| A total number of shares as the distribution basis(shares) | 506,521,849 |
| Cash dividend amount (yuan, including tax | 32,923,920.19 |
| Other means (such as repurchase of shares) cash dividend amount (yuan) | 0.00 |
| Total cash dividend (yuan, including tax) | 32,923,920.19 |
| Distributable profit (yuan) | 216,160,896.14 |
| Proportion of cash dividend in the distributable profit | 100% |
| Cash dividend distribution policy | |
| When the company's development stage is in the growth period and there are major capital expenditure arrangements, when the profit distribution is carried out, the proportion of cash dividends in this profit distribution should be at least 20%. | |
| Detailed explanation of the profit distribution or capital reserve transfer plan | |
| Based on the distributable profits in the consolidated statement, with the total share capital of 506,521,849 shares as of December 31, 2023 as the base, a cash dividend of RMB 0.6 (including tax) was distributed to every 10 shares of all shareholders, with a total cash dividend of RMB 32,923,920.19 (including tax). No bonus shares will be issued and no capital reserve will be converted | |
into share capital. Do not bonus shares , the capital reserve will not be converted into share capital.
If the total share capital of the Company changes before the implementation of the distribution plan, the total distributionamount will be adjusted based on the total share capital of date of record when the distribution plan is implemented in the future,and with the above distribution ratio remained unchanged. The specific amount will be subject to the actual distribution.
XI. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock Ownership Planor Other Employee Incentive Measures
□Applicable ?Not applicable
None.XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control
During the reporting period, the Company timely updated and improved the internal control system according tothe Basic Standards for Enterprise Internal Control and its supporting guidelines, and established a scientific,concise, applicable and effective internal control system. The Audit Committee and the Risk Control AuditDepartment jointly formed the Company's risk internal control management organization system to supervise andevaluate the Company's internal control management. Through the operation, analysis and evaluation of theCompany's internal control system, the risks in operation and management are effectively prevented, and therealization of internal control objectives is promoted.According to the identification of major internal control defects in the Company's financial report, there were nomajor internal control defects in the financial report on the base date of the internal control evaluation report. Inaccordance with the requirements of enterprise internal control standard system and relevant regulations, theCompany has maintained effective internal control of financial reports in all major aspects.According to the identification of major defects in the internal control of the Company's non-financial reports,the Company found no major defects in the internal control of non-financial reports on the base date of theinternal control evaluation report.
2.Details of major internal control defects found during the reporting period
□ Yes √ No
XIII. Management and control of the Company's subsidiaries during the reporting period
| Company name | Integration plan | Integration progress | Problems encountered in integration | Measures taken for solution | Solution progress | Subsequent planned solution |
| Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable |
XIV.Internal control self-evaluation report or internal control audit report
1.Self-evaluation report on internal control
| Disclosure date of appraisal report on | March 28,2024 |
| internal control | ||
| Disclosure index of appraisal report on internal control | Juchao Website:（http://www.cninfo.com.cn）, Self-evaluation report of internal control in 2023 | |
| The ratio of the total assets of units included in the scope of evaluation accounting for the total assets on the company's consolidated financial statements | 100.00% | |
| The ratio of the operating income of units included in the scope of evaluation accounting for the operating income on the company's consolidated financial statements | 100.00% | |
| Standards of Defects Evaluation | ||
| Category | Financial Report | Non-financial Report |
| Qualitative standard | The defects related to financial reports were divided into general defects, important defects and significant defects according to their severity. Significant defects referred to one or multiple combinations of controlling defects, which may lead to serious deviation from the controlling objectives. Important defects referred to one or multiple combinations of controlling defects, and their severity and economic consequences were below significant defects, but they could still lead to serious deviation from the controlling objectives. General defects referred to other internal controlling defects which couldn't constitute significant defects or important defects. | 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 process of "Three-Importance& One-Large" were unscientific, leading to major decision errors, and causing major property loses to the company; (3) Massive loss of key posts or technology talents; (4) The controlling system involving important business fields of the company failed; (5) It Caused serious negative effects on business of the company, and the effects couldn’t be eliminated; (6) The evaluation results of internal control were significant defects, and couldn’t get effective rectification. Important defects referred to one or multiple combinations of controlling defects, and their severity and economic consequences were below significant defects, but they could still lead to serious deviation from the controlling objectives. General defects referred to other internal controlling defects which couldn't constitute significant defects or important defects. |
| Quantitative criteria | Misstatement amount of financial statement fell into the following intervals: significant defects: Misstatement amount ≥ 1.5% of total revenue; Misstatement amount ≥ 10% of gross profit; Misstatement amount ≥ 1% of total asset; Misstatement amount ≥ 5% of net asset. significant defects: 0.5% of Total revenue ≤Misstatement amount ＜ 1.5% of total revenue; 5% of gross profit ≤Misstatement amount ＜ 10% of gross 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 profit ＜Misstatement amount＜5% of total | Not applicable |
| 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） | 0 | |
| Number of major defects in non financial reporting (a) | 0 | |
| Number of important defects in financial reporting（a） | 0 | |
| Number of important defects in non financial reporting（a） | 0 | |
2. Internal Control audit report
√ Applicable □Not applicable
| Review opinions in the internal control audit report | |
| As of December 31, 2023, Shenzhen Textile Group has maintained effective internal control over financial reporting in all material aspects in accordance with the Basic Standards for Enterprise Internal Control and relevant regulations. | |
| Disclosure date of audit report | Disclosure |
| Index of audit report of internal control | March 28, 2024 |
| Internal audit report's opinion | Juchao Website（http://www.cninfo.com.cn） |
| Type of audit report on internal control | Unqualified auditor's report |
| Whether there is significant defection non-financial report | No |
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 ofDirectors?Yes □NoXV. Rectification of self-examination problems in special governance actions of listed companies
None
V. Environmental & Social Responsibility
I. Significant environmental issuesWhether the Company or any of its subsidiaries is identified as a key polluter by the environment authorities
√ Yes □ No
Policies and industry standards related to environmental protection(I) SAPO Photoelectric:
1. Names of implementation standards for air pollutant emission:
① Emission Standard of Air Pollutants for Coal-burning Oil-burning Gas-fired Boiler (DB44/765-2019);
② Emission Limit of Air Pollutants DB44/ 27—2001;
③ The limit value of electronic components in the electronic industry in Tianjin's Emission Control Standardfor Volatile Organic Compounds in Industrial Enterprises (DB12/524-2020) shall be implemented;
④ Emission Standards for Odor Pollutants (GB 14554-93), Standard for Fugitive Emission of Volatile OrganicCompounds (GB 37822-2019).
Names of implementation standards for water pollutant discharge:
Discharge Limit Standard for Water Pollutants in Guangdong Province (DB44/26-2001)
(II) Beauty Century
1.Regulations of Guangdong Province on Environmental Protection
2.Administrative Measures for Ecological Environment Standards
Environmental protection administrative license(I) SAPO Photoelectric: The existing sewage discharge permit was applied on September 7, 2022, and is validfrom December 13, 2022 to December 12, 2027.(II) Beauty Century: The existing sewage discharge permit is valid from August 10, 2020 to August 9, 2023,TheValidity Period after application for extension is from August 10, 2023 to August 9 2028.Industrial emission standards and the specific situation of the pollutant emission involved in the
production and business activities
| Company or subsidiary name | Main pollutant and specific pollutant Typeame | Main pollutant and specific pollutant name | Emission way | Emission port number | Emission port distribution condition | Emission concentration (mg/Nm3) | Implemented pollutant emission standards | Total emission | Verified total emission(Tons) | Excessive emission condition |
| SAPO Photoelectric | Waste gases | Non methane hydrocarbon | High altitude emission | 4 | The discharge port is located on the east side of No.1 and No.3 plants | <50mg/m3 | 120mg/m3 | 21.9t/a | 49.98t/a | No |
| roof | ||||||||||
| SAPO Photoelectric | Effluents | COD | Open trench discharge after treatment | 1 | Southeast side of the factory | <20mg/L | 40mg/L | 3.9347/a | 25.0536/a | No |
| Beauty Century | Effluents | COD, ammonia nitrogen, PH value, suspended solids, five-day BOD, total phosphorus (calculated as P), chromaticity, aniline, chlorine dioxide, sulfide, total nitrogen (calculated as N), ammonia (ammonia gas), non-methane total hydrocarbons, sulfide and odor (concentration), Ammonia (ammonia) | Atmosphere: unorganized; wastewater: 1. Intermittent discharge, with unstable and irregular flow rate during discharge, which however is not impact discharge; 2. Intermittent discharge, with stable flow during discharge | 1 | Longitude：114°15′31.36″Latitude：22°43′38.14″ | Permissible discharge value: PH value: 6-9; Aniline: 1.0 mg/L; Suspended solids: 50mg/L; Total nitrogen (calculated as N) 15 mg/L; Ammonia nitrogen: 8 mg/L; Sulfide: 0.5 mg/L; Chemical oxygen demand: 60 mg/L; Chlorine dioxide: 0.5 mg/L; Chromaticity 50; Five-day BOD: 20 mg/L; Total phosphorus (calculated as P) 0.5 mg/L; | Discharge Limit Standard for Water Pollutants DB44/26-2001, Discharge Standard of Water Pollutants in Danshui River and Shima River Basin DB44/2050-2017, Discharge Standard of Water Pollution in Dyeing and Finishing Textile Industry GB4287-2012GB 4287-2012. | CODcr:0.349t/a；Ammonia nitrogen：0.0102t/a；Total nitrogen（Calculated as N）0.1305t/a | CODcr1.62t/a；Ammonia nitrogen：0.216t/a；Total nitrogen（calculated as N）0.405t/a | No |
The treatment of the pollutants（I）SAPO Photoelectric
RTO waste gas regenerative incineration process is adopted for the organic waste gas produced in all productionlines of SAPO Photoelectric, and RTO+ advanced treatment process is adopted for Line 7. RTO waste gastreatment equipment runs stably, with good waste gas treatment effect. The removal rate of VOCs in organicwaste gas reaches over 99%, which can fully meet the requirements of waste gas discharge. Meanwhile,imported heat storage materials are adopted for the equipment, with a heat storage effect of 95%, and lowrunning energy consumption of the equipment; After RTO treatment, the waste gas from the production processafter treatment can meet the discharge standard. The wastewater treatment facility of SAPO Photoelectric PhaseI adopts the wastewater treatment process of Fenton + sedimentation + UASB anaerobic + aerobic + MBRmembrane, which has strong impact load resistance, stable system operation, low energy consumption, lowmaintenance cost, high degree of automation and good effluent effect. In phase II, it adopts Fenton +sedimentation + UASB anaerobic + aerobic + MBR membrane + mc membrane treatment + evaporation system,and all the wastewater is recycled to the production line after treatment. All the wastewater of SAPOPhotoelectric can meet the environmental protection requirements after being treated by the treatment facilities.
（II）Beauty Century
Beauty Century has established a set of special wastewater treatment facilities, and continuously optimized
and upgraded the facilities and processes in the actual operation process to treat the wastewater professionallythrough multiple processes, with good operation effect, and all pollutant indicators in line with relevantstandards, laws and regulations. In addition, Shenzhen Beauty Century built the reclaimed water reuse system in2021, which can effectively save water consumption and reduce wastewater discharge after the system was putinto operation.Environmental Self-Monitoring Program（I）SAPO PhotoelectricAccording to the monitoring requirements issued by the monitoring station and the operation requirements ofeach system of SAPO Photoelectric, the specific monitoring plan is as follows: 4 times/year (twice everyquarter) for organic waste gas, 12 times/year (once every quarter) for wastewater discharge, 2 times/year (onceevery six months) for boiler waste gas, 1 time/year for canteen oil fume, 2 times/year (once every six months)for noise at factory boundary and 1 time/year for drinking water.（II）Beauty CenturyAccording to the environmental management requirements of the pollution discharge permit, the specificmonitoring plan is as follows: automatic detection of wastewater pH value, flow rate, COD, and ammonianitrogen, once/day for chromaticity, suspended solids, total nitrogen, and total phosphorus, once/week for fiveday biochemical oxygen demand, once/month for sulfides and aniline, once/year for chlorine dioxide, andonce/half a year for plant boundary ammonia, non-methane total hydrocarbons, sulfides, and odorconcentrations.Emergency plan for sudden environmental events(I) SAPO PhotoelectricAccording to the actual situation of the company, the emergency plan for sudden environmental incidents hasbeen compiled, and the application for filing the emergency plan for sudden environmental incidents by relevantdepartments has been passed.（II）Beauty CenturySome contents from the emergency plan for environmental events are extracted as follows:
Investigation and control measures for hidden dangers of environmental risks
Investment in environmental governance and protection and the relevant payment of environmental protectiontax(I) SAPO PhotoelectricInvestment in environmental governance and protection in 2023: RMB 11.1646 million;Environmental protection tax paid in 2023: RMB 25447.85.（II）Beauty CenturyInvestment in environmental governance and protection in 2023: RMB 233,200;Environmental protection tax paid in 2023: RMB 669.06.Cost of purchasing environmental liability insurance: RMB 12,116.86.Measures taken to reduce its carbon emissions during the reporting period and their effects?Applicable □Not applicable(I) SAPO PhotoelectricDuring the reporting period, SAPO Photoelectric strictly abided by laws and regulations, strictly controlled thecompany's waste gas and wastewater discharge, and ensured the effective operation of waste gas andwastewater treatment facilities. No violations occurred throughout the year.（II）Beauty CenturyDuring the reporting period, Shenzhen Beauty Century strictly abided by laws and regulations, strengthened themanagement of wastewater treatment, and ensured the effective operation of wastewater treatment facilities. Noviolations occurred throughout the year.Administrative penalties for environmental problems during the reporting period
| Name of company or subsidiary | Reasons for punishment | Violation situation | Penalty result | Impact on the production and operation of listed companies | Company's rectification measures |
| SAPO Photoelectric | No | No | / | / | / |
| Beauty Century | No | No | / | / | / |
Other Environmental Information That Should Be Disclosed(I)SAPO Photoelectric
1.Annual report on disclosure of enterprise environmental information according to law: https://www-app.gdeei.cn/stfw/index
2.Annual implementation report of pollutant discharge permit: http://permit.mee.gov.cn/(II)Beauty CenturyNoneOther Environmental Related InformationNone
II. Social responsibilities
(I) Protection of shareholders' rights and interestsDuring the reporting period, the Company abided by laws and regulations, operated in compliance withregulations, and constantly improved its governance structure and further standardized the Company's operation instrict accordance with the requirements of the Company Law, the Securities Law and the Governance Guidelinesfor Listed Companies and other laws and regulations. It adhered to the procedure system of general meeting ofshareholders, Board of Directors, Board of Supervisors and independent directors as the core, further improved
the corporate governance structure and various management systems, constantly improved the internal controlsystem in the process of the Company's operation and management, took effective operational risk preventionmeasures, earnestly safeguarded and protected shareholders' rights and interests, and laid a solid foundation forthe healthy and sustainable development of the Company. Independent directors paid close attention to theCompany's operation, put forward many valuable professional suggestions for the Company's daily operation andkey concerns, and played an important role in improving the supervision mechanism and safeguarding thelegitimate rights and interests of the Company and all shareholders. The Company strictly fulfilled its obligationof information disclosure according to law, truly, accurately, completely, timely and fairly disclosed informationthat has a significant impact on investment decision-making. The disclosure content was concise and easy tounderstand, fully revealed risks, and facilitated all shareholders to consult. According to regulatory requirements,it further combed and improved relevant systems and enhanced the quality of information disclosure.During the reporting period, the Company further improved the information disclosure and informationtransparency, fulfilled the obligation of information disclosure in strict accordance with regulatory requirements,communicated with investors through various channels, answered questions raised by investors in a timelymanner, and improved information transparency. Meanwhile, it cooperated with regulatory authorities tosafeguard the rights and interests of investors, especially small and medium-sized investors, and realized thebenign interaction and harmonious development between investors and listed companies.
(II) Protection of employees' rights and interestsIn 2023, according to the requirements of modern enterprise management, the Company strengthened thescientific, standardized and professional management of human resources management through measures suchas system construction and cultural construction, effectively improved the management level of humanresources, avoided the risks of labor employment, created a good corporate culture atmosphere, furthermobilized employees' work enthusiasm, and enhanced their sense of acquisition and belonging.First, according to the needs of enterprise development, the Company further revised and improved thehuman resource management system. During the year, it newly revised the Management System of Selectingand Appointing Cadres of Shenzhen Textile Group, the Management System of Employee PerformanceAppraisal of Shenzhen Textile Group, the Organizational Structure, Department Setting and Functional PostEstablishment of Shenzhen Textile Group, and optimized and improved the Company's organizational structureand functional setting, personnel training, cadre talent team allocation, performance salary management andother human resources-related work; Second, the Company signed a formal labor contract with each employee,and implemented necessary management for employees according to the Labor Law and relevant managementregulations of the Company;Thirdly, the Company established a scientific assessment and distribution systemaccording to the classification of senior managers, department managers and employees, established asystematic and standardized performance assessment and evaluation system, and conducted a comprehensive,objective, fair and accurate assessment of employees' performance of duties and tasks, which is used as thebasis for determining employees' remunerations, rewards and punishments and appointments; Fourth, theCompany strengthened the construction of talent team, thoroughly implemented the strategy of "strengtheningthe enterprise through talents", and continued to carry out two-way exchange and training activities for cadresand talents of the group and its affiliated enterprises, so as to better care for and help employees grow intotalents, enhance the comprehensive business ability and performance ability of employees, and stimulate thevitality of cadres. At the same time, the Company selected talents through marketization, created a goodenvironment for talent development, and constantly stimulated innovation vitality and motivation; Fifth, theheadquarters of the Group actively guided and assisted subordinate enterprises to promote various human
resources management standards and personnel optimization, and guided enterprises to strengthen salaryperformance management, promote enterprise personnel optimization and help enterprises reform according totheir actual conditions.
(III) Environmental protectionStriving to build a modern "green enterprise" is the Company's long-term positive responsibility. We insist onbuilding the whole process of green cycle in the industrial chain, realizing the real green cycle economy,improving the quality of the Company's surrounding environment and escorting the Company's production.During the reporting period, the OSBL noise, industrial wastewater and waste gas emissions in the Company'sproduction process all passed the monitoring of the environmental protection department, and complied with thestandard requirements of relevant laws and regulations. During the reporting period, the Company's organic wastegas was treated by the rotary RTO treatment process, and the removal rate of VOCs in organic waste gas reachedover 99%. On the basis of meeting the discharge standards, the pollutant discharge was further reduced, and nomajor environmental incidents occurred. In addition, the Company vigorously advocated green office, carried outvarious forms of environmental protection publicity and education activities, raised employees' awareness ofenergy conservation and emission reduction, realized the coordinated development of production & operation andenvironmental protection, and earnestly fulfilled social responsibilities.
(IV) Protection of consumers' rights and interestsThe Company has been adhering to the core values of "honesty oriented and responsibility first". Beingresponsible for customers is the source of our enterprise value. It is our unremitting pursuit to provide customerswith professional, personalized and all-round products and services. With customer demand as the core,continuously innovating to serve customers, and continuously improving and enhancing product quality are thedriving force for the Company to achieve good performance and sustainable development, and also an importantguarantee to win customers' long-term trust. It has provided active attention to customer needs, quick response tocustomer feedback, sincere consideration for customers and promotion of long-term cooperative partnership.III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
In 2023, the company earnestly fulfilled its social responsibility, actively participated in the work ofconsumer assistance, and completed the purchase of 553,700 yuan of consumer assistance in the year to helprural revitalization; It took the initiative to respond to Shenzhen Investment Holdings' 2023 theme publicwelfare activity of "Love Shenzhen Investment Holdings · Helping People's Livelihood 1+1", and proposed toguide all employees to participate in garbage sorting publicity activities, and donated living materials to KebaVillage in Qinghai Tibetan area, with a total of 497 winter clothes and a number of quilts, pillows, shoes andother warm materials donated.
VI. Important EventsI. Commitments to fulfill the situation
1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of thereporting period made by the company, shareholder, actual controller, acquirer, director, supervisor,senior management personnel and other related parities.
√Applicable □Not applicable
| Commitment | Commitment maker | Type | Contents | Time of making commitment | Period of commitment | Fulfillment |
| Commitment on share reform | Shenzhen Investment Holdings Co., Ltd. | Share reduction commitment | As Shenzhen Investment Holdings Co., Ltd., the controlling shareholder of the company, committed when the restricted-for-sale shares from the shares restructuring were listed for circulation in the market: i. if they plan to sell the 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 | August 4, 2006 | Sustained and effective | Under Fulfillment |
| Companies” and the provisions of the relevant business principles of Shenzhen Stock Exchange. | ||||||
| Commitment made upon the assets replacement | The Company | Statement and Commitment on the Authenticity, Accuracy and Completeness of the Information Provided | Commitments made during asset restructuring: 1. The relevant information provided by the Company during this transaction is authentic, accurate and complete, and it is guaranteed that there are no false records, misleading statements or major omissions, and the Company will bear individual and joint legal responsibilities for the authenticity, accuracy and completeness of the information provided. If there are false records, misleading statements or major omissions in the information provided, which cause losses to the company or investors, the Company will be liable for compensation according to law; 2. The Company will submit relevant | November 17,2023 | Sustained and effective | Under Fulfillment |
| authenticity, accuracy and completeness of such information. | ||||||
| 资产重组时所作承诺 | All the directors, supervisors and senior managers of the company | Statement and Commitment on the Authenticity, Accuracy and Completeness of the Information Provided | Commitments made during asset restructuring: 1. The relevant information provided by me during this transaction is authentic, accurate and complete, and it is guaranteed that there are no false records, misleading statements or major omissions, and I will bear individual and joint legal responsibilities for the authenticity, accuracy and completeness of the information provided. If there are false records, misleading statements or major omissions in the information provided, which cause losses to the company or investors, I will be liable for compensation according to law. 2. I will submit relevant information, documents and materials (including but not limited to | November 17,2023 | Sustained and effective | Under Fulfillment |
| authorized to directly lock the relevant stocks. If any violation of laws and regulations is found during the investigation, I promise to lock in the shares and voluntarily use them for compensation arrangements of relevant investors. | ||||||
| 资产重组时所作承诺 | All the directors, supervisors and senior managers of the company | Statement and Commitment on No Illegal Acts | Commitments made during asset restructuring: 1. There are no false records, misleading statements or major omissions in the application documents for this transaction; 2. The rights and interests of the listed company are not seriously damaged by the controlling shareholder or actual controller and have not been eliminated; 3. The listed company and its subsidiaries do not provide external guarantees in violation of regulations and have not been lifted; 4. The listed company's financial statements for the latest year | November 17,2023 | Sustained and effective | Under Fulfillment |
| 资产重组时所作承诺 | All the directors, supervisors and senior managers of the company | Explanation on the Absence of the Circumstances Stipulated in Article 12 of the Guidance on Supervision of Listed Companies No.7 - Supervision of Abnormal Trading of Stocks Related to Major Asset Restructuring of Listed Companies. | Commitments made during asset restructuring: The listed company, its directors, supervisors, senior managers and the enterprises controlled by the above-mentioned entities have not been placed on file for investigation on suspicion of insider trading related to this transaction; In the last 36 months, they have not been punished by the China Securities Regulatory Commission or investigated by the judicial organs for criminal responsibility according to law for insider trading related to major asset restructuring of listed companies, which does not allow them to participate in any major asset restructuring of listed companies. | November 17,2023 | Sustained and effective | Under Fulfillment |
| 资产重组时所作承诺 | All the directors, supervisors and senior managers of the company | Explanation on Whether There is a Reduction Plan | Commitment made during asset restructuring: From the date of resumption of trading to the completion of this transaction, | November 17,2023 | Sustained and effective | Under Fulfillment |
| if I hold shares of the listed company, I have no plans to reduce the shares of the listed company. | ||||||
| 资产重组时所作承诺 | Shenzhen Investment Holdings Co., Ltd. | Statement and Commitment on the Authenticity, Accuracy and Completeness of the Information Provided | Commitment made during asset restructuring: 1. The relevant information provided by the Company during this transaction is authentic, accurate and complete, and it is guaranteed that there are no false records, misleading statements or major omissions, and the Company will bear individual and joint legal responsibilities for the authenticity, accuracy and completeness of the information provided. If there are false records, misleading statements or major omissions in the information provided, which cause losses to the listed company or investors, the Company will be liable for compensation according to law; 2. The Company will | November 17,2023 | Sustained and effective | Under Fulfillment |
| Company, the Stock Exchange and the Depository and Clearing Company are authorized to directly lock the relevant shares. If any violation of laws and regulations is found during the investigation, the Enterprise promises to lock in the shares and voluntarily use them for compensation arrangements of relevant investors. | ||||||
| 资产重组时所作承诺 | Shenzhen Investment Holdings Co., Ltd. | Commitment on Compliance and Integrity | Commitment made during asset restructuring: 1. The Company has not been subjected to administrative punishment (except those obviously unrelated to the securities market) or criminal punishment in the last three years; 2. The Company is in good credit, with no public condemnation by the stock exchange or other major dishonesty in the last 12 months; In the last three years, the Company has not been placed on file | November 17,2023 | Sustained and effective | Under Fulfillment |
| for investigation by the judicial authorities for suspected crimes or by the China Securities Regulatory Commission for suspected violations of laws and regulations; 3. The Company does not disclose the relevant inside information of this transaction or use the inside information for insider trading; 4. The Company does not infringe the rights and interests of the listed company; 5. The Company guarantees that it is willing to bear corresponding legal responsibilities if it violates the above statements and commitments. | ||||||
| 资产重组时所作承诺 | Shenzhen Investment Holdings Co., Ltd. | Explanation on the Absence of the Circumstances Stipulated in Article 13 of the Guidance on Supervision of Listed Companies No.7 - Supervision of Abnormal Trading of Stocks Related to Major Asset | Commitment made during asset restructuring: Shenzhen Investment Holdings and all its directors, supervisors, senior managers and the enterprises controlled by the above-mentioned entities have | November 17,2023 | Sustained and effective | Under Fulfillment |
| Restructuring of Listed Companies | not been placed on file for investigation due to insider trading related to major asset restructuring; In the last 36 months, they were not subjected to administrative punishment imposed by China Securities Regulatory Commission or investigated for criminal responsibility by judicial organs according to law, which does not allow them to participate in any major asset restructuring of listed companies. | |||||
| 资产重组时所作承诺 | Shenzhen Investment Holdings Co., Ltd. | Explanation on Whether There is a Reduction Plan | Commitment made during asset restructuring: During the period from the date of resumption of this restructuring to the completion of this restructuring, the Company has no plans to reduce the shares of listed company. | November 17,2023 | Sustained and effective | Under Fulfillment |
| 资产重组时所作承诺 | Qimei Material, Haosheng Danyang, Danyang Ruoyan, Xiamen Ruoyan, Fuzhou Xintou, | Statement and Commitment on the Authenticity, Accuracy and Completeness of the Information | Commitment made during asset restructuring: 1. The relevant information provided by the Enterprise | November 17,2023 | Sustained and effective | Under Fulfillment |
| Hefei Beicheng, Hangzhou Rencheng, Xinghe Technology , lishui Huahui, Huzhou Painuo, Lishui Tengbei, Fuzhou Investment, Xiamen Zhifeng, Jiaxing Painuo, Huzhou Zhekuang, Guangdong Xingzhi, Guangzhou Boyue | Provided | during this transaction is authentic, accurate and complete, and it is guaranteed that there are no false records, misleading statements or major omissions, and the Enterprise will bear individual and joint legal responsibilities for the authenticity, accuracy and completeness of the information provided. If there are false records, misleading statements or major omissions in the information provided, which cause losses to the listed company or investors, the Enterprise will be liable for compensation according to law; 2. The Enterprise will submit relevant information, documents and materials (including but not limited to original written materials, electronic materials, duplicate materials and oral testimony) required for this transaction to |
| found during the investigation, the Enterprise promises to lock in the shares and voluntarily use them for compensation arrangements of relevant investors. | ||||||
| 资产重组时所作承诺 | Qimei Material, Haosheng Danyang, Danyang Ruoyan, Xiamen Ruoyan,Lishui Huahui, Xiamen Zhifeng, Fuzhou Xintou, Kunshan Guochuang | Commitment on share lock-up | Commitment made at the time of asset restructuring: 1. The shares of the listed company obtained by the company in this transaction shall not be transferred within 36 months from the date of the end of the issuance; 2. After the end of the issuance, if the shares obtained by the company due to this transaction are increased due to the bonus shares of the listed company, the increase in share capital and other reasons, the above lock-up period shall also be observed. After the expiration of the lock-up period, the transfer and trading of the shares of the listed company will be handled in accordance | November 17,2023 | Sustained and effective | Under Fulfillment |
| with the laws and regulations in force at that time and the rules of the Shenzhen Stock Exchange; 3. If the lock-up period of the shares subscribed by the company is inconsistent with the latest regulatory opinions of the securities regulatory authorities, the company will make corresponding adjustments according to the regulatory opinions of the securities regulatory authorities; 4. After the expiration of the above-mentioned lock-up period, it will be implemented in accordance with the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange. | ||||||
| 资产重组时所作承诺 | Hefei Beicheng, Xingheying Technology, Huzhou Painuo, Lishui Tengbei, Fuzhou Investment, Jiaxing Painuo, Huzhou | Commitment on share lock-up | Commitment made at the time of asset restructuring: 1. The shares of the listed company obtained by the company in this transaction shall not be | November 17,2023 | Sustained and effective | Under Fulfillment |
| Zhekuang, Guangdong Xingzhi, Guangzhou Boyue | transferred within 12 months from the date of the end of the issuance(When the shares obtained in this transaction are registered in the name of the company, if the company holds the underlying assets for less than 12 months, they shall not be transferred within 36 months.); 2. After the end of the issuance, if the shares obtained by the company due to this transaction are increased due to the bonus shares of the listed company, the increase in share capital and other reasons, the above lock-up period shall also be observed. After the expiration of the lock-up period, the transfer and trading of the shares of the listed company will be handled in accordance with the laws and regulations in force at that time and the rules of the Shenzhen Stock Exchange; 3. If the lock-up period of the shares |
| subscribed by the company is inconsistent with the latest regulatory opinions of the securities regulatory authorities, the company will make corresponding adjustments according to the regulatory opinions of the securities regulatory authorities; 4. After the expiration of the above-mentioned lock-up period, it will be implemented in accordance with the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange. | ||||||
| 资产重组时所作承诺 | Qimei Material, Danyang Nuoyan, Xiamen Nuoyan, Fuzhou Xintou, Hefei Beicheng, Xinghe Technology, Lishui Huahui, Huzhou Painuo, Lishui Pengbei, Fuzhou Investment, Xiamen Zhifeng, Jiaxing Painuo, Huzhou Zhekuang, Guangdong | Commitment on Compliance and Integrity | Commitment made during asset restructuring: The Enterprise and its main management personnel have not been subjected to criminal penalties or administrative penalties (except those obviously unrelated to the securities market) in the last five years, and there is no | November 17,2023 | Sustained and effective | Under Fulfillment |
| Xingzhi, Guangzhou Boyue | major civil litigation or arbitration related to economic disputes; 2. In the last five years, the Enterprise has not been investigated by the judicial authorities for suspected crimes or by the China Securities Regulatory Commission for suspected violations of laws and regulations; 3. The Enterprise and its main management personnel had no failure to repay large debts, or to fulfill their commitments, and were not subjected to administrative supervision measures by the China Securities Regulatory Commission or disciplinary actions by the stock exchange in the last five years; 4. The Enterprise and its main management personnel have not disclosed the relevant insider information of this transaction or used the insider information for |
| insider trading; 5. The Enterprise has none of the following circumstances: (1) It has a large amount of debt, which is not paid off at maturity and is in a continuous state; (2) It had major illegal acts or suspected major illegal acts in the last 3 years; (3) It had serious acts of dishonesty in the securities market in the last 3 years; (4) Other circumstances stipulated by laws and administrative regulations and determined by China Securities Regulatory Commission that it is not allowed to acquire listed companies. | ||||||
| 资产重组时所作承诺 | Qimei material, Haosheng Danyang, Danyang Nouyan, Xiamen Nouyan, Fuzhou Xintou, Hefei Beicheng, Hangzhou Rencheng, Xinghe Technology, Lishui Huhui, Huzhou Painuo, Lishui Tengbei, Fuzhou Investment , | Explanation on the Absence of the Circumstances Stipulated in Article 12 of the Guidance on Supervision of Listed Companies No.7 - Supervision of Abnormal Trading of Stocks Related to Major Asset Restructuring of Listed Companies | Commitment made during asset restructuring: The Enterprise and its main management personnel (including directors, supervisors and senior management personnel in the case of a company; or executive partners and key | November 17,2023 | Sustained and effective | Under Fulfillment |
| Xiamen Zhifeng, Jiaxing Painuo, Huzhou Zhekuang, Guangdong Xingzhi, Guangzhou Boyue | management personnel in the case of a partnership), the controlling shareholder and actual controller of the Enterprise and the enterprises controlled by the above-mentioned entities have not been placed on file for investigation due to insider trading related to major asset restructuring; In the last 36 months, they were not subjected to administrative punishment imposed by China Securities Regulatory Commission or investigated for criminal responsibility by judicial organs according to law, which does not allow them to participate in any major asset restructuring of listed companies. | |||||
| 资产重组时所作承诺 | Qimei material, Haosheng Danyang, Danyang Nouyan, Xiamen Nouyan, Fuzhou Xintou, Hefei Beicheng, Hangzhou Rencheng, | Explanation on the Ownership of the Underlying Assets | Commitment made during asset restructuring: 1. The Enterprise legally owns the corresponding shares of the target company, and its capital contribution to | November 17,2023 | Sustained and effective | Under Fulfillment |
| Xinghe Technology, Lishui Huhui, Huzhou Painuo, Lishui Tengbei, Fuzhou Investment , Xiamen Zhifeng, Jiaxing Painuo, Huzhou Zhekuang, Guangdong Xingzhi, Guangzhou Boyue | the target assets has been fully paid, and there is no false capital contribution or withdrawal of capital contribution, and the Enterprise has complete ownership of the target assets, with no other circumstances that may affect the legal existence of the target company; 2. The Enterprise is the ultimate and true owner of the underlying assets, and the ownership of the underlying assets is clear with no dispute, and there are no circumstances of holding the underlying assets by means of trust, entrusting others or accepting others' entrustment; The underlying assets are not in custody, with no pledge, mortgage, lien and other security rights or other third-party rights, or other terms or agreements restricting transfer signed, and no dispute or potential |
| underlying assets to be transferred by the Enterprise has none of unresolved or foreseeable disputes such as litigation and arbitration, and the responsibilities arising from disputes such as litigation and arbitration shall be borne by the Enterprise. | ||||||
| 资产重组时所作承诺 | Haosheng Danyang | Explanation on the Ownership of the Underlying Assets | Commitment made during asset restructuring: 1. The Enterprise legally owns the corresponding shares of the target company, and its capital contribution to the target assets has been fully paid, and there is no false capital contribution or withdrawal of capital contribution, and it has complete ownership of the target assets, and there is no other circumstances that may affect the legal existence of the target company; 2. The Enterprise is the ultimate and true owner of the underlying assets, and the | November 17,2023 | Sustained and effective | Under Fulfillment |
| foreseeable disputes such as litigation and arbitration, and the responsibilities arising from disputes such as litigation and arbitration shall be borne by the Enterprise. | ||||||
| 资产重组时所作承诺 | Qimei Material, Danyang Nuoyan, Xiamen Nuoyan | Commitment not to seek control of listed companies | Commitments made during asset restructuring: The Enterprise fully recognizes the position of Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as "Shenzhen Investment Holdings") as the controlling shareholder of listed companies, supports Shenzhen Investment Holdings to continuously control the listed companies, supports it to lead the production and operation of listed companies, and maintain its status of state-owned holding enterprise of listed companies, thus providing assistance for the sustainable operation and development of listed | November 17,2023 | Sustained and effective | Under Fulfillment |
| companies. Within 60 months from the date when the Enterprise obtains the shares of the listed company through this transaction, the Enterprise will not seek the status and control of the largest shareholder or controlling shareholder of the listed company by entrustment, soliciting voting rights, signing a concerted action agreement, and uniting with other shareholders in any other way, nor will it assist or urge other shareholders to seek the control of the listed company in any way. | ||||||
| 资产重组时所作承诺 | Haosheng Danyang | Commitment not to seek control of listed companies | Commitments made during asset restructuring: The Enterprise fully recognizes the position of Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as "Shenzhen Investment Holdings") as the controlling shareholder of listed companies, | November 17,2023 | Sustained and effective | Under Fulfillment |
| or urge other shareholders to seek the control of the listed company in any way. | ||||||
| 资产重组时所作承诺 | Fuxhou Xintou, Kunshan Guochuang | Commitment not to seek control of listed companies | Commitments made during asset restructuring: The Enterprise fully recognizes the position of Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as "Shenzhen Investment Holdings") as the controlling shareholder of listed companies, supports Shenzhen Investment Holdings to continuously control the listed companies, supports it to lead the production and operation of listed companies, and maintain its status of state-owned holding enterprise of listed companies, thus providing assistance for the sustainable operation and development of listed companies. Within 60 months from the date when the Enterprise obtains the | November 17,2023 | Sustained and effective | Under Fulfillment |
| shares of the listed company through this transaction, the Enterprise will not seek the status and control of the largest shareholder or controlling shareholder of the listed company by entrustment, soliciting voting rights, signing a concerted action agreement, and uniting with other shareholders in any other way, nor will it assist or urge other shareholders to seek the control of the listed company in any way. | ||||||
| 资产重组时所作承诺 | Hefei Beicheng | Commitment not to seek control of listed companies | Commitments made during asset restructuring: The Enterprise fully recognizes the position of Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as "Shenzhen Investment Holdings") as the controlling shareholder of listed companies, supports Shenzhen Investment Holdings to continuously control the | November 17,2023 | Sustained and effective | Under Fulfillment |
| 资产重组时所作承诺 | Chen Rongsheng, Li Xinfei, Zhuang Yingming, Management Committee of Danyang Economic Development Zone, Jiangsu Province(Danyang Qua Street office), Danyang State-owned assets operation service Center | Commitment not to seek control of listed companies | Commitments made during asset restructuring: I and the Enterprise fully recognizes the position of Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as "Shenzhen Investment Holdings") as the controlling shareholder of listed companies, supports Shenzhen Investment Holdings to continuously control the listed companies, supports it to lead the production and operation of listed companies, and maintain its status of state-owned holding enterprise of listed companies, thus providing assistance for the sustainable operation and development of listed companies. Within 60 months from the date when the Enterprise obtains the shares of the listed company through this transaction, the Enterprise will | November 17,2023 | Sustained and effective | Under Fulfillment |
| not seek the status and control of the largest shareholder or controlling shareholder of the listed company by entrustment, soliciting voting rights, signing a concerted action agreement, and uniting with other shareholders in any other way, nor will it assist or urge other shareholders to seek the control of the listed company in any way. | ||||||
| 资产重组时所作承诺 | Hengmei Photoelectric | Statement and Commitment on the Authenticity, Accuracy and Completeness of the Information Provided | Commitment made during asset restructuring: 1. The relevant information provided by the Company during this transaction is authentic, accurate and complete, and it is guaranteed that there are no false records, misleading statements or major omissions, and the Company will bear individual and joint legal responsibilities for the authenticity, accuracy and completeness of the | November 17,2023 | Sustained and effective | Under Fulfillment |
| the original, all signatures and seals on the documents are authentic and valid, and the photocopies are consistent with the original, and the signatories of these documents have legally authorized and effectively signed the documents, and that there are no false records, misleading statements or major omissions; 3. The Company guarantees that it has fulfilled its statutory disclosure and reporting obligations on this transaction, and there are no contracts, agreements, arrangements or other matters that should be disclosed but not disclosed. The Company is aware of the possible legal consequences of the above commitments, and will bear corresponding legal responsibilities for acts that violate the above commitments. | ||||||
| Commitments made upon issuance | Shenzhen Investment Holdings Co., | Commitments on horizontal competition, | Shenzhen Investment Holdings Co., | October 9, 2009 | Sustained and effective | Under Fulfillment |
| Ltd. | related transaction and capital occupation | Ltd. signed a “Letter of Commitment and Statement on Horizontal Competition Avoidance” when the company issued non-public stocks in 2009. Pursuant to the Letter of Commitment and Statement, Shenzhen Investment Holdings Co., Ltd. and its wholly owned subsidiary, subsidiaries under control or any other companies that have actual control of it shall not be involved in the business the same as or similar to those Shenzhen Textile currently or will run in the future, or any businesses or activities that may constitute direct or indirect competition with Shenzhen Textile; if the operations of Shenzhen Investment Holdings Co., Ltd. and its wholly owned subsidiaries, subsidiaries under control or other companies that have actual control of it compete with Shenzhen Textile in the same industry or contradict the interest of the issuer in the future, Shenzhen |
| Investment Holdings Co., Ltd. shall urge such companies to sell the equity, assets or business to Shenzhen Textile or a third party; when the horizontal competition may occur due to the business expansion concurrently necessary for Shenzhen Investment Holdings Co., Ltd. and its wholly owned subsidiaries, subsidiaries under control or other companies that have actual control of it and Shenzhen Textile, Shenzhen Textile shall have priority. | ||||||
| 首次公开发行或再融资时所作承诺 | Shenzhen Investment Holdings Co., Ltd. | Commitments on horizontal competition, related transaction and capital occupation | The commitments during the period non-public issuance in 2012: 1. Shenzhen Investment Holdings, as the controlling shareholder of Shenzhen Textile, currently hasn't the production and business activities of inter-industry competition with Shenzhen Textile or its share-holding subsidiary. 2. Shenzhen Investment Holdings and its share-holding subsidiaries or other enterprises owned the | July 14, 2012 | Sustained and effective | Under Fulfillment |
| 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. | |||
| Executed timely or not? | Yes | ||
| If the commitments failed to complete the execution when expired, should specifically explain the reasons of unfulfillment and the net stage of the working plan | Not applicable | ||
2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is still inthe forecast period, the company has assets or projects meet the original profit forecast made and the reasonsexplained
□ Applicable √ Not applicable
II. Particulars about the non-operating occupation of funds by the controlling shareholder
□ Applicable √ Not applicable
NoneIII. Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
NoneIV. Explanation of the Board of Directors on the latest "Non-standard Audit Report"
□ Applicable √ Not applicable
V. Notes for “non-standard audit report” of CPAs firm during the Reporting Period by board ofdirectors and supervisory board
□ Applicable √ Not applicable
VI. Explain change of the accounting policy, accounting estimate and measurement methods as comparedwith the financial reporting of last year.?Applicable □Not applicableFor details of the changes in the Company's accounting policies and accounting estimates and the correction ofaccounting errors in the previous period, see "(IV) Changes in important accounting policies and accountingestimates and the correction of accounting errors in the previous period" in "Section X Financial Report" of thisreportVII.Explain change of the consolidation scope as compared with the financial reporting of last year.
□ Applicable √ Not applicable
NoneVIII. Engagement/Disengagement of CPAsCPAs currently engaged
| Name of the domestic CPAs | Deloitte Touche Tohmatsu CPA Ltd .(special general partnership) |
| Remuneration for domestic accounting firm (Ten thousands yuan) | 110 |
| Successive years of the domestic CPAs offering auditing services | 2 |
| Name of CPA | Huang Tianyi, Chen Junheng |
| Continuous years of audit services of certified public accountants of domestic public accounting firms | 0 |
Has the CPAs been changed in the current period
□Yes □ ?No
Description of the CPAs, financial advisers or sponsors engaged for internal control auditing
√ Applicable □Not applicable
During the reporting period, the company engaged Deloitte Touche Tohmatsu CPA Ltd.(special generalpartnership) as the company's internal control audit agency for 2023, with an audit remuneration of RMB 1.1million (including travel expenses and other expenses). The related financial statement audit fee is RMB 850,000(including tax), and the internal control audit fee is RMB 250,000 (including tax).IX. Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the YearlyReport
□Applicable √ Not applicable
X. Relevant Matters of Bankruptcy Reorganization
□Applicable √ Not applicable
NoneXI. Matters of Important Lawsuit and Arbitration
√ Applicable □Not applicable
| Basic situation of litigation(arbitration) | Amount involved (Ten thousand yuan) | Whether to form estimated liabilities | Litigation(arbitration)progress | Litigation(arbitration)trial results and impact | Implementation of litigation(arbitration)judgments | Disclosure date | Disclosure index |
| During the reporting period, the Company and its subsidiaries involved in 12 other litigation and arbitration cases that did not meet the disclosure standards of major litigation, mainly contract disputes and labor disputes, of which 3 as plaintiffs and 9 as defendants. | 3,409.1 | No | As of the end of the reporting period in October 2023, among the 12 cases mentioned above, 7 cases were concluded, 2 cases were withdrawn by the plaintiff, and 3 cases were not concluded. | For the concluded cases, the Company's demands were basically supported, which had no significant adverse impact on the Company. | By the end of the reporting period, the concluded cases were being executed or completed, which had no significant adverse impact on the company. | / |
XII. Situation of Punishment and Rectification
□Applicable √ Not applicable
NoneXIII. Credit Condition of the Company and its Controlling Shareholders and Actual Controllers
√ Applicable □ Not applicable
No such cases in the Reporting Period.XIV. Material related transactions
1. Related transactions in connection with daily operation
□Applicable ?Not applicable
During the reporting period, the total amount of related party transactions related to daily operations of a certainrelated party did not meet the standard for significant related party transactions.
2. Related-party transactions arising from asset acquisition or sale
□Applicable √ Not applicable
None
3. Related-party transitions with joint investments
□Applicable √ Not applicable
None
4. Credits and liabilities with related parties
√ Applicable □ Not applicable
Whether was any contract related to the non-operating credits and liabilities with related parties?
□Yes ?No
None
5. Transactions with related finance company, especially one that is controlled by the Company
□Applicable √ Not applicable
None
6. Transactions between the financial company controlled by the Company and related parties
□ Applicable √Not applicable
There is no deposit, loan, credit or other financial business between the financial company controlled by theCompany and related parties.
7. Other significant related-party transactions
√ Applicable □ Not applicable
The Company intends to purchase 100% equity of Hengmei Optoelectronics Co., Ltd. by issuing shares andpaying cash, and at the same time, it plans to raise matching funds from non-public offering of shares to nomore than 35 qualified specific targets (hereinafter referred to as "this transaction"). This transaction constitutesa related party transaction and is expected to constitute a major asset restructuring, but it does not constitute arestructuring and listing, nor will it lead to the change of the actual controller of the company.The website to disclose the interim announcements on significant related-party transactions
| Description of provisional announcement | Date of disclosing provisional announcement | Description of the website for disclosing provisional announcements |
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions" and Its Summary and other proposals related to this transaction | January 30,2023 | Juchao Website http://www.cninfo.com.cn |
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching | February 28,2023 | Juchao Website http://www.cninfo.com.cn |
| Funds and Related Party Transactions" and Its Summary and other proposals related to this transaction | ||
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions" and Its Summary and other proposals related to this transaction | March 31,2023 | Juchao Website http://www.cninfo.com.cn |
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions" and Its Summary and other proposals related to this transaction | April 29,2023 | Juchao Website Juchao Website http://www.cninfo.com.cn |
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions" and Its Summary and other proposals related to this transaction | May 31,2023 | Juchao Website http://www.cninfo.com.cn |
| Special explanation on being unable to issue notice of convening a shareholders' meeting within the specified period onthe progress of issuing shares and paying cash to purchase assets and raise matching funds namely the related party transaction | June 28,2023 | Juchao Website http://www.cninfo.com.cn |
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions" and Its Summary and other proposals related to this transaction | July 28,2023 | Juchao Website http://www.cninfo.com.cn |
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions" and Its Summary and other proposals related to this transaction | August 29,2023 | Juchao Website http://www.cninfo.com.cn |
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions" and Its Summary and other proposals related to this transaction | September 28,2023 | Juchao Website http://www.cninfo.com.cn |
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions" | October 28,2023 | Juchao Website http://www.cninfo.com.cn |
| and Its Summary and other proposals related to this transaction | ||
| Announcement on Suspension of the Proposed Adjustment of Major Asset Restructuring Plan | November 15,2023 | Juchao Website http://www.cninfo.com.cn |
| Announcement of Resolutions of the 25th Meeting of the Eighth Board of Directors | November 17,2023 | Juchao Website http://www.cninfo.com.cn |
| Announcement of Resolutions of the 18th Meeting of the Eight board of supervisors | November 17,2023 | Juchao Website http://www.cninfo.com.cn |
| Announcement on Suspension of the Proposed Adjustment of Major Asset Restructuring Plan | November 17,2023 | Juchao Website http://www.cninfo.com.cn |
| Announcement on the Shareholding of the Top Ten Shareholders One Trading Day before the Suspension of Major Asset Restructuring Plan Adjustment | November 17,2023 | Juchao Website http://www.cninfo.com.cn |
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions" and Its Summary and other proposals related to this transaction | November 29,2023 | Juchao Website http://www.cninfo.com.cn |
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions" and Its Summary and other proposals related to this transaction | December 29,2023 | Juchao Website http://www.cninfo.com.cn |
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions" and Its Summary and other proposals related to this transaction | January 30,2024 | Juchao Website http://www.cninfo.com.cn |
| Progress announcement the Proposal on "Plan for Shenzhen Textile (Holdings) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions" and Its Summary and other proposals related to this transaction | February 29,2024 | Juchao Website http://www.cninfo.com.cn |
XV. Significant contracts and execution
1.Entrustments, contracting and leasing
（1）Entrustment
□Applicable √ Not applicable
No such cases in the reporting period.
（2）Contracting
□Applicable √ Not applicable
No such cases in the reporting period.
（3）Leasing
□Applicable √ Not applicable
No such cases in the reporting period.II. Other significant contract
√ Applicable □Not applicable
In RMB10,000
| Guarantee of the Company for the controlling subsidiaries (Exclude controlled subsidiaries) | ||||||||||
| Name of the Company | Relevant disclosure date/No. of the guaranteed amount | Amount of Guarantee | Date of happening (Date of signing agreement) | Actual mount of guarantee | Guarantee type | Guaranty（If any） | Counter-guarantee（If any） | Guarantee term | Complete implementation or not | Guarantee for associated parties (Yes or no) |
| Guarantee of the company for its subsidiaries | ||||||||||
| Name of the Company | Relevant disclosure date/No. of the guaranteed amount | Amount of Guarantee | Date of happening (Date of signing agreement) | Actual mount of guarantee | Guarantee type | Guaranty（If any） | Counter-guarantee（If any） | Guarantee term | Complete implementation or not | Guarantee for associated parties (Yes or no) |
| SAPO Photoelectric | March 18,2020 | 48,000 | September 8,2020 | 36,491.45 | Guaranteeing of joint liabilities | From the date the guarantee agreement takes effect to the date when the actual loan performance period expires | No | No | ||
| Total of guarantee for subsidiaries approved in the period(B1) | 0 | Total of actual guarantee for subsidiaries in the period (B2) | 0 | |||||||
| Total of guarantee for subsidiaries approved at period-end(B3) | 48,000 | Total of actual guarantee for subsidiaries at period-end(B4) | 36,491.45 | |||||||
| Guarantee of the subsidiaries for the controlling subsidiaries | ||||||||||
| Name of the Company | Relevant disclosure date/No. of the guaranteed amount | Amount of Guarantee | Date of happening (Date of signing agreement) | Actual mount of guarantee | Guarantee type | Guaranty（If any） | Counter-guarantee（If any） | Guarantee term | Complete implementation or not | Guarantee for associated parties (Yes or no) |
| Total guarantee line for subsidiaries approved during this reporting Period（C1） | 0 | Total actual guarantee amount for subsidiaries during this Reporting period（C2） | 0 | |||||||
| Total Approved guarantee line for subsidiaries at the end of this reporting period（C3） | 0 | Total actual guarantee balance for subsidiaries at the end of this reporting Period（C4） | 0 | |||||||
| The Company’s total guarantee(i.e. total of the first three main items) | ||||||||||
| Total guarantee quota approved in the reporting period（A1+B1+C1） | 0 | Total amount of guarantee actually incurred in the reporting period（A2+B2+C2） | 0 | |||||||
| Total guarantee quota already approved at the end of the reporting period（A3+B3+C3） | 48,000 | Total balance of the actual guarantee at the end of the reporting period（A4+B4+C4） | 36,491.45 | |||||||
| The proportion of the total amount of actually guarantee in the net assets of the Company (that is A4+B4+C4）% | 12.66% | |||||||||
| Including： | ||||||||||
| Amount of guarantee for shareholders, actual controller and its associated parties（D） | 0 | |||||||||
| The debts guarantee amount provided for the Guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly（E） | 0 | |||||||||
| Proportion of total amount of guarantee in net assets of the company exceed 50%（F） | 0 | |||||||||
| Total guarantee Amount of the abovementioned guarantees（D+E+F） | 0 | |||||||||
| Situations where there is guarantee liability or evidence indicating the possibility of joint and several repayment liability for unexpired guarantee contracts during the reporting period (if any) | 0 | |||||||||
Specific situation of the use of composite guarantees
3. Situation of Entrusted Finance
(1)Situation of Entrusted Finance
√ Applicable □Not applicable
Overview of entrusted wealth-management during the reporting period
√ Applicable □Not applicable
In RMB10，000
| Specific type | Source of funds for entrusted financial management | The Occurred Amount of Entrusted Wealth-management | Undue balance | Amount overdue | Un-recovered of overdue amount |
| Bank financial products | Self fund | 140,000 | 50,000 | 0 | 0 |
| Other | Self fund | 29,050 | 32,194.61 | 0 | 0 |
| Total | 169,050 | 82,194.61 | 0 | 0 | |
The detailed information of entrusted wealth-management with significant amount or low safety, poor liquidityor high risk with no promise of principal
√ Applicable □Not applicable
In RMB10,000
| Name of Trustee Organization (or Trustee Name) | Type of Trustee Organization(or Trustee) | Product Type | Amount | Capital Source | Start Date | Expiry Date | Funds Allocation | Method of Reward Determination | Reference Annualized Rate of Return | Expected Income (if any) | Actual profit and loss during the reporting period | The actual recovery of profit and loss during the reporting period | Amount of provision for impairment (if any) | Whether passed the statutory procedure | Whether there is any entrusted financial plan in the future | Summary of events and related search index (if any) |
| Bank of China | Bank | Structural deposits | 25,000 | Self funds | Jan 9, 2023 | July 7, 2023 | Money market instrument | A lum p-sum pay men twhe n due | 3.40% | 416.84 | 416.84 | Redemption upon maturity | 0 | Yes | Not applicable | |
| Bank of Communications | Bank | Structural deposits | 15,000 | Self funds | Jan 9, 2023 | July 1, 2023 | Money market instrument | A lum p-sum pay men twhe n due | 3.36% | 254.07 | 254.07 | Redemption upon maturity | 0 | Yes | Not applicable | |
| Bank of Communications | Bank | Structural deposits | 20,000 | Self funds | July 27, 2023 | Otc 31, 2023 | Money market instrume | A lum p-sum pay men | 3.00% | 151.83 | 151.83 | Redemption upon | 0 | Yes | Not applicable |
| nt | twhe n due | maturity | ||||||||||||||
| Bank of China | Bank | Structural deposits | 30,000 | Self funds | Aug 1, 2023 | Nov 1, 2023 | Money market instrument | A lum p-sum pay men twhe n due | 3.20% | 241.97 | 241.97 | Redemption upon maturity | 0 | Yes | Not applicable | |
| Bank of China | Bank | Structural deposits | 50,000 | Self funds | November 10,2023 | February 9,2024 | Money market instrument | A lum p-sum pay men twhe n due | 3.08% | 383.95 | 0 | Not expi r ed | 0 | Yes | Not applicable | |
| Southern Fund Management Co., Ltd | Funds | Monetary Fund | 6,000 | Self funds | June 19, 2023 | June 27, 2023 | Money market tools | Redemp tion on T day, arrival on T+1 day | 2.32% | 2.67 | 2.67 | Not expi r ed | 0 | Yes | Not applicable | |
| Southern Fund Management Co., Ltd | Funds | Monetary Fund | 6,000 | Self funds | Aug 28, 2023 | Money market tools | Redemp tion on T day, arrival on T+1 day | 2.32% | 0 | 0 | Not expi r ed | 0 | Yes | Not applicable | ||
| Southern Fund Management Co., Ltd | Funds | Monetary Fund | 27,194.61 | Self funds | December 16,2022 | Money market tools | Redemp tion on T day, arrival on T+1 day | 2.19% | 0 | 0 | Not expi r ed | 0 | Yes | Not applicable | ||
| Penghua Fund Manage | Funds | Monetary Fund | 5,000 | Self funds | December 14,2023 | Money market tools | Redemp tion on T day, arriv | 2.26% | 0 | 0 | Not expi r ed | 0 | Yes | Not applicable |
| ment Co., Ltd. | al on T+1 day | ||||||||||||||
| Total | 162,000 | -- | -- | -- | -- | -- | -- | 1,451.33 | 1,067.38 | -- | -- | -- | -- | ||
Entrusted financing appears to be unable to recover the principal or there may be other circumstances thatmay result in impairment
□ Applicable √ Not applicable
(2)Situation of Entrusted Loans
□ Applicable √ Not applicable
No such cases in the reporting period.
4. Other significant contract
□ Applicable √ Not applicable
No such cases in the reporting period.XVI. Explanation on other significant events
√ Applicable □Not applicable
(I) Issue shares to purchase assets and raise supporting fundsAccording to the relevant regulations of Shenzhen Stock Exchange, upon the application of the company,the shares of the company were suspended from trading on the morning of December 19, 2022. On December30, 2022, the company held the nineteenth meeting of the Eighth Board of Directors and the thirteenth meetingof the Eighth Board of Supervisors, and deliberated and passed the Proposal on the "Plan for Shenzhen Textile(Group) Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related PartyTransactions" and Its Summary and other proposals related to this transaction. The Company intends topurchase 100% equity of Hengmei Optoelectronics Co., Ltd. by issuing shares and paying cash, and at the sametime, it plans to raise matching funds from non-public offering of shares to no more than 35 qualified specifictargets (hereinafter referred to as "this transaction"). The company's shares resumed trading on the morning ofJanuary 3, 2023.
On June 28, 2023, due to the upcoming expiration of the validity period of the financial data of the targetcompany in this transaction, the intermediary agency planned to conduct additional audit and supplementarydue diligence, and the Company still needs to communicate with the counterparty to negotiate the details of thetransaction, so the Company could not disclose the draft restructuring report within six months and issue anotice on the convening of General Meeting of Shareholders. After the parties to the transaction reached anagreement through consultation, the Company continued to promote the transaction, and disclosed a specialexplanation announcement according to relevant requirements. For details, please refer to AnnouncementNo.2023-29 of the Company on CNINF (http://www.cninfo.com.cn).
Due to the changes in the shareholders and shareholding ratio of the target company HengmeiOptoelectronics during the reorganization, it is necessary to adjust the counterparty of this restructuring and the
transaction plan according to the requirements of the relevant rules of the registration system. On November 17,2023, the Company reconvened the meeting of the Board of Directors to review and approve the revised draft ofthis transaction plan, and adjusted the pricing base date, issue price and counterparty of this transaction plan.Atpresent, while intermediaries continue to promote the overtime audit, evaluation and supplementary duediligence of the target company, the Company further negotiates the transaction details with the counterparty toconsolidate the restructuring transaction plan. After the transaction plan is determined and the state-ownedassets examination and approval procedures are fulfilled, the Company will convene the meeting of the Boardof Directors again to consider matters related to this transaction.This restructuring is the adjustment and optimization of the Company's main polarizer business in the faceof the rapidly developing new display industry environment. Through the integration of high-quality resourcesin the same industry and the realization of large-scale development, the restructuring will help the Company tooptimize the industrial chain layout in the polarizer industry, deepen the depth of technical reserves, enhance itscore competitiveness, enhance its overall profitability, give full play to the synergistic effect, and help it becomea bigger and stronger listed company.
（2） Disposal of assets of the joint venture company Shenzhen Xieli
Shenzhen Xieli Automobile Enterprise Co., Ltd. (hereinafter referred to as "Shenzhen Xieli") is a Sinoforeign joint venture established by the company and Hong Kong Xieli Maintenance Company in 1981, with aregistered capital of 3.12 million yuan. The company holds 50% of the equity. The company's operating periodended in 2008 and its business license was revoked in 2014. The company's main assets are real estate. InMarch 2020, Shenzhen Xieli Industrial and Commercial Co., Ltd. has been cancelled, but there are still threeproperties under its name that need to be resolved through further negotiation between the shareholders of bothparties.On July 26, 2021, the Company filed a complaint with the People's Court of Yantian District, ShenzhenCity, Guangdong Province to revoke the approval of cancelation of Shenzhen Xieli Automobile Enterprise Co.,Ltd by theShenzhen Market Supervision and Administration Bureau. In November 2021, the court ruled torevoke the aforementioned approval of cancellation. Hong Kong Xieli Maintenance Company and ShenzhenMarket Supervision and Administration Bureau were not satisfied and submitted appeal petitions to theShenzhen Intermediate People's Court respectively. On June 28, 2022, the Shenzhen Intermediate People'sCourt ruled in the second instance: revoked the administrative judgment-No. 1883(2021) Yue 0308 Xingchuofthe Yantian District People's Court of Shenzhen City, Guangdong Province, and remanded it to the YantianDistrict People's Court of Shenzhen City, Guangdong Province for a new trial.The case was reopened in Yantian District People's Court on September 29, 2022, and Yantian District People'sCourt made a retrial judgment on December 30, 2022: The administrative act of Shenzhen Xieli AutomobileEnterprise Co., Ltd., which was approved by Shenzhen Administration for Market Regulation on March 9, 2020,was revoked.The third party Xieli Maintenance Company filed an appeal in January 2023. Later, because XieliMaintenance Company failed to pay the appeal fee in advance, the Shenzhen Intermediate People's Court ofGuangdong Province issued an administrative ruling that Hong Kong Xieli withdrew the appeal. The retrialverdict of the first instance came into effect on March 22, 2023.
（3） Matters on waiving the preemptive right and equity transfer of controlling subsidiaries
The shareholders' meeting of SAPO Photoelectric , the company's holding subsidiary, agreed that HangzhouJinhang Equity Investment Fund Partnership (limited partnership) would transfer 40% of its shareholding inSAPO Photoelectric to Hengmei Optoelectronics Co., Ltd. For details, see http//www.cninfo.com.cn（ http://www.cninfo.com.cn ）Company Announcement No. 2023-01. On January 19, 2023, SAPO
Photoelectric obtained the "Registration Notice" issued by the Shenzhen Municipal Market Supervision andAdministration Bureau, and the industrial and commercial change registration procedures for this equity transferhave been completed. After this change, the company still holds 60% equity of SAPO Photoelectric, whileHengmei Optoelectronics holds 40% equity of SAPO Photoelectric. This equity transfer is conducive tosynergizing the advantages of both parties in the polarizer industry, integrating high- quality resources of bothparties, further optimizing and strengthening the main polarizer industry, and better enhancing the corecompetitiveness of listed companies.XVII. Significant event of subsidiary of the Company
√ Applicable □Not applicable
(1)About the progress of the Company and its holding subsidiaries involved in litigationIn July and August 2022, the Company and its holding subsidiary SAPO Photoelectric received the legaldocuments such as Notice of Respondence to Action, and Summon, with case numbers of (2022) Y0310 MCNo. 3507, No.4013 and No.4336 served by Pingshan District People's Court, Shenzhen City, GuangdongProvince, and were informed that the court had accepted Hangzhou Jinhang Equity Investment FundPartnership (Limited Partnership) (hereinafter referred to as "Jinhang Fund") v. SAPO Photoelectric for ①dissolution dispute, ② dispute over the confirmation of the validity of company resolutions and ③ dispute overshareholders' right to know, and the Company was informed to participate in the lawsuit as a party to the case,and SAPO Photoelectric was informed to respond as the defendant to the case. For details, please refer to theCompany's Announcement No. 2022-20 and No. 2022-25 on CNINF (http://www.cninfo.com.cn).
In the above-mentioned lawsuits, concerning the dissolution dispute of SAPO Photoelectric and thedispute over shareholders' right to know, the People's Court of Pingshan District of Shenzhen City, GuangdongProvince received the plaintiff's application for withdrawal on March 30, 2023, and made a ruling on April 6,2023. The Company and SAPO Photoelectric have received the Civil Rulings of the above two cases, with therulings as follows: The plaintiff's withdrawal of the lawsuit is a self-disposition of its right of action, which doesnot violate the law, does not harm the interests of the state, the collective and others, and it is allowed accordingto law.
For details, please refer to the Company's Announcement No. 2023-19 on CNINF(http://www.cninfo.com.cn).
In addition, on May 25, 2023, the People's Court of Pingshan District of Shenzhen City, GuangdongProvince rendered a first-instance judgment in the above-mentioned dispute case over the confirmation of thevalidity of the resolution of SAPO Photoelectric , and the Company and SAPO Photoelectric have received theCivil Judgment of the above-mentioned case, with the judgment is as follows: all claims of the plaintiff JinhangFund are dismissed. For details, please refer to the Company's Announcement No. 2023-28 on CNINF(http://www.cninfo.com.cn).
VII. Change of share capital and shareholding of Principal ShareholdersI. Changes in share capital
1. Changes in share capital
In shares
| Before the change | Increase/decrease（+，-） | After the Change | |||||||
| Amount | Proportion | Share allotment | Bonus shares | Capitalization of common reserve fund | Other | Subtotal | Quantity | Proportion | |
| 1.Shares with conditional subscription | 72,000 | 0.01% | 0 | 0 | 0 | 0 | 0 | 72,000 | 0.01% |
| 1.State -owned shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2. State-owned legal person shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3.Other domestic shares | 72,000 | 0.01% | 0 | 0 | 0 | 0 | 0 | 72,000 | 0.00% |
| Incl：Domestic legal person shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Domestic Natural Person shares | 72,000 | 0.01% | 0 | 0 | 0 | 0 | 0 | 72,000 | 0.01% |
| 4.Foreign share | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Incl：Foreign legal person share | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Foreign Natural Person shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| II.Shares with unconditional subscription | 506,449,849 | 99.99% | 0 | 0 | 0 | 0 | 0 | 506,449,849 | 99.99% |
| 1.Common shares in RMB | 457,021,849 | 90.23% | 0 | 0 | 0 | 0 | 0 | 457,021,849 | 90.23% |
| 2.Foreign shares in domestic | 49,428,000 | 9.76% | 0 | 0 | 0 | 0 | 0 | 49,428,000 | 9.76% |
| market | |||||||||
| 3. Foreign shares in foreign market | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 4.Other | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| III. Total of capital shares | 506,521,849 | 100.00% | 0 | 0 | 0 | 0 | 0 | 506,521,849 | 100.00% |
Reasons for share changed
□ Applicable √ Not applicable
Approval of Change of Shares
□Applicable √Not applicable
Ownership transfer of share changes
□Applicable √Not applicable
Progress on any share repurchase:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributableto common shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose for the company or need to disclosed under requirement from securityregulators
□ Applicable √Not applicable
2. Change of shares with limited sales condition
□ Applicable √Not applicable
II. Securities issue and listing
1.Explanation of the Situation of the Security Issue(No Preferred Shares) in the Report Period
□ Applicable √ Not applicable
2.Change of asset and liability structure caused by change of total capital shares and structure
□ Applicable √Not applicable
3.About the existing employees’ shares
□Applicable √Not applicable
III. Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
In Shares
| Total number of common shareholders at the end of the | 26,709 | Total shareholders at the end of the month from the date of | 26,787 | The total number of preferred shareholders voting rights restored at p | 0 | Total preference shareholders with voting rights recovered at end of last month before annual | 0 |
| reporting period | disclosing the annual report | eriod-end (if any)(Note 8) | report disclosed(if any)(Note8) | |||||
| Particulars about shares held above 5% by shareholders or top ten shareholders（Excluding shares lent through refinancing) | ||||||||
| Shareholders | Nature of shareholder | Proportion of shares held（%） | Number of shares held at period -end | Changes in reporting period | Amount of restricted shares held | Amount of un-restricted shares held | Number of share pledged/frozen | |
| State of share | Amount | |||||||
| Shenzhen Investment Holdings Co., Ltd. | State-owned legal person | 46.21% | 234,069,436 | 0 | 0 | 234,069,436 | Not applicable | 0 |
| Shenzhen Shenchao Technology Investment Co., Ltd. | State-owned Legal person | 3.18% | 16,129,032 | 0 | 0 | 16,129,032 | Not applicable | 0 |
| Sun Huiming | Domestic Nature person | 1.26% | 6,399,653 | 190,800 | 0 | 6,399,653 | Not applicable | 0 |
| Su Weipeng | Domestic Nature person | 0.71% | 3,580,000 | 0 | 0 | 3,580,000 | Pledge | 2,800,000 |
| China Construction Bank Co., Ltd－Xinao new energy industry equity securities investment fund | Other | 0.60% | 3,049,784 | 2,851,000 | 0 | 3,049,784 | Not applicable | 0 |
| Chen Zhaoyao | Domestic Nature person | 0.60% | 3,035,100 | 3,035,100 | 0 | 3,035,100 | Not applicable | 0 |
| Chen Xiaobao | Domestic Nature person | 0.59% | 3,002,384 | -27,100 | 0 | 3,002,384 | Not applicable | 0 |
| Li Zengmao | Domestic Nature person | 0.56% | 2,831,397 | 607,000 | 0 | 2,831,397 | Not applicable | 0 |
| Peng Xun | Domestic Nature person | 0.38% | 1,920,500 | 560,800 | 0 | 1,920,500 | Not applicable | 0 |
| HKSCC | Overseas Legal person | 0.36% | 1,843,603 | 1,843,603 | 0 | 1,843,603 | Not applicable | 0 |
| Strategy investors or general legal person becomes top 10 shareholders due to rights issued (if applicable)（See Notes 3） | None | |||||||
| Explanation on shareholders participating in the margin trading business | Among the top 10 common shareholders, Shenzhen Investment Holdings Co., Ltd. and Shenzhen Shenchao Technology Investment Co., Ltd. do not constitute a concerted party relationship. In addition, the company does not know whether there is an associated relationship among the top 10 ordinary shareholders, and between the top 10 ordinary shareholders 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 Company. | |||
| Above shareholders entrusting or entrusted with voting rights, or waiving voting rights | None | ||
| Top 10 shareholders including the special account for repurchase (if any) (see note 10) | None | ||
| Shareholding of top 10 shareholders of unrestricted shares | |||
| Name of the shareholder | Quantity of unrestricted shares held at the end of the reporting period | Share type | |
| Share type | Quantity | ||
| Shenzhen Investment Holdings Co., Ltd. | 234,069,436 | Common shares in RMB | 234,069,436 |
| Shenzhen Shenchao Technology Investment Co., Ltd. | 16,129,032 | Common shares in RMB | 16,129,032 |
| Sun Huiming | 6,399,653 | Foreign shares in domestic market | 6,399,653 |
| Su Weipeng | 3,580,000 | Common shares in RMB | 3,580,000 |
| China Construction Bank Co., Ltd－Xinao new energy industry equity securities investment fund | 3,049,784 | Common shares in RMB | 3,049,784 |
| Chen Zhaoyao | 3,035,100 | Common shares in RMB | 3,035,100 |
| Chen Xiaobao | 3,002,384 | Common shares in RMB | 3,002,384 |
| Li Zengmao | 2,831,397 | Common shares in RMB | 2,831,397 |
| Peng Xun | 1,920,500 | Common shares in RMB | 1,920,500 |
| HKSCC | 1,843,603 | Common shares in RMB | 1,843,603 |
| Explanation on associated relationship or consistent action among the top 10 shareholders of non-restricted negotiable shares and that between the top 10 shareholders of non-restricted negotiable shares and top 10 shareholders | Among the top 10 common shareholders, Shenzhen Investment Holdings Co., Ltd. and Shenzhen Shenchao Technology Investment Co., Ltd. do not constitute a concerted party relationship. In addition, the company does not know whether there is an associated relationship among the top 10 ordinary shareholders, and between the top 10 ordinary shareholders 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 Company. | ||
| Explanation on shareholders participating in the margin trading business(if any )(See Notes 4) | None | ||
Lending of shares by the top ten shareholders participating in refinancing business
□ Applicable √ Not applicable
The top ten shareholders have changed from the previous period?Applicable □Not applicable
In Shares
| Changes of the top ten shareholders compared with the end of the previous period | |||||
| Name of shareholder (full name) | Addition/Withdrawal in this reporting period | Number of shares lent by refinancing at the end of the period and not yet returned | Number of shares held by shareholders in general accounts and credit accounts and lent by refinancing at the end of the period and not yet returned | ||
| Total quantity | Proportion of total share capital | Total quantity | Proportion of total share capital | ||
| HKSCC | Newly increased | 0 | 0.00% | 1,843,603 | 0.36% |
| Zhangzhou Xiaotian Venture Investment Co., Ltd. | Left | 0 | 0.00% | 0 | 0.00% |
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have abuy-back agreement dealing in reporting period.
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of theCompany have no buy –back agreement dealing in reporting period.
2.Controlling shareholder
Nature of Controlling Shareholders: Local state holdingType: Legal person
| Name of the Controlling shareholder | Legal representative/Leader | Date of incorporation | Organization code | Principal business activities |
| Shenzhen Investment Holdings Co., Ltd. | He Jianfeng | October 13,2004 | 76756642-1 | Investment and acquisition of financial and similar financial stock rights such as bank, security, insurance, fund and guarantee; Engage in real estate development and management business within the limit of legally-acquired land use right; Carry out investment and service in the field of strategic emerging industry; Carry out investment, operation and management of state-owned stocks of wholly-owned, holding and joint-stock company by reorganization & integration, capital operation and asset disposal; Other businesses undertaken by authorization of municipal SASAC(State Asset Supervision and Administration |
Commission) (If theabove business scopeneeds to be approvedaccording to nationalregulations, thebusiness can only beoperated after theapprovalis obtained)
Equity of otherdomestic/foreign listedcompany with sharecontrolling and shareparticipation bycontrolling shareholderin reporting period
Shen PropertyA（000011），Quantity of shares 301.41 million，Shareholding ratio：50.57%；SPGA （000029），Quantity of shares 564.3538 million，Shareholding ratio：67.50%；Shen Universe A（000023），Quantity of shares 8.21 million，Shareholding ratio：5.91%；Pingan（601318），Quantity of shares962.72 million，Shareholding ratio：5.27%；Guosen Securities（002736），Quantity of shares 3,223.11 million，Shareholding ratio：33.53%；Guotai Junan（601211），Quantity of A shares 609.43 million，Quantity of H shares 103.37 million，Totalshareholding ratio：8.00%；Telling Holding（000829），Quantity of shares 195.03 million，Shareholding ratio：19.03%；Shenzhen International（00152），Quantity of shares 1,059.0825million，Shareholding ratio：44.25%；Beauty Star（002243），Quantity of shares 604.82 million，Shareholding ratio:49.96%；Infinova（002528）, Quantity of shares 315.83 million，Shareholdingratio:26.35%；Eternal Asia（002183），Quantity of shares 601.6733 million，Shareholdingratio:23.17%；Shenzhen Water（301038），Quantity of shares 64.35 million，Shareholdingratio:37.57%；Shenzhen Energy（000027)，Quantity of shares 6.77 million，Shareholdingratio:0.14%；Bank of Communication（601328），Quantity of shares 9.52 million，Shareholdingratio:0.01%； CECEP （300197），Quantity of shares 113.98million，Shareholding ratio:4.04%；VANKE（02202），Quantity of shares 77.27 million，Shareholding ratio:0.66%；SEG（000058）, Quantity of shares 696.16 million，Shareholding ratio56.54%；SDG（000070）, Quantity of shares 325.7215 million，Shareholding ratio36.18%；Shenzhen Telus A（000025）, Quantity of shares 205.3416 million，Shareholding ratio31.79%；SDG（300917）, Quantity of shares 80.7398 million，Shareholding ratio47.78%；Microgate（300319），Quantity of shares72 million，Shareholding ratio6.49%；Merchants Shekou（001979），Quantity of shares456.1219 million，Shareholding ratio5.03%.
Changes of controlling shareholder in reporting period
□ Applicable √ Not applicable
No changes of controlling shareholder for the Company in reporting period.3．Information about the controlling shareholder of the CompanyActual controller nature：Local state owned assets managementActual controller type：Legal person
| Name of the actual controller | Legal representative /Leader | Date of incorporation | Organization code | Principal business activities |
| State-owned Assets Regulatory Commission of Shenzhen Municipal People's Government | Wang Yongjian | July 30,2004 | K3172806-7 | Performing the responsibilities of investors on behalf of the state and supervising and managing state-owned assets according to authorization and law. |
Equity of otherdomestic/foreign listedcompany with sharecontrolling and shareparticipation bycontrolling shareholderin reporting period
It directly held 40.10% equity of Shenzhen Gas (601139); It directly held 21.93% equity ofShenzhen Zhenye (000006); It directly held 43.91% equity of Shenzhen Energy (000027).
Changes of controlling shareholder in reporting period
□ Applicable √ Not applicable
No changes of controlling shareholder for the Company in reporting period
Block Diagram of the ownership and control relations between the company and the actual controller
The actual controller controls the company by means of trust or managing the assets in other way
□Applicable √Not applicable
4.The cumulative number of shares pledged by the controlling shareholder or the largest shareholder of thecompany and its person acting in concert accounts for 80% of the number of shares held by the company
□Applicable √Not applicable
5.Particulars about other legal person shareholders with over 10% share held
□Applicable √Not applicable
6.Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers,Restructuring Party and Other Commitment Subjects
□Applicable √Not applicable
IV. Specific implementation of share repurchase during the reporting period
Progress in implementation of share repurchase
□ Applicable √Not applicable
Implementation progress of reducing repurchased shares by centralized bidding
□ Applicable √Not applicable
VIII. Situation of the Preferred Shares
□Applicable √Not applicable
The Company had no preferred shares in the reporting period.
IX. Corporate Bond
□ Applicable √ Not applicable
X. Financial Report
Please refer to the attached financial statements and notes for details.
Chairman: Yin KefeiApproval date for submission by the board of directors: March 26, 2024
Shenzhen Textile (Holdings) Co., Ltd.
Financial Statements and Auditor's ReportFor the year ended December 31,2023
深圳市纺织(集团)股份有限公司
补充资料2023年12月31日止年度
Contents
Auditor's Report
Consolidated and Company Balance sheet
Consolidated and Company Income statement
Consolidated and Company cash flow statement
Consolidated and Company Statement on Change in Owners’ Equity
Shenzhen Textile (Holdings) Co., Ltd.
Financial Statements and Auditor's ReportFor the year ended December 31,2023
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
Contents
Auditor's Report
Consolidated and Company Balance sheet
Consolidated and Company Income statement
Consolidated and Company cash flow statement
Consolidated and Company Statement on Change in Owners’ Equity
Notes to Financial statements
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
- 1 -
Auditor’ s Report
DeShiReport(Shen)Zi(24)No. P02833To 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"), whichcomprise the balance sheet as at December 31, 2023, and the income statement, the statement of cash flows and the statement of changes inowners' 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 forBusiness Enterprises and present fairly the financial position of the Company as at December 31, 2023 and its operating results and cashflows for the year then ended.II. Basis for Our OpinionWe conducted our audit in accordance with the Auditing Standards for Certified Public Accountants in China. Our responsibilitiesunder 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 ChineseCPA and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion.III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financialstatements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and informing our opinion thereon, and we do not provide a separate opinion on these matters.
1. Recognition of polarizer sales revenue
As mentioned in Note (V) 40 to the financial statement, in 2023 the operating income reported in the consolidated financialstatement of Shenzhen Textile Group was RMB3,079,678,375.45, of which the sales revenue of polarizers was RMB 2,885,625,542.77,accounting for 93.70% of the total operating income. The sales revenue of Shenzhen Textile Group's polarizer is recognized when thecustomer obtains control of the relevant goods. Due to the importance of polarizer sales revenue to the consolidated financial statement asa whole, and the revenue is one of the key performance indicators of Shenzhen Textile Group, there is an inherent risk that managementwill manipulate revenue recognition in order to achieve specific objectives or expectations, therefore, we have identified the recognition ofpolarizer sales revenue as a key audit matter for the audit of the consolidated financial statement.
In response to the above key audit matter, the audit procedures we implement mainly include:
Test and evaluate the internal control of the revenue-related business of Shenzhen Textile Group.Examine sales contracts with key customers, identify contractual terms and conditions related to the transfer of control of goods, andassess whether the accounting policies for revenue recognition comply with the requirements of accounting standards for businessenterprisesPerform revenue analysis procedures by production line, product type and customer, and analyze the rationality of revenue changesbased on market and other factors.Samples are taken to perform detailed tests on sales revenue, check supporting documents such as invoices, outbound delivery orders,and receipts related to revenue recognition, and verify the sales of major customers by letter of confirmation and evaluate the authenticity ofpolarizer sales revenue recognition.Select samples of sales transactions before and after the balance sheet date, check the supporting documents such as invoices,outbound delivery orders, and receipts, and evaluate whether the revenue is recorded in the appropriate accounting period.
2. Impairment of polarizer inventory
As mentioned in Note (V) 8 to the financial statement, as of December 31, 2023, the inventory book balance reported in theconsolidated financial statement of Shenzhen Textile Group was RMB852,104,157.04, of which the book balance of polarizer inventory wasRMB838,447,375.39 accounting for 98.40% of the total inventory, and the corresponding inventory decline reserve wasRMB107,290,039.96. In accordance with the Group's accounting policy, inventories are measured at the lower of cost or net realizable valueat the end of the year, and when the net realizable value of inventories is lower than cost, a provision is made for inventory price declines. Asthe provision for inventory declines involves significant management estimates, we have identified the impairment of polarizer inventoriesas a key audit matter in the audit of the consolidated financial statement.In response to the above key audit matter, the audit procedures we implement mainly include:
Test and evaluate the design and implementation of internal controls related to inventory impairment;
Implement inventory on-site monitoring procedures, check the check-count quantity of inventory on a sampling basis, and observe thestatus of inventory to evaluate the inventory quantity and condition at the balance sheet date;
Evaluate the reasonableness of management's methodology for accruing provisions for inventory declines and the importantassumptions and parameters used to calculate net realizable value;IV. Other information
The management of the Company is responsible for the other information. The other information comprises information of theCompany's annual report in 2023, 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 ofassurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, indoing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the
- 2 -
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, weconclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in thisregardV. Responsibilities of Management and Those Charged with Governance for the Financial StatementsThe Company's management is responsible for preparing the financial statements in accordance with the requirements of AccountingStandards for Business Enterprises to achieve a fair presentation, and for designing, implementing and maintaining internal control that isnecessary 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 agoing concern, disclosing matters related to going concern and using the going concern basis of accounting unless management eitherintends 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 materialmisstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level ofassurance, but is not a guarantee that an audit conducted in accordance with the audit standards will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they couldreasonably 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 theaudit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design andperform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve 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 thecircumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosuresmade by management of the Company.
(4) Conclude on the appropriateness of using the going concern assumption by the management of the Company, and conclude, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in ourauditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may causethe 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 thefinancial 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 theCompany to express an opinion on the financial statements and bear all liability for the opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit andsignificant 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 regardingindependence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance inthe 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, inextremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of such communication.Deloitte Touche Tohmatsu CPA Ltd.(special general partnership) Chinese C.P.A.
（Project Partner)Shanghai ChinaChinese C.P.A.
March 26, 2024
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
- 3 -
Consolidated balance sheetDecember 31,2023
Consolidated balance sheetIn RMB
| Items | Note | December 31,2023 | December 31,2022 |
| Current asset： | |||
| Monetary fund | (V).1 | 472,274,448.00 | 991,789,968.19 |
| Transactional financial assets | (V).2 | 821,946,114.68 | 319,605,448.44 |
| Note receivable | (V).3 | 50,963,943.01 | 74,619,100.26 |
| Account receivable | (V.).4 | 820,134,833.95 | 636,583,469.93 |
| Financing of receivables | (V.).5 | 22,839,459.13 | 54,413,796.91 |
| Prepayments | (V).6 | 19,499,886.80 | 18,391,444.67 |
| Other account receivable | (V).7 | 3,220,285.42 | 10,585,975.38 |
| Including：Interest receivable | - | - | |
| Dividend receivable | - | - | |
| Inventories | (V).8 | 736,392,172.27 | 558,447,648.77 |
| Other current asset | (V.).9 | 60,773,457.39 | 69,535,531.24 |
| Total of current assets | 3,008,044,600.65 | 2,733,972,383.79 | |
| Non-current assets： | |||
| Long term share equity investment | (V.).10 | 127,682,020.70 | 134,481,835.74 |
| Other equity instruments investment | (V)..11 | 145,988,900.00 | 167,678,283.27 |
| Real estate investment | (V.).12 | 125,603,207.18 | 126,315,834.76 |
| Fixed assets | (V.).13 | 2,066,006,237.73 | 2,240,221,656.36 |
| Construction in progress | (V.).14 | 31,307,060.74 | 38,061,619.60 |
| Use right assets | (V).15 | 11,999,466.57 | 15,365,393.88 |
| Intangible assets | (V).16 | 39,564,422.80 | 44,192,571.95 |
| Goodwill | (V).17 | - | - |
| Long-germ expenses to be amortized | (V.).18 | 3,503,660.94 | 4,470,957.79 |
| Deferred income tax asset | (V).19 | 60,605,365.42 | 69,823,814.29 |
| Other non-current asset | (V).20 | 29,517,420.71 | 42,553,016.47 |
| Total of non-current assets | 2,641,777,762.79 | 2,883,164,984.11 | |
| Total of assets | 5,649,822,363.44 | 5,617,137,367.90 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
- 4 -
Consolidated balance sheet(Continued)
In RMB
| Note | December 31,2023 | December 31,2022 | |
| Current liabilities： | |||
| Short-term loans | (V).22 | 8,000,000.00 | 7,000,000.00 |
| Notes payable | (V).23 | 31,049,291.49 | - |
| Account payable | (V).24 | 408,548,136.24 | 327,049,873.70 |
| Advance receipts | (V).25 | 1,450,096.30 | 1,393,344.99 |
| Contract liabilities | (V).26 | 1,436,943.34 | 4,274,109.40 |
| Employees’ wage payable | (V).27 | 56,437,162.09 | 61,166,444.90 |
| Tax payable | (V).28 | 4,340,895.14 | 8,897,312.51 |
| Other account payable | (V).29 | 184,528,344.55 | 197,345,455.37 |
| Including：Interest payable | - | - | |
| Dividend payable | - | - | |
| Non-current liability due within 1 year | (V).30 | 108,102,752.99 | 104,183,438.22 |
| Other current liability | (V).31 | 80,082,477.22 | 92,945,741.78 |
| Total of current liability | 883,976,099.36 | 804,255,720.87 | |
| Non-current liabilities： | |||
| Long-term loan | (V).32 | 505,578,314.56 | 607,421,585.00 |
| Lease liability | (V).33 | 6,687,317.22 | 8,628,672.71 |
| Deferred income | (V).34 | 97,485,986.89 | 117,814,796.10 |
| Deferred income tax liability | (V).19 | 44,177,287.45 | 47,974,267.80 |
| Total non-current liabilities | 653,928,906.12 | 781,839,321.61 | |
| Total of liability | 1,537,905,005.48 | 1,586,095,042.48 | |
| Owners’ equity | |||
| Share capital | (V).35 | 506,521,849.00 | 506,521,849.00 |
| Capital reserves | (V).36 | 1,961,599,824.63 | 1,961,599,824.63 |
| Other comprehensive income | (V).37 | 93,607,380.81 | 109,596,609.31 |
| Special reserve | (V)..38 | 104,262,315.64 | 100,909,661.32 |
| Retained profit | (V).39 | 216,160,896.14 | 170,636,610.95 |
| Total of owner’s equity belong to the parent company | 2,882,152,266.22 | 2,849,264,555.21 | |
| Minority shareholders’ equity | 1,229,765,091.74 | 1,181,777,770.21 | |
| Total of owners’ equity | 4,111,917,357.96 | 4,031,042,325.42 | |
| Total of liabilities and owners’ equity | 5,649,822,363.44 | 5,617,137,367.90 |
The notes are integral parts of the financial statements_____________________ ______________________ ______________________Legal Representative: Person-in-charge of the accounting work：Person-in -charge of the accounting organ：
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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Parent Company Balance Sheet
In RMB
| Note | December 31,2023 | December 31,2022 | |
| Current asset： | |||
| Monetary fund | 9,125,800.27 | 426,042,455.28 | |
| Transactional financial assets | 741,243,309.42 | 319,605,448.44 | |
| Account receivable | (XVI).、1 | 12,671,623.65 | 15,643,024.11 |
| Prepayments | - | - | |
| Other account receivable | (XVI).2 | 14,013,552.95 | 14,132,756.62 |
| Including：Interest receivable | - | - | |
| Dividend receivable | - | - | |
| Inventories | 32,814.05 | 26,237.85 | |
| Total of current assets | 777,087,100.34 | 775,449,922.30 | |
| Non-current assets： | |||
| Long term share equity investment | (XVI).3 | 2,087,532,810.79 | 2,092,431,333.83 |
| Other equity instruments investment | 131,185,500.00 | 151,618,842.39 | |
| Real estate investment | 102,430,682.27 | 101,190,712.85 | |
| Fixed assets | 2,522,229.44 | 11,346,585.35 | |
| Construction in progress | 191,875.56 | 308,243.90 | |
| Deferred income tax asset | - | - | |
| Other non-current asset | 27,823,005.45 | 25,997,082.15 | |
| Total of non-current assets | 2,351,686,103.51 | 2,382,892,800.47 | |
| Total of assets | 3,128,773,203.85 | 3,158,342,722.77 | |
| Current liabilities | |||
| Account payable | 411,743.57 | 411,743.57 | |
| Advance receipts | 540,673.07 | 691,160.58 | |
| Employees’ wage payable | 15,810,919.71 | 18,510,589.33 | |
| Tax payable | 3,115,369.56 | 7,121,466.14 | |
| Other account payable | 106,722,393.87 | 113,736,371.24 | |
| Including：Interest payable | - | - | |
| Dividend payable | - | - | |
| Total of current liability | 126,601,099.78 | 140,471,330.86 | |
| Non-current liabilities： | |||
| Deferred income | 200,000.00 | 300,000.00 | |
| Deferred income tax liability | 40,855,186.12 | 44,363,868.30 | |
| Total non-current liabilities | 41,055,186.12 | 44,663,868.30 | |
| Total of liability | 167,656,285.90 | 185,135,199.16 | |
| Owners’ equity | |||
| Share capital | 506,521,849.00 | 506,521,849.00 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| Capital reserves | 1,577,392,975.96 | 1,577,392,975.96 | |
| Other comprehensive income | 83,629,830.81 | 98,855,668.75 | |
| Surplus reserves | 104,262,315.64 | 100,909,661.32 | |
| Retained profit | 689,309,946.54 | 689,527,368.58 | |
| Total of owners’ equity | 2,961,116,917.95 | 2,973,207,523.61 | |
| Total of liabilities and owners’ equity | 3,128,773,203.85 | 3,158,342,722.77 |
The notes are integral parts of the financial statements
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
- 7 -
Consolidated Income statement
In RMB
| Note | Year 2023 | Year 2022 | |
| 1.Operating Revenue | (V).40 | 3,079,678,375.45 | 2,837,988,264.36 |
| Less: Operating cost | (V).40 | 2,561,631,844.53 | 2,374,005,896.43 |
| Business tax and surcharge | (V).41 | 9,293,623.13 | 7,907,126.91 |
| Sales expense | (V).42 | 34,195,670.61 | 35,962,529.35 |
| Administrative expense | (V).43 | 134,371,410.53 | 128,388,940.29 |
| R & D costs | (V).44 | 104,653,040.92 | 80,520,155.54 |
| Financial expenses | (V).45 | 24,399,501.16 | 12,943,606.57 |
| Including：Interest expense | 27,339,804.17 | 31,131,112.38 | |
| Interest income | 12,947,471.64 | 8,327,248.75 | |
| Add: Other income | (V).46 | 50,740,363.91 | 26,350,210.89 |
| Investment gain | (V).47 | 10,828,635.56 | 19,383,351.87 |
| Incl: investment gains from affiliates | (6,898,983.89) | 1,307,639.15 | |
| Financial assets measured at amortized cost cease to be recognized as income | - | - | |
| Changing income of fair value | (V).48 | 2,151,780.82 | - |
| Credit impairment loss | (V).49 | 4,535,775.14 | (4,618,553.09) |
| Impairment loss of assets | (V.).50 | (126,089,709.42) | (202,573,465.84) |
| Assets disposal income | (v).51 | 1.72 | 31,264.60 |
| II. Operating profit | 153,300,132.30 | 36,832,817.70 | |
| Add：Non-Operating income | (V).52 | 1,449,879.26 | 14,993,082.57 |
| Less：Non-Operating expenses | (V).53 | 8,205,801.51 | 7,477,057.47 |
| III. Total profit | 146,544,210.05 | 44,348,842.80 | |
| Less：Income tax expenses | (V).54 | 19,407,731.47 | (67,443,123.52) |
| IV. Net profit | 127,136,478.58 | 111,791,966.32 | |
| (I) Classification by business continuity | |||
| 1.Net continuing operating profit | 127,136,478.58 | 111,791,966.32 | |
| 2.Termination of operating net profit | - | - | |
| (II) Classification by ownership | |||
| Including：Net profit attributable to the owners of parent company | 79,268,250.45 | 73,309,182.94 | |
| Minority shareholders’ equity | 47,868,228.13 | 38,482,783.38 | |
| V. Net after-tax of other comprehensive income | (V).37 | (15,870,135.10) | (10,204,603.14) |
| Net of profit of other comprehensive income attributable to owners of the parent company. | (15,989,228.50) | (10,085,509.74) | |
| （I）Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period | (16,267,037.45) | (10,058,739.46) | |
| 1.Re-measurement of defined benefit plans of changes in net debt or net assets | - | - | |
| 2.Other comprehensive income under the equity method in | - | - |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| vestee can not be reclassified into profit or loss. | |||
| 3. Changes in the fair value of investments in other equity instruments | (16,267,037.45) | (10,058,739.46) | |
| 4. Changes in the fair value of the company’s credit risks | - | - | |
| (II)Other comprehensive income that will be reclassified into profit or loss. | 277,808.95 | (26,770.28) | |
| 1.Other comprehensive income under the equity method investee can be reclassified into profit or loss. | - | - | |
| 2. Changes in the fair value of investments in other debt obligations | 178,640.10 | (178,640.10) | |
| 3. Other comprehensive income arising from the reclassification of financial assets | - | - | |
| 4.Allowance for credit impairments in investments in other debt obligations | - | - | |
| 5. Reserve for cash flow hedges | - | - | |
| 6.Translation differences in currency financial statements | 99,168.85 | 151,869.82 | |
| 7.Other | - | - | |
| Net of profit of other comprehensive income attributable to Minority shareholders’ equity | 119,093.40 | (119,093.40) | |
| VI. Total comprehensive income | 111,266,343.48 | 101,587,363.18 | |
| Total comprehensive income attributable to the owner of the parent company | 63,279,021.95 | 63,223,673.20 | |
| Total comprehensive income attributable minority shareholders | 47,987,321.53 | 38,363,689.98 | |
| VII. Earnings per share | |||
| Basic earnings per share | 0.16 | 0.14 |
The notes are integral parts of the financial statements
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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Income statement of the Parent Company
In RMB
| Note | Year 2023 | Year 2022 | |
| I.Operating revenue | (XVI).4 | 77,822,508.75 | 56,046,883.88 |
| Less：Operating cost | (XVI).4 | 9,822,306.53 | 9,544,956.96 |
| Business tax and surcharge | 3,193,559.74 | 2,296,709.15 | |
| Sales expense | 233,086.71 | 106,542.65 | |
| Administrative expense | 46,901,768.72 | 46,419,746.13 | |
| Financial expenses | (3,418,990.44) | (5,381,252.49) | |
| Including：Interest expenses | 356,264.79 | 6,601.33 | |
| Interest income | 3,838,789.68 | 5,369,095.59 | |
| Add：Other income | 153,012.52 | 269,698.97 | |
| Investment gain | (XVI).5 | 19,300,515.95 | 18,656,000.37 |
| Including: investment gains from affiliates | (6,898,983.89) | 1,307,639.15 | |
| Financial assets measured at amortized cost cease to be recognized as income | - | - | |
| Changing income of fair value | 2,151,780.82 | - | |
| Credit impairment loss | 708,847.28 | 940,005.04 | |
| Impairment loss of assets | - | - | |
| Assets disposal income | - | - | |
| II.Operating profit | 43,404,934.06 | 22,925,885.86 | |
| Add：Non-operating income | 6,431.44 | 6,004,050.33 | |
| Less：Non-operating expenses | 59,123.40 | 100,500.00 | |
| III. Total profit | 43,352,242.10 | 28,829,436.19 | |
| Less：Income tax expenses | 9,825,698.88 | 2,191,277.71 | |
| IV. Net profit | 33,526,543.22 | 26,638,158.48 | |
| 1.Net continuing operating profit | 33,526,543.22 | 26,638,158.48 | |
| 2.Termination of operating net profit | - | - | |
| V. Net after-tax of other comprehensive income | (15,225,837.94) | (9,906,869.64) | |
| （I）Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period | (15,325,006.79) | (10,058,739.46) | |
| 1.Re-measurement of defined benefit plans of changes in net debt or net assets | - | - | |
| 2.Other comprehensive income under the equity method investee can not be reclassified into profit or loss. | - | - | |
| 3. Changes in the fair value of investments in other equity instruments | (15,325,006.79) | (10,058,739.46) | |
| 4. Changes in the fair value of the company’s credit risks | - | - | |
| 5.Other | - | - | |
| (II)Other comprehensive income that will be reclassified into profit or loss | 99,168.85 | 151,869.82 | |
| 1.Other comprehensive income under the equity method investee can be reclassified into profit or loss. | - | - |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| 2. Changes in the fair value of investments in other debt obligations | - | - | |
| 3. Other comprehensive income arising from the reclassification of financial assets | - | - | |
| 4.Allowance for credit impairments in investments in other debt obligations | - | - | |
| 5. Reserve for cash flow hedges | - | - | |
| 6.Translation differences in currency financial statements | 99,168.85 | 151,869.82 | |
| 7.Other | - | - | |
| VI. Total comprehensive income | 18,300,705.28 | 16,731,288.84 |
The notes are integral parts of the financial statements
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
- 11 -
Consolidated Cash flow statement
In RMB
| Note | Year 2023 | Year 2022 | |
| I.Cash flows from operating activities | |||
| Cash received from sales of goods or rending of services | 2,985,794,229.99 | 3,046,091,280.79 | |
| Tax returned | 5,073,509.20 | 113,982,534.22 | |
| Other cash received from business operation | (V).55(1) | 87,277,323.90 | 218,296,299.96 |
| Sub-total of cash inflow | 3,078,145,063.09 | 3,378,370,114.97 | |
| Cash paid for purchasing of merchandise and services | 2,466,252,261.73 | 2,453,492,479.82 | |
| Cash paid to staffs or paid for staffs | 255,045,680.87 | 253,460,171.00 | |
| Taxes paid | 54,636,406.53 | 59,230,421.14 | |
| Other cash paid for business activities | (V).55(1) | 117,443,974.16 | 121,948,492.41 |
| Sub-total of cash outflow from business activities | 2,893,378,323.29 | 2,888,131,564.37 | |
| Net cash generated from /used in operating activities | (V).56(1) | 184,766,739.80 | 490,238,550.60 |
| II. Cash flow generated by investing | |||
| Cash received from investment retrieving | - | 28,500,000.00 | |
| Cash received as investment gains | 13,769,440.75 | 18,075,712.72 | |
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | 11,634.84 | 101,301.53 | |
| Net cash received from disposal of subsidiaries or other operational units | - | - | |
| Other investment-related cash received | (V).55(2) | 1,454,000,000.00 | 1,316,000,000.00 |
| Sub-total of cash inflow due to investment activities | 1,467,781,075.59 | 1,362,677,014.25 | |
| Cash paid for construction of fixed assets, intangible assets and other long-term assets | 64,069,967.97 | 123,210,891.17 | |
| Cash paid as investment | - | 1.00 | |
| Net cash received from subsidiaries and other operational units | - | - | |
| Other cash paid for investment activities | (V).55(2) | 1,840,500,000.00 | 1,140,433,371.49 |
| Sub-total of cash outflow due to investment activities | 1,904,569,967.97 | 1,263,644,263.66 | |
| Net cash flow generated by investment | (436,788,892.38) | 99,032,750.59 | |
| III.Cash flow generated by financing | |||
| Cash received as investment | - | - | |
| Including: Cash received as investment from minor shareholders | - | - | |
| Cash received as loans | 8,000,000.00 | 73,230,492.79 | |
| Other financing –related cash received | - | - | |
| Sub-total of cash inflow from financing activities | 8,000,000.00 | 73,230,492.79 | |
| Cash to repay debts | 103,387,387.94 | 26,642,157.50 | |
| Cash paid as dividend, profit, or interests | 57,324,944.21 | 56,596,142.54 | |
| Including: Dividend and profit paid by subsidiaries to minor shareholders | - | - | |
| Other cash paid for financing activities | (V).55(3) | 8,776,024.71 | 9,144,572.43 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| Sub-total of cash outflow due to financing activities | 169,488,356.86 | 92,382,872.47 | |
| Net cash flow generated by financing | (161,488,356.86) | (19,152,379.68) | |
| IV. Influence of exchange rate alternation on cash and cash equivalents | 456,132.31 | 1,947,479.23 | |
| V.Net increase of cash and cash equivalents | (V).56(1) | (413,054,377.13) | 572,066,400.74 |
| Add: balance of cash and cash equivalents at the beginning of term | (V).56(2) | 874,474,834.46 | 302,408,433.72 |
| VI ..Balance of cash and cash equivalents at the end of term | (V).56(2) | 461,420,457.33 | 874,474,834.46 |
The notes are integral parts of the financial statements
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
- 13 -
Cash Flow Statement of the Parent Company
In RMB
| Note | Year 2023 | Year 2022 | |
| I.Cash flows from operating activities | |||
| Cash received from sales of goods or rending of services | 79,719,541.58 | 49,647,323.90 | |
| Tax returned | - | 600,618.94 | |
| Other cash received from business operation | 20,183,240.81 | 7,065,800.34 | |
| Sub-total of cash inflow | 99,902,782.39 | 57,313,743.18 | |
| Cash paid for purchasing of merchandise and services | 3,005,590.09 | 2,458,133.73 | |
| Cash paid to staffs or paid for staffs | 38,735,139.38 | 33,850,730.29 | |
| Taxes paid | 19,540,659.95 | 6,260,647.31 | |
| Other cash paid for business activities | 18,940,923.33 | 5,334,787.37 | |
| Sub-total of cash outflow from business activities | 80,222,312.75 | 47,904,298.70 | |
| Net cash generated from /used in operating activities | 19,680,469.64 | 9,409,444.48 | |
| II. Cash flow generated by investing | |||
| Cash received from investment retrieving | - | - | |
| Cash received as investment gains | 12,954,592.48 | 17,348,361.22 | |
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | - | - | |
| Net cash received from disposal of subsidiaries or other operational units | - | - | |
| Other investment-related cash received | 1,250,200,000.00 | 1,316,000,000.00 | |
| Sub-total of cash inflow due to investment activities | 1,263,154,592.48 | 1,333,348,361.22 | |
| Cash paid for construction of fixed assets, intangible assets and other long-term assets | 2,784,786.15 | 2,586,581.13 | |
| Cash paid as investment | - | 1.00 | |
| Net cash received from subsidiaries and other operational units | - | - | |
| Other cash paid for investment activities | 1,550,500,000.00 | 1,134,754,229.41 | |
| Sub-total of cash outflow due to investment activities | 1,553,284,786.15 | 1,137,340,811.54 | |
| Net cash flow generated by investment | (290,130,193.67) | 196,007,549.68 | |
| III. Cash flow generated by financing | |||
| Cash received as investment | - | - | |
| Cash received as loans | - | - | |
| Other financing –related ash received | - | - | |
| Sub-total of cash inflow from financing activities | - | - | |
| Cash to repay debts | - | - | |
| Cash paid as dividend, profit, or interests | 30,747,575.73 | 25,332,693.78 | |
| Other cash paid for financing activities | - | - | |
| Sub-total of cash outflow due to financing activities | 30,747,575.73 | 25,332,693.78 | |
| Net cash flow generated by financing | (30,747,575.73) | (25,332,693.78) | |
| IV. Influence of exchange rate alternation on cash and cash equivalents | 571.84 | 1,886.83 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| V.Net increase of cash and cash equivalents | (301,196,727.92) | 180,086,187.21 | |
| Add: balance of cash and cash equivalents at the beginning of term | 310,322,528.19 | 130,236,340.98 | |
| VI ..Balance of cash and cash equivalents at the end of term | 9,125,800.27 | 310,322,528.19 |
The notes are integral parts of the financial statements
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
- 15 -
Consolidated Statement on Change in Owners’ Equity
In RMB
| Items | Year 2023 | ||||||
| Owner’s equity Attributable to the Parent Company | Minor shareholders’ equity | Total of owners’ equity | |||||
| Share Capital | Capital reserves | Other Comprehensive Income | Surplus reserves | Retained profit | |||
| I .Balance at the end of last year | 506,521,849.00 | 1,961,599,824.63 | 109,596,609.31 | 100,909,661.32 | 170,636,610.95 | 1,181,777,770.21 | 4,031,042,325.42 |
| Add: Change of accounting policy | - | - | - | - | - | - | - |
| Correcting of previous errors | - | - | - | - | - | - | - |
| Merger of entities under common control | - | - | - | - | - | - | - |
| Other | - | - | - | - | - | - | - |
| II. Balance at the beginning of current year | 506,521,849.00 | 1,961,599,824.63 | 109,596,609.31 | 100,909,661.32 | 170,636,610.95 | 1,181,777,770.21 | 4,031,042,325.42 |
| III .Changed in the current year | - | - | (15,989,228.50) | 3,352,654.32 | 45,524,285.19 | 47,987,321.53 | 80,875,032.54 |
| （1）Total comprehensive income | - | - | (15,989,228.50) | - | 79,268,250.45 | 47,987,321.53 | 111,266,343.48 |
| （II）Investment or decreasing of capital by owners | - | - | - | - | - | - | - |
| 1．Ordinary Shares invested by shareholders | - | - | - | - | - | - | - |
| 2．Amount of shares paid and accounted as owners’ equity | - | - | - | - | - | - | - |
| 3．Other | - | - | - | - | - | - | - |
| （III）Profit allotment | - | - | - | 3,352,654.32 | (33,743,965.26) | - | (30,391,310.94) |
| 1.Providing of surplus reserves | - | - | - | 3,352,654.32 | (3,352,654.32) | - | - |
| 2．Allotment to the owners (or shareholders) | - | - | - | - | (30,391,310.94) | - | (30,391,310.94) |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| 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 comprehensive income carry-over retained earnings | - | - | - | - | - | - | - |
| 5．Other | - | - | - | - | - | - | - |
| (V). Special reserves | - | - | - | - | - | - | - |
| 1. Provided this year | - | - | - | - | - | - | - |
| 2．Used this term | - | - | - | - | - | - | - |
| （VI）Other | - | - | - | - | - | - | - |
| IV. Balance at the end of this term | 506,521,849.00 | 1,961,599,824.63 | 93,607,380.81 | 104,262,315.64 | 216,160,896.14 | 1,229,765,091.74 | 4,111,917,357.96 |
The notes are integral parts of the financial statements
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
- 17 -
Consolidated Statement on Change in Owners’ Equity(Continued)
In RMB
| Items | Year 2022 | ||||||
| Owner’s equity Attributable to the Parent Company | Minor shareholders’ equity | Total of owners’ equity | |||||
| Share Capital | Capital reserves | Other Comprehensive Income | Surplus reserves | Retained profit | |||
| I .Balance at the end of last year | 506,521,849.00 | 1,961,599,824.63 | 119,682,119.05 | 98,245,845.47 | 125,317,336.31 | 1,143,414,080.23 | 3,954,781,054.69 |
| Add: Change of accounting policy | - | - | - | - | - | - | - |
| Correcting of previous errors | - | - | - | - | - | - | - |
| Merger of entities under common control | - | - | - | - | - | - | - |
| Other | - | - | - | - | - | - | - |
| II. Balance at the beginning of current year | 506,521,849.00 | 1,961,599,824.63 | 119,682,119.05 | 98,245,845.47 | 125,317,336.31 | 1,143,414,080.23 | 3,954,781,054.69 |
| III .Changed in the current year | - | - | (10,085,509.74) | 2,663,815.85 | 45,319,274.64 | 38,363,689.98 | 76,261,270.73 |
| （1）Total comprehensive income | - | - | (10,085,509.74) | - | 73,309,182.94 | 38,363,689.98 | 101,587,363.18 |
| （II）Investment or decreasing of capital by owners | - | - | - | - | - | - | - |
| 1．Ordinary Shares invested by shareholders | - | - | - | - | - | - | - |
| 2．Amount of shares paid and accounted as owners’ equity | - | - | - | - | - | - | - |
| 3．Other | - | - | - | - | - | - | - |
| （III）Profit allotment | - | - | - | 2,663,815.85 | (27,989,908.30) | - | (25,326,092.45) |
| 1.Providing of surplus reserves | - | - | - | 2,663,815.85 | (2,663,815.85) | - | - |
| 2．Allotment to the owners (or shareholders) | - | - | - | - | (25,326,092.45) | - | (25,326,092.45) |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| 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 comprehensive income carry-over retained earnings | - | - | - | - | - | - | - |
| 5．Other | - | - | - | - | - | - | - |
| (V). Special reserves | - | - | - | - | - | - | - |
| 1. Provided this year | - | - | - | - | - | - | - |
| 2．Used this term | - | - | - | - | - | - | - |
| （VI）Other | - | - | - | - | - | - | - |
| IV. Balance at the end of this term | 506,521,849.00 | 1,961,599,824.63 | 109,596,609.31 | 100,909,661.32 | 170,636,610.95 | 1,181,777,770.21 | 4,031,042,325.42 |
The notes are integral parts of the financial statements
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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Statement of change in owner’s Equity of the Parent Company
In RMB
| Items | Year 2023 | |||||
| Share Capital | Capital reserves | Other Comprehensive Income | Surplus reserves | Retained profit | Total of owners’ equity | |
| I.Balance at the end of last year | 506,521,849.00 | 1,577,392,975.96 | 98,855,668.75 | 100,909,661.32 | 689,527,368.58 | 2,973,207,523.61 |
| Add: Change of accounting policy | - | - | - | - | - | - |
| Correcting of previous errors | - | - | - | - | - | - |
| Other | - | - | - | - | - | - |
| II. Balance at the beginning of current year | 506,521,849.00 | 1,577,392,975.96 | 98,855,668.75 | 100,909,661.32 | 689,527,368.58 | 2,973,207,523.61 |
| III .Changed in the current year | - | - | (15,225,837.94) | 3,352,654.32 | (217,422.04) | (12,090,605.66) |
| （I）Total comprehensive income | - | - | (15,225,837.94) | - | 33,526,543.22 | 18,300,705.28 |
| (II) Investment or decreasing of capital by owners | - | - | - | - | - | - |
| 1．Ordinary Shares invested by shareholders | - | - | - | - | - | - |
| 2.Amount of shares paid and accounted as owners’ equity | - | - | - | - | - | - |
| 3．Other | - | - | - | - | - | - |
| （III）Profit allotment | - | - | - | 3,352,654.32 | (33,743,965.26) | (30,391,310.94) |
| 1.Providing of surplus reserves | - | - | - | 3,352,654.32 | (3,352,654.32) | - |
| 2．Allotment to the owners (or shareholders) | - | - | - | - | (30,391,310.94) | (30,391,310.94) |
| 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) | - | - | - | - | - | - |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| 3．Making up losses by surplus reserves. | - | - | - | - | - | - |
| 4．Other comprehensive income carry-over retained earnings | - | - | - | - | - | - |
| 5．Other | - | - | - | - | - | - |
| (V) Special reserves | - | - | - | - | - | - |
| 1. Provided this year | - | - | - | - | - | - |
| 2．Used this term | - | - | - | - | - | - |
| （VI）Other | - | - | - | - | - | - |
| IV. Balance at the end of this term | 506,521,849.00 | 1,577,392,975.96 | 83,629,830.81 | 104,262,315.64 | 689,309,946.54 | 2,961,116,917.95 |
The notes are integral parts of the financial statements
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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Statement of change in owner’s Equity of the Parent Company(Continued)
In RMB
| Items | Year 2022 | |||||
| Share Capital | Capital reserves | Other Comprehensive Income | Surplus reserves | Retained profit | Total of owners’ equity | |
| I.Balance at the end of last year | 506,521,849.00 | 1,577,392,975.96 | 108,762,538.39 | 98,245,845.47 | 690,879,118.40 | 2,981,802,327.22 |
| Add: Change of accounting policy | - | - | - | - | - | - |
| Correcting of previous errors | - | - | - | - | - | - |
| Other | - | - | - | - | - | - |
| II. Balance at the beginning of current year | 506,521,849.00 | 1,577,392,975.96 | 108,762,538.39 | 98,245,845.47 | 690,879,118.40 | 2,981,802,327.22 |
| III .Changed in the current year | - | - | (9,906,869.64) | 2,663,815.85 | (1,351,749.82) | (8,594,803.61) |
| （I）Total comprehensive income | - | - | (9,906,869.64) | - | 26,638,158.48 | 16,731,288.84 |
| (II) Investment or decreasing of capital by owners | - | - | - | - | - | - |
| 1．Ordinary Shares invested by shareholders | - | - | - | - | - | - |
| 2.Amount of shares paid and accounted as owners’ equity | - | - | - | - | - | - |
| 3．Other | - | - | - | - | - | - |
| （III）Profit allotment | - | - | - | 2,663,815.85 | (27,989,908.30) | (25,326,092.45) |
| 1.Providing of surplus reserves | - | - | - | 2,663,815.85 | (2,663,815.85) | - |
| 2．Allotment to the owners (or shareholders) | - | - | - | - | (25,326,092.45) | (25,326,092.45) |
| 3．Other | - | - | - | - | - | - |
| (IV) Internal transferring of owners’ equity | - | - | - | - | - | - |
| 1. Capitalizing of capital reserves (or to capital shares) | - | - | - | - | - | - |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| 2. Capitalizing of surplus reserves (or to capital shares) | - | - | - | - | - | - |
| 3．Making up losses by surplus reserves. | - | - | - | - | - | - |
| 4．Other comprehensive income carry-over retained earnings | - | - | - | - | - | - |
| 5．Other | - | - | - | - | - | - |
| (V) Special reserves | - | - | - | - | - | - |
| 1. Provided this year | - | - | - | - | - | - |
| 2．Used this term | - | - | - | - | - | - |
| （VI）Other | - | - | - | - | - | - |
| IV. Balance at the end of this term | 506,521,849.00 | 1,577,392,975.96 | 98,855,668.75 | 100,909,661.32 | 689,527,368.58 | 2,973,207,523.61 |
The notes are integral parts of the financial statements
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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I. Basic Information of the Company
1.Company overview
Shenzhen Textile (Holdings) Co., Ltd (hereinafter referred to as "the Company") is a company limited by sharesregistered in Guangdong Province, formerly known as Shenzhen Textile Industry Company and established in 1984.The Company was listed on the Shenzhen Stock Exchange in August 1994. The Company publicly issued RMBordinary shares (A shares) and domestic listed foreign capital shares (B shares) to the domestic and foreign publicrespectively and listed them for trading.Headquartered in Shenzhen, Guangdong Province, the main business of the Company and its subsidiaries(hereinafter referred to as "the Group") includes the research and development, production and marketing ofpolarizers for liquid crystal display, as well as property management business mainly located in the prosperouscommercial area of Shenzhen and textile and garment business.
2. Scope of consolidated financial statement
The financial statements have been authorized for issuance of Board of Directors of the Company on March 26,2024.
. II. Basis for the preparation of the financial report
（1）Basis for the preparation
The Group implements the accounting standards for enterprises and related regulations promulgated by theMinistry of Finance. In addition, the Group also discloses relevant financial information in accordance with the No.15 Compilation Rules for Disclosure of Information by Companies ofIssuing Securities to the Public-GeneralProvisions for Financial Reporting (2023 Revision).
(2) Continuous operation
The Group evaluated its ability to continue as a going concern for the 12 months from 31 December 2022 and foundno matters or circumstances that raised significant doubts about its ability to continue as a going concern.Accordingly, the present financial reporthas been prepared on the basis of going concern assumptions.
(3) Bookkeeping basis and pricing principle
The Group's accounting is based on the accrual basis. Except for certain financial instruments-which are measured atfair value, the financial reportusesthe historical cost as the measurement basis. If the asset is impaired, thecorresponding impairment provision will be made in accordance with the relevant regulations.Under historical cost measurement, an asset is measured at the fair value of the amount of cash or cash equivalentspaid or the consideration paidat the time of acquisition. Liabilities are measured by the amount of money or assetsactually received as a result of the present obligation is assumed, or the contractual amount of the present obligationis incurred, or the amount of cash or cash equivalents expected to be paid in the ordinary course of life to repay theliability.Fair value is the price that market participants shall have to receive for the sale of an asset or shall to pay for atransfer of a liability in an orderly transaction that occurs on the measurement date. Whether the fair value isobservable or estimated using valuation techniques, the fair value measured and disclosed in this financial report isdetermined on that basis.For financial assets that use the transaction price as the fair value at the time of initial recognition, and a valuationtechnique involving unobservable inputs is used in subsequent measures of fair value, the valuation technique iscorrected during the valuation process so that the initial recognition result determined by the valuation technique isequal to the transaction price.Fair value measurement is divided into three levels as to the observability of fair value inputs, and the importance ofsuch inputs to fair value measurement as a value inputs, and the importance of such inputs to fair value measurementas a whole:
The first level of input is the unadjusted quotation of the same asset or liability in an active market that can beobtained at the measurement date.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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The second-level input value is the input value that is directly or indirectly observable for the underlying asset orliability in addition to the first-level input.The third level input value is the unobservable input value of the underlying asset or liability.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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II. Important accounting policies and accounting estimates
1.Statement of compliance with accounting standards for business enterprisesThe financial report prepared by the Company complies with the requirements of the Accounting Standards forBusiness Enterprises and truly and completely reflects the consolidated and parent financial position of theCompany as of December 31, 2023 and the consolidated and parent operating results, the consolidated and parentshareholders' equity changes and the consolidated and parent cash flows for 2023.
2. Accounting period
The Group's fiscal year is the Gregorian calendar year, i.e. from January 1 to December 31 of each year.
3.Business cycle
The business cycle is the period from the time an enterprise purchases an asset for processing to the realization ofcash or cash equivalents. The Company's business cycle is 12 months.
4. The base currency of account
RMB is the currency in the main economic environment in which the Company and its domestic subsidiariesoperate, and the Company and its domestic subsidiaries use RMB as the base accounting currency. The overseassubsidiaries of the Company determine RMB as their base accounting currency according to the currency of themain economic environment in which they operate. The currency used by the Company in the preparation of thisfinancial report is RMB.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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5.Determination method and selection basis for material criteria
| Item | Material criteria |
| Receivables for a significant single provision for bad debts | The proportion of individual item exceeds 0.5% of total assets |
| Important accounts receivable for the recovery or reversal of bad debt reserves | The proportion of individual item exceeds 0.5% of total assets |
| Significant prepayments that are more than 1 year old | The proportion of individual item exceeds 0.5% of total assets |
| Significant accountspayable and/or advance receipts aged more than 1 year Contract liabilities and other payables | The proportion of individual item exceeds 0.5% of total assets |
| Cash received in connection with significant investment activities | Amount exceeding RMB 50 million yuan |
| Payments of cash in connection with significant investment activities | Amount exceeding RMB 50 million yuan |
| Significant non-wholly owned subsidiary | More than 10% of total assets, or total revenues or total profits |
| Significant joint ventures or associates | Net assets account for more than 5% |
6. Accounting treatment of business combinations under the common control and under non-commoncontrolBusiness combinations are divided into business combinations under common control and business combinationsunder non-common control.
6.1 Business combinations under common control
The enterprises participating in the merger are ultimately controlled by the same party or multiple parties beforeand after the merger, and the control is not temporary, therefore it is a business combination under the commoncontrol.Assets and liabilities acquired in a business combination are measured at their carrying value on the consolidatedparty at the date of consolidation. The difference between the carrying amount of net assets acquired by themerging party and the carrying amount of the merger consideration paid is adjusted for the equity premium in thecapital reserve or for retained earnings if the equity premium is insufficient to be offset.Direct carrying value on the consolidated party at the date of consolidation. The difference between the carryingamount of net assets acquired by the merging party and the carrying amount of the merger consideration paid isadjusted for the equity premium in the capital reserve or for retained earnings if the equity premium is insufficientto be offset.Direct expenses incurred in connection with the business combination are recognized in profit or loss for theperiod when incurred.
6.2 Business combinations and goodwill under non-common control
The enterprises participating in a merger are not ultimately controlled by the same party or multiple parties beforeand after the merger, therefore it is a business combination under non-common control.Consolidation cost is the fair value of assets paid, liabilities incurred or assumed and equity instruments issued togain control of the acquired partyby the purchaser. Intermediary fees such as auditing, legal services, valuationconsulting and other related management expenses incurred by the purchaser for the business combination arerecognized in the profit or loss of the period when incurred.The identifiable assets, liabilities and contingent liabilities of the acquiree that are eligible for recognition acquired bythe purchaser in the merger are measured at fair value at the date of purchase.The cost of the merger is greater than the difference in the fair value share of the acquiree's identifiable net assetsacquired in the merger, which is recognized as goodwill as an asset and initially measured at cost. If the cost of themerger is less than the fair value share of the acquiree's identifiable net assets acquired in the merger, the fair value ofthe acquired acquiree's identifiable assets, liabilities and contingent liabilities and the measurement of the cost of the
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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merger are first reviewed, and if the consolidated cost after review is still less than the fair value share of theacquiree's identifiable net assets share acquired in the merger, which shall be included in profit or loss for theperiodoccurred.Goodwill resulting from business combinations is presented separately in the consolidated financial statement andmeasured at cost less accumulated impairment provisions.
7. Criteria for determining control and preparation method for consolidated financial statement
7.1 Criteria for Determining Control
Control means that the investor has power over the investee, enjoys variable returns by participating in the investee'srelated activities, and has the ability to use its power over the investee to influence the amount of its returns. TheGroup will reassess the relevant elements involved in the above definition of controls as a result of changes in therelevant facts and circumstances.
7.2. Methodology for the preparation of consolidated financial statement
The consolidated scope of the consolidated financial statement is determined on a control basis.
The merger of subsidiaries begins when the Group acquires control of the subsidiary and terminates when theGroup loses control of the subsidiary.
For subsidiaries disposed of by the Group, the results of operations and cash flows prior to the date of disposal(the date of loss of control) have been duly included in the consolidated statement of income and the consolidatedstatement of cash flows.
For subsidiaries acquired through a business combination under non-common control, the results of operationsand cash flows from the date of purchase (the date of acquisition of control) have been appropriately included in theconsolidated statement of income and the consolidated statement of cash flows.
For subsidiaries acquired through a business combination under common control, regardless of when thebusiness combination takes place in any point of the reporting period, the subsidiary shall be deemed to be includedin the scope of the Group's consolidation on the date on which the subsidiary is under the control of the ultimatecontrolling party, the results of operations and cash flows from the beginning of the earliest period of the reportingperiod are duly included in the consolidated income statement and the consolidated statement of cash flows.
The principal accounting policies and the accounting periods adopted by the subsidiaries are determined inaccordance with the accounting policies and accounting periods uniformly prescribed by the Company.
The impact of the Company's internal transactions with its subsidiaries and between subsidiaries on theconsolidated financial statement is offset at the time of consolidation.
The shares of the subsidiary's ownership interest that are not part of the parent company are shown as minorityinterests under the item "minority interests" under the item on shareholders' equityin the consolidated balance sheet.The shares of the subsidiary's net profit or loss for the period that belongs to minority interests is shown under theitem "minority profit and loss" under the net profit item in the consolidated statement of income.
The minority shareholders’ share of the subsidiary's losses exceeds the minority shareholders’ share ofownership interest enjoyed in the beginning of the period, and its balance is still offset by the minority shareholders’equity.
For transactions that purchase minority stakes in a subsidiary or dispose of part of the equity investment withoutlosing control of the subsidiary, it’s accounted as equity transactions, and the carrying amount of the owner'sinterest and minority interest attributable tothe parent company is adjusted to reflect their change in the relevantinterest in the subsidiary. The difference between the adjustment of minority interests and the fair value of theconsideration paid/received is adjusted to the capital reserve, and if the capital reserve is insufficient to offset it,then it’s adjusted to the retained earnings.
8. Joint venture arrangement
Joint arrangements are divided into commonly-operated ventures and jointly-operated ventures, which are determined inaccordance with the rights and obligations of the joint venture parties in the joint venture arrangement by taking intoaccount factors such as the structure, legal form and contractual terms of the arrangement. Commonly-operated refers toa joint arrangement in which the joint venture parties enjoy the assets related to the arrangement and bear the liabilities
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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related to the arrangement. The jointly-operated is a joint arrangement in which the joint venture party has rights only tothe net assets of the joint arrangement.
The Group's investments in joint ventures are accounted by using the equity method, please see Note (III) 17.3.2"Long-term equity investments accounted by the equity method".
9. Standards for determining cash and cash equivalents
Cash refers to cash on hand and deposits that can be used to pay at any time. Cash equivalents refer toinvestments held by the Group for a short period (generally within three months from the date of purchase), highlyliquid, easily convertible into a known amount of cash, and with little risk of change in value.
10.Foreign currency transactions and translation of foreign currency statements
10.1 Foreign Currency Business
Foreign currency transactions are initially recognized at an exchange rate similar to the spot exchange rate on thedate of the transaction, and the exchange rate similar to the spot rate on the date of the transaction is determined in asystematic and reasonable manner.
At the balance sheet date, foreign currency monetary items are converted into RMB using the spot exchange rateon that date, and the exchange difference arising from the difference between the spot exchange rate on that date andthe spot exchange rate at the time of initial recognition or the day preceding the balance sheet date, except: (1) theexchange difference of foreign currency special borrowings eligible for capitalization is capitalized during thecapitalization period and included in the cost of the underlying asset; (2) The exchange difference of hedginginstruments for hedging in order to avoid foreign exchange risk is treated according to the hedge accounting method;The exchange differenceresults from changes in other carrying balances other than amortized cost for monetaryitems classified as measured at fair value and changes in which are included in other comprehensive income, it shallbe recognized as profit or loss for the period.
Where the preparation of the consolidated financial statement involves overseas operations, if there are foreigncurrency monetary items that substantially constitute net investment in overseas operations, the exchange differencearising from exchange rate changes is included in the "foreign currency statement translation difference" itemincluded in other comprehensive income; When disposing of overseas operations, it is included in the profit or lossof the period of disposal.
Foreign currency non-monetary items measured at historical cost are still measured at the base currency amounttranslated at the spot exchange rate on the date of the transaction. Foreign currency non-monetary items measured atfair value are translated using the spot exchange rate on the fair value determination date, and the difference betweenthe converted base currency amount and the original accounting currency amount is treated as a change in fair value(including exchange rate changes) and recognized as profit or loss for the period or recognized as othercomprehensive income.
10.2 Translation of Foreign Currency Financial Statements
For the purpose of preparing consolidated financial statement, foreign currency financial statements for overseasoperations are converted into RMB statements in the following manner: all assets and liabilities in the balancesheet are converted at the spot exchange rate at the balance sheet date; Shareholders' equity items are converted atthe spot exchange rate at the time of incurrence; All items in the income statement and items reflecting the amountof profit distribution are converted at an exchange rate similar to the spot exchange rate on the date of thetransaction; The difference between the converted asset items and the total of liability items and shareholders'equity items is recognized as other comprehensive income and included in shareholders' equity.Foreign currency cash flows and cash flows of overseas subsidiaries are translated using exchange rates similar tothe spot exchange rate on the occurrence date of cash flow, and the impact amount of exchange rate changes oncash and cash equivalents is used as a reconciliation item and is shown separately in the statement of cash flows as"Impact of exchange rate changes on cash and cash equivalents".The prior-year year-end amounts and the prior-year actual are presented on the basis of the amounts convertedfrom the prior-year financial statement.Where the Group losses control of overseas operations due to disposing of all the ownership interests in overseasoperations or the disposal of part of the equity investment or other reasons, the difference in the translation of theforeign currency statements in the ownership interests attributable to the parent company related to the overseasoperations shown below the items of shareholders' equity in the balance sheet shall be transferred to the profit orloss of the period of disposal.Where the proportion of equity interests held in overseas operations decreases due to the disposal of part of theequity investment or other reasons without lost the control of the overseas operations, the difference in thetranslation of foreign currency statements related to the disposal part of the overseas operations shall be attributedto the minority shareholders' interests and shall not be transferred to the profit or loss of the period. Wheredisposing of part of the equity of an overseas operation in an associate or a joint venture, the difference in the
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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translation of foreign currency statements related to the overseas operation shall be transferred to the profit or lossof the period of disposal according to the proportion of the disposal of the overseas operation.
11.Financial instruments
The Group recognizes a financial asset or financial liability when it becomes a party to a financial instrumentcontract.In the case of the purchase or sale of financial assets in the usual manner, it shall recognize the assets to be receivedand the liabilities to be incurred on the transaction date, or derecognize the assets sold on the transaction date.Financial assets and financial liabilities are measured at fair value at initial recognition. For financial assets andfinancial liabilities measured at fair value and changes in which are recorded in profit or loss for the period, therelated transaction costs are recognized directly in profit or loss for the period; For other categories of financialassets and financial liabilities, the related transaction costs are included in the initial recognition amount. Where theGroup initially recognizes accounts receivable that do not contain a material financing component or do not takeinto account the financing component in a contract not older than one year in accordance with No. 14AccountingStandard for Business Enterprises-Revenue (the "Revenue Standard"), the initial measurement is made at thetransaction price as defined by the revenue standard.The effective interest rate method refers to the method of calculating the amortized cost of financial assets orfinancial liabilities and apportioning interest income or interest expense into each accounting period.The effective interest rate is the interest rate used to discount the estimated future cash flows of a financial asset orfinancial liability over the expected life of the financial asset to the carrying balance of the financial asset or theamortized cost of the financial liability. In determining the effective interest rate, the expected cash flow isestimated taking into account all contractual terms of the financial asset or financial liability (such as earlyrepayment, rollover, call option or other similar option, etc.), without taking into account the expected credit loss.The amortized cost of a financial asset or financial liability is the amount initially recognized less the principalrepaid, plus or minus the accumulated amortization resulting from the amortization of the difference between theinitial recognition amount and the amount due date using the effective interest rate method, and then deduct theaccumulated provision for losses (for financial assets only).
11.1 Classification, recognition and measurement of financial assets
After initial recognition, the Group conducts subsequent measurements of different classes of financial assets atamortized cost, measured at fair value and changes in which are recognized in other comprehensive income, ormeasured at fair value and changes in which are recorded in profit or loss for the period.The contractual clauses of a financial asset provide that the cash flows generated on a given date are only thepayment of principal and interest based on the outstanding principal amount, and the Group's business model isaimed for managing the financial asset is to collect contractual cash flows, then the Group classifies the financialasset as a financial asset measured at amortized cost. Such financial assets mainly include monetary funds, notesreceivable, accounts receivable and other receivables.The contractual terms of a financial asset provide that the cash flows generated at a particular date are only thepayment of principal and interest based on the outstanding principal amount, and the Group's business model formanaging the financial asset is aimed at both the receipt of contractual cash flows and the sale of the financial asset,then the financial asset is classified as a financial asset measured at fair value and the change therein is recognizedin other comprehensive income. Such financial assets with a maturity of more than one year from the date ofacquisition are listed as other debt investments, and if they mature within one year (inclusive) from the balancesheet date, they are shown as non-current assets maturing within one year; Accounts receivable and notesreceivable classified as measured at fair value and changes in which are recognized in other comprehensive incomeat the time of acquisition are shown in receivables financing, and the other acquired with a maturity of one year(inclusive) are shown in other current assets.At initial recognition, the Group may irrevocably designate investments in non-tradable equity instruments otherthan contingent consideration recognized in business combinations that are under non-common control as financialassets measured at fair value and changes in which are recognized in other comprehensive income on a singlefinancial asset basis. Such financial assets are listed as investments in other equity instruments.Where a financial asset meets any of the following conditions, it indicates that the Group's purpose in holding thefinancial asset is transactional:
The purpose of acquiring the underlying financial asset is primarily for the purpose of the recent sale.The underlying financial assets were part of a centrally managed portfolio of identifiable financial instruments at
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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the time of initial recognition and there was objective evidence of an actual pattern of short-term profits in therecent.The underlying financial asset is a derivative instrument, except for derivatives that meet the definition of afinancial guarantee contract and derivatives that are designated as effective hedging instruments.Financial assets measured at fair value and changes in which are recorded in profit or loss for the period includefinancial assets classified as measured at fair value and changes in which are recorded in profit or loss for theperiod and financial assets designated as measured at fair value and changes in which are recorded in profit or lossfor the period:
Financial assets that do not qualify as financial assets measured at amortized cost and financial assets measured atfair value and changes in which are included in other comprehensive income are classified as financial assetsmeasured at fair value and changes in which are recorded in profit or loss for the period.At the time of initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Groupmay irrevocably designate financial assets as financial assets measured at fair value and changes in which arerecorded in profit or loss for the period.Financial assets measured at fair value and changes in which are recorded in profit or loss for the period are shownin trading financial assets, and financial assets with maturity of more than one year (or have an indefinite maturity)from the balance sheet date and expected to be held for more than one year is shown as other non-current financialassets
11.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost are subsequently measured at amortized cost using the effectiveinterest rate method, and the gains or losses arising from impairment or derecognition are included in profit or lossfor the period.The Group recognizes interest income on financial assets measured at amortized cost in accordance with theeffective interest rate method. For financial assets purchased or derived that have incurred credit impairment, theGroup determines interest income based on the amortized cost of the financial asset and the credit-adjustedeffective interest rate from the initial recognition. In addition, the Group determines interest income based on thecarrying balance of financial assets multiplied by the effective interest rate.
11.1.2 Financial assets measured at fair value and changes in which are recorded in other comprehensive incomeImpairment losses or gains and interest income calculated using the effective interest rate methodrelated tofinancial assets classified as measured at fair value and changes in which are included in other comprehensiveincome are recognized in profit or loss for the period, and except that, changes in the fair value of such financialassets are recognized in other comprehensive income. The amount of the financial asset recognized in profit or lossfor each period is equal to the amount that is recognized in profit or loss for each period as if it had been measuredat amortized cost. When the financial asset is derecognized, the accumulated gain or loss previously recognized inother comprehensive income is transferred from other comprehensive income and recognized in profit or loss forthe period.Changes in fair value in investments in non-traded equity instruments designated as measured at fair value and thechange in which are recognized in other comprehensive income are recognized in other comprehensive income,and when the financial asset is derecognized, the accumulated gain or loss previously recognized in othercomprehensive income is transferred from other comprehensive income to retained earnings. During the periodduring which the Group holds the investment in the non-tradable equity instrument, the dividend income isrecognized and recorded in profit or loss for the period when the Group's right to receive dividends has beenestablished, the economic benefits associated with the dividends are likely to flow into the Group and the amountof the dividends can be reliably measured.
11.1.3 Financial assets measured at fair value and changes in which are recorded in profit or loss for the periodFinancial assets measured at fair value and changes in which are recorded in profit or loss for the period aresubsequently measured at fair value, and gains or losses resulting from changes in fair value and dividends andinterest income related to the financial asset are recorded in profit or loss for the period.
11.2 Impairment of Financial Instruments
The Group performs impairment accounting and recognizes loss provisions for financial assets measured atamortized cost, financial assets classified as measured at fair value and changes in which are recognized in othercomprehensive income, and lease receivables based on expected credit losses.The Group measures the loss provision at an amount equivalent to the expected credit loss over the life of notesreceivable and accounts receivable formed by transactions regulated by revenue standards that do not contain a
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material financing element or do not take into account the financing component of contracts not exceeding one year,as well as operating leases receivable arising from transactions regulated by No. 21Accounting Standard forBusiness Enterprises -Leases.For other financial instruments, the Group assesses the change in the credit risk of the relevant financialinstruments since initial recognition at each balance sheet date, except for financial assets purchased or derived thathave incurred credit impairment. If the credit risk of the Financial Instrument has increased significantly since theinitial recognition, the Group measures its loss provision by an amount equivalent to the expected credit loss overthe life of the financial instrument; If the credit risk of the financial instrument does not increase significantly sincethe initial recognition, the Group measures its loss provision by an amount equivalent to the expected credit loss ofthe financial instrument in the next 12 months. Increases or reversals of credit loss provisions are recognized asimpairment losses or gains in profit or loss for the period, except for financial assets classified as measured at fairvalue and changes in which are recognized in other comprehensive income. For financial assets classified asmeasured at fair value and the change thereof is recorded in other comprehensive income, the Group recognizes acredit loss provision in other comprehensive income and includes impairment losses or gains in profit or loss forthe period without reducing the carrying amount of the financial asset as shown in the balance sheet.Where the Group has measured a loss provision in the preceding accounting period by an amount equivalent to theexpected credit loss over the life of the financial instrument, but the financial instrument is no longer subject to asignificant increase in credit risk since the initial recognition at the period balance sheet date, the Group measuresthe loss provision for the financial instrument at the period balance sheet date by an amount equivalent to theexpected credit loss in the next 12 months, and the resulting reversal amount for loss provision is recognized as animpairment gain in profit or loss for the period.
11.2.1 Significant increase in credit risk
Using reasonably and evidence-based forward-looking information available, the Group compares the risk ofdefault on financial instruments at the balance sheet date with the risk of default on the initial recognition date todetermine whether the credit risk of financial instruments has increased significantly since initial recognition.In assessing whether credit risk has increased significantly, the Group will consider the following factors:
(1) whether the internal price indicators have changed significantly due to changes in credit risk.
(2) whether the interest rate or other terms of an existing financial instrument have changed significantly (e.g.,stricter contractual terms, additional collateral or higher yields) if the existing financial instrument is derived orissued as a new financial instrument at the balance sheet date.
(3) whether there has been a significant change in the external market indicators of the credit risk of the samefinancial instrument or similar financial instruments with the same estimated duration. These indicators include:
credit spreads, credit default swap prices for borrowers, the length and extent to which the fair value of financialassets is less than their amortized cost, and other market information relevant to borrowers (such as changes in theprice of borrowers' debt or equity instruments).
(4) whether there has been a significant change in the external credit rating of the financial instrument in fact orexpectation.
(5) whether the actual or expected internal credit rating of the debtor has been downgraded.
(6) whether there has been an adverse change in business, financial or economic circumstances that is expected toresult in a significant change in the debtor's ability to meet its debt servicing obligations.
(7) whether there has been a significant change in the actual or expected operating results of the debtor.
(8) whether the credit risk of other financial instruments issued by the same debtor has increased significantly.
(9) whether there has been a significant adverse change in the regulatory, economic or technical environment inwhich the debtor is located.
(10) whether there has been a significant change in the value of the collateral used as collateral for the debt or inthe quality of the guarantee or credit enhancement provided by a third party. These changes are expected to reducethe economic incentive for the debtor to repay the loan within the term specified in the contract or affect theprobability of default.
(11) whether there has been a significant change in the economic incentive expected to reduce the borrower'srepayment within the term agreed in the contract.
(12) whether there has been a change in the expectations of the loan contract, including the waiver or amendmentof contractual obligations that may result from the anticipated breach of the contract, the granting of interest-freeperiods, interest rate jumps, requests for additional collateral or guarantees, or other changes to the contractualframework of financial instruments.
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(13) whether there has been a significant change in the debtor's expected performance and repayment behavior.
(14) Whether the Group's credit management methods for financial instruments have changed.Regardless of whether the credit risk has increased significantly after the above assessment, when the payment of afinancial instrument contract has been overdue for more than (inclusive) 30 days, it indicates that the credit risk ofthe financial instrument has increased significantly.At the balance sheet date, if the Group determines that a financial instrument has only a low credit risk, the Groupassumes that the credit risk of the financial instrument has not increased significantly since its initial recognition. Afinancial instrument is considered to have a low credit risk if it has a low risk of default, the borrower's ability tomeet its contractual cash flow obligations in the short term is strong, and even if there are adverse changes in theeconomic situation and operating environment over a longer period of time that do not necessarily reduce theborrower's performance of its contractual cash obligations.
11.2.2 Financial assets that have undergone credit impairment
Where one or more events occur in which the Group expects to adversely affect the future cash flows of a financialasset, the financial asset becomes a financial asset that has experienced credit impairment. Evidence that creditimpairment of financial assets has occurred includes the following observable information:
（1）significant financial difficulties of the issuer or debtor;
(2)Breach of contract by the debtor, such as default or delay in payment of interest or principal;
(3)The creditor gives the debtor concessions under economic or contractual considerations relating to the debtor'sfinancial difficulties that would not have been made under any other circumstances;
(4)The debtor is likely to go bankrupt or undergo other financial restructuring;
(5)The financial difficulties of the issuer or debtor that result in the disappearance of an active market for thatfinancial asset;
(6)Purchase or derive a financial asset at a substantial discount that reflects the fact that a credit loss has occurred.Based on the Group's internal credit risk management, the Group considers an event of default to have occurredwhen the internally advised or externally obtained information indicates that the debtor of the financial instrumentcannot fully pay creditors including the Group (without regard to any security obtained by the Group).Notwithstanding the above assessment, if a contract payment for a financial instrument is overdue for more than 90days(inclusive), the Group presumes that the financial instrument has defaulted.
11.2.3 Determination of Expected Credit Loss
The Group uses an impairment matrix on a portfolio basis on notes receivable, accounts receivable and otherreceivables to determine credit losses on relevant financial instruments. The Group classifies financial instrumentsinto different groups based on common risk characteristics. The common credit risk characteristics adopted by theGroup include: type of financial instrument, credit risk rating, type of collateral, date of initial recognition, industryin which the debtor is in, value of collateral relative to financial assets, etc.For financial assets and lease receivables, the expected credit loss is the present value of the difference between thecontractual cash flows due to the Group and the cash flows expected to be collected.The reflection factors of the Group's methodology for measuring expected credit losses on financial instrumentsinclude: an unbiased probability-weighted average amount determined by evaluating a range of possible outcomes;the time value of money; reasonable and well-founded information about past events, current conditions, andprojections of future economic conditions that can be obtained at the balance sheet date without unnecessaryadditional costs or efforts.
11.2.4 Write-down of Financial Assets
Where the Group no longer reasonably expects that the contractual cash flows of financial assets will be recoveredin whole or in part, the carrying balance of the financial assets will be written down directly. Such write-downsconstitute derecognition of the underlying financial assets.
11.3 Transfer of Financial Assets
Financial assets that meet one of the following conditions are derecognized: (1) the contractual right to receive cashflows from the financial asset is terminated; (2) the financial asset has been transferred and substantially all of therisks and rewards in the ownership of the financial asset have been transferred to the transferring party; (3) thefinancial asset has been transferred, and although the Group has neither transferred nor retained substantially all ofthe risks and rewards in the ownership of the financial asset, it has not retained control over the financial asset.Where the Group neither transfers nor retains substantially all of the risks and rewards in ownership of a financialasset, and retains control of the financial asset, it will continue to recognize the transferred financial asset to theextent that it continues to be involved in the transferred financial asset and recognize the relevant liabilitiesaccordingly. The Group measures the relevant liabilities as follows:
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Where the transferred financial assets are measured at amortized cost, the carrying amount of the relevant liabilityis equal to the carrying amount of the financial asset that continues to be involved in the transferred less theamortized cost of the rights retained by the Group (if the Group retains the relevant rights as a result of the transferof financial assets) plus the amortized cost of the obligations assumed by the group (if the group has assumed therelevant obligations as a result of the transfer of financial assets), and the relevant liabilities are not designated asfinancial liabilities measured at fair value and changes in which are recorded in profit or loss for the period.Where the transferred financial assets are measured at fair value, the carrying amount of the relevant liabilities isequal to the carrying amount of the financial assets that continue to be involved in the transferred financial assetsless the fair value of the rights retained by the Group (if the Group retains the relevant rights as a result of thetransfer of financial assets) plus the fair value of the obligations assumed by the Group (if the Group has assumedsuch obligations as a result of the transfer of financial assets), the fair value of such rights and obligations is the fairvalue when measured on an independent basis.If the overall transfer of financial assets satisfies the conditions for derecognition, the difference between thecarrying amount of the transferred financial assets at the derecognition date and the consideration received as aresult of the transfer of the financial and the sum of the amount corresponding to the derecognition portion of theaccumulated fair value change originally included in other comprehensive income is included in profit or loss forthe period. If the Group transfers financial assets that are investments in non-traded equity instruments designatedas measured at fair value and changes in which are recognized in other comprehensive income, the accrued gains orlosses previously recognized in other comprehensive income are transferred from other comprehensive income andrecorded in retained earnings.If a partial transfer of financial assets satisfies the conditions for derecognition, the carrying amount of the financialassets as a whole before the transfer is apportioned between the derecognized portion and the continuingrecognition portion at the respective relative fair value on the transfer date, and the difference between the sum ofthe amount of the consideration received in the derecognized portion and the amount corresponding to thederecognized portion of the accumulated fair value change originally included in other comprehensive income andthe carrying amount of the derecognized portion at the derecognition date is included in profit or loss for thecurrent period. If the Group transfers financial assets that are investments in non-traded equity instrumentsdesignated as measured at fair value and changes in which are recognized in other comprehensive income, theaccrued gains or losses previously recognized in other comprehensive income are transferred from othercomprehensive income and recorded in retained earnings.If the conditions for derecognition are not met for the overall transfer of financial assets, the Group continues torecognize the transferred financial assets as a whole and recognizes the consideration received as a liability.
11.4 Classification of financial liabilities and equity instruments
The Group classifies the financial instruments or their components as financial liabilities or equity instruments atinitial recognition according to the contract terms of the financial instruments issued and their economic essence,not just in legal form, combined with the definitions of financial liabilities and equity instruments.
11.4.1 Classification, recognition and measurement of financial liabilities
Financial liabilities are divided into financial liabilities measured at fair value and whose changes are included incurrent profits and losses at initial recognition and other financial liabilities.
11.4.1.1 Financial liabilities measured at fair value and whose changes are included in the current profits and lossesFinancial liabilities measured at fair value and whose changes are included in current profits and losses includetransactional financial liabilities (including derivatives belonging to financial liabilities) and financial liabilitiesdesignated as measured at fair value and whose changes are included in current profits and losses. Except forderivative financial liabilities which are listed separately, financial liabilities measured at fair value and whosechanges are included in current profits and losses are listed as transactional financial liabilities.Financial liabilities that meet one of the following conditions, indicate that the purpose of the Group's financialliabilities is transactional:
The purpose of undertaking relevant financial liabilities is mainly to repurchase in the near future.The relevant financial liabilities are part of the identifiable financial instrument portfolio under centralizedmanagement at the initial recognition, and there is objective evidence to show the actual short-term profit model inthe near future.Related financial liabilities are derivatives. Except for derivatives that meet the definition of financial guaranteecontract and derivatives that are designated as effective hedging instruments.The Group can designate financial liabilities that meet one of the following conditions as financial liabilities
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measured at fair value and whose changes are included in current profits and losses at initial recognition: (1) Thedesignation can eliminate or significantly reduce accounting mismatch; (2) According to the risk management orinvestment strategy stated in the formal written documents of the Group, the financial liability portfolio or theportfolio of financial assets and financial liabilities are managed and evaluated on the basis of fair value, andreported to key management personnel within the Group on this basis; (3) Qualified mixed contracts containingembedded derivatives.Transactional financial liabilities are subsequently measured at fair value, and gains or losses caused by changes infair value and dividends or interest expenses related to these financial liabilities are included in current profits andlosses.For financial liabilities designated as being measured at fair value and whose changes are included in the currentprofits and losses, the changes in fair value of the financial liabilities caused by changes in the Group's own creditrisk are included in other comprehensive income, and other changes in fair value are included in the current profitsand losses. When the financial liabilities are derecognized, the accumulated change of its fair value caused by thechange of their own credit risk previously included in other comprehensive income is carried forward to retainedincome. Dividends or interest expenses related to these financial liabilities are included in the current profits andlosses. If the accounting mismatch in profit and loss will be caused or enlarged by handling the impact of thechanges in credit risk of these financial liabilities in the above way, the Group will include all the gains or losses ofthe financial liabilities (including the amount affected by the changes in credit risk) in the current profits and losses.
11.4.1.2 Other financial liabilities
Other financial liabilities, except those caused by the transfer of financial assets that do not meet the conditions forderecognition or continue to be involved in the transferred financial assets, are classified as financial liabilitiesmeasured in amortized cost and subsequently measured in amortized cost. The gains or losses arising fromderecognition or amortization are included in the current profits and losses.If the modification or renegotiation of the contract between the Group and the counterparty does not result in thetermination of the recognition of the financial liabilities that are subsequently measured according to amortizedcost, but the cash flow of the contract changes, the Group recalculates the book value of the financial liabilities andrecords the relevant gains or losses into the current profits and losses. The recalculated book value of such financialliabilities is determined by the Group according to the present value of discounted contract cash flow that will berenegotiated or modified according to the original actual interest rate of the financial liabilities. For all costs orexpenses arising from the modification or renegotiation of the contract, the Group adjusts the book value of themodified financial liabilities and amortizes them within the remaining term of the modified financial liabilities.
11.4.2 Derecognition of financial liabilities
If all or part of the current obligations of financial liabilities have been discharged, the recognition of financialliabilities or part thereof shall be terminated. If the Group (the Borrower) and the Lender will sign an agreement toreplace the original financial liabilities by undertaking new financial liabilities, and the contract terms of the newfinancial liabilities are substantially different from those of the original financial liabilities, the Group willderecognize the original financial liabilities and recognize the new financial liabilities at the same time.If all or part of the financial liabilities are derecognized, the difference between the book value of the derecognizedpart and the consideration paid (including the transferred non-cash assets or the new financial liabilities undertaken)will be included in the current profits and losses.
11.4.3 Equity instruments
Equity instruments refer to contracts that can prove that the Group has residual interests in assets after deducting allliabilities. The issuance (including refinancing), repurchase, sale or cancellation of equity instruments by the Groupare treated as changes in equity. The Group does not recognize changes in the fair value of equity instruments.Transaction costs related to equity transactions are deducted from equity.The distribution of equity instrument holders by the Group is treated as profit distribution, and the stock dividendspaid do not affect the total shareholders' equity.
11.5 Offset of financial assets and financial liabilities
When the Group has the legal right to offset the recognized financial assets and financialliabilities, and this legalright is currently enforceable, and the Group plans to settle the financial assets on a net basis or realize the financialassets and pay off the financial liabilities at the same time, the financial assets and financial liabilities are listed in thebalance sheet at the amount after offsetting each other. In addition, financial assets and financial liabilities are listedseparately in the balance sheet and do not offset each other.
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12 .Notes receivable
12.1 Methods for determining and accounting treatment for expected credit lossesof notes receivableThe Group separately assesses the credit risk of notes receivable with significantly different credit risks, includingnotes receivable that have not been accepted at maturity and notes receivable that have clear indications that theacceptor is likely to be unable to fulfill the acceptance obligations, and other notes receivable are accrued forexpected credit losses on a portfolio basis based on The increase or reversal of the provision for expected creditlosses on notes receivable is included in the profit or loss for the current period as a credit impairment loss or gain.
their credit risk characteristics.
12.2 Portfolio types and basis for determining credit loss provisions based on credit risk characteristics
Except for the notes receivable that assess the credit risk individually, the rest of the notes receivable are divided intodifferent portfolios based on their credit risk characteristics:
| Portfolio Category | Determining basis |
| Portfolio 1 | Bank acceptance |
| Portfolio 2 | Trade acceptance |
13.Account receivable
13.1 Methods for determining expected credit losses and accounting treatment of accounts receivable
The Group uses an impairment matrix to determine the credit losses of accounts receivable on a portfolio basis. Theincrease or reversal of the provision for expected credit losses of accounts receivable shall be recognized in profit orloss for the current period as credit impairment losses or gains.
13.2 The type of portfolio and the basis for determining the provision for credit losses based on the credit riskcharacteristics of the portfolio.
The Group classifies accounts receivable into portfolio1 based on common risk characteristics. The common creditrisk characteristics adopted by the Group mainly include the credit tenor and operating conditions of the debtor.
13.3 Calculation method of aging for credit risk characteristics portfolio recognized by aging
The Group uses the aging of accounts receivable as a credit risk characteristic and uses an impairment matrix todetermine its credit losses. Aging is calculated from the date of its initial recognition. If the terms and conditions ofthe accounts receivable are modified but do not result in the derecognition of the accounts receivable, the agingshall be calculated consecutively.
13.4 Determining standard of individual provision according to individual provision for bad debts
The Group assesses credit risk of accounts receivable individually due to its significant differences in creditriskwith evidence demonstrated greater credit risk.
14. Financing of accounts receivable
14.1 Determination method and accounting treatment method for expected credit loss of accounts receivablefinancingThe Group recognizes credit loss provisions for accounts receivable financing in other comprehensive income andincludes credit impairment losses or gains in the current period's profit and loss, without reducing the carryingamount of accounts receivable financing presented in the balance sheet.
14.2 Judgment criteria for individual provision of credit loss reserves based on individual provisionThe Group evaluates the financing of corresponding receivables based on the acceptance bank credit status of bankacceptance bills and makes provisions for credit losses.
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15.Other accounts receivable
15.1 Methods for determining expected credit losses and accounting treatment of other receivables
The Group determines the credit losses on other receivables on a portfolio basis. The increase or reversal of theprovision for expected credit losses of other receivables is recognized as credit impairment losses or gainsin profitor loss for the current period.
15.2 Calculation method of aging for credit risk characteristics portfolio recognized by aging
Aging is calculated from the date of its initial recognition. If the terms and conditions of other receivables aremodified but do not result in the derecognition of other receivables, the aging shall be calculated consecutively.
16.Inventory
16.1 Inventory Category, Goods Out Pricing Method, Inventory System, Amortization Method for Low-Value
Consumables and Packaging
16.1.1 Inventory Category
The Group's inventory mainly includes raw materials, products in process, finished products and materialsentrusted for processing. Inventory is initially measured at cost, which includes purchasing cost, processing cost andother expenses incurred to make inventory reach the current place and use state.
16.1.2 Goods Out Pricing Method
When the inventory is issued, the actual cost of the issued inventory is determined by the weighted meanmethod.
16.1.3 Inventory system
The inventory system is perpetual inventory system.
16.1.4 Amortization method of low-value consumables and packaging materials
Turnover materials and low-value consumables are amortized by straight-line method or one-time write-offmethod.
16.2 Recognition criteria and accrual method of provision for inventory falling price loss
On the balance sheet date, inventories are measured according to the lower of cost and net realizable value.When the net realizable value is lower than the cost, the inventory depreciation provision is withdrawn.
Net realizable value refers to the estimated selling price of inventory minus the estimated cost, estimated salesexpenses and related taxes and fees at the time of completion in daily activities. When determining the net realizablevalue of inventory, it is based on the conclusive evidence obtained, and the purpose of holding inventory and theinfluence of events after the balance sheet date are also considered.
Inventory depreciation provision is drawn according to the difference between the cost of a single inventoryitem and its net realizable value.
After the inventory depreciation provision is withdrawn, if the influencing factors of previous write-down ofinventory value have disappeared, resulting in the net realizable value of inventory being higher than its book value,it will be reversed within the original amount of inventory depreciation provision, and the reversed amount will beincluded in the current profits and losses.
17. Long-term equity investment
17.1 Criteria for joint control and important influence
Control means that the investor has the power over the investee, enjoys variable returns by participating in therelated activities of the investee, and has the ability to influence the amount of returns by using the power over theinvestee. Joint control refers to the common control of an arrangement according to the relevant agreement, and that
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the related activities of the arrangement must be unanimously agreed by the participants who share the control rightsbefore making decisions. Significant influence refers to the power to participate in decision-making on the financialand operating policies of the investee, but it cannot control or jointly control the formulation of these policies withother parties. When determining whether the investee can be controlled or exert significant influence, the potentialvoting rights factors such as convertible corporate bonds and current executable warrants of the investee held byinvestors and other parties have been considered.
17.2 Determination of initial investment cost
For the long-term equity investment obtained by business merger under the same control, the initial investmentcost of the long-term equity investment shall be the share of the book value of the owners' equity of the merged partyin the consolidated financial statements of the final controlling party on the merger date. The capital reserve shall beadjusted for the difference between the initial investment cost of long-term equity investment and the book value ofcash paid, non-cash assets transferred and debts undertaken; If the capital reserve is insufficient to be offset, theretained income shall be adjusted. If equity securities are issued as the merger consideration, the initial investmentcost of long-term equity investment shall be the share of the book value of the owners' equity of the merged party inthe consolidated financial statements of the final controlling party on the merger date, the share capital shall be thetotal face value of issued shares, and the capital reserve shall be adjusted according to the difference between theinitial investment cost of long-term equity investment and the total face value of the issued shares; If the capitalreserve is insufficient to be offset, the retained income shall be adjusted.For the long-term equity investment obtained from the business merger not under the same control, the initialinvestment cost of the long-term equity investment shall be the merger cost on the purchase date.Intermediary expenses such as audit, legal services, evaluation and consultation and other related managementexpenses incurred by the merging party or the purchaser for business merger are included in the current profits andlosses when incurred.
Long-term equity investment obtained by other means except the long-term equity investment formed bybusiness merger shall be initially measured at cost. If the additional investment can exert a significant influence orimplement joint control which however does not constitute control on the investee, the long-term equity investmentcost is the sum of the fair value of the original equity investment determined in accordance with the AccountingStandards for Business Enterprises No.22-Recognition and Measurement of Financial Instruments plus the newinvestment cost.
17.3 Subsequent measurement and profit and loss recognition method
17.3.1 Long-term equity investment calculated by cost method
The company's financial statements use the cost method to calculate the long-term equity investment insubsidiaries. Subsidiaries refer to the invested entities over which the Group can exercise control.
Long-term equity investment accounted by cost method is measured at the initial investment cost. Add orrecover investment to adjust the cost of long-term equity investment. The current investment income is recognizedaccording to the cash dividend or profit declared by the investee.
17.3.2 Long-term equity investment calculated by equity method
The Group's investment in associated enterprises and joint ventures is accounted for by the equity method. Anassociated enterprise refers to the investee over which the Group can exert significant influence, and a joint venturerefers to a joint venture arrangement in which the Group has rights only over the net assets of the arrangement.
When accounting by equity method, if the initial investment cost of long-term equity investment is greater thanthe fair value share of the identifiable net assets of the investee, the initial investment cost of long-term equityinvestment will not be adjusted; If the initial investment cost is less than the fair value share of the identifiable netassets of the investee, the difference shall be included in the current profits and losses, and the cost of long-termequity investment shall be adjusted.
When accounting by the equity method, the investment income and other comprehensive income are recognizedrespectively according to the share of the net profit and loss and other comprehensive income realized by theinvestee, and the book value of long-term equity investment is adjusted; The share is calculated according to theprofit or cash dividend declared by the investee, and the book value of long-term equity investment is reducedaccordingly; For other changes in the owners' equity of the investee except the net profit and loss, othercomprehensive income and profit distribution, the book value of the long-term equity investment shall be adjustedand included in the capital reserve. When recognizing the share of the net profit and loss of the investee, the netprofit of the investee shall be adjusted and recognized based on the fair value of the identifiable assets of the investeeat the time of investment. If the accounting policies and accounting periods adopted by the investee are inconsistentwith those of the Company, the financial statements of the investee shall be adjusted according to the accountingpolicies and accounting periods of the Company, so as to recognize the investment income and other comprehensiveincome. For the transactions between the Group and the associated enterprises and joint ventures, if the assets
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invested or sold do not constitute business, the unrealized internal transaction gains and losses shall be offset by theportion belonging to the Group according to the proportion enjoyed, and the investment gains and losses shall berecognized on this basis. However, the unrealized internal transaction losses between the Group and the investeebelong to the impairment losses of the transferred assets and shall not be offset.When recognizing the share of the net loss of the investee, the book value of the long-term equity investmentand other long-term rights and interests that substantially constitute the net investment of the investee shall bewritten down to zero. In addition, if the Group is obligated to bear additional losses to the investee, the estimatedliabilities will be recognized according to the expected obligations and included in the current investment losses. Ifthe investee realizes the net profit in the future, the Group will resume the recognition of the income share after theincome share makes up for the unrecognized loss share.
17.4 Disposal of long-term equity investment
When disposing of long-term equity investment, the difference between its book value and the actual purchaseprice is included in the current profits and losses. For the long-term equity investment accounted by the equitymethod, if the remaining equity after disposal is still accounted by the equity method, other comprehensive incomeoriginally accounted by the equity method shall be accounted for on the same basis as the direct disposal of relatedassets or liabilities by the investee; Owners' equity recognized by changes in other owners' equity of the investeeexcept net profit and loss, other comprehensive income and profit distribution shall be carried forward to currentprofits and losses in proportion. If the long-term equity investment accounted for by the cost method is stillaccounted for by the cost method after disposal, the other comprehensive income recognized by the equity methodaccounting or the recognition of financial instruments and accounting standards before gaining control of theinvestee shall be accounted for on the same basis as the direct disposal of related assets or liabilities by the investee;Changes in owners' equity other than net profit and loss, other comprehensive income and profit distribution in thenet assets of the investee recognized by using the equity method are carried forward to the current profits and lossesin proportion.
If the Group loses control of the investee due to the disposal of part of its equity investment, if the remainingequity after disposal can exercise joint control or exert significant influence on the investee in the preparation ofindividual financial statements, it shall be accounted for by the equity method instead, and the remaining equity shallbe treated as if it were adjusted by the equity method at the time of acquisition; If the remaining equity after disposalcannot be jointly controlled or exert significant influence on the investee, it shall be accounted for according to therelevant provisions of the standards for the recognition and measurement of financial instruments, and the differencebetween its fair value and book value on the date of control loss shall be included in the current profits and losses.For other comprehensive income recognized by the Group before it gains control of the investee, when it losescontrol of the investee, it shall be treated on the same basis as the direct disposal of related assets or liabilities by theinvestee. Changes in owners' equity in the net assets of the investee, except net profit and loss, other comprehensiveincome and profit distribution, shall be carried forward to current profits and losses when it loses control of theinvestee. If the remaining equity after disposal is accounted by the equity method, other comprehensive income andother owners' equity will be carried forward in proportion; If the remaining equity after disposal is changed toaccounting treatment according to the recognition and measurement standards of financial instruments, all othercomprehensive income and other owners' equity will be carried forward.
If the Group loses joint control or significant influence on the investee due to the disposal of some equityinvestments, the remaining equity after disposal shall be accounted for according to the recognition andmeasurement standards of financial instruments, and the difference between its fair value and book value on the dateof joint control loss or significant influence shall be included in the current profits and losses. Other comprehensiveincome recognized by the original equity investment due to accounting by the equity method shall be accounted foron the same basis as the direct disposal of relevant assets or liabilities by the investee when the equity method isterminated. All the owners' equity recognized by the investee due to changes in other owners' equity except net profitand loss, other comprehensive income and profit distribution shall be carried forward to the current investmentincome when the equity method is terminated.
The Group disposes of the equity investment in its subsidiaries step by step through multiple transactions until itloses control. If the above transactions belong to a package transaction, each transaction will be treated as atransaction that disposes of the equity investment in its subsidiaries and loses control. Before losing control, thedifference between the price of each disposal and the book value of the long-term equity investment correspondingto the disposed equity will be recognized as other comprehensive income, and then carried forward to the currentprofits and losses when it loses control.Provision forinventory falling price loss is generally made on the basis of a single inventory item.
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18. Investment real estate
Investment real estate refers to real estate held to earn rent or capital appreciation, or both, including rentedhouses and buildings.Investment real estate is initially measured at cost. Subsequent expenditures related to investment real estateare included in the cost of investment real estate if the economic benefits related to the asset are likely to flow in andthe cost can be measured reliably. Other subsequent expenditures are included in the current profits and losses whenincurred.The Group adopts a cost model for subsequent measurement of investment properties, and adopts the average lifemethod to provide depreciation over the useful life. The depreciation methods, depreciation periods, estimatedresidual value rates and annual depreciation rates for various types of investment real estate are as follows:
| Category | Depreciation period (years) | Residual value rate (%) | Annual Depreciation Rate (%) |
| Houses, buildings | 10-40 | 0.00-4.00 | 2.40-10.00 |
When the investment real estate is disposed of, or permanently withdrawn from use, and it is not expected toobtain economic benefits from its disposal, the recognition of the investment real estate will be terminated.
The difference between the disposal income from the sale, transfer, scrapping or damage of investment realestate after deducting its book value and related taxes is included in the current profits and losses.
19. Fixed assets
19.1 Recognition conditions
Fixed assets refer to tangible assets held for producing goods, providing services, leasing or management, witha service life of more than one fiscal year. Fixed assets are recognized only when the economic benefits related tothem are likely to flow into the Group and their costs can be measured reliably. Fixed assets are initially measured atcost.
Subsequent expenditures related to fixed assets shall be included in the cost of fixed assets if the economicbenefits related to the fixed assets are likely to flow in and the cost can be measured reliably, and the book value ofthe replaced part shall be derecognized. Other subsequent expenditures are included in the current profits and losseswhen incurred.
19.2 Depreciation method
Fixed assets shall be depreciated within their service life by using the life-average method from the monthfollowing the scheduled serviceable state. The depreciation methods, service life, estimated net salvage and annualdepreciation rate of various fixed assets are as follows:
| Category | Depreciation life (year) | Estimated net salvage rate (%) | Annual depreciation rate (%) |
| Houses and buildings | 10-40 | 0.00-4.00 | 2.40-10.00 |
| Machinery equipment | 10-14 | 4.00 | 6.86-9.60 |
| Transportation equipment | 8 | 4.00 | 12.00 |
| Electronic equipment and others | 5 | 4.00 | 19.20 |
Estimated net salvage refers to the amount that the Group currently obtains from the disposal of fixed assets afterdeducting the estimated disposal expenses, assuming that the expected service life of the fixed assets has expired andis in the expected state at the end of the service life.
19.3 Other instructions
When the fixed assets are disposed of or it is expected that no economic benefits can be generated through theuse or disposal, the fixed assets is derecognized. The difference between the disposal income from the sale, transfer,scrapping or damage of fix assets after deducting its book value and related taxes is included in the current profits andlosses.
At least at the end of the year, the Group will review the service life, estimated net salvage and depreciationmethod of fixed assets, and if there is any change, it will be treated as a change in accounting estimate.
20. Construction in progress
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The construction in progress is measured according to the actual cost, which includes various project expendituresincurred during the construction period, capitalized borrowing costs before the project reaches the scheduledserviceable state and other related expenses. No depreciation is allowed for construction in progress.
Construction in progress is carried forward as a fixed asset when it reaches the intended usable state. The standardsand timing points for the carry-forward of various types of projects under construction into fixed assets are as follows:
| Category | The criteria for carrying forward to fixed assets | The time point at which it is carried forward to a fixed asset |
| Installation of machinery and equipment | The equipment has been accepted by asset management personnel and user personnel and meets one or more of the following conditions according to the actual situation: (1) Relevant equipment and other supporting facilities have been installed; (2) The equipment can maintain normal and stable operation for a period of time after debugging; (3) The production equipment can stably produce qualified products for a period of time. | It has reached the intended usable state |
21. Borrowing costs
Borrowing costs that can be directly attributed to the purchase, construction or production of assets that meetthe capitalization conditions will be capitalized when the asset expenditure has occurred, the borrowing costs haveoccurred, and the necessary purchase, construction or production activities to make the assets reach thepredetermined serviceable or saleable state have begun; Capitalization shall stop when the assets that meet thecapitalization conditions purchased, constructed or produced reach the predetermined serviceable state or saleablestate. The remaining borrowing costs are recognized as expenses in the current period.
22. Intangible assets
22.1 Useful life and the basis for its determination, estimates, amortization method or review procedure
Intangible assets include land use rights, software and patent rights.
Intangible assets are initially measured at cost. Intangible assets with limited service life shall be amortized bystraight-line method in equal installments within their expected service life from the time they are available for use.Intangible assets with uncertain service life shall not be amortized. The amortization method, service life andestimated net salvage of various intangible assets are as follows:
| Category | Amortization method | Service life (year) | Estimated net salvage rate (%) |
| Land use right | Straight-line method | 50(Legal Right to Use) | - |
| Software | Straight-line method | 5(The useful life is determined by the period of time that is expected to bring economic benefits to the company) | - |
| Patent | Straight-line method | 15(The useful life is determined by the period of time that is expected to bring economic benefits to the company) | - |
At the end of the period, the service life and amortization method of intangible assets with limited service lifeshall be reviewed and adjusted if necessary.For the impairment test of intangible assets, please refer to Note (III) 22 "Impairment of Long-term Assets" fordetails.
22.2 Post-employment benefits are all defined contribution plan.
Expenditure in the research stage is included in the current profits and losses when incurred.
Expenditures in the development stage are recognized as intangible assets if they meet the following conditionsat the same time. Expenditures in the development stage that cannot meet the following conditions are included in the
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current profits and losses:
(1) It is technically feasible to complete the intangible assets so that they can be used or sold;
(2) Having the intention to complete the intangible assets and use or sell them;
(3) The ways in which intangible assets generate economic benefits, including the ability to prove that theproducts produced by using the intangible assets exist in the market or the intangible assets themselves exist in themarket, and the intangible assets will be used internally, which can prove their usefulness;
(4) Having sufficient technical, financial and other resources to support the development of the intangible assets,and having the ability to use or sell the intangible assets;
(5) Expenditure attributable to the development stage of the intangible assets can be reliably measured.
If it is impossible to distinguish between research stage expenditure and development stage expenditure, all theR&D expenditures incurred shall be included in the current profits and losses. The cost of intangible assets formed byinternal development activities only includes the total expenditure from the time when the capitalization conditionsare met to the time when the intangible assets reach the intended use, and the expenditure that has been expensed intoprofit and loss before the capitalization conditions are met in the development process will not be adjusted.
23. Long-term asset impairment
On each balance sheet date, the Group checks whether there are signs that long-term equity investment,investment real estate measured by cost method, fixed assets, construction in progress, right-to-use assets andintangible assets with definite service life may be impaired. If these assets show signs of impairment, the recoverableamount is estimated. Intangible assets with uncertain service life and intangible assets that have not yet reached theserviceable state are tested for impairment every year, regardless of whether with signs of impairment.
Estimating the recoverable amount of an asset is based on a single asset. If it is difficult to estimate therecoverable amount of a single asset, the recoverable amount of the asset group is determined based on the asset groupto which the asset belongs. The recoverable amount is the higher of the net amount of the fair value of the asset orasset group minus the disposal expenses or the present value of its expected future cash flow.
If the recoverable amount of an asset is lower than its book value, the asset impairment provision shall beaccrued according to the difference and included in the current profits and losses.
Goodwill shall be tested for impairment at least at the end of each year. When testing the impairment ofgoodwill, it shall be conducted in combination with the related asset group or asset group portfolio. That is, from thepurchase date, the book value of goodwill is allocated to the asset group or asset group portfolio that can benefit fromthe synergistic effect of business merger in a reasonable way. If the recoverable amount of the asset group or assetgroup portfolio containing the allocated goodwill is lower than its book value, the corresponding impairment loss willbe recognized. The amount of impairment loss will firstly deduct the book value of goodwill allocated to the assetgroup or asset group portfolio, and then deduct the book value of other assets according to the proportion of the bookvalue of assets other than goodwill in the asset group or asset group portfolio.
Once the above-mentioned asset impairment losses are recognized, they will not be reversed in future accountingperiods.
24. Long-term deferred expenses
Long-term deferred expenses refer to the expenses that have occurred but should be borne by the current periodand subsequent periods with an amortization period of more than one year. Long-term deferred expenses shall beamortized evenly by stages during the expected benefit period.
25. Contractual liabilities
Contractual liabilities refer to the obligation of the Group to transfer goods or services to customers forconsideration received or receivable from customers. Contract assets and liabilities under the same contract are listedon a net basis.
26. Employee Remuneration
26.1 Accounting treatment method of short-term Remuneration
During the accounting period when employees provide services for the Group, the Group recognizes the actualshort-term remuneration as a liability, and records it into the current profits and losses or related asset costs. Theemployee welfare expenses incurred by the Group are included in the current profits and losses or related asset costsaccording to the actual amount when actually incurred. If employee welfare expenses are non-monetary benefits, theyshall be measured at fair value.
The social insurance premiums such as medical insurance premium, work injury insurance premium andmaternity insurance premium and housing provident fund paid by the Group for employees, as well as the trade unionfunds and employee education funds withdrawn by the Group according to regulations, shall be calculated according
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to the stipulated accrual basis and accrual ratio during the accounting period when employees provide services for theGroup to determine the employee compensation amount, and recognize the corresponding liabilities, and be includedin the current profits and losses or related asset costs.
26.2 Accounting treatment of post-employment benefits
Post-employment benefits are all defined contribution plans.During the accounting period when employees provide services for the Group, the amount payable calculatedaccording to the set deposit plan is recognized as a liability, and included in the current profits and losses or relatedasset costs.
26.3 Accounting treatment of dismissal benefits
If the Group provides dismissal benefits to employees, the employee compensation liabilities arising from thedismissal benefits shall be recognized at the earlier of the following two dates, and included in the current profits andlosses: when the Group cannot unilaterally withdraw the dismissal benefits provided by the plan to terminate laborrelations or the proposal to cut back; When the Group recognizes the costs or expenses related to the reorganizationinvolving the payment of dismissal benefits.
27. Estimated liabilities
When the obligation related to contingencies such as customer return are the current obligations undertaken by theGroup, and the fulfillment of this obligation is likely to lead to the outflow of economic benefits, and the amount of thisobligation can be measured reliably, it is recognized as estimated liabilities.
On the balance sheet date, considering the risk, uncertainty and time value of money related to contingencies, theestimated liabilities are measured according to the best estimate of the expenditure required to fulfill the relevantcurrent obligations. If the time value of money is significant, the best estimate is determined by the discounted amountof expected future cash outflow.
28.Revenue
28.1 Accounting policy used for measurement and revenue recognition disclosure according to type of business
The Group has fulfilled its contractual obligation, that is, when the customer obtains the control right of therelevant goods or services, the income will be recognized according to the transaction price allocated to theperformance obligation. Performance obligation refers to the commitment of the Group to transfer clearlydistinguishable goods or services to customers in the contract. Transaction price refers to the amount of considerationthat the Group is expected to receive due to the transfer of goods or services to customers, which however, does notinclude the money received on behalf of third parties and the money that the Group expects to return to customers.
The Group evaluates the contract on the start date of the contract, identifies the individual performance obligationscontained in the contract, and determines whether each individual performance obligation is performed within a certainperiod of time or at a certain point of time. If one of the following conditions is met, it belongs to the performanceobligation within a certain period of time, and the Group recognizes the income within a certain period of timeaccording to the performance progress: (1) The customer obtains and consumes the economic benefits brought by theperformance of the Group; (2) The customer can control the goods under construction during the performance of theGroup; (3) The goods produced by the Group during the performance of the contract have irreplaceable purposes, andthe Group has the right to collect money for the accumulated performance part completed so far during the wholecontract period. Otherwise, the Group recognizes income at the point when the customer obtains control over therelevant goods or services.Transaction price refers to the amount of consideration that the Group expects to be entitled to receive as a result of thetransfer of goods or services to the customer, but does not include payments received on behalf of a third party andamounts expected to be refunded to the customers by the Group. In determining the transaction price, the Group takesinto account the impact of factors such as variable consideration, significant financing elements in the contract, non-cash consideration, consideration payable to customers, etc.
If the contract contains two or more performance obligations, the Group will allocate the transaction price to eachindividual performance obligation on the contract start date according to the relative proportion of the separate sellingprice of the goods or services promised by each individual performance obligation. However, if there is conclusiveevidence that the contract discount or variable consideration is only related to one or more (but not all) performanceobligations in the contract, the Group will allocate the contract discount or variable consideration to one or more relatedperformance obligations. Separate selling price refers to the price at which the Group sells goods or services to
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customers separately. If the separate selling price cannot be directly observed, the Group comprehensively considers allrelevant information that can be reasonably obtained, and estimates the separate selling price by using observable inputvalues to the maximum extent.For sales with return clauses, when the customer obtains the control right of the relevant goods, the Grouprecognizes the income according to the amount of consideration expected to be charged due to the transfer of goods tothe customer (that is, excluding the amount expected to be refunded due to sales return), and recognizes the liabilitiesaccording to the amount expected to be refunded due to sales return; At the same time, according to the book value ofthe expected returned goods at the time of transfer, the balance after deducting the expected cost of recovering thegoods (including the loss of the value of the returned goods) is recognized as an asset, and the net carry-over cost of theabove assets is deducted according to the book value of the transferred goods at the time of transfer.
For sales with quality assurance clauses, if the quality assurance provides a separate service in addition to assuringcustomers that the goods or services sold meet the established standards, the quality assurance constitutes a singleperformance obligation. Otherwise, the Group shall handle the quality assurance responsibility in accordance with theAccounting Standards for Business Enterprises No.13-Contingencies.According to whether the Group has control over the goods or services before transferring them to customers, theGroup judges whether it is the main responsible person or the agent when engaging in transactions. If the Group cancontrol the goods or services before transferring them to customers, the Group is the main responsible person, and theincome is recognized according to the total consideration received or receivable; Otherwise, the Group, as an agent,recognizes income according to the expected amount of commission or handling fee, which is determined according tothe net amount of the total consideration received or receivable after deducting the price payable to other interestedparties.If the Group receives the payment for the sale of goods or services from customers in advance, it will firstrecognize the payment as a liability, and then change it to income when the relevant performance obligations arefulfilled. When the advance payment of the Group does not need to be returned, and the customer may give up all orpart of its contractual rights, if the Group is expected to be entitled to the amount related to the contractual rights givenup by the customer, the above amount will be recognized as income in proportion according to the mode of thecustomer's exercise of contractual rights; Otherwise, the Group will only convert the relevant balance of the aboveliabilities into income when it is extremely unlikely that the customer will demand to perform the remainingperformance obligations.
Please refer to Note (III) 30.2.2 "The Group as a lessor records the operating leasing business" for the accountingpolicy of the Group's income recognition in property leasing.
29. Government subsidies
Government subsidies refer to the monetary assets and non-monetary assets obtained by the Group from thegovernment free of charge. Government subsidies are recognized when they can meet the conditions attached togovernment subsidies and can be received.
If government subsidies are monetary assets, they shall be measured according to the amount received orreceivable.
29.1 Judgment basis and accounting treatment method of government subsidies related to assets
As long-term assets can be formed in the production line subsidies and equipment subsidies of the Group'sgovernment subsidies, these government subsidies are government subsidies related to assets.
Government subsidies related to assets are recognized as deferred income, and are included in the current profitsand losses in installments according to the straight-line method within the service life of the related assets.
29.2 Judgment basis and accounting treatment method of government subsidies related to income
As the Group's government subsidies, such as industry development support funds, enterprise developmentsupport funds and tax subsidies, cannot form long-term assets, these government subsidies are government subsidiesrelated to income.
Government subsidies related to income, if used to compensate related costs and losses in future periods, will berecognized as deferred income, and are included in the current profits and losses during the period when related costsor expenses are recognized; if used to compensate the related costs and losses that have occurred, will be directlyincluded in the current profits and losses.
Government subsidies related to the daily activities of the Group are included in other income according to thenature of economic business. Government subsidies unrelated to the daily activities of the Group are included in non-operating income.
When the confirmed government subsidy needs to be returned, if there is a relevant deferred revenue balance, the
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relevant deferred income book balance will be offset, and the excess will be included in the current profits and losses;If there is no relevant deferred income, it will be directly included in the current profits and losses.
30.Lease
Lease refers to a contract in which the lessor transfers the right to use assets to the lessee for consideration withina certain period of time.On the commencement date of the contract, the Group evaluates whether the contract is a lease or contains alease. Unless the terms and conditions of the contract change, the Group will not re-evaluate whether the contract is alease or contains a lease.
30.1 The Group as the lessee
30.1.1 Split of lease
If the contract contains one or more leased and non-leased parts at the same time, the Group will split eachseparate leased and non-leased part and allocate the contract consideration according to the relative proportion of thesum of the separate prices of each leased part and the non-leased part.
30.1.2 Right-to-use assets
Except for short-term leases, the Group recognizes the right-to-use assets on the start date of lease term. Thestart date of lease term refers to the start date when the lessor provides the leased assets for the use of the Group. Theright-to-use assets is initially measured according to the cost. The cost includes:
Initial measurement amount of lease liabilities;
For the lease payment paid on or before the start date of the lease term, if there are lease incentives, deduct theamount related to the lease incentives enjoyed;· Initial direct expenses incurred by the Group;· The estimated costs incurred by the Group for dismantling and removing the leased assets, restoring the premiseswhere the leased assets are located or restoring the leased assets to the state agreed in the lease clauses.
The Group refers to the depreciation provisions in Accounting Standards for Business Enterprises No.4-FixedAssets, and accrues depreciation for right-to-use assets. If the Group can reasonably determine that it has acquired theownership of the leased assets at the expiration of the lease term, the right-to-use assets will be depreciated within theremaining service life of the leased assets. If it cannot be reasonably determined that the ownership of the leased assetscan be obtained at the expiration of the lease term, depreciation shall be accrued during the lease term or the remainingservice life of the leased assets, whichever is shorter.According to the Accounting Standards for Business Enterprises No.8-Impairment of Assets, the Group determineswhether the right-to-use assets have been impaired, and carries out accounting treatment for the identified impairmentlosses.
30.1.3Lease liabilities
Except for short-term leases, the Group initially measures the lease liabilities on the start date of lease termaccording to the present value of the unpaid lease payment on that date. When calculating the present value of the leasepayment, the Group uses the lease interest rate as the discount rate. If the lease interest rate cannot be determined, theincremental loan interest rate is used as the discount rate.
Lease payment refers to the amount paid by the Group to the lessor related to the right to use the leased assetsduring the lease term, including:
· Fixed payment amount and substantial fixed payment amount. If there is lease incentive, the relevant amount oflease incentive shall be deducted;
· Variable lease payment amount depending on index or ratio;
· The exercise price of the option reasonably determined by the Group to be exercised;
· The amount to be paid to terminate the lease when the lease term reflects that the Group will exercise the option;
· The amount expected to be paid according to the residual value of the guarantee provided by the Group.
After the start of the lease term, the Group calculates the interest expense of the lease liabilities in each period ofthe lease term at a fixed periodic interest rate, and includes it in the current profits and losses or related asset costs.
After the commencement of the lease term, if the following circumstances occur, the Group will re-measure thelease liabilities and adjust the corresponding right-to-use assets. If the book value of the right-to-use assets has beenreduced to zero, but the lease liabilities still need to be further reduced, the Group will include the difference in thecurrent profits and losses:
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· If the lease term changes or the evaluation result of the purchase option changes, the Group will re-measure thelease liabilities according to the present value calculated by the changed lease payment amount and the revised discountrate;· If the estimated payable amount according to the guarantee residual value or the index or proportion used todetermine the lease payment changes, the Group will re-measure the lease liabilities according to the present valuecalculated by the changed lease payment amount and the original discount rate.
30.1.4 As the judgment basis and accounting treatment method for the lessee to simplify the treatment of the
short-term lease
For the short-term lease of some factories and some rented warehouses, the Group chooses not to recognize theright-to-use assets and lease liabilities. Short-term lease refers to the lease that does not exceed 12 months and does notinclude the option to purchase on the start date of the lease term. The Group will charge the lease payment for short-term lease to the current profits and losses or related asset costs in accordance with the straight-line method in eachperiod of the lease term.
30.1.5 Lease change
If the lease changes and the following conditions are met at the same time, the Group will carry out accountingtreatment on the lease change as a separate lease:
·· The lease change expands the lease scope by increasing the right to use one or more leased assets;
· The increased consideration is equivalent to the individual price of the expanded part of the lease scope adjustedaccording to the contract situation.
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If the lease change is not accounted for as a separate lease, on the effective date of the lease change, the Groupwill re-allocate the consideration of the changed contract, re-determine the lease term, and re-measure the leaseliabilities according to the present value calculated by the changed lease payment and the revised discount rate.If the lease scope is reduced or the lease term is shortened due to lease change, the Group shall correspondinglyreduce the book value of the right-to-use assets, and include the related gains or losses of partial or full termination oflease in the current profits and losses. If other lease changes lead to the re-measurement of lease liabilities, the Groupwill adjust the book value of the right-to-use assets accordingly.
30.2 The Group as the lessor
30.2.1 Split of lease
If the contract contains both leased and non-leased parts, the Group will allocate the contract considerationaccording to the provisions of the Accounting Standards for Business Enterprises Revenues on transaction priceallocation, and the basis of allocation is the separate prices of the leased part and the non-leased part.
30.2.2 Classification and accounting treatment for rental housing leases
A lease that essentially transfers almost all the risks and rewards related to the ownership of the leased assets is afinancial lease. Other leases except financing lease are operating leases.
30.2.2.1 The Group as a lessor records the operating lease business
During each period of the lease term, the Group adopts the straight-line method to recognize the lease receiptsfrom operating lease as rental income. The initial direct expenses incurred by the Group in connection with operatingleases are capitalized when incurred, apportioned on the same basis as rental income recognition during the lease term,and included in current profits and losses in installments.
The variable lease receipts related to operating leases obtained by the Group, which are not included in the leasereceipts, are included in the current profits and losses when actually incurred.
30.2.3 Lease change
If the operating lease is changed, the Group will carry out accounting treatment on it as a new lease from theeffective date of the change, and the lease receipts received in advance or receivable related to the lease before thechange will be regarded as the receipts of the new lease.
31. Deferred income tax assets/Deferred income tax liabilities
Income tax expenses include current income tax and deferred income tax.
31.1 Current income tax
On the balance sheet date, the current income tax liabilities (or assets) formed in the current and previous periodsshall be measured by the expected income tax payable (or refunded) calculated in accordance with the provisions of thetax law.
31.2 Deferred income tax assets and deferred income tax liabilities
For the difference between the book values of some assets and liabilities and their tax basis, and the temporarydifference between the book values of items that are not recognized as assets and liabilities but can be determined intax basis according to the provisions of the tax law and tax basis, the balance sheet liability method is adopted torecognize deferred income tax assets and deferred income tax liabilities.
In general, all temporary differences are recognized as related deferred income tax. However, for deductibletemporary differences, the Group recognizes related deferred income tax assets to the extent that it is likely to obtaintaxable income to offset the deductible temporary differences. In addition, for the temporary differences related to theinitial recognition of goodwill and the initial recognition of assets or liabilities arising from transactions that are neitherbusiness merger nor affect accounting profits and taxable income (or deductible losses), the relevant deferred incometax assets or liabilities are not recognized.
For deductible losses and tax deductions that can be carried forward to future years, the corresponding deferredincome tax assets are recognized to the extent that it is likely to obtain future taxable income for deducting deductiblelosses and tax deductions.
The Group recognizes deferred income tax liabilities arising from taxable temporary differences related toinvestments in subsidiaries, associated enterprises and joint ventures, unless the Group can control the time when thetemporary differences are reversed, and the temporary differences are unlikely to be reversed in the foreseeable future.For deductible temporary differences related to the investments of subsidiaries, associated enterprises and jointventures, the Group recognizes the deferred income tax assets only when the temporary differences are likely to bereversed in the foreseeable future and the taxable income used to offset the deductible temporary differences is likely tobe obtained in the future.
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On the balance sheet date, deferred income tax assets and deferred income tax liabilities shall be measuredaccording to the applicable tax rate during the expected recovery of related assets or settlement of related liabilities.Except that the current income tax and deferred income tax related to transactions and events directly included inother comprehensive income or shareholders' equity are included in other comprehensive income or shareholders'equity, and the deferred income tax arising from business merger adjusts the book value of goodwill, the remainingcurrent income tax and deferred income tax expenses or gains are included in the current profits and losses.On the balance sheet date, the book value of deferred income tax assets shall be rechecked. If it is probable thatsufficient taxable income will not be obtained in the future to offset the benefits of deferred income tax assets, the bookvalue of deferred income tax assets shall be written down. When sufficient taxable income is likely to be obtained, theamount written down will be reversed.
31.3 Offset of income tax
When the Group has the legal right to settle on a net basis and intends to settle on a net basis or acquire assets andpay off liabilities at the same time, the Group's current income tax assets and current income tax liabilities arepresented on an offset net basis.
When the taxpayer has the legal right to settle the current income tax assets and liabilities on a net basis, and thedeferred income tax assets and liabilities are related to the income tax levied by the same tax collection department onthe same taxpayer or to different taxpayers, but in the future, the taxpayers involved intend to settle the current incometax assets and liabilities on a net basis, or acquire assets and pay off liabilities at the same time, the Group's deferredincome tax assets and liabilities are presented on an offset net basis.
32. Changes in important accounting policies and accounting estimates, and correction of previous errors
32.1 Changes in significant accounting policy
On November30, 2022, the Ministry of Finance (MOF) issued Interpretation No. 16 of Accounting Standards forBusiness Enterprises ("Interpretation No. 16"), clarifying that the accounting treatment of deferred income tax relatedto assets and liabilities arising from a single transaction is not subject to the initial recognition exemption.Interpretation No. 16 revises the scope of the initial recognition exemption of deferred income tax in AccountingStandard for Business Enterprises No. 18-Income Tax, clarifying that Accounting Standard for Business EnterprisesNo. 18-Income Tax-provisions regarding exemption from the initial recognition of deferred tax liabilities and deferredtax assetsdoes not apply to individual transaction that is not a business combination and the transaction does not affectneither the accounting profit nor the taxable income (or deductible loss) at the time of the transaction occurs, and theassets and liabilities initially recognized result in the same amount of taxable temporary differences to the deductibletemporary differences . The regulations will come into force on January 1, 2023 and can be implemented in advance.
After assessment, the Group considers that the adoption of this regulation will not have a significant impact on theGroup's financial statement.
32.2 Significant Changes in Accounting Estimates
There are no significant changes in the Group's accounting estimates during the year.
IV. Taxes
1. Main tax categories and tax rates
| Tax category | Tax basis | Tax rate |
| VAT | The balance after deducting the deductible input tax from the output tax; The tax calculation method of "exemption, offset and refund" is applied to sales of export products | The output tax for domestic sales is calculated according to 13%, 9%, 6% and 5% of the sales amount calculated according to relevant tax regulations, and the tax rebate rate for export products is 13% |
| Urban maintenance and construction tax | Payable turnover tax | 7% |
| Surcharge for education | Payable turnover tax | 3% |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| Local education surcharge | Payable turnover tax | 2% |
| Business income tax | Payable turnover tax | 25%、20%、15%、8.25% |
| Property tax | Residual value or rental income after deducting 30% from the original value of property at one time | 1.2% |
The disclosure statement if there are taxpayers with different enterprise income tax rates
| Name of taxpayer | Income tax rate |
| The Company | 25% |
| Shenzhen Shenfang Property Management Co., Ltd. | 25% |
| Shenzhen Shengjinlian Technology Co., Ltd. | 25% |
| Shenzhen Beauty Century Garment Co., Ltd. | 20% (Note 1) |
| Shenzhen Lisi Industrial Co., Ltd. | 20% (Note 1) |
| Shenzhen Shenfang Sungang Property Management Co., Ltd. | 20% (Note 1) |
| Shenzhen Huaqiang Hotel | 20% (Note 1) |
| Shengtou（HK）Co., Ltd. | 8.25% ( Note 2) |
| Shenzhen SAPO Photoelectric Co., Ltd. | 15% (Note 3) |
Note 1: See Notes (IV), 2 (2) for details.Note 2: According to the Tax Ordinance of Hong Kong, Hong Kong companies applied the two-tier system ofprofits tax , and the first profit of HK$ 2 million will be calculated and paid at 8.25%, and the profits generatedthereafter will be calculated at 16.5%.Note 3: See Notes (IV), 2(1) for details.
2. Tax preference
(1) In 2022, SAPO Photoelectric, a subsidiary of the Company, was jointly recognized as a high-tech enterprise byShenzhen Science and Technology Innovation Committee, Shenzhen Finance Bureau and Shenzhen Tax Service,State Taxation Administration, respectively, with a certification period of 3 years, and the certificate numbers ofGR202244204504 respectively. It shall apply the preferential tax policies for high-tech enterprises within three yearsafter it is recognized as a high-tech enterprise, and pay enterprise income tax at the rate of 15% after being filed bythe competent tax bureau.
(2) The Company's subsidiaries Shenzhen Beauty Century Garment Co., Ltd., Shenzhen Huaqiang Hotel Co., Ltd.,Shenzhen Lisi Industrial Development Co., Ltd. and Shenzhen Shenfang Sungang Property Management Co., Ltd. arequalified small and low-profit enterprises, and according to the Announcement of the State Administration of Taxationof the Ministry of Finance on Further Implementing the Preferential Income Tax Policies for Small and MicroEnterprises (No. 13 of 2022) and the announcement of the State Administration of Taxation of the Ministry of Financeon the preferential income tax policies for small and micro enterprises and individual industrial and commercialhouseholds (No. 6 of 2023),the part of the annual taxable income of small and low-profit enterprises not exceedingRMB 3 million will be reduced to include in the taxable income by 25%, and the enterprise income tax will be paid atthe rate of 20%.
(3) In accordance with the relevant provisions of the Notice of the State Administration of Taxation of the GeneralAdministration of Customs of Ministry of Finance on Import Tax Policies for Supporting the Development of the NewDisplay Device Industry (No. 19[2021]Cai Guan Shui ), SAPO Photoelectric , a subsidiary of the Company, meets therelevant conditions and enjoys the policy of exemption from import duties for related products from January 1, 2021 toDecember 31, 2030.
(4)According to the relevant provisions of the Announcement of the State Administration of Taxation of the Ministryof Finance on Clarifying the Policies for VAT Reduction and Exemption for Small-scale VAT Taxpayers(Announcement No. 1 [2023] of the State Administration of Taxation of the Ministry of Finance), SAPO Photoelectric ,a subsidiary of the Company, meets the relevant conditions and is eligible to enjoy the policy for taxpayers of theproduction service industry to offset the tax payable for the period from January 1, 2023 to December 31, 2023inaccordance with the policy of 5% addition to the current period's deductible input tax amount to offset tax payable.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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V. Notes of consolidated financial statement
1.Monetary Capital
In RMB
| Items | Year-end balance | Year-beginning balance |
| Cash at hand | 1,710.40 | 3,980.56 |
| RMB | 1,651.50 | 3,980.56 |
| HKD | 58.90 | - |
| Bank deposit( Note 1) | 462,967,619.54 | 874,795,302.32 |
| RMB | 396,264,667.05 | 853,053,825.65 |
| USD | 62,535,102.56 | 17,490,003.77 |
| Yen | 3,440,280.17 | 4,200,382.59 |
| HKD | 727,569.76 | 51,090.31 |
| Other monetary capital(Note 2)： | 9,305,118.06 | 116,990,685.31 |
| RMB | 9,305,118.06 | 116,929,425.84 |
| Yen | - | 60,972.46 |
| USD | - | 287.01 |
| Total | 472,274,448.00 | 991,789,968.19 |
| Including : The total amount of deposit abroad | - | - |
Note 1: Bank deposits include demand deposits and 7-day call deposit interest of RMB1,548,872.61.Note 2: As of December 31, 2023, the Group's other monetary funds include RMB3,400,000.00 of funds whose use isrestricted due to account freezing and RMB5,905,118.06 of bill margin.
2. Transactional financial assets
In RMB
| Items | Balance at the end of this year | Balance at the end of last year |
| Financial assets measured at fair value and whose changes are included in the current profits and losses | 821,946,114.68 | 319,605,448.44 |
| Including: money funds and structured deposits | 821,946,114.68 | 319,605,448.44 |
3. Notes receivable
(1) Notes receivable listed by category
In RMB
| Items | Balance at the end of this year | Balance at the end of last year |
| Bank acceptance | 50,963,943.01 | 74,619,100.26 |
(2) On December 31, 2023, the Group had no pledged bills receivable.
(3) On December 31, 2023, the notes receivable that have been endorsed or discounted by the Group and have notyet matured on the balance sheet date
In RMB
| Items | Amount to be derecognized at the end of this year | Amount not derecognized at the end of this year |
| Bank acceptance | - | 42,665,954.11 |
(4) By accrual of bad debt provision
In RMB
| Category | Balance at the end of this year | Balance at the end of last year | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion (%) | Amount | Accrual proportion | Amount | Proportion (%) | Amount | Accrual proportion | |||
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| (%) | (%) | |||||||||
| With bad debt provision accrual on single item | - | - | - | - | - | - | - | - | - | - |
| with single minor amount but withdrawal single item bad debt provision | 50,963,943.01 | 100.00 | - | - | 50,963,943.01 | 74,619,100.26 | 100.00 | - | - | 74,619,100.26 |
| Bank acceptance bill | 50,963,943.01 | 100.00 | - | - | 50,963,943.01 | 74,619,100.26 | 100.00 | - | - | 74,619,100.26 |
| Total | 50,963,943.01 | 100.00 | - | / | 50,963,943.01 | 74,619,100.26 | 100.00 | - | / | 74,619,100.26 |
(5) On December 31, 2023, the Group had no bills receivable actually written off.
4. Account receivable
1. (1)Disclosure by aging
In RMB
| Aging | Balance at the end of this year | Balance at the end of last year |
| Within 1 year | 848,526,236.04 | 670,780,300.16 |
| 1-2 years | 1,640,043.18 | 614,645.76 |
| 2-3 years | 618,907.34 | - |
| Over 3 years | 12,911,211.29 | 12,883,224.42 |
| Total | 863,696,397.85 | 684,278,170.34 |
(2) Classified disclosure by credit loss provision accrual method
On December 31, 2023, the credit risk and credit loss provision of the accounts receivable of the above portfoliowere as follows:
In RMB
| Balance at the end of this year | |||||
| Category | Book balance | Bad debt provision | Book value | ||
| Amount | Proportion (%) | Amount | Accrual proportion (%) | ||
| Account receivable that withdrawal bad debt provision by single item | 71,687,951.26 | 8.30 | 27,464,002.48 | 38.31 | 44,223,948.78 |
| Account receivable withdrawal bad debt provision by portfolio | 792,008,446.59 | 91.70 | 16,097,561.42 | 775,910,885.17 | |
| Including：Portfolio 1 | 779,372,185.30 | 90.24 | 15,882,600.54 | 2.04 | 763,489,584.76 |
| Portfolio 2 | 12,636,261.29 | 1.46 | 214,960.88 | 1.70 | 12,421,300.41 |
| Total | 863,696,397.85 | 100.00 | 43,561,563.90 | 820,134,833.95 | |
In RMB
| Amount at year-begin | |||||
| Category | Book balance | Bad debt provision | Book value | ||
| Amount | Proportion (%) | Amount | Accrual proportion (%) | ||
| Account receivable that withdrawal bad debt provision by single item | 74,770,706.00 | 10.93 | 28,457,163.32 | 38.06 | 46,313,542.68 |
| Account receivable withdrawal bad debt provision by portfolio | 609,507,464.34 | 89.07 | 19,237,537.09 | 590,269,927.25 | |
| Including：Portfolio 1 | 591,168,603.26 | 86.39 | 18,295,605.12 | 3.09 | 572,872,998.14 |
| Portfolio 2 | 18,338,861.08 | 2.68 | 941,931.97 | 5.14 | 17,396,929.11 |
| Total | 684,278,170.34 | 100.00 | 47,694,700.41 | 636,583,469.93 | |
As of December 31, 2023, the Company has no accounts receivable with significant individual provision for baddebts.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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As of December 31, 2023, the credit risk and bad debt provision for Portfolio 1 accounts receivable are as follows:
In RMB
| Category | Balance at the end of the year | |||
| )Expected average loss ratio (%) | Book balance | Provision for bad debts | Book value | |
| During the credit period | 1.87 | 687,200,006.06 | 12,850,250.59 | 674,349,755.47 |
| 1-30 days overdue | 2.49 | 88,368,765.06 | 2,204,379.13 | 86,164,385.93 |
| 31-60 days overdue | 21.77 | 3,803,414.18 | 827,970.82 | 2,975,443.36 |
| Total | 779,372,185.30 | 15,882,600.54 | 763,489,584.76 | |
As ofDecember 31, 2023, the credit risk and bad debt provision of Portfolio 2 accounts receivableare as follows:
In RMB
| Ageing | Balance at the end of the year | |||
| Expected average loss ratio (%) | Book balance | Provision for bad debts | Book value | |
| Within 1 year | 1.55 | 12,569,011.29 | 194,785.88 | 12,374,225.41 |
| 2-3 years | 30.00 | 67,250.00 | 20,175.00 | 47,075.00 |
| Total | 12,636,261.29 | 214,960.88 | 12,421,300.41 | |
As o fDecember 31, 2023, the provision for bad debts is made based on the general model of expected credit losses.
In RMB
| Bad Debt Reserves | Stage 1 | Stage 3 | Total |
| Expected credit losses over the next 12 months | Expected credit losses for the entire duration (credit impairment occurred) | ||
| Balance as at January 1, 2023 | 34,269,017.23 | 13,425,683.18 | 47,694,700.41 |
| Balance as at January 1, 2023 in current | - | - | - |
| -- Reversal to the II stage | (125,323.83) | - | - |
| -- Reversal to the I stage | - | - | - |
| Provision in Current Year | 10,785,115.69 | 2,857,008.27 | 13,642,123.96 |
| Reversal in Current Year | (17,775,260.47) | - | (17,775,260.47) |
| Conversion in Current Year | - | - | - |
| Write off in Current Year | - | - | - |
| Other change | - | - | - |
| Balance as at 31 Dec. 2023 | 27,153,548.62 | 16,408,015.28 | 43,561,563.90 |
(3) Provision for bad debts
In RMB
| Category | Balance at the beginning of this year | Amount of change this year | Balance at the end of this year | |||
| Accrual | Recovery or reversal | Write-off or cancellation | Other changes | |||
| Provision for bad debts | 47,694,700.41 | 13,642,123.96 | (17,775,260.47) | - | - | 43,561,563.90 |
There is no bad debt provision recovered or reversed with amounts significant during the year.
（4） There are no accounts receivable actually written off during the year.
（5）Top 5 of the closing balance of the accounts receivable collected according to the arrears party
In RMB
| Name | Balance in year-end | Proportion(%) | Bad debt provision |
| Client 1 | 157,318,095.40 | 18.21 | 3,255,038.13 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| Client 2 | 124,972,436.40 | 14.47 | 2,437,300.46 |
| Client 3 | 105,546,202.49 | 12.22 | 1,985,018.81 |
| Client 4 | 62,902,335.60 | 7.28 | 1,242,469.89 |
| Client 5 | 60,181,476.77 | 6.97 | 1,117,846.56 |
| Total | 510,920,546.66 | 59.15 | 10,037,673.85 |
5.Receivable financing
(1) Presentation of financings receivable classifications
In RMB
| Item | Balance at the end of the year | Balance at the end of the previous year |
| Bank acceptance bill | 22,839,459.13 | 54,413,796.91 |
The Group considers that the bank acceptance bills held by the Group have a high credit rating and do not havesignificant credit risks, thus no provision for bad debts has been made.
(2) On December 31, 2023, the Group had no pledged receivable financing.
(3) On December 31, 2023, the receivable financing that have been endorsed or discounted by the Group and have notyet matured on the balance sheet date
In RMB
| Items | Balance at the end of this year | Balance at the end of last year |
| Bank acceptance bill | 59,520,699.22 | - |
(4) On December 31, 2023,There are no Receivable financing actually written off during the year.
6.Prepayments
(1) List by aging analysis:
In RMB
| Aging | Balance at the end of this year | Balance at the end of last year | ||
| Amount | Proportion % | Amount | Proportion % | |
| Within 1 year | 16,927,119.84 | 86.81 | 16,690,766.68 | 90.75 |
| 1-2 years | 969,677.39 | 4.97 | 1,700,677.99 | 9.25 |
| 2-3 years | 1,603,089.57 | 8.22 | - | - |
| Total | 19,499,886.80 | 100.00 | 18,391,444.67 | 100.00 |
On December 31, 2023, the Group had no prepayments with an age of more than one year and a significant amount.
(2) Prepayments of the top five ending balances by prepayment object
The total amount of the top five year-end balances collected by prepayment objects is RMB 13,857,835.22,accounting for 71.07% of the total year-end balances of prepayments.
7. Other receivables
(1) Disclosure by age
In RMB
| Balance at the end of this year | Balance at the end of this year | Balance at the end of last year |
| Within 1 year | 1,860,613.92 | 9,677,505.85 |
| 1-2 years | 548,779.55 | 822,689.31 |
| 2-3 years | 690,301.34 | 329,051.11 |
| Over 3 years | 18,115,521.40 | 18,154,298.53 |
| Total | 21,215,216.21 | 28,983,544.80 |
| Less: Bad debt provision | 17,994,930.79 | 18,397,569.42 |
| Book value | 3,220,285.42 | 10,585,975.38 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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(2) Disclosure by payment nature
In RMB
| Payment nature | Book balance at the end of this year | Book balance at the end of last year |
| Current payment | 15,350,589.97 | 16,330,801.03 |
| Deposit and security deposit | 2,000,722.80 | 2,801,300.29 |
| Export rebate | 710,026.13 | 1,023,715.60 |
| Reserve funds and employee loans | 577,183.94 | 580,028.97 |
| Freeze funds | - | 6,559,327.26 |
| Other | 2,576,693.37 | 1,688,371.65 |
| Total | 21,215,216.21 | 28,983,544.80 |
(3) Provision for bad debts
As ofDecember 31, 2023, the provision for bad debts is made based on the general model of expected credit losses.
In RMB
| Bad Debt Reserves | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses over the next 12 months | Expected credit loss over life (no credit impairment) | Expected credit losses for the entire duration (credit impairment occurred) | ||
| Balance as at January 1, 2023 | 494,588.28 | 198,890.09 | 17,704,091.05 | 18,397,569.42 |
| Balance as at January 1, 2023 in current | - | - | - | - |
| ——Transfer to stage II | (28,089.18) | 28,089.18 | - | - |
| ——Transfer to stage III | - | (106,906.07) | 106,906.07 | - |
| -- Reversal to the II stage | - | - | - | - |
| -- Reversal to the I stage | - | - | - | - |
| Provision in Current Year | 671.40 | 158,326.45 | 7,224.50 | 166,222.35 |
| Reversal in Current Year | (393,251.53) | (10,103.39) | (165,506.06) | (568,860.98) |
| Conversion in Current Year | - | - | - | - |
| Write off in Current Year | - | - | - | - |
| Other change | - | - | - | - |
| Balance as at 31 Dec. 2023 | 73,918.97 | 268,296.26 | 17,652,715.56 | 17,994,930.79 |
As ofDecember 31, 2023, the provision for bad debts is made based on the credit risk characteristics portfolio.
In RMB
| Stage | Balance at the end of the year | |||
| Expected average loss ratio (%) | Book balance | Provision for losses | Book value | |
| Other receivables for which provision for credit losses is made based on the credit risk characteristics portfolio | 84.82 | 21,215,216.21 | 17,994,930.79 | 3,220,285.42 |
As of December 31, 2023, the credit risk and bad debt provision for other receivables are as follows:
In RMB
| Aging of accounts | Balance at the end of the year | |||
| Book balance | Provision for losses | Book value | 账面价值 | |
| Within 1 year | 3.97 | 1,860,613.92 | 73,918.97 | 1,786,694.95 |
| 1-2 years | 9.23 | 548,779.55 | 50,646.56 | 498,132.99 |
| 2-3 years | 31.53 | 690,301.34 | 217,649.70 | 472,651.64 |
| Over 3 years | 97.45 | 18,115,521.40 | 17,652,715.56 | 462,805.84 |
| Total | 21,215,216.21 | 17,994,930.79 | 3,220,285.42 | |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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(4) Provision for bad debts
：
In RMB
| Category | Balance at the beginning of the year | Change amount for the year | Balance at the end of the year | |||
| Accrual | Recovery or reversal | Transfer or write off | Other changes | |||
| Expected credit loss over the entire duration | 18,397,569.42 | 166,222.35 | (568,860.98) | - | - | 17,994,930.79 |
| Total | 18,397,569.42 | 166,222.35 | (568,860.98) | - | - | 17,994,930.79 |
(5) There are no other accounts receivable actually written off during the year.
(6) The top five of the year-end balance of other receivables categorized by the debtor
In RMB
| Other receivables | Balance at the end of the year | Proportion of total balance of other receivables at the end of the year (%) | The nature of the amount | Ageing | Balance of provision for bad debts at the end of the year |
| The total amount of other receivables with the top five balances at the end of the year | 16,287,801.03 | 76.77 | Account current receivables of external units | Within 1 year, Over 3 years | 15,246,651.03 |
8. Inventories
（1）Category of Inventory
In RMB
| Items | Closing book balance | Opening book balance | ||||
| Book balance | Provision for inventory impairment | Book value | Book balance | Provision for inventory impairment | Book value | |
| Raw materials | 403,031,948.06 | 7,506,047.48 | 395,525,900.58 | 291,062,812.80 | 48,809,720.50 | 242,253,092.30 |
| Processing products | 309,068,674.96 | 64,610,590.25 | 244,458,084.71 | 258,881,779.59 | 41,882,202.00 | 216,999,577.59 |
| Semi-finished | 137,596,740.37 | 43,501,540.31 | 94,095,200.06 | 183,723,885.96 | 92,381,073.63 | 91,342,812.33 |
| Commissioned materials | 2,406,793.65 | 93,806.73 | 2,312,986.92 | 9,016,668.25 | 1,164,501.70 | 7,852,166.55 |
| Total | 852,104,157.04 | 115,711,984.77 | 736,392,172.27 | 742,685,146.60 | 184,237,497.83 | 558,447,648.77 |
Note: The carrying balance of polarizer inventory is RMB838,447,375.38, and the corresponding provision for
price decline is RMB107,290,039.96.
（2）Inventory falling price reserves
In RMB
| Items | Opening balance | Increased in current period | Decreased in current period | Closing balance | ||
| Accrual | Reversed or collected amount | Write-off | Other | |||
| Raw materials | 48,809,720.50 | 1,768,514.83 | - | 43,072,187.85 | - | 7,506,047.48 |
| Processing products | 41,882,202.00 | 46,991,687.69 | - | 24,263,299.44 | - | 64,610,590.25 |
| Semi-finished | 92,381,073.63 | 105,484,567.76 | - | 154,364,101.08 | - | 43,501,540.31 |
| Commissioned materials | 1,164,501.70 | 93,806.73 | - | 1,164,501.70 | - | 93,806.73 |
| Total | 184,237,497.83 | 154,338,577.01 | - | 222,864,090.07 | - | 115,711,984.77 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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The specific basis for determining the net realizable value of inventories and the reasons for the provision for theinventories price decline reversed or resold during the year:
| Items | The specific basis for determining the net realizable value | The reason for the reversal or resale of the provision for inventory price decline in the current year |
| Raw materials, work-in-progress product, and consignment materials | The net realizable value is determined by the estimated selling price of the relevant finished product, less the estimated costs to be incurred at completion, and less the estimated selling expenses and the relevant taxes | Get used or sold in the year |
| Finished products |
The net realizable value of the inventory isdetermined by the estimated selling price minus theestimated selling expenses and related taxes
Sold in the year
(3) On December 31, 2023, there was no amount in the inventory balance for guarantee and no amount for capitalizationof borrowing costs.
9. Other current assets
In RMN
| Items | Balance at the end of this year | Balance at the end of last year |
| VAT to be deducted and input tax to be certified | 27,399,897.46 | 26,077,404.45 |
| Advance payment of income tax | 47,034.59 | 11,654.12 |
| Receivable return cost | 33,326,525.34 | 43,446,472.67 |
| Total | 60,773,457.39 | 69,535,531.24 |
10. Long-term equity investment
In RMB
| Investees | Opening balance | Increase /decrease | Closing balance | Closing balance of impairment provision | |||||||
| Additional investment | Decrease in investment | Profits and losses on investments Recognized under the equity method | Other comprehensive income | Changes in other equity | Cash bonus or profits announced to issue | Withdrawal of impairment provision | Other | ||||
| I. Joint ventures | |||||||||||
| Shenzhen Guanhua Printing & Dyeing Co., Ltd. | 129,506,271.76 | - | - | (7,135,777.68) | - | - | - | - | - | 122,370,494.08 | - |
| Subtotal | 129,506,271.76 | - | - | (7,135,777.68) | - | - | - | - | - | 122,370,494.08 | - |
| 2. Affiliated Company | |||||||||||
| Shenzhen Changlianfa Printing & dyeing Company | 3,105,796.55 | - | - | 252,320.54 | - | - | - | - | - | 3,358,117.09 | - |
| Hongkong Yehui International Co., Ltd. | 1,869,767.43 | - | - | (15,526.75) | 99,168.85 | - | - | - | - | 1,953,409.53 | - |
| Subtotal | 4,975,563.98 | - | - | 236,793.79 | 99,168.85 | - | - | - | - | 5,311,526.62 | - |
| Total | 134,481,835.74 | - | - | (6,898,983.89) | 99,168.85 | - | - | - | - | 127,682,020. | - |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| Investees | Opening balance | Increase /decrease | Closing balance | Closing balance of impairment provision | |||||||
| Additional investment | Decrease in investment | Profits and losses on investments Recognized under the equity method | Other comprehensive income | Changes in other equity | Cash bonus or profits announced to issue | Withdrawal of impairment provision | Other | ||||
| 70 | |||||||||||
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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11. Other equity instruments investment
(1) Investment in other equity instruments
In RMB
| Items | Balance at the end of the previous year | Changes in the current year | Closing balance | Dividend income recognized during the year | Gains accrued to other comprehensive income | Losses accrued to other comprehensive income | Reason designated as being measured at fair value and change being included in other comprehensive income | ||||
| Additional investment | Decrease in investment | Gains included in other comprehensive income during the year | |||||||||
| Union Development Co., Ltd. | 125,753,939.39 | - | - | - | (15,296,239.39) | - | 110,457,700.00 | 208,000.00 | 107,857,700.00 | - | Planned to be held by the Group for a long time. |
| Shenzhen Dailishi Underwear Co., Ltd. | 23,637,000.00 | - | - | - | (5,895,100.00) | - | 17,741,900.00 | 1,037,735.85 | 15,182,043.74 | - | Planned to be held by the Group for a long time. |
| Shenzhen South Textile Co., Ltd. | 16,059,440.88 | - | - | - | (1,256,040.88) | - | 14,803,400.00 | 814,848.27 | 13,303,400.00 | - | Planned to be held by the Group for a long time. |
| Shenzhen Xinfang Knitting Co., Ltd. | 2,227,903.00 | - | - | 757,997.00 | - | - | 2,985,900.00 | 148,000.00 | 2,461,900.00 | - | Planned to be held by the Group for a long time. |
Jintian Industry（Group）Co., Ltd.
| Jintian Industry（Group）Co., Ltd. | - | - | - | - | - | - | - | - | - | (14,831,681.50) | Planned to be held by the Group for a long time. |
| Total | 167,678,283.27 | - | - | 757,997.00 | (22,980,045.07) | - | 145,988,900.00 | 2,208,584.12 | 138,805,043.74 | (14,831,681.50) | / |
(2) Statement of the circumstances in which there is a derecognition during the yearAs of December 31, 2023, there has been no derecognition of investments in other equity instruments.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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12. Investment real estate
(1) Investment real estate adopted the cost measurement mode
In RMB
| Items | House, Building |
| I. Original price | |
| 1. Balance at period-beginning | 328,128,815.41 |
| 2.Increase in the current period | 22,238,626.99 |
| (1)Outsourcing | 644,437.82 |
| (2) Transferred from Fixed assets | 21,594,189.17 |
| 3.Decreased amount of the period | - |
| （1）Dispose | - |
| （2）Other out | - |
| 4. Balance at period-end | 350,367,442.40 |
| II.Accumulated amortization | |
| 1.Opening balance | 201,812,980.65 |
| 2.Increased amount of the period | 22,951,254.57 |
| (1) Withdrawal | 9,117,671.12 |
| (2)Transferred from Fixed assets | 13,833,583.45 |
| 3.Decreased amount of the period | - |
| （1）Dispose | - |
| （2）Other out | - |
| 4. Balance at period-end | 224,764,235.22 |
| III. Impairment provision | |
| 1. Balance at period-beginning | - |
| 2.Increased amount of the period | - |
| (1) Withdrawal | - |
| 3.Decreased amount of the period | - |
| （1）Dispose | - |
| 4. Balance at period-end | - |
| IV. Book value | |
| 1.Book value at period -end | 125,603,207.18 |
| 2.Book value at period-beginning | 126,315,834.76 |
（2）Investment real estate without certificate of ownership
In RMB
| Items | Book balance | Reason |
| Houses and Building | 12,944,151.87 | Unable to apply for warrants due to historical reasons |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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13. Fixed assets
(1) List of fixed assets
In RMB
| Items | Houses & buildings | Machinery equipment | Transportations | Other equipment | Total |
| I. Original price | |||||
| 1.Opening balance | 742,709,971.36 | 2,655,871,126.91 | 15,875,027.26 | 50,483,511.70 | 3,464,939,637.23 |
| 2.Increased amount of the period | 6,625,073.63 | 58,968,661.84 | 1,224,757.32 | 1,058,285.96 | 67,876,778.75 |
| (1) Purchase | 375,978.84 | 12,004,429.74 | 946,881.22 | 1,058,285.96 | 14,385,575.76 |
| (2) Transferred from construction in progress | - | 46,964,232.10 | 277,876.10 | - | 47,242,108.20 |
| (3)Other changes | 6,249,094.79 | - | - | - | 6,249,094.79 |
| 3.Decreased amount of the period | 21,655,211.05 | 3,405,884.77 | 8,888.71 | 7,002,175.11 | 32,072,159.64 |
| （1）Disposal | - | 2,272,154.22 | 8,888.71 | 753,080.32 | 3,034,123.25 |
| (2)Transferred from Real estate investment | 21,594,189.17 | - | - | - | 21,594,189.17 |
| (3)Other changes | 61,021.88 | 1,133,730.55 | - | 6,249,094.79 | 7,443,847.22 |
| 4. Balance at period-end | 727,679,833.94 | 2,711,433,903.98 | 17,090,895.87 | 44,539,622.55 | 3,500,744,256.34 |
| II. Accumulated depreciation | |||||
| 1.Opening balance | 173,190,869.37 | 986,203,419.91 | 5,871,266.55 | 34,223,428.40 | 1,199,488,984.23 |
| 2.Increased amount of the period | 30,063,009.36 | 195,106,408.71 | 2,005,472.53 | 5,841,471.09 | 233,016,361.69 |
| (1) Withdrawal | 23,813,914.57 | 195,106,408.71 | 2,005,472.53 | 5,841,471.09 | 226,767,266.90 |
| (2) )Other changes | 6,249,094.79 | - | - | - | 6,249,094.79 |
| 3.Decreased amount of the period | 13,833,583.45 | 2,177,192.99 | 7,124.50 | 6,972,131.93 | 22,990,032.87 |
| （1）Disposal | - | 2,177,192.99 | 7,124.50 | 723,037.14 | 2,907,354.63 |
| (2)Transferred from Real estate investment | 13,833,583.45 | - | - | - | 13,833,583.45 |
| (3)Other changes | - | - | - | 6,249,094.79 | 6,249,094.79 |
| 4.Closing balance | 189,420,295.28 | 1,179,132,635.63 | 7,869,614.58 | 33,092,767.56 | 1,409,515,313.05 |
| III. Impairment provision | |||||
| 1.Opening balance | - | 25,120,608.21 | - | 108,388.43 | 25,228,996.64 |
| 2.Increase in the reporting period | 9,820,261.26 | - | 6,126.41 | 145,183.36 | 9,971,571.03 |
| （1）Withdrawal | - | - | - | - | - |
| (2) Other changes | 9,820,261.26 | - | 6,126.41 | 145,183.36 | 9,971,571.03 |
| 3.Decrease in the reporting period | - | 9,971,571.03 | - | 6,291.08 | 9,977,862.11 |
| （1）Disposal | - | - | - | 6,291.08 | 6,291.08 |
| (2) Other changes | - | 9,971,571.03 | - | - | 9,971,571.03 |
| 4. Closing balance | 9,820,261.26 | 15,149,037.18 | 6,126.41 | 247,280.71 | 25,222,705.56 |
| IV. Book value | |||||
| 1.Book value of the period-end | 528,439,277.40 | 1,517,152,231.17 | 9,215,154.88 | 11,199,574.28 | 2,066,006,237.73 |
| 2.Book value of the period-begin | 569,519,101.99 | 1,644,547,098.79 | 10,003,760.71 | 16,151,694.87 | 2,240,221,656.36 |
(2) Fixed assets without certificate of title completed
In RMB
| Items | Book Value | Reason |
| Houses and Building | 11,193,085.07 | Unable to apply for warrants due to historical reasons |
(3) Mortgaged and secured fixed assets
As of December 31, 2023, the Group's fixed assets mortgaged by bank loans are detailed in Notes (V), 21 "Assets withrestricted ownership or use right":
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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14. Construction in progress
14.1 Summary of projects under construction
In RMB
| Items | Year-end balance | Year-beginning balance |
| Construction in progress | 31,307,060.74 | 38,061,619.60 |
14.2 List of construction in progress
In RMB
| Items | Year-end balance | Year-beginning balance | ||||
| Book balance | Provision for devaluation | Book value | Book balance | Provision for devaluation | Book value | |
| Installation of machines and equipment | 31,307,060.74 | - | 31,307,060.74 | 38,061,619.60 | - | 38,061,619.60 |
15. Right to use assets
In RMB
| Items | Houses and Building |
| I. Original price | |
| 1.Opening balance | 28,914,047.83 |
| 2.Increased amount of the period | 11,048,317.88 |
| (1)Newly increased | 11,048,317.88 |
| 3.Decreased amount of the period | 6,511,563.48 |
| (1) Termination of lease | 6,511,563.48 |
| 4. Balance at period-end | 33,450,802.23 |
| II. Accumulated depreciation | |
| 1.Opening balance | 13,548,653.95 |
| 2.Increased amount of the period | 8,257,857.90 |
| (1) Withdrawal | 8,257,857.90 |
| 3.Decreased amount of the period | 355,176.19 |
| (1) Termination of lease | 355,176.19 |
| 4.Closing balance | 21,451,335.66 |
| III. Impairment provision | |
| 1.Opening balance | - |
| 2.Increase in the reporting period | - |
| （1）Withdrawal | - |
| 3.Decrease in the reporting period | - |
| 4. Closing balance | - |
| IV. Book value | |
| 1.Book value of the period-end | 11,999,466.57 |
| 2.Book value of the period-begin | 15,365,393.88 |
16. Intangible assets
(1) Information
In RMB
| Items | Land use right | Software | Patent right | Total |
| I. Original price | ||||
| 1. Balance at period-beginning | 48,258,239.00 | 22,336,546.33 | 11,825,200.00 | 82,419,985.33 |
| 2.Increase in the current period | - | 263,523.53 | - | 263,523.53 |
| (1) Purchase | - | 263,523.53 | - | 263,523.53 |
| 3.Decreased amount of the period | - | - | - | - |
| 4. Balance at period-end | 48,258,239.00 | 22,600,069.86 | 11,825,200.00 | 82,683,508.86 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| II.Accumulated amortization | ||||
| 1. Balance at period-beginning | 15,274,148.35 | 11,128,065.03 | 11,825,200.00 | 38,227,413.38 |
| 2. Increase in the current period | 891,565.32 | 4,000,107.36 | - | 4,891,672.68 |
| (1) Withdrawal | 891,565.32 | 4,000,107.36 | - | 4,891,672.68 |
| 3.Decreased amount of the period | - | - | - | - |
| 4. Balance at period-end | 16,165,713.67 | 15,128,172.39 | 11,825,200.00 | 43,119,086.06 |
| III. Impairment provision | ||||
| 1. Balance at period-beginning | - | - | - | - |
| 2. Increase in the current period | - | - | - | - |
| 3.Decreased amount of the period | - | - | - | - |
| 4. Balance at period-end | - | - | - | - |
| 4. Book value | ||||
| 1.Book value at period -end | 32,092,525.33 | 7,471,897.47 | - | 39,564,422.80 |
| 2.Book value at period-beginning | 32,984,090.65 | 11,208,481.30 | - | 44,192,571.95 |
As of December 31, 2023, the Group's intangible assets mortgaged by bank loans are detailed in Notes (V),21"Assets with restricted ownership or use right".
17. Goodwill
(1) Original book value of goodwill
In RMB
| Name of the investee or matters that form goodwill | Balance at the end of last year | Increase this year | Decrease this year | Balance at the end of this year |
| SAPO Photoelectric | 9,614,758.55 | - | - | 9,614,758.55 |
| Shenzhen Beauty Century Garment Co., Ltd. | 2,167,341.21 | - | - | 2,167,341.21 |
| Total | 11,782,099.76 | - | - | 11,782,099.76 |
(2) Goodwill impairment provision
In RMB
| Name of the investee or matters that form goodwill | Balance at the end of last year | Increase this year | Decrease this year | Balance at the end of this year |
| SAPO Photoelectric | 9,614,758.55 | - | - | 9,614,758.55 |
| Shenzhen Beauty Century Garment Co., Ltd. | 2,167,341.21 | - | - | 2,167,341.21 |
| Total | 11,782,099.76 | - | - | 11,782,099.76 |
18. Long-term deferred expenses
In RMB
| Items | Balance at the end of last year | Increased amount this year | Amortized amount this year | Other reduction amount | Balance at the end of this year |
| Decoration and facilities renovation fee | 4,470,957.79 | 1,218,440.63 | 2,160,430.42 | 25,307.06 | 3,503,660.94 |
19. Deferred income tax assets/Deferred income tax liabilities
(1) Uncompensated deferred income tax assets
In RMB
| Items | Balance in year-end | Balance in year-begin | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| Items | Balance in year-end | Balance in year-begin | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Credit loss provision | 59,994,128.15 | 10,538,054.68 | 65,076,915.43 | 11,372,802.27 |
| Asset impairment provision | 132,512,745.52 | 19,876,911.83 | 206,115,717.20 | 30,917,357.58 |
| Unrealized profit from internal transactions | 2,145,963.47 | 321,894.52 | 2,235,077.97 | 335,261.70 |
| Employee compensation payable | 4,173,800.00 | 1,043,450.00 | 9,397,730.55 | 2,143,607.14 |
| Deferred income | 96,647,256.82 | 14,497,088.52 | 116,768,810.33 | 17,515,321.55 |
| Deductible loss | 127,769,387.40 | 19,165,408.11 | 90,052,078.73 | 13,397,964.96 |
| Changes in fair value of investment in other equity instruments | 14,831,681.50 | 3,707,920.38 | 14,831,681.50 | 3,707,920.38 |
| Lease liabilities | 12,177,572.68 | 1,826,635.90 | 15,365,393.88 | 2,304,809.08 |
| Total | 450,252,535.54 | 70,977,363.94 | 519,843,405.59 | 81,695,044.66 |
According to the Group's profit forecast results for the future period, the Group believes that it is likely to obtainsufficient taxable income in the future period to make use of the above deductible temporary differences and deductiblelosses, so relevant deferred income tax assets are recognized.
(2)Details of the un-recognized deferred income tax liabilities
In RMB
| Items | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax liabilities | Deductible temporary difference | Deferred income tax liabilities | |
| The difference between the initial recognition cost of long-term equity investment and tax basis | 62,083,693.36 | 15,520,923.34 | 62,083,693.36 | 15,520,923.34 |
| Changes in fair value of investment in other equity instruments | 138,805,043.74 | 34,701,260.94 | 160,494,427.01 | 40,123,606.76 |
| Rent receivable | 10,108,726.81 | 2,527,181.70 | 7,584,635.96 | 1,896,158.99 |
| Use right assets | 11,999,466.57 | 1,799,919.99 | 15,365,393.88 | 2,304,809.08 |
| Total | 222,996,930.48 | 54,549,285.97 | 245,528,150.21 | 59,845,498.17 |
(3) Deferred income tax assets or liabilities listed by net amount after off-set
In RMB
| Items | Trade-off between the deferred income tax assets and liabilities | End balance of deferred income tax assets or liabilities after off-set | Trade-off between the deferred income tax assets and liabilities at period-begin | Opening balance of deferred income tax assets or liabilities after off-set |
| Deferred income tax assets | (10,371,998.52) | 60,605,365.42 | (11,871,230.37) | 69,823,814.29 |
| Deferred income tax assets | (10,371,998.52) | 44,177,287.45 | (11,871,230.37) | 47,974,267.80 |
(4)Details of income tax assets not recognized
In RMB
| Items | Balance in year-end | Balance in year-begin |
| Deductible temporary difference | 14,740,965.97 | 5,742,636.02 |
| Deductible loss | 442,263,671.30 | 464,226,095.10 |
| Total | 457,004,637.27 | 469,968,731.12 |
(5)Deductible losses of the un-recognized deferred income tax asset will expire in the following years
In RMB
| Year | Balance in year-end | Balance at the end of last year |
| 2024 | 69,053,143.67 | 79,132,962.34 |
| 2025 | - | 16,680,938.23 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| 2026 | 53,989,578.07 | 128,597,715.91 |
| 2027 | 10,067,397.50 | 12,155,889.69 |
| 2028 | 39,988,583.76 | 22,463,907.95 |
| 2029 | 129,732,249.98 | 129,766,788.98 |
| 2030 | 75,352,814.24 | 75,427,892.00 |
| 2031 | - | - |
| 2032 | - | - |
| 2033 | 64,079,904.08 | - |
| Total | 442,263,671.30 | 464,226,095.10 |
20 .Other non-current assets
In RMB
| Items | Balance in year-end | Balance in year-begin | ||||
| Book balance | Provision for devaluation | Book value | Book balance | Provision for devaluation | Book value | |
| Prepayment for engineering and equipment | 3,757,334.44 | - | 3,757,334.44 | 16,792,930.20 | - | 16,792,930.20 |
| Investment funds to be liquidated | 25,760,086.27 | - | 25,760,086.27 | 25,760,086.27 | - | 25,760,086.27 |
| Total | 29,517,420.71 | - | 29,517,420.71 | 42,553,016.47 | - | 42,553,016.47 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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21. Assets with restricted ownership or right of use
| Items | End of the year | End of the previous year | ||||||
| Book balance | Book value | Restricted type | Restricted circumstances | Book balance | Book value | Restricted circumstances | Restricted circumstances | |
| Monetary funds | 9,305,118.06 | 9,305,118.06 | Restricted right of use | Account Freezing and Margin | 116,990,685.31 | 116,990,685.31 | Restricted right of use | Account Freezing and Time Deposit Certificates |
| Notes receivable | 42,665,954.11 | 42,665,954.11 | Restricted right of use | The endorsement of the note is not terminated | 48,387,401.67 | 48,387,401.67 | Restricted right of use | The endorsement of the note is not terminated |
| Other receivables | - | - | / | / | 6,559,327.26 | 6,559,327.26 | Restricted right of use | Account Freezing |
| Fixed asset | 572,261,261.14 | 454,185,881.22 | Restricted right of use | Mortgage | 572,261,261.14 | 470,366,658.55 | Restricted right of use | Mortgage |
| Intangible asset | 44,770,083.00 | 32,092,525.33 | Restricted right of use | Mortgage | 44,770,083.00 | 32,984,090.65 | Restricted right of use | Mortgage |
| Total | 669,002,416.31 | 538,249,478.72 | / | / | 788,968,758.38 | 675,288,163.44 | / | / |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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22. Short-term borrowings
In RMB
| Items | Balance in year-end | Balance in year-begin |
| Credit loans | 8,000,000.00 | 7,000,000.00 |
23.Notes payable
In RMB
| Items | Balance in year-end | Balance in year-begin |
| Bank acceptance Bill | 31,049,291.49 | - |
The Group has no notes payable due and unpaid at the end of the year.
24. Accounts payable
In RMB
| Items | Balance in year-end | Balance in year-begin |
| Payment for goods | 386,767,637.00 | 304,916,368.65 |
| Service charge | 13,817,610.72 | 11,386,158.86 |
| Loyalities | 2,207,166.50 | 4,609,134.50 |
| Subcontracting payment | 4,584,423.60 | 3,970,214.14 |
| Others | 1,171,298.42 | 2,167,997.55 |
| Total | 408,548,136.24 | 327,049,873.70 |
On December 31, 2023, the Group had no significant accounts payable with an aging of more than one year.
25.Advance account
In RMB
| Items | Balance in year-end | Balance in year-begin |
| Rent and other | 1,450,096.30 | 1,393,344.99 |
On December 31, 2023, the Group had no significant accounts payable with an aging of more than one year.
26.Contract liabilities
In RMB
| Items | Balance in year-end | Balance in year-begin |
| Goods | 1,436,943.34 | 4,274,109.40 |
On December 31, 2023, the Group had no significant contract liabilities with an aging of more than one year.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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27.Payable Employee wage
(1) List of Payroll payable
In RMB
| Items | Balance in year-begin | Increase in this period | Payable in this period | Balance in year-end |
| Short-term compensation | 60,940,432.90 | 223,391,192.84 | 230,478,544.09 | 53,853,081.65 |
| Post-employment benefits - defined contribution plans | - | 17,698,860.49 | 17,698,860.49 | - |
| Dismissal benefits | 226,012.00 | 8,460,265.33 | 6,102,196.89 | 2,584,080.44 |
| Total | 61,166,444.90 | 249,550,318.66 | 254,279,601.47 | 56,437,162.09 |
（2）Short-term remuneration
In RMB
| Items | Balance in year-begin | Increase in this period | Decrease in this period | Balance in year-end |
| Wages, bonuses, allowances and subsidies | 57,472,981.87 | 196,563,582.14 | 203,551,752.29 | 50,484,811.72 |
| Employee welfare | 29,185.44 | 10,196,697.74 | 10,225,883.18 | - |
| Social insurance premiums | - | 3,800,816.39 | 3,800,816.39 | - |
| Including：Medical insurance | - | 3,098,787.68 | 3,098,787.68 | - |
| Maternity insurance | - | 296,157.78 | 296,157.78 | - |
| Work injury insurance | - | 405,870.93 | 405,870.93 | - |
| Public reserves for housing | 202,391.00 | 8,005,658.59 | 8,208,049.59 | - |
| Union funds and staff education fee | 3,235,874.59 | 4,824,437.98 | 4,692,042.64 | 3,368,269.93 |
| Total | 60,940,432.90 | 223,391,192.84 | 230,478,544.09 | 53,853,081.65 |
（3）Defined contribution plans listed
In RMB
| Items | Balance in year-begin | Increase in this period | Decrease in this period | Balance in year-end |
| Basic old-age insurance premiums | - | 14,207,148.80 | 14,207,148.80 | - |
| Unemployment insurance | - | 3,194,871.82 | 3,194,871.82 | - |
| Annuity payment | - | 296,839.87 | 296,839.87 | - |
| Total | - | 17,698,860.49 | 17,698,860.49 | - |
The Group participates in pension insurance and unemployment insurance plans established by governmentagencies according to regulations, and according to the plans, the Group pays fees to these plans according to theprescribed standards. In addition to the above-mentioned monthly deposit fees, the Group will no longer assume furtherpayment obligations. The corresponding expenses are included in the current profits and losses or the related asset costswhen incurred.This year, the Group shall pay RMB 14,207,148.80 and RMB 296,839.87(2022: RMB 13,593,639.21 andRMB303,261.11) to the pension insurance and unemployment insurance plans respectively. As of December 31, 2023,the Group has fully paid the amount of pension insurance and unemployment insurance plans payable during thereporting period.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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28.Tax Payable
In RMB
| Items | Balance in year-end | Balance in year-begin |
| Enterprise Income tax | 2,080,849.81 | 4,655,525.64 |
| Individual Income tax | 1,080,628.82 | 1,847,004.45 |
| VAT | 582,961.29 | 1,740,677.77 |
| Other | 596,455.22 | 654,104.65 |
| Total | 4,340,895.14 | 8,897,312.51 |
29.Other payable
(1) Other payables listed according to the payment nature
In RMB
| Items | Balance in year-end | Balance in year-begin |
| Engineering equipment payment | 67,176,881.34 | 83,337,092.31 |
| Current payment | 56,444,481.12 | 53,102,831.34 |
| Deposit and security deposit | 48,208,919.61 | 45,628,573.39 |
| Others | 12,698,062.48 | 15,276,958.33 |
| Total | 184,528,344.55 | 197,345,455.37 |
(2) On December 31, 2023, the Group had no significant other payable with an aging of more than one year.
30. Non-current liabilities due within 1 year
In RMB
| Items | Balance at the end of this year | Balance at the end of last year |
| Long-term loans due within one year(Note(V).32) | 102,612,497.53 | 97,182,080.19 |
| Lease liabilities due within one year(Note(V).、33) | 5,490,255.46 | 7,001,358.03 |
| Total | 108,102,752.99 | 104,183,438.22 |
31.Other current liabilities
In RMB
| Items | Balance at the end of this year | Balance at the end of last year |
| Endorsed and unexpired acceptance bill | 42,665,954.11 | 48,387,401.67 |
| Return payable | 37,244,449.90 | 44,558,340.11 |
| To be rescheduled | 172,073.21 | - |
| Total | 80,082,477.22 | 92,945,741.78 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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32. Long-term loans
In RMB
| Items | Balance at the end of this year | Balance at the end of last year | Interest rate interval |
| Guaranteed loan (note) | 608,190,812.09 | 704,603,665.19 | 3.96-4.41% |
| Total | 608,190,812.09 | 704,603,665.19 | |
| Less: Long-term loans due within one year | 102,612,497.53 | 97,182,080.19 | |
| Less: Long-term loans due after one year | 505,578,314.56 | 607,421,585.00 |
Note: SAPO Photoelectric, a subsidiary of the Company, mortgaged its real estate rights such as the factorybuilding, and the Company and Hangzhou Jinjiang Group Co., Ltd. provided 60% and 40% joint guarantee for the loanrespectively.
33. Lease liabilities
In RMB
| Items | Balance at the end of this year | Balance at the end of last year |
| Lease liabilities | 12,177,572.68 | 15,630,030.74 |
| Subtotal | 12,177,572.68 | 15,630,030.74 |
| Less: Lease liabilities due within one year | 5,490,255.46 | 7,001,358.03 |
| Lease liabilities becoming due after one year | 6,687,317.22 | 8,628,672.71 |
The Group's lease liabilities are analysed by the maturity of the undiscounted remaining contractual obligations asfollows:
In RMB
| Within 1 month | 1 to 3 months | 3 to 12 months | 1 to 5 years | More than 5 years | Total | |
| Balance at the end of the year | 513,149.55 | 2,012,582.22 | 3,284,024.84 | 5,822,333.46 | 1,672,592.08 | 13,304,682.15 |
| Balance at the end of the previous year | 1,075,350.63 | 2,330,382.48 | 4,884,203.14 | 6,111,983.10 | 2,819,512.65 | 17,221,432.00 |
34. Deferred income
In RMB
| Items | Balance at the end of last year | Increase this year | Decrease this year | Balance at the end of this year | Reason |
| Government subsidies | 117,814,796.10 | 4,278,925.00 | 24,607,734.21 | 97,485,986.89 | Received the government subsidies |
35.Stock capital
In RMB
| Items | Year-beginning balance | Changed（+，-） | Balance in year-end | ||||
| Issuance of new share | Bonus shares | Capitalization of public reserve | Other | Subtotal | |||
| Total of capital shares | 506,521,849.00 | - | - | - | - | - | 506,521,849.00 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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36. Capital reserves
In RMB
| Items | Year-beginning balance | Increase in the current period | Decrease in the current period | Year-end balance |
| Share premium | 1,826,482,608.54 | - | - | 1,826,482,608.54 |
| Other capital reserves | 135,117,216.09 | - | - | 135,117,216.09 |
| Total | 1,961,599,824.63 | - | - | 1,961,599,824.63 |
37. Other comprehensive income
In RMB
| Items | Year-beginning balance | Amount of current period | Year-end balance | |||||
| Amount incurred before income tax | Less：Amount transferred into profit and loss in the current period that recognized into other comprehensive income in prior period | Less：Prior period included in other composite income transfer to retained income in the current period | Less：Income tax expenses | After-tax attribute to the parent company | After-tax attribute to minority shareholder | |||
| I. Other comprehensive income that cannot be reclassified into profit or loss | 108,584,344.77 | (21,689,383.27) | - | - | (5,422,345.82) | (16,267,037.45) | - | 92,317,307.32 |
| 1. Changes in fair value of investment in other equity instruments | 108,584,344.77 | (21,689,383.27) | - | - | (5,422,345.82) | (16,267,037.45) | - | 92,317,307.32 |
| II. Other comprehensive income to be reclassified into profit or loss | 1,012,264.54 | 396,902.35 | - | - | - | 277,808.95 | 119,093.40 | 1,290,073.49 |
| 1. Changes in fair value of receivables financing | (178,640.10) | 297,733.50 | - | - | - | 178,640.10 | 119,093.40 | - |
| 2. Translation difference of foreign currency financial statements | 1,190,904.64 | 99,168.85 | - | - | - | 99,168.85 | - | 1,290,073.49 |
| Total of other comprehensive income | 109,596,609.31 | (21,292,480.92) | - | - | (5,422,345.82) | (15,989,228.50) | 119,093.40 | 93,607,380.81 |
38. Special reserves
In RMB
| Items | Year-beginning balance | Increase in the current period | Decrease in the current period | Year-end balance |
| Statutory surplus reserve | 100,909,661.32 | 3,352,654.32 | - | 104,262,315.64 |
39. Retained profits
In RMB
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| Items | Amount of current period | Amount of previous period |
| Undistributed profit at the end of last year before adjustment | 170,636,610.95 | 125,317,336.31 |
| Total undistributed profits adjusted at the beginning of the year | - | - |
| Adjusted undistributed profit at the beginning of the year | 170,636,610.95 | 125,317,336.31 |
| Add: Net profit attributable to shareholders of parent company this year | 79,268,250.45 | 73,309,182.94 |
| Less: Withdrawal of statutory surplus reserve | 3,352,654.32 | 2,663,815.85 |
| Distribution of common stock dividends ( | 30,391,310.94 | 25,326,092.45 |
| Year end undistributed profit | 216,160,896.14 | 170,636,610.95 |
Note: According to the resolution of the General Meeting of Shareholders on May 26, 2023, the Company distributed acash dividend of RMB 0.6 (including tax) for every 10 shares, totally RMB30,391,310.94 (including tax) based on theshare capital of 506,521,849 shares as of December 31, 2022.
40. Operating income and operating cost
(1) Operating income and operating cost
In RMB
| Items | Amount incurred this year | Amount incurred last year | ||
| Income | Cost | Income | Cost | |
| Main business | 3,031,175,008.58 | 2,560,743,931.49 | 2,802,203,439.94 | 2,373,407,000.36 |
| Other business | 48,503,366.87 | 887,913.04 | 35,784,824.42 | 598,896.07 |
| Total | 3,079,678,375.45 | 2,561,631,844.53 | 2,837,988,264.36 | 2,374,005,896.43 |
(2) Main business classified by product
In RMB
| Product type | Amount incurred this year | Amount incurred last year | ||
| Main business income | Main business cost | Main business income | Main business cost | |
| Polarizer sales | 2,885,625,542.77 | 2,499,416,729.45 | 2,693,787,636.62 | 2,317,793,097.44 |
| Property leasing and management | 145,549,465.81 | 61,327,202.04 | 108,415,803.32 | 55,613,902.92 |
| Total | 3,031,175,008.58 | 2,560,743,931.49 | 2,802,203,439.94 | 2,373,407,000.36 |
(3) Main business classified by region
InRMB
| Main business region | Amount incurred this year | Amount incurred last year | ||
| Main business income | Main business cost | Main business income | Main business cost | |
| Domestic | 2,914,588,072.35 | 2,464,223,583.43 | 2,686,847,406.83 | 2,278,271,215.01 |
| Overseas | 116,586,936.23 | 96,520,348.06 | 115,356,033.11 | 95,135,785.35 |
| Total | 3,031,175,008.58 | 2,560,743,931.49 | 2,802,203,439.94 | 2,373,407,000.36 |
(4) Description of performance obligations
The Group's goods sales are mainly the production and sales of polarizer and textile-related goods. For goods soldto customers, the Group recognizes income when the control of the goods is transferred, that is, when the goods aredelivered to the designated place of the other party and signed by the other party. Since the delivery of goods tocustomers represents the right to unconditionally receive the contract consideration, the maturity of the money onlydepends on the passage of time, so the Group recognizes a receivable when the goods are delivered to professionalcustomers. When the customer prepays the payment, the Group recognizes the transaction amount received as acontractual liability until the goods are delivered to the customer.The Group provides property and leasing services to customers, which is a performance obligation to be fulfilled withina certain period of time. The Group recognizes income in the process of providing property and leasing services. Forproperty services, the Group recognizes revenue in the course of providing property services, and for leasing services,the Group apportions the total rental amount on a straight-line basis throughout the lease term without deducting therent-free period and recognize rental income.
(5) Description of allocation to remaining performance obligations
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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On December 31, 2023, the amount of contractual liabilities corresponding to the performance obligations that theGroup has signed but has not yet fulfilled or has not yet fully fulfilled is RMB 1,436,943.34, and the income will berecognized when the customer obtains the control of the goods.
41. Taxes and surcharges
In RMB
| Items | Amount incurred this year | Amount incurred last year |
| Property tax | 6,184,638.83 | 5,213,976.28 |
| Urban maintenance and construction tax | 555,230.22 | 366,211.93 |
| Surcharge for education | 400,403.17 | 237,396.39 |
| Other taxes | 2,153,350.91 | 2,089,542.31 |
| Total | 9,293,623.13 | 7,907,126.91 |
42. Sales expenses
In RMB
| Items | Amount incurred this year | Amount incurred last year |
| Employee compensation | 17,089,203.74 | 18,560,229.96 |
| Sales service charge | 10,639,607.95 | 10,661,049.94 |
| Business entertainment | 972,733.63 | 2,214,489.62 |
| Others | 5,494,125.29 | 4,526,759.83 |
| Total | 34,195,670.61 | 35,962,529.35 |
43. Management cost
In RMB
| Items | Amount incurred this year | Amount incurred last year |
| Employee compensation | 90,991,755.13 | 83,952,597.31 |
| Depreciation cost | 11,118,057.18 | 12,258,281.68 |
| Professional service fee | 8,841,449.74 | 7,197,534.84 |
| Amortization of intangible assets | 4,891,672.68 | 5,082,893.36 |
| Property leasing and utilities | 4,086,627.39 | 5,252,212.15 |
| Business entertainment | 1,439,231.97 | 1,557,382.87 |
| Others | 13,002,616.44 | 13,088,038.08 |
| Total | 134,371,410.53 | 128,388,940.29 |
44. R&D expenses
In RMB
| Items | Amount incurred this year | Amount incurred last year |
| Employee compensation | 14,827,264.16 | 16,349,423.75 |
| Material consumption | 85,216,243.35 | 58,840,560.48 |
| Depreciation cost | 3,389,328.35 | 3,518,432.27 |
| Others | 1,220,205.06 | 1,811,739.04 |
| Total | 104,653,040.92 | 80,520,155.54 |
Note: The Group has no R&D project development expenditure that meets the conditions for capitalization.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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45. Financial expenses
In RMB
| Items | Amount incurred this year | Amount incurred last year |
| Interest expense (note) | 27,339,804.17 | 31,131,112.38 |
| Less: capitalized interest expense | - | - |
| Less: interest income | 12,947,471.64 | 8,327,248.75 |
| Exchange difference | 4,332,702.63 | (14,569,863.53) |
| Handling fees and others | 5,674,466.00 | 4,709,606.47 |
| Total | 24,399,501.16 | 12,943,606.57 |
Note: The interest expense on lease liabilities in 2023 is RMB431,636.06.
46. Other income
In RMB
| Sources of other income | Amount incurred in the current period | Amount incurred in the previous period |
| Transfer-in of deferred income | 22,107,734.21 | 16,401,222.05 |
| Industry development support funds (Note 1) | 11,049,910.96 | 6,384,733.03 |
| Enterprise development support funds (Note 2) | 553,455.00 | 2,062,888.38 |
| Tax subsidy | 16,881,612.68 | 1,262,440.33 |
| Others | 147,651.06 | 238,927.10 |
| Total | 50,740,363.91 | 26,350,210.89 |
Note 1: The industry development support funds mainly include the subsidy for the incentive project for industrialenterprises to expand production capacity, the first batch of key new material industry support projects of theShenzhen Municipal Bureau of Industry and Information Technology in 2023, the special fund project for economicdevelopment in Pingshan District, and the subsidy for the emerging industry support plan (new materials) of theBureau of Industry and Information Technology.
Note 2: The enterprise development support funds mainly include the R&D subsidy for enterprises of the ShenzhenScience and Technology Innovation Commission, and the subsidy fund for the improvement of atmosphericenvironment quality of the Shenzhen Municipal Bureau of Ecology and Environment.
47. Investment income
In RMB
| Items | Amount incurred this year | Amount incurred last year |
| Long-term equity investment income calculated by equity method | (6,898,983.89) | 1,307,639.15 |
| Investment income of transactional financial assets during the holding period | 15,519,035.33 | 15,457,585.05 |
| Dividend income from investment in other equity instruments during the holding period | 2,208,584.12 | 2,618,127.67 |
| Total | 10,828,635.56 | 19,383,351.87 |
48. Income from changes in fair value
In RMB
| Sources of income from changes in fair value | Amount incurred this year | Amount incurred last year |
| Transactional financial assets | 2,151,780.82 | - |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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49. Credit impairment gain (loss)
In RMB
| Items | Amount incurred this year | Amount incurred last year |
| Impairment loss of notes receivable | - | 365,055.74 |
| Gain (loss) from impairment of accounts receivable | 4,133,136.51 | (11,584,551.67) |
| Gain (loss) from impairment of other receivables | 402,638.63 | 6,600,942.84 |
| Total | 4,535,775.14 | (4,618,553.09) |
50. Asset impairment gain (loss)
In RMB
| Items | Amount incurred this year | Amount incurred last year |
| Inventory depreciation loss | (126,089,709.42) | (183,706,022.57) |
| Impairment loss of fixed assets | - | (18,867,443.27) |
| Total | (126,089,709.42) | (202,573,465.84) |
51. Asset disposal income
In RMB
| Items | Amount incurred this year | Amount incurred last year |
| Gains & losses on foreign investment in fixed assets | 1.72 | 31,264.60 |
52. Non-Operation income
In RMB
| Items | Amount of current period | Amount of previous period | Recorded in the amount of the non-recurring gains and losses |
| Non-current asset Disposition loss | 768,398.45 | 6,334,444.97 | 768,398.45 |
| Compensation expenses | 252,000.00 | - | 252,000.00 |
| Insurance expenses | 193,275.48 | 7,652,845.40 | 193,275.48 |
| Other | 236,205.33 | 1,005,792.20 | 236,205.33 |
| Total | 1,449,879.26 | 14,993,082.57 | 1,449,879.26 |
53.Non-current expenses
In RMB
| Items | Amount of current period | Amount of previous period | The amount of non-operating gains & lossed |
| Non-current asset Disposition loss | 115,541.99 | 26,020.82 | 115,541.99 |
| Compensation expenses | 7,926,787.08 | 7,248,331.74 | 7,926,787.08 |
| Fine expenses | 42,319.72 | 778.86 | 42,319.72 |
| Other | 121,152.72 | 201,926.05 | 121,152.72 |
| Total | 8,205,801.51 | 7,477,057.47 | 8,205,801.51 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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54.Income tax expenses
(1)Income tax expenses
In RMB
| Items | Amount of current period | Amount of previous period |
| Current income tax expense | 8,563,917.13 | 4,043,680.11 |
| Deferred income tax expense | 10,843,814.34 | (71,486,803.63) |
| Total | 19,407,731.47 | (67,443,123.52) |
(2)Reconciliation of account profit and income tax expenses
In RMB
| Items | Amount of current period | Amount of previous period |
| Total profits | 146,544,210.05 | 44,348,842.80 |
| Current income tax expense accounted by tax and relevant regulations | 36,636,052.51 | 11,087,210.70 |
| Influence of different tax rates applied by some subsidiaries | (14,393,929.80) | (2,715,451.54) |
| The impact of non-taxable income | (1,126,262.45) | (2,483,588.11) |
| Non-deductible costs, expenses and losses | 2,293,874.74 | 771,675.89 |
| Tax impact by the unrecognized deductible losses and deductible temporary differences in previous years | (25,587.79) | (66,704,686.87) |
| The tax impact of the deductible loss and the deductible temporary difference is not recognized | 10,154,045.89 | 2,931,982.20 |
| The tax rate adjustment leads to a change in the balance of deferred income tax assets / liabilities at the beginning of the period | (21,128.84) | - |
| ax impact of research and development fee plus deduction | (13,995,916.51) | (10,330,265.79) |
| Other | (113,416.28) | - |
| Income tax expenses | 19,407,731.47 | (67,443,123.52) |
55. Supplementary information to cash flow statement
(1) Cash related to operating activities
Other cash received relevant to operating activities
In RMB
| Items | Amount of current period | Amount of previous period |
| Letter of Credit Deposit | 37,450,879.69 | 167,866,753.31 |
| Interest income | 18,578,870.77 | 8,067,195.21 |
| Government Subsidy | 16,029,942.02 | 33,703,713.84 |
| Current account | 15,217,631.42 | 8,658,637.60 |
| Total | 87,277,323.90 | 218,296,299.96 |
Other cash paid related to operating activities
In RMB
| Items | Amount of current period | Amount of previous period |
| Payment of credit deposit | 34,639,361.27 | 25,106,708.19 |
| Cash | 71,894,532.84 | 87,642,432.49 |
| Current account and other | 10,910,080.05 | 9,199,351.73 |
| Total | 117,443,974.16 | 121,948,492.41 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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(2) Cash related to investment activities
Cash received related to other investment activities
In RMB
| Items | Amount of current period | Amount of previous period |
| Structured deposits | 950,000,000.00 | 430,000,000.00 |
| Fixed deposit | 245,000,000.00 | 753,000,000.00 |
| Currency fund and others | 259,000,000.00 | 133,000,000.00 |
| Total | 1,454,000,000.00 | 1,316,000,000.00 |
Payments of cash in connection with significant investment activities
In RMB
| Items | Amount of current period | Amount of previous period |
| Structured deposits | 1,400,000,000.00 | 480,000,000.00 |
| Currency fund | 290,500,000.00 | 436,064,713.28 |
| Fixed deposit | 150,000,000.00 | 224,368,658.21 |
| Total | 1,840,500,000.00 | 1,140,433,371.49 |
Cash received in connection with significant investment activities
In RMBIn RMB
| Items | Amount of current period | Amount of previous period |
| Structured deposits, financial products, | 1,454,000,000.00 | 1,316,000,000.00 |
Cash paid related to other investment activities
In RMB
| Items | Amount of current period | Amount of previous period |
| Structured deposits, financial products, | 1,840,500,000.00 | 1,140,433,371.49 |
(3)Cash related to financing activities
Cash paid related with financing activities
In RMB
| Items | Amount of current period | Amount of previous period |
| Lease payment | 8,776,024.71 | 9,144,572.43 |
Changes in various liabilities arising from fund-raising activities
In RMB
| Item | Balance at the end of the previous year | Increase in the year | Decrease in the year | Balance at the end of the year | ||
| Changes in cash | Non-cash changes | Changes in cash | Non-cash changes | |||
| Short-term borrowing | 7,000,000.00 | 8,000,000.00 | - | 7,000,000.00 | - | 8,000,000.00 |
| Long-term borrowing | 704,603,665.19 | - | 26,908,168.11 | 123,321,021.21 | - | 608,190,812.09 |
| Lease liabilities | 15,630,030.74 | - | 5,323,566.65 | 8,776,024.71 | - | 12,177,572.68 |
| Total | 727,233,695.93 | 8,000,000.00 | 32,231,734.76 | 139,097,045.92 | - | 628,368,384.77 |
Note: Long-term borrowings and lease liabilities include those that are due within one year.
(4) The Group does not present cash flow on a net basis
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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(5) The Group does not have any major activities or financial impacts that do not involve cash receipts and expendituresfor the current period but affect the financial position of the enterprise or may affect the cash flow of the enterprise in thefuture.
56. Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
In RMB
| Items | Amount of current period | Amount of previous period |
| I. Adjusting net profit to cash flow from operating activities | ||
| Net profit | 127,136,478.58 | 111,791,966.32 |
| Add: asset impairment provision | 126,089,709.42 | 202,573,465.84 |
| Credit loss preparation | (4,535,775.14) | 4,618,553.09 |
| Depreciation of fixed assets and investment property | 235,884,938.02 | 256,562,100.50 |
| Depreciation of right-of-use assets | 8,257,857.90 | 9,007,666.58 |
| Amortization of intangible assets | 4,891,672.68 | 5,082,893.36 |
| Amortization of Long-term deferred expenses | 2,160,430.42 | 1,819,286.52 |
| Loss on disposal of fixed assets, intangible assets and other long-term deferred assets | (1.72) | (31,264.60) |
| Fixed assets scrap loss | 113,290.32 | 26,020.82 |
| Loss on fair value changes | (2,151,780.82) | - |
| Financial cost | 26,883,671.86 | 29,183,633.15 |
| Loss on investment | (10,828,635.56) | (19,383,351.87) |
| Decrease of deferred income tax assets | 9,218,448.87 | (66,115,217.51) |
| Increased of deferred income tax liabilities | 1,625,365.47 | (5,371,586.12) |
| Decrease of inventories | (304,034,232.92) | 1,248,186.40 |
| Decease of operating receivables | (126,515,773.08) | (81,468,525.61) |
| Increased of operating Payable | 90,571,075.50 | 40,694,723.73 |
| Net cash flows arising from operating activities | 184,766,739.80 | 490,238,550.60 |
| II. Significant investment and financing activities that without cash flows: | ||
| End balance of cash equivalents | 461,420,457.33 | 874,474,834.46 |
| Less: Beginning balance of cash equivalents | 874,474,834.46 | 302,408,433.72 |
| Net increase of cash and cash equivalent | (413,054,377.13) | 572,066,400.74 |
(2) Component of cash and cash equivalents
In RMB
| Items | Year-end balance | Year-beginning balance |
| I. Cash | 461,420,457.33 | 874,474,834.46 |
| Including：Cash at hand | 1,710.40 | 3,980.56 |
| Demand bank deposit | 461,418,746.93 | 874,470,853.90 |
| Demand other monetary funds | - | - |
| II.Cash equivalents | - | - |
| III. Balance of cash and cash equivalents at the period end | 461,420,457.33 | 874,474,834.46 |
(3) During the reporting period, the Group does not have any presentation for those with restricted scope of use but stillpresented as cash and cash equivalents.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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(4) Monetary funds that are not cash or cash equivalents
In RMB
| Item | Amount incurred in the year | Amount incurred in the previous year | Reason |
| Bill margin | 5,905,118.06 | - | Cannot be used for payment at any time |
| Current interest and 7-day call deposit interest | 1,548,872.61 | 324,448.42 | Cannot be used for payment at any time |
| The principal and interest of certificates of deposit maturing more than three months | - | 115,719,927.09 | Cannot be used for payment at any time |
| Other | 3,400,000.00 | 1,270,758.22 | Account freezing |
| Total | 10,853,990.67 | 117,315,133.73 | / |
57. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
| Items | Closing foreign currency balance | Exchange rate | Closing convert to RMB balance |
| Monetary funds | 66,703,011.39 | ||
| Including：USD | 8,829,274.51 | 7.0827 | 62,535,102.56 |
| Yen | 68,513,734.89 | 0.0502 | 3,440,280.17 |
| HKD | 802,927.17 | 0.9062 | 727,628.66 |
| Account receivable | 28,289,108.51 | ||
| Including：USD | 3,958,508.14 | 7.0827 | 28,036,925.61 |
| HKD | 278,280.00 | 0.9062 | 252,182.90 |
| Other receivable | 498,404.86 | ||
| Including：USD | 70,369.33 | 7.0827 | 498,404.86 |
| Account payable | 319,354,807.51 | ||
| Including：USD | 4,335,058.95 | 7.0827 | 30,703,922.03 |
| Yen | 5,747,765,566.00 | 0.0502 | 288,612,552.37 |
| HKD | 42,300.00 | 0.9062 | 38,333.11 |
| Other payable | 6,587,005.74 | ||
| Including：USD | 860,536.00 | 7.0827 | 6,094,918.33 |
| Yen | 9,800,000.20 | 0.0502 | 492,087.41 |
58.Leasing
(1) As a lessee
The Group has leased a number of assets, including houses and buildings, with lease terms ranging from 1 to 10years. The above-mentioned right-of-use assets cannot be used for the purpose of loan mortgage, guarantee, etc.
The Group does not have variable lease payments that are not included in the measurement of lease liabilities.Lease expenses for simplified short-term leases: Simplified short-term lease expenses included in profit or loss forthe current period amounted to RMB558,957.38 (previous year: RMB653,461.86).
The total lease-related cash outflow for the year is RMB9,334,982.09 (previous year: RMB9,798,034.29).
(2) As a lessor
Operating lease as a lessor
In RMB
| Item | Lease income | Thereinto: Income related to variable lease payments that are not included in lease receipts |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| Item | Lease income | Thereinto: Income related to variable lease payments that are not included in lease receipts |
| Houses and buildings | 97,558,143.88 | - |
The Group's operating leases with it as lessor are related to premises and buildings with lease terms ranging from 1to 15 years.
The income related to operating leases for the year is RMB97,558,143.88 (previous year: RMB67,804,574.63), ofwhich the income related to variable lease payments that are not included in lease receipts is RMB0 (previous year:
RMB0).
In RMB
| Item | Undiscounted lease receipts | |
| Amount incurred in the year | Amount incurred in the previous year | |
| 1st year after the balance sheet date | 74,399,477.80 | 65,239,408.94 |
| 2nd year after the balance sheet date | 54,475,653.29 | 49,608,649.57 |
| 3rd year after the balance sheet date | 44,564,404.34 | 40,071,243.84 |
| 4th year after the balance sheet date | 29,708,115.33 | 33,797,303.21 |
| 5th year after the balance sheet date | 9,346,233.32 | 22,595,837.83 |
| Subsequent years | 7,327,310.40 | 5,527,129.80 |
| The total amount of undiscounted lease receipts | 219,821,194.48 | 216,839,573.19 |
(VI) R&D expenditures
（1） Presented by nature of expenses
In RMB
| Items | Amount incurred in the year | Amount incurred in the previous year |
| Employee remuneration | 14,827,264.16 | 16,349,423.75 |
| Material consumption | 85,216,243.35 | 58,840,560.48 |
| Depreciation | 3,389,328.35 | 3,518,432.27 |
| Others | 1,220,205.06 | 1,811,739.04 |
| Total | 104,653,040.92 | 80,520,155.54 |
| Thereinto: Expensed R&D expenditures | 104,653,040.92 | 80,520,155.54 |
| Capitalized R&D expenditures | - | - |
(2) The Group has no R&D project development expenditure eligible for capitalization.
(3) The Group has no significant outsourced R&D projects under development.
(VII) Change in the scope of consolidation
Shenzhen Shengjinlian Technology Co., Ltd. was deregistered on December 13, 2023, and other than that, the scope
of the Group's consolidation has not changed.
Note: Shenzhen Shengjinlian Technology Co., Ltd. was cancelled on December 13, 2023.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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(VIII). Equity in other subjects
1. Equity in subsidiaries
(1) Composition of the enterprise group
| Subsidiary name | Main place of business | Place of registration | Registered address | Business nature | Shareholding ratio % | Acquisition method | |
| Direct | Indirect | ||||||
| Shenzhen Lishi Industry Development Co., Ltd | Shenzhen | RMB 2,360,000.00 | Shenzhen | Property leasing | 100.00 | - | Establishment |
| Shenzhen Huaqiang Hotel | Shenzhen | RMB 10,005,300.00 | Shenzhen | Property leasing | 100.00 | - | Establishment |
| Shenzhen Shenfang Real Estate Management Co., Ltd. | Shenzhen | RMB 1,600,400.00 | Shenzhen | Property management | 100.00 | - | Establishment |
| Shenzhen Beauty Century Garment Co., Ltd. | Shenzhen | RMB 13,000,000.00 | Shenzhen | Textile production and sales | 100.00 | - | Establishment |
| Shenzhen Shenfang Sungang Real Estate Management Co., Ltd. | Shenzhen | RMB 1,000,000.00 | Shenzhen | Property management | 100.00 | - | Establishment |
| SAPO Photoelectric | Shenzhen | RMB 583,333,333.00 | Shenzhen | Polarizer production and sale | 60.00 | - | Acquisition |
| Shengtou (Hongkong) Co.,Ltd. | Hongkong | HKD 10,000.00 | Hongkong | Polarizer sales | - | 100.00 | Establishment |
| Shenzhen Shengjinlian Technology Co., Ltd. | Shenzhen | RMB 1,000,000.00 | Shenzhen | Polarizer production and sale, etc. | - | 100.00 | Establishment |
Note: Shenzhen Shengjinlian Technology Co., Ltd. was cancelled on December 13, 2023.
(2) Important non-wholly-owned subsidiaries
In RMB
| Subsidiary name | Minority shareholding ratio | Profit and loss attributable to minority shareholders in the current period | Dividends declared to minority shareholders in the current period | Balance of minority equity at the end of the period |
| Shenzhen SAPO Photoelectric Co., Ltd. | 40.00% | 47,868,228.13 | - | 1,229,765,091.74 |
(3) Major financial information of important non-wholly-owned subsidiaries
In RMB
| Items | SAPO Photoelectric | |
| Year-end balance/Amount incurred this year | Balance of the end of last year / amount of last year | |
| Current assets | 2,224,998,868.32 | 1,936,541,263.47 |
| Non-current assets | 2,215,651,449.74 | 2,419,432,602.01 |
| Total assets | 4,440,650,318.06 | 4,355,973,865.48 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| Items | SAPO Photoelectric | |
| Year-end balance/Amount incurred this year | Balance of the end of last year / amount of last year | |
| Current liabilities | 762,685,435.65 | 674,071,107.48 |
| Non-current liabilities | 608,912,888.60 | 732,819,068.02 |
| Total liabilities | 1,371,598,324.25 | 1,406,890,175.50 |
| Operating income | 2,944,147,907.27 | 2,735,055,209.89 |
| Net profit | 119,670,570.33 | 96,206,958.45 |
| Total comprehensive income | 119,968,303.83 | 95,909,224.95 |
| Cash flow from operating activities | 168,163,478.05 | 484,437,283.64 |
2 Equity in joint venture arrangements or joint venturesSummary financial information of unimportant joint ventures and associated enterprises
In RMB
| Items | Year-end balance/Amount incurred this year | Balance of the end of last year / amount of last year |
| Joint ventures Associated enterprise | ||
| Total book value of investment | 122,370,494.08 | 129,506,271.76 |
| Total of the following items calculated by shareholding ratio | ||
| -Net profit(Loss) | (7,135,777.68) | 1,292,045.22 |
| -Other comprehensive income | - | - |
| -Total comprehensive income | (7,135,777.68) | 1,292,045.22 |
| Associated enterprise | ||
| Total book value of investment | 5,311,526.62 | 4,975,563.98 |
| Total of the following items calculated by shareholding ratio | ||
| -Net profit | 236,793.79 | 15,593.93 |
| -Other comprehensive income | 99,168.85 | 151,869.82 |
| -Total comprehensive income | 335,962.64 | 167,463.75 |
(IX) Government subsidies
(1) As of December 31, 2023, the Group does not have any government subsidies recognized on the basis of receivables.
(2) Liabilities involving government subsidies
In RMB
| Liability item | The number at the beginning of the year | The amount of new subsidy added in the current year | The amount of non-operating income included in the current year | The amount of other income included in the current year | Other changes during the year | The number at the end of the year | Asset-related/ Earnings related |
| Deferred income | 111,814,796.10 | 4,278,925.00 | - | 16,107,734.21 | (2,500,000.00) | 97,485,986.89 | Asset-related |
| Deferred income | 6,000,000.00 | - | - | 6,000,000.00 | - | - | Income -related |
| Total | 117,814,796.10 | 4,278,925.00 | - | 22,107,734.21 | (2,500,000.00) | 97,485,986.89 | / |
(3) Government subsidies included in profit or loss for the current period
In RMB
| Subsidy Items | Amount incurred in the year | Amount incurred in the previous year |
| Other income | 33,711,100.17 | 24,848,843.46 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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X. Risks related to financial instruments
The Group's main financial instruments include monetary funds, transactional financial assets, notes receivable,accounts receivable, accounts receivable financing, other receivables, other equity instruments investment, short-termloans, accounts payable, other payables, other current liabilities, long-term loans and lease liabilities, etc. At the end ofthis year, the financial instruments held by the Group are as follows. See Note (V) for details. The risks associated withthese financial instruments and the risk management policies adopted by the Group to reduce these risks are as follows.The management of the Group manages and monitors these risk exposures to ensure that the above risks are controlledwithin a limited range.In RMB
| Items | Amount incurred in the year | Amount incurred in the previous year |
| Financial assets | ||
| Measured at fair value, with its changes included in current profits and losses | ||
| Transactional financial assets | 821,946,114.68 | 319,605,448.44 |
| Measured at fair value, with its changes included in other comprehensive income | ||
| Receivable financing | 22,839,459.13 | 54,413,796.91 |
| Investment in other equity instruments | 145,988,900.00 | 167,678,283.27 |
| Measured in amortized cost | ||
| Monetary funds | 472,274,448.00 | 991,789,968.19 |
| Note receivable | 50,963,943.01 | 74,619,100.26 |
| Accounts receivable | 820,134,833.95 | 636,583,469.93 |
| Other receivables | 3,219,287.77 | 10,288,124.02 |
| Financial liabilities | ||
| Measured in amortized cost | ||
| Short-term loan | 8,000,000.00 | 7,000,000.00 |
| Notes payable | 31,049,291.49 | - |
| Accounts payable | 408,548,136.24 | 327,049,873.70 |
| Other payables | 184,528,344.55 | 197,345,455.37 |
| Other current liabilities | 42,665,954.11 | 92,945,741.78 |
| Long-term loans | 608,190,812.09 | 704,603,665.19 |
The Group uses sensitivity analysis technology to analyze the possible impact of reasonable and possible changesin risk variables on current profits and losses and shareholders' equity. Because any risk variable rarely changes inisolation, and the correlation between variables will have a great impact on the final amount of a risk variable change,the following contents are carried out under the assumption that each variable change is independent.
1. Risk management objectives, policies and procedures, and changes occurred during the year
The Group's goal in risk management is to strike a proper balance between risks and benefits, reduce the negativeimpact of risks on the Group's operating performance to the lowest level, and maximize the interests of shareholdersand other equity investors. Based on this risk management goal, the basic strategy of the Group's risk management is toidentify and analyze all kinds of risks faced by the Group, establish an appropriate risk tolerance bottom line andconduct risk management, and timely and reliably supervise all kinds of risks to control the risks within a limited range.
1.1 Market risk
1.1.1 Foreign exchange risk
Foreign exchange risk refers to the risk of losses caused by exchange rate changes. The Group's foreign exchangerisks are mainly related to US dollars, Japanese yen, Hong Kong dollars and euros. Except for some import purchasesand export sales of the Group's companies located in Chinese mainland which are mainly settled in US dollars,Japanese yen, Hong Kong dollars and Euros, other major business activities of the Group are settled in RMB.As of 31 December 2023, the Group's assets and liabilities were all RMB balances, except for the monetary items
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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in foreign currencies mentioned in Notes (V), (57). The foreign exchange risks arising from the assets and liabilitieswith foreign currency balances (converted into RMB) described in the table below may have an impact on the Group'soperating results.
In RMB
| Items | Balance at the end of this year | |
| Assets | Liabilities | |
| USD | 91,070,433.03 | 36,798,840.36 |
| Yen | 3,440,280.17 | 289,104,639.78 |
| HKD | 979,811.56 | 38,333.11 |
The Group pays close attention to the impact of exchange rate changes on the Group's foreign exchange risk. Atpresent, the Group has not taken any measures to avoid foreign exchange risks.
Sensitivity analysis of foreign exchange risk
Sensitivity analysis of foreign exchange risk assumes that all net investment hedging and cash flow hedging ofoverseas operations are highly effective.
On the basis of the above assumptions, with other variables unchanged, the pre-tax impact of possible reasonableexchange rate changes on current profits and losses and shareholders' equity is as follows:
In RMB
| Items | Changes in exchange rate | This year | Last Year | ||
| Impact on profits | Impact on shareholders' equity | Impact on profits | Impact on shareholders' equity | ||
| All foreign currencies | Appreciation of RMB by 5% | (11,522,564.42) | (11,522,564.42) | (10,266,787.69) | (10,266,787.69) |
| All foreign currencies | Depreciation of RMB by 5% | 11,522,564.42 | 11,522,564.42 | 10,266,787.69 | 10,266,787.69 |
1.1.2. Interest rate risk - risk of cash flow change
The Company's risk of cash flow changes of financial instruments caused by interest rate changes is mainly relatedto bank loans with floating interest rate. The Group continues to pay close attention to the impact of interest rate changeson the Group's interest rate risk. The Group's policy is to maintain floating interest rates on these loans, and there is nointerest rate swap arrangement at present.
Sensitivity analysis of interest rate risk
With other variables unchanged, the pre-tax impact of possible reasonable interest rate changes on current profitsand losses and shareholders' equity is as follows:
In RMB
| Items | Interest rate change | This year | Last Year | ||
| Impact on profits | Impact on shareholders' equity | Impact on profits | Impact on shareholders' equity | ||
| Floating-rate loan | Increase by 1% | (6,154,214.55) | (6,154,214.55) | (7,108,088.43) | (7,108,088.43) |
| Floating-rate loan | Decrease by 1% | 6,154,214.55 | 6,154,214.55 | 7,108,088.43 | 7,108,088.43 |
1.2. Credit risk
On December 31, 2023, the largest credit risk exposure that may cause the Group's financial losses mainly camefrom the loss of the Group's financial assets caused by the failure of the other party to the contract, including monetaryfunds, transactional financial assets, notes receivable, accounts receivable, receivables financing and other receivables.On the balance sheet date, the book value of the Group's financial assets has represented its maximum credit riskexposure.
In order to reduce the credit risk, the Group arranges special personnel to determine the credit limit, conduct creditapproval and implement other monitoring procedures to ensure that necessary measures are taken to recover overduedebts. In addition, the Group reviews the recovery of financial assets on each balance sheet date to ensure that sufficientcredit loss provision has been made for relevant financial assets. Therefore, the management of the Group believes thatthe credit risk assumed by the Group has been greatly reduced.
The Group's monetary funds are deposited in banks with high credit ratings, so the monetary funds only have low
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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credit risk.On December 31, 2023, the balance of accounts receivable of the Group to the top five customers wasRMB510,920,546.66, accounting for 59.16% of the balance of accounts receivable of the Group. In addition, the Grouphas no other significant credit risk exposure concentrated in a single financial asset or financial asset portfolio withsimilar characteristics.
1.3 Liquidity risk
When managing liquidity risk, the Group maintains sufficient cash and cash equivalents as deemed by themanagement and monitors them to meet the Group's business needs and reduce the impact of cash flow fluctuations. Themanagement of the Group monitors the use of bank loans and ensures compliance with the loan agreement.
On December 31, 2023, the Group's unused comprehensive bank credit line was RMB 111,896.00.
The financial liabilities held by the Group are analyzed according to the maturity of the undiscounted remainingcontractual obligations as follows:
In RMB
| Item | Within 1 year | 1-5 years | Over 5 years | Total |
| Short-term loan | 8,202,908.33 | - | - | 8,202,908.33 |
| Notes payable | 31,049,291.49 | - | - | 31,049,291.49 |
| Accounts payable | 408,548,136.24 | - | - | 408,548,136.24 |
| Other payables | 184,528,344.55 | - | - | 184,528,344.55 |
| Other current liabilities | 42,665,954.11 | - | - | 42,665,954.11 |
| Long-term loans | 121,051,052.09 | 543,134,195.76 | - | 664,185,247.85 |
| Lease liabilities | 5,809,756.61 | 5,822,333.46 | 1,672,592.08 | 13,304,682.15 |
2. Transfer of financial assets
2.1Classification of transfer methods
In RMB
| Transfer method | The nature of the transferred financial assets | The amount of financial assets transferred | Derecognition information | The basis for determining the situation of derecognition |
| Factoring | Accounts receivable | 634,780,309.98 | Derecognition | After the accounts receivable are factored, the factoring institution has no right to recover from the company, and it can be determined that the main risks and rewards of the accounts receivable have been transferred, so the recognition is terminated. |
| Endorsement transfer | Outstanding banker's acceptance bill that is classified as financings receivable | 59,520,699.22 | Derecognition | Since the credit risk and deferred payment risk of banker's acceptance bill in financingsreceivable are very small, and the interest rate risk related to the bill has been transferred to the bank, it can be determinedthat the main risks and rewards on the ownership of the note have been transferred, so the recognition is derecognized. |
| Endorsement transfer | Unexpired banker's acceptance bill classified as bills receivable | 42,665,954.11 | Non-derecognition | Not eligible for derecognition |
| Total | / | 736,966,963.31 |
2.2 Financial assets that have been derecognized as a result of transfer
In RMB
| Item | Method for the financial assets transferred | The amount of the financial asset derecognized | Gains or losses related to derecognition |
| Financings receivable | Endorsement transfer | 59,520,699.22 | - |
| Accounts receivable | Factoring | 634,780,309.98 | - |
| Total | / | 694,301,009.20 | - |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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2.3 Transferred financial assets that continue to be involved
In RMB
| Item | Asset transfer method | Amount of assets resulting from continued involvement | Amount of liability arising from continued involvement |
| Notes receivable | Transfer by endorsement | - | 42,665,954.11 |
| Total | / | - | 42,665,954.11 |
XI. Disclosure of fair value
1. Ending fair value of assets and liabilities measured at fair value
In RMB
| Items | Year-end fair value | |||
| Fair value measurement of Level 1 | Fair value measurement of Level 2 | Fair value measurement of Level 3 | Total | |
| Measured at fair value continuously | ||||
| (I) Transactional financial assets | - | 821,946,114.68 | - | 821,946,114.68 |
| (II) Receivable financing | - | - | 22,839,459.13 | 22,839,459.13 |
| (III) Investment in other equity instruments | - | - | 145,988,900.00 | 145,988,900.00 |
| Total assets continuously measured at fair value | - | 821,946,114.68 | 168,828,359.13 | 990,774,473.81 |
2. For Level 2 items measured at fair value continuously and non-continuously, the valuation techniques andqualitative and quantitative information of important parameters are adopted
In RMB
| Items | Fair value at the end of this year | Valuation technique | Input value |
| Transactional financial assets | 821,946,114.68 | Discounted cash flow technique | Expected yield |
3. For Level 3 items measured at fair value continuously and non-continuously, the valuation techniques andqualitative and quantitative information of important parameters are adopted
In RMB
| Items | Fair value at the end of this year | Valuation technique | Input value |
| Receivable financing | 22,839,459.13 | Discounted cash flow technique | Discount rate |
| Investment in other equity instruments | 145,988,900.00 | Comparison of listed companies | P/B ratio of similar listed companies |
| Comparable income method | Market price | ||
| Statement adjustment method | Book value |
4. Fair value of financial assets and financial liabilities not measured at fair valueFinancial assets and liabilities not measured at fair value mainly include monetary funds, notes receivable, accountsreceivable, other receivables, short-term loans, accounts payable, other payables, long-term loans and lease liabilities.The management of the Group believes that the book values of financial assets and financial liabilities measured inamortized cost in the financial statements are close to their fair values.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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XII. Related parties and related party transactions
1. Information about the parent company of the Enterprise.
| Name of parent company | Place of registration | Business nature | Registered capital (RMB '0,000) | Shareholding ratio of the parent company to the Company % | Percentage of voting rights of the parent company to the Company % |
| Shenzhen Investment Holdings Co., Ltd | 18/F, Investment Building, Shennan Road, Futian District, Shenzhen | Equity investment, real estate development, etc | 3,235,900.00 | 46.21 | 46.21 |
Description of the parent company of the EnterpriseThe parent company of the Company is a wholly state-owned company approved and authorized by the ShenzhenMunicipal Government, and exercises the investor function for the state-owned enterprises within the authorized scopeaccording to law.During the reporting period, the changes in the registered capital of the parent company are as follows:
In RMB 10,000
| Balance at the end of last year | Increase this year | Decrease this year | Balance at the end of this year |
| 2,850,900.00 | 385,000.00 | - | 3,235,900.00 |
2. Information on subsidiaries of the Enterprise
Please refer to Notes (VII), 1 for details of the subsidiaries of the Enterprise.
3. Information on joint ventures and associated enterprises of the EnterpriseSee Notes (VII), 2 for details of the important joint ventures or associated enterprises of the Enterprise.
4. Information on other related parties
| Names of other related parties | Relationship between other related parties and the Enterprise |
| Shenzhen Xinfang Knitting Co., Ltd. | The Company's shareholding company and the chairman of the company are the employees of the Group |
| Shenzhen Dailishi Underwear Co., Ltd. | The Company's shareholding company and the chairman of the company are the employees of the Group |
| Hengmei Optoelectronics Co., Ltd | Minority shareholder of SAPO Photoelectric , a subsidiary of the Company, one of whose directors is a supervisor of SAPO Photoelectric |
| Shenzhen Shentou Property Development Co.Ltd | A subsidiary of Shenzhen Investment Holdings Limited, the parent company of the Company |
| Shenzhen Investment Building Hotel Co., Ltd. | A subsidiary of Shenzhen Investment Holdings Limited, the parent company of the Company |
| Shenzhen Investment Building Property Management Co., Ltd. | A subsidiary of Shenzhen Investment Holdings Limited, the parent company of the Company |
| Shenzhen SGE Longyan Energy Technology Co., Ltd. | A subsidiary of Shenzhen Investment Holdings Limited, the parent company of the Company |
5. Related party transactions
(1) Procurement of goods/acceptance of services
| Related party | Content of related party transaction | Amount incurred this year | Amount incurred last year |
| Hengmei Optoelectronics Co., Ltd | Optical film materials | 4,540,435.30 | - |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| and processing | |||
| Shenzhen SGE Longyan Energy Technology Co., Ltd. | Purchasing electricity | 1,075,289.19 | - |
| Shenzhen Guanhua Printing & Dyeing Co., Ltd. | Interest expenses | 16,237.39 | 6,601.33 |
| Total | 5,631,961.88 | 6,601.33 |
(2) Sale of goods
In RMB
| Related party | Content of related party transaction | Amount incurred this year | Amount incurred last year |
| Hengmei Optoelectronics Co., Ltd | Polarizer | 4,744,631.12 | - |
| Shenzhen Shentou Property Development Co.Ltd | Textile | 65,634.51 | - |
| Shenzhen Investment Building Hotel Co., Ltd. | Textile | 163,729.20 | - |
| Shenzhen Investment Building Property Management Co., Ltd. | Textile | 35,522.12 | - |
| Shenzhen Investment Holdings Co., Ltd | Textile | 15,371.68 | - |
| Shenzhen Guanhua Printing & Dyeing Co., Ltd. | Textile | - | 8,849.56 |
| Total | 5,024,888.63 | 8,849.56 |
(3) Lending of related party funds
In RMB
| Related party | Borrowing amount | Start date | Due date | Description |
| Lending | ||||
| Shenzhen Guanhua Printing & Dyeing Co., Ltd. | 3,806,454.17 | 2019.07.30 | 2024.07.31 | The annual lending rate is 0.30% |
(4) Rewards for the key management personnel
In RMB
| Rewards for the key management personnel Items | Amount of current period | Amount of previous period |
| Rewards for the key management personnel | 8,557,258.00 | 11,966,067.00 |
6. Receivables and payables of related parties
（1）Receivables
In RMB
| Name | Related party | Amount at year end | Amount at year beginning | ||
| Balance of Book | Balance of Book | Balance of Book | Bad debt Provision | ||
| Other Account receivable | Shenzhen Dailishi Underwear Co., Ltd. | 1,100,000.00 | 58,850.00 | 1,100,000.00 | 58,850.00 |
| Other Account receivable | Shenzhen Guanhua Printing & Dyeing Co., Ltd. | 41,325.00 | - | - | - |
| Total | 1,141,325.00 | 58,850.00 | 1,100,000.00 | 58,850.00 | |
（2）Payables
In RMB
| Name | Related party | Amount at year end | Amount at year |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| beginning | |||
| Other payable | Yehui International Co.,Ltd. | 1,124,656.60 | 1,124,656.60 |
| Other payable | Shenzhen Changlianfa Printing & dyeing Co., Ltd. | 2,023,699.95 | 2,023,699.95 |
| Other payable | Shenzhen Guanhua Printing & dyeing Co., Ltd. | 3,811,272.20 | 3,806,454.17 |
| Other payable | Shenzhen Xinfang Knitting Co., Ltd. | 244,789.85 | 244,789.85 |
| Other payable | Shenzhen Investment Holdings Co., Ltd | 485,189.00 | 643,987.04 |
| Total | 7,689,607.60 | 7,843,587.61 |
XIII. Commitments and contingencies
1. Important commitments
(1) Capital commitment
In RMB
| Items | Amount at the end of this year | Amount at the end of last year |
| Contracted but not recognized in the financial statements | ||
| Commitment to purchase and build long-term assets | 2,413,823.52 | 3,761,094.00 |
2. Contingencies
As of December 31, 2023, the Group has no pending litigation, external guarantees and other contingencies that shall bedisclosed.XIV. Matters after the balance sheet date
1. Profit distribution after the balance sheet date
On March 26, 2024, the Board of Directors of the Company convened and adopted the profit distribution plan for2023. Based on the total number of shares entitled to profit distribution of 506,521,849 shares on December 31, 2023,the Company distributed RMB0.65 in cash (including tax) for every 10 shares, with a total cash dividend of RMB32,923,920.19元. The profit distribution plan has yet to be approved by the General Meeting of Shareholders of theCompany.
In RMB
| Items | Amount |
| Profits or dividends to be distributed | 32,923,920.19 |
| Profits or dividends declared after deliberation and approval |
XV. Other important matters
1. Segment information
(1) Determination basis and accounting policy of reporting segment
According to the Group's internal organizational structure, management requirements and internal reporting system,the Group's business operations are divided into three business segments, and the management of the Group regularlyevaluates the operating results of these segments to determine the allocation of resources and evaluate the performance.On the basis of operating segments, the Group has identified the following three reporting segments: polarizer business,property leasing business and textile business.
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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The information reported by each segment is disclosed according to the accounting policies and measurementstandards adopted by each segment when reporting to the management, and these measurement bases are consistent withthose used when preparing financial statements
(2) Financial information of reporting segment
In RMB
| This year or the end of this year | Polarizer | Property leasing | Offset | Total |
| Operating income: | ||||
| External transaction income | 2,885,625,542.77 | 194,052,832.68 | - | 3,079,678,375.45 |
| Inter-segment transaction income | - | 5,228,270.79 | (5,228,270.79) | - |
| Total operating income of segment | 2,885,625,542.77 | 199,281,103.47 | (5,228,270.79) | 3,079,678,375.45 |
| Operating expenses (note) | 2,740,034,558.58 | 133,409,869.35 | (4,899,337.05) | 2,868,545,090.88 |
| Operating profit | 127,113,090.17 | 36,505,509.79 | (10,318,467.66) | 153,300,132.30 |
| Net profit | 111,017,342.91 | 26,450,970.51 | (10,331,834.84) | 127,136,478.58 |
| Total assets of segment | 4,439,757,297.25 | 3,223,473,385.00 | (2,013,408,318.81) | 5,649,822,363.44 |
| Total liabilities of segment | 1,363,903,983.44 | 219,428,207.11 | (45,427,185.07) | 1,537,905,005.48 |
Note: This item includes operating costs, taxes and surcharges, management costs, R&D expenses, sales expenses andfinancial expenses.
2. Other important transactions and matters that have an impact on investors' decisions
(1) Major asset restructuring
On December 30, 2022, the "Proposal on the Purchase of Assets by Issuing Shares and Paying Cash and RaisingMatching Funds Namely the Related Party Transaction Plan" was deliberated and approved in the 19th meeting of the8th session of the board of directors of the Company, in which the Company intends to purchase 100% of the shares ofHengmei Optoelectronics Co., Ltd. held by 17 companies including Chimei Materials and Haosheng (Danyang) byissuing shares and paying cash. The cash consideration for this transaction is intended to be paid by the Companythrough self-raised funds such as M&A loans and raising matching funds, and the Company intends to raise matchingfunds from no more than 35 qualified specific investors through non-public issuance of shares. The total amount ofmatching funds raised shall not exceed 100% of the transaction price of the assets to be purchased by issuing shares,and the number of shares issued shall not exceed 30% of the total share capital of the listed company after thecompletion of the purchase of assets by issuing shares.
On November 17, 2023, the "Proposal on Shenzhen Textile (Holdings) Co., Ltd.’s Issuance of Shares and Payment ofCash to Purchase Assets and Raise Matching Funds Namely the Related Party Transaction Plan (Revised Draft) and itsSummary" wasdeliberated and approved in the 25th meeting of the 8th session of the Board of Directors of theCompany, the original counterparty Hangzhou Rencheng Trading Partnership (Limited Partnership) will no longerparticipate in this transaction, and add the new counterparty Kunshan Guochuang Investment Group Co., Ltd., and theunderlying assets will still be the 100% equity of the target company. Meanwhile, the transaction plan will be adjustedin accordance with the relevant system rules for the full implementation of the stock issuance registration systemissued by the China Securities Regulatory Commission.
The transaction will not result in a change of control of the Company, and the actual controller of the Company beforeand after the transaction is the State-owned Assets Supervision and Administration Commission of the ShenzhenMunicipal People's Government. As of the date of approval of the financial report, the transaction still needs to obtainrelevant approvals, filing and other procedures, the audit, evaluation, due diligence and other work involved in thetransaction are still in progress, and after the completion of the relevant work, the Company will once more conveneameeting of the board of directors to consider the relevant matters of the transaction.
(2) Real estate that has not yet been disposed of by Shenzhen Xieli Automobile Enterprise Co., Ltd. (hereinafter referredto as "Shenzhen Xieli").
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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Shenzhen Xieli, a sino-foreign joint venture invested and established by the Company and Hong Kong XieliMaintenance Company (hereinafter referred to as "Hong Kong Xieli"), was cancelled by the Shenzhen MunicipalAdministration for Market Regulation in March 2020, but there are still three properties under the name of ShenzhenXieli that need to be disposed of through consultation between the shareholders of both parties. In July 2020, theCompany filed an administrative act in the People's Court of Yantian District, Shenzhen, Guangdong Province to revokethe cancellation of Shenzhen Xieli approved by the Shenzhen Municipal Administration for Market Regulation.In December 2022, the People's Court of Yantian District, Shenzhen, Guangdong Province, rendered a judgment of firstinstance for retrial, revoking the administrative act of approving the cancellation of Shenzhen Xieli. In January 2023, thethird party of the original trial, Hong Kong Xie-li, appealed to the Intermediate People's Court of Shenzhen, GuangdongProvince, and later ruled that the appeal should be withdrawn by Hong Kong Xie-Li due to Hong KongXie-Li's failure topay the case acceptance fee in advancement schedule, and retrial of first instance judgment took effect on March 22,2023.XVI. Notes on main items of parent company's financial statements
1. Accounts receivable
(1) Disclosure by age
In RMB
| Aging | Amount at the end of this year | Amount at the end of last year |
| Within 1 year | 10,190,859.62 | 13,871,107.36 |
| 1-2 years | - | 2,485,076.00 |
| 2-3 years | 2,485,076.00 | - |
| Total | 12,675,935.62 | 16,356,183.36 |
(2) Classified disclosure by credit loss provision accrual method
In RMB
| Category | Balance at the end of this year | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Proportion (%) | Amount | Accrual proportion (%) | ||
| Account receivable that withdrawal bad debt provision by single item | - | - | - | - | - |
| Account receivable withdrawal bad debt provision by portfolio | 12,675,935.62 | 100.00 | 4,311.97 | 0.03 | 12,671,623.65 |
| Total | 12,675,935.62 | 100.00 | 4,311.97 | / | 12,671,623.65 |
In RMB
| Amount at year-begin | |||||
| Category | Book balance | Bad debt provision | Book value | ||
| Amount | Proportion (%) | Amount | Accrual proportion (%) | ||
| Account receivable that withdrawal bad debt provision by single item | - | - | - | - | - |
| Account receivable withdrawal bad debt provision by portfolio | 16,356,183.36 | 100.00 | 713,159.25 | 4.36 | 15,643,024.11 |
| Total | 16,356,183.36 | 100.00 | 713,159.25 | / | 15,643,024.11 |
As of December 31, 2023, the credit risk and bad debt provision for Portfolio 1 accounts receivable are asfollows:
In RMB
| Category | Balance at the end of the year | |||
| )Expected average loss ratio (%) | Book balance | Provision for bad debts | Book value | |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| Within 1 year | 0.04 | 10,190,859.62 | 4,311.97 | 10,186,547.65 |
| 2-3 years | - | 2,485,076.00 | - | 2,485,076.00 |
| Total | / | 12,675,935.62 | 4,311.97 | 12,671,623.65 |
As ofDecember 31, 2023, the credit risk and bad debt provision of Portfolio 2 accounts receivableare as follows:
In RMB
| Bad Debt Reserves | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses over the next 12 months | Expected credit loss over life (no credit impairment) | Expected credit losses for the entire duration (credit impairment occurred) | ||
| Balance as at January 1, 2023 | 713,159.25 | - | - | 713,159.25 |
| Balance as at January 1, 2023 in current | - | - | - | - |
| ——Transfer to stage II | - | - | - | - |
| ——Transfer to stage III | - | - | - | - |
| -- Reversal to the II stage | - | - | - | - |
| -- Reversal to the I stage | - | - | - | - |
| Provision in Current Year | - | - | - | - |
| Reversal in Current Year | (708,847.28) | - | - | (708,847.28) |
| Conversion in Current Year | - | - | - | - |
| Write off in Current Year | - | - | - | - |
| Other change | - | - | - | - |
| Balance as at 31 Dec. 2023 | 4,311.97 | - | - | 4,311.97 |
(3) Provision for bad debts
In RMB
| Category | Balance at the beginning of this year | Amount of change this year | Balance at the end of this year | |||
| Accrual | Recovery or reversal | Write-off or cancellation | Other changes | |||
| Provision for bad debts | 713,159.25 | - | 708,847.28 | - | - | 4,311.97 |
| Total | 713,159.25 | - | 708,847.28 | - | - | 4,311.97 |
There is no bad debt provision recovered or reversed with amounts significant during the year.
（4）There are no accounts receivable actually written off during the year.
（5）Top 5 of the closing balance of the accounts receivable collected according to the arrears party
In RMB
| Name | Balance in year-end | Proportion(%) | Bad debt provision |
| Total accounts receivable of the top five balances on December 31, 2023 | 12,652,340.62 | 99.81 | 3,073.24 |
2.Other receivable
(1) Disclosure by aging
In RMB
| Aging | Balance at the end of this year | Balance at the end of last year |
| Within 1 year | 1,683,810.52 | 3,408,892.46 |
| 1-2 years | 2,213,073.28 | 10,707,995.02 |
| 2-3 years | 10,100,800.01 | - |
| Over 3 years | 15,279,395.10 | 15,279,395.10 |
| Total | 29,277,078.91 | 29,396,282.58 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| Less: Bad debt provision | 15,263,525.96 | 15,263,525.96 |
| book value | 14,013,552.95 | 14,132,756.62 |
(2) Disclosure by payment nature
In RMB
| Payment nature | Book balance at the end of this year | Book balance at the end of last year |
| Deposit and security deposit | 10,000.00 | 10,000.00 |
| External unit transactions | 15,349,339.97 | 15,349,339.97 |
| Related party transactions within the consolidation scope | 12,553,241.09 | 12,980,241.09 |
| Others | 1,364,497.85 | 1,056,701.52 |
| Total | 29,277,078.91 | 29,396,282.58 |
(3) Accrual of credit loss provision
As ofDecember 31, 2023, the provision for bad debts is made based on the general model of expected credit losses.
In RMB
| Bad Debt Reserves | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses over the next 12 months | Expected credit loss over life (no credit impairment) | Expected credit losses for the entire duration (credit impairment occurred) | ||
| Balance as at January 1, 2023 | 59,301.12 | 3,018.92 | 15,201,205.92 | 15,263,525.96 |
| Balance as at January 1, 2023 in current | ||||
| ——Transfer to stage II | (442.69) | 442.69 | - | - |
| ——Transfer to stage III | - | - | - | - |
| -- Reversal to the II stage | - | - | - | - |
| -- Reversal to the I stage | - | - | - | - |
| Provision in Current Year | - | 5,529.83 | - | 5,529.83 |
| Reversal in Current Year | (5,529.83) | - | - | (5,529.83) |
| Conversion in Current Year | - | - | - | - |
| Write off in Current Year | - | - | - | - |
| Other change | - | - | - | - |
| Balance as at 31 Dec. 2023 | 53,328.60 | 8,991.44 | 15,201,205.92 | 15,263,525.96 |
As ofDecember 31, 2023, Accrual of credit loss provision
In RMB
| Stage | Year-end amount | |||
| Expected average loss rate (%) | Book balance | Loss provision | Book value | |
| Other receivables for which credit loss provision is made according to the combination of credit risk characteristics | 52.13 | 29,277,078.91 | 15,263,525.96 | 14,013,552.95 |
As of December 31, 2023, the credit risk and bad debt provision for other receivables are as follows:
| 账龄 | Year-end amount | |||
| Expected average loss rate (%) | Book balance | Loss provision | Book value | |
| Within 1 year | 3.17 | 1,683,810.52 | 53,328.60 | 1,630,481.92 |
| 1-2 years | 0.04 | 2,213,073.28 | 902.24 | 2,212,171.04 |
| 2-3 years | 0.08 | 10,100,800.01 | 8,089.20 | 10,092,710.81 |
| Over 3 years | 99.49 | 15,279,395.10 | 15,201,205.92 | 78,189.18 |
| Total | 29,277,078.91 | 15,263,525.96 | 14,013,552.95 | |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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(4) Changes in bad debt provisions
In RMB
| Category | Balance at the beginning of the year | Change amount for the year | Balance at the end of the year | |||
| Accrual | Recovery or reversal | Transfer or write off | Other changes | |||
| Bad debt provisions | 15,263,525.96 | 5,529.83 | (5,529.83) | - | - | 15,263,525.96 |
(5) There are no other accounts receivable actually written off during the year.
(6) Top five companies with year-end balance of other receivables collected by the defaulting party
In RMB
| Unit name | Payment nature | Year-end balance of other receivables | Aging | Proportion of total year-end balance of other receivables (%) | Year-end balance of credit loss provision |
| Total other receivables of the top five balances on December 31, 2023 | Current payment receivable between companies and internal current payment | 27,860,581.06 | Within 1 year, 1-2 years, 2-3 years, Over 3 years | 95.16 | 14,266,189.97 |
3. Long-term equity investment
In RMB
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Investments in subsidiaries | 1,976,433,419.39 | 16,582,629.30 | 1,959,850,790.09 | 1,974,532,127.39 | 16,582,629.30 | 1,957,949,498.09 |
| Investments in joint ventures | 122,370,494.08 | - | 122,370,494.08 | 129,506,271.76 | - | 129,506,271.76 |
| Investments in associates company | 5,311,526.62 | - | 5,311,526.62 | 4,975,563.98 | - | 4,975,563.98 |
| Total | 2,104,115,440.09 | 16,582,629.30 | 2,087,532,810.79 | 2,109,013,963.13 | 16,582,629.30 | 2,092,431,333.83 |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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（1）Investment to the subsidiary
In RMB
| Name | Opening balance | Add investment | Decreased investment | Closing balance | Withdrawn impairment provision | Closing balance of impairment provision |
| SAPO Photoelectric | 1,924,663,070.03 | - | - | - | 1,924,663,070.03 | 14,415,288.09 |
| Shenzhen Lisi Industrial Development Co., Ltd. | 8,073,388.25 | - | - | - | 8,073,388.25 | - |
| Shenzhen Beauty Century Garment Co., Ltd. | 18,765,507.55 | 1,901,292.00 | - | - | 20,666,799.55 | 2,167,341.21 |
| Shenzhen Huaqiang Hotel | 15,489,351.08 | - | - | - | 15,489,351.08 | - |
| Shenzhen Shenfang Real Estate Management Co., Ltd. | 1,713,186.55 | - | - | - | 1,713,186.55 | - |
| Shenzhen Shenfang Sungang Real Estate Management Co., Ltd. | 5,827,623.93 | - | - | - | 5,827,623.93 | - |
| Total | 1,974,532,127.39 | 1,901,292.00 | - | - | 1,976,433,419.39 | 16,582,629.30 |
（2）Investment to joint ventures and associated enterprises
In RMB
| Name | Opening balance | Increase /decrease in reporting period | Chosing balance | Closing balance of impairment provision | |||||||
| Add investment | Decreased investment | Equity method affirmative profit and loss on investments | Adjustment of other comprehensive income | Other equity changes | Declaration of cash dividends or profit | Withdrawn impairment provision | Other | ||||
| I. Joint ventures | |||||||||||
| Shenzhen Guanhua Printing & Dyeing Co., Ltd. | 129,506,271.76 | - | - | (7,135,777.68) | - | - | - | - | - | 122,370,494.08 | - |
| Subtotal | 129,506,271.76 | - | - | (7,135,777.68) | - | - | - | - | - | 122,370,494.08 | - |
| II. Associated enterprises | |||||||||||
| Shenzhen Changlianfa Printing and dyeing Company | 3,105,796.55 | - | - | 252,320.54 | - | - | - | - | - | 3,358,117.09 | - |
| Yehui International Co., Ltd. | 1,869,767.43 | - | - | (15,526.75) | 99,168.85 | - | - | - | - | 1,953,409.53 | - |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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| Subtotal | 4,975,563.98 | - | - | 236,793.79 | 99,168.85 | - | - | - | - | 5,311,526.62 | - |
| Total | 134,481,835.74 | - | - | (6,898,983.89) | 99,168.85 | - | - | - | - | 127,682,020.70 | - |
Shenzhen Textile(Holdings) Co., Ltd.Financial Statements and Auditor's ReportFor the year ended December 31,2023
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4.Business income and Business cost
(1）Business income and Business cost
In RMB
| Items | Amount of current period | Amount of previous period | ||
| Business income | Business cost | Business income | Business cost | |
| Income from Main Business | 77,822,508.75 | 9,822,306.53 | 56,046,883.88 | 9,544,956.96 |
(2) Main business income and main business cost classified by product
In RMB
| Product | Amount incurred this year | Amount incurred last year | ||
| Main business income | Main business cost | Main business income | Main business cost | |
| Property leasing | 77,822,508.75 | 9,822,306.53 | 56,046,883.88 | 9,544,956.96 |
(3) Main business income and main business cost classified by area
In RMB
| Area | Amount incurred this year | Amount incurred last year | ||
| Main business income | Main business cost | Main business income | Main business cost | |
| Domestic | 77,822,508.75 | 9,822,306.53 | 56,046,883.88 | 9,544,956.96 |
5.Investment income
In RMB
| Items | Amount of current period | Amount of previous period |
| Income from long-term equity investment measured by adopting the equity method | (6,898,983.89) | 1,307,639.15 |
| Income from long-term equity investment measured by adopting the cost method | 9,989,533.92 | - |
| Investment income of trading financial assets during the holding period | 14,816,230.07 | 15,748,625.37 |
| Dividend income earned during investment holdings in other equity instruments | 1,393,735.85 | 1,599,735.85 |
| Tota | 19,300,515.95 | 18,656,000.37 |
Shenzhen Textile(Holdings) Co., Ltd.
Supplementary informationFor the year ended December 31,2023
1. Particulars about current non-recurring gains and loss
In accordance with the provisions of the No. 1Explanatory Announcement on Information Disclosure of CompaniesOffering Securities to the Public-Non-Recurring Profit and Loss (Revised in 2023) (hereinafter referred to as the " No.1Explanatory Announcement") issued by the China Securities Regulatory Commission, the Group's non-recurring profitand loss for 2023 is as follows:
In RMB
| Items | Amount |
| Non-current asset disposal gain/loss(including the write-off part for which assets impairment provision is made) | 1.72 |
| Government subsidy recognized in current gain and loss(excluding those closely related to the Company’s business and granted under the state’s policies) | 19,927,836.02 |
| Losses/gains from changes of fair values occurred in holding trading financial assets and trading financial liabilities, and investment income obtaining from the disposal of trading financial assets, trading financial liability and financial assets available-for-sale, excluded effective hedging business relevant with normal operations of the Company | 2,151,780.82 |
| Reversal of the account receivable depreciation reserves subject to separate impairment test | 15,031,480.15 |
| Other non-business income and expenditures other than the above | (6,755,922.25) |
| Total non-recurring gains and losses | 30,355,176.46 |
| Less :Influenced amount of income tax | 3,478,333.83 |
| Net non-recurring gains and losses | 26,876,842.63 |
| Influenced amount of minor shareholders’ equity (after tax) | 9,937,259.91 |
| Non-recurring gains or losses attributable to the common shareholders of the Company | 16,939,582.72 |
Note: According to No. 1Explanatory Announcement, the impact on the Group's net non-recurring profit and loss in2022 is RMB13,006,395.30, and the impact on the non-recurring profit or loss attributable to ordinary shareholders ofthe Company is RMB7,803,837.18.
2. Return on net asset and earnings per share
This statement of return on net assets and earnings per share is prepared by the Group in accordance with the Rules forInformation Disclosure of Companies Issuing Securities to the Public No. 9- Calculation and Disclosure of Return onEquity and Earnings per Share (revised in 2010) issued by China Securities Regulatory Commission.
In RMB
| Profit of report period | Weighted average returns equity(%) | Earnings per share | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profit attributable to the Common stock shareholders of Company. | 2.77 | 0.16 | 0.16 |
| Net profit attributable to the Common stock shareholders of Company after deducting of non-recurring gain/loss. | 2.17 | 0.12 | 0.12 |
The Board of Directors of Shenzhen Textile (Holdings) Co., Ltd.
March 28, 2024