Shenzhen Textile (Holdings) Co., Ltd.
Auditor’s Report
Qin Xin Shen Zi (2016)]No.1564
Table of contents
Contents Page
I. Auditor’s Report
II. Audited Financial Statements
1.Consolidated Balance sheet
2．Parent company Balance sheet
3. Consolidated Income statement
4. Parent company Income statement
5. Consolidated Cash flow statement
6. Parent company Cash flow statement
7. Consolidated Statement on Change in Owners’
Equity
8. Statement of change in owner’s Equity of the Parent
Company
III. Notes to financial statements
Peking Certified Public Accountants
Add:11/F,Zhongtang Building,No.110, Xizhimen Street, Beijing
Tel：（86-10）68360123
Fax：（86-10）68360123-3000
Zip Code:100044
Auditor’s Report
Qin Xin Shen Zi (2016)]No.1564
To all shareholders of Shenzhen Textile (Holdings) Co., Ltd.：
We audited accompanying financial statements of Shenzhen Textile (Holdings) Co., Ltd.(the “Company),
including Consolidated and parent Company balance sheet as of December 31, 2015, and the Parent Company and
Consolidated income statement, The parent company and Consolidated cash flow statement ,The parent Company
and Consolidated Statements of Changes in equity for the year then ended, and the notes to the financial
statements .
I. The responsibility of the Management for the financial statements
Shenzhen Textile (Holdings) Co., Ltd ’s. management is responsible for the preparation and fair presentation
of these financial statements this responsibility includes : (1) Prepare the financial statements according to
business enterprises regulation, so that making reasonable accounting estimate;(2) Design, implementation and
maintenance of internal control related to the preparation of financial statements so that financial statements are
free from material misstatement caused by fraudulent practices or errors.
II. Responsibility of certified public accountants
We are responsible for expressing opinions on financial statements based on our audit. We conducted audit in
accordance with the audit criteria for Chinese certified public accountants. The audit criteria for Chinese certified
public accountants require us to abide by professional ethics, plan and conduct audit to obtain reasonable
assurance as to whether financial statements are free from material misstatement.
Audit involves carrying out audit procedure to obtain the audit evidences about the amounts and disclosure of
financial statements. The selected audit procedure relies on the judgment of certified public accountants,
6
including the appraisal of risk of material misstatement of financial statements used by fraudulent practices or
errors. While appraising risks, we considered the internal control related to the preparation of financial
statements to design proper audit procedure. The audit also includes the appraisal of suitability of accounting
policies selected by the management, the reasonableness of accounting estimate and the overall presentation of
financial statements.
We believe that the audit evidences obtained by us are full and appropriate and provide a basis for expressing
audit opinion.
III. Audit opinion
In our opinion, the financial statements of the Company Wharf present fairly, in all material respects, the
company’s and consolidated financial position as of 31 December 2015, and the Company’s and consolidated
results of operations and cash flows for the year then ended in accordance with Accounting Standards for
Business Enterprises.
Peking Certified Public Accountants(Special General Partnership)
Chinese C.P.A. Xiao Yi
Chinese C.P.A. Lan Tao
March 29,2016
7
Financial Statements
\Statement in Financial Notes are carried in RMB/CNY
1.Consolidated Balance sheet
Prepared by : Shenzhen Textile (Holdings) Co., Ltd.
In RMB
Items Year-end balance Year-beginning balance
Current asset：
Monetary fund 752,314,871.53 1,101,771,561.28
Settlement provision
Outgoing call loan
Financial assets measured at fair value
with variations accounted into current
income account
Derivative financial assets
Bill receivable 18,841,745.16 43,412,635.19
Account receivable 182,766,372.05 156,123,570.35
Prepayments 7,853,818.19 27,075,094.81
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts
receivable
Interest receivable 30,298,938.80 13,357,311.32
Dividend receivable
Other account receivable 45,133,672.10 41,843,377.39
Repurchasing of financial assets
Inventories 308,775,044.88 230,659,122.24
Assets held for sales
Non-current asset due in 1 year
Other current asset 513,553,675.47 61,748,415.41
Total of current assets 1,859,538,138.18 1,675,991,087.99
Non-current assets：
Loans and payment on other’s behalf
disbursed
Disposable financial asset 43,241,524.06 87,592,297.11
8
Expired investment in possess
Long-term receivable
Long term share equity investment 22,879,269.06 20,795,057.33
Property investment 134,389,963.05 140,905,275.45
Fixed assets 790,019,487.16 824,871,367.33
Construction in progress 75,803,586.70 79,822,149.34
Engineering material
Fixed asset disposal
Production physical assets
Gas & petrol
Intangible assets 40,626,936.34 41,771,402.89
R & D petrol
Goodwill 9,614,758.55
Long-germ expenses to be amortized 633,541.50 560,877.06
Differed income tax asset 2,262,532.65 2,607,644.23
Other non-current asset
Total of non-current assets 1,109,856,840.52 1,208,540,829.29
Total of assets 2,969,394,978.70 2,884,531,917.28
Current liabilities
Short-term loans 53,866,521.87 24,676,594.72
Loan from Central Bank
Deposit received and hold for others
Call loan received
Financial liabilities measured at fair
value with variations accounted into
current income account
Derivative financial liabilities
Bill payable
Account payable 227,528,808.60 153,026,682.35
Advance payment 28,199,415.11 41,135,510.00
Selling of repurchased financial assets
Fees and commissions receivable
Employees’ wage payable 35,307,822.40 37,736,705.46
Tax payable 14,682,643.09 8,912,594.55
Interest payable 39,088,887.96 33,037,218.68
9
Dividend payable
Other account payable 125,775,723.80 112,654,863.06
Reinsurance fee payable
Insurance contract provision
Entrusted trading of securities
Entrusted selling of securities
Liabilities held for sales
Non-current liability due in 1 year 40,000,000.00 75,346,136.30
Other current liability
Total of current liability 564,449,822.83 486,526,305.12
Non-current liabilities：
Long-term loan 120,000,000.00 124,653,863.70
Bond payable
Including：preferred stock
Sustainable debt
Long-term payable
Long-term payable employees’s
remuneration
Special payable
Expected liabilities
Deferred income 99,524,165.58 66,546,079.96
Deferred income tax liability 10,851,444.74 10,556,420.24
Other non-current liabilities
Total non-current liabilities 230,375,610.32 201,756,363.90
Total of liability 794,825,433.15 688,282,669.02
Owners’ equity
Share capital 506,521,849.00 506,521,849.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 1,585,130,051.37 1,585,130,051.37
Less：Shares in stock
Other comprehensive income 3,212,187.35 33,389,117.46
Special reserves
10
Surplus reserves 70,539,319.86 64,403,027.10
Common risk provision
Undistributed profit 9,166,137.97 6,805,203.33
Total of owner’s equity belong to the
2,174,569,545.55 2,196,249,248.26
parent company
Minority shareholders’ equity
Total of owners’ equity 2,174,569,545.55 2,196,249,248.26
Total of liabilities and owners’ equity 2,969,394,978.70 2,884,531,917.28
Legal Representative: Zhu Jun Person in charge of accounting：Zhu Jun Accounting Dept Leader: Mu Linying
2. Balance sheet of Parent Company
In RMB
Items Year-end balance Year-beginning balance
Current asset：
Monetary fund 271,582,749.03 457,379,886.16
Financial assets measured at fair value
with variations accounted into current
income account
Derivative financial assets
Bill receivable 1,800,000.00
Account receivable 819,054.57 468,887.97
Prepayments 1,754,880.00 2,771,374.00
Interest receivable 22,294,015.02 10,640,957.35
Dividend receivable 7,798,378.51
Other account receivable 72,543,709.78 64,581,392.46
Inventories
Assets held for sales
Non-current asset due in 1 year
Other current asset 260,000,000.00
Total of current assets 636,792,786.91 537,642,497.94
Non-current assets：
Disposable financial asset 41,741,524.06 84,292,297.11
Expired investment in possess
Long-term receivable
11
Long term share equity investment 1,779,103,035.67 1,797,651,565.42
Property investment 126,873,096.51 132,976,776.39
Fixed assets 26,579,978.92 27,002,348.21
Construction in progress 38,792,110.90 31,482,502.19
Engineering material
Fixed asset disposal
Production physical assets
Gas & petrol
Intangible assets 1,378,688.61 1,627,715.16
R & D petrol
Goodwill
Long-germ expenses to be amortized
Deferred income tax asset 2,556,126.29 3,061,417.30
Other non-current asset
Total of non-current assets 2,017,024,560.96 2,078,094,621.78
Total of assets 2,653,817,347.87 2,615,737,119.72
Current liabilities
Short-term loans
Financial liabilities measured at fair
value with variations accounted into
current income account
Derivative financial liabilities
Bill payable
Account payable 411,743.57 411,743.57
Advance payment 639,024.58 639,024.58
Employees’ wage payable 7,299,686.80 5,878,352.45
Tax payable 12,558,340.06 6,660,135.95
Interest payable
Dividend payable
Other account payable 77,332,555.09 67,479,912.27
Liabilities held for sales
Non-current liability due in 1 year
Other current liability
Total of current liability 98,241,350.10 81,069,168.82
Non-current liabilities：
12
Long-term loan
Bond payable
Including：preferred stock
Sustainable debt
Long-term payable
Employees’ wage payable
Special payable
Expected liabilities
Deferred income
Deferred income tax liability 278,469.57 10,556,420.24
Other non-current liabilities
Total of Non-current liabilities 278,469.57 10,556,420.24
Total of liability 98,519,819.67 91,625,589.06
Owners’ equity
Share capital 506,521,849.00 506,521,849.00
Other equity instrument
Including：preferred stock
Sustainable debt
Capital reserves 1,576,547,069.58 1,576,547,069.58
Less：Shares in stock
Other comprehensive income 3,212,187.35 33,389,117.46
Special reserves
Surplus reserves 70,539,319.86 64,403,027.10
Undistributed profit 398,477,102.41 343,250,467.52
Total of owners’ equity 2,555,297,528.20 2,524,111,530.66
Total of liabilities and owners’ equity 2,653,817,347.87 2,615,737,119.72
Legal Representative: Zhu Jun Person in charge of accounting：Zhu Jun Accounting Dept Leader: Mu Linying
3.Consolidated Income Statement
In RMB
Items Report period Same period of the previous year
I. Income from the key business 1,226,746,791.62 1,210,952,548.57
Incl：Business income 1,226,746,791.62 1,210,952,548.57
Interest income
13
Insurance fee earned
Fee and commission received
II. Total business cost 1,302,269,276.48 1,317,382,360.52
Incl：Business cost 1,142,511,012.84 1,154,743,462.84
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
Insurance policy dividend paid
Insurance policy dividend paid
Reinsurance expenses
Business tax and surcharge 7,624,971.76 7,905,969.24
Sales expense 11,743,914.73 14,067,625.17
Administrative expense 103,044,704.30 119,496,105.45
Financial expenses -24,448,318.10 -30,392,840.60
Asset impairment loss 61,792,990.95 51,562,038.42
Add：Gains from change of fir value
（“-”for loss）
Investment gain（“-”for loss） 94,812,557.58 23,294,636.54
Incl: investment gains from affiliates 2,431,042.20 1,788,818.78
Gains from currency exchange（“-”for
loss）
III. Operational profit（“-”for loss） 19,290,072.72 -83,135,175.41
Add ：Non-operational income 24,122,339.62 21,159,989.26
Including：Income from disposal of
235,533.62 135,925.51
non-current assets
Less：Non business expenses 260,665.61 83,757.49
Incl：Loss from disposal of non-current
260,642.59 83,643.89
assets
IV.Total profit(“-”for loss) 43,151,746.73 -62,058,943.64
Less：Income tax expenses 34,654,519.33 51,532,384.62
V. Net profit 8,497,227.40 -113,591,328.26
Net profit attributable to the owners of
8,497,227.40 -113,591,328.26
parent company
Minority shareholders’ equity
14
VI. Other comprehensive income -30,176,930.11 9,854,344.17
Net of profit of other comprehensive inco
me attributable to owners of the parent co -30,176,930.11 9,854,344.17
mpany.
（I）Other comprehensive income items
that will not be reclassified into
gains/losses in the subsequent
accounting period
1.Re-measurement of defined benefit pla
ns of changes in net debt or net assets
2.Other comprehensive income under the
equity method investee can not be reclass
ified into profit or loss.
（II）
Other comprehensive income that will b -30,176,930.11 9,854,344.17
e reclassified into profit or loss.
1.Other comprehensive income under the
equity method investee can be reclassifie
d into profit or loss.
2.Gains and losses from changes in fair v
-30,375,486.14 9,886,627.82
alue available for sale financial assets
3.Held-to-maturity investments reclassifi
ed to gains and losses of available for sal
e financial assets
4.The effective portion of cash flow hedg
es and losses
5.Translation differences in currency fina
198,556.03 -32,283.65
ncial statements
6.Other
7.Net of profit of other comprehensive i
ncome attributable to Minority
shareholders’ equity
VII. Total comprehensive income -21,679,702.71 -103,736,984.09
Total comprehensive income attributable
-21,679,702.71 -103,736,984.09
to the owner of the parent company
Total comprehensive income attributable
minority shareholders
VIII. Earnings per share
（I）Basic earnings per share 0.02 -0.22
(II)Diluted earnings per share 0.02 -0.22
The current business combination under common control, the net profits of the combined party before achieved ne
t profit of RMB 0, last period the combined party realized RMB 0.
15
Legal Representative: Zhu Jun Person in charge of accounting：Zhu Jun Accounting Dept Leader: Mu Linying
4. Income statement of the Parent Company
In RMB
Items Amount in this period Amount in last period
I. Income from the key business 64,473,351.83 63,124,318.89
Incl：Business cost 12,333,803.24 12,482,856.41
Business tax and surcharge 5,494,540.21 5,530,512.60
Sales expense
Administrative expense 28,207,859.60 31,313,410.67
Financial expenses -19,528,024.29 -15,035,734.73
Asset impairment loss 14,939,945.14 -5,163,448.04
Add：Gains from change of fir value
（“-”for loss）
Investment gain（“-”for loss） 58,283,064.18 22,062,282.28
Incl: investment gains from affiliates 2,431,042.20 1,788,818.79
II. Operational profit（“-”for loss） 81,308,292.11 56,059,004.26
Add ：Non-operational income 2,047,648.92 3,993,511.97
Including：Income from disposal of
235,233.62
non-current assets
Less：Non business expenses 13,020.92
Incl：Loss from disposal of non-current
13,020.92
assets
III.Total profit(“-”for loss) 83,342,920.11 60,052,516.23
Less：Income tax expenses 21,979,992.46 14,039,596.21
IV. Net profit（“-”for net loss） 61,362,927.65 46,012,920.02
V.Net of profit of other comprehensive i
-30,176,930.11 9,854,344.17
ncome
（I）Other comprehensive income items
that will not be reclassified into
gains/losses in the subsequent
accounting period
1.Re-measurement of defined benefit pl
ans of changes in net debt or net assets
2.Other comprehensive income under th
e equity method investee can not be recl
assified into profit or loss.
16
（II）
Other comprehensive income that will b -30,176,930.11 9,854,344.17
e reclassified into profit or loss.
1.Other comprehensive income under th
e equity method investee can be reclassi
fied into profit or loss.
2.Gains and losses from changes in fair
-30,375,486.14 9,886,627.82
value available for sale financial assets
3.Held-to-maturity investments reclassif
ied to gains and losses of available for s
ale financial assets
4.The effective portion of cash flow hed
ges and losses
5.Translation differences in currency fin
198,556.03 -32,283.65
ancial statements
6.Other
VI. Total comprehensive income 31,185,997.54 55,867,264.19
VII. Earnings per share：
（I）Basic earnings per share
(II)Diluted earnings per share
Legal Representative: Zhu Jun Person in charge of accounting：Zhu Jun Accounting Dept Leader: Mu Linying
5. Consolidated Cash flow statement
In RMB
Items Amount in this period Amount in last period
I.Cash flows from operating activities
Cash received from sales of goods or
1,247,874,437.38 1,225,517,209.48
rending of services
Net increase of customer deposits
and capital kept for brother company
Net increase of loans from central bank
Net increase of inter-bank loans from
other financial bodies
Cash received against original insurance
contract
Net cash received from reinsurance
17
business
Net increase of client deposit and
investment
Net increase of amount from disposal
financial assets that measured by fair
value and with variation reckoned into
current gains/losses
Net increase of inter-bank fund
received
Net increase of trade financial asset
disposal
Net increase of repurchasing business
Tax returned 68,431,596.59 77,012,597.33
Other cash received from business
95,526,183.51 75,754,386.32
operation
Sub-total of cash inflow 1,411,832,217.48 1,378,284,193.13
Cash paid for purchasing of
1,157,396,626.23 1,165,323,109.41
merchandise and services
Net increase of client trade and advance
Net increase of savings n central bank
and brother company
Cash paid for original contract claim
Cash paid for interest, processing fee
and commission
Cash paid for policy dividend
Cash paid to staffs or paid for staffs 128,028,856.25 134,633,573.32
Taxes paid 36,667,118.26 80,706,284.79
Other cash paid for business activities 50,155,116.37 46,322,719.66
Sub-total of cash outflow from business
1,372,247,717.11 1,426,985,687.18
activities
Cash flow generated by business
39,584,500.37 -48,701,494.05
operation, net
II.Cash flow generated by investing
Cash received from investment
89,640,023.95 21,307,417.68
retrieving
Cash received as investment gains 4,871,581.37 3,298,701.39
Net cash retrieved from disposal of
2,950.00 118,690.00
fixed assets, intangible assets, and other
18
long-term assets
Net cash received from disposal of
100,386,000.00
subsidiaries or other operational units
Other investment-related cash received 30,591,780.82 202,371,196.29
Sub-total of cash inflow due to
125,106,336.14 327,482,005.36
investment activities
Cash paid for construction of
fixed assets, intangible assets 17,134,529.58 48,919,307.85
and other long-term assets
Cash paid as investment
Net increase of loan against pledge
Net cash received from subsidiaries and
other operational units
Other cash paid for investment
490,059,223.58 100,000,000.00
activities
Sub-total of cash outflow due to
507,193,753.16 148,919,307.85
investment activities
Net cash flow generated by investment -382,087,417.02 178,562,697.51
III.Cash flow generated by financing
Cash received as investment
Incl: Cash received as investment from
minor shareholders
Cash received as loans 244,759,302.00 160,095,760.79
Cash received from bond placing
Other financing –related ash received 279.31
Sub-total of cash inflow from financing
244,759,302.00 160,096,040.10
activities
Cash to repay debts 255,569,374.85 135,419,166.07
Cash paid as dividend, profit, or
792,115.53 402,425.29
interests
Incl: Dividend and profit paid by
subsidiaries to minor shareholders
Other cash paid for financing activities
Sub-total of cash outflow due to
256,361,490.38 135,821,591.36
financing activities
Net cash flow generated by financing -11,602,188.38 24,274,448.74
IV. Influence of exchange rate 4,531,621.61 182,755.14
19
alternation on cash and cash equivalents
V.Net increase of cash and cash
-349,573,483.42 154,318,407.34
equivalents
Add: balance of cash and cash
1,098,232,359.02 943,913,951.68
equivalents at the beginning of term
VI ..Balance of cash and cash
748,658,875.60 1,098,232,359.02
equivalents at the end of term
Legal Representative: Zhu Jun Person in charge of accounting：Zhu Jun Accounting Dept Leader: Mu Linying
6. Cash flow statement of the Parent Company
In RMB
Items Amount in this period Amount in last period
I.Cash flows from operating activities
Cash received from sales of goods or
63,862,579.19 62,399,316.68
rending of services
Tax returned
Other cash received from business
18,819,989.01 20,495,286.17
operation
Sub-total of cash inflow 82,682,568.20 82,894,602.85
Cash paid for purchasing of
4,835,838.70 6,021,459.84
merchandise and services
Cash paid to staffs or paid for staffs 14,524,922.32 17,957,199.61
Taxes paid 22,477,306.54 68,706,268.66
Other cash paid for business activities 9,551,257.85 10,533,550.85
Sub-total of cash outflow from business
51,389,325.41 103,218,478.96
activities
Cash flow generated by business
31,293,242.79 -20,323,876.11
operation, net
II.Cash flow generated by investing
Cash received from investment
46,395,738.95 19,302,132.19
retrieving
Cash received as investment gains 3,777,417.02 2,048,981.52
Net cash retrieved from disposal of
fixed assets, intangible assets, and other
long-term assets
Net cash received from disposal of 100,386,000.00
20
subsidiaries or other operational units
Other investment-related cash received 30,591,780.82 567,210.00
Sub-total of cash inflow due to
80,764,936.79 122,304,323.71
investment activities
Cash paid for construction of
fixed assets, intangible assets 7,855,316.71 10,228,512.00
and other long-term assets
Cash paid as investment
Net cash received from subsidiaries and
other operational units
Other cash paid for investment
290,000,000.00
activities
Sub-total of cash outflow due to
297,855,316.71 10,228,512.00
investment activities
Net cash flow generated by investment -217,090,379.92 112,075,811.71
III.Cash flow generated by financing
Cash received as investment
Cash received as loans
Cash received from bond placing
Other financing –related ash received 279.31
Sub-total of cash inflow from financing
279.31
activities
Cash to repay debts
Cash paid as dividend, profit, or
interests
Other cash paid for financing activities
Sub-total of cash outflow due to
financing activities
Net cash flow generated by financing 279.31
IV. Influence of exchange rate
6,989.91
alternation on cash and cash equivalents
V.Net increase of cash and cash
-185,797,137.13 91,759,204.82
equivalents
Add: balance of cash and cash
457,379,886.16 365,620,681.34
equivalents at the beginning of term
VI ..Balance of cash and cash
271,582,749.03 457,379,886.16
equivalents at the end of term
21
Legal Representative: Zhu Jun Person in charge of accounting：Zhu Jun Accounting Dept Leader: Mu Linying
7. Consolidated Statement on Change in Owners’ Equity
Amount in this period
In RMB
Amount in this period
Owner’s equity Attributable to the Parent Company
Other Equity
Minor
instrusment Other Commo Total of
Items Share Less: Speciali Attribut shareho
Capital Compre Surplus n risk owners’
Capita prefer Shares zed able lders’
Sustai reserves hensive reserves provisio equity
l red Other in stock reserve profit equity
nable Income n
stock
debt
506,52 1,585,1 2,196,2
I.Balance at the 33,389, 64,403, 6,805,2
1,849. 30,051. 49,248.
end of last year 117.46 027.10 03.33
00 37 26
Add: Change of
accounting
policy
Correcting of
previous errors
Merger of entities
under common
control
Other
II.Balance at the 506,52 1,585,1 2,196,2
33,389, 64,403, 6,805,2
beginning of 1,849. 30,051. 49,248.
117.46 027.10 03.33
current year 00 37 26
III.Changed in the -30,176, 6,136,2 2,360,9 -21,679,
current year 930.11 92.76 34.64 702.71
（1）Total
-30,176, 8,497,2 -21,679,
comprehensive
930.11 27.40 702.71
income
（II）Investment
or decreasing of
capital by owners
1．Ordinary Share
s invested by hare
holders
22
2 ． Holders of oth
er equity instrume
nts invested capital
3．Amount of
shares paid and
accounted as
owners’ equity
4．Other
（III）Profit 6,136,2 -6,136,2
allotment 92.76 92.76
1.Providing of 6,136,2 -6,136,2
surplus reserves 92.76 92.76
2.Providing of
common risk
provisions
3．Allotment to the
owners (or
shareholders)
4．Other
(IV) Internal
transferring of
owners’ equity
1. Capitalizing of
capital reserves (or
to capital shares)
2. Capitalizing of
surplus reserves
(or to capital
shares)
3．Making up
losses by surplus
reserves.
4. Other
(V). Special
reserves
1. Provided this
year
2．Used this term
（VI）Other
23
506,52 1,585,1 2,174,5
IV. Balance at the 3,212,1 70,539, 9,166,1
1,849. 30,051. 69,545.
end of this term 87.35 319.86 37.97
00 37 55
Amount in last year
In RMB
Amount in last year
Owner’s equity Attributable to the Parent Company
Other Equity
Minor
instrusment Total of
Items Other Commo
Share Less: Speciali Attribut shareho
Capital Compre Surplus n risk owners’
Capita prefer Shares zed able lders’
Sustai reserves hensive reserves provisio equity
l red Other in stock reserve profit equity
nable Income n
stock
debt
506,52 1,582,9 2,297,8
I.Balance at the 23,534, 59,801, 124,997
1,849. 90,396. 46,577.
end of last year 773.29 735.10 ,823.59
00 13 11
Add: Change of
accounting
policy
Correcting of
previous errors
Merger of entities
under common
control
Other
II.Balance at the 506,52 1,582,9 2,297,8
23,534, 59,801, 124,997
beginning of 1,849. 90,396. 46,577.
773.29 735.10 ,823.59
current year 00 13 11
-118,19 -101,59
III.Changed in the 2,139,6 9,854,3 4,601,2
2,620.2 7,328.8
current year 55.24 44.17 92.00
6 5
（1）Total -113,59 -103,73
9,854,3
comprehensive 1,328.2 6,984.0
44.17
income 6 9
（II）Investment
or decreasing of
capital by owners
1．Ordinary Share
s invested by hare
24
holders
2 ． Holders of oth
er equity instrume
nts invested capital
3．Allotment to the
owners (or
shareholders)
4．Other
（III）Profit 4,601,2 -4,601,2
allotment 92.00 92.00
1.Providing of 4,601,2 -4,601,2
surplus reserves 92.00 92.00
2.Providing of
common risk
provisions
3．Allotment to the
owners (or
shareholders)
4．Other
(IV) Internal
transferring of
owners’ equity
1. Capitalizing of
capital reserves (or
to capital shares)
2. Capitalizing of
surplus reserves
(or to capital
shares)
3．Making up
losses by surplus
reserves.
4. Other
(V) Special
reserves
1. Provided this
year
2．Used this term
（VI）Other 2,139,6 2,139,6
25
55.24 55.24
506,52 1,585,1 2,196,2
IV. Balance at the 33,389, 64,403, 6,805,2
1,849. 30,051. 49,248.
end of this term 117.46 027.10 03.33
00 37 26
Legal Representative: Zhu Jun Person in charge of accounting：Zhu Jun Accounting Dept Leader: Mu Linying
8. Statement of change in owner’s Equity of the Parent Company
Amount in this period
In RMB
Amount in this period
Other Equity instrusment
Other
Other Less: Total of
Items Share Capital Compreh Specialize Surplus Attribut
preferre Sustain Shares in able owners’
Capital reserves ensive d reserve reserves profit
d stock able stock equity
Income
debt
506,521, 1,576,547 33,389,11 64,403,02 343,250 2,524,111
I.Balance at the
end of last year 849.00 ,069.58 7.46 7.10 ,467.52 ,530.66
Add: Change of
accounting
policy
Correcting of
previous errors
Other
II.Balance at the
506,521, 1,576,547 33,389,11 64,403,02 343,250 2,524,111
beginning of
849.00 ,069.58 7.46 7.10 ,467.52 ,530.66
current year
III.Changed in the -30,176,9 6,136,292 55,226, 31,185,99
current year 30.11 .76 634.89 7.54
（1）Total
-30,176,9 61,362, 31,185,99
comprehensive
30.11 927.65 7.54
income
（II）Investment or
decreasing of
capital by owners
1．Ordinary Share
s invested by hareh
olders
2 ． Holders of oth
26
er equity instrume
nts invested capital
3．Allotment to the
owners (or
shareholders)
4．Other
（III）Profit 6,136,292 -6,136,2
allotment .76 92.76
1.Providing of 6,136,292 -6,136,2
surplus reserves .76 92.76
2．Allotment to the
owners (or
shareholders)
3．Other
(IV)Internal
transferring of
owners’ equity
1. Capitalizing of
capital reserves (or
to capital shares)
2. Capitalizing of
surplus reserves
(or to capital
shares)
3．Making up
losses by surplus
reserves.
4. Other
(V) Special
reserves
1. Provided this
year
2．Used this term
（VI）Other
IV. Balance at the 506,521, 1,576,547 3,212,187 70,539,31 398,477 2,555,297
end of this term 849.00 ,069.58 .35 9.86 ,102.41 ,528.20
Amount in last year
In RMB
Items Amount in last year
27
Other Equity instrusment
Other
Other Less: Total of
Share Capital Compreh Specialize Surplus Attribut
preferre Sustain Shares in able owners’
Capital reserves ensive d reserve reserves profit
d stock able stock equity
Income
debt
506,521, 1,574,407 23,534,77 59,801,73 301,838 2,466,104
I.Balance at the
end of last year 849.00 ,414.34 3.29 5.10 ,839.50 ,611.23
Add: Change of
accounting
policy
Correcting of
previous errors
Other
II.Balance at the
506,521, 1,574,407 23,534,77 59,801,73 301,838 2,466,104
beginning of
849.00 ,414.34 3.29 5.10 ,839.50 ,611.23
current year
III.Changed in the 2,139,655 9,854,344 4,601,292 41,411, 58,006,91
current year .24 .17 .00 628.02 9.43
（1）Total
9,854,344 46,012, 55,867,26
comprehensive
.17 920.02 4.19
income
（II）Investment or
decreasing of
capital by owners
1．Ordinary Share
s invested by hareh
olders
2 ． Holders of oth
er equity instrume
nts invested capital
3．Allotment to the
owners (or
shareholders)
4．Other
（III）Profit 4,601,292 -4,601,2
allotment .00 92.00
1.Providing of 4,601,292 -4,601,2
surplus reserves .00 92.00
2．Allotment to the
owners (or
28
shareholders)
3．Other
(IV)Internal
transferring of
owners’ equity
1. Capitalizing of
capital reserves (or
to capital shares)
2. Capitalizing of
surplus reserves
(or to capital
shares)
3．Making up
losses by surplus
reserves.
4. Other
(V) Special
reserves
1. Provided this
year
2．Used this term
2,139,655 2,139,655
（VI）Other
.24 .24
IV. Balance at the 506,521, 1,576,547 33,389,11 64,403,02 343,250 2,524,111
end of this term 849.00 ,069.58 7.46 7.10 ,467.52 ,530.66
Legal Representative: Zhu Jun Person in charge of accounting：Zhu Jun Accounting Dept Leader: Mu Linying
29
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Shenzhen Textile (Holdings) Co., Ltd.
Notes to financial statements
Year 2015
(Currency unit for the statements in the notes to these financial statements: RMB)
I. Basic Information of the Company
(1)Company Profile
1. Enterprise registration address, organization mode and headquarter address.
The company was previously the Shenzhen Textile Industry Company, on April 13, 1994, approved
by the Letter(1994)No.15 issued by Shenzhen Municipal People's Government, the Company was
restructured and named as Shenzhen Textile (Holdings) Co., Ltd. In the same year, approved by the
(1994) No.19 file of Shenzhenshi, the shares of the company were listed in Shenzhen Stock
Exchange. The Company has got the corporate business certification of Shensizi No.
440301105031014, Registration address and headquarter address are 6/F,Shenfang Building,
Huaqiang Road. North, Futian District, Shenzhen.
2.Enterprise’s business nature and major business operation.
At present, the Company is mainly engaged in high-tech industry focusing on R&D, production and
marketing of polarizer’s for liquid crystal display, management of properties in bustling business
districts of Shenzhen and reserved high-class textile and garment business.
3. Approval of the financial statements reported
The financial statements have been authorized for issuance by the Board of Directors of the Group
on March 29,2016.
(2)Scope of consolidated financial statements
1.As of the end of the reporting period, there are 7 subsidiaries companies included in the
consolidated financial statements:Shenzhen Shengbo Optoelectronic Technology Co., Ltd.,
Shenzhen Lisi Industrial Development Co., Ltd.,Shenzhen Huaqiang Hotel, Shenzhen Shenfang
Property Management Co., Ltd., Shenzhen Beautify Garments Co., Ltd., Shenzhen Shenfang Import
& Export Co., Ltd. and Shengtou (Hongkong) Co.,Ltd.
2．The scope of consolidated financial statements this period did not change.
II.Basis for the preparation of financial statements
（1）Basis for the preparation
The basis of the financial statements was continuous operation assumption, based on actual
transactions, in accordance with the relevant provisions of Accounting Standards for Business
Enterprises and in accordance with this Note III, "Significant accounting policies and accounting
estimates".
30
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
(2).Continuation
There will be no such events or situations in the 12 months from the end of the reporting period that
will cause material doubts as to the continuation capability of the Company.
III. Important accounting policies and estimations
1. Statement on complying with corporate accounting standards
The financial statements prepared by the Company comply with the requirements of corporate
accounting standards. They truly and completely reflect the financial situations, operating results,
equity changes and cash flow, and other relevant information of the company.
2.Fiscal Year
The Company adopts the Gregorian calendar year commencing on January 1 and ending on
December 31 as the fiscal year.
3. Operating cycle
Normal business cycle is realized by the Company in cash or cash equivalents from the purchase of
assets for processing until. Less than 1 year is for the normal operating cycle in the company.
With regard to less than 1 year for the normal operating cycle, the assets realized or the liabilities
repaid at maturity within one year as of the balance sheet date shall be classified into the current
assets or the current liabilities.
4. Accounting standard money
The Company takes RMB as the standard currency for bookkeeping.
5. Accounting process method of enterprise consolidation under same and different
controlling.
（1）Enterprise merger under same control：
For a business combination involving enterprises under common control, the party that, on the
combination date, obtains control of another enterprise participating in the combination is the
absorbing party, while that other enterprise participating in the combination is a party being
absorbed. Combination date is the date on which the absorbing party effectively obtains control of
the party being absorbed.
The assets and liabilities obtained are measured at the carrying amounts as recorded by the
enterprise being combined at the combination date. The difference between the carrying amount of
the net assets obtained and the carrying amount of consideration paid for the combination (or the
total face value of shares issued) is adjusted to the capital premium in the capital reserve. If the
balance of the capital premium is insufficient, any excess is adjusted to retained earnings.
31
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
The cost of a combination incurred by the absorbing party includes any costs directly attributable to
the combination shall be recognized as an expense through profit or loss for the current period when
incurred.
Accounting Treatment of the Consolidated Financial Statements:
The long-term equity investment held by the combining party before the combination will change if
the relevant profit and loss, other comprehensive income and other owner equity are confirmed
between the ultimate control date and the combining date for the combining party and the combined
party on the acquirement date, and shall respectively offset the initial retained incomes or the profits
and losses of the current period during the comparative statement.
(2)Business combination involving entities not under common control
A business combination involving enterprises not under common control is a business combination
in which all of the combining enterprises are not ultimately controlled by the same party or parties
both before and after the business combination. For a business combination not involving
enterprises under common control, the party that, on the acquisition date, obtains control of another
enterprise participating in the combination is the acquirer, while that other enterprise participating in
the combination is the acquire. Acquisition date is the date on which the acquirer effectively obtains
control of the acquire.
The difference of the merger cost minus the fair value shares of identifiable net assets obtained by
the acquire during the merger on the acquisition date, is recognized as the business reputation.
While the merger cost is less than the fair value shares of identifiable net assets obtained by the
acquire during the merger, all the measurement on the identifiable assets, the liabilities, the fair
value of liabilities and the merger cost obtained by the acquire should firstly be rechecked, and the
difference shall be recorded into the current profits and costs if the merger cost is still less than the
fair value shares of identifiable net assets obtained by the acquire during the merger after
rechecking.
Where the temporary difference obtained by the acquirer was not recognized due to inconformity
with the conditions applied for recognition of deferred income tax, if, within the 12 months after
acquisition, additional information can prove the existence of related information at acquisition date
and the expected economic benefits on the acquisition date arose from deductible temporary
difference by the acquiree can be achieved, relevant income tax assets can be recognized, and
goodwill offset. If the goodwill is not sufficient, the difference shall be recognized as profit of the
current period.
For a business combination not involving enterprise under common control, which achieved in
stages that involves multiple exchange transactions, according to “The notice of the Ministry of
Finance on the issuance of Accounting Standards Interpretation No. 5” (CaiKuai [2012] No. 19) and
Article51 of “Accounting Standards for Business Enterprises No.33 - Consolidated Financial
Statements” on the “package deal” criterion, to judge the multiple exchange transitions whether they
are the"package deal". If it belong to the “package deal” in reference to the preceding paragraphs of
this section and “long-term investment” accounting treatment, if it does not belong to the “package
deal” to distinguish the individual financial statements and the consolidated financial statements
related to the accounting treatment:
In the individual financial statements, the total value of the book value of the acquirer’s equity
32
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
investment before the acquisition date and the cost of new investment at the acquisition date, as the
initial cost of the investment, the acquirer’s equity investment before the acquisition date involved
in other comprehensive income, in the disposal of the investment will be in other comprehensive
income associated with the use of infrastructure and the acquire directly related to the disposal of
assets or liabilities of the same accounting treatment (that is, except in accordance with the equity
method of accounting in the defined benefit plan acquire is remeasured net changes in net assets or
liabilities other than in the corresponding share of the lead, and the rest into the current investment
income).
In the combination financial statements, the equity interest in the acquire previously held before the
acquisition date re-assessed at the fair value at the acquisition date, with any difference between its
fair value and its carrying amount is recorded as investment income. The previously-held equity
interest in the acquire involved in other comprehensive income and other comprehensive income
associated with the purchase of the foundation should be used party directly related to the disposal
of assets or liabilities of the same accounting treatment (that is, except in accordance with the equity
method of accounting in the acquire is remeasured defined benefit plans other than changes in net
liabilities or net assets due to a corresponding share of the rest of the acquisition date into current
investment income).
6.Preparation of the consolidated financial statements
(1)The scope of consolidation
The scope of consolidation for the consolidated financial statements is determined on the basis of
control. Control is the power to govern the financial and operating policies of an enterprise so as to
obtain benefits from its operating activities. The relevant events refer to the activities that have
significant influence on the return to the invested party. In accordance with the specific conditions,
the relevant events of the invested party should conclude the sale and purchase of goods and services,
the management of the financial assets, the purchase and disposal of the assets, the research and
development activities, the financing activities and so on.
The scope of consolidation includes the Company and all of the subsidiaries. Subsidiary is an
enterprise or entity under the control of the Company.
Once the change in the relevant facts and circumstances leading to the definition of the relevant
elements involved in the control of the change, the company will be re-evaluated.
( 2)Preparation of the consolidated financial statements.
The Company based on its own and its subsidiaries financial statements, in accordance with other
relevant information, to prepare the consolidated financial statements.
For a subsidiary acquired through a business combination not under common control, the operating
results and cash flows from the acquisition (the date when the control is obtained) are included in the
consolidated income statement and consolidated statement of cash flows, as appropriated; no
adjustment is made to the opening balance and comparative figures in the consolidated financial
statements. Where a subsidiary and a party being absorbed in a merger by absorption was acquired
during the reporting period, through a business combination involving enterprises under common
control, the financial statements of the subsidiary are included in the consolidated financial
statements. The results of operations and cash flow are included in the consolidated balance sheet and
33
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
the consolidated income statement, respectively, based on their carrying amounts, from the date that
common control was established, and the opening balances and the comparative figures of the
consolidated financial statements are restated.
When the accounting period or accounting policies of a subsidiary are different from those of the
Company, the Company makes necessary adjustments to the financial statements of the subsidiary
based on the Company’s own accounting period or accounting policies. Where a subsidiary was
acquired during the reporting period through a business combination not under common control, the
financial statements was reconciliated on the basis of the fair value of identifiable net assets at the
date of acquisition.
Intra-Group balances and transactions, and any unrealized profit or loss arising from intra-Group
transactions, are eliminated in preparing the consolidated financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Company are
presented separately in the consolidated balance sheet within shareholders’/ owners’ equity and net
profit. Net profit or loss attributable to minority shareholders in the subsidiaries is presented
separately as minority interest in the consolidated income statement below the net profit line item.
When the amount of loss for the current period attributable to the minority shareholders of a
subsidiary exceeds the minority shareholders’ portion of the opening balance of shareholders’/equity
of the subsidiary, the excess is allocated against the minority interests.
When the Company loses control of a subsidiary due to the disposal of a portion of an equity
investment or other reasons, the remaining equity investment is re-measured at its fair value at the
date when control is lost. The difference between 1) the total amount of consideration received from
the transaction that resulted in the loss of control and the fair value of the remaining equity
investment and 2) the carrying amounts of the interest in the former subsidiary’s net assets
immediately before the loss of the control is recognized as investment income for the current period
when control is lost. Other comprehensive income related to the former subsidiary's equity
investment, using the foundation and the acquire directly related to the disposal of the same assets or
liabilities are accounted when the control is lost(ie, in addition to the former subsidiary is remeasured
at the net defined benefit plan or changes in net assets and liabilities resulting from, the rest are
transferred to the current investment income). The retained interest is subsequently measured
according to the rules stipulated in the - “Chinese Accounting Standards for Business Enterprises
No.2 - Long-term equity investment” or “Chinese Accounting Standards for Business Enterprises
No.22 - Determination and measurement of financial instruments”.
The company through multiple transactions step deal with disposal of the subsidiary's equity
investment until the loss of control, need to distinguish between equity until the disposal of a
subsidiary's loss of control over whether the transaction is package deal. Terms of the transaction
disposition of equity investment in a subsidiary, subject to the following conditions and the economic
impact of one or more of cases, usually indicates that several transactions should be accounted for as
a package deal:①these transactions are considered。simultaneously, or in the case of mutual influence
made, ②these transactions as a whole in order to achieve a complete business results; ③the
occurrence of a transaction depends on occurs at least one other transaction; ④a transaction look
alone is not economical, but when considered together with other transaction is economical.
If they does not belong to the package deal, each of them separately, as the case of a transaction in
accordance with “without losing control over the disposal of a subsidiary part of a long-term equity
34
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
investments“principles applicable accounting treatment. Until the disposal of the equity investment
loss of control of a subsidiary of the transactions belonging to the package deal, the transaction will
be used as a disposal of a subsidiary and the loss of control of the transaction. However, before losing
control of the price of each disposal entitled to share in the net assets of the subsidiary 's investment
corresponding to the difference between the disposal, recognized in the consolidated financial
statements as other comprehensive income, loss of control over the transferred together with the loss
of control or loss in the period.
7.Joint venture arrangements classification and Co-operation accounting treatment
(1)Joint arrangement
A joint arrangement is an arrangement of which two or more parties have joint control，depending of
the rights and obligation of the Company in the joint arrangement. A joint operation is a joint
arrangement whereby the Company has rights to the assets, and obligations for the liabilities, relating
to the arrangement. A joint venture is a joint arrangement whereby the Company has rights to the net
assets of the arrangement.
(2)Co-operation accounting treatment
When the joint venture company for joint operations, confirm the following items and share common
business interests related to:
（1）Confirm individual assets and common assets held based on shareholdings;
（2）Confirm individual liabilities and shared liabilities held based on shareholdings;
（3）Confirm the income from the sales revenue of co-operate business output
（4）Confirm the income from the sales of the co-operate business output based on shareholdings;
（5）Confirm the individual expenditure and co-operate business cost based on shareholdings.
(3)When a 、company is a joint ventures, joint venture investment will be recognized as long-term
equity investments .
8.Recognition Standard of Cash & Cash Equivalents
Cash and cash equivalents of the Company include cash on hand, ready usable deposits and
investments having short holding term (normally will be due within three months from the day of
purchase), with strong liquidity and easy to be exchanged into certain amount of cash that can be
measured reliably and have low risks of change.
9.Foreign Currency Transaction
（1）Foreign Currency Transaction
The approximate shot exchange rate on the transaction date is adopted and translated as RMB
amount when the foreign currency transaction is initially recognized. On the balance sheet date, the
monetary items of foreign currency are translated as per the shot exchange rate on the balance sheet
date, the foreign exchange conversion gap due to the exchange rate, except for the balance of
exchange conversion arising from special foreign currency borrowings capitals and interests for the
purchase and construction of qualified capitalization assets, shall be recorded into the profits and
35
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
losses of the current period. The non-monetary items of foreign currency measured at the historical
cost shall still be translated at the spot exchange rate on the transaction date, of which the RMB
amount shall not be changed. The non-monetary items of foreign currency measured at the fair
value shall be translated at the spot exchange rate on the fair value recognized date, the gap shall be
recorded into the current profits and losses or other comprehensive incomes.
(2) Translation Method of Foreign Currency Financial Statement
For the assets and liabilities in the balance sheet, the shot exchange rate on the balance sheet date is
adopted as the translation exchange rate. For the owner’s equity, the shot exchange rate on the
transaction date is adopted as the translation exchange rate, with the exception of “undistributed
profits”. The incomes and expenses in the income statement shall be translated at the spot exchange
rate or the approximate exchange rate on the transaction date. The translation gap of financial
statement of foreign currency converted above shall be listed in other comprehensive incomes under
the owner’s equity in the consolidated balance sheet.
10.Financial tools
One financial asset or financial liability shall be recognized when the company becomes the party in
the financial instrument contract. The financial assets and the financial liabilities are measured at the
fair value in the initial recognition. For the financial assets and liabilities that measured at the fair
values and the variation included in the current profits and losses, the relative transaction expenses
shall be directly recorded into the profits and losses. For the financial assets and liabilities of other
categories, the expenses related to transactions are recognized as initial amount.
1 Determination of financial assets and liabilities’ fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’s length transaction. For a financial instrument which has an
active market, the Company uses quoted price in the active market to establish its fair value. The
quoted price in the active market refers to the price that can be regularly obtained from exchange
market, agencies, industry associations, pricing authorities; it represents the fair market trading price
in the actual transaction. For a financial instrument which does not have an active market, the
Company establishes fair value by using a valuation technique. Valuation techniques include using
recent arm’s length market transactions between knowledgeable, willing parties, reference to the
current fair value of another instrument that is substantially the same, discounted cash flow analysis
and option pricing models.
2. Classification, recognition and measurement of financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date
basis. On initial recognition, the Company’s financial assets are classified into including financial
assets at fair value though profit or loss, held-to maturity investments, loans and receivables and
available-for-trade assets.
（1） Financial assets at fair value through profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit or
loss. Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A. the financial asset is acquired for the purpose of selling it in a short term;
36
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively
managed, and there is objective evidence indicating that the enterprise recently manages this portfolio
for the purpose of short-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective hedging
instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by
delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair
value cannot be reliably measured. For such kind of financial assets, fair values are adopted for
subsequent measurement.
Financial asset is designated on initial recognition as at fair value through profit or loss only when it
meets one of the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement or
recognition of relevant gains or losses that would otherwise arise from measuring the financial
instruments on different bases.
B. a Group of financial instruments is managed and its performance is evaluated on a fair value basis,
and is reported to the enterprise’s key management personnels. Formal documentation regarding risk
management or investment strategy has prepared。
Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any
gains or losses arising from changes in the fair value and any dividends or interest income earned on
the financial assets are recognized in the profit or loss.
（2）Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments
and fixed maturity that an entity has the positive intention and ability to hold to maturity. Such kind
of financial assets are subsequently measured at amortized cost using the effective interest method.
Gains or losses arising from derecognition, impairment or amortization are recognized in profit or
loss for the current period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through the
expected life of the financial asset or financial liability or, where appropriate, a shorter period to the
net carrying amount of the financial asset or financial liability. When calculating the effective interest
rate, the Company shall estimate future cash flow considering all contractual terms of the financial
asset or financial liability without considering future credit losses, and also consider all fees paid or
received between the parties to the contract giving rise to the financial asset and financial liability that
are an integral part of the effective interest rate, transaction costs, and premiums or discounts, etc.
（3）Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment that are
not quoted in an active market. Financial assets classified as loans and receivables by the Company
include note receivables, account receivables, interest receivable dividends receivable and other
receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest
method. Gain or loss arising from derecognition, impairment or amortization is recognized in profit
or loss.
（4）Financial assets available-for-trade
Financial assets available-for-trade include non-derivative financial assets that are designated on
initial recognition as available for trade, and financial assets that are not classified as financial assets
37
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
at fair value through profit or loss, loans and receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses
arising from changes in the fair value are recognized as other comprehensive income and included in
the capital reserve, except that impairment losses and exchange differences related to amortized cost
of monetary financial assets denominated in foreign currencies are recognized in profit or loss, until
the financial assets are derecognized, at which time the gains or losses are released and recognized in
profit or loss. Interests obtained and dividends declared by the investee during the period in which the
financial assets available-for-trade are held, are recognized in investment gains.
3. Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for
the financial assets that measured by the fair value. If there is objective evidence indicating a
financial asset may be impaired, a provision is provided for the impairment.
The company shall make an independent impairment test on the financial assets with significant
single amounts, and carry out an independent impairment test on the financial assets with
insignificant single amounts, or conduct an impairment-related test after they are included in a
combination of financial assets with similar credit risk features so as to carry out. Where, upon
independent test, the financial asset (including those financial assets with significant single amounts
and those with insignificant amounts) has not been impaired, it shall be included in a combination of
financial assets with similar risk features so as to conduct another impairment test. The financial
assets which have suffered from an impairment loss in any single amount shall not be included in any
combination of financial assets with similar risk features for any impairment test.
（1）Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the
estimated present value of future cash flow. The difference is recorded as impairment loss. If there is
objective evidence to indicate the recovery of value of financial assets after impairment, and it is
related with subsequent event after recognition of loss, the impairment loss recorded originally can be
reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the
amortized cost of the financial assets without provisions of impairment loss on the reserving date.
（2）Impairment loss on available-for-trade financial assets
Where the fair value of the equity instrument investment drops significantly or not contemporarily
according to the integrated relevant factors, an available-for-trade financial asset is impaired. The
"serious decline" refers to the cumulative fair value declines more than 30%; "non-temporary
decline" refers to the continuous decline in the fair value of time over 12 months.
When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in
fair value that had been recognized in capital reserve shall be removed and recognized in profit or
loss. The amount of the cumulative loss that is removed shall be difference between the acquisition
cost with deduction of recoverable amount less amortized cost, current fair value and any impairment
loss on that financial asset previously recognized in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the value of the
financial asset is recovered, and it is objectively related to an event occurring after the impairment
loss was recognized, the initial impairment loss can be reversed and the reserved impairment loss on
available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss on
available-for-trade debt instrument is recorded in the current profit or loss.
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
The equity instrument where there is no quoted price in an active market, and whose fair value cannot
be reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by
delivery of such an unquoted equity instrument shall not be reversed.
4. Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under a
pass-through arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either has
transferred substantially all the risks and rewards of the asset, or has neither transferred norretained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over
the asset, the asset is recognized according to the extent it exists as financial asset, and correspondent
liability is recognized. The extent of existence refers the level of risk by the financial asset changes
the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the carrying
amount of the financial asset transferred; and the sum of the consideration received from the transfer
and any cumulative gain or loss that had been recognized in other comprehensive income, is
recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the
transferred financial asset is allocated between the part that continues to be recognized and the part
that is derecognized, based on the relative fair value of those parts. The difference between (a) the
carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for
the part derecognized and any cumulative gain or loss allocated to the part derecognized which has
been previously recognized in other comprehensive income, is recognized in profit or loss.
The Company uses recourse sale financial assets, or financial assets held endorser, determine almost
all of the risks and rewards of ownership of the financial assets have been transferred if. Has
transferred the ownership of the financial assets of almost all the risks and rewards to the transferee,
the derecognition of the financial asset; retains ownership of the financial assets of almost all of the
risks and rewards of financial assets that are not derecognised; neither transfers nor retains ownership
of the financial assets of almost all of the risks and rewards, then continue to determine whether the
enterprise retains control of the assets and the accounting treatment in accordance with the principles
described in the preceding paragraphs.
5. Classification and measurement of financial liabilities
The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair
value through profit or loss and other financial liabilities. For financial liabilities at fair value through
profit or loss, relevant transaction costs are immediately recognized in profit or loss for the current
period, and transaction costs relating to other financial liabilities are included in the initial recognition
amounts.
(1)Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the
initial recognition to be measured by the fair value follows the same criteria as the classification by
which financial assets held-for-trade and financial assets designed at the initial recognition to be
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
measured by the fair value and their changes are recorded in the current profit or loss.For the
financial liabilities measured by the fair value and changes recorded in the profit or loss, fair values
are adopted for subsequent measurement. All the gains or losses on the change of fair value and the
expenses on dividends or interests related to these financial liabilities are recognized in profit or loss
for the current period.
（2）Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price
in an active market and their fair value cannot be measured reliably, is subsequently measured by cost
Other financial liabilities are subsequently measured at amortized cost using the effective interest
method. Gains or losses arising from derecognition or amortization is recognized in profit or loss for
the current period.
6. Derecognition of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation
(or part of it) is discharged or cancelled or has expired. An agreement between the Company (an
existing borrower) and existing lender to replace original financial liability with a new financial
liability with substantially different terms is accounted for as an extinguishment of the original
financial liability and the recognition of a new liability.
When the Company derecognizes a financial liability or a part of it, it recognizes the difference
between the carrying amount of the financial liability (or part of the financial liability) derecognized
the consideration paid (including any non-cash assets transferred or new financial liabilities assumed)
in profit or loss.
7. Offsetting financial assets and financial liabilities
When the Company has a legal right that is currently enforceable to set off the recognized financial
assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial
asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be
offset and the net amount is presented in the balance sheet. Except for the above circumstances,
financial assets and financial liabilities shall be presented separately in the balance sheet and shall not
be offset.
8. Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company
after deducting all of its liabilities. The consideration received from issuing equity instruments, net of
transaction costs, are added to shareholders’ equity. All types of distribution (excluding stock
dividends) made by the Company to holders of equity instruments are deducted from shareholders’
equity. The Group does not recognize any changes in the fair value of equity instruments.
11.Accounts Receivable
1.Accounts receivable with material specific amount and specific provisioned bad debt
preparation.
Judgment criteria or The Client Identifies single amount of accounts receivable that is not less than RMB 1 million as
amount standard of account receivable that are individually significant in amount. The Client Identifies single
material specific amount amount of accounts receivable that is not less than RMB 0.5 million as account receivable that
40
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
or amount criteria： are individually significant in amount.
Making an independent impairment test. If any objective evidence shows that it has been
impaired, the impairment-related losses shall be recognized according to the gap between its
Provision method with
material specific amount present value of future cash flow less than its book value, and the several shall be determined to
and provision of specific withdraw the bad debt provision. If there exists no the impairment after the impairment test,
bad debt preparation： they shall be included in a combination of the receivables with similar risk features so as to
withdraw the bad debt provision.
2.The accounts receivable of bad debt provisions made by credit risk Group
(1) Recognition Criteria for the Group and Withdrawing Method of Bad Debt Provision
Name Recognition Criteria Withdrawing Method
Aging Group Division by Aging Aging Analysis Method
(2)Accounts on age basis in the portfolio：
Aging Rate for receivables(%) Rate for other receivables(%)
Within 1 year（Included 1 year） 5 5
1－2 years 10 10
2－3 years 30 30
Over 3 years 50 50
(3)Account receivable with non-material specific amount but specific bad debt preparation
Reasons of Withdrawing Individual Bad Debt
There is any objective evidence shows that it has been impaired.
Provision
The impairment-related losses shall be recognized according to the gap
Withdrawing Method of Bad Debt Provision
between its present value of future cash flow less than its book value.
12.Inventory
1.Investories class
Inventory shall include the finished products or goods available for sale during daily activities, the
products in the process of production, the stuff and material consumed during the process of
production or the services offered.
2．Valuation method of inventory issued
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
The company calculates the prices of its inventories according to the weighted averages method
3. Recognition Criteria for the Net Realizable Value of Different Category of Inventory and
Withdrawing Method of Inventory Falling Price Reserves
The inventory shall be measured by use of the lower between the cost and the net realizable value and
the inventory falling price reserves shall be withdrawn as per the gap of single inventory cost minus
the net realizable value at the balance sheet date. The net realizable value refers to the amounts that
the estimated sale price of inventory minus the estimated costs ready to happen till the completion of
works, the estimated selling expenses and the relevant expenses of taxation. The company shall
recognize the net realizable value of inventory based on the acquired unambiguous evidence and in
view of the purpose to hold the inventory, the influence of matters after the balance sheet date and
other factors.
The net realizable value of inventory directly for sale shall be recognized according to the amounts of
the estimated sale price of the inventory minus the estimated sale expenses and the relevant expenses
of taxation during the process of normal production and operation. The net realizable value of
inventory that required to conduct processing shall be recognized according to the amounts of the
estimated sale price of the finished products minus the estimated costs ready to happen till the
completion of works, the estimated selling expenses and the relevant expenses of taxation. On the
balance sheet date, the net realizable value shall be respectively defined for the partial agreed with the
contract price and others without the contract price in the same inventory, and the amounts of the
inventory falling price reserves withdrawn or returned shall be respectively recognized in comparison
with their corresponding costs.
4. Inventory System: Adopts the Perpetual Inventory System
5．Amortization method for low cost and short-lived consumable items and packaging materials
（1）Low cost and short-lived consumable items
Low cost and short-lived consumable items are amortized using immediate write-off method。
（2）Packaging materials
Packaging materials are amortized using
13.Held-for-sale assets
A non-current asset is classified as held-for-sale if all of the following conditions are satisfied:
1The asset is immediately sellable at its current condition per usual sales term applicable to the type
of assets to which it belongs；
2. the Company's has completed official decision to dispose the asset;
3. the Company has entered into irrevocable sales contract with the purchaser; and
4. the sales will be completed within one year.
Is classified as held for sale and the disposal of non current assets in the group of assets and liabilities,
are classified as current assets and current liabilities.
Termination of operation to meet one of the following conditions have been disposed of or classified
as held for sale, in the operation and the preparation of the financial statements to be able to
differentiate the components alone in the company within:
1.This part of main business represents an independent or a main business area;
2.This part of the proposed disposal plans for a major business independent or a main business area;
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
3 This part is just to sell again and made subsidiary.
For the fixed assets held for sale, the company shall adjust the estimated net residual value of the
fixed assets in order to make it reflecting the amount after the disposal costs deducted from the fair
value, which doesn’t exceed the original book value of the fixed assets when the condition of holding
for sale is met. The impairment losses of the assets shall be regarded and recorded into the current
profits and losses if the original book value is more than the balance of the estimated net residual
value after adjusting.
The assets or the disposal group held for sale no longer meet the recognized requirements of the fixed
assets held for sale, the company shall terminate the classification of held-for-sale and measure based
on the less one between the following amounts: (1) the amounts after adjusted for the assets or the
disposal group classified as the book value before the held-for-sale according to the originally
confirmed depreciation, amortization or impairment when supposed that have not classified as the
held-for-sale. (2) the returned amounts that can’t be re-sold.
The intangible assets and other non-current assets held for sale shall be treated as per above
principles.
14.Long-term equity investments
Long-term equity investments referred to in this section refer to the Company invested entity has
control, joint control or significant influence over the long-term equity investments. The Company
invested does not have control, joint control or significant influence over the long-term equity
investments as financial assets available for sale or at fair value and the changes included financial
assets through profit or loss.
Joint control is the Company control over an arrangement in accordance with the relevant stipulations
are common, related activities and the arrangement must be after sharing control participants agreed
to the decision-making. Significant influence is the Company s financial and operating policies of the
entity has the right to participate in decision-making, but can not control or with other parties joint
control over those policies.
1. Determination of Investment cost
The cost of a long-term equity investment acquired through business combination under common
control is measured at the acquirer's share of the combination date book value of the acquiree's net
equity in the ultimate controller's consolidated financial statements. The difference between the cost
and book value of cash paid, non-monetary assets transferred and liabilities assumed is adjusted to
capital reserves, and to retained earnings if capital reserves is insufficient. If the consideration is
transferred by way of issuing equity instruments, the face value of the equity instruments issued is
recognised in share capital and the difference between the cost of the face value of the equity
instruments issued is adjusted to capital reserves, and to retained earnings if capital reserves is
insufficient. The cost of a long-term equity investment acquired through business combination not
under common control is the fair value of the assets transferred, liabilities incurred or assumed and
equity instruments issued. (For the equity of the combined party under common control obtained
step-by-step through multiple transactions and the business combination under common control
ultimately formed, the company should respectively dispose all the transactions if belong to the
package deal. For the package deal, all the transactions will be conducted the accounting treatment as
the deal with acquisition of control. For the non-package deal, the shares of the book value of the
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
stockholders’ equity/owners’ equity of the combined party in the consolidated financial statements of
the ultimate control party shall be as the initial investment cost of the long-term equity investment,
and the capital reserves shall be adjusted for the difference between the initial investment cost of
long-term equity investment and the sum of the book value of long-term equity investment before
merging and that of new consideration payment obtained on the merger date, or the retained earnings
shall be adjusted if the capital reserves are insufficient to offset. As for the equity investment held
before the merger date, the accounting treatment will not be conducted temporarily for other
comprehensive income accounted by equity method or confirmed for the financial assets available for
sale.)
All expenses incurred directly associated with the acquisition by the acquirer, including expenditure
of audit, legal services, valuation and consultancy and other administrative expenses, are recognised
in profit or loss for the period during which the acquisition occurs. For the merger of enterprises not
under the same control through gaining the shares of the combined enterprise by multiple steps of
deals, it shall deal with it in the following two ways depending on that if it belongs to "a package
deal": if it belongs to "a package deal", it shall deal with all the deals as one obtaining the control
power; if it does not belong to "a package deal", it shall, on the date of merger, regard the sum of
book value of the owner’s original equity of the merged enterprise and the newly increased
investment cost as the initial cost of the long-term equity investment. For the shares originally held
by this enterprise accounted for by weighted equity method, the relevant other comprehensive income
shall not be accounted for temporarily. If the equity investment held originally can be classified as the
financial assets for sale, the difference between the fair value and the book value, and the variation in
the accumulative fair value of other comprehensive returns recorded originally will be transferred into
the current profits and losses.
All expenses incurred directly associated with the acquisition by the acquirer, including expenditure
of audit, legal services, valuation and consultancy and other administrative expenses, are recognised
in profit or loss for the period during which the acquisition occurs.
Long-term equity investments acquired not through business combination are measured at cost on
initial recognition. Depending on the way of acquisition, the cost of acquisition can be the total cash
paid, the fair value of equity instrument issued, the contract price, the fair value or book value of the
assets given away in the case of non-monetary asset exchange, or the fair value of the relevant
long-term equity investments. The cost of acquisition of a long-term equity investment acquired not
through business combination also includes all directly associated expenses, applicable taxes and fees,
and other necessary expenses. When the significant impact or the joint control but non-control on the
invested party can be implemented due to the additional investment, the long-term equity investment
cost is the sum of the fair value of the equity investment originally held and the new investment costs
based on the recognition of “Accounting Standards for Enterprises No.22 – Recognition and
Measurement of Financial Instruments”.
2. Subsequent Measurement
To be invested joint control ( except constitute common operator ) or long-term equity investments
significant influence are accounted for using the equity method. In addition, the Company's financial
statements using the cost method of accounting for long-term equity can exercise control over the
investee.
(1)Cost method of accounting for long-term equity investments
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Under the cost method, a long-term equity investment is measured at initial investment cost. Except
for cash dividends or profits declared but not yet paid that are included in the price or consideration
actually paid upon acquisition of the long-term equity investment, investment income is recognized in
the period in accordance with the attributable share of cash dividends or profit distributions declared
by the investee.
(2)Equity method of accounting for long-term equity investments
When using the equity method, the initial investment cost of long-term equity investment exceeds th
e investor's net identifiable assets of the fair share of the investment value, do not adjust the initial in
vestment cost of long-term equity investment; the initial investment cost is less than the investee uni
t share of identifiable net assets at fair value, the difference is recognized in profit or loss, while the
long-term equity investment adjustment costs.
Where the initial investment cost of a long-term equity investment exceeds the investing enterprise’s
interest in the fair values of the investee’s identifiable net assets at the time of acquisition, no
adjustment shall be made to the initial investment cost. The carrying amount of an long-term equity
investment measured using the equity method is adjusted by the Company's share of the investee's net
profit and other comprehensive income, which is recognised as investment income and other
comprehensive income respectively. The carrying amount of an long-term equity investment
measured using the equity method is reduced by profit distribution or cash dividends announced by
the investee. The carrying amount of an long-term equity investment measured using the equity
method is also adjusted by the investee's equity movement other than net profit, other comprehensive
income and profit distribution, which is adjusted to capital reserves。The net profit of the investee is
adjusted by the fair value of the investee's identifiable assets as at acquistion. The financial statements
and hence the net profit and other comprehensive income of an investee which does not adopt
accounting policies or accounting period uniform with the Company is adjusted by the Company's
accounting policies and accounting period. The Company's share of unrealised profit or loss arising
from related party transactions between the Company and an associate or joint venture is deducted
from investment income. Unrealised loss arising from related party transactions between the
Company and an associate or joint venture which is associated with asset impairment is not adjusted.
Where assets transferred to an associate or joint venture which form part of the Company's
investment in the investee but which does not enable the Company obtain control over the investee,
the cost of the additional investment acquired is measured at the fair value of assets transferred and
the difference between the cost of the additional investment and the book value of the assets
transferred is recognised in profit or loss. Where assets transferred to an associate or joint venture
form an operation, the difference between the consideration received and the book value of the assets
transferred in recognised in profit or loss. Where assets transferred from an associate or joint venture
form an operation, the transaction is accounted for in accordance with CAS 20 - Business
Combination, any gain or loss is reocgnised in profit or loss.
The Company's share of an investee's net loss is limited by the sum of the book value of the
long-term equity investment and other net long-term investments in the investees. Where the
Company has obligation to share additional net loss of the investee, the estimatedshare of loss
recognised as accrued liabilities and investment loss. Where the Company has unrecognised share of
loss of the investee when the investee generates net profit, the Company's unrecognised share of loss
is reduced by the Company's share of net profit and when the Company's unrecognised share or loss
is eliminated in full, the Company's share of net profit, if any, is recognised as investment income.
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
(3)Acquisition of minority interest
The difference between newly increased equity investment due to acquisition of minority interests
and portion of net asset cumulatively calculated from the acquisition date is adjusted as capital
reserve. If the capital reserve is not sufficient to absorb the difference, the excess are adjusted against
returned earnings.
(4)Disposal of long-term equity investment
Where the parent company disposes long-term investment in a subsidiary without a change in control,
the difference in the net asset between the amount of disposed long-term investment and the amount
of the consideration paid or received is adjusted to the owner’s equity. If the disposal of long-term
investment in a subsidiary involves loss of control over the subsidiary, the related accounting policies
in Note applies. For disposal of long-term equity investments in any situation other than the
fore-mentioned situation, the difference between the book value of the investment disposed and the
consideration received is recognised in profit or loss.
The investee's equity movement other than net profit, other comprehensive income and profit
distribution is reocgnised in profit or loss proportionate to the disposal.
Where a long-term equity investment is measured by the equity method both before and after part
disposal of the investment, cumulative other comprehensive income relevant to the investment
recognised prior to the acquistion is treated in the same manner that the investee disposes the relevant
assets or liabilities proportionate to the disposal. The investee's equity movement other than net profit,
other comprehensive income and profit distribution is reocgnised in profit or loss proportionate to the
disposal.
Where a long-term equity investment is measured at cost both before and after part disposal of the
investment, cumulative other comprehensive income relevant to the investment recognised, as a result
of accounting by equity method or recognition and measurement principles applicable to financial
instruments, prior to the Company's acquisition of control over the investee is treated in the same
manner that the investee disposes the relevant assets or liabilities and recognised in profit or loss
proportionate to the disposal. The investee's equity movement other than net profit, other
comprehensive income and profit distribution, as a result of accounting by equity method, is
reocgnised in profit or loss proportionate to the disposal.
Where the Company's control over an investee is lost due to partial disposal of investment in the
investee and the Company continues to have significant influence over the investee after the partial
disposal, the investment in measured by the equity method in the Company's separate financial
statements; where the Company's control over an investee is lost due to partial disposal of investment
in the investee and the Company ceases to have significant influence over the investee after the
partial disposal, the investment in measured in accordance with the recognition and measurement
principles applicable to financial instruments in the Company's separate financialstatements and the
difference between the fair value and the book value of the remaining investment at the date of loss of
control is recognised in profit or loss. Cumulative other comprehensive income relevant to the
investment recognised, as a result of accounting by equity method or recognition and measurement
principles applicable to financial instruments, prior to the Company's acquisition of control over the
investee is treated in the same manner that the investee disposes the relevant assets or liabilities on
the date of loss of control. The investee's equity movement other than net profit, other comprehensive
income and profit distribution, as a result of accounting by equity method, is reocgnised in profit or
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
loss when control is lost. Where the remaining investment is measured by equity method, the
fore-mentioned other comprehensive income and other equity movement are recognised in profit or
loss proportionate to the disposal; Where the remaining investment is measured in accordance with
the recognition and measurement principles applicable to financial instruments, the fore-mentioned
other comprehensive income and other equity movement are recognised in profit or loss in full.
Where the Company's joint control or significant influence over an investee is lost due to partial
disposal of investment in the investee,the remaining investment in the investee is measured in
accordance with the recognition and measurement principles applicable to financial instruments, the
difference between the fair value and the book value of the remaining investment at the date of loss of
joint control or significant influence is recognised in profit or loss.Cumulative other comprehensive
income relevant to the investment recognised, as a result of accounting by equity method, prior to the
partial disposal is treated in the same manner that the investee disposes the relevant assets or
liabilities on the date of loss of joint control or significant influence. The investee's equity movement
other than net profit, other comprehensive income and profit distribution is reocgnised in profit or
loss when joint control or significant influence is lost.
Where the Company's control over an investee is lost through multiple disposals and the multiple
disposals shall be viewed as one single transaction, the multiple disposals is accounted for one single
transaction which result in the Company's loss of control over the investee. Each difference between
the consideration received and the book value of the investment disposed is recognised in other
comprehensive income and reclassified in full to profit or loss at the time when control over the
investee is lost.
15.Investment property
1. The Measurement Mode of Investment Property
The investment property of the company includes the leased land use rights, the leased buildings,
the land use rights held and prepared to transfer after appreciation.
The company shall adopt the cost mode to measure the investment property.
2. Depreciation or Amortization Method by Use of Cost Mode
The leased buildings of the investment property in the company shall be withdrawn the depreciation
by the service life average method, and the depreciation policy is the same with that of the fixed
assets. The land use rights held and prepared to transfer after appreciation in the investment property
shall be amortized by the line method, and the specific accounting policy is same with that of the
intangible assets.
16.Fixed assets
1．The conditions of recognition
Fixed assets refers to the tangible assets that are held for the sake of producing commodities,
rendering labor service, renting or business management and their useful life is in excess of one
fiscal year. The fixed assets can be recognized when the following requirements are all met: (1) the
economic benefits relevant to the fixed assets will flow into the enterprise. (2) the cost of the fixed
assets can be measured reliably.
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
The fixed assets of the company include the houses and buildings, the decoration of the fixed assets,
the machinery equipment, the transportation equipment, the electronic instrument and other devices.
2. Initial Measurement and Subsequent Measurement of the Fixed Assets
The fixed assets shall be book kept as per the acquired actual cost, and the depreciation shall be
withdrawn from the subsequent month after the usable status reserved and achieved.
3．The method for depreciation
The method for Expected useful life
Category Estimated residual value Depreciation
depreciation （Year）
House and Building- Straight-line method
35 years 4% 2.74%
Production
House and Straight-line method
Building-Non- 40 years 4% 2.40%
Production
Decoration of Fixed
10 years 10.00%
assets Straight-line method
Machinery and Straight-line method
10-14 years 4% 9.60%-6.86%
equipment
Transportation Straight-line method
8 years 4% 12.00%
equipment
Electronic equipment 8 years 4% 12.00%
Straight-line method
Other equipment Straight-line method 8 years 4% 12.00%
4．Cognizance evidence and pricing method of financial leasing fixed assets
(1) Recognition Criteria of the Fixed Assets under Financing Lease
The financing lease shall be recognized if the following one or several criteria are met: ① the
ownership of the leasing assets shall be transferred to the tenant when the expiration of lease term.
② the tenant has the option to purchase the leasing assets, and the made purchase price is expected
to be far less than the fair value of the leasing assets in the implementation of the option. Thus, it
can be reasonably recognized that the tenant will implement the option on the lease date. ③ the
ownership of assets is not transferred, but the lease term shall be the most of the life of the lease
assets. ④ the least present value of the lease payment of the tenant and the least present value of the
lease receipts on the lease date almost equal to the fair value of the leasing assets on the lease date
respectively. ⑤ the leasing assets have the special nature, and only the tenant can use if there is no
major modifications.
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
(2) Valuation of Fixed Assets Acquired under Finance Leases: the fixed assets acquired under
finance leases shall be book kept according to the lower between the fair value of the leasing assets
and the least lease payment on the lease date.
(3) Depreciation Method of Fixed Assets Acquired under Finance Leases: the depreciation shall be
withdrawn for the fixed assets acquired under finance leases as per the depreciation policy of own
fixed assets.
17.Construction in progress
1. The projects under construction shall be recognized when the economic benefits may flow into and
the cost can be reliably measured. Meanwhile, the projects under construction shall be measured
according to the actual cost occurred before the assets are built to achieve the expected usable
condition.
2. The projects under construction shall be transferred into the fixed assets according to the actual
project costs when the expected usable condition achieved. For the expected usable condition
achieved while the final accounts for completed projects not handled yet, the projects shall be
transferred into the fixed assets as per the estimated value. After the final accounts for completed
projects handled, the original estimated value shall be adjusted as per the actual cost, but the original
withdrawn depreciation shall not be adjusted again.
18.Borrowing costs
1. Recognition principles for capitalizing of loan expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or production of
asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset.
Other borrowing expenses are recognized as expenses according to the occurred amount, and
accounted into gain/loss of current term.
2. Duration of capitalization of Loan costs
(1).When a loan expense satisfies all of the following conditions, it is capitalized:
1. Expenditures on assets have taken place.
2. Loan costs have taken place;
3. The construction or production activities to make assets to reach the intended use or sale of state
have begun.
（2）Capitalization of borrowing costs is suspended during periods in which the acquisition,
construction or production of a qualifying asset is interrupted by activities other than those necessary
to prepare the asset for its intended use or sale, when the interruption is for a continuous period of
more than 3 months. Borrowing costs incurred during these periods recognized as an expense for the
current period until the acquisition, construction or production is resumed.
（3）When the construction or production meets the intended use or sale of state of capitalization
conditions, the Loan costs should stop capitalization.
3. Computation Method for Capitalization Rate and Amount of Borrowing Costs
With regard to the special borrowings for the purchase and construction of qualified assets, the
capitalized interest amount shall be recognized according to the amount of the interest cost for the
49
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
special borrowings actually occurred during the current period (including the amortization of discount
or premium recognized as per the effective interest method) minus the interest income acquired after
the borrowings deposit in bank or the investment income obtained from the temporary investment.
For the general borrowings for the purchase and construction of qualified assets, the capitalized
interest amount of the general borrowings shall be computed and recognized according to the
weighted average of accumulative asset expense beyond the expense of the special borrowings,
multiplying the capitalization rate of general borrowings.
19.Intangible assets
1. Valuation Method, Service Life and Impairment Test of Intangible Assets
(1) The intangible assets include the land use rights, the professional technology and the software,
which are conducted the initial measurement as per the cost.
(2) The service life of intangible assets is analyzed and judged when of the company acquires the
intangible assets. For the finite service life of the intangible assets, the years of service life or the
quantity of service life formed and the number of similar measurement unit shall be estimated. If the
term of economic benefits of the intangible assets brought for the company is not able to be foreseen,
the intangible assets shall be recognized as that with the indefinite service life.
(3) Estimation Method of Service life of Intangible Assets
1) For the intangible assets with the finite service life, the company shall generally consider the
following factors to estimate the service life: ① the normal service life of products produced with the
assets, and the acquired information of the service life of similar assets. ② the estimation of the
current stage conditions and the future development trends in the aspects of technology and craft. ③
the demand of the products produced by the assets or the offered services in the market. ④ the
expectation of actions adopted by current or potential competitors. ⑤ the expected maintenance
expense for sustaining the capacity to economic benefits brought by the assets and the ability to the
relevant expense expected. ⑥ the relevant law provision or the similar limit to the control term of the
assets, such as the licensed use term and the lease term. ⑦ the correlation with the service life of
other assets held by the company.
2) Intangible Assets with Indefinite Service Life, Judgment Criteria on Indefinite Service Life and
Review Procedure of Its Service Life
The company shall be unable to foresee the term of economic benefits brought by the assets for the
company, or the indefinite term of intangible assets recognized as the indefinite service life of
intangible assets.
The judgment criteria of Indefinite service life: ① as from the contractual rights or other legal rights,
but the indefinite service life of contract provision or legal provisions. ② unable to judge the term of
economic benefits brought by the intangible assets for the company after the integration of
information in the same industry or the relevant expert argumentation.
At the end of every year, the review should be made for the service life of the intangible assets with
the indefinite service life, and the relevant department that uses the intangible assets, shall conduct
the basic review by the method from up to down, in order to evaluate the judgment criteria of the
indefinite service life if there is the change.
50
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
(4) Amortization Method of Intangible Assets Value
The intangible assets with the finite service life shall be systematically and reasonably amortized
according to the expected implementation mode of the economic benefits related to the intangible
assets during the service life, and the line method shall be adopted to amortize for the intangible
assets unable to reliably recognize the expected implementation mode. The specific service life is as
follows:
Items Amortization life time（Year）
Land use right 50 years
Proprietary technology 15 years
Software 5 years
The intangible assets with the indefinite service life shall not be amortized, and the company shall
make the review of the service life of the intangible assets during every accounting period.
(5) If there is the impairment for the intangible assets with the definite service life on the balance
sheet date, the corresponding impairment provision shall be withdrawn according to the difference
between the book value and the recoverable amount. The intangible assets with the indefinite service
life and without the usable condition shall be conducted the impairment test every year whether the
impairment exists.
2. Accounting Policy of Internal Research and Development Expenditure
The expenditure for internal research and development project in the study stage shall be recorded
into the current profits and losses when occurring. The expenditure for internal research and
development project in the development stage shall be recognized as the intangible assets when the
following requirements are simultaneously met: (1) the completion of the intangible assets is
available for use or sale, and feasible in the technology. (2) the intention to complete the intangible
assets and use or sale. (3) the method for the economic benefits produced by the intangible assets,
including the evidence that shows there exists the market for the products generated from the
intangible assets or the intangible assets have the market. The intangible assets are used internally
which shows the serviceability. (4) there are sufficient technology, financial resources and other
resources to support the completion of the development of the intangible assets, and there is ability
to use or sell the intangible assets. (5) the expenditure belong to the development stage of the
intangible assets can be reliably measured.
The specific criteria for the division of the internal research and development projects at the
research stage and the development stage of the company is as follows: (1) the investigation stage
planned to obtain the new technology and knowledge, shall be recognized as the research stage,
which has the features of planning and exploration. (2) before the commercial manufacture and use,
the research results or other knowledge should be applied for the plan or design, in order to produce
the new or improved stages with substantial materials, devices and products, which should be
recognized as the development stage, and this stage has the features of pertinence and more
possibility to create the achievement.
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
20.Long-term Assets Impairment
The company shall make judgment of the long-term assets including the long-term equity
investment, the investment property measured by the cost mode, the fixed assets and the projects
under construction if there is possible impairment on the balance sheet date. If there exists the
evidence shows that the long-term assets have the impairment, the impairment test should be
conducted, and the recoverable amount should be estimated. The impairment shall be confirmed if
there exists after the comparison of the estimated recoverable amount of the assets and its book
value, and if the assets impairment provision shall be withdrawn to recognize the corresponding
impairment losses. The estimation of the recoverable amount of assets should be confirmed
according to the higher one between the net amount of the fair value minus the disposal costs and
the present value of the cash flow of assets expected in the future.
The company shall conduct the impairment test at least every year for the goodwill established by
the business combination and the intangible assets with the indefinite service life whether there
exists the impairment.
The impairment loss of long-term assets after recognized shouldn’t be reversed in the future
accounting period.
21.Long-term amortizable expenses
Deferred charges represent expenses incurred that should be borne and amortized over the current and
subsequent period (together of more than one year).
The long-term unamortized expense shall be book kept as per the actual amount occurred, and shall
be averagely amortize within the benefit period or the specified period. If the long-term unamortized
expense can’t make the benefits for the future accounting period, the amortized value of the
unamortized project shall all be transferred into the current profits and losses.
22.Remuneration
The employee benefits of the company include short-term employee benefits, post-employment
benefits, termination benefits and other long-term employee benefits.
1. Accounting Treatment Method of Short-term Compensation
During the accounting period of service provision of staff, the company shall regard the actual
short-term compensation as the liability and record into the current profits and losses or the relevant
assets cost as per the beneficiary. Of which, the non-monetary welfare shall be measured as per the
fair value.
2. Accounting Treatment Method of Severance Benefit Plans
The severance benefit plans can be divided into the defined contribution plan and the defined benefit
plan according to the risk and obligation borne.
(1) The Defined Contribution Plan
52
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
The contribution deposits that paid to the individual subject for the services provided by the staffs on
the balance sheet date during the accounting period, shall be recognized as the liability, and recorded
into the current profits and losses or the relevant asset costs as per the beneficiary.
(2) The Defined Benefit Plan
The defined benefit plan is the severance benefit plans with the exception of the defined contribution
plans.
1) Based on the expected cumulative welfare unit method, the company shall adopt unbiased and
mutually consistent actuarial assumptions to make evaluation of demographic variables and financial
variables, measure and define the obligations arising from the benefit plan, and determine the period
of the relevant obligations. The company shall discount all the defined benefit plan obligations,
including the obligation within twelve months after the end of the annual report during the expected
services provision of employee. The discount rate adopted in discounting shall be recognized
according to the bonds matched with the defined benefit plan obligation term and the currency at the
balance sheet date or the market return of high-quality corporate bonds in the active market.
2) If there exist the assets for the defined benefit plan, the deficit or surplus arising from the present
value of the defined benefit plan obligations minus the fair value of the defined benefit plan assets are
recognized as the net liability or the net assets of the defined benefit plan. If there exists the surplus of
the defined benefit plan, the lower one between the surplus of the define benefit plan and the upper
limit of assets shall be used to measure the net assets of the defined benefit plan. The upper limit of
assets refers to the present value of economic benefits obtained from the refund of the defined benefit
plans or the reduction of deposit funds of future defined benefit plans.
3) At the end of period, the employee’s payroll costs arising from the defined benefit plan are
recognized as the service costs, the net interests on the net liabilities or the net assets of the defined
benefit plan, and the changes caused by the net liabilities and the net assets of the defined benefit plan
that re-measured. Of which, the service costs and the net interests on the net liabilities or the net
assets of the defined benefit plan shall be recorded into the current profits and losses or the relevant
assets costs, the changes caused by the net liabilities and the net assets of the defined benefit plan that
re-measured shall be recorded into other comprehensive incomes, which should not be switched back
to the profits and losses during the subsequent accounting period, but the amount recognized from
other comprehensive incomes can be transferred within the scope of the rights and interests.
4) The profit or loss of one settlement shall be recognized when settling the defined benefit plan.
3. Accounting Treatment Method of Demission Welfare
The employee compensation liabilities generated by the demission welfare shall be recognized on the
early date and recorded into the current profits and losses: (1) when the company can’t withdraw the
demission welfare provided due to the rundown suggestion or the termination of labor relations plans.
(2) when the company recognizes the costs or the expenses related to the reorganization of demission
welfare payment.
The earlier one between when the company can’t withdraw the rundown suggestion or the
termination of labor relations plans at its side and when the costs relevant to the recombination of
dismission welfare payment, shall be recognized as the liabilities arising from the compensation due
to the termination of labor relations with staff and shall be recorded into the current profits and losses.
Then company shall reasonably predict and recognize the payroll payable arising from the dismission
53
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
welfare. The dismission welfare, which is expected to finish the payment within twelve months after
the end of the annual report recognized, shall apply to the relevant provisions of short-term
compensation. The dismission welfare, which is expected to be unfinished for the payment within
twelve months after the end of the annual report recognized, shall apply to the relevant provisions of
short-term compensation, shall apply to the provisions related to other long-term employee benefits.
4. Accounting Treatment Method of Other Long-term Employee Benefits
If other long-term employee benefits of employees provided by the company meet the conditions of
the defined contribution plan, the accounting treatment shall be made in accordance with the defined
contribution plan. Except for these, other long-term benefits shall be made the accounting treatment
according to the defined benefit plan, but the changes arising from the re-measurement of net
liabilities or net assets of other long-term employee benefits shall be recorded into the current profits
and losses or the relevant assets costs.
23. Estimated Liabilities
1. Recognition Criteria of Estimated Liabilities
The liabilities shall be recognized when external guarantee, pending litigation or arbitration, product
quality assurance, staff reduction plan, loss contract, recombination obligation, disposal obligation of
the fixed assets and other pertinent businesses all meet the following requirements:
(1) The obligation is the current obligation borne by the company.
(2) The implementation of the obligation may cause the economic benefits out of the enterprise.
(3) The amount of the obligation can be measured reliably.
2. Measurement Method of Estimated Liabilities
The estimated liabilities shall be made the initial measurement according to the best estimate of the
expenditure required to settle the present obligation. There is the continuous scope for the required
expenditure, and the best estimate with the same possibilities resulted from various outcomes within
the scope shall be recognized as per the intermediate value. The best estimate should be recognize
according to the following methods:
(1) The best estimate shall be recognized as per the most possible amount if there are matters
involved in the single item.
(2) The best estimate shall be calculated and recognized as per the possible amount if there are
matters involved in the multiple item.
If the company pays all the expenses for paying off the estimated liabilities, or partial estimates are
compensated by the third party or other parties, the compensation amount should be separately
recognized as the assets when the receipt of the compensation amount is basically determined.
Meanwhile, the determined compensation amount shall not exceed the book value of the estimated
liabilities recognized.
The company shall make review of the book value of estimated liabilities at the balance sheet date. If
there is conclusive evidence that the book value cannot really reflect the current best estimate, the
adjustment shall be made for the book value in accordance with the current best estimate.
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
24. Revenue
1. Recognition Principle of Revenue
(1) The Goods for Sale
The revenue of the goods for sale shall be recognized when the following requirements are met
simultaneously: the transfer of main risks and rewards on ownership of the goods to the buyers, the
continual management rights related to ownership no longer retained by the company and the
effective control of the sold goods no longer implemented, the reliable measurement of the revenue
amount, the possible inflow of the relevant economic benefits, and the reliable measurement of the
relevant costs incurred or to be incurred.
(2) The Service Provision
If the provided services transaction results can be reliably estimated at the balance sheet date (the
reliable measurement of the revenue amount, the possible inflow of the relevant economic benefits,
the reliable recognition of the completion schedule of transaction, and the reliable measurement of the
relevant costs incurred or to be incurred in the transaction), the company shall recognize the relevant
service incomes according to the completion percentage method and recognized the completion
schedule of the provided service transaction according to the proportion of the costs occurred
accounting for the total estimated costs. If the provided services transaction results cannot be reliably
estimated at the balance sheet date and the occurred service costs can be expected to have
compensation, the company shall recognize to provide the service revenue according to the occurred
service cost amount and transfer the service costs as per the same amount. If the occurred service
costs cannot be expected to have compensation, the occurred service costs shall be recorded into the
current profits and losses and not be recognized as the service revenue.
(3) The Abalienation of the Right to Use Assets
The revenue of abalienation of the right to use assets shall be recognized when the abalienation of the
right to use assets meets the requirements of the possible inflow of the relevant economic benefits and
the reliable measurement of revenue amount. The interest income shall be calculated and determined
according to time and actual interest rate of the monetary capital of the company used by others, and
the royalty revenue shall be measured and determined in accordance with the charging time and
method appointed in the relevant contract or agree.
2. The Specific Recognition Method of Revenue
The company mainly sells the polaroid, textiles and other products. The revenue of the sale of
products in domestic market shall be recognized after the following requirements are met: The
company has agreed to deliver the goods to the purchaser under the contract and the revenue amount
of product sales has been determined, the payment for goods has been withdrawn or the payment
vouchers has been obtained and related economic benefits are likely to inflow, and the costs related to
the products can be measured reliably. The revenue of the sale of products in foreign market shall be
recognized after the following requirements are met: The company has made customs clearance and
departure from port under the contract, the bill of landing has obtained and the revenue of the sale of
products has been recognized, the payment for goods has been withdrawn or the payment vouchers
has been obtained and related economic benefits are likely to inflow, and the costs related to the
products can be measured reliably.
55
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
25.Government subsidy
1. Judgment Basis and Accounting Treatment Method of Government Grants related to Assets
The government grants of long-term assets that obtained, used for construction or formed by other
ways, shall be recognized as the government subsidy related to the assets. The government grants
related to assets are recognized as the deferred income, equally distributed within the service life of
the relevant assets, and recorded into the current profits or losses.
2. Judgment Basis and Accounting Treatment Method of Government subsidy related to Income
The government subsidy other than that related to income acquired by the company shall be
recognized as the government subsidy related to income.
If the grant objects are not explicitly stipulated in the government files, the government subsidy
shall be divided into that related to assets and that related to income, and the judgment basis is that:
① if the specific purpose of subsidy is stipulated in the government document, the review and
necessary change shall be made at the balance sheet date for the proportion of division according to
the relative proportion of assets expense amount and expense amount recorded in the budget of the
special item. ② only general expression is made in the government documents, and the government
subsidy related to income should be made for the non-particular items.
The government subsidy related to income that used for the compensation of the related expenses or
losses in subsequent period, shall be recognized as the deferred income and recorded into the current
profits and losses during the period of the confirmation of relevant expenses. The relevant expenses
or losses occurred for the purpose of compensation shall be directly recorded into the current profits
and losses.
3. Recognition Time of Government subsidy
If there is evidence shows that the company can meet the financial support policies and regulations at
the end of period, and the support funds can be expected to receive, the government grants shall be
recognized as per the receivable amount. In addition, the government subsidy should be recognized
when actually received.
4. Accounting Method of Government subsidy
The government subsidy shall be measured as per the received or receivable amount if the grants are
as the monetary assets. The government subsidy shall be measured as per the fair value if the grants
are as the non-monetary assets, and shall be measured as per the nominal amount if the fair value
cannot be reliably obtained.
26.The Deferred Tax Assets / The deferred Tax Liabilities
1. Temporary Difference
The temporary difference includes the difference of the book value of assets and liabilities and the tax
basis, and the difference of the book value and the tax basis that no confirmation of assets and
liabilities but able to confirm the tax basis as per the provisions of tax law. The temporary difference
can be classified into the taxable temporary difference and the deductible temporary difference.
2. Recognition Basis of Deferred Tax Assets
56
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
For the deductible temporary difference, the deductible loss and the tax payment offset, the company
shall recognize the deferred tax assets arising from the future taxable income that obtained to deduce
the deductible temporary difference, the deductible loss and the tax payment offset.
The deferred tax assets with the following features and arising from the initial recognition of assets or
liabilities in the transaction shall not be recognized: (1) the transaction is not the business
combination. (2) the transaction doesn’t influence the accounting profits and the taxable incomes (or
the deductible losses).
The company shall recognize the corresponding deferred tax assets for the deductible temporary
difference related to the investment of subsidiaries, cooperative enterprises and joint ventures if the
following requirements are simultaneously met: (1) the temporary difference is possible to be
reversed in the foreseeable future. (2) the taxable income used to offset the deductible temporary
difference is possible to be obtained in the future.
3. Recognition Basis of Deferred Tax Liabilities
All the taxable temporary differences shall be recognized as the deferred tax liabilities.
But the company shall not recognize the taxable temporary differences arising from the following
transactions as the deferred tax liabilities: (1) the initial recognition of goodwill. (2) the initial
recognition of assets or liabilities arising from the transactions with the following features: this
transaction is not the business combination, and the transaction doesn’t influence the accounting
profits and the taxable incomes (or the deductible losses).
The company shall recognize the corresponding deferred tax liabilities for the taxable temporary
difference related to the investment of subsidiaries, cooperative enterprises and joint ventures. Except
that the following requirements are simultaneously met: (1) the investment enterprise can control the
reversal time of the temporary difference. (2) the temporary difference is possible to not be reversed
in the foreseeable future.
4. Impairment of Deferred Tax Assets
The company shall review the book value of the deferred tax assets at the balance sheet date. If it is
not possible to obtain sufficient taxable income for the reduction of the benefit of the deferred tax
assets in the future, the book value of the deferred tax assets shall be deduced. Except that the
deferred tax assets and the reduction amount are recorded into the owner’s equity when the original
recognition, others shall be recorded into the current income tax expense. The book value of the
deferred tax assets reduced can be recovered when sufficient taxable income is possibly obtained.
5. Income Tax Expense
The income tax expense should include the current income tax and the deferred income tax.
Other comprehensive income or the current income tax and the deferred income tax related to the
transactions and items directly recorded into the stockholders’ equity, shall be recorded into other
comprehensive incomes or the stockholders’ equity, and the book value of goodwill shall be adjusted
by the deferred income tax arising from the business combination, but the rest of the current income
tax and the deferred income tax expense or income shall be recorded into the current profits and
losses.
27.Lease
1. Accounting Treatment Method of Operating Lease
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S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
When the company is as the tenant, the rental within the lease term shall be recorded into the relevant
assets cost or recognized as the current profits and losses as per the line method, and the initial direct
expense occurred shall be directly recorded into the current profit and loss. The contingent rental
shall be recorded into the current profit and loss once the actual occurrence.
When the company is as the leaser, the rental within the lease term shall be recognized as the current
profits and losses as per the line method, and the initial direct expense occurred shall be directly
recorded into the current profit and loss, except that the large amounts are capitalized and recorded
into the profit and loss by stages. The contingent rental shall be recorded into the current profit and
loss once the actual occurrence.
2. Accounting Treatment Method of Finance Lease
When the company is as the tenant, the company shall recognize the less one between the fair value
of leasing assets and the present value of minimum lease payment at the lease commencement date as
the book value of rented assets, recognize the minimum lease payment as the book value of the
long-term payables, and the undetermined fiancéexpense of the difference and the initial direct costs
occurred shall be recorded into the leasing asset value. During each lease period, the current financing
charges shall be measured and recognized by the effective interest method.
When the company is as the leaser, the company shall recognize the sum of minimum lease
receivables and initial direct expense at the lease commencement date as the book value of finance
lease receivables, and record the unguaranteed residual value. Meanwhile, the company shall
recognize the difference between the sums of minimum lease receivables, minimum lease receivables
and unguaranteed minus the sum of the present value as the unrealized financing income. During
each lease period, the current financing charges shall be measured and recognized by the effective
interest method.
28.Change of main accounting policies and estimations
(1)Change of main accounting policies
□Applicable √Not applicable
N/A
（2）Change of main accounting estimations
□Applicable √Not applicable
N/A
IV.Taxes of the Company
1. Main taxes categories and tax rate
Taxes Tax references Applicable tax rates
Selling goods or providing taxable
VAT 17%
labor services
Business tax. Taxable income 5%
58
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
City construction tax The taxable turnover 7%
Business income tax Taxable income 25%、15%
Business income tax Taxable income 25%、15%
2. Tax preference and approval file
(1)Shenzhen Shengbo Optoelectronic Technology Co., Ltd., the subsidiary company of our company,
has been qualified as national high-tech enterprise since 2013 ,High-tech and enterprise certificate
No.: GF201344200044 ,The certificate is valid for three years, The enterprise income tax rate of this
year is 15%.
(2).In accordance with relevant provisions of the Notice of Ministry of Finance, General Administra
tion of Customs and State Taxation Administration Regarding Tax Preference Policies for Further Su
pporting the Development of New-type Display Device Industry (Cai Guan Shui (2012) No. 16), an
d the Notice of Printing and Issuing the Scope of Imported Materials of Enterprises Manufacturing
Colorful Light Filtering Coating and Polarizer Sheets and the List of the First Group of Enterprises
Enjoying Preferential Policies (Cai Guan Shui (2012) No. 53), Shenzhen Shengbo Optoelectronic Te
chnology Co., Ltd. manufactured key materials and parts for the upstream industry of new-type disp
lay devices including colorful light filter coating and polarizer sheet that comply with the planning f
or independent development of domestic industries may enjoy the preferential policies of exemption
from import tariff for the import of raw materials and consumables for the purpose of self use and p
roduction that can not be produced domestically from June 1, 2012 and December 31, 2015. For the
concrete regulations on tax exemption, the Provisional Regulations on Taxation Policies for Importe
d Materials of Enterprises Manufacturing New-type Display Device Panels (Cai Guan Shui (2012)
No. 16).
V. Notes of consolidated financial statement
Unless otherwise stated, the meaning of "B/f", "C/f", "Current year", "Prior year" in the following
notes (incl. Notes to elements of the separate financial statements) is "1st January 2015", "31st
December 2015", "the year ended 31st December 2015", and "the year ended 31st December 2014"
respectively.
1.Monetary Capital
In RMB
Items Year-end balance Year-beginning balance
Cash at hand 8,872.71 8,588.42
Bank deposit 750,353,139.33 1,101,274,000.66
Other monetary funds 1,952,859.49 488,972.20
59
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Total 752,314,871.53 1,101,771,561.28
Including : The total amount of deposit 31,258,353.11 3,552,067.53
abroad
Notes :As of December 31, 2016，The fixed-term deposit balance of money fund is RMB
3,655,995.93 , this part will not be treated as closing cash or closing cash equivalent in preparing cash
flow statement. Monetary unit is RMB yuan
2.Bill receivables
1. Classification Bill receivable
In RMB
Items
Year-end balance Year-beginning balance
Bank acceptance 18,841,745.16 43,412,635.19
Trade acceptance
Total 18,841,745.16 43,412,635.19
2. As of December 31, 2015，The company has no Bill receivable pledged.
3．Notes endorsement or discount and undue on balance sheet date
In RMB
Items Amount derecognizing at period –end Amount derecognizing at period-end
Bank acceptance 32,454,052.03
Trade acceptance
Total 32,454,052.03
4．Bill transferred to account receivable for the issuer is not able to execute the liability at the end of
period.
3. Account receivable
1.Classification account receivables.
Amount in year-end
Book balance Bad debt provision
Classification
Book value
Proportio Proportion(
Amount Amount
n(%) %)
60
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Amount in year-end
Book balance Bad debt provision
Classification
Book value
Proportio Proportion(
Amount Amount
n(%) %)
Accounts receivable of
individual significance and
subject to individual
impairment assessment 6,373,036.66 3.16 4,035,782.60 63.33 2,337,254.06
Accounts receivable subject to
impairment assessment by
credit risk characteristics of
a portfolio 189,029,540.68 93.74 9,776,480.20 5.17 179,253,060.48
Accounts receivable of
individual insignificance but
subject to individual
impairment assessment 6,259,765.85 3.10 5,083,708.34 81.21 1,176,057.51
Total 201,662,343.19 100.00 18,895,971.14 182,766,372.05
Amount in year-begin
Book balance Bad debt provision
Classification
Book value
Proportio Proportion(
Amount Amount
n(%) %)
Accounts receivable of
individual significance and
subject to individual
impairment assessment 4,698,879.38 2.73 3,198,621.70 68.07 1,500,257.68
Accounts receivable subject to
impairment assessment by
credit risk characteristics of
a portfolio 162,559,876.54 94.56 8,393,593.26 5.16 154,166,283.28
Accounts receivable of
individual insignificance but
subject to individual
impairment assessment 4,651,945.06 2.71 4,194,915.67 90.18 457,029.39
Total 171,910,700.98 100.00 15,787,130.63 156,123,570.35
61
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
(1)Accounts receivable of individual significance and subject to individual impairment assessment.
Amount in year-end
Debtor
Account receivable Bad debt provision Proportion(%) Reason for allowance
It has been included in
Dongguan Fair LCD Co., the list of national courts
1,698,528.55 1,698,528.55 100.00
Ltd. dishonest debtor, unlikely
to recover.
Beyond the credit period
Guangdong Ruili Baolai
1,418,965.36 709,482.68 50.00 for a long time, uncertain
Technology Co., Ltd.
recovered.
Beyond the credit period
Dongguan Yaxing
3,255,542.75 1,627,771.37 50.00 for a long time, uncertain
Semiconductor Co., Ltd.
recovered.
Total 6,373,036.66 4,035,782.60 --
（2）Account receivable on which bad debt provisions are provided on age basis in the group
Balance in year-end
Aging
Account receivable Bad debt provision Proportion(%)
Within 1 year 188,008,826.83 9,400,441.34 5.00
1-2 years 269,320.69 26,932.07 10.00
2-3 years 132,948.96 39,884.69 30.00
Over 3 years 618,444.20 309,222.10 50.00
Total 189,029,540.68 9,776,480.20
2．Recognisation , recovery or reversal of allowance for bad debt：
（1）The account of allowance for bad debts recognised during the period is RMB3,899,615.51, The
amount collected or switches back amounting to 790,775.00.
（2）Bad debt provision accrual collected or switch back
Amount Allowance for
Name Recovery methods
receivable bad debts
Guangdong Ruili Baolai Technology 790,775.00
1,581,550.00 Cash and Bank acceptance
Co., Ltd.
Total 1,581,550.00 790,775.00
62
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
3．The company has no account receivables written off this period.
4.The ending balance of receivable owed by the imputation of the top five parties
Balance in Proportion(%) Bad debt provision
Name Nature Aging
year-end
Client 1 Goods 67,995,405.77 Within 1 year 33.72 3,399,770.29
Client 2 Goods 31,812,267.30 Within 1 year 15.77 1,590,613.37
Client 3 Goods 15,437,524.43 Within 1 year 7.65 771,876.22
Client 4 Goods 8,562,394.21 Within 1 year 4.25 428,119.71
Client 5 Goods 7,315,138.55 Within 1 year 3.63 365,756.93
Total 131,122,730.26 65.02 6,556,136.52
4.Prepayments
1．Disclosure by age
（1）Disclosure by age
Balance in year-end Balance in year-begin
Aging
Amount Proportion（%） Amount Proportion（%）
Within 1 year(including
5,027,361.20 64.01 24,681,972.11 91.16
1 year)
1-2 years 1,033,416.99 13.16 2,298,742.28 8.49
2-3 years 1,754,880.00 22.34 94,380.42 0.35
Over 3 years 38,160.00 0.49
Total 7,853,818.19 100.00 27,075,094.81 100.00
(2)Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled
in time
Claims unit Debt unit Balance in year-end Aging Reason of not clearing
Shenzhen Futian 1,754,880.00
Shenzhen Textile
District Housing and 2-3 years Not delivery of real estate
（Holdings）Co., Ltd.
Construction Bureau
63
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
2.The ending balance of Prepayments owed by the imputation of the top five parties
Name Balance in year-end Proportion
First 1,754,880.00 22.35
Second 981,952.10 12.50
Third 438,461.55 5.58
Fourth 437,459.86 5.57
Fifth 219,687.79 2.80
Total 3,832,441.30 48.80
5.Interest receivable
1.Category of interest receivable
In RMB
Items Balance in year-end Balance in year-begin
Fixed deposit interest 13,357,311.32 5,520,035.21
Structure deposit interest 706,164.38
Total 13,357,311.32 6,226,199.59
6.Other receivable
1．Category of Other receivable
In RMB
Amount in year-end
Book balance Bad debt provision
Classification
Amount Proporti Amount Withdrawal
Book value
on(%) proportion
(%)
Other accounts receivable of
individual significance and
11,981,464.60 19.67 11,981,464.60 100.00
subject to individual
impairment assessment
64
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Amount in year-end
Book balance Bad debt provision
Classification
Amount Proporti Amount Withdrawal
Book value
on(%) proportion
(%)
Other accounts receivable
subject to impairment
48,425,735.21 79.49 3,292,063.11 6.80 45,133,672.10
assessment by credit risk
characteristics of a portfolio
Other accounts receivable of
individual insignificance but
511,820.77 0.84 511,820.77 100.00
subject to individual
impairment assessment
Total 60,919,020.58 100.00 15,785,348.48 45,133,672.10
Amount in year-begin
Book balance Bad debt provision
Classification
Book value
Amount Proport Amount Withdrawal
ion(%) proportion (%)
Other accounts receivable of
individual significance and
11,981,464.60 20.88 11,981,464.60 100.00
subject to individual
impairment assessment
Other accounts receivable
subject to impairment
44,880,159.19 78.23 3,036,781.80 6.77 41,843,377.39
assessment by credit risk
characteristics of a portfolio
Other accounts receivable of
individual insignificance but
511,820.77 0.89 511,820.77 100.00
subject to individual
impairment assessment
Total 57,373,444.56 100.00 15,530,067.17 41,843,377.39
Other receivable accounts with large amount and were provided had debt provisions individually at
end of period.
Debtor Amount in year-end
65
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Withdrawal proportion
Other account receivable Bad debt provision Reason for allowance
(%)
Jiangxi Xuanli String No executable property,
11,389,044.60 11,389,044.60 100.00
Co., Ltd. unlikely to recover.
Shenzhen Tianlong Has been
Induatry& Trade Co., 592,420.00 592,420.00 100.00 conceled,unlikely to
Ltd. recover
Total 11,981,464.60 11,981,464.60 --
(2)Other receivable accounts in Group on which bad debt provisions were provided on age analyze
basis：
Amount in year-end
Aging
Other receivable Bad debt provision Withdrawal proportion
Within 1 year 44,339,566.81 2,216,978.35 5.00
1-2 years 2,237,253.61 223,725.36 10.00
2-3 years 365,489.98 109,646.99 30.00
Over 3 years 1,483,424.81 741,712.41 50.00
Total 48,425,735.21 3,292,063.11
2.The current amount of provision for bad debts is RMB255,281.31, no withdraw or return for bad
debts.
3．The company has no other receivables written off this period.
4.Other accounts receivable classified by the nature of accounts
Category
Year-end balance Year-beginning balance
The equity transfer 2,276,015.00
Export rebate 37,916,465.75 37,329,677.22
Unit account 16,318,999.87 14,476,263.97
Deposit 2,024,236.32 2,074,647.36
Reserve fund and staff loans 968,214.01 1,058,737.57
Other 1,415,089.63 2,434,118.44
Total 60,919,020.58 57,373,444.56
66
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
5.Top 5 of the closing balance of the other accounts receivable colleted according to the arrears
party
Proportion of Bad debt
the total year provision
Name Nature Closing balance Aging end balance of
the accounts Closing balance
receivable(%)
First Export rebate 37,916,465.75 Within 1 year 62.25 1,895,823.29
Second Unit account 11,389,044.60 Over 3 years 18.69 11,389.044.60
1,800,000.00 Within 1 year 2.95 90,000.00
Third
Unit account 1,800,000.00 1-2 years 2.95 180,000.00
Fourth Equity transfer 2,276,015.00 Within 1 year 3.74 113,800.75
Fifth Deposit 980,461.06 Over 3 years 1.61 490,230.53
Total 56,161,986.41 92.19 14,158,899.17
7.Inventories
（1）Inventories types
In RMB
Year-end balance Year-beginning balance
Items Book balance Provision for bad Book value Book balance Provision for bad Book value
debts debts
Raw materials 150,409,810.60 14,406,278.95 136,003,531.65 96,253,606.72 18,042,269.08 78,211,337.64
Processing
6,871,382.66 493,094.77 6,378,287.89 6,209,041.89 6,209,041.89
products
Finished product 128,415,576.27 30,161,550.92 98,254,025.35 116,534,286.34 25,965,053.01 90,569,233.33
Semi-finished
90,791,967.01 22,652,767.02 68,139,199.99 76,759,022.66 21,506,818.01 55,252,204.65
product
Turnover
133,102.72 133,102.72
materials
Designated
processing 284,202.01 284,202.01
material
67
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Total 376,488,736.54 67,713,691.66 308,775,044.88 296,173,262.34 65,514,140.10 230,659,122.24
（2）Inventory Impairment provision
Increased in current period Decreased in current period
Year-beginning
Items Year-end balance
balance Provision Other Transferred back Other
Raw materials 18,042,269.08 5,678,191.34 9,314,181.47 14,406,278.95
Finished product 25,965,053.01 25,463,253.58 21,266,755.67 30,161,550.92
Semi-finished
21,506,818.01 17,179,570.89 16,033,621.88 22,652,767.02
product
Processing
493,094.77 493,094.77
products
Total 65,514,140.10 48,814,110.58 46,614,559.02 67,713,691.66
8.Other current assets
Items
Year-end balance Year-beginning balance
Structural Deposit 460,000,000.00
After the deduction of input VAT 53,553,675.47 61,748,415.41
Total 513,553,675.47 61,748,415.41
9.Available-for-sale financial assets
(1)Available-for-sale financial assets
Year-end balance Year-beginning balance
Items
Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Available-for-sale equity 124,282,285.6
79,931,512.57 36,689,988.51 43,241,524.06 36,689,988.51 87,592,297.11
instruments 2
Measured by fair value 10,054,476.60 10,054,476.60 52,605,249.65 52,605,249.65
Measured by cost 69,877,035.97 36,689,988.51 33,187,047.46 71,677,035.97 36,689,988.51 34,987,047.46
124,282,285.6
Total 79,931,512.57 36,689,988.51 43,241,524.06 36,689,988.51 87,592,297.11
2
68
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
(2)Available-for-sale financial assets measured by fair value at the period-end
Items Cost Fair value
Available-for-sale financial instrument 8,940,598.31 10,054,476.60
Fawer（000030） 8,940,598.31 10,054,476.60
Total 8,940,598.31 10,054,476.60
(2)Available-for-sale financial assets measured by cost at the period-end
Book balance Impairment provision Shareholdi Cash
ng bonus of
Investee Period-beg Period-beg proportion the
Increase Decrease Period-end Increased Decreased Period-end among the reporting
in in
investees period
Shenzhen
Jintian
Industry
（Group） 14,831,68 14,831,68 14,831,68 14,831,68
Co., Ltd. 1.50 1.50 1.50 1.50 3.68
Shenzhen
Jiafeng
Textile 16,800,00 16,800,00 16,800,00 16,800,00
Co., ltd. 0.00 0.00 0.00 0.00 10.80
Shenzhen
Guanhua
Prnting &
dyeing 5,491,288 5,491,288 5,058,307 5,058,307
.71 .71 .01 .01 45.00
Co., Ltd.
Shenzhen
Union
Developm
ent Group 2,600,000 2,600,000 156,000.0
.00 .00 2.87 0
Co., Ltd
Shenzhen 160,000.0 160,000.0
Xiangjiang 0 0 20.00 84,587.22
69
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Trade Co.,
Ltd.
Shenzhen
Xinfang
Knitting 524,000.0 524,000.0
0 0 20.00 54,000.00
Co., Ltd.
Shenzhen
Dailisi
Knitting 2,559,856 2,559,856 788,870.0
.26 .26 30.00 0
Co., Ltd.
Anhui
Huapeng
Textile 25,410,20 25,410,20 1,800,000
9.50 9.50 50.00 .00
Co., Ltd.
Shenzhen
South
Textile 1,500,000 1,500,000 658,819.4
Co., Ltd. .00 .00 9.84 0
Shenzhen
Tongyi
Silk Co., 1,800,000 1,800,000 685,344.9
Ltd. .00 .00 5
71,677,03 1,800,000 69,877,03 36,689,98 36,689,98 4,227,621
Total
5.97 .00 5.97 8.51 8.51 .57
In the reporting period, 18% Equity of Tongyi with assessed value RMB 45.5203 million was
transferred to Shenzhen Fenghuirun Investment Co., Ltd; Shenzhen Dailisi Knitting Co., Ltd. and Anhui
Huapeng Textile Co., Ltd. provided foreign contract in the current period.
(4)Changes of the impairment of the available-for-sale financial assets during the reporting period
Available for sale equity Available for sale
Category Total
instruments debts instruments
Impairment amount at the beginning 37,301,142.97 37,301,142.97
period
Current provision
70
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Available for sale equity Available for sale
Category Total
instruments debts instruments
Including: Transferred from other
comprehensive income
Decreased of this period
Including:transferred from the 611,154.46 611,154.46
increased fair value
Impairment amount at the end of
period 36,689,988.51 36,689,988.51
Fawer Shares （000030）the company held impairment loss at the last period of RMB
2,947,341.67, the current value raised, the reversal of impairment losses of RMB 611,154.46
through equity.
71
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
10.Long-term equity investment
(1)Long-term equity investment
Increase/decrease
Closing
Adjustme
Cash Withdraw balance
Gains/los nt of
Opening Add Investme Changes bonus or al of Closing of
Investees s of other
balance investmen nt of other profits impairme Other balance impairme
Investme comprehe
t decreased equity announce nt nt
nt nsive
d to issue provision provision
income
I. Joint venture
Shenzhen
Haohao
Property
Leasing 3,762,40 635,434.1 4,397,840
6.73 5 .88
Co., Ltd.
Shenzhen
Xieli
Automobil 3,675,12 386,836.5 4,061,958 266,654.9
2.44 2 .96 9
e Co., Ltd.
7,437,52 1,022,270 8,459,799 266,654.9
Subtotal
9.17 .67 .84 9
2. Affiliated Company
Shenzhen
Changlianf
a Printing
& dyeing 1,814,15 1,871,377
8.78 57,218.31 .09
Company
Jordan
Garment 3,262,74 -76,209.2 197,479.0 3,384,014
4.69 3 3 .49
Factory
Hongkong
Yehui 8,547,27 1,427,762 545,386.5 9,430,732
9.68 .45 1,077.00 0 .63
Internation
72
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
al Co.,
Ltd.
13,624,1 1,408,771 198,556.0 545,386.5 14,686,12
Subtotal
83.15 .53 3 0 4.21
21,061,7 2,431,042 198,556.0 545,386.5 23,145,92 266,654.9
Total
12.32 .20 3 0 4.05 9
Shenzhen Xieli Automobile Co., Ltd. Business license has been revoked the business sector.
73
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
11.Investment real estate
（1）Measured by the cost of investment in real estate
Items House, Building Land use right Construction in process Total
I. Original price
1. Balance at
254,042,931.46 254,042,931.46
period-beginning
2.Increase in the current
60,000.00 60,000.00
period
3.Decrease in the current
1,817,038.92 1,817,038.92
period
4 Year-end balance 252,285,892.54 252,285,892.54
II.Total accumulated
depreciation accumulated
amortization
1. Year-begin balance 113,137,656.01 113,137,656.01
2.Increase in the current
6,575,312.40 6,575,312.40
period
(1).Provision or
6,575,312.40 6,575,312.40
amortization
3.Decrease in the current
1,817,038.92 1,817,038.92
period
4 Year-end balance 117,895,929.49 117,895,929.49
4. Balance at period-end
III. Impairment provision
1. Balance at
period-beginning
2.Increased amount of
the period
3.Decrease in the
current period
4. Balance at period-end
IV.Book value 134,389,963.05 134,389,963.05
1.Book value at period 140,905,275.45 140,905,275.45
74
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
-end
2.Book value at
140,905,275.45 140,905,275.45
period-beginning
12. Fixed assets
（1）Fixed assets
Electronic
House and Machinery Transportation
Items Equipment and Total
buildings equipment equipment
other
I.Original book value
1. Year-beginning 477,461,993.94 633,688,396.11 3,691,157.72 18,266,876.86 1,133,108,424.63
balance
2. Increased at this 18,163,742.62 19,105,781.35 1,630,732.31 38,900,256.28
period
（1）Purchase 903,094.00 3,571,969.74 1,630,732.31 6,105,796.05
（2） 17,260,648.62 15,533,811.61 32,794,460.23
Transferredfromconstruct
3. Decreased at 5,573,724.08 622,103.56 434,356.71 6,630,184.35
ion in -progress
this period
（1）Disposal or scrap 5,573,724.08 622,103.56 434,356.71 6,630,184.35
4 Year-end balance 490,052,012.48 652,172,073.90 3,691,157.72 19,463,252.46 1,165,378,496.56
II. Accumulated
depreciation
1. Year-beginning 76,531,202.95 217,981,340.78 2,363,208.73 11,126,071.22 308,001,823.68
balance
2. Increased at this 13,946,557.06 58,087,101.46 365,764.49 1,324,654.47 73,724,077.48
period
（1）Provision 13,946,557.06 58,087,101.46 365,764.49 1,324,654.47 73,724,077.48
3.Decreased at this 5,573,724.08 444,802.17 348,365.51 6,366,891.76
period
（1）Disposal or scrap 5,573,724.08 444,802.17 348,365.51 6,366,891.76
4. Year-end balance 84,904,035.93 275,623,640.07 2,728,973.22 12,102,360.18 375,359,009.40
III. Impairment
allowance
1. Year-beginning 235,233.62 235,233.62
balance
2. Increased at this
period
3. Decreased at this 235,233.62 235,233.62
period
4. Year-end balance
IV.Book value
75
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Electronic
House and Machinery Transportation
Items Equipment and Total
buildings equipment equipment
other
1. Closing book value 405,147,976.55 376,548,433.83 962,184.50 7,360,892.28 790,019,487.16
2. Book value at year 400,930,790.99 415,707,055.33 1,092,715.37 7,140,805.64 824,871,367.33
beginning
(2)Fixed assets with un-completed property certificates
Items Book Value Reasons for un-completed certificate
TFT-LCD polarizing film project phase 1 fixed Need to improve the relevant accreditation
288,049,723.38 information
assets of houses and buildings
Notes
Current depreciation is RMB73,724,077.48 .The issue of fixed assets transferred from
construction in progress original price is RMB32,794,460.23.
2.Fixed assets with un-completed property certificates
Items Book Value Reasons for un-completed
certificate
TFT-LCD polarizing film project phase 1 fixed Need to improve the relevant
assets of houses and buildings 296,998,079.44 accreditation information
13.Project under construction
（1）Project under construction
Year-end balance Year-beginning balance
Items Book balance Provision for Book Net value Book balance Provision for Book Net value
devaluation devaluation
TFT-LCD
36,212,078.79 36,212,078.79 32,436,160.45 32,436,160.45
polarizing film II
project
Guanhua
39,004,527.58 39,004,527.58 31,482,502.19 31,482,502.19
Building project
76
S Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Research and
development
14,745,915.59 14,745,915.59
center expansion
project
Other 586,980.33 586,980.33 1,157,571.11 1,157,571.11
Total 75,803,586.70 75,803,586.70 79,822,149.34 79,822,149.34
（2）Changes of significant construction in progress
77
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Including： Source of fund
Including： Current
Capitalizat
The year amount of Capitalizat
Amount at Transferre ion of
Increase at Other Balance in Proportion Progress of amount of capitalizati ion of
Name Budget year d to fixed interest
this period decrease year-end (%) work capitalizati on of interest
beginning assets accumulat
on of interest ratio（%)
ed balance
interest
TFT-LCD Collect and Self-
polarizing 1,470.93m 32,436,160 3,775,918. 36,212,0
2% 2%
film II illion .45 34 78.79
project
32,436,160 3,775,918. 36,212,0
Total
.45 34 78.79
78
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
14.Intangible assets
（1）List of intangible assets
Items Land use right Proprietary technology Software Total
I. Original price
1.Opening
48,765,130.50 11,825,200.00 1,876,780.00 62,467,110.50
balance
2.Increased
amount of the 61,500.00 61,500.00
period
61,500.00 61,500.00
(1) Purchase
3.Decreased at
thisperiod
4. Balance at
48,765,130.50 11,825,200.00 1,938,280.00 62,528,610.50
period-end
II.Accumulated
amortization
1. Balance at
8,417,706.45 11,825,200.00 452,801.16 20,695,707.61
period-beginning
2. Increase in the
965,603.28 240,363.27 1,205,966.55
current period
(1) Withdrawal 965,603.28 240,363.27 1,205,966.55
3.Decreased
amount of the
period
4. Balance at
9,383,309.73 11,825,200.00 693,164.43 21,901,674.16
period-end
III. Impairment
provision
1. Balance at
period-beginning
2. Increase in the
current period
3.Decreased
amount of the
period
4. Balance at
79
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
period-end
IV. Book value
1.Book value at
39,381,820.77 1,245,115.57 40,626,936.34
period -end
2.Book value at
40,347,424.05 1,423,978.84 41,771,402.89
period-beginning
15.Goodwill
1．General information
Increased at this .Decreased at
Investee Balance in year-begin Balance in year-end
period this period
Shenzhen Beauty Century
Garment Co., Ltd. 2,167,341.21 2,167,341.21
Shenzhen Shenfang Import and
Export Co., Ltd. 82,246.61 82,246.61
Shenzhen Shengbo
Optoelectronic Technology Co.,
Ltd 9,614,758.55 9,614,758.55
Total
11,864,346.37 11,864,346.37
（2）Impairment allowance
Increased at this .Decreased at
Investee Balance in year-begin Balance in year-end
period this period
Shenzhen Beauty Century
Garment Co., Ltd. 2,167,341.21 2,167,341.21
Shenzhen Shenfang Import and
Export Co., Ltd. 82,246.61 82,246.61
Shenzhen Shengbo
Optoelectronic Technology Co.,
Ltd 9,614,758.55 9,614,758.55
Total
2,249,587.82 9,614,758.55 11,864,346.37
Notes ：
The company has purchased 52.05% stock equity of Shenzhen Shengbo Optoelectronic Technology Co., Ltd. In
June 2009, and has paid the consideration with the difference RMB9,614,758.55 after the shares of the fair value
80
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
of the identifiable net assets deducted, which shall be recorded into the goodwill. the company has made the
impairment test for the assets group combination including the goodwill, After testing, the goodwill impairment
provision is RMB 9,614,758.55.
16. Long term amortize expenses
Amortized expenses
Increase in this
Items Balance in year-begin Other loss Balance in year-end
period
Renovation fee 245,050.54 350,688.00 246,709.20 349,029.34
Other 315,826.52 14,616.00 45,930.36 284,512.16
Total 560,877.06 365,304.00 292,639.56 633,541.50
17. Deferred income tax assets/deferred income tax liabilities
（1）Details of the un-recognized deferred income tax assets
In RMB
Balance in year-end Balance in year-begin
Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Assets depreciation
7,334,802.71 1,833,700.67 8,661,780.26 2,165,445.08
reserves
Unattained internal sales
2,858,879.80 428,831.98 2,947,994.35 442,199.15
profits
Total 10,193,682.51 2,262,532.65 11,609,774.61 2,607,644.23
（2）Details of the un-recognized deferred income tax liabilities
In RMB
Balance in year-end Balance in year-begin
Items
Temporarily Deductable Deferred Income Tax Temporarily Deductable Deferred Income Tax
or Taxable Difference liabilities or Taxable Difference liabilities
Stock equity disposition
of the temporary
42,291,900.69 10,572,975.17
taxable difference and
the taxable income
Changes in fair value of 1,113,878.29 278,469.57 42,225,680.94 10,556,420.24
81
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
financial assets
available for sale
Total 43,405,778.98 10,851,444.74 42,225,680.94 10,556,420.24
(3)Details of un-recognized deferred income tax assets
Items Balance in year-end Balance in year-begin
Deductible temporary difference 85,512,740.17 81,167,910.31
Deductible loss 495,605,796.60 411,615,401.60
Total 581,118,536.77 492,783,311.91
Due to the uncertainty which exists in whether sufficient taxable income can be obtained in the future ,
therefore, delay-tax capital has not been confirmed.
（4）Deductible losses of the un-recognized deferred income tax asset will expire in the following years
Year Balance in year-end Balance in year-begin Remark
2017 134,292,559.16 134,292,559.16
2018 129,226,944.33 129,226,944.33
2019 148,095,898.11 148,095,898.11
2020 83,990,395.00
Total 495,605,796.60 411,615,401.60 --
18. Short-term loan
（1）Categories of short-term loans
In RMB
Items Balance in year-end Balance in year-Beginning
Credit loans 53,866,521.87 24,676,594.72
Total 53,866,521.87 24,676,594.72
19.Account payable
（1）Account payable
In RMB
Items Balance in year-end Balance in year-begin
Within 1 year 221,732,534.76 147,154,864.20
82
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
1-2 years 339,044.59 364,150.98
2-3 years 64,917.00 281,468.35
3-4 years 187,643.43 48,196.00
4-5 years 38,046.00 33,784.50
Over 5 years 5,166,622.82 5,144,218.32
Total 227,528,808.60 153,026,682.35
（2）Significant accounts payable that aged over one year
The reason for not repaid or carried fo
Items Balance in year-end Age
rward
Will Taco Corporation 5,089,267.83 Over 5 years Quality dissension
Total 5,089,267.83
20. Advance account
（1） Advance account
Items Balance in year-end Balance in year-begin
Within 1 year 27,505,005.53 40,457,864.19
1-2 years 45,161.00 27,012.70
2-3 years 10,224.00 968.40
3-4 years 9,072.57
4-5 years 50.76
Over 5 years 639,024.58 640,541.38
Total 28,199,415.11 41,135,510.00
21.Payable Employee wage
（1）Payable Employee wage
Items Balance in year-begin Increase in this period Payable in this period Balance in year-end
I. Short-term employee 37,736,705.46 121,924,801.52 125,103,684.58 34,557,822.40
benefits
83
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
II. Post-employment 9,307,301.55 8,557,301.55 750,000.00
benefits
III. Termination benefit 175,175.00 175,175.00
Total 37,736,705.46 131,407,278.07 133,836,161.13 35,307,822.40
（2）Short-term remuneration
Items Balance in year-begin Increase in this period Payable in this period Balance in year-end
107,369,504.10 111,363,785.59
1.Wages, bonuses,
36,466,410.58 32,472,129.09
allowances and subsidies
2.Employee welfare 5,323,050.11 5,323,050.11
3. Social insurance 2,457,634.32 2,457,634.32
premiums
Including：Medical 1,899,806.38 1,899,806.38
insurance
Work injury insurance 169,446.03 169,446.03
Maternity insurance 388,381.91 388,381.91
4. Public reserves for 4,452,911.39 3,932,911.39 520,000.00
housing
5.Union funds and staff 1,270,294.88 2,321,701.60 2,026,303.17 1,565,693.31
education fee
Total 37,736,705.46 121,924,801.52 125,103,684.58 34,557,822.40
（3）Defined contribution plans listed
Items Balance in year-begin Increase in this period Payable in this period Balance in year-end
1. Basic old-age 7,030,420.62 7,030,420.62
insurance premiums
2.Unemployment 545,800.73 545,800.73
insurance
3. Annuity payment 1,731,080.20 981,080.20
Total 9,307,301.55 8,557,301.55
84
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
22.Tax Payable
Items At end of term At beginning of term
VAT 135,460.12 475,624.79
Business Tax 510,707.45 658,958.83
City Construction tax 31,836.84 58,577.68
Enterprise Income tax 12,570,466.83 6,320,905.10
Individual Income tax 480,334.74 386,166.15
House property Tax 750,607.19 750,603.03
Education surcharge 22,964.43 85,549.33
Other 180,265.49 176,209.64
Total 14,682,643.09 8,912,594.55
23.Interest Payable
（.1）Interest Payable
Items At end of term At beginning of term
Interest on long-term borrowings payable 39,000,625.75 32,806,459.08
Interest on short-term borrowings 88,262.21 230,759.60
Total 39,088,887.96 33,037,218.68
24.Other payable
（1）Disclosure by nature
Items At end of term At beginning of term
Engineering Equipment fund 59,222,758.80 44,921,304.26
Unit account 24,819,916.41 38,703,210.28
Deposit 19,151,806.04 11,209,176.63
Drawing expenses 2,879,640.37 2,872,752.99
Other 19,701,602.18 14,948,418.90
85
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Total 125,775,723.80 112,654,863.06
25.Non-currentliabilitiesdue within 1 year
Items At end of term At beginning of term
Long-term borrowings due with in 1year 40,000,000.00 75,346,136.30
Total 40,000,000.00 75,346,136.30
The long-term borrowings at the end of period are the borrowings extended to the Company by Pingan
Bank.Shenzhen Jiangsu Building Branch. Entrusted by Shenzhen Shenchao Technology Investment Co.,Ltd.
26.Long-term borrowings
（1）Long-term term borrowings
In rmb
Items At end of term At beginning of term
Credit borrowings 120,000,000.00 124,653,863.70
Total 120,000,000.00 124,653,863.70
The long-term borrowings at the end of period are the borrowings enxtended to the Company by Pingan
Bank.Shenzhen Jiangsu Building Branch. Entrusted by Shenzhen Shenchao Technology Investment Co.,Ltd.
27.Deferredincome
Balance in Increase at this Decrease at this
Items Balance in year-end
year-begin period period
Govemment Subsidy 66,546,079.96 45,202,608.00 12,224,522.38 99,524,165.58
Total 66,546,079.96 45,202,608.00 12,224,522.38 99,524,165.58
Details of govemment subsidy：
The
Balance in New grants
Items non-operating Balance in Income related to
amount of this Other changed
year-begin revenue amount year-end assets
period
of this period
Textile special
1,142,857.16 142,857.14 1,000,000.02 1,142,857.16 Related to assets
funds
High-tech
Industrialization 1,000,000.00 200,000.00 800,000.00 900,000.00 Related to assets
demonstration
86
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
projects
National grant
fundsfor new flat
5,000,000.00 1,000,000.00 4,000,000.00 4,500,000.00 Related to assets
panel display
industry
Borrowing
1,209,722.08 241,944.44 967,777.64 1,088,749.87 Related to assets
discount
Government R &
7,909,980.00 7,909,980.00 3,954,990.00 Related to income
D subsidies
Grant funds for
TFT-LCD
9,533,333.34 1,300,000.00 8,233,333.34 8,883,333.34 Related to assets
polarizer industry
project
Grant funds for
TFT-LCD
polarizer narrow 4,000,000.00 500,000.00 3,500,000.00 3,750,000.00 Related to assets
line (line 5)
project
Purchase of
imported
1,377,377.58 175,090.20 1,202,287.38 1,289,832.48 Related to assets
equipment and
technology
Innovation and
venture capital
400,000.00 50,000.00 350,000.00 375,000.00 Related to assets
for TFT-LCD
polarier project
Shenzzhen
Engineering
laboratory
polarizing 500,000.00 37,500.00 462,500.00 500,000.00 Related to assets
material and
technical
engineering
Shenzhen
polarizingmateria
5,000,000.00 375,000.00 4,625,000.00 5,000,000.00 Related to assets
l and technical
engineering
87
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Capital funding
for Technology 3,000,000.00 225,000.00 2,775,000.00 3,000,000.00 Related to assets
Center
Subsidy funds to
support the
introduction of a 115,104.80 14,388.10 100,716.70 107,910.72 Related to assets
dvanced technolo
gy
Grant funds for
TFT-LCD
polarizer narrow 15,000,000.00 15,000,000.00 15,000,000.00 Related to assets
line (line 6)
project
Grant funds for
TFT-LCD
polarizer narrow 10,000,000.00 10,000,000.00 10,000,000.00 Related to assets
line (line 6)
project
Grant funds for
TFT-LCD
polarizer narrow 500,000.00 500,000.00 500,000.00 Related to assets
line (line 6)
project
Imported
equipment and
technology of 857,705.00 857,705.00 857,705.00 Related to assets
discount interest
funds
key technology
research and deve
lopment projects
5,000,000.00 5,000,000.00 5,000,000.00 Related to assets
of optical
compensation
film for polarizer
Strategic
industries
Development
20,000,000.00 20,000,000.00 18,152.00 Related to assets
fund of
Guangdong
Province
88
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Grants of
Purchase
equipment of
20,000,000.00 20,000,000.00 Related to assets
TFT-LCD
polarizing film
phase II project
Energy saving
transformation 202,608.00 52,762.50 149,845.50 Related to assets
grant funds
Total 66,546,079.96 45,202,608.00 12,224,522.38 99,524,165.58 65,926,431.57 --
Notes：
（1）According to the "Notice on National Development and Reform Commission to the General Office of the
textile project management of the special funds" (Faigaiban [2006]2841), on December 22, 2006, the Company
received "Textile special" funds RMB 2,000,000.00 from Shenzhen Finance Bureau. The company will use 14
years as asset depreciation period for amortization with the corresponding equipment in current period. The
amortization in accordance with the corresponding equipment, The non-operating income in current period is
RMB142,857.14, the ending balance of uncompleted amortization is RMB 1,000,000.02 .
(2) According to the document of Shenzhen Municipal Development and Reform Commission 【2009】 No. 416
that "The Notice On issued the Governmental Investment Plan in 2009 on Zhong Ke New Industrial Internet
Security Audit System and Other High-tech Industrialization Demonstration Project and the Public Testing and
Consultation Service of Information Security Industry and other National High-tech Industrial Base Platform
Projects”, on May 2009, the company received the Shenzhen Municipal Development and Reform Commission
high-tech industrialization demonstration project supporting Capital RMB 2 million allocated by Shenzhen City
Bureau of Finance for the construction of “The Project of the Construction Line of Polaripiece for TFT-LCD”.Our
company will use 10 years as asset depreciation period for amortization in current period. The non-operating
income in current period is RMB 200,000.00 and the balance amount of unfinished final amortization is RMB
800,000.00.
(3) According to the document of the Office of the State Development and Reform Commission on "The Office of
the State Development and Reform Commission on the Reply of New Flat-Panel Display Industrialization Special
Project” (Development and Reform Office High-Tech【2008】No. 2104), the company obtained the state subsidies
RMB 10,000,000.00 from the State Development and Reform Commission New Flat-Panel Display
Industrialization Special Project for the construction of “The Project of Polaripiece Industrialization for
TFT-LCD”. On June 2009, December 2009 and April 2010, the company received the special subsidies of State
Development and Reform Commission RMB 10,000,000.00. Our company will use 10 years as asset depreciation
period for amortization. The non-operating income in current period is RMB100,000.00, the balance amount of
unfinished final amortization is RMB 4,000,000.00;
（4）On December 2009 ,June 2011 and February 2013, the Company received a loan interest discount funds of
RMB 992,000.00, RMB 850,000.00 and RMB 483,000.00 allocated by Shenzhen Bureau of Finance for phase-II
alteration project. Our company will use 10 years as asset depreciation period for amortization in current
period.The non-operating income in current period is RMB 241,944.44 and the balance amount of unfinished final
89
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
amortization is RMB967,777.64.
（5）The Company received R&D subsidy of RMB39,549,900.00 from the government according to Shen Cai
Jian (2010) No. 101 Document - Circular of Plan for Use of Special Funds for the 14th Group of Significant
High-tech Projects in 2010. The Company plans to invest these funds in R&D in five years from 2011. The
non-operating income in current period is RMB 7,909,980.00, The final allocation has been completed。
（6）In accordance with the Notice of Forwarding the Reply of General Office of State Development and Reform
Commission Regarding Special Plan for Strategic Transformation and Industrialization of Color TV Industry
issued by Shenzhen Development and Reform Commission (Shen Fa Gai (2011) No. 823), State Development
and Reform Commission approved including the project of industrialization of polarizer sheet for TFT-LCD of
Shengbo Optoelectronic Company into the special plan for strategic transformation and industrialization of color
TV industry in 2010 and appropriated national aid of RMB 10,000,000.00 to Shengbo Optoelectronic Company
for the research and development in the process of the project of industrialization and the purchase of required
software and hardware equipment. On June 2012 and September 2013, the company received the national grants
of RMB 10,000,000.00.. According to the Notice of Issuing the Governmental Investment Plan for 2011
Regarding Demonstration Project of High-tech Industrialization Including Specialized Services Such As Disaster
Recovery of Financial Information System issued by Shenzhen Development and Reform Commission (Shen Fa
Gai (2012) No. 3), the Company received subsidy of RMB 3,000,000.00 for the project of industrialization of
polarizer sheet for TFT-LCD in April 2012. Our company will use 10 years as asset depreciation period for
amortization in current period.The non-operating income in current period is RMB1,300,000.00. and the balance
amount of unfinished final amortization is RMB8,233,333.34.
（7）According to the Notice about the Plan for Supporting the Second Group of Enterprises in Biological,
Internet, New Energy and New Material Industries with Special Development Funds (Shen Fa Gai (2011) No.
1782), the Company received subsidy of RMB 5,000,000.00 for the narrow-width line (line 5) of phase-I project
of polarizer sheet for TFT-LCD on February 2012. The Company planned to amortize the subsidy over 10 years
according to the depreciation period of relevant assets. The non-operating income in current period is
RMB5,000,000.00 and the balance amount of unfinished final amortization is RMB3,500,000.00.
（8）On October 2013, The company received the grants for the purchase of imported equipment and technology
in 2012 of RMB 1,750,902.00, the Company planned to amortize the subsidy over 10 years according to the
depreciation period of relevant assets.The non-operating income in current period is RMB175,090.20 and the
balance amount of unfinished final amortization is RMB1,202,287.38.
（9）On December 2013，The company received the funds for innovation and entrepreneurship of of TFT-LCD
polarizing project from Pingshan New District Development and Finance Bureau of RMB 500,000.00(matching
funding category),the Company planned to amortize the subsidy over 10 years according to the depreciation
period of relevant assets. The non-operating income in current period is RMB50,000.00 and the balance amount of
unfinished final amortization is RMB350,000.00.
（10）On December 2013，The company received the funds for innovation and entrepreneurship of of TFT-LCD
polarizing project from Pingshan New District Development and Finance Bureau of RMB 500,000.00(matching
funding category),the Company planned to amortize the subsidy over 10 years according to the depreciation
period of relevant assets. The non-operating income in current period is RMB37,500.00 and the balance amount of
unfinished final amortization is RMB462,500.00.
90
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
（11）According to the Approval of Application of Shenzhen Shengbo Optoelectronic Technology Co., Ltd. for
Project Funds for Shenzhen Polarization Material and Technology Engineering Laboratory (Shen Fa Gai (2012)
No. 1385), Shenzhen Polarization Material and Technology Engineering Laboratory was approved to be
established on the strength of Shengbo Optoelectronic with total project investment of RMB 24,390,000.00. As
approved by Shenzhen Municipal People's Government, this project was included in the plan for supporting the
fourth group of enterprises with special fund for the development of strategic new industries in Shenzhen in 2012
(new material industry). According to the Notice of Issuing the Plan for Supporting the Fourth Group of Enterprises
with Special Fund for Development of Strategic New Industries in Shenzhen in 2012 (Shen Fa Gai (2012) No. 1241),
the Company received subsidy of RMB 5,000,000.00 on December 2012 for purchasing instruments and equipment
and improving existing technological equipment and test conditions. The fund gap will be filled by the Company
through raising funds by itself. the Company planned to amortize the subsidy over 10 years according to the
depreciation period of relevant assets. The non-operating income in current period is RMB375,000.00 and the
balance amount of unfinished final amortization is RMB4,625,000.00.
（12）According to the “Announcement on the Identification of Technology Centers of 24 Enterprises including
Shenzhen Yuanwanggu Information Technology Joint Stock Company Limited as the Municipal Research and
Development Centers (Technical Center)” (SJMXXJS [2013] No.137), the research and development center of
Shenzhen SAPO Photoelectric Co., Ltd. has been regarded as 2012 annual municipal R&D center. In December
2013, the company has received the funding subsidy of RMB3 million for the construction of the technical center.
the Company planned to amortize the subsidy over 10 years according to the depreciation period of relevant assets.
The non-operating income in current period is RMB225,000.00 and the balance amount of unfinished final
amortization is RMB2,775,000.00.
(13)On March 2014 the company received the introduction of advanced technology import subsidy funds of RMB
143,881.00 from Shenzhen Finance Committee, the Company planned to amortize the subsidy over 10 years
according to the depreciation period of relevant assets. The non-operating income in current period is
RMB14,388.10 and the balance amount of unfinished final amortization is RMB100,716.70.
（14）According to the "Shenzhen Municipal Development and Reform Commission Reply for Shenzhen
Shengbo Optoelectronic Technology Co., Ltd. application for local matching funds of TFT-LCD polarizing film II
project (Line 6) " (Shenzhen DRC [2013]No. 1771), the company obtained TFT-LCD polarizing film II project
(line 6) local matching funds of RMB 15,000,000.00 in April 2014.The fund gap will be filled by the Company
through raising funds by itself. The subsidy will be amortized over the depreciation period from the day when
relevant assets get ready for intended use.
（15）According to "National Development and Reform Commission issued on industrial transformation and
upgrading projects (2nd industrial restructuring) notify the central budget for 2014 investment plan" (NDRC
Investment [2014] No. 1280), the company obtained TFT- LCD polarizer II project (line 6) state grants of RMB
10,000,000.00 in December 2014.The fund gap will be filled by the Company through raising funds by itself. The
subsidy will be amortized over the depreciation period from the day when relevant assets get ready for intended
use.
（16）In December 2014, the company received innovation venture capital (matching funding category) for Ping
Shan District Development and Finance Bureau of TFT-LCD polarizing film II project (line 6) of RMB
500,000.00.The fund gap will be filled by the Company through raising funds by itself. The subsidy will be
amortized over the depreciation period from the day when relevant assets get ready for intended use;
91
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
（17）On September 2014，The company received a discount of imported equipment and technology funds of
RMB 857,705.00.The fund gap will be filled by the Company through raising funds by itself. The subsidy will be
amortized over the depreciation period from the day when relevant assets get ready for intended use.
(18) On Jan. 2015, the company received RMB 5 million of grants for key technology research and development
projects of optical compensation film for polarizer from Shenzhen Scientific and Technological Innovation
Committee. The company will defer income share transferred in the current profit and loss on the basis of
depreciation life as of the date of the predetermined workability state the related assets reach.
19. According to “Reply on Congregating Development in Emerging Industrial Area Strategic Pilot Implement
Scheme of Guangdong Province ”(Reform and Development Office High-Tech [2013] No.2552, the Company
received 20 million RMB of the pilot project fund( period II project of TFT-LCD polarizer).The company will
defer income share transferred in the current profit and loss on the basis of depreciation life as of the date of the
predetermined workability state the related assets reach.
20. According to Reform and Development Commission of Shenzhen Municipality sending the notice of “Reply
of National Reform and Development Office on Investing in Petrifaction and Medicine Project within Central
Budget of 2013 for Industry Structure Adjustment Special Project”(Reform and Development Commission of
Shenzhen Municipality [2013]No.1449) , the Company received 20 million RMB of new production line of
TFT-LCD polarizer project period II and equipment purchase subsidy in August 2015 and December 2015.The
company will defer income share transferred in the current profit and loss on the basis of depreciation life as of
the date of the predetermined workability state the related assets reach.
21. In 2015, the Company received the subsidy funds of 202,608.00 RMB on energy-saving reconstruction,
amortized by 8-year depreciation life of the relevant asset, the no business income was 52,762.50 RMB at the
current period, the ending balance without amortization was 149,845.50 RMB
28.Stock capital
Changed（+，-）
Balance in Balance in
Capitalization
year-begin Issuance of
Bonus shares of public Other Subtotal year-end
new share
reserve
Total of capital
506,521,849.00 506,521,849.00
shares
29.Capital reserves
Items Year-beginning balance Increase in the current Decrease in the current Year-end balance
period period
Share premium 1,574,407,414.34 1,574,407,414.34
Other 10,722,637.03 10,722,637.03
Total 1,585,130,051.37 1,585,130,051.37
92
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
30.Other Comprehensive income
Amount of current period
Less ：
Previously rec
Amount for After - tax a After - tax a
Year-beginni Year-end
Items ognized in pro
the period Less： ttributable t ttributable t
ng balance balance
fit or loss in ot
before inco Income tax o the parent o minority s
her comprehen
me tax company hareholders
sive income
1.Other comprehensive income will
be reclassified into
income or loss in the future
Including: remeasurement of net
assets or net liabilities of defined
benefit plans
Share of other comprehensive income
of the investee that cannot be
transferred to profit or loss accounted
for using the equity method
2.Other comprehensive income
33,389,117.4 1,923,588.7 -30,176,930 3,212,187
reclassifiable to profit or loss in 31,669,260.70 431,258.19
6 8 .11 .35
subsequent periods
Including ： Share of other
comprehensive income of the
investee that cannot be
transferred to profit or loss
accounted for using the equity
method
Gains and losses from changes
33,421,401.1 1,725,032.7 -30,375,486 3,045,914
in fair value of financial assets 31,669,260.70 431,258.19
1 5 .14 .97
available for sale
Held-to-maturity investment
that is reclassified as financial
assets available for sale
Effective gains(losses) arising from
cash flow hedging instruments
Translation differences of financial -32,283.65 198,556.03 198,556.03 166,272.3
93
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
statements denominated 8
Total of other comprehensive income 33,389,117.4 1,923,588.7 -30,176,930 3,212,187
31,669,260.70 431,258.19
6 8 .11 .35
31.Surplus reserve
Items Year-beginning balance Increase in the current Decrease in the current Year-end balance
period period
Statutory surplus reserve 64,403,027.10 6,136,292.76 70,539,319.86
Total 64,403,027.10 6,136,292.76 70,539,319.86
The increase in the surplus reserves for the current period is caused by the legal surplus reserves withdrawn as per
10% of the net profits of the parent company.
32.Retained profits
Items Amount of this period Amount of last period
Before adjustments: Retained profits at 6,805,203.33 124,997,823.59
the period end
Adjustment: Total unappropriated
profits at the beginning of the year
After adjustments: Retained profits at the 6,805,203.33 124,997,823.59
period beginning
Add: Net profit attributable to owners of 8,497,227.40 -113,591,328.26
the Company for the period
Less: Appropriation to statutory surplus 6,136,292.76 4,601,292.00
reserve
Appropriation to discretionary
surplus reserveCommon risk provision
Appropriation to
Common stock dividend payable
Common stock dividends Converted to
shares
Retained profits at the period end 9,166,137.98 6,805,203.33
33.Business income, Business cost
（1）Business income
Items Amount of current period Amount of previous period
Income from Main Business 1,220,983,979.24 1,205,218,842.69
94
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Other Business income 5,762,812.38 5,733,705.88
Total 1,226,746,791.62 1,210,952,548.57
Main business cost 1,136,902,952.29 1,149,096,458.05
Other business cost 5,608,060.55 5,647,004.79
Total 1,142,511,012.84 1,154,743,462.84
（2）Main business（Industry）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Domestic and foreign
trade 429,639,819.01 423,199,182.16 418,662,598.31 415,021,559.43
700,600,503.65 690,228,637.37 697,875,210.57 710,855,827.41
Manufacturing
Property management,
90,743,656.58 23,475,132.76 88,681,033.81 23,219,071.21
leasing
Total 1,220,983,979.24 1,136,902,952.29 1,205,218,842.69 1,149,096,458.05
（3）Main business（Production）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Property and rental
income 90,743,656.58 23,475,132.76 88,681,033.81 23,219,071.21
Textile income 25,205,284.70 27,117,500.23 36,871,877.02 30,147,926.39
Polaroid income 803,719,803.87 787,302,128.29 734,488,663.78 752,645,742.75
Trade income 301,315,234.09 299,008,191.01 345,177,268.08 343,083,717.70
Total 1,220,983,979.24 1,136,902,952.29 1,205,218,842.69 1,149,096,458.05
（4）Main Business（Area）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Domestic 446,846,597.09 396,404,251.87 427,602,892.57 343,117,315.91
Oversea 774,137,382.15 740,498,700.42 777,615,950.12 805,979,142.14
Total 1,220,983,979.24 1,136,902,952.29 1,205,218,842.69 1,149,096,458.05
（5）Operating income from top five clients
95
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Name Income Proportion
First 318,888,124.08 25.99%
Second 300,886,664.10 24.53%
Third 141,768,566.85 11.56%
Fourth 40,520,628.95 3.30%
Fifth 33,128,839.03 2.70%
Total 835,192,823.01 68.08%
34.Business tax and subjoin
Items Amount of current period Amount of previous period
Business tax 4,569,235.38 4,627,582.53
Urban construction tax 456,427.96 534,309.40
Education surcharge 282,652.28 381,647.42
Other 2,316,656.14 2,362,429.89
Total 7,624,971.76 7,905,969.24
35.Sales expenses
Items Amount of current period Amount of previous period
Wage 3,328,467.06 4,363,205.11
Transportation changes 3,570,014.59 5,836,916.82
Exhibition fee 214,273.75 427,035.70
Advertising expenses 21,367.52 47,821.93
Business expenses 803,058.95 796,292.50
Samples and product loss 153,275.77 131,439.90
Other 3,653,457.09 2,464,913.21
Total 11,743,914.73 14,067,625.17
96
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
36.Administrative expenses
Items Amount of current period Amount of previous period
Wage 43,599,715.93 39,927,512.63
Property insurance 531,310.04 520,476.41
Repair charge 1,040,496.65 320,063.00
Business entertainment 1,436,619.00 1,839,218.23
Travel expenses 1,135,661.35 1,415,640.88
Office expenses 1,487,998.89 1,731,141.43
Water and electricity 3,839,832.91 655,053.39
Tax 1,364,877.14 1,222,081.41
Lawsuit expenses 120,304.55 412,056.24
Agency expenses 1,710,285.57 2,457,575.02
R& D 30,867,294.24 55,070,970.28
Board fees 65,515.20 73,289.60
Other 7,945,060.22 6,300,185.37
Depreciation of fixed assets 6,370,639.10 4,948,505.73
Amortization of intangible assets 1,205,966.55 2,298,368.48
Amortization of long-term deferred
expenses 134,803.96 49,821.45
Low consumables amortization 188,323.00 254,145.90
Total 103,044,704.30 119,496,105.45
37.Financial Expenses
Items Amount of current period Amount of previous period
6,843,784.81 9,608,435.14
Interest expenses
-38,467,889.51 -33,143,531.65
Interest income
Exchange loss 6,356,852.45 -7,497,707.98
97
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
818,934.15 639,963.89
Fees and other
-24,448,318.10 -30,392,840.60
Total
38.Loss of assets impairment
Items Amount of current period Amount of previous period
3,364,121.82 -5,232,365.43
I .Losses for bad debts
48,814,110.58 56,794,403.85
II. Losses for falling price of inventory
9,614,758.55
III. Goodwill impairment
Total 61,792,990.95 51,562,038.42
39.Investment income
1.Detail
Items Amount of this period Amount of last period
Investment income from the disposal of
2,431,042.20 1,788,818.78
long-term equity investment
Investment income arising from disposal of
long-term equity investment
Hold the investment income during from 4,374,824.87 4,609,627.57
available-for-sale financial assets
Investment income gain from available for sale
88,006,690.51 16,896,190.19
financial assets
Total 94,812,557.58 23,294,636.54
2.Long-term equity investment income by costing
Amount of current period Amount of previous
Name Reason to increase or decrease
period
Shenzhen Haohao Property Leasing Co.,
635,434.15 574,502.13
Ltd.
386,836.52 350,422.87
Shenzhen Xieli Automobile Co., Ltd.
98
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Amount of current period Amount of previous
Name Reason to increase or decrease
period
Shenzhen Changlianfa Printing and 55,707.44
57,218.31
dyeing Company
-76,209.23 395,273.09
Jordan Garment Factory
Yehui International Co., Ltd. 1,427,762.45 412,913.25
Total 2,431,042.20 1,788,818.78
40. Non-Operation income
1．Non-Operation income
Items Amount of current period Amount of previous period Recorded in the amount of the
non-recurring gains and losses
Total gains from disposal of
235,533.62 135,925.51 235,533.62
non-current assets
Including：Gains from disposal
235,533.62 135,925.51 235,533.62
of fixed assets
Government Subsidy 21,420,940.38 16,688,387.98 21,420,940.38
Other 2,465,865.62 4,335,675.77 2,465,865.62
Total 24,122,339.62 21,159,989.26 24,122,339.62
2．Government subsidy reckoned into current gains/losses
Assets-related/
Amount of this Amount of last
Items income
period period
-related
Related to the
Grant funds for TFT-LCD polarizer narrow line (line 5)
500,000.00 500,000.00 assets
project
Related to the
175,090.20 175,090.20 assets
Purchase of imported equipment and technology
Related to the
142,857.14 142,857.14 assets
Textile special funds
99
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Related to
7,909,980.00 7,909,980.00 income
Government R & D subsidies
Related to the
200,000.00 200,000.00 assets
High-tech Industrialization demonstration projects
Related to the
1,000,000.00 1,000,000.00 assets
National grant fundsfor new flat panel display industry
Related to the
Loan subsidy interest allocated by Finance Commission
241,944.44 241,944.44 assets
of Shenzhen Municipality
Related to the
Subsidy amortization of the projecto of TFT-LCD
1,300,000.00 1,300,000.00 assets
polarizer industrialization
Innovation entrepreneurship fund amortization of
Related to the
TFT-LCD polarizer period I project for Pingshan New
50,000.00 50,000.00 assets
District Development and Finance Bureau
Related to the
Financing aid amortization of introducing advanced
14,388.10 28,776.20 assets
technique
Related to
Innovation entrepreneurship subsidy of Pingshan New
590,000.00 income
District Development and Finance Bureau
Related to
Reward funds for innovation of SASAC of Shenzhen
300,000.00 income
Municipality
Related to
Special fund subsidy of industry development of Futian
63,000.00 32,000.00 income
District
Financing aid of Finance Commission of Shenzhen
Related to
Municipality for optimizing foreign trade export
74,623.00 income
structure
Related to
6,380.00 income
Financing aid of the domestic market development
Related to
93,543.00 60,460.00 income
Subsidy of the exhibition
Related to
250,000.00 income
Financing aid of science and technology platform
Related to
88,152.00 100,000.00 income
Interest subsidy
Related to
200,000.00 income
Subsidy of dyeing polarizer project
100
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Related to
Incentive of outstanding science-and-technology
50,000.00 income
enterprise
Related to
8,287,100.00 4,140,900.00 income
High-tech major projects Special funds
Shenzhen Engineering laboratory polarizing material and Related to
technical engineering 37,500.00 assets
Related to
Shenzhen polarizing material and technical engineering
375,000.00 assets
Related to
Capital funding for Technology Center 225,000.00 assets
Related to
Energy saving transformation grant funds amortization
52,762.50 assets
Total 21,420,940.38 16,688,387.98
41．Non-current expenses
The amount of non-operating
Items
Amount of current period Amount of previous period gains & lossed
Total of non-current asset
Disposition loss 260,642.59 83,643.89 260,642.59
Incl: loss of fixed assets
disposition 260,642.59 83,643.89 260,642.59
Other 23.02 113.60 23.02
Total 260,665.61 83,757.49 260,665.61
42.Income tax expenses
(1)Income tax expenses
Items
Amount of current period Amount of previous period
Current income tax expense 24,352,326.20 14,590,550.96
Deferred income tax expense 10,302,193.13 36,941,833.66
Total 34,654,519.33 51,532,384.62
(2)Reconciliation of account profit and income tax expenses：
In RMB
101
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Items Amount of current period
Total profits 43,151,746.73
Income tax computed in accordance with the applicable tax rate 10,787,936.68
Effect of different tax rate applicable to the subsidiary Company 905,254.95
Influence of income tax before adjustment 69,480.07
Influence of non taxable income -3,054,186.40
Impact of non-deductible costs, expenses and losses 3,862,227.82
Affect the use of deferred tax assets early unconfirmed
deductible losses
The current period does not affect the deferred tax assets
22,083,806.21
recognized deductible temporary differences or deductible loss
Income tax expense 34,654,519.33
43.Other comprehensive income
1．Other comprehensive income items and income tax effects and transferred to profit and loss
Items Amount of current period Amount of previous period
I. Net amount included in other comprehensive
income that cannot be transferred to profit or loss
in the future
I.Share of other comprehensive income of the investee that
cannot be transferred to profit or loss accounted for using
the equity method
II. Net amount included in other comprehensive
income that can be transferred to profit or loss in -30,176,930.11 9,854,344.17
the future
1.
Share of other comprehensive income of the
investee that can be transferred to profit or loss
accounted for using the equity method
Less ： Previously recognized in other comprehensive
income, Profit or loss in current period
Subtotal
102
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Items Amount of current period Amount of previous period
2. The income gains (losses) amount of available for sale
1,725,032.75 30,124,854.43
financial assets
Less： Recognized in other comprehensive income that tax
431,258.19 7,531,213.61
effect amount
Less ： Previously recognized in other comprehensive
31,669,260.70 12,707,013.00
income, Profit or loss in current period
Subtotal -30,375,486.14 9,886,627.82
3.
198,556.03 -32,283.65
Translation differences of financial statements
denominated in foreign currencies
Less ： Previously recognized in other comprehensive
income, Profit or loss in current period
Subtotal 198,556.03 -32,283.65
III.Total of other comprehensive income -30,176,930.11 9,854,344.17
2.Adjustment process of accounting profit and income tax expense
Gains and losses from
Foreign currency
changes in fair value of
Items translation differences Subtotal
available for sale
of financial statements
financial assets
I. Beginning balance last year 23,534,773.29 23,534,773.29
II.Changes in the amount last year 9,886,627.82 -32,283.65 9,854,344.17
III.Beginning balance this year 33,421,401.11 -32,283.65 33,389,117.46
IV.Changes in the amount this year -30,375,486.14 198,556.03 -30,176,930.11
V.The year-end balance 3,045,914.97 166,272.38 3,212,187.35
44.Items of Cash flow statement
(1)Other cash received from business operation
Items Amount of current period Amount of previous period
54,399,026.00 31,641,326.00
Government Subsidy
103
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
41,127,157.51 44,113,060.32
Bank deposit interest income and other
Total 95,526,183.51 75,754,386.32
2.Other cash paid related to operating activities
Other cash paid relating to operating activities this period was RMB 50,155,116.37, mainly for the payment of the
cost of sales and administration expenses.
3.Other Cash received related to investment activities
Items Amount of current period Amount of previous period
Structure deposit and income 30,591,780.82 201,803,986.29
Other 567,210.00
Total 30,591,780.82 202,371,196.29
(4)Cash paid related to other investment activities
In RMB
Items Amount of current period Amount of previous period
Structure deposit investment 490,000,000.00 100,000,000.00
Other 59,223.58
Total 490,059,223.58 100,000,000.00
45.Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
Supplement Information Amount of Amount of
current period previous period
I. Adjusting net profit to cash flow from operating activities
Net profit 8,497,227.40 -113,591,328.26
Add: Impairment loss provision of assets 15,178,431.93 -24,728,253.16
Depreciation of fixed assets, oil and gas assets and consumable biological
80,299,389.88 78,523,175.42
assets
1,205,966.55 2,298,368.48
Amortization of intangible assets
Amortization of Long-term deferred expenses 292,639.56 385,402.12
Loss on disposal of fixed assets, intangible assets and other long-term -52,725.62
104
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Supplement Information Amount of Amount of
current period previous period
deferred assets
Loss on scrap of fixed assets 25,108.97 444.00
Loss on fair value changes
Financial cost -12,222,940.66 5,937,407.06
Loss on investment -94,812,557.58 -23,294,636.54
Decrease in deferred income tax assets 192,322.96 36,941,833.66
Increased of deferred income tax liabilities 10,572,975.17 -52,384,071.50
Decrease of inventories -80,315,474.20 -7,352,419.31
11,626,183.95 -49,608,590.83
Decease of operating receivables
99,045,226.43 102,121,539.16
Increased of operating Payable
Other -3,897,638.73
Net cash flows arising from operating activities 39,584,500.37 -48,701,494.05
II. Significant investment and financing activities that without cash
flows:
Debt-to-capital conversion
Convertible loan due within 1 year
Fixed assets acquired under financial lease
3．Movement of cash and cash equivalents：
Ending balance of cash 748,658,875.60 1,098,232,359.02
Less: Beginning balance of cash equivalents 1,098,232,359.02 943,913,951.68
Add：Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase of cash and cash equivalents -349,573,483.42 154,318,407.34
(2)Composition of cash and cash equivalents
In RMB
Items Year-end balance Year-beginning balance
105
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
I. Cash 1,098,232,359.02 943,913,951.68
Including：Cash at hand 8,588.42 85,537.12
Demand bank deposit 1,097,734,798.40 941,362,518.21
Demand other monetary funds 488,972.20 2,465,896.35
Depositing performs
Loan to performs
II. Cash equivalents
Including：Debt instrument matured within
three months
III. Balance of cash and cash equivalents at
the period end
1,098,232,359.02 943,913,951.68
46.Foreign currency monetary items
(1)Foreign currency monetary items
Closing foreign currency Closing convert to RMB
Items Exchange rate
balance balance
Monetary funds
Including：USD 8,497,366.48 6.4936 55,178,498.97
JPY 5,371,949.00 0.053875 289,413.75
HKD 154,976.76 0.83778 129,836.43
Account receivable
Including：USD 9,770,547.62 6.4936 63,446,028.03
JPY 240,306.00 0.053875 12,946.49
HKD 278,280.00 0.83778 233,137.42
Other receivable
Including：HKD 330,841.65 0.83778 277,172.52
Account payable
Including：USD 17,319,633.39 6.4936 112,466,771.38
106
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
JPY 1,731,904,956.09 0.053875 93,306,379.51
Other payable
Including：USD 81,000.00 6.4936 525,981.60
JPY 24,567,800.00 0.053875 1,323,590.23
HKD 1,530,628.30 0.83778 1,282,329.78
Euro 51,500.00 7.0952 365,402.80
Short –term loans
Including：USD 2,226,967.88 6.4936 14,461,038.63
JPY 731,424,283.00 0.053875 39,405,483.25
Interest payable
Including：USD 260.20 6.4936 1,689.63
JPY 1,606,915.99 0.053875 86,572.60
VI. Change in consolidation scope
No change of scope of consolidation from last year.
VII. Equity in other entity
1. Equity in subsidiary
（1）Constitute of enterprise group
Share-holding ratio
Subsidiary Main operation Registered place Business nature Acquired way
Directly Indirectly
Shenzhen Lishi
Domestic trade,
Industry Establish
Shenzhen Shenzhen Property
Development Co.,
Management
Ltd 100.00
Accommodation, Establish
Shenzhen
Shenzhen Shenzhen restaurants,
Huaqiang Hotel
business center; 100.00
Shenfang Establish
Property Property
Shenzhen Shenzhen
Management Co., Management
Ltd. 100.00
107
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Shenzhen Beauty Production of Establish
fully electronic
Century Garment Shenzhen Shenzhen 100.00
jacquard knitting
Co., Ltd. whole shape
Shenzhen
Shengbo Operating import
Ophotoelectric Shenzhen Shenzhen Purchase
Technology Co., and export
Ltd business 100.00
Shenzhen Operating import
Shenfang Import
Shenzhen Shenzhen and export Establish
& export Co.,
Ltd. business 100.00
Shengtou
(Hongkong) Production and
Hongkong Hongkong Establish
Co.,Ltd. sales of polarizer
100.00
2.Equity in joint venture arrangement or associated enterprise
(1) Significant joint venture arrangement or associated enterprise
Holding proportion(%) The accounting
Joint venture or
Place of treatment of
associated Place of operation Nature
registration Directly Indirectly investment in
enterprise
associates
Shenzhen Haohao
Property Leasing Shenzhen Shenzhen Property leasing 50.00 Equity method
Co., Ltd.
Shenzhen Xieli
Automobile Co., Shenzhen Shenzhen Property leasing 50.00 Equity method
Ltd.
Shenzhen
Changlianfa
Shenzhen Shenzhen Property leasing 40.25 Equity method
Printing and
dyeing Company
Jordan Garment
Jordan Jordan Manufacturing 35.00 Equity method
Factory
Yehui
International Co., Hongkong Hongkong Manufacturing 22.75 Equity method
Ltd.
(2)Key financial information of significant joint venture or associated enterprise
108
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Year-beginning balance/
Year-end balance/ Amount
Amount of previous
of current period
period
Joint venture：
Total book value of the investment 8,193,144.85 6,720,327.40
Total amount of the pro rata calculation of the following
items
--Net profit 1,022,270.67 924,925.00
--Other Comprehensive income
--Total comprehensive income 1,022,270.67 924,925.00
Dividends received from joint ventures this period 474,378.22
Associated enterprise：
Total book value of the investment 14,686,124.21 4,614,853.99
Total amount of the pro rata calculation of the following
items
--Net profit 1,408,771.53 863,893.78
--Other Comprehensive income 198,556.03 -32,283.65
--Total comprehensive income 1,607,327.56 831,610.13
Dividends received from joint ventures this period 545,386.50
3. Significant common operation
Proportion /shareportion
Name Main operating place Registration place Business nature
Directly Indirectly
Guanhua Building Shenzhen Shenzhen Cooperate 50.16%
According to the company along with Hongkong Qiaohui Industries Co.,Ltd. signed "Agreement on cooperative
development and construction of Guanhua building", jointly developed Guanhua building construction, the compa
ny invested 50.16%, Hong Qiao Hui Industrial Co., Ltd. invested 49.84%, the two sides need to agree matters affe
cting the cooperation projects. In addition, the two sides agreed to the project is completed in accordance with the
ratio of the actual investment allocation or co-operation, specific programs need further deliberations.
As of the reporting period, Guanhua unfinished building projects.
109
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
VIII. Risks Related to Financial Instruments
The company has the main financial instruments, such as bank deposits, receivables and payables, investments,
loans and so on. Please refer to the relevant disclosure in Notes for the details. The risks associated with these
financial instruments mainly include credit risk, market risk and liquidity risk. The company’s management shall
manage and monitor these risks and ensure above risks to be controlled within certain scope.
（I）Credit Risk
The credit risk of the company is primarily attributable to bank deposits and receivables. Of which, the bank
deposits are mainly deposited in the medium and large commercial banks with strength, high credibility. For the
receivables, the company has developed the relevant policies to control the credit risk, and set up the
corresponding debt and credit limit after the credit status of debtor is evaluated based on financial condition of
debtor, credit history, external ratings, possibility of guarantee obtained from the third party. Meanwhile, the
company shall regularly monitor the debtor’s credit history. With regard to the bad credit record for the debtor, the
company shall adopt the written reminder, shortening or cancel of credit period to ensure the overall credit risks
within the controllable scope.
（II）Market risk
Market risk of financial instrument arises from changes in fair value or future cash flow of financial instruments
affected by market price . Market risks includes foreign exchange risk and interest risk.
(1) Interest Rate Risk
The interest rate risk faced by the company is mainly from the bank borrowings. The company is faced the interest
rate risk of the cash flow due to the financial liability of the floating interest rate, and faced the interest rate risk of
the fair value due to the financial liability of the fixed interest rate. The company shall determine the relative
proportion in the fixed and floating interest rate contracts.
(2) Foreign Exchange Risk
The foreign exchange risks faced by the company are mainly from the financial assets and liabilities based on the
price of US dollar and JPY. The company matches the income and expenditure of foreign currency as far as
possible in order to reduce the foreign exchange risk.
（III）Liquidity risk
Liquidity risk refers to fund shortage problems when fulfilling obligations settled in cash or other financial assets.
The company shall guarantee to have the sufficient funds to repay the debts through monitoring the cash balance,
the marketable securities available to be cash and the rolling forecast for the future cash flow.
IX. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Closing fair value
Items Fir value measurement Fir value measurement Fir value measurement
Total
items at level 1 items at level 2 items at level 3
I. Consistent fair value
110
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
measurement
(1).Available for sale
financial assets 10,054,476.60 10,054,476.60
1.Equity instrument
investment 10,054,476.60 10,054,476.60
Total of Consistent fair
value measurement 10,054,476.60 10,054,476.60
2. Market price recognition basis for consistent and inconsistent fair value measurement items at level
The fair value of financial assets available for sale at the end of period is measured based on the closing price of
Shenzhen Stock Exchange on December 31,2016.
X. Related parties and related-party transactions
1.Parent company information of the enterprise
The parent company The parent company
Registered capital
Name Registered address Nature of the Company's of the Company’s
（RMB’0000）
shareholding ratio vote ratio
18/F, Investment Equity investment ,
Shenzhen
Building, Shennan Real-estate
Investment Holdings 2,145,000.00 46.21% 49.39%
Co.,Ltd. Road, Futian Development and
District, Shenzhen Guarantee
The company is authorized and approved to be state-owned independent company by Shenzhen Government, and
it Executes financial contributor function on state-owned enterprise within authorization scope.
The finial control of the Company was Shenzhen People’s Govemment state owned assets supervision &
Administration Commission.
2.Subsidiaries of the Company
Details refer to the Note VII-1, Interest in the subsidiary
3. Information on the joint ventures and associated enterprises of the Company
Details refer to the Note VII-2, Interests in joint ventures or associates
4.Other Related parties information
Other related party Relationship to the Company
Shenzhen Shenchao Technology Investment Co., Ltd. Subject to the same party controls
111
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Shenzhen Tianma Microelectronics Co., Ltd. Chairman of the Board Is the Vice Chairman of the Company
Shengbo （HK）Co., Ltd. The Company Executives are Director of the company
Shenzhen Xiangjiang Trade Co., Ltd. Sharing Company
Shenzhen Xinfang Knitting Co., Ltd. Sharing Company
Shenzhen Dailishi Underwear Co., Ltd. Sharing Company
Anhui Huapeng Textile Co., Ltd. Sharing Company
5. Related transactions.
1．Sales of goods and vendering of services
Related party Content
Amount of current period Amount of previous period
Shenzhen Tianma 2,077,019.45 3,169,202.48
Sales polarizer sheet
Microelectronics Co., Ltd.
2．Entrusted loans to related parties
For the construction of the project of polarizer sheet for TFT-LCD, the Company signed Entrusted Loan Contract
with Shenzhen Shenchao Technology Investment Co., Ltd. and Shenzhen Jiangsu Building Sub-branch of
Shenzhen Development Bank Co., Ltd. in 2010. According to the contract, Shenzhen Shenchao Technology
Investment Co., Ltd. entrusted Shenzhen Jiangsu Building Sub-branch of Shenzhen Development Bank Co., Ltd.
to extend a loan of RMB 200 million to the Company. The term of the loan is 108 months from the day when the
first installment of entrusted loan is transferred to the account of the Company. The interest rate of the entrusted
loan is the rate of commercial loans with a term of 5 years quoted by People's Bank of China minus 2%. In case of
adjustment of such commercial loan rate, the rate of commercial loans with a term of 5 years after adjustment
minus 2% shall apply as interest rate of entrusted loan from the first day of the next month after the adjustment of
basic interest rate.As of December 31, 2015, The Company actually received a loan of RMB 160 million.
3. Rewards for the key management personnel
Items
Amount of current period Amount of previous period
Rewards for the key management 4.3809 million 5.5268 million
personnel
6. Receivables and payables of related parties
（1）Receivables
Amount at year end Amount at year beginning
Name Related party
Balance of Book Bad debt Provision Balance of Book Bad debt Provision
Shenzhen Tianma
Account receivable 349,938.59 17,496.93 568,133.34 28,406.67
Microelectronics
112
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Co., Ltd.
Other Account Anhui Huapeng
3,600,000.00 270,000.00 1,800,000.00 90,000.00
receivable Textile Company
Other Account Shenzhen Dailishi
277,172.52 13,858.63 257,450.22 12,872.51
receivable Underwear Co., Ltd.
（2）Payables
In RMB
Amount at year end Amount at year beginning
Name Related party
Shenzhen Xinfang Knitting Co.,
Other payable 244,789.85 244789.85
Ltd.
Shenzhen Xiangjiang Trade
Other payable 40,000.00 40,000.00
Co., Ltd.
Shenzhen Changlianfa Printing
Other payable 916,673.69 584,644.49
and dyeing Co., Ltd.
Shenzhen Haohao Property
Other payable 4,179,489.85 3,479,489.85
Leasing Co., Ltd.
Other payable Yehui International Co.,Ltd. 1,137,966.35 1,071,546.49
Other payable Shengbo （Hongkong）Co., Ltd. 315,000.00 315,000.00
Shenzhen Shenchao Technology
Interest payable 39,000,625.75 32,806,459.08
Investment Co., Ltd.
XI. Subsequent events
During the reporting period, the company received the No.28 respondent notice issued by Shenzhen Intermediate
People's Court (2014) Foreign legislation, the plaintiff association of Hong Kong Xieli Automobile Co., Ltd
liability disputes has been formally accepted. The company as the first defendant, Shenzhen Xieli Automobile Co.,
Ltd. was the second defendant. The plaintiff requested: 1, the economic loss of tort liability by the total amount of
RMB 31.8579 million; 2, the second defendant involved in joint liability of the amount of compensation; 3, the
litigation fee paid by two co-defendants. As of December 31,2015, this case was in process.
XII. Post-balance-sheet events
According to the dividend distribution preplan made by the board of directors of the Company, the Company will
neither distribute profits nor capitalize capital surplus for the current period.
113
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
XIII. Notes s of main items in financial reports of parent company
（1）Account receivable
1.Classification account receivables.
Year-end balance
Book balance Provision for bad debts
Classification
Proportio Proportion( Book value
Amount Amount
n(%) %)
Accounts receivable of
individual significance and
subject to individual
impairment assessment
Accounts receivable subject to
impairment assessment by
862,162.70 100.00 43,108.13 5.00 819,054.57
credit risk characteristics of
a portfolio
Accounts receivable of
individual insignificance but
subject to individual
impairment assessment
Total 862,162.70 100.00 43,108.13 819,054.57
Year-beginning
Book balance Provision for bad debts
Classification
Proportio Proportion( Book value
Amount Amount
n(%) %)
Accounts receivable of
individual significance and
subject to individual
impairment assessment
Accounts receivable subject to
impairment assessment by
credit risk characteristics of
a portfolio 493,566.28 100.00 24,678.31 5.00 468,887.97
114
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Year-beginning
Book balance Provision for bad debts
Classification
Proportio Proportion( Book value
Amount Amount
n(%) %)
Accounts receivable of
individual insignificance but
subject to individual
impairment assessment
Total 493,566.28 100.00 24,678.31 468,887.97
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
Balance in year-end
Aging
Account receivable Bad debt provision Proportion(%)
Within 1 year 862,162.70 43,108.13 5.00
2.Other receivable
(1)Category of Other receivable
Year-end balance
Book balance Provision for bad debts
Classification
Book value
Amount Proportio Amount Proportion(
n(%) %)
Other Accounts receivable of
individual significance and
11,981,464.60 12.98 11,981,464.60 100.00
subject to individual
impairment assessment
Other Accounts receivable
subject to impairment
assessment by credit risk 79,979,624.27 86.68 7,435,914.49 9.30 72,543,709.78
characteristics of a
portfolio
Other Accounts receivable of
individual insignificance but
311,486.35 0.34 311,486.35 100.00
subject to individual
impairment assessment
115
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Year-end balance
Book balance Provision for bad debts
Classification
Book value
Amount Proportio Amount Proportion(
n(%) %)
Total 92,272,575.22 100.00 19,728,865.44 72,543,709.78
Year-beginning
Book balance Provision for bad debts
Classification
Book value
Amount Proportio Amount Proportion(
n(%) %)
Other Accounts receivable of
individual significance and
11,981,464.60 14.30 11,981,464.60 100.00
subject to individual
impairment assessment
Other Accounts receivable
subject to impairment
assessment by credit risk 71,511,079.72 85.33 6,929,687.26 9.69 64,581,392.46
characteristics of a
portfolio
Other Accounts receivable of
individual insignificance but
311,486.35 0.37 311,486.35 100.00
subject to individual
impairment assessment
Total 83,804,030.67 100.00 19,222,638.21 64,581,392.46
（1）Other Receivable accounts with large amount individually and bad debt provisions were provided
Balance at year-end
Other receivable （Unit）
Other receivable Provision for bad debts Proportion% Reason
Jiangxi Xuanli String Co., 11,389,044.60 11,389,044.60 Unable to
100.00
Ltd. recover
Shenzhen Tianlong Industry & 592,420.00 592,420.00 Unable to
100.00 recover Unable
Trade Co., Ltd.
to recover
Total 11,981,464.60 11,981,464.60
116
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
（2）In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
Amount in year-end
Aging
Other receivable Bad debt provision Withdrawal proportion
Within 1 year 70,741,994.77 3,537,099.74 5.00%
1-2 years 1,800,000.00 180,000.00 10.00%
Over 3 year 7,437,629.50 3,718,814.75 50.00%
Total 79,979,624.27 7,435,914.49
2.The amount of allowance for bad debt recovered or reversed during the current year is RMB506,227.23.
（3）Other accounts receivable classified by the nature of accounts
In RMB
Category
Year-end balance Year-beginning balance
Internal current account 75,889,102.97 69,244,280.72
Unit account 16,251,300.27 14,431,577.97
Other 132,171.98 128,171.98
Total 92,272,575.22 83,804,030.67
（4）The ending balance of other receivables owed by the imputation of the top five parties
Bad debt
Portion in total
Year-end provision
Name Nature Age other
balance Year-end
receivables(%)
balance
63,644,822.25 3,182,241.10
First Internal current account Within 1 year 68.98
Second Unit account 11,389,044.60 Over 3 years 12.34 11,389,044.60
Third Internal current account 7,168,680.72 Over 3 years 7.77 3,584,340.36
5,000,000.00 Within 1 year 5.42 250,000.00
Fourth Internal current account
75,600.00 Over 3 years 0.08 37,800.00
1,800,000.00 Within 1 year 1.95 90,000.00
Fifth
Unit account
Total 1,800,000.00 1-2 Year 1.95 180,000.00
117
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Total 90,878,147.57 98.49 18,713,426.06
3.Long-term equity investment
Year-end balance Year-beginning balance
Items Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Investment to the
1,772,806,395.91 16,582,629.30 1,756,223,766.61 1,779,106,095.91 2,249,587.82 1,776,856,508.09
subsidiary
Investment to
joint ventures and
23,145,924.05 266,654.99 22,879,269.06 21,061,712.32 266,654.99 20,795,057.33
associated
enterprises
Total 1,795,952,319.96 16,849,284.29 1,779,103,035.67 1,800,167,808.23 2,516,242.81 1,797,651,565.42
（1）Investment to the subsidiary
Withdrawn
Closing balance
impairment
Name Opening balance Increase Decrease Closing balance of impairment
provision in the
provision
reporting period
Shenzhen Shengbo
Optoelectrionc
Technology Co.,
Ltd. 1,716,663,070.03 1,716,663,070.03 14,415,288.09 14,415,288.09
Shenzhen Lisi
Industrial
Development Co.,
Ltd. 8,073,388.25 8,073,388.25
Shenzhen Beauty
Centruty Garment
Co., Ltd. 30,867,400.00 30,867,400.00 2,167,341.21
Shenzhen
Shenfang Import
& Export Co., Ltd 6,299,700.00 6,299,700.00
Shenzhen
Huaqiang Hotal 15,489,351.08 15,489,351.08
Shenfang Property
1,713,186.55 1,713,186.55
Management Co.,
118
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Ltd.
Total 1,779,106,095.91 0.00 6,299,700.00 1,772,806,395.91 14,415,288.09 16,582,629.30
（2）Investment to joint ventures and associated enterprises
Increase /decrease in reporting period
Closing
Adjustme
Withdraw balance
Decreas Gain/loss nt of Declarati
Opening Add Other n Closing of
Name ed of other on of cash
balance investme equity impairme Other balance impairme
investm Investme comprehe dividends
nt changes nt nt
ent nt nsive or profit
provision provision
income
I. Joint ventures
Shenzhen
Haohao
Property
Leasing Co., 3,762,406. 635,434.1 4,397,840
Ltd. 73 5 .88
Shenzhen
Xieli
Automobile 3,675,122. 386,836.5 4,061,958 266,654.9
Co., Ltd. 44 2 .96 9
7,437,529. 1,022,270 8,459,799 266,654.9
Subtotal
17 .67 .84 9
II. Associated enterprises
Shenzhen
Changlianfa
Printing and
dyeing 1,814,158. 1,871,377
Company 78 57,218.31 .09
Jordan
Garnent 3,262,744. -76,209.2 197,479.0 3,384,014
Factory 69 3 3 .49
119
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Yehui
International 8,547,279. 1,427,762 545,386.5 9,430,732
Co., Ltd. 68 .45 1,077.00 0 .63
13,624,18 1,408,771 198,556.0 545,386.5 14,686,12
Subtotal
3.15 .53 3 0 4.21
21,061,71 2,431,042 198,556.0 545,386.5 23,145,92 266,654.9
Total
2.32 .20 3 0 4.05 9
4.Business income and Business cost
（1）Business income
Items Amount of current period Amount of previous period
59,936,965.65 58,390,060.58
Income from Main Business
4,536,386.18 4,734,258.31
Other Business income
Total 64,473,351.83 63,124,318.89
Cost from Main Business 7,797,417.08 7,748,598.15
Other Business cost 4,536,386.16 4,734,258.26
Total 12,333,803.24 12,482,856.41
（2）Main business（Industry）
Name Amount of current period Amount of previous period
Business income Business cost Business income Business cost
Rental industry 59,936,965.65 7,797,417.08 58,390,060.58 7,748,598.15
Total 59,936,965.65 7,797,417.08 58,390,060.58 7,748,598.15
（3）Main business（Production）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
Rental industry 59,936,965.65 7,797,417.08 58,390,060.58 7,748,598.15
Total 59,936,965.65 7,797,417.08 58,390,060.58 7,748,598.15
120
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
（4）Main business（Area）
Amount of current period Amount of previous period
Name
Business income Business cost Business income Business cost
59,936,965.65 7,797,417.08 58,390,060.58 7,748,598.15
Shenzhen
59,936,965.65 7,797,417.08 58,390,060.58 7,748,598.15
Total
（5）Operating income from top five clients
Name Business Income Proportion(%)
First 26,979,808.44 41.85%
Second 1,778,880.00 2.76%
Third 1,680,000.00 2.60%
Fourth4 1,110,014.77 1.72%
Fifth 890,400.00 1.38%
Total 32,439,103.21 50.31%
5.Investment income
Items Amount of current Amount of previous
period period
Income from long-term equity investment measured by adopting
8,048,378.51
the cost method
Income from long-term equity investment measured by adopting
2,431,042.20 1,788,818.79
the Equity method
Investment income arising from disposal of long-term eqiuty
427,368.86
investments
Investment income received from holding of available-for –sale
3,030,660.52 3,377,273.30
financial assets
The investment income procure from the available-for-sale
44,345,614.09 16,896,190.19
financial assets
Total 58,283,064.18 22,062,282.28
6. Supplement information of Cash Flow Statement
121
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Supplement information Amount of Amount of
current period previous period
I. Adjusting net profit to cash flow from operating activities
61,362,927.65 46,012,920.02
Net profit
14,939,945.14 -5,163,448.04
Add : Impairment loss provision of assets
Depreciation of fixed assets, oil and gas assets and consumable biological
8,301,759.87 8,255,226.95
assets
Amortization of intangible assets 310,526.55 614,528.48
Amortization of long-term deferred expenses
Loss on disposals of fixed assets, intangible assets and other long-term
assets(“-“for gains)
Loss on discard of fixed assets -222,212.70
Loss on fair value changes
Financial expenses -8,307,625.26 -1,392,989.91
-22,062,282.2
Loss on investment -58,283,064.18
8
Decrease of deferred income tax assets 352,502.39 1,653,775.47
Increase of deferred income tax assets -52,384,071.50
Decrease in inventories
Decrease of operating receivable -4,280,901.95 -1,764,126.72
Increase of operating recivable 17,119,385.28 9,804,230.15
Other -3,897,638.73
Net cash flows arising from operating activities 31,293,242.79 -20,323,876.11
II. Significant investment and financing activities that without cash flows
Debt-to –capital conversion
Convertible loan due within 1 year
Fixed assets acquired under financial lease
122
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
Supplement information Amount of Amount of
current period previous period
3. Net Changes of cash and cash equivalents
Ending balance of cash 271,582,749.03 457,379,886.16
Less: Beginning balance of cash 457,379,886.16 365,620,681.34
Add：End balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase of cash and cash equivalents -185,797,137.13 91,759,204.82
XIV. Supplement information
1. Particulars about current non-recurring gains and loss
Items Amount Notes
Non-current asset disposal gain/loss -25,108.97
Government subsidies recognized in current gain and
loss(excluding those closely related to the Company’s 21,420,940.38
business and granted under the state’s policies)
Except for effective hedge business relevant to
normal operation of the Company, gains and losses
arising from fair value change of tradable financial
assets and tradable financial liabilities, and 88,006,690.51
investment income from disposal of tradable financial
assets, tradable financial liabilities and financial
assets available for sale
Single impairment test for impairment of receivables
transferred back to preparation 790,775.00
Other non-business income and expenditures other
2,465,842.60
than the above
Influenced amount of income tax -11,902,114.51
Total 100,757,025.01
123
Shenzhen Textile (Holdings) Co., Ltd. Notes to Financial Statements
2. Return on net asset and earnings per share
EPS
Profit as of reporting period Weighted average ROE (%)
EPS-basic EPS-diluted
Net profit attributable to the Common
0.39 0.02 0.02
stock shareholders of Company.
Net profit attributable to the Common
stock shareholders of Company after -4.22 -0.18 -0.18
deducting of non-recurring gain/loss.
Shenzhen Textile (Holdings) Co., Ltd.
March 29, 2016
124
125
126
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