Shenzhen Textile (Holdings) Co., Ltd.
Financial Statements and Audit Report
For Year Ended December 31, 2024
Shenzhen Textile (Holdings) Co., Ltd.
Financial Statements and Audit Report
For Year Ended December 31, 2024
Content Page
Audit Report 1-4
Consolidated and parent company's balance sheet 5-7
Consolidated and parent company's income statement 8-9
Consolidated and parent company's statement of cash flows 10-11
Consolidated and parent company's statement of changes in shareholders' equity 12-15
Notes to the financial statements 16-102
Shenzhen Textile (Holdings) Co., Ltd.
Audit Report
DSB (S) Z (25) No. P03605
(Page 1 of 4)
All shareholders of Shenzhen Textile (Holdings) Co., Ltd.
I. Audit opinions
We have audited the financial statements of Shenzhen Textile (Holdings) Co., Ltd. (hereinafter referred to as the
"Shenzhen Textile"), including the consolidated and parent company's balance sheet as at December 31, 2024, the
consolidated and parent company's income statement, consolidated and parent company's statement of cash flows,
consolidated and parent company's statement of changes in shareholders' equity and related notes to the financial
statements for the year then ended.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance with the
Accounting Standards for Business Enterprises, and fairly present the consolidated and the parent company's
financial position of Shenzhen Textile as at December 31, 2024 and the consolidated and the parent company's
operating results and cash flows for the year then ended.
II. Basis for the audit opinion
We have conducted our audit in accordance with the Chinese Auditing Standards for Certified Public Accountants.
Our responsibilities under these standards are further described in the "Certified Public Accountant's Responsibilities
for the Audit of Financial Statements" section of the audit report. In accordance with the Code of Ethics for Chinese
Certified Public Accountants, we are independent of Shenzhen Textile and have fulfilled other ethical responsibilities.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
III. Key audit matters
Key audit matters are those matters that, in our professional judgment, are of most significance in our audit of the
financial statements of the current year. These matters are addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. We have identified the following matters as key audit matters to be communicated in the audit report.
As described in the Note (V). 41 to the financial statements, in 2024, the operating revenue of Shenzhen Textile as
presented in the consolidated financial statements was RMB 3,335,283,008.68, of which the revenue from sales of
polarizers was RMB 3,161,332,478.08, accounting for 94.78% of the total revenue. The revenue from sales of
polarizers of Shenzhen Textile is recognized when the customer obtains control of the relevant goods. Due to the
importance of revenue from sales of polarizers to the consolidated financial statements as a whole, and the fact that
the revenue is one of the key performance indicators of Shenzhen Textile, there is an inherent risk that management
may manipulate the revenue recognition, in order to achieve specific goals or expectations. Therefore, we have
identified the recognition of revenue from sales of polarizers as a key audit matter in the audit of the consolidated
financial statements.
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Shenzhen Textile (Holdings) Co., Ltd.
Audit Report - Continued
DSB (S) Z (25) No. P03605
(Page 2 of 4)
III. Key audit matters - continued
In response to the above key audit matters, the audit procedures we performed mainly include:
? Test and evaluate the effectiveness of the operation of internal control related to the sales business of polarizer;
? Check the sales contracts signed with major customers, identify the terms and conditions of the contracts related to
the transfer of right of control of the goods, and evaluate whether the accounting policies for recognition of revenue
from sales of polarizers meet the requirements of the Accounting Standards for Business Enterprises;
? Execute analytical procedures for the revenue from sales of polarizers by production line, product type and
customer respectively, and analyze the rationality of the change in revenue from sales of polarizers in combination with
market selling price and other factors;
? Extract samples to perform detail tests on the revenue from sales of polarizers, check the supporting documents
such as invoices, delivery orders and receipts related to the recognition of revenue from sales of polarizers, and conduct
letter of confirmation on the sales amount of major customers to verify the authenticity of revenue from sales of
polarizers;
? Select samples for sales transactions before and after the balance sheet date, check supporting documents such as
delivery orders, receipts and invoices, and evaluate whether the revenue from sales of polarizers is recorded in the
appropriate accounting period.
As described in Note (V). 8 to the Financial Statements, as of December 31, 2024, the book balance of inventories of
Shenzhen Textile as presented in the consolidated financial statements was RMB 911,706,239.87, of which the book
balance of polarizer inventories was RMB 905,482,857.11, accounting for 99.32% of the total inventories, and the
corresponding provision for inventory depreciation of polarizer was RMB 115,967,084.94. According to the accounting
policies of Shenzhen Textile, the inventories are measured at the lower of cost or net realizable value at the end of the
year. When the net realizable value of the inventories is lower than the cost, the provision for inventory depreciation
shall be made according to the difference. Since the provision for inventory depreciation involves significant estimates
of the management, we have identified the impairment of polarizer inventories as a key audit matter in the audit of the
consolidated financial statements.
In response to the above key audit matters, the audit procedures we performed mainly include:
? Test and evaluate the effectiveness of internal control related to the impairment of polarizer inventories;
? Evaluate the appropriateness of accounting policies related to the impairment of polarizer inventories;
? Implement the on-site monitoring procedures of polarizer inventories, check the inventory quantity of polarizer
inventories and observe the status of polarizer inventories on the basis of sampling;
? Select samples, compare the data used in determining the net realizable value of the polarizer inventories with the
actual cost of completion of products in progress and the actual selling prices incurred recently, and evaluate the
reasonableness of the net realizable value of polarizer inventories.
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Audit Report - Continued
DSB (S) Z (25) No. P03605
(Page 3 of 4)
IV. Other information
The management of Shenzhen Textile is responsible for other information. Other information includes information
covered in the 2024 Annual Report of Shenzhen Textile, but excludes the financial statements and our audit report.
Our audit opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with financial statements or our knowledge obtained
during the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we
are required to report that fact. We have nothing to report in this regard.
IV. Responsibilities of the management and those charged with governance for financial statements
The management of Shenzhen Textile is responsible for preparing the financial statements in accordance with the
requirements of Accounting Standards for Business Enterprises to achieve a fair presentation, and for designing,
implementing and maintaining internal control that is necessary to ensure that the financial statements are free from
material misstatements, whether due to frauds or errors.
In preparing the financial statements, the management is responsible for assessing the going-concern ability of Shenzhen
Textile, disclosing matters related to going concern (if applicable) and applying the going concern basis, unless the
management plans to liquidate Shenzhen Textile, terminate its operations or has no other realistic alternative.
Those charged with governance are responsible for overseeing the financial reporting process of Shenzhen Textile.
VI. Responsibilities of certified public accountants for the audit of financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the audit
standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
We have exercised professional judgment and maintained professional skepticism in performing our audit under the
auditing standards. At the same time, we also implement the following work:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
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Audit Report - Continued
DSB (S) Z (25) No. P03605
(Page 4 of 4)
VI. Responsibilities of certified public accountants for the audit of financial statements - continued
(2) Understand the internal control related to the audit, so as to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the management.
(4) Draw conclusions on the appropriateness of the management's use of the going concern basis. At the same time,
based on the audit evidence obtained, a conclusion is drawn as to whether there is a material uncertainty in events or
circumstances that may give rise to significant doubt about the going-concern ability of Shenzhen Textile. If we
conclude that a material uncertainty exists, we are required to, in our audit report, draw attention of the users of
statements to the related disclosures in the financial statements; if such disclosures are inadequate, we should modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit report. However, future
events or circumstances may cause Shenzhen Textile to cease to continue as a going concern.
(5) Evaluate the overall presentation (including disclosures), structure and content of the financial statements, and
whether the financial statements fairly reflect the relevant transactions and matters.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business
activities within Shenzhen Textile to express an opinion on the financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding the planned scope and timing of the audit, significant
audit findings and other matters, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and the related safeguards (if applicable).
From the matters communicated with those charged with governance, we have determined which matters are of most
significance to the audit of the financial statements in the current year and thus constitute the key audit matters. We
describe these matters in the audit report unless laws and regulations prohibit public disclosure of these matters, or in
extremely rare circumstances, if it is reasonably expected that the negative consequences of communicating a matter
outweigh the benefits to the public interest in the audit report, we determine not to do so.
Deloitte Touche Tohmatsu Certified Public Accountants LLP Certified Public Accountant of China
(Engagement partner)
Shanghai, China
Certified Public Accountant of China
March 26, 2025
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Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Balance Sheet
December 31, 2024
Consolidated Balance Sheet
RMB
Balance as at the Balance as at the
Notes end of the current end of the previous
year year
Current assets:
Monetary funds (V). 1 340,961,443.82 472,274,448.00
Financial assets held for trading (V). 2 731,419,904.42 821,946,114.68
Notes receivable (V). 3 47,305,221.88 50,963,943.01
Accounts receivable (V). 4 863,731,936.89 820,134,833.95
Receivables financing (V). 5 6,804,603.68 22,839,459.13
Advances to suppliers (V). 6 8,176,724.70 19,499,886.80
Other receivables (V). 7 3,596,543.96 3,220,285.42
Including: interest receivable - -
Dividends receivable - -
Inventories (V). 8 789,756,700.88 736,392,172.27
Other current assets (V). 9 21,461,736.14 60,773,457.39
Total current assets 2,813,214,816.37 3,008,044,600.65
Non-current assets:
Long-term equity investments (V). 10 114,828,026.04 127,682,020.70
Other equity instrument investments (V). 11 165,402,900.00 145,988,900.00
Investment properties (V). 12 115,993,390.19 125,603,207.18
Fixed assets (V). 13 1,873,552,843.91 2,066,006,237.73
Construction in progress (V). 14 5,814,012.03 31,307,060.74
Right-of-use assets (V). 15 15,338,117.86 11,999,466.57
Intangible assets (V). 16 35,207,791.95 39,564,422.80
Goodwill (V). 17 - -
Long-term deferred expenses (V). 18 6,084,115.87 3,503,660.94
Deferred tax assets (V). 19 58,920,511.20 60,605,365.42
Other non-current assets (V). 20 27,793,871.91 29,517,420.71
Total non-current assets 2,418,935,580.96 2,641,777,762.79
Total assets 5,232,150,397.33 5,649,822,363.44
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Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Balance Sheet - Continued
December 31, 2024
Consolidated Balance Sheet - Continued
RMB
Balance as at the Balance as at the
Notes end of the current end of the previous
year year
Current liabilities:
Short-term borrowings (V). 22 - 8,000,000.00
Derivative financial liabilities (V). 23 1,278,559.35 -
Notes payable (V). 24 31,095,540.29 31,049,291.49
Accounts payable (V). 25 304,812,580.55 408,548,136.24
Advances from customers (V). 26 1,051,491.96 1,450,096.30
Contract liabilities (V). 27 490,562.97 1,436,943.34
Employee compensation payable (V). 28 56,685,289.92 56,437,162.09
Taxes payable (V). 29 6,853,730.84 4,340,895.14
Other payables (V). 30 160,296,989.98 184,528,344.55
Including: interest payable - -
Dividends payable - -
Non-current liabilities maturing within one year (V). 31 63,347,555.03 108,102,752.99
Other current liabilities (V). 32 54,072,022.27 80,082,477.22
Total current liabilities 679,984,323.16 883,976,099.36
Non-current liabilities:
Long-term borrowings (V). 33 162,388,870.00 505,578,314.56
Lease liabilities (V). 34 9,496,564.12 6,687,317.22
Deferred income (V). 35 96,349,196.26 97,485,986.89
Deferred tax liabilities (V). 19 48,610,809.66 44,177,287.45
Total non-current liabilities 316,845,440.04 653,928,906.12
Total liabilities 996,829,763.20 1,537,905,005.48
Shareholders' equity:
Equity (V). 36 506,521,849.00 506,521,849.00
Capital reserve (V). 37 1,961,599,824.63 1,961,599,824.63
Other comprehensive income (V). 38 106,877,807.32 93,607,380.81
Surplus reserves (V). 39 104,262,315.64 104,262,315.64
Undistributed profits (V). 40 272,608,113.66 216,160,896.14
Total equity attributable to shareholders of the parent
company
Minority interests 1,283,450,723.88 1,229,765,091.74
Total shareholders' equity 4,235,320,634.13 4,111,917,357.96
Total liabilities and shareholders' equity 5,232,150,397.33 5,649,822,363.44
The notes are an integral part of the financial statements
_____________________ ______________________ ______________________
Principal Chief Finance Officer Chief Accountant
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Shenzhen Textile (Holdings) Co., Ltd.
Balance Sheet of the Parent Company
December 31, 2024
Balance Sheet of the Parent Company
RMB
Balance as at the Balance as at the
Notes end of the current end of the previous
year year
Current assets:
Monetary funds 13,630,974.26 9,125,800.27
Financial assets held for trading 731,419,904.42 741,243,309.42
Accounts receivable (XVI). 1 13,028,987.63 12,671,623.65
Advances to suppliers 99,904.79 -
Other receivables (XVI). 2 1,534,395.80 14,013,552.95
Including: interest receivable - -
Dividends receivable - -
Inventories 39,835.05 32,814.05
Total current assets 759,754,001.95 777,087,100.34
Non-current assets:
Long-term equity investments (XVI). 3 2,040,690,006.71 2,087,532,810.79
Other equity instrument investments 152,221,200.00 131,185,500.00
Investment properties 94,773,462.23 102,430,682.27
Fixed assets 2,099,585.67 2,522,229.44
Intangible assets 83,350.98 191,875.56
Long-term deferred expenses 4,448,190.05 -
Other non-current assets 25,860,862.33 27,823,005.45
Total non-current assets 2,320,176,657.97 2,351,686,103.51
Total assets 3,079,930,659.92 3,128,773,203.85
Current liabilities:
Accounts payable 411,743.57 411,743.57
Advances from customers 540,673.07 540,673.07
Employee compensation payable 17,955,509.70 15,810,919.71
Taxes payable 5,619,509.34 3,115,369.56
Other payables 87,029,351.12 106,722,393.87
Including: interest payable - -
Dividends payable - -
Total current liabilities 111,556,786.80 126,601,099.78
Non-current liabilities:
Deferred income 100,000.00 200,000.00
Deferred tax liabilities 34,086,313.51 40,855,186.12
Total non-current liabilities 34,186,313.51 41,055,186.12
Total liabilities 145,743,100.31 167,656,285.90
Shareholders' equity:
Equity 506,521,849.00 506,521,849.00
Capital reserve 1,577,392,975.96 1,577,392,975.96
Other comprehensive income 98,116,532.32 83,629,830.81
Surplus reserves 104,262,315.64 104,262,315.64
Undistributed profits 647,893,886.69 689,309,946.54
Total shareholders' equity 2,934,187,559.61 2,961,116,917.95
Total liabilities and shareholders' equity 3,079,930,659.92 3,128,773,203.85
The notes are an integral part of the financial statements
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Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Income Statement
For Year Ended December 31, 2024
Consolidated Income Statement
RMB
Amount for the current Amount for the previous
Notes
year year
I. Operating revenue (V). 41 3,335,283,008.68 3,079,678,375.45
Less: operating costs (V). 41 2,795,859,934.82 2,561,631,844.53
Taxes and surcharges (V). 42 10,235,505.65 9,293,623.13
Selling and distribution expenses (V). 43 42,260,603.47 34,195,670.61
G&A expenses (V). 44 134,347,821.58 134,371,410.53
R&D expenses (V). 45 103,811,822.91 104,653,040.92
Financial expenses (V). 46 12,121,156.05 24,399,501.16
Including: interest expenses 17,858,022.73 27,339,804.17
Interest income 7,272,362.76 12,947,471.64
Plus: other income (V). 47 41,484,107.53 50,740,363.91
Investment (loss) income (V). 48 (165,313.89) 10,828,635.56
Including: investment losses in associates and joint ventures (10,701,895.08) (6,898,983.89)
Gains from derecognition of financial assets measured at
- -
amortized costs
Gains from changes in fair value (V). 49 1,134,503.45 2,151,780.82
Credit loss gains (V). 50 5,100,446.66 4,535,775.14
Asset impairment loss (V). 51 (132,423,108.75) (126,089,709.42)
Gains from disposal of assets - 1.72
II. Operating profit 151,776,799.20 153,300,132.30
Plus: non-operating revenue (V). 52 1,805,086.92 1,449,879.26
Less: non-operating expenses (V). 53 698,017.71 8,205,801.51
III. Total profit 152,883,868.41 146,544,210.05
Less: income tax expenses (V). 54 9,827,102.03 19,407,731.47
IV. Net profit 143,056,766.38 127,136,478.58
(I) Classified by operating sustainability:
(II) Classified by ownership:
V. Net of tax of other comprehensive income (V). 38 13,270,426.51 (15,870,135.10)
Net of tax of other comprehensive income attributable to shareholders
of the parent company
(I) Other comprehensive income that cannot be reclassified into profit
or loss
- -
profit or loss under the equity method
(II) Other comprehensive income that will be reclassified into profit
(1,290,073.49) 277,808.95
or loss
- -
or loss under the equity method
- -
comprehensive income
- -
hedging profit or loss)
(1,290,073.49) 99,168.85
financial statements
Net of tax of other comprehensive income attributable to minority
- 119,093.40
shareholders
VI. Total comprehensive income 156,327,192.89 111,266,343.48
Total comprehensive income attributable to shareholders of the parent
company
Total comprehensive income attributable to minority shareholders 53,685,632.14 47,987,321.53
VII. Earnings per share
Basic earnings per share (RMB/share) 0.18 0.16
Dilute earnings per share (RMB/share) 0.18 0.16
The notes are an integral part of the financial statements
-8-
Shenzhen Textile (Holdings) Co., Ltd.
Income Statement of the Parent Company
For Year Ended December 31, 2024
Income Statement of the Parent Company
RMB
Amount for the current Amount for the previous
Notes
year year
I. Operating revenue (XVI). 4 77,167,496.95 77,822,508.75
Less: operating costs (XVI). 4 10,205,157.84 9,822,306.53
Taxes and surcharges 3,069,369.36 3,193,559.74
Selling and distribution expenses 476,938.50 233,086.71
G&A expenses 46,124,842.97 46,901,768.72
Financial expenses (1,179,537.25) (3,418,990.44)
Including: interest expenses 422,950.59 356,264.79
Interest income 1,698,292.14 3,838,789.68
Plus: other income 164,150.75 153,012.52
Investment income (XVI). 5 12,077,902.81 19,300,515.95
Including: investment losses in associates and joint ventures (10,701,895.08) (6,898,983.89)
Gains from derecognition of financial assets measured at
- -
amortized costs
Gains from changes in fair value 2,413,062.80 2,151,780.82
Credit impairment (loss) gains (26,291,403.84) 708,847.28
Asset impairment loss (20,243,658.34) -
Gains from disposal of assets - -
II. Operating (loss) profit (13,409,220.29) 43,404,934.06
Plus: non-operating revenue 1,124,656.60 6,431.44
Less: non-operating expenses 93,185.54 59,123.40
III. Total profit (loss) (12,377,749.23) 43,352,242.10
Less: income tax expenses (3,885,606.10) 9,825,698.88
IV. Net (loss) profit (8,492,143.13) 33,526,543.22
(I) Net (loss) profit from continuing operations (8,492,143.13) 33,526,543.22
(II) Net profit from discontinued operations - -
V. Net of tax of other comprehensive income 14,486,701.51 (15,225,837.94)
(I) Other comprehensive income that cannot be reclassified into profit
or loss
- -
profit or loss under the equity method
(II) Other comprehensive income that will be reclassified into profit
(1,290,073.49) 99,168.85
or loss
- -
or loss under the equity method
- -
comprehensive income
- -
hedging profit or loss)
(1,290,073.49) 99,168.85
financial statements
VI. Total comprehensive (loss) income 5,994,558.38 18,300,705.28
The notes are an integral part of the financial statements
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Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Statement of Cash Flows
For Year Ended December 31, 2024
Consolidated Statement of Cash Flows
RMB
Amount for the current Amount for the
Notes
year previous year
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 3,390,788,584.83 2,985,794,229.99
Refunds of taxes and surcharges received 21,049,133.80 5,073,509.20
Other cash received related to operating activities (V). 55(1) 87,008,969.95 87,277,323.90
Sub-total of cash inflows from operating activities 3,498,846,688.58 3,078,145,063.09
Cash paid for purchase of goods and receipt of services 2,842,864,632.73 2,466,252,261.73
Cash paid to and on behalf of employees 238,890,310.33 255,045,680.87
Cash paid for taxes and surcharges 32,071,014.09 54,636,406.53
Other cash paid related to operating activities (V). 55(1) 153,756,206.34 117,443,974.16
Sub-total of cash outflows from operating activities 3,267,582,163.49 2,893,378,323.29
Net cash flows from operating activities (V). 56(1) 231,264,525.09 184,766,739.80
II. Cash flows from investing activities:
Cash received from recovery of investment 1,349,489.37 -
Cash received from investment income 11,747,113.36 13,769,440.75
Net cash received from disposal of fixed assets, intangible
assets, and other long-term assets (18.74) 11,634.84
Net cash received from disposal of subsidiaries and other
- -
business units
Other cash received related to investing activities (V). 55(2) 1,697,000,000.00 1,454,000,000.00
Sub-total of cash inflows from investing activities 1,710,096,583.99 1,467,781,075.59
Cash paid for the purchase of fixed assets, intangible assets,
and other long-term assets 29,441,167.62 64,069,967.97
Cash paid for investments - -
Net cash paid to acquire subsidiaries and other business units - -
Other cash paid related to investing activities (V). 55(2) 1,605,454,000.00 1,840,500,000.00
Sub-total of cash outflows from investing activities 1,634,895,167.62 1,904,569,967.97
Net cash flows from the investing activities 75,201,416.37 (436,788,892.38)
III. Cash flows from financing activities:
Cash received from absorption of investments - -
Including: cash received by subsidiaries from absorption of
- -
investments of minority shareholders
Cash received from acquisition of borrowings - 8,000,000.00
Other cash received related to financing activities - -
Sub-total of cash inflows from financing activities - 8,000,000.00
Cash paid for debt repayments 406,216,304.56 103,387,387.94
Cash paid for distribution of dividends and profits or
payment of interests
Including: dividends and profits paid to minority
- -
shareholders by subsidiaries
Other cash paid related to financing activities (V). 55(3) 9,508,462.57 8,776,024.71
Sub-total of cash outflows from financing activities 466,358,420.51 169,488,356.86
Net cash flows from financing activities (466,358,420.51) (161,488,356.86)
IV. Effect of fluctuation in exchange rate on cash and cash
equivalents
V. Net increase (decrease) in cash and cash equivalents (V). 56(1) (159,335,617.98) (413,054,377.13)
Plus: balance of cash and cash equivalents at the beginning
(V). 56(2) 461,420,457.33 874,474,834.46
of the year
VI. Balance of cash and cash equivalents at the end of the year (V). 56(2) 302,084,839.35 461,420,457.33
The notes are an integral part of the financial statements
- 10 -
Shenzhen Textile (Holdings) Co., Ltd.
Statement of Cash Flows of the Parent Company
For Year Ended December 31, 2024
Statement of Cash Flows of the Parent Company
RMB
Amount for the Amount for the
Notes
current year previous year
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of
services
Refunds of taxes and surcharges received - -
Other cash received related to operating activities 7,902,075.25 20,183,240.81
Sub-total of cash inflows from operating activities 88,455,829.93 99,902,782.39
Cash paid for purchase of goods and receipt of
services
Cash paid to and on behalf of employees 35,045,305.67 38,735,139.38
Cash paid for taxes and surcharges 13,926,380.37 19,540,659.95
Other cash paid related to operating activities 15,727,708.36 18,940,923.33
Sub-total of cash outflows from operating activities 67,541,887.21 80,222,312.75
Net cash flows from operating activities 20,913,942.72 19,680,469.64
II. Cash flows from investing activities:
Cash received from recovery of investment 1,554,056.96 -
Cash received from investment income 7,790,814.29 12,954,592.48
Net cash received from disposal of fixed assets,
- -
intangible assets, and other long-term assets
Net cash received from disposal of subsidiaries and
- -
other business units
Other cash received related to investing activities 1,373,585,151.73 1,250,200,000.00
Sub-total of cash inflows from investing activities 1,382,930,022.98 1,263,154,592.48
Cash paid for the purchase of fixed assets, intangible
assets, and other long-term assets
Cash paid for investments - -
Net cash paid to acquire subsidiaries and other
- -
business units
Other cash paid related to investing activities 1,363,000,000.00 1,550,500,000.00
Sub-total of cash outflows from investing activities 1,365,993,281.20 1,553,284,786.15
Net cash flows from the investing activities 16,936,741.78 (290,130,193.67)
III. Cash flows from financing activities:
Cash received from absorption of investments - -
Cash received from acquisition of borrowings - -
Other cash received related to financing activities - -
Sub-total of cash inflows from financing activities - -
Cash paid for debt repayments - -
Cash paid for distribution of dividends and profits or
payment of interests
Other cash paid related to financing activities - -
Sub-total of cash outflows from financing activities 33,346,867.31 30,747,575.73
Net cash flows from financing activities (33,346,867.31) (30,747,575.73)
IV. Effect of fluctuation in exchange rate on cash and
cash equivalents
V. Net increase (decrease) in cash and cash equivalents 4,505,173.99 (301,196,727.92)
Plus: balance of cash and cash equivalents at the
beginning of the year
VI. Balance of cash and cash equivalents at the end of
the year
The notes are an integral part of the financial statements
- 11 -
Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Statement of Changes in Shareholders' Equity
For Year Ended December 31, 2024
Consolidated Statement of Changes in Shareholders' Equity
RMB
Amount for the current year
Equity attributable to shareholders of the parent company
Item Total shareholders'
Other comprehensive Minority interests
Equity Capital reserve Surplus reserves Undistributed profits equity
income
I. Balance as at the end of the previous year 506,521,849.00 1,961,599,824.63 93,607,380.81 104,262,315.64 216,160,896.14 1,229,765,091.74 4,111,917,357.96
Plus: changes in accounting policies - - - - - - -
Correction of prior period errors - - - - - - -
Business combination under
- - - - - - -
common control
Others - - - - - - -
II. Balance at the beginning of the current
year
III. Increase/decrease in the current year - - 13,270,426.51 - 56,447,217.52 53,685,632.14 123,403,276.17
(I) Total comprehensive income - - 13,270,426.51 - 89,371,134.24 53,685,632.14 156,327,192.89
(II) Capital contributed or reduced by
- - - - - - -
shareholders
- - - - - - -
in shareholders' equity
(III) Profit distribution - - - - (32,923,916.72) - (32,923,916.72)
(IV) Internal transfer of shareholders' equity - - - - - - -
- - - - - - -
capital
- - - - - - -
capital
- - - - - - -
into retained earnings
(V) Special reserves - - - - - - -
(VI) Others - - - - - - -
IV. Balance as at the end of the current year 506,521,849.00 1,961,599,824.63 106,877,807.32 104,262,315.64 272,608,113.66 1,283,450,723.88 4,235,320,634.13
Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Statement of Changes in Shareholders' Equity - Continued
For Year Ended December 31, 2024
Consolidated Statement of Changes in Shareholders' Equity - Continued
RMB
Amount for the previous year
Equity attributable to shareholders of the parent company
Item Total shareholders'
Other comprehensive Minority interests
Equity Capital reserve Surplus reserves Undistributed profits equity
income
I. Balance as at the end of the previous year 506,521,849.00 1,961,599,824.63 109,596,609.31 100,909,661.32 170,636,610.95 1,181,777,770.21 4,031,042,325.42
Plus: changes in accounting policies - - - - - - -
Correction of prior period errors - - - - - - -
Business combination under
- - - - - - -
common control
Others - - - - - - -
II. Balance at the beginning of the current
year
III. Increase/decrease in the current year - - (15,989,228.50) 3,352,654.32 45,524,285.19 47,987,321.53 80,875,032.54
(I) Total comprehensive income - - (15,989,228.50) - 79,268,250.45 47,987,321.53 111,266,343.48
(II) Capital contributed or reduced by
- - - - - - -
shareholders
- - - - - - -
in shareholders' equity
(III) Profit distribution - - - 3,352,654.32 (33,743,965.26) - (30,391,310.94)
(IV) Internal transfer of shareholders' equity - - - - - - -
- - - - - - -
capital
- - - - - - -
capital
- - - - - - -
into retained earnings
(V) Special reserves - - - - - - -
(VI) Others - - - - - - -
IV. Balance as at the end of the current year 506,521,849.00 1,961,599,824.63 93,607,380.81 104,262,315.64 216,160,896.14 1,229,765,091.74 4,111,917,357.96
The notes are an integral part of the financial statements
- 13 -
Shenzhen Textile (Holdings) Co., Ltd.
Statement of Changes in Shareholders' Equity of the Parent Company
For Year Ended December 31, 2024
Statement of Changes in Shareholders' Equity of the Parent Company
RMB
Amount for the current year
Item Other comprehensive
Equity Capital reserve Surplus reserves Undistributed profits Total shareholders' equity
income
I. Balance as at the end of the previous year 506,521,849.00 1,577,392,975.96 83,629,830.81 104,262,315.64 689,309,946.54 2,961,116,917.95
Plus: changes in accounting policies - - - - - -
Correction of prior period errors - - - - - -
Others - - - - - -
II. Balance at the beginning of the current
year
III. Increase/decrease in the current year - - 14,486,701.51 - (41,416,059.85) (26,929,358.34)
(I) Total comprehensive income - - 14,486,701.51 - (8,492,143.13) 5,994,558.38
(II) Capital contributed or reduced by
- - - - - -
shareholders
- - - - - -
shareholders
- - - - - -
included in shareholders' equity
(III) Profit distribution - - - - (32,923,916.72) (32,923,916.72)
(IV) Internal transfer of shareholders'
- - - - - -
equity
- - - - - -
share capital
- - - - - -
into share capital
- - - - - -
income into retained earnings
(V) Special reserves - - - - - -
(VI) Others - - - - - -
IV. Balance as at the end of the current year 506,521,849.00 1,577,392,975.96 98,116,532.32 104,262,315.64 647,893,886.69 2,934,187,559.61
- 14 -
Shenzhen Textile (Holdings) Co., Ltd.
Statement of Changes in Shareholders' Equity of the Parent Company - Continued
For Year Ended December 31, 2024
Statement of Changes in Shareholders' Equity of the Parent Company - Continued
RMB
Amount for the previous year
Item Other comprehensive
Equity Capital reserve Surplus reserves Undistributed profits Total shareholders' equity
income
I. Balance as at the end of the previous year 506,521,849.00 1,577,392,975.96 98,855,668.75 100,909,661.32 689,527,368.58 2,973,207,523.61
Plus: changes in accounting policies - - - - - -
Correction of prior period errors - - - - - -
Others - - - - - -
II. Balance at the beginning of the current
year
III. Increase/decrease in the current year - - (15,225,837.94) 3,352,654.32 (217,422.04) (12,090,605.66)
(I) Total comprehensive income - - (15,225,837.94) - 33,526,543.22 18,300,705.28
(II) Capital contributed or reduced by
- - - - - -
shareholders
- - - - - -
shareholders
- - - - - -
included in shareholders' equity
(III) Profit distribution - - - 3,352,654.32 (33,743,965.26) (30,391,310.94)
(IV) Internal transfer of shareholders'
- - - - - -
equity
- - - - - -
share capital
- - - - - -
into share capital
- - - - - -
income into retained earnings
(V) Special reserves - - - - - -
(VI) Others - - - - - -
IV. Balance as at the end of the current year 506,521,849.00 1,577,392,975.96 83,629,830.81 104,262,315.64 689,309,946.54 2,961,116,917.95
The notes are an integral part of the financial statements
- 15 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
（I） Basic information of the Company
Shenzhen Textile (Holdings) Co., Ltd. (hereinafter referred to as "the Company") is a joint stock limited company
registered in Guangdong Province. The Company was listed on Shenzhen Stock Exchange in August 1994. The
Company has publicly issued RMB ordinary shares (A shares) and domestically listed foreign shares (B shares) to the
domestic and foreign public respectively, and listed for trading.
Headquartered in Shenzhen, Guangdong Province, the Company and its subsidiaries (hereinafter referred to as "the
Group") are principally engaged in the research and development, production and marketing of polarizers for liquid
crystal displays, as well as property management and textile and apparel businesses, which are mainly located in the
prosperous commercial area of Shenzhen.
The consolidated and parent company's financial statements of the Company were approved by the Board of Directors
on March 26, 2025.
（II） Basis for preparation of the financial statements
The Group implements the Accounting Standards for Business Enterprises and related provisions issued by the Ministry
of Finance. In addition, the Group also discloses relevant financial information in accordance with the Rules for the
Compilation and Reporting of Information Disclosure by Companies Issuing Securities to the Public No. 15 - General
Provisions on Financial Reports (Revised in 2023).
The Group has evaluated its going-concern ability for 12 months from December 31, 2024 and has not found any
matters or circumstances that cast significant doubt on the going-concern ability. Therefore, the financial statements
have been prepared on the going concern basis.
The accounting of the Group is based on the accrual basis. Except for certain financial instruments measured at fair
value, the financial statements are measured at historical cost. In the event of any asset impairment, a provision for
impairment will be made in accordance with relevant provisions.
Under the historical cost measurement, assets are measured at the amount of cash or cash equivalents paid or the fair
value of the consideration paid at the time of acquisition. Liabilities are measured at the amount of money or assets
actually received for assuming current obligations, or the contract amount of assuming current obligations, or the
amount of cash or cash equivalents expected to be paid to repay liabilities in daily activities.
Fair value is the price received from the sale of an asset or paid for the transfer of a liability by a market participant in an
orderly transaction occurring on the measurement date. Regardless of whether the fair value is observable or estimated
by using valuation techniques, the fair value measured and disclosed in these financial statements is determined on this
basis.
- 16 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(II) Basis for preparation of financial statements - continued
For financial assets where the transaction price is taken as the fair value at initial recognition and valuation techniques
involving unobservable input value are used in the subsequent measurement of fair value, the valuation techniques are
corrected during the valuation process to make the initial recognition result determined by the valuation techniques equal
to the transaction price.
The fair value measurement is divided into three levels based on the observability of the input value of the fair value and
the importance of such input value to the fair value measurement as a whole:
? Level 1 input value is the unadjusted quoted price in active markets for identical assets or liabilities that are available on the
measurement date.
? Level 2 input value is the directly or indirectly observable input value of the relevant assets or liabilities except for the level 1
input value.
? Level 3 input value is the unobservable input value of the relevant assets or liabilities.
（III） Significant accounting policies and accounting estimates
The financial statements prepared by the Company meet the requirements of the Accounting Standards for Business
Enterprises, and truly and completely reflect the Company's consolidated and parent company's financial position as at
December 31, 2024, and the consolidated and parent company's operating results, changes in consolidated and parent
company's shareholders' equity and consolidated and parent company's cash flows for the year then ended.
The Company adopts the Gregorian calendar year for its accounting year, that is, from January 1 to December 31 of each
year.
Operating cycle refers to the period from the purchase of assets for processing to the realization of cash or cash
equivalents by the enterprise. The operating cycle of the Company is 12 months.
RMB is the currency in the main economic environment in which the Company and its domestic subsidiaries operate.
The Company and its domestic subsidiaries adopt RMB as the recording currency. The Company's overseas subsidiaries
determine RMB as their recording currency based on the currency in the main economic environment in which they
operate. The currency used by the Company in preparing these financial statements is RMB.
- 17 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
Item Importance criteria
Significant accounts receivable with the provision for bad debts The individual book balance accounts for more than 0.5%
made on an individual basis of the total assets
The individual recovery or reversal amount accounts for
Recovery or reversal amount of provision for bad debts of more than 10% of the total amount of provision for bad
significant accounts receivable debts recovery or reversal of the corresponding accounts
receivable and the amount exceeds RMB 10 million
Advances to suppliers with aging over 1 year and of significant Individual amount accounts for more than 0.5% of total
amount assets
Important accounts payable, advances from customers, Individual amount accounts for more than 0.5% of total
contract liabilities and other payables with aging over 1 year assets
Other cash received related to significant investing activities The amount exceeds RMB 50 million
Other cash paid related to significant investing activities The amount exceeds RMB 50 million
The total assets, total revenue or total profit of the non-
wholly-owned subsidiary account for more than 10% of the
Major non-wholly-owned subsidiaries
amount of the corresponding items in the consolidated
financial statements of the Group
The book value of the long-term equity investments of the
enterprise at the end of the year accounts for more than 5%
Significant joint ventures or associates
of the net assets of the consolidated financial statements of
the Group
control
Business combinations are categorized into those under common control and those not under common control.
If, before and after the business combination, all parties involved are ultimately controlled by the same party or the same
group of parties and such control is not temporary, the combination is considered under common control.
The assets and liabilities obtained in the business combination are measured at their book value as recorded in the
consolidated financial statements of the ultimate controller on the combination date. Any difference between the book
value of the net assets acquired by the combining party and the book value of the consideration paid is adjusted against
the share premium in capital reserve. If the equity premium is insufficient, the difference is adjusted against retained
earnings.
All direct expenses incurred for the purpose of the business combination are recognized in current profit or loss as they
occur.
When the entities involved in the combination are not under the ultimate control of the same party or the same group of
parties before and after the combination, it is considered a business combination not under common control.
The combination cost refers to the fair value of the assets paid, the liabilities incurred or assumed, and the equity
instruments issued by the acquirer to obtain the right of control of the acquiree. Any intermediary fees for business
combination, including but not limited to audit, legal, and valuation consulting services, and other related G&A
expenses incurred by the acquirer are charged to current profit or loss as they arise.
Any identifiable assets, liabilities, and contingent liabilities of the acquiree that meet the recognition criteria and are
obtained by the acquirer in the combination are measured at fair value on the acquisition date.
- 18 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
continued
If the combination cost exceeds the acquiree's fair value share of net identifiable assets obtained, this difference is
recognized as goodwill and initially measured at cost. If the combination cost is less than the acquiree's fair value share
of net identifiable assets obtained, the acquirer shall first reassess the fair values of all identifiable assets, liabilities, and
contingent liabilities of the acquiree, as well as the measurement of the combination cost. After reassessment, if the
combination cost is still less than acquiree's fair value share of net identifiable assets obtained, the difference is included
in current profit or loss.
Goodwill arising from a business combination is presented separately in the consolidated financial statements and is
measured at cost less any accumulated provision for impairment.
Control means that an investor has power over the investee, derives variable returns by participating in the investee's
relevant activities, and can use that power to affect the amount of returns. Whenever changes in relevant facts and
circumstances alter any element of this definition of control, the Group will reassess the situation.
The consolidation scope in the consolidated financial statements is determined on the basis of control.
A subsidiary is consolidated from the date the Group obtains the right of control over it until the date such right is lost.
For subsidiaries that the Group disposes of, operating results and cash flows prior to the disposal date (the date when the
loss of control occurs) are appropriately included in the consolidated income statement and consolidated cash flow
statement.
For subsidiaries acquired in a business combination not under common control, their operating results and cash flows
from the acquisition date (the date when the right of control is obtained) are appropriately included in the consolidated
income statement and consolidated cash flow statement.
For subsidiaries acquired in a business combination under common control, regardless of the point in time during the
reporting period at which the combination takes place, the subsidiary is deemed to have been under the Group's
consolidation scope from the date it came under the ultimate controller. Its operating results and cash flows from the
earliest beginning date of the reporting period are appropriately included in the consolidated income statement and
consolidated cash flow statement.
The primary accounting policies and reporting periods adopted by the subsidiaries are determined in accordance with the
uniform accounting policies and reporting periods set by the Company.
- 19 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
Any effects on the consolidated financial statements from intercompany transactions between the Company and its
subsidiaries, or among the subsidiaries themselves, are eliminated upon consolidation.
Any portion of the subsidiary's owners' equity not attributable to the parent company is recognized as non-controlling
interests and presented under "Minority Interests" in the shareholders' equity section of the consolidated balance sheet.
The share of the subsidiary's current net profit or loss attributable to these minority interests is presented in the
consolidated income statement under the net profit item as "minority interest income".
If the losses borne by minority shareholders exceed the share of owners' equity they hold at the beginning of the
subsidiary's period, the excess continues to be deducted from the minority interests.
Transactions involving the purchase of a subsidiary's minority interests or the partial disposal of a subsidiary's equity
investments without losing the right of control are accounted for as equity transactions. The book value of the parent
company's owners' equity and the minority interests are adjusted to reflect the changes in their respective ownership in
the subsidiary. Any difference between the adjustment to minority interests and the fair value of the consideration paid
or received is adjusted against the capital reserve. If the capital reserve is insufficient, the difference is adjusted against
retained earnings.
Joint venture arrangements are classified as either joint operations or joint ventures, based on the rights and obligations
of the parties—determined by factors such as the arrangement's structure, legal form, and contractual terms. A joint
operation is a joint arrangement in which the parties have rights to the related assets and obligations for the related
liabilities. A joint operation refers to those joint venture arrangements under which the joint venture is entitled to
relevant assets and be responsible for relevant liabilities. A joint venture is a joint venture arrangement in which the
parties are entitled only to the arrangement's net assets.
The Group accounts for investments in joint ventures using the equity method. For further details, refer to Note (III),
Section 17.3.2, "Long-term equity investments accounted for under the equity method."
Cash refers to cash on hand and deposits readily available for payment. Cash equivalents refer to short-term (generally
maturing within three months from the purchase date), highly liquid investments held by the Group that are easily
convertible into known amounts of cash and subject to an insignificant risk of value changes.
Foreign currency transactions are initially recognized using an exchange rate approximating the spot exchange rate on
the transaction date, determined by a reasonable systematic method.
- 20 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
At each balance sheet date, foreign currency monetary items are translated into RMB at the spot rate on that date. Any
exchange differences arising from changes in the spot exchange rate (compared to the rate at initial recognition or the
previous balance sheet date) are recognized in current profit or loss, except for: (1) exchange differences on foreign-
currency-specific borrowings that qualify for capitalization, which are capitalized as part of the cost of the related asset
during the capitalization period; (2) exchange differences on hedging instruments used to hedge foreign exchange risk,
which are accounted for under hedge accounting; (3) foreign exchange differences arising from changes in the book
balance of monetary items classified as measured at fair value through other comprehensive income, except for
amortized costs, are recognized in current profit or loss.
When preparing consolidated financial statements involving foreign operations, if a foreign currency monetary item
essentially constitutes a net investment in a foreign operation, any exchange differences arising from fluctuation in
exchange rate are included under "Exchange differences on translation of foreign currency statements" in other
comprehensive income. Upon disposal of the foreign operation, these differences are recognized in profit or loss for the
disposal period.
Foreign currency non-monetary items measured at historical cost continue to be measured using the spot exchange rate
in recording currency on the transaction date. For foreign currency non-monetary items measured at fair value, the spot
exchange rate on the date the fair value is determined is used for translation. Any difference between the translated
amount in recording currency and the original currency is treated as a fair value change (including fluctuation in
exchange rate) and is recognized in current profit or loss or other comprehensive income, as appropriate.
To prepare consolidated financial statements, foreign-currency financial statements of overseas operations are translated
into RMB as follows: all assets and liabilities in the balance sheet are translated at the spot exchange rate on the balance
sheet date; shareholders' equity items are translated at the spot exchange rate on the date of occurrence; all items in the
income statement and items reflecting profit distribution are translated using an exchange rate approximating the spot
exchange rate on the transaction date; any difference between the sum of translated assets and the sum of translated
liabilities plus equity items is recognized as other comprehensive income and included in shareholders' equity.
Foreign currency cash flows and the cash flows of overseas subsidiaries are translated using an exchange rate
approximating the spot exchange rate on the date of the cash flow. The impact of fluctuation in exchange rate on cash
and cash equivalents is presented separately in the statement of cash flows under "Effect of exchange rate changes on
cash and cash equivalents."
The figures for the prior year-end and the actual amounts for the previous year are presented according to the amounts
translated in the previous year's financial statements.
When the Group disposes of its entire owners' equity in a foreign operation or otherwise loses the right of control over a
foreign operation—whether by partially disposing of equity investments or for any other reason—all differences on
translation of foreign currency statements related to that foreign operation and presented under shareholders' equity
(attributable to the parent company) in the balance sheet are transferred in full to profit or loss for the disposal period.
- 21 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
When disposing of part of an equity investments or in other circumstances that reduce the Group's ownership interest in
an overseas operation without losing the right of control over that operation, any differences on translation of foreign
currency statements related to the disposed portion are attributed to minority interests and are not transferred to profit or
loss for the current period. When disposing of a portion of equity in an overseas operation that is classified as an
associate or a joint venture, the differences on translation of foreign currency statements related to that operation are
transferred to profit or loss in the disposal period, in proportion to the percentage of equity disposed.
The Group recognizes a financial asset or financial liability when it becomes a party to the contractual provisions of a
financial instrument.
For purchases or sales of financial assets in the ordinary course of business, the Group recognizes the assets to be
received and the liabilities to be assumed on the trade date, or derecognizes the assets sold on the trade date.
Financial assets and financial liabilities are measured at fair value upon initial recognition (see Note (II) "Basis of
accounting and valuation principles" for details on determining fair value). For financial assets and liabilities measured
at fair value through profit or loss, transaction costs are recognized directly in profit or loss for the current period; for
other categories of financial assets and liabilities, the relevant transaction costs are included in the initial recognition
amount. When the Group initially recognizes accounts receivable that do not include a significant financing component,
or when the financing component of a contract not exceeding one year is disregarded under Accounting Standards for
Business Enterprises No. 14 - Revenue (“Revenue Standard”), such receivables are initially measured at the transaction
price as defined in the Revenue Standard.
The effective interest method is the method used to calculate the amortized cost of a financial asset or liability and to
allocate the interest income or interest expenses over the relevant accounting periods.
The effective interest rate is the rate that discounts the estimated future cash flows over the expected life of a financial
asset or liability to the financial asset's book balance or the financial liability's amortized cost. In determining the
effective interest rate, the Group estimates expected cash flows based on all contractual terms of the financial asset or
liability (e.g., early repayment, extension, call options, or other similar options), but does not factor in expected credit
losses.
The amortized cost of a financial asset or liability is the initial recognized amount minus any repaid principal, plus or
minus the accumulated amortization of the difference between the initial recognized amount and the amount at maturity
using the effective interest method, and then minus the accumulated provision for losses (applicable only to financial
assets).
- 22 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
After initial recognition, the Group subsequently measures different categories of financial assets at amortized cost, at
fair value through other comprehensive income, or at fair value through profit or loss.
If the contractual terms of a financial asset stipulate that, on specified dates, cash flows comprise solely payments of
principal and interest on the outstanding principal, and the Group's business model for managing this financial asset is to
collect the contractual cash flows, the Group classifies this financial asset as measured at amortized cost. Such financial
assets mainly include monetary funds, notes receivable, accounts receivable, and other receivables.
If the contractual terms of a financial asset stipulate that, on specified dates, cash flows comprise solely payments of
principal and interest on the outstanding principal, and the Group's business model for managing the financial asset is
both to collect contractual cash flows and to sell the financial asset, then the Group classifies this asset as measured at
fair value through other comprehensive income. Such financial assets with a maturity of more than one year from the
date of acquisition are presented as "Other debt investments," while those maturing within one year (inclusive) from the
balance sheet date are presented under "Non-current assets due within one year." Accounts receivable and notes
receivable classified upon acquisition as measured at fair value through other comprehensive income are presented under
"Receivables financing," and any other items acquired with a maturity of one year (inclusive) or less are presented under
"Other current assets."
At initial recognition, on an individual financial asset basis, the Group may irrevocably designate a non-trading equity
instrument investment, other than any contingent consideration recognized in a business combination not under common
control, as measured at fair value through other comprehensive income. Such financial assets are presented as "Other
equity instrument investments."
If a financial asset meets any of the following conditions, it indicates that the Group holds this asset for trading purposes:
? The main purpose of acquiring the financial asset is to sell it in the near term.
? Upon initial recognition, the financial asset is part of an identifiable portfolio of financial instruments that is
collectively managed, and there is objective evidence of a recent pattern of short-term profit-taking.
? The financial asset is a derivative, except for derivatives that meet the definition of a financial guarantee contract or
are designated as effective hedging instruments.
Financial assets measured at fair value through profit or loss include those classified as such and those designated as
such:
? Any financial asset that does not meet the classification criteria for measurement at amortized cost or at fair value through
other comprehensive income is classified as measured at fair value through profit or loss.
? At initial recognition, to eliminate or significantly reduce accounting mismatches, the Group may irrevocably
designate a financial asset as measured at fair value through profit or loss.
- 23 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
Financial assets measured at fair value through profit or loss are presented under "Financial assets held for trading."
Those due in more than one year from the balance sheet date (or with no fixed maturity) and expected to be held for
more than one year are presented under "Other non-current financial assets."
Financial assets measured at amortized cost are subsequently measured at amortized cost using the effective interest
method, and any gain or loss arising from impairment or derecognition is recognized in profit or loss.
The Group recognizes interest income on financial assets measured at amortized cost using the effective interest method.
For purchased or originated financial assets that are already credit-impaired, the Group determines interest income from
the date of initial recognition based on the asset's amortized cost and a credit-adjusted effective interest rate. For all other
financial assets, the Group calculates interest income by multiplying the book balance of the asset by the effective
interest rate.
For a financial asset classified as measured at fair value through other comprehensive income, any impairment loss or
gain and interest income calculated using the effective interest method are recognized in profit or loss, while all other
fair value changes are recognized in other comprehensive income. The amount recognized in profit or loss each period is
the same as if the asset had been measured at amortized cost throughout its life. When such a financial asset is
derecognized, the cumulative gains or losses previously recognized in other comprehensive income are transferred from
other comprehensive income to profit or loss.
For a non-trading equity instrument investment designated as measured at fair value through other comprehensive
income, fair value changes are recognized in other comprehensive income. When the financial asset is derecognized, the
cumulative gains or losses previously recognized in other comprehensive income are transferred out of other
comprehensive income and into retained earnings. During the period the Group holds this non-trading equity instrument
investment, if the right to receive dividends is established, the related economic benefits are likely to flow to the Group,
and the amount of dividends can be measured reliably, then the Group recognizes dividend income in profit or loss.
Financial assets measured at fair value through profit or loss are subsequently measured at fair value; gains or losses
arising from fair value changes, as well as any dividend and interest income related to these assets, are recognized in
profit or loss.
- 24 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
The Group recognizes impairment allowances and provision for losses based on expected credit losses for financial
assets measured at amortized cost, financial assets classified as fair value through other comprehensive income, and
lease receivables.
For all notes receivable and accounts receivable arising from transactions governed by the Revenue Standard, as well as
operating lease receivables arising from transactions governed by Accounting Standards for Business Enterprises No. 21
- Leases, the Group measures the provision for loss at an amount equal to the lifetime expected credit losses.
For other financial instruments, except for those purchased or originated with credit loss, the Group evaluates changes in
credit risk since initial recognition at each balance sheet date. If the credit risk of such a financial instrument has
significantly increased since initial recognition, the Group measures the provision for loss at an amount equal to the
lifetime expected credit losses; if it has not significantly increased, the Group measures the provision for loss at an
amount equal to the 12-month expected credit losses. Except for financial assets classified as fair value through other
comprehensive income, any increase or reversal of the provision for credit losses is recognized as an impairment loss or
gain in the current period's profit or loss. For financial assets classified as fair value through other comprehensive
income, the Group recognizes the provision for credit losses in other comprehensive income and records the impairment
loss or gain in profit or loss, without reducing the asset's book value in the balance sheet.
If, in a prior period, the Group measured the provision for loss at an amount equal to the lifetime expected credit losses
(due to a significant increase in credit risk since initial recognition), but at the current balance sheet date that significant
increase in credit risk no longer applies, then the Group measures the provision for loss at an amount equal to the 12-
month expected credit losses. The amount of any resulting reversal is recognized as an impairment gain in profit or loss.
The Group uses reasonable and supportable forward-looking information to compare the risk of default on a financial
instrument at the balance sheet date with the risk of default at initial recognition, in order to determine whether the credit
risk has significantly increased since initial recognition.
- 25 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
When the Group assesses whether credit risk has increased significantly, it considers the following factors:
(1) Whether internal price indicators resulting from changes in credit risk have undergone a significant change.
(2) Whether, if an existing financial instrument is effectively originated or issued as a new financial instrument on the
balance sheet date, there is a significant change in the interest rate or other terms of that instrument (e.g., more stringent
contractual terms, increased collateral or guarantees, or a higher yield).
(3) Whether external market indicators of credit risk for the same financial instrument, or similar instruments with the
same expected term, have changed significantly. Such indicators include credit spreads, credit default swap (CDS) prices
for the borrower, the length of time and extent to which a financial asset's fair value is below its amortized cost, and
other market information related to the borrower (e.g., changes in the prices of the borrower's debt or equity instruments).
(4) Whether the external credit rating of the financial instrument has actually changed or is expected to change
significantly.
(5) Whether there has been a downgrade in the debtor's internal credit rating, either actual or anticipated.
(6) Whether there has been an adverse change in the debtor's business, financial, or economic conditions that is expected
to significantly affect the debtor's ability to meet its debt obligations.
(7) Whether the debtor's operating performance, whether actual or expected, has changed significantly.
(8) Whether the credit risk of other financial instruments issued by the same debtor has increased significantly.
(9) Whether there has been a significantly adverse change in the regulatory, economic, or technological environment in
which the debtor operates.
(10) Whether the value of collateral securing the debt, or the quality of a third-party guarantee or credit enhancement,
has changed significantly. Such changes are expected to reduce the debtor's economic incentive to repay under the
contractual schedule or affect the probability of default.
(11) Whether there has been a significant change in factors that would reduce the borrower's economic incentive to
repay in accordance with the contractual terms.
(12) Whether the loan contract is expected to be modified, including the potential release or amendment of contractual
obligations due to anticipated breaches of contract, granting interest-free periods, raising interest rates, requiring
additional collateral or guarantees, or otherwise modifying the contractual framework of the financial instrument.
(13) Whether there is a significant change in the debtor's expected performance or repayment behavior.
(14) Whether the Group's credit management approach for the financial instrument has changed.
Regardless of the outcome of the above assessment, if payments under the financial instrument's contract are more than
(or equal to) 30 days past due, it indicates that the financial instrument's credit risk has increased significantly.
On the balance sheet date, if the Group concludes that a financial instrument has only low credit risk, it presumes the
credit risk has not increased significantly since initial recognition. A financial instrument is considered to have low
credit risk if its risk of default is low, the borrower has a strong capacity to meet its contractual cash flow obligations in
the short term, and even over a longer period, adverse changes in economic and operating conditions would not
necessarily reduce the borrower's ability to meet those obligations.
- 26 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
When one or more events occur that the Group expects to adversely affect the future cash flows of a financial asset, that
asset is considered credit-impaired. Evidence for a credit-impaired financial asset includes the following observable
information:
(1) The debtor breaches a contract, such as default or delinquency in interest or principal payments.
(2) The debtor breaches the contract, such as default or delay in repayment of interest or principal.
(3) The creditor grants concessions to the debtor in consideration of the debtor's financial difficulties that would not
otherwise be offered under normal circumstances.
(4) The debtor is highly likely to go bankrupt or undertake other financial restructuring.
(5) The issuer's or debtor's financial difficulties lead to the disappearance of an active market for the financial asset.
(6) A financial asset is purchased or originated at a substantial discount, reflecting the fact that a credit loss has
occurred.
Based on the Group's internal credit risk management, if internal recommendations or externally obtained information
indicates that the debtor of a financial instrument cannot fully repay all creditors, including the Group (regardless of any
guarantee obtained by the Group), the Group considers this a default event.
Regardless of the above assessment, if payments under the financial instrument's contract are more than (or equal to) 90
days past due, the Group presumes the instrument is in default.
For financial assets and lease receivables, the expected credit loss is the present value of the difference between the
contractual cash flows the Group is entitled to receive and the cash flows the Group actually expects to receive.
When measuring the expected credit losses on financial instruments, the Group's method reflects: an unbiased,
probability-weighted average determined by evaluating a range of possible outcomes; the time value of money; and
reasonable and supportable information about past events, current conditions, and forecasts of future economic
conditions, available without undue cost or effort at the balance sheet date.
If the Group no longer reasonably expects to recover all or part of the contractual cash flows of a financial asset, the
Group writes off the book balance of the financial asset directly. This write-off constitutes derecognition of the relevant
financial asset.
- 27 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
A financial asset is derecognized if one of the following conditions is met: (1) the contractual right to receive cash flows
from the financial asset expires; (2) the financial asset has been transferred and substantially all the risks and rewards of
ownership of the asset have been transferred to the transferee; or (3) the financial asset has been transferred, and
although the Group has neither transferred nor retained substantially all the risks and rewards of ownership, it has not
retained control over the asset.
If the Group has neither transferred nor retained substantially all the risks and rewards of ownership of the financial asset
but retains control of it, the Group continues to recognize the transferred financial asset to the extent of its continuing
involvement, and recognizes a corresponding liability. The Group measures that liability as follows:
? Where the transferred financial asset is measured at amortized cost, the book value of the related liability equals the
book value of the asset in which the Group continues to be involved minus the amortized cost of any rights retained by
the Group (if the Group retained such rights due to the transfer) and plus the amortized cost of any obligations assumed
by the Group (if the Group assumed such obligations due to the transfer). Such liabilities are not designated as financial
liabilities measured at fair value through profit or loss.
? Where the transferred financial asset is measured at fair value, the book value of the related liability equals the
book value of the asset in which the Group continues to be involved minus the fair value of any rights retained by the
Group (if the Group retained such rights due to the transfer) and plus the fair value of any obligations assumed by the
Group (if the Group assumed such obligations due to the transfer). The fair values of such rights and obligations are
measured on a stand-alone basis.
When the full transfer of a financial asset qualifies for derecognition, the difference between the book value of the
transferred financial asset on the derecognition date and the sum of the consideration received and the corresponding
portion of the cumulative fair value changes previously recognized in other comprehensive income is recognized in
profit or loss. If the transferred asset by the Group is a non-trading equity instrument investment designated as measured
at fair value through other comprehensive income, any cumulative gains or losses previously recognized in other
comprehensive income are transferred out of other comprehensive income and into retained earnings.
When a partial transfer of a financial asset qualifies for derecognition, the book value of the original asset before transfer
is allocated between the portion being derecognized and the portion that continues to be recognized, based on the
relative fair values of each portion on the transfer date. The difference between (a) the consideration received for the
derecognized portion plus the corresponding portion of the cumulative fair value changes previously recognized in other
comprehensive income and (b) the book value of the derecognized portion on the derecognition date is recognized in
profit or loss. If the transferred asset by the Group is a non-trading equity instrument investment designated as measured
at fair value through other comprehensive income, any cumulative gains or losses previously recognized in other
comprehensive income are transferred out of other comprehensive income and into retained earnings.
If a full transfer of a financial asset does not satisfy the derecognition criteria, the Group continues to recognize the
entire transferred financial asset and recognizes the consideration received as a liability.
- 28 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
Based on the contractual terms and the economic substance of the issued financial instrument rather than merely its legal
form and in conjunction with the definitions of financial liabilities and equity instruments, the Group classifies the
financial instrument (or its components) as either a financial liability or an equity instrument at initial recognition.
Upon initial recognition, financial liabilities are classified as financial liabilities measured at fair value through profit or
loss or other financial liabilities.
Financial liabilities measured at fair value through profit or loss include financial liabilities held for trading (including
derivatives classified as financial liabilities) and those designated as measured at fair value through profit or loss. Except
for derivative financial liabilities, which are presented separately, financial liabilities measured at fair value through
profit or loss are presented as financial liabilities held for trading.
If a financial liability meets any of the following conditions, it indicates that the Group has assumed this liability for
trading purposes:
? The primary purpose of assuming the financial liability is to repurchase it in the near term.
? Upon initial recognition, the financial liability is part of an identifiable portfolio of financial instruments that is
collectively managed, and there is objective evidence of a recent pattern of short-term profit-taking.
? The financial liability is a derivative, except for derivatives that meet the definition of a financial guarantee contract
or are designated as effective hedging instruments.
At initial recognition, if any of the following conditions are met, the Group may designate a financial liability as
measured at fair value through profit or loss: (1) the designation can eliminate or significantly reduce accounting
mismatches; (2) under the Group's formally documented risk management or investment strategy, portfolios of financial
liabilities or combined portfolios of financial assets and liabilities are managed and evaluated on a fair value basis, and
this is reported internally to key officers; or (3) it is part of an eligible hybrid contract containing an embedded
derivative.
Financial liabilities held for trading are subsequently measured at fair value, with any gains or losses arising from fair
value changes, along with dividends or interest expenses related to these liabilities, recognized in profit or loss.
- 29 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
For a financial liability designated as measured at fair value through profit or loss, the portion of the fair value change
attributable to the Group's own credit risk is recognized in other comprehensive income, while other changes in fair
value are recognized in profit or loss. When the financial liability is derecognized, the accumulated fair value change
attributable to changes in the Group's own credit risk that was previously recorded in other comprehensive income is
transferred to retained earnings. Any dividends or interest expenses related to such financial liabilities are recognized in
profit or loss. If treating the effect of changes in the liability's own credit risk in this manner creates or enlarges an
accounting mismatch in profit or loss, the Group recognizes all gains or losses on the liability (including those related to
changes in its own credit risk) in profit or loss.
Except for financial liabilities arising from the transfer of financial assets that do not meet derecognition criteria, or
where the Group continues to be involved in transferred financial assets, other financial liabilities are classified as
financial liabilities measured at amortized cost. They are subsequently measured at amortized cost, and any gains or
losses from derecognition or amortization are recognized in profit or loss.
If the Group modifies or renegotiates a contract with a counterparty, and it does not result in the derecognition of a
financial liability subsequently measured at amortized cost but leads to changes in the contractual cash flows, the Group
recalculates the book value of the financial liability and recognizes any related gain or loss in profit or loss. For
recalculated book value, the Group shall determine it by discounting the renegotiated or modified contractual cash flows
at the original effective interest rate of the financial liability. For any costs or fees incurred as a result of modifying or
renegotiating the contract, the Group shall adjust the book value of the modified financial liability and amortize them
over the remaining term thereof.
If the present obligation of a financial liability is fully or partially discharged, the liability (or the discharged portion) is
derecognized. If the Group (as borrower) signs an agreement with a lender to replace the original financial liability with
a new one, and the terms of the new liability differ substantially from those of the original liability, the Group
derecognizes the original liability and recognizes the new one.
When a financial liability is fully or partially derecognized, the difference between the book value of the derecognized
portion and the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) is
recognized in profit or loss for the current period.
- 30 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
An equity instrument is a contract that evidences a residual interest in the Group's assets after deducting all liabilities.
The Group treats the issuance (including refinancing), repurchase, sale, or cancellation of its equity instruments as
changes in equity. The Group does not recognize fair value changes in equity instruments. Transaction costs directly
attributable to equity transactions are deducted from equity.
The Group's distributions made to holders of equity instruments are treated as profit distribution, and any issued stock
dividends do not affect the total shareholders' equity.
Derivatives, including forward foreign exchange contracts, are initially measured at fair value on the contract date and
subsequently measured at fair value.
When the Group has a legal right to offset recognized financial assets and liabilities, and that right is currently
enforceable, and the Group intends to settle on a net basis or to realize the asset and settle the liability simultaneously,
the financial assets and liabilities are presented on the balance sheet at the net amount. Otherwise, financial assets and
financial liabilities are presented separately in the balance sheet without offset.
For notes receivable with significantly increased credit risk, such as those past due and not accepted or where there is
clear evidence that the acceptor is likely unable to fulfill its acceptance obligation, the Group evaluates credit losses on
an individual basis. Other notes receivable are evaluated based on their credit risk characteristics as a group.
Any increase or reversal of the provision for expected credit losses on notes receivable is recognized as a credit loss or
gain in profit or loss.
combination
Apart from those notes receivable whose credit losses are determined on an individual basis, the Group classifies the
remaining notes receivable into different groups based on shared credit risk characteristics:
Combination category Determination basis
Combination 1 Bank acceptance bills
Combination 2 Commercial acceptance bills
- 31 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
The Group uses an impairment matrix at the group level to determine expected credit losses for accounts receivable. Any
increase or reversal of the provision for expected credit losses of accounts receivable is recognized as a credit loss or
gain in profit or loss.
combination.
The Group classifies accounts receivable into Combination 1 and Combination 2 based on the credit risk characteristics
of counterparties under different business segments. Combination 1 refers to accounts receivable arising from the
polarizer business revenue, where provisions for credit losses are made based on overdue aging relative to the credit
term. Combination 2 refers to accounts receivable arising from property leasing and other business revenue, where
provisions for credit losses are made based on natural aging.
The Group uses both the natural aging of accounts receivable and the overdue aging relative to the credit term as credit
risk characteristics, applying an impairment matrix to determine expected credit losses. Natural aging is calculated
starting from the date of initial recognition of the accounts receivable, while overdue aging begins once the natural aging
exceeds the credit term granted to the customer. If the terms and conditions of an accounts receivable are modified but
do not lead to derecognition, the aging continues to accumulate.
The Group individually determines credit losses for accounts receivable where there is evidence of a significant increase
in credit risk.
The Group determines credit losses for receivables financing on an individual-asset basis. The Group recognizes the
provision for credit losses for receivables financing in other comprehensive income and records any credit loss or gain in
profit or loss, without reducing the book value presented in the balance sheet.
Based on the credit status of the accepting bank for bank acceptance bills, the Group individually assesses and
determines credit losses for receivables financing.
- 32 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
The Group determines credit losses for other receivables on a group basis. Any increase or reversal of the provision for
expected credit losses on other receivables is recognized as a credit loss or gain in profit or loss.
combination
The Group divides other receivables into different combinations based on common credit risk characteristics. Common
credit risk characteristics used by the Group include initial recognition date, remaining contract term, and length of
overdue period.
The aging is calculated from the date of initial recognition. If the terms and conditions of other receivables are modified
but do not lead to derecognition, the aging continues to accumulate.
consumables and packaging materials
The Group's inventories mainly include raw materials, work in progress, finished products, and materials processed on
consignment. Inventories are initially measured at cost, which includes purchase costs, processing costs, and other
expenditures incurred to bring the inventories to their current location and condition.
When inventories are issued, the actual cost is determined using the weighted average method.
The Group uses a perpetual inventory system.
Low-value consumables and packaging materials are amortized using the straight-line method or are written off in full at
once.
- 33 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
On the balance sheet date, inventories are measured at the lower of cost and net realizable value. If net realizable value is
lower than cost, a provision for inventory depreciation is made.
Net realizable value is the estimated selling price of inventories in the ordinary course of business, less the estimated
costs to complete, the estimated selling and distribution expenses, and related taxes. When determining the net realizable
value of inventories, the Group uses conclusive evidence while considering the purpose of holding the inventories and
the impact of events after the balance sheet date.
After the provisions for the inventory depreciation are made, the factors causing any write-down of inventory value have
disappeared, leading to the net realizable values of inventories higher than its book value, the amount of write-down
shall be resumed and be reversed from the original provision for inventory devaluation with the reversal being included
in current profit or loss.
Generally, provisions for inventory depreciation are made on an item-by-item basis.
Control means that an investor has power over the investee, derives variable returns by participating in the investee's
relevant activities, and can use that power to affect the amount of returns. Common control refers to shared control over
an arrangement under relevant agreements, where decisions about the arrangement's relevant activities require the
unanimous consent of the parties sharing the right of control. Significant influence refers to the power to participate in
decisions on an investee's financial and operating policies, but not to control or commonly control the formation of those
policies. When determining whether the investor can exercise control or significant influence over the investee, the
potential voting rights arising from convertible corporate bonds or exercisable warrants currently held by the investor or
other parties are taken into account.
For a long-term equity investment acquired in a business combination under common control, the initial investment cost
is determined on the combination date based on the share of the book value of the acquiree's owners' equity in the
ultimate controller's consolidated financial statements. Any difference between the initial investment cost of the long-
term equity investment and the book value of the cash paid, non-cash assets transferred, or liabilities assumed is adjusted
against capital reserve. If the capital reserve is insufficient, the difference is adjusted against retained earnings. Where
equity securities are issued as consideration for the combination, on the combination date, the initial investment cost of
the long-term equity investment is determined based on the share of the book value of the acquiree's owners' equity in
the ultimate controller's consolidated financial statements. The total par value of the issued shares is recognized as share
capital, and any difference between the initial investment cost and the total par value of the shares issued is adjusted
against capital reserve. If the capital reserve is insufficient, the difference is adjusted against retained earnings.
- 34 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
For a long-term equity investment acquired in a business combination not under common control, on the acquisition date
the initial investment cost is determined based on the combination cost.
Audit, legal, valuation, consulting, and other related G&A expenses incurred by the acquirer or purchaser for the
business combination are recognized in profit or loss when they occur.
Long-term equity investments obtained through methods other than a business combination are initially measured at cost.
Where an investor gains significant influence or common control but not control over an investee through additional
investment, the cost of the long-term equity investment is the sum of the fair value of the previously held equity
investment (as determined in accordance with Accounting Standards for Business Enterprises No. 22 - Recognition and
Measurement of Financial Instruments) and the new investment cost.
In the parent company's financial statements, long-term equity investments in subsidiaries are measured using the cost
method. A subsidiary is an investee over which the Group can exercise control.
Under the cost method, long-term equity investments are measured at their initial investment cost. Any additional
investment or capital recovery adjusts the cost of the long-term equity investment. Current investment income is
recognized based on the amount of cash dividends or profits declared and distributed by the investee.
The Group applies the equity method to its investments in associates and joint ventures. An associate is an investee over
which the Group has significant influence, and a joint venture is a joint venture arrangement under which the Group has
rights to the net assets of the arrangement.
Under the equity method, if the initial investment cost of the long-term equity investment exceeds the share of the fair
value of the investee's identifiable net assets at the time of investment, the initial investment cost is not adjusted. If the
initial investment cost is less than the share of the fair value of the investee's identifiable net assets at the time of
investment, the difference is recognized in current profit or loss, and the cost of the long-term equity investment is
adjusted accordingly.
- 35 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
When the equity method is adopted for accounting, the Group, based on its attributable share of the net profit or loss and
other comprehensive income realized by the investee, respectively recognize the investment income and other
comprehensive income, and simultaneously adjust the book value of the long-term equity investment. COOEC shall
calculate the shares according to profits or cash dividends declared by the investee and correspondingly reduce the book
value of long-term equity investments; As to any change in owners' equity of the investee other than net profit or loss,
other comprehensive income and profit distribution, the Group shall adjust the book value of the long-term equity
investment and include such change in capital reserves. When recoginzing the attributable share of net profit or loss of
the investee, the Group shall, based on the fair value of identifiable net asset of the investee when it obtains the
investment,recognize the net profits of the investee after adjustment. If accounting policies and accounting periods
adopted by the investee are inconsistent with those of the Company, the financial statements of the investee shall be
adjusted according to the accounting policies and accounting periods of the Company and investment income and other
comprehensive income etc. shall be recognized on such basis. For transactions between the Group and associates and
joint ventures, if the invested or sold assets do not constitute business, the unrealized profit or loss from internal
transactions will be offset at the part attributable to the Group and the investment profit or loss will be recognized on that
basis However, the unrealized losses from internal transactions between the Group and any investee shall not be offset if
they belong to the losses from the impairment of the transferred assets.
When recognizing the net losses occurred in the investee that shall be shared, the reduction value of book value of long-
term equity investments and other long-term equities that constitute net investments in the investee will be the limit until
it becomes zero. In addition, if the Group has the obligation to assume extra-amount losses for the investee, the
estimated liabilities are recognized according to the estimated obligations and included in the current investment losses.
Where the investee realizes net profits in the subsequent period, the Group shall restore the income shared after making
up for unrecognized losses undertaken by such income.
When a long-term equity investment is disposed of, the difference between its book value and the actual proceeds is
recognized in current profit or loss. If a long-term equity investment has been accounted for using the equity method and
the remaining equity after disposal is still accounted for using the equity method, any other comprehensive income
previously recognized under the equity method is treated on the same basis as if the investee had directly disposed of the
related assets or liabilities, and is transferred proportionately. Any other changes in owners' equity of the investee, other
than net profit or loss, other comprehensive income, and profit distribution, which were previously recognized, are
transferred proportionately to the current profit or loss. If a long-term equity investment is accounted for using the cost
method and the remaining equity after disposal continues to be accounted for using the cost method, any other
comprehensive income recognized before the Group gained control, under either the equity method or the accounting
standards for recognizing and measuring financial instruments, is treated on the same basis as if the investee had directly
disposed of the related assets or liabilities, and is transferred proportionately. Other changes in owners' equity other than
net profit or loss, other comprehensive income and profit distribution in net asset of the investee accounted for and
recognized by using the equity method shall be carried forward to the current profit or loss.
- 36 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
Where the Group loses the control over the investee due to the disposal of part of the equity investments, when it
prepares separate financial statements, the remaining equity after disposal that can commonly control or have significant
influence on the investee will be measured under the equity method, and the remaining equity shall be deemed to have
been adjusted under the equity method on acquisition. If the remaining equity after disposal can not exercise common
control or significant influence on the investee, such equity will be changed to be accounted for according to recognition
and measurement standards of financial instruments and the difference between fair value and book value on the date of
loss of the control shall be included in the current profit or loss. For other comprehensive income recognized by using
the equity method or financial instruments recognition and measurement standards before the Group obtains the control
over the investee, accounting treatment shall be made on the same basis as that for direct disposal of relevant assets or
liabilities by the investee when the Group loses the control over the investee. Other changes in owners' equity other than
net profit or loss, other comprehensive income and profit distribution in net asset of the investee recognized by using the
equity methodshall be carried forward to the current profit or loss when the control over the investee is lost. Where the
remaining equities after disposal are accounted for under the equity method, the other comprehensive income and other
owners' equity shall be carried forward in proportion. If the remaining equity after disposal is changed to be accounted
for according to the recognition and measurement standards of the financial instruments, the other comprehensive
income and other owner's equity shall be fully carried forward.
In case the common control or significant influence over the investee is lost for disposing part of equity investments, the
remaining equity will be changed to be accounted for according to the recognition and measurement principles of
financial instruments. The difference between the fair value and the book value on the date of the loss of common
control or significant influence shall be included in the current profit or loss. Any other comprehensive income
previously recognized under the equity method for the original equity investment is accounted for on the same basis as if
the investee had directly disposed of related assets or liabilities once the equity method ceases to apply. All other
changes in owners' equity recognized due to factors other than net profit or loss, other comprehensive income, and profit
distribution of the investee are transferred in full to current investment income when the equity method is no longer
applied.
Where the Group disposes of equity investments in subsidiaries through multiple transactions and by stages until loss of
control, if the above transactions belong to a package of transactions, accounting treatment shall be made on the
transactions as a transaction to dispose equity investments of subsidiaries and lose the control. The difference between
each disposal cost and the book value of long-term equity investments corresponding to disposed equities before the loss
of control shall be firstly recognized as other comprehensive income and then transferred into the current profit or loss at
the loss of control.
Investment property refers to property held to earn rentals or for capital appreciation, or both, and includes leased land
use rights and leased buildings.
Investment property is initially measured at cost. Subsequent expenses related to the investment property, if the
economic benefits related to the asset are likely to flow in and the cost can be measured reliably, shall be included in the
cost of the investment property. Other subsequent expenses shall be included in the current profit or loss when incurred.
- 37 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
The Group uses the cost model for subsequent measurement of investment property and provides for depreciation on a
straight-line basis over its service life. The depreciation method, useful life, estimated residual value, and annual
depreciation rates for each category of investment property are as follows:
Depreciation method Depreciation life Residual value rate Annual depreciation
Type
(years) (%) rate (%)
Houses and buildings Straight-line method 10-40 0.00-4.00 2.40-10.00
When an investment property is being disposed of or permanently withdraws from use without any economic benefits
expected from the disposal, the investment property shall be derecognized.
The difference between the disposal proceeds of an investment property (through sale, transfer, retirement, or damage)
and its book value, net of related taxes and fees, is recognized in current profit or loss.
Fixed assets refer to tangible assets held for the purpose of producing goods, providing services, renting or operating
management, with a service life exceeding one fiscal year. Fixed assets will only be recognized when the economic
benefits associated with such assets are likely to flow into the Group and the cost can be measured reliably. A fixed asset
is initially measured at cost.
For the subsequent expenses related to the fixed assets, if the economic benefits related to the fixed assets are likely to
flow in and the cost can be measured reliably, they shall be included in the cost of the fixed assets, and the book value of
the replaced part shall be derecognized, Other subsequent expenses shall be included into the current profit or loss when
incurred.
From the month following the date a fixed asset is in working condition for intended use, the Group depreciates the asset
on a straight-line basis over its service life. The depreciation method, service year, estimated residual value, and annual
depreciation rates for each category of fixed assets are as follows:
Depreciation life Residual value rate Annual depreciation
Type Depreciation method
(years) (%) rate (%)
Buildings and constructions Straight-line method 10-40 0.00-4.00 2.40-10.00
Machinery equipment Straight-line method 10-14 4.00 6.86-9.60
Transportation equipment Straight-line method 8 4.00 12.00
Electronic equipment and
Straight-line method 5 4.00 19.20
others
Estimated net residual value refers to the amount obtained by the Group from the disposal of the fixed assets at present
after deducting the estimated disposal expenses, assuming that the estimated service life of the fixed asset has expired
and the fixed asset is in the expected state at the end of its service life.
- 38 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
When the fixed assets are disposed of or it is expected that no economic benefits can be generated through use or
disposal, the fixed assets shall be derecognized. The difference of the revenue from disposal of fixed assets such as sales,
transfer, retirement or damage deducting their book value and related taxes shall be included into the current profit or
loss.
The Group will review service life, estimated net residual value and depreciation methods of the fixed assets at the end
of each year. Changes, if any, shall be handled as changes in accounting estimates.
The construction in progress is measured at actual cost, which includes various project expenditures incurred during the
construction period, capitalized borrowing costs before the project reaches working condition for intended use, and other
related costs. No depreciation is made for construction in progress.
The construction in progress shall be carried forward to the fixed assets after it reaches the working condition for
intended use. The criteria and timing for the conversion of various types of construction in progress into fixed assets are
as follows:
Time point of conversion
Type Criteria for conversion to fixed assets
into fixed assets
The machinery equipment shall be carried forward to the fixed
assets when it has been accepted and the following conditions are
met:
Installation of
(1) The machinery equipment and its supporting facilities have been Reach working condition for
machinery
installed; intended use
equipment
(2) After commissioning, the machinery equipment can maintain
normal and stable operation or produce qualified products for a
period of time.
The capitalization of the borrowing costs that can be directly attributable to the acquisition, construction or production of
assets that meet the capitalization conditions will start when the asset expenditure has incurred, the borrowing costs have
incurred, and the acquisition, construction or production activities necessary for the asset to reach the intended usable or
salable state have begun; The capitalization shall be ceased when the acquired and constructed or produced assets
eligible for capitalization have reached their working condition for intended use or sales condition. The remaining
borrowing costs are recognized as expenses on occurrence.
- 39 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
Intangible assets include land use right, software and patent rights, etc.
The intangible assets shall be initially measured at the costs. For intangible assets with limited service life, the original
value shall be evenly amortized by straight-line method within the expected service life from the time when they are
available for use. The intangible assets with uncertain service life shall not be amortized. The amortization method,
service life and residual value rate of various intangible assets are as follows:
Amortization Residual value
Type Service life (year) and basis of determination
method rate (%)
Straight-line 50 (Determine the service life based on the statutory service
Land use rights -
method life)
Straight-line 5 (Determine the service life based on the period expected to
Software -
method bring economic benefits)
Straight-line 15 (Determine the service life based on the period expected
Patent right -
method to bring economic benefits)
At the end of the period, the service life and amortization method of intangible assets with limited service life shall be
reviewed and adjusted if necessary.
The expenditures in research phase will be included in current profit or loss on occurrence.
Expenditures in the development stage will be recognized as intangible assets only when the following conditions are
simultaneously satisfied, and included in current profit or loss if the following conditions are not satisfied:
(1) It is technically feasible to complete the intangible assets so that it can be used or sold;
(2) It has the intention to complete the intangible assets and use or sell them;
(3) The manner in which an intangible asset generates economic benefits includes the ability to prove that there is a
market for the products produced through the use of this intangible asset or a market for the intangible asset itself. In the
case that the intangible asset will be used internally, its usefulness shall be proven.
(4) With the support of sufficient technology, financial resources and other resources, it is able to complete the
development of the intangible assets, and it is able to use or sell the intangible assets;
(5) The expenditures attributable to the intangible assets in the development stage can be measured reliably.
Where the research expenditures and the development expenditures are indistinguishable, the COOEC shall include
research expenditures and development expenditures incurred in current profit or loss. The cost of the intangible assets
formed by internal development activities only includes the total expenditure incurred from the time when the
capitalization conditions are met to the time when the intangible assets reach the intended use. The expenses recognized
in profit or loss before meeting the capitalization conditions during the development for the same intangible asset will
not be adjusted.
The collection scope of R&D expenditures includes the wages, salaries and welfare expenses of the personnel directly
engaged in R&D activities, and the direct R&D activities
The depreciation cost of materials, fuel and power expenses, instruments and equipment for R&D activities, etc.
- 40 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
On each balance sheet date, the Group checks whether there is any indication that long-term equity investments,
investment properties measured by the cost model, fixed assets, construction in progress, right-of-use assets and
intangible assets with a definite service life may have impairment. If there are indications of impairment of such assets,
the recoverable amount shall be estimated. Intangible assets with indefinite service life and intangible assets that have
not yet reached a usable state are subject to impairment testing every year regardless of whether there are indications of
impairment.
The recoverable amount of the estimated asset is based on a single asset. If it is difficult to estimate the recoverable
amount of a single asset, the recoverable amount of the asset group shall be determined on the basis of the asset group to
which the asset belongs. The recoverable amount is the higher of the net amount obtained by deducting the disposal
expenses from the fair value of an asset or an asset group and the present value of its expected future cash flows.
If the recoverable amount of the asset is lower than its book value, the provision for asset impairment shall be made at
the difference and included in the current profit or loss.
The goodwill shall be tested for impairment at least at the end of each year. The impairment test of goodwill shall be
carried out in combination with the asset group or combination of asset groups related to it. That is, from the acquisition
date, the book value of goodwill shall be allocated using a reasonable method to the asset group or portfolio of asset
groups that benefit from the synergies of the business combination. If the recoverable amount of the asset group or group
of asset groups including the allocated goodwill is lower than its book value, the corresponding impairment losses shall
be recognized. Amount of impairment losses shall be firstly used to deduct the book value of goodwill allocated to the
asset group or portfolio of asset groups, and then deduct book value of other assets according to the proportion of the
book values of other assets (except for goodwill) in the asset group or portfolio of asset groups.
The above losses from assets impairment will not be reversed in subsequent accounting periods once recognized.
Long-term deferred expenses refer to the expenses which have been already incurred but will be borne in the current
period and in the future with an amortization period of over 1 year. Long-term deferred expenses are amortized evenly
over the expected benefit period.
Contract liabilities refer to the obligation of the Group to transfer goods or services to customers for consideration
received or receivable from customers. Contract assets and contract liabilities under the same contract are presented by
their net amounts.
During the accounting period when employees provide services for the Group, the Group recognizes the short-term
compensation actually incurred as liabilities and includes it in the current profit or loss or related asset costs. The
employee welfare expenses incurred by the Group shall be included in the current profit or loss or related asset costs
according to the actual amount incurred. If the employee benefits are non-monetary benefits, they shall be measured at
fair value.
- 41 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
For the medical insurance premiums, work-related injury insurance premiums, maternity insurance premiums and other
social insurance premiums and housing provident funds paid by the Group for employees, as well as the labor union
funds and employee education expenses withdrawn by the Group in accordance with the provisions, the corresponding
employee compensation amount shall be calculated and determined according to the prescribed accrual basis and accrual
ratio during the accounting period when employees provide services for the Group, and the corresponding liabilities
shall be recognized and included in the current profit or loss or related asset costs.
Post-employment benefits are all defined contribution plans.
During the accounting period when employees provide services for the Group, the Group recognizes the amount payable
calculated according to the defined contribution plans as a liability and includes it in the current profit or loss or related
asset costs.
When the Group provides dismissal benefits to employees, the employee compensation liability arising from the
dismissal benefits shall be recognized at the earlier of the following dates and included in the current profit or loss: when
the Group cannot unilaterally withdraw the dismissal benefits provided due to the termination of labor relationship plan
or the layoff proposal; When the Group recognizes the costs or expenses related to the restructuring involving the
payment of dismissal benefits.
When the obligation related to the contingency such as product quality guarantee is a current obligation of the Group,
and the performance of such obligation is likely to result in the outflow of economic benefits, and the amount of such
obligation can be measured reliably, it is recognized as estimated liabilities.
On the balance sheet date, by considering the risks, uncertainty and time value of money and other factors related to
contingency, the estimated liabilities will be measured according to the best estimate of the required expenditures for
performace of relevant present obligation. If the time value of money is significant, the best estimate shall be determined
by the amount discounted by the estimated future cash flows.
When the Group has fulfilled its performance obligations under the contract, that is, when the customer obtains right of
control of the relevant goods or services, the revenue is recognized based on the transaction prices allocated to the
specific performance obligation. Performance obligations refer to the contractual commitments in which the Group
transfers clearly distinguishable goods or services to the customers.
- 42 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
The Group evaluates the contract on the contract commencement date, identifies each individual performance obligation
contained in the contract, and determines whether each individual performance obligation is performed within a certain
period of time or at a certain point in time. If one of the following conditions is met, it is a performance obligation
performed within a certain period of time, and the Group recognizes revenue within a certain period of time according to
the performance progress: (1) the customer obtains and consumes the economic benefits brought by the Group at the
same time as the Group performs the contract; (2) The customer is able to control the goods under construction in the
course of the Group's performance; (3) The goods produced during the performance of the Group have irreplaceable uses,
and the Group has the right to receive payment for the performance accumulated to date throughout the contract period.
Otherwise, the Group recognizes the revenue at the point when the customer obtains the right of control of the relevant
goods or services.
For goods sold to customers, the Group recognizes revenue when the right of control of the goods is transferred, that is,
when the goods are delivered to the designated place of the other party and signed by the other party. For property
service, the Group recognizes revenue in the course of providing property service.
Transaction prices refer to the amount of consideration that the Group is expected to be entitled to receive as a result of
the transfer of goods or services to customers, but does not include the amount received on behalf of third parties and the
amount expected to be returned to customers by the Group. When determining the transaction prices, the Group
considers the impact of variable consideration, significant financing components in the contract, non-cash consideration,
consideration payable to customers and other factors.
If the contract contains two or more performance obligations, the Group shall, on the commencement date of the
contract, allocate the transaction prices to each individual performance obligation according to the relative ratio of the
individual selling price of the goods or services promised by each individual performance obligation. However, if there
is conclusive evidence that the contractual discount or variable consideration is only related to one or more (but not all)
performance obligations in the contract, the Group shall allocate the contractual discount or variable consideration to the
relevant one or more performance obligations. Individual selling price refers to the price at which the Group sells goods
or services to customers separately. If the individual selling price cannot be directly observed, the Group will
comprehensively consider all the information that can be reasonably obtained and estimate the individual selling price
by maximizing the use of observable input value.
For sales with sales return clauses, the Group recognizes revenue at the amount of consideration expected to be entitled
to receive due to the transfer of goods to the customer (i.e., excluding the amount expected to be returned due to sales
return) when the customer obtains the relevant control over goods, and recognizes liabilities at the amount expected to
be returned due to sales return; At the same time, the balance of the book value of the expected goods to be returned at
the time of transfer after deducting the expected cost of recovering the goods (including the impairment of the value of
the returned goods) is recognized as an asset. The net amount after deducting the cost of the above asset will be
transferred as cost based on the book value of the transferred goods.
For sales with quality assurance clauses, if the quality assurance provides a separate service in addition to assuring the
customer that the goods or services sold meet the established standards, the quality assurance constitutes a single
performance obligation. Otherwise, the Group shall conduct accounting treatment for the quality assurance liability in
accordance with the Accounting Standards for Business Enterprises No. 13 - Contingencies.
The Group determines whether it is the principal or the agent when engaging in transactions based on whether it has the
right of control over the goods or services before transferring them to the customer. If the Group can control the goods
or services before transferring them to the customer, the Group is the main responsible person and recognizes the
revenue according to the total consideration received or receivable; Otherwise, the Group is an agent and recognizes
revenue based on the expected commissions or service fee it is entitled to receive. This amount is determined by
subtracting the price payable to other related parties from the total consideration received or receivable.
- 43 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
If the Group receives payment in advance from customers for sales of goods or services, the payment is first recognized
as a liability and then transferred to revenue when the relevant performance obligations are fulfilled. When the Group's
advances from customers do not need to be returned and the customer may waive all or part of its contractual rights, the
Group expects to be entitled to the amount related to the contractual rights waived by the customer, and recognizes the
above amount as revenue in ratio according to the mode of the customer's exercise of contractual rights; Otherwise, the
Group will only transfer the relevant balance of the above-mentioned liabilities to revenue when it is highly unlikely that
the customer will request the fulfillment of the remaining performance obligations.
Government grants refer to the monetary assets and non-monetary assets obtained by the Group from the government for
free. Government grants are recognized when they can meet the conditions attached to government grants and can be
received.
The government grants considered as monetary assets are measured at the amount received or receivable.
The subsidies fro production line and equipment in the Group's government grants can form long-term assets, so such
government grants are asset-related government grants.
Government grants related to assets are recognized as deferred income and included in the current profit or loss by
stages according to the straight-line method within the service life of the relevant assets.
The industry development support funds and enterprise development support funds in the Group's government grants
cannot form long-term assets, so such government grants are income-related government grants.
Income-related government grants used to compensate for relevant costs and losses in subsequent periods are recognized
as deferred income and included in the current profit or loss in the period when the relevant costs or expenses are
recognized; If it is used to compensate the relevant costs and losses incurred, it shall be directly included in the current
profit or loss.
Government grants related to the daily activities of the Group are included in other income according to the essence of
economic business. Government grants unrelated to the daily activities of the Group are included in the non-operating
revenue.
When the recognized government grants need to be returned, if there is relevant deferred income balance, the book
balance of relevant deferred income shall be offset, and the excess shall be included in the current profit or loss; If there
is no relevant deferred income, it shall be directly included in the current profit or loss.
- 44 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
Leases refers to a contract in which the lessor transfers the right of use of the asset to the lessee for consideration within
a certain period of time.
At the commencement date of the contract, the Group assesses whether the contract is a lease contract or contains a lease.
Unless the terms and conditions of the contract change, the Group does not reassess whether the contract is a lease
contract or contains a lease.
When a contract contains one or more lease and non-lease parts, the Group will split the individual lease and non-lease
parts and allocate the contract consideration according to the relative ratio of the sum of the individual price of each
lease part and the individual price of the non-lease part.
Except for short-term leases, the Group recognizes the right-of-use assets of the lease on the lease commencement date.
The lease commencement date refers to the starting date when the lessor provides the leased assets for use by the Group.
Right-of-use assets are initially measured at cost. The cost includes:
? The initial measurement amount of the lease liabilities;
? The lease payments made on or before the lease commencement date, or the relevant amount after deducting the lease
incentive already enjoyed if any;
?Initial direct costs incurred by the Group;
? The costs to be incurred to the Group for demolishing and removing leased assets, restoring the site where the leased
assets are located, or restoring the leased assets to the state agreed in the lease terms.
The Group depreciates right right-of-use assets with reference to the depreciation provisions of Accounting Standards
for Business Enterprises No. 4 - Fixed Assets. If the Group can reasonably determine that the ownership of leased assets
will be obtained at the expiration of the lease term, the right-of-use assets shall be depreciated within the remaining
service life of the leased assets. If it is not reasonably certain that ownership of leased assets will be obtained at the
expiration of the lease term, the depreciation shall be accrued during the shorter of the lease term and remaining service
life leased assets.
The Group determines whether the right-of-use assets are impairment in accordance with the Accounting Standards for
Business Enterprises No. 8 - Asset Impairment and performs accounting treatment on the identified impairment losses.
Except for short-term leases, the Group makes initial measurement of the lease liabilities on the lease commencement
date according to the present value of the lease payments that have not been paid on that date. When calculating the
present value of lease payments, the Group uses the interest rate implicit in lease as the discount rate, and if the interest
rate implicit in lease cannot be determined, the incremental borrowing rate is used as the discount rate.
- 45 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
Lease payments refer to the payments made by the Group to the lessor in connection with the right to use the leased
assets during the lease term, including:
?Fixed payment (including substantial fixed payment), and the relevant amount after deducting the lease incentive if any;
?Variable lease payments depending on index or ratio;
?The Group reasonably determines the exercise price of purchase option to be exercised;
?Lease term reflects the amount that needs to be paid if the Group exercises the option to termination of leases
termination of leases;
?The amount expected to be paid based on the residual value of guarantee provided by the Group.
After the lease commencement date, the Group calculates the interest expenses of the lease liabilities for each period of
the lease term at a fixed cyclical interest rate and includes it in the current profit or loss or related asset costs.
After the lease commencement date, if any of the following circumstances occurs, the Group shall remeasure the lease
liabilities and adjust the corresponding right-of-use assets. If the book value of the right-of-use assets has been reduced
to zero, but the lease liabilities still needs to be further reduced, the Group shall include the difference in the current
profit or loss:
?If lease term changes or the valuation result of purchase option changes, the Group remeasures lease liabilities based on
the present value of the changed lease payments and the revised discount rate;
?If there is a change in the estimated amount payable of the residual value of guarantee or the index or ratio used to
determine lease payments, the Group remeasures lease liabilities based on the changed lease payments and the present
value calculated using the original discount rate.
lessee
The Group chooses not to recognize right-of-use assets and lease liabilities for short-term leases of some plants and
some leased warehouses. Short-term lease refers to a lease that lasts for no more than 12 months and includes no
purchase options at the lease commencement date. The Group includes the lease payments of short-term leases in the
current profit or loss or related asset costs according to the straight-line method in each period of the lease term.
If the lease is modified and the following conditions are met at the same time, the Group will account for the lease
modification as a separate lease:
? • The lease modification expands the scope of the lease by adding one or more right of use of the leased assets;
? • The increased consideration is equivalent to the individual price of the expanded part adjusted according to the
contract.
- 46 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
If the lease modification is not accounted for as a separate lease, on the effective date of the lease modification, the
Group re-apportions the consideration of the modified contract, re-determines the lease term, and re-measures the lease
liabilities at the present value calculated according to the modified lease payments and the revised discount rate.
If the lease modification results in a reduction in the scope of the lease or the lease term, the Group shall reduce the book
value of the right-of-use assets accordingly, and include the relevant gains or losses of partial or complete termination of
leases into the current profit or loss. If the lease liabilities are remeasured due to other lease modification, the Group
shall adjust the book value of the right-of-use assets accordingly.
If the contract contains both the lease and non-lease parts, the Group shall allocate the contract consideration according
to the provisions of the revenue standards on the allocation of transaction prices, and the basis of allocation shall be the
separate price of the lease part and the non-lease part.
Leases that substantially transfer substantially all of the risks and rewards associated with the ownership of leased assets
are financing leases Leases other than financing lease are operating leases.
During each period of the lease term, the Group recognizes the lease receipts of operating leases as rental income by
using the straight-line method. The initial direct costs incurred by the Group in connection with operating leases are
capitalized when incurred, amortized on the same basis as rental income recognition during the lease term, and included
in the current profit or loss in installments.
The variable lease receipts related to operating leases acquired by the Group and not included in the lease receipts are
included in the current profit or loss when actually incurred.
If the operating lease is changed, the Group will account for it as a new lease from the effective date of the change, and
the advance or receivable lease receipts related to the lease before the change will be regarded as the receipt amount of
the new lease.
- 47 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
Income tax expenses include current income tax and deferred income tax.
On the balance sheet date, the current income tax liabilities (or assets) formed in the current and prior periods are
measured at the expected income tax payable (or refundable) calculated in accordance with the tax law.
For the difference between the book value of certain assets and liabilities and their tax bases, and the temporary
differences arising from the difference between the book value and tax base of items that are not recognized as assets
and liabilities but whose tax bases can be determined in accordance with the tax law, the balance sheet liability method
is adopted to recognize deferred tax assets and deferred tax liabilities.
In general, the relevant deferred income taxes are recognized for all temporary differences. However, for deductible
temporary differences, the Group recognizes the relevant deferred tax assets to the extent of the taxable income that is
likely to be obtained to offset the deductible temporary differences. In addition, deferred tax assets or liabilities are not
recognized for temporary differences associated with the initial recognition of goodwill and with the initial recognition
of assets or liabilities arising from transactions that are neither business combinations nor affect accounting profit or
taxable income (or deductible losses) and do not result in equal taxable temporary differences and deductible temporary
differences.
For deductible loss and tax credits that can be carried forward to subsequent years, the corresponding deferred tax assets
arising therefrom are recognized to the extent that future taxable income will be probable to be available against
deductible losses and tax credits.
The Group recognizes deferred tax liabilities arising from taxable temporary differences associated with subsidiaries,
associates and investments in joint ventures, unless the Group is able to control the timing of the reversal of the
temporary differences and it is probable that the temporary differences will not be reversed in the foreseeable future. For
deductible temporary differences related to subsidiaries, associates and investments in joint ventures, the Group
recognizes deferred tax assets only if it is probable that the temporary differences will reverse in the foreseeable future
and it is probable that taxable income will be available to offset the deductible temporary differences in the future.
On the balance sheet date, deferred tax assets and deferred tax liabilities should be measured at the applicable tax rate
during the period of expected recovery of the relevant assets or liquidation of the relevant assets according to the
provisions of tax laws.
Except for the current income tax and deferred income taxes related to transactions and events directly included in other
comprehensive income or shareholders' equity, which are included in other comprehensive income or shareholders'
equity, and the book value of deferred income taxes arising from business combination to adjust goodwill, the remaining
current income tax and deferred income tax expenses or income are included in the current profit or loss.
On the balance sheet date, the book value of the deferred tax assets shall be reviewed. If it is likely that sufficient taxable
income will not be available in the future to offset the benefits of the deferred tax assets, the book value of the deferred
tax assets shall be written down. When it is likely to earn sufficient taxable income, the written down amount is reversed.
- 48 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(III) Significant accounting policies and accounting estimates - continued
When the Group has a legal right to settle on a net basis and intends to settle with net amount or acquire assets and pay
off liabilities simultaneously, the Group reports the net amount of current income tax assets and current tax liabilities
after offsetting.
When the Group has the legal right to settle current income tax assets and current income tax liabilities on a net basis,
and the deferred tax assets and deferred tax liabilities are related to the income tax levied by the same tax collection
authority on the same taxpayer or on different taxpayers, but in each important future period of reversal of deferred tax
assets and liabilities, the involved taxpayer intends to settle current income tax assets and liabilities on a net basis or to
obtain assets and settle liabilities at the same time, the deferred tax assets and deferred tax liabilities of the Group are
presented at the net amount after offset.
On October 25, 2023, the Ministry of Finance issued the Accounting Standards for Business Enterprises - Interpretation
No. 17 (hereinafter referred to as "Interpretation No. 17"). Interpretation No. 17 standardizes the classification of current
liabilities and non-current liabilities and the accounting treatment of sale and leaseback transactions, and will come into
effect on January 1, 2024.
On December 6, 2024, the Ministry of Finance issued the Accounting Standards for Business Enterprises - Interpretation
No. 18" (hereinafter referred to as "Interpretation No. 18"). It regulates the subsequent measurement of investment
properties held as underlying items under the floating charge method and the accounting treatment of warranty-type
quality assurance that is not a single performance obligation. It will come into force from December 6, 2024, allowing
enterprises to implement it ahead of the annual release.
After assessment, the Group believes that the adoption of the above provisions has no material impact on the Group's
financial statements.
The Group has no significant changes in accounting estimates during the year.
- 49 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
（IV） Taxation
Tax type Tax basis Tax rate
The output tax for domestic sales is
Balance of output tax minus deductible input tax; calculated at 13%, 9%, 6%, and 5% of the
Value-added tax Tax exemption, offset and refund measures are sales amount according to relevant tax
applicable to the sales of export products regulations, and the export product tax
rebate rate is 13%
Urban maintenance
Turnover tax payable 7%
and construction tax
Education
Turnover tax payable 3%
surcharge
Local education
Turnover tax payable 2%
surtax
Corporate income
Taxable income 25%、20%、15%、8.25%
tax
THE RESIDUAL VALUE AFTER
Property taxes DEDUCTING 30% FROM THE ORIGINAL 1.2%
VALUE OF THE PROPERTY AT ONCE
Notes to the taxpayers with different corporate income tax rates:
Name of taxpayer Income tax rate
The Company 25%
Shenzhen Shenfang Property Management Co., Ltd. 20% (Note 1)
Shenzhen MCENTURY Garment Co., Ltd. 20% (Note 1)
Shenzhen Lisi Industrial Development Co., Ltd. 20% (Note 1)
Shenzhen Shenfang Sungang Property Management Co., Ltd. 20% (Note 1)
Shenzhen Huaqiang Hotel Co., Ltd. 20% (Note 1)
SATO (Hong Kong) Limited 8.25% (Note 2)
Shenzhen SAPO Photoelectric Co., Ltd. (hereinafter referred to as
"SAPO Photoelectric")
Note 1: See Note (IV) and 2(2) for details.
Note 2: according to the Inland Revenue Ordinance of Hong Kong, SATO (Hong Kong) Limited is subject to a two-tier
profits tax system. The first HKD 2 million of taxable profits shall taxed at a rate of 8.25%, and the profits generated
thereafter shall be taxed at a rate of 16.5%.
Note 3: See Note (IV) and 2(1) for details.
(1) SAPO Photoelectric, a subsidiary of the Company, was jointly recognized as a high-tech enterprise in 2022 by
Shenzhen Science and Technology Innovation Commission, Finance Bureau of Shenzhen Municipality and Shenzhen
Tax Service, State Taxation Administration. The certification is valid for 3 years and the certificate number is
GR202244204504. Since SAPO Photoelectric was recognized as a high-tech enterprise, it is eligible for the tax
incentives for high-tech enterprises for three years. After filing with the competent tax bureau, SAPO Photoelectric has
paid corporate income tax at a tax rate of 15%.
- 50 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(IV) Taxes - continued
(2) The Company's subsidiaries, Shenzhen MCENTURY Garment Co., Ltd., Shenzhen Huaqiang Hotel Co., Ltd.,
Shenzhen Lisi Industrial Development Co., Ltd., Shenzhen Shenfang Sungang Property Management Co., Ltd. and
Shenzhen Shenfang Property Management Co., Ltd. are qualified small low-profit enterprises. According to the
Announcement of the Ministry of Finance and the State Taxation Administration of Taxation on Further Implementing
Preferential Policies for Corporate Income Tax of Small and Micro Enterprises (No. 13, 2022) and the Announcement of
the Ministry of Finance and the State Taxation Administration on Preferential Policies for Corporate Income Tax of
Small and Micro Enterprises and Individual Industrial and Commercial Households (No. 6, 2023), the part of the annual
taxable income not exceeding RMB 3 million will be included in the taxable income after deducting 25%, and corporate
income tax will be paid at a tax rate of 20%.
(3) According to the relevant provisions of the Notice of the Ministry of Finance, the General Administration of
Customs, and the State Taxation Administration on the Import Tax Policies for Supporting the Development of the New
Display Device Industry (CGS 2021 No. 19), SAPO Photoelectric, a subsidiary of the Company, meets the relevant
conditions and will enjoy the policy of exemption from import duties on relevant products from January 1, 2021, to
December 31, 2030.
(4) According to the Announcement on the Policy of Additional Value-Added Tax Deduction for Advanced
Manufacturing Enterprises (CZBSWZJGG 2023 No.43) issued by the Ministry of Finance and the State Taxation
Administration in September 2023, from January 1, 2023 to December 31, 2027, advanced manufacturing enterprises are
allowed to deduct the value-added tax payable by 5% of the deductible input tax for the current period. SAPO
Photoelectric, a subsidiary of the Company, meets the relevant conditions and enjoyed the policy of additional deduction
of value-added tax (VAT) in 2024.
（V） Notes to financial statements items
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Cash on hand: 4,751.69 1,710.40
RMB 4,691.50 1,651.50
HKD 60.19 58.90
Bank deposits (Note 1): 302,111,853.17 462,967,619.54
RMB 245,621,517.8 396,264,667.05
USD 40,462,152.89 62,535,102.56
JPY 15,265,963.38 3,440,280.17
HKD 762,219.10 727,569.76
Other monetary funds (Note 2): 38,844,838.96 9,305,118.06
RMB 10,920,461.06 9,305,118.06
JPY 27,924,377.90 -
Total 340,961,443.82 472,274,448.00
Including: total amount deposited abroad - -
- 51 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
Note 1: bank deposits include interest income from current deposits and 7-day notice deposits amounting to RMB
Note 2: as of December 31, 2024, the Group's other monetary funds included RMB 3,401,500.00 (2023: RMB
guarantee deposits for bills and letters of credit.
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Financial assets measured at fair value through current
profit or loss
Including: money funds and structured deposits 731,419,904.42 821,946,114.68
(1) Classification of notes receivable
RMB
Balance as at the end of Balance as at the end of
Category
the current year the previous year
Bank acceptance bills 47,305,221.88 50,963,943.01
(2) As at December 31, 2024, the Group has no pledged notes receivable.
(3) As of December 31, 2024, notes receivable endorsed or discounted by the Group and not yet due on the balance
sheet date at the end of the period
RMB
Amount derecognized at the Amount not derecognized at
Item
end of the period the end of the period
Bank acceptance bill - 30,291,952.76
(4) Disclosure by provision method for bad debts
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Provision for bad
Book balance Provision for bad debts Book balance
debts
Category Provisi Provisi
Book value Book value
Ratio on Ratio on
Amount Amount Amount Amount
(%) ratio (%) ratio
(%) (%)
Provision for bad
debts accrued on an - - - - - - - - - -
individual basis
Provision for bad
debts made by 47,305,221.88 - - 50,963,943.01 100.00 - - 50,963,943.01
portfolio
Including: bank 100.0 47,305,221.8
acceptance bills 0 8
Total 47,305,221.88 - 50,963,943.01 100.00 - 50,963,943.01
(5) In 2024, the Group has no actual write-off of notes receivable.
- 52 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(1) Disclosure by aging
RMB
Book balance at the end of Book balance at the end of
Aging
the year the previous year
Within 1 year 888,265,598.53 848,526,236.04
Over 3 years 13,565,696.79 12,911,211.29
Total 902,199,660.44 863,696,397.85
(2) Disclosure by provision method for bad debts
RMB
Balance as at the end of the current year
Category Book balance Provision for bad debts
Book value
Amount Ratio (%) Amount Provision ratio (%)
Provision for bad debts accrued
on an individual basis
Provision for bad debts made
by portfolio
Including: portfolio 1 854,782,067.66 94.74 20,338,340.21 2.38 834,443,727.45
Combination 2 11,794,762.87 1.31 259,364.97 2.20 11,535,397.90
Total 902,199,660.44 100.00 38,467,723.55 863,731,936.89
RMB
Balance as at the end of the previous year
Category Book balance Provision for bad debts
Book value
Amount Ratio (%) Amount Provision ratio (%)
Provision for bad debts accrued
on an individual basis
Provision for bad debts made
by portfolio
Including: portfolio 1 779,372,185.30 90.24 15,882,600.54 2.04 763,489,584.76
Combination 2 12,636,261.29 1.46 214,960.88 1.70 12,421,300.41
Total 863,696,397.85 100.00 43,561,563.90 820,134,833.95
As of December 31, 2024, the Company has no significant accounts receivable with individual provision for bad debts.
As of December 31, 2024, the credit risk and provision for bad debts of accounts receivable of Portfolio 1 are as follows:
RMB
Balance as at the end of the current year
Type Expected average Provision for bad
Book balance Book value
loss rate (%) debts
Within the credit period 2.11 796,842,757.97 16,786,953.04 780,055,804.93
More than 90 days overdue
(with impairment)
Total 854,782,067.66 20,338,340.21 834,443,727.45
- 53 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(2) Disclosure by provision method for bad debts - continued
As of December 31, 2024, the credit risk and provision for bad debts of accounts receivable of Portfolio 2 are as follows:
RMB
Balance as at the end of the current year
Aging Expected average Provision for bad
Book balance Book value
loss rate (%) debts
Within 1 year 1.44 11,460,139.05 165,377.59 11,294,761.46
Over 3 years 100.00 67,250.00 67,250.00 -
Total 11,794,762.87 259,364.97 11,535,397.90
As of December 31, 2024, provision for bad debts is made based on the simplified expected credit losses model
RMB
Whole duration Whole duration
Provision for bad debts Expected credit losses Expected credit losses Total
(No credit loss) (With credit loss)
Balance at the beginning of
the year
Balance at the beginning of
the year
- Transfer to credit loss
- - -
incurred
- Reversal of credit loss not
- - -
incurred
Withdrawal in the current
year
Reversal in the current year (11,196,138.79) (2,871,805.43) (14,067,944.22)
Charge-off in the current
- - -
year
Write-off in the current year - - -
Other changes - - -
Balance as at the end of the
current year
(3) Provision for bad debts
RMB
Balance at the Changes in the current year Balance as at
Type beginning of Recovery or Resale or write- the end of the
Provision Other changes
the year reversal off current year
Provision
for bad debts
There was no significant amount of provision for bad debts recovered or reversed this year.
(4) There are no accounts receivable with actual write-off this year.
- 54 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(5) Top 5 accounts receivable in terms of the ending balances by debtors
RMB
Proportion in accounts
Provision for bad debts
Book balance at the end of receivable
Entity name Balance as at the end of the
the year Ratio of balance at the end
current year
of the year (%)
Customer 1 216,148,577.64 23.96 4,753,114.82
Customer 2 102,082,718.13 11.31 2,184,024.62
Customer 3 90,645,486.60 10.05 1,855,541.78
Customer 4 84,618,742.39 9.38 1,841,371.17
Customer 5 65,531,083.75 7.26 1,350,058.99
Total 559,026,608.51 61.96 11,984,111.38
(1) Presentation of receivables financing by category
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Bank acceptance bills 6,804,603.68 22,839,459.13
The Group believes that the bank acceptance bills it holds are issued by banks with high credit ratings and carry no
significant credit risk; therefore, no provision for bad debts has been made.
(2) As at December 31, 2024, the Group has no pledged receivables financing.
(3) As of December 31, 2024, receivables financing endorsed or discounted by the Group and not yet due on the
balance sheet date at the end of the period
RMB
Amount derecognized at the Amount not derecognized at
Item
end of the period the end of the period
Bank acceptance bills 34,926,518.99 -
(4) In 2024, the Group has no receivables financing with actual write-off.
- 55 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(1) Disclosure of advances to suppliers by aging
RMB
Balance as at the end of the previous
Balance as at the end of the current year
Aging year
Amount Ratio (%) Amount Ratio (%)
Within 1 year 7,233,035.70 88.46 16,927,119.84 86.81
Over 3 years 62,085.80 0.76 - -
Total 8,176,724.70 100.00 19,499,886.80 100.00
As of December 31, 2024, the Group has no advances to suppliers with an aging of more than 1 year and an important
amount.
(2) Top 5 advances to suppliers in terms of the ending balances by prepayment objects
The total amount of the top five prepayments categorized by prepayment objects as of the end of the year was RMB
(1) Disclosure by aging
RMB
Balance as at the end of Balance as at the end of
Aging
the current year the previous year
Within 1 year 2,878,553.22 1,860,613.92
Over 3 years 18,436,540.75 18,115,521.40
Total 21,580,746.02 21,215,216.21
Less: provision for bad debts 17,984,202.06 17,994,930.79
Book value 3,596,543.96 3,220,285.42
(2) Disclosure by nature of payment
RMB
Book balance at the
Book balance at the
Nature of payment end of the previous
end of the year
year
Current accounts 15,422,685.97 15,350,589.97
Guarantee and deposits 2,523,551.88 2,000,722.80
Export tax rebate 709,028.48 710,026.13
Petty cash and employee borrowings 296,058.95 577,183.94
Others 2,629,420.74 2,576,693.37
Total 21,580,746.02 21,215,216.21
- 56 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(3) Provision for bad debts
As of December 31, 2024, provision for bad debts is made based on general model of expected credit losses
RMB
Phase I Phase II Phase III
The entire expected The entire expected
Expected credit credit loss over the credit loss over the
Provision for bad debts Total
losses over the next life of the life of the
(No credit loss) (With credit loss)
Balance at the beginning of the
year
Balance at the beginning of the
year
-Transfer to phase II (12,183.55) 12,183.55 - -
-Transfer to phase III - (187,095.88) 187,095.88 -
-Reversal to phase II - - - -
-Reversal to phase I - - - -
Withdrawal in the current year 85,256.08 - - 85,256.08
Reversal in the current year - (54,177.15) (37,685.24) (91,862.39)
Charge-off in the current year - - - -
Write-off in the current year - - (4,122.42) (4,122.42)
Other changes - - - -
Balance as at the end of the
current year
As of December 31, 2024, provision for bad debts shall be made according to the credit risk characteristic combination
RMB
Balance as at the end of the current year
Expected
Phase Provision for
average loss rate Book balance Book value
bad debts
(%)
Provision for bad debts based on
credit risk characteristic
combination
Provision for other receivables
As of December 31, 2024, the credit risk and provision for bad debts of other receivables are as follows:
RMB
Balance as at the end of the current year
Aging Expected average Provision for bad
Book balance Book value
loss rate (%) debts
Within 1 year 5.11 2,878,553.22 146,991.50 2,731,561.72
Over 3 years 96.54 18,436,540.75 17,798,003.78 638,536.97
Total 21,580,746.02 17,984,202.06 3,596,543.96
- 57 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(4) Provision for bad debts
RMB
Balance at the Changes in the current year Balance as at
Type beginning of Recovery or Resale or write- the end of the
Provision Other changes
the year reversal off current year
Provision for bad debts 17,994,930.79 85,256.08 (91,862.39) (4,122.42) - 17,984,202.06
There is no provision for bad debts recovery or reversal of significant amount in the current year.
(5) There are no other receivables with actual write-off this year.
(6) Top five entities in terms of ending balance of other receivables by debtors
RMB
Provision for bad
Balance as at the debts
Other receivables end of the current Ratio in ending Nature of amount Aging Balance as at the
year balance of other end of the current
receivables (%) year
Top five of the ending
balance of the current Current accounts of Within 1 year, more
year receivables, etc. than 3 years
Total other receivables
(1) Classification of inventories
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Provision for Provision for
Item
Book balance inventory Book value Book balance inventory Book value
depreciation depreciation
Raw materials 453,134,126.81 14,875,137.34 438,258,989.47 403,031,948.06 7,506,047.48 395,525,900.58
Products in
progress
Finished
products
Entrusted
processing 1,710,557.68 496,720.51 1,213,837.17 2,406,793.65 93,806.73 2,312,986.92
materials
Total 911,706,239.87 121,949,538.99 789,756,700.88 852,104,157.04 115,711,984.77 736,392,172.27
Note: as of December 31, 2024, the book balance of the polarizer inventories was RMB 905,482,857.11 (December 31,
(December 31, 2023: RMB 107,290,039.96).
(2) Provision for inventory depreciation
RMB
Balance at the Increase in the current year Decrease in the current year Balance as at the
Item beginning of the Reversal or end of the current
Provision Others Others
year write-off year
Raw materials 7,506,047.48 10,509,078.42 - 3,139,988.56 - 14,875,137.34
Products in
progress
Finished
products
Entrusted
processing 93,806.73 402,913.78 - - - 496,720.51
materials
Total 115,711,984.77 123,538,967.06 - 117,301,412.84 - 121,949,538.99
- 58 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(2) Provision for inventory depreciation - continued
Specific basis for determining the net realizable value of inventories and the reasons for reversal or write-off of the
provision for inventory depreciation during the current year:
Reasons for reversing or
writing off provision for
Item Specific basis for determining net realizable value
inventory depreciation
this year
The net realizable value is determined by the
estimated selling price of the relevant finished
Raw materials, goods in process and Received or sold in the
products minus the estimated cost to be incurred until
consigned processing materials current year
completion, estimated selling and distribution
expenses and relevant taxes.
The net realizable value is determined by the
It is sold or market value
estimated selling price of the inventories minus the
Finished products is recovered in the current
estimated selling and distribution expenses and
year
related taxes.
(3) As of December 31, 2024, there is no amount in the balance of inventories used for guarantee and no amount of
capitalization of borrowing costs.
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Value-added tax to be deducted and input tax to be certified 2,100,314.86 27,399,897.46
Prepaid income tax 47,034.59 47,034.59
Cost of return receivable 19,314,386.69 33,326,525.34
Total 21,461,736.14 60,773,457.39
RMB
Changes in the current year Provision
Other for
comp Provisi impairme
Cash
Balance at the Addit rehen Other on Balance as at the nt
Investment dividends or
Investees beginning of the ional Reduced sive chang Provisi end of the Balance
profit or loss profits Others
year invest investment inco es in on for current year as at the
recognized declared to be
ment me equit impair end of the
under the equity paid
adjust y ment current
method
ment year
I. Joint ventures
Shenzhen Guanhua Printing
and Dyeing Co., Ltd.
Sub-total 122,370,494.08 - - (10,814,606.80) - - - - - 111,555,887.28 -
II. Associates
Shenzhen Changlianfa
Printing and Dyeing Co., Ltd.
Yehui International Co., Ltd. 1,953,409.53 - (1,805,949.58) (147,459.95) - - - - - - -
Sub-total 5,311,526.62 - (1,805,949.58) 112,711.72 - - (346,150.00) - - 3,272,138.76 -
Total 127,682,020.70 - (1,805,949.58) (10,701,895.08) - - (346,150.00) - - 114,828,026.04 -
- 59 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(1) Details of other equity instrument investments
RMB
Changes in the current year
Gains accrued Dividend Accumulative Reasons designated as
Balance at the Loss accrued to Balance as at the Accumulative gains
to other income losses accrued to being measured at fair
Item beginning of Additional Reduced other Others end of the current accrued to other
comprehensive recognized in other value through other
the year investment investment comprehensive year comprehensive
income in the the current comprehensive comprehensive income
income in the income
current year period income
current year
The Group plans to hold
Hualian Development Co., Ltd. 110,457,700.00 - - 19,426,300.00 - - 129,884,000.00 208,000.00 127,284,000.00 -
it for a long time
The Group plans to hold
Shenzhen Dailisi Underwear Co., Ltd. 17,741,900.00 - - 1,901,000.00 - - 19,642,900.00 1,037,735.85 17,083,043.74 -
it for a long time
The Group plans to hold
Shenzhen Nanfang Textile Co.,Ltd. 14,803,400.00 - - - (1,621,700.00) - 13,181,700.00 865,050.16 11,681,700.00 -
it for a long time
Shenzhen Xinfang Knitting Factory Co., The Group plans to hold
Ltd. it for a long time
The Group plans to hold
Jintian Industry (Group) Co., Ltd. - - - - - - - - - (14,831,681.50)
it for a long time
Total 145,988,900.00 - - 21,327,300.00 (1,913,300.00) - 165,402,900.00 2,310,786.01 158,219,043.74 (14,831,681.50)
(2) Description of derecognition in the current year
There is no derecognition of other equity instrument investments this year.
- 60 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(1) Investment properties measured at the cost mode
RMB
Item Houses and buildings
I. Total original book value
(1) Outsourcing -
(2) Transfer of fixed assets -
(1) Disposal -
(2) Other transfer-out -
II. Accumulated depreciation and accumulated amortization
(1) Provision or amortization 9,609,816.99
(2) Transfer of fixed assets -
(1) Disposal -
(2) Other transfer-out -
III. Provision for impairment
(1) Provision -
(1) Disposal -
IV. Book value
(2) Investment properties without certificate of title
RMB
Reasons for failure to
Item Book value obtain the certificate of
title
Warrants not obtained
Houses and buildings 11,556,252.96
for historical reasons
- 61 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(1) Fixed assets
RMB
Buildings and Machinery Transportation Electronic
Item Total
constructions equipment equipment equipment and
others
I. Total original book value
of the year
year
(1) Purchase - 5,444,196.63 471,769.90 1,139,257.60 7,055,224.13
(2) Transfer from
- 30,045,567.99 - - 30,045,567.99
construction in progress
(3) Other changes 9,634,489.50 - - - 9,634,489.50
- 4,168,000.00 266,184.80 717,804.27 5,151,989.07
year
(1) Disposal or scrapping - - 266,184.80 717,804.27 983,989.07
(2) Other changes - 4,168,000.00 - - 4,168,000.00
year
II. Accumulated depreciation
of the year
year
(1) Provision 23,097,751.05 198,886,428.20 2,046,425.49 4,076,907.22 228,107,511.96
(2) Other changes - - - - -
- - 249,694.76 677,349.26 927,044.02
year
(1) Disposal or scrapping - - 249,694.76 677,349.26 927,044.02
(2) Other changes - - - - -
year
III. Provision for impairment
of the year
year
(1) Provision 99,508.16 6,572,870.85 1,102.16 189,993.37 6,863,474.54
- - - 7,256.11 7,256.11
year
(1) Disposal or scrapping - - - 7,256.11 7,256.11
year
IV. Book value
the year
beginning of the year
(2) Fixed assets without certificate of title
RMB
Reasons for failure to obtain the
Item Book value
certificate of title
Warrants not handled for
Houses and buildings 10,815,790.07
historical reasons
(3) Fixed assets of mortgage and guarantee
As at December 31, 2024, the Group's fixed assets mortgaged for bank borrowings are detailed in Note (V) 21 "Assets
with Restricted Ownership or Right of Use".
- 62 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
RMB
Balance as at the end Balance as at the end
Item
of the current year of the previous year
Construction in progress 5,814,012.03 31,307,060.74
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Provision for Provision for
Book balance Net book value Book balance Net book value
impairment impairment
Installation of
machinery equipment
RMB
Buildings and Machinery equipment Total
Item
constructions
I. Total original book value:
year
(1) Addition 11,214,565.00 1,799,631.64 13,014,196.64
(1) Termination of leases 8,181,940.76 - 8,181,940.76
II. Accumulated depreciation
year
(1) Provision 8,105,002.79 1,546,340.96 9,651,343.75
(1) Termination of leases 8,157,739.16 - 8,157,739.16
III. Provision for impairment
- - -
year
(1) Provision - - -
IV. Book value
the year
- 63 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(1) Details of intangible assets
RMB
Item Land use rights Software Patent right Total
I. Total original book value
of the year
- 219,057.84 - 219,057.84
year
(1) Purchase - 219,057.84 - 219,057.84
- - - -
year
year
II. Accumulated accumulation
of the year
year
(1) Provision 891,565.32 3,684,123.37 - 4,575,688.69
- - - -
year
year
III. Provision for impairment
- - - -
of the year
- - - -
year
- - - -
year
- - - -
year
IV. Book value
the year
beginning of the year
As at December 31, 2024, for the intangible assets pledged by the Group due to bank borrowings, please refer to Note
(V), 21 "Assets with restricted ownership or right of use" for details.
(1) Original book value of goodwill
RMB
Balance at the Balance as at the
Increase in Decrease in
Name of the investees or matters beginning of the end of the
current year current year
forming goodwill year current year
SAPO Photoelectric 9,614,758.55 - - 9,614,758.55
Shenzhen MCENTURY Garment
Co., Ltd.
Total 11,782,099.76 - - 11,782,099.76
- 64 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(2) Provision for impairment of goodwill
RMB
Balance at the Balance as at the
Increase in Decrease in
Name of the investees or matters beginning of the end of the
current year current year
forming goodwill year current year
SAPO Photoelectric 9,614,758.55 - - 9,614,758.55
Shenzhen MCENTURY Garment
Co., Ltd.
Total 11,782,099.76 - - 11,782,099.76
RMB
Balance at the Amortization Balance as at
Increase in the
Item beginning of amount for the Other decreases the end of the
current year
the year current year current year
Decoration and
facility renovation 3,503,660.94 5,515,370.67 2,934,915.74 - 6,084,115.87
costs
(1) Deferred tax assets without offset
RMB
Balance as at the end of the current Balance as at the end of the
year previous year
Item Deductible Deductible
Deferred tax Deferred tax
temporary temporary
Assets Assets
differences differences
Provision for credit losses 55,500,808.39 9,874,641.13 59,994,128.15 10,538,054.68
Provision for asset impairment 146,194,722.68 21,929,208.40 132,512,745.52 19,876,911.83
Unrealized profits of internal
transactions
Employee compensation payable 4,173,800.00 1,043,450.00 4,173,800.00 1,043,450.00
Deferred income 95,821,558.58 14,373,233.79 96,647,256.82 14,497,088.52
Deductible losses 96,771,113.52 14,515,667.03 127,769,387.40 19,165,408.11
Fair value changes of investments in
other equity instruments
Lease liabilities 16,381,050.71 2,457,157.61 12,177,572.68 1,826,635.90
Changes in fair value of derivative
financial liabilities
Estimated liabilities 9,451,090.40 1,417,663.56 - -
Total 442,461,234.06 69,819,253.14 450,252,535.54 70,977,363.94
Based on the Group's profit forecast for the future periods, the Group believes that it is highly probable to obtain
sufficient taxable income to utilize the above-mentioned deductible temporary differences and deductible losses in the
future periods, so the relevant deferred tax assets are recognized.
- 65 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(2) Deferred tax liabilities without offset
RMB
Balance as at the end of the current Balance as at the end of the previous
year year
Item Taxable Taxable
Deferred tax Deferred tax
temporary temporary
Liabilities Liabilities
differences differences
Difference between initial
recognition cost and tax base of
long-term equity investments
Fair value changes of investments
in other equity instruments
Rent receivable 8,532,598.56 2,133,149.64 10,108,726.81 2,527,181.70
Right-of-use assets 15,338,117.86 2,300,717.68 11,999,466.57 1,799,919.99
Total 244,173,453.52 59,509,551.60 222,996,930.48 54,549,285.97
(3) Deferred tax assets or liabilities listed net amount after write-offs
RMB
Deduction amount Deduction amount
Balance of
of deferred tax Balance of of deferred tax
deferred tax assets
assets and deferred tax assets assets and
Item or liabilities after
liabilities at the or liabilities after liabilities at the
offset at the end of
end of the current offset at the end of end of the
the previous year
year the current year previous year
Deferred tax assets (10,898,741.94) 58,920,511.20 (10,371,998.52) 60,605,365.42
Deferred tax liabilities (10,898,741.94) 48,610,809.66 (10,371,998.52) 44,177,287.45
(4) Unrecognized deferred tax assets
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Deductible temporary differences 15,750,990.01 14,740,965.97
Deductible losses 365,594,502.67 442,263,671.30
Total 381,345,492.68 457,004,637.27
(5) Deductible losses from unrecognized deferred tax assets will be expired in the following years
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Year 2024 - 69,053,143.67
Total 365,594,502.67 442,263,671.30
- 66 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Advances for projects
and equipment
Investment funds to be
liquidated
Total 27,793,871.91 - 27,793,871.91 29,517,420.71 - 29,517,420.71
- 67 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
At the end of current year At the end of the previous year
Item Restricted
Book balance Book value Restricted type Restricted condition Book balance Book value Restricted condition
type
Restricted Account freezing and Restricted Account freezing and
Monetary funds 38,844,838.96 38,844,838.96 9,305,118.06 9,305,118.06
right of use guarantee right of use guarantee
Restricted Bill endorsement has Restricted Bill endorsement has
Notes receivable 30,291,952.76 30,291,952.76 42,665,954.11 42,665,954.11
right of use not been derecognized right of use not been derecognized
Restricted Restricted
Fixed assets 581,895,750.64 448,156,480.33 Mortgage 572,261,261.14 454,185,881.22 Mortgage
right of use right of use
Restricted Restricted
Intangible assets 44,770,083.00 31,200,960.01 Mortgage 44,770,083.00 32,092,525.33 Mortgage
right of use right of use
Total 695,802,625.36 548,494,232.06 669,002,416.31 538,249,478.72
- 68 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Credit borrowings - 8,000,000.00
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Foreign exchange forward contract 1,278,559.35 -
RMB
Balance as at the end of Balance as at the end of
Bill type
the current year the previous year
Bank acceptance bills 31,095,540.29 31,049,291.49
The Group had no notes payable due but unpaid at the end of the year.
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Payment for goods 282,510,771.35 386,767,637.00
Service fee 15,645,017.04 13,817,610.72
Payment for outsourcing processing 3,489,364.64 4,584,423.60
Royalties 2,006,578.00 2,207,166.50
Others 1,160,849.52 1,171,298.42
Total 304,812,580.55 408,548,136.24
As at December 31, 2024, the Group had no significant accounts payable with aging of over 1 year or overdue.
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Rent and others 1,051,491.96 1,450,096.30
As at December 31, 2024, the Group had no significant advances from customers with aging of over 1 year.
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Payment for goods 490,562.97 1,436,943.34
As at December 31, 2024, the Group had no significant contract liabilities with aging of more than 1 year.
- 69 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(1) Presentation of employee compensation payable
RMB
Balance at the Balance as at the
Increase in Decrease in
Item beginning of the end of the current
current year current year
year year
Short-term compensation 53,853,081.65 213,903,704.48 214,130,906.81 53,625,879.32
Post-employment benefits -
- 18,732,853.22 18,032,853.22 700,000.00
defined contribution plans
Dismissal welfare 2,584,080.44 6,172,694.98 6,397,364.82 2,359,410.60
Total 56,437,162.09 238,809,252.68 238,561,124.85 56,685,289.92
(2) Presentation of short-term compensation
RMB
Balance at the Balance as at the
Increase in Decrease in
Item beginning of the end of the current
current year current year
year year
Salaries, bonuses, allowances and
subsidies
Employee welfare expenses - 6,936,747.83 6,936,747.83 -
Social insurance premiums - 4,740,283.18 4,740,283.18 -
Including: medical insurance
- 3,516,302.65 3,516,302.65 -
premiums
Maternity insurance premiums - 572,355.25 572,355.25 -
Work-related injury insurance
- 651,625.28 651,625.28 -
premiums
Housing provident fund - 8,872,644.55 8,872,644.55 -
Union funds and employee
education funds
Total 53,853,081.65 213,903,704.48 214,130,906.81 53,625,879.32
(3) Presentation of defined contribution plans
RMB
Balance at the Balance as at the
Increase in Decrease in
Item beginning of the end of the current
current year current year
year year
Basic endowment insurance
- 15,756,686.06 15,056,686.06 700,000.00
premiums
Supplementary endowment
- 2,765,981.24 2,765,981.24 -
insurance premiums
Unemployment insurance
- 210,185.92 210,185.92 -
premium
Total - 18,732,853.22 18,032,853.22 700,000.00
The Group participates in the endowment insurance and unemployment insurance plans established by government
agencies in accordance with the regulations. According to the plans, the Group makes contributions to such plans in
accordance with the prescribed standards. Except for the above monthly contributions, the Group has no further payment
obligations. The corresponding expenses are included in the current profit or loss or the cost of related assets when
incurred.
The Group shall pay RMB 15,756,686.06 and RMB 210,185.92 to the endowment insurance and unemployment
insurance plans respectively for the current year (2023: RMB 14,207,148.80 and RMB 296,839.87). As at December 31,
during the reporting period, and the relevant payable contributions are expected to be paid after the reporting period.
- 70 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
RMB
Balance as at the end of Balance as at the end of
Taxation
the current year the previous year
Corporate income tax 4,720,967.29 2,080,849.81
Individual income tax 751,443.34 1,080,628.82
Value-added tax 592,143.28 582,961.29
Other taxes 789,176.93 596,455.22
Total 6,853,730.84 4,340,895.14
(1) Other payables by nature of payment
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Engineering equipment payment 56,213,373.95 67,176,881.34
Current accounts 53,333,604.97 56,444,481.12
Guarantee and deposits 37,775,687.75 48,208,919.61
Others 12,974,323.31 12,698,062.48
Total 160,296,989.98 184,528,344.55
(2) As at December 31, 2024, the Group had no significant other payables with aging of more than 1 year or overdue.
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Long-term borrowings maturing within one year (Note
(V), 33)
Lease liabilities maturing within one year (Note (V),
Estimated liabilities due within one year 9,451,090.40 -
Total 63,347,555.03 108,102,752.99
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Endorsed but undue acceptance bills 30,291,952.76 42,665,954.11
Payables for returned goods 23,747,757.33 37,244,449.90
Output tax to be carried forward in the value-added tax 32,312.18 172,073.21
Total 54,072,022.27 80,082,477.22
- 71 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
RMB
Balance as at the end of Balance as at the end of
Item Interest rate range
the current year the previous year
Guaranteed borrowings (Note) 209,400,848.04 608,190,812.09 3.36%-3.41%
Total 209,400,848.04 608,190,812.09
Less: long-term borrowings
maturing within one year
Long-term borrowings due
after one year
Note: SAPO Photoelectric, a subsidiary of the Company, obtained the loan by mortgaging the real estate such as the
plant it held, and the Company and Hengmei Optoelectronics Co., Ltd. provided 60% and 40% joint and several liability
guarantee for the loan respectively.
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Lease liabilities 16,381,050.71 12,177,572.68
Total 16,381,050.71 12,177,572.68
Less: Lease liability maturing within one year 6,884,486.59 5,490,255.46
Lease liabilities due after one year 9,496,564.12 6,687,317.22
The Group's lease liabilities are presented as follows according to the maturity of undiscounted remaining contractual
obligations:
RMB
Within 1 month 1- 3 months 3 - 12 months 1 - 5 years Over 5 years Total
Balance as at the
end of the current 1,105,714.51 2,425,877.50 3,879,671.64 7,808,943.06 3,098,158.97 18,318,365.68
year
Balance as at the
end of the 513,149.55 2,012,582.22 3,284,024.84 5,822,333.46 1,672,592.08 13,304,682.15
previous year
RMB
Balance at the Balance as at the
Increase in Decrease in
Item beginning of the end of the current Formation causes
current year current year
year year
Government Government
grants grants received
RMB
Changes in the current year
Balance at the Conversion of Balance as at the
Item beginning of the New shares provident end of the
Bonus issue Others Sub-total
year issued fund into current year
shares
Total shares 506,521,849.00 - - - - - 506,521,849.00
- 72 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
RMB
Balance at the Balance as at the
Increase in current Decrease in current
Item beginning of the end of the current
year year
year year
Equity premium 1,826,482,608.54 - - 1,826,482,608.54
Other capital reserves 135,117,216.09 - - 135,117,216.09
Total 1,961,599,824.63 - - 1,961,599,824.63
RMB
Amount for the current year
Less:
retained
income
Less: the
included
amount
in other Attribut
included in
compreh able to
other
Balance at the Amount before ensive minorit Balance as at the
comprehensi Attributable to
Item beginning of income tax this income Less: income y end of the current
ve income in parent company
the year year in prior tax expenses shareho year
prior period after tax
periods lders
and
and after
transferred
transferr tax
to current
ed to
profit or loss
current
profit or
loss
I. Other comprehensive income that 106,877,807.32
cannot be reclassified into profit or loss
instrument investments
II. Other comprehensive income to be
reclassified into profit or loss later
- - - - - - - -
investments
currency financial statements
Total of other comprehensive income 93,607,380.81 19,414,000.00 1,290,073.49 - 4,853,500.00 13,270,426.51 - 106,877,807.32
RMB
Balance at the Balance as at the
Increase in current Decrease in current
Item beginning of the end of the current
year year
year year
Statutory surplus reserve 104,262,315.64 - - 104,262,315.64
RMB
Item Current year Previous year
Undistributed profits at the beginning of the
year before adjustment
Total adjusted undistributed profits at the
- -
beginning of the year
Adjusted undistributed profit at the beginning
of the year
Plus: net profit attributable to shareholders of
the parent company in the current year
Less: Withdrawal of statutory surplus reserves - 3,352,654.32
Distribution of dividends of ordinary
shares (Note)
Undistributed profits at the end of the year 272,608,113.66 216,160,896.14
Note: according to the resolution of the General Meeting on May 29, 2024, the Company distributed cash dividends of
RMB 0.65 (including tax) for every 10 shares based on the share capital of 506,521,849 shares as at December 31, 2023,
with a total cash dividends of RMB 32,923,916.72 (tax inclusive).
- 73 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(1) Operating revenue and operating costs
RMB
Amount for the current year Amount for the previous year
Item
Revenue Cost Revenue Cost
Primary business 3,275,150,434.05 2,748,312,498.75 3,031,175,008.58 2,524,464,550.09
Other business 60,132,574.63 47,547,436.07 48,503,366.87 37,167,294.44
Total 3,335,283,008.68 2,795,859,934.82 3,079,678,375.45 2,561,631,844.53
(2) Primary business by product
RMB
Amount for the current year Amount for the previous year
Product type Income from Cost of primary Income from Cost of primary
primary business business primary business business
Polarizer sales
business
Property leasing and
others
Total 3,275,150,434.05 2,748,312,498.75 3,031,175,008.58 2,524,464,550.09
(3) Primary business by region
RMB
Amount for the current year Amount for the previous year
Main business area Income from Cost of primary Income from Cost of primary
primary business business primary business business
Domestic 3,113,083,695.45 2,621,542,725.57 2,914,588,072.35 2,427,944,202.03
Overseas 162,066,738.60 126,769,773.18 116,586,936.23 96,520,348.06
Total 3,275,150,434.05 2,748,312,498.75 3,031,175,008.58 2,524,464,550.09
(4) Description of performance obligations
The Group's sales of goods are mainly the production and sales of polarizers and textiles-related goods. For goods
sold to customers, the Group recognizes revenue when the right of control of the goods is transferred, that is, when the
goods are delivered to the designated place of the other party and signed by the other party. The Group recognizes a
receivable when the goods are delivered to the customer because the delivery of the goods to the customer represents an
unconditional right to receive the contractual consideration, and the maturity of the payment depends only on the
passage of time. When the customer makes a prepayment for goods, the Group recognizes the transaction amount
received as a contract liability and recognizes the revenue when the goods are delivered to the customer.
The Group provides property services to customers, and such services represent performance obligations performed over
a period of time. For property service, the Group recognizes revenue in the course of providing property service.
(5) Description of allocation to remaining performance obligations
As of December 31, 2024, the amount of contract liabilities corresponding to the performance obligations that the Group
has already signed contracts for but has not yet fulfilled or has not fully fulfilled is RMB 490,562.97, which will be
recognized as revenue when the customer obtains the control over goods.
- 74 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
RMB
Amount for the Amount for the
Item
current year previous year
Property taxes 7,240,576.84 6,184,638.83
Urban maintenance and construction tax 397,643.06 555,230.22
Education surcharge 287,055.45 400,403.17
Other taxes 2,310,230.30 2,153,350.91
Total 10,235,505.65 9,293,623.13
RMB
Amount for the Amount for the
Item
current year previous year
Employee compensation 15,245,568.88 17,089,203.74
Sales service fee 19,491,891.54 10,639,607.95
Business entertainment expenses 1,117,751.47 972,733.63
Others 6,405,391.58 5,494,125.29
Total 42,260,603.47 34,195,670.61
RMB
Amount for the Amount for the
Item
current year previous year
Employee compensation 90,301,081.26 90,991,755.13
Depreciation cost 10,962,929.91 11,118,057.18
Professional service fees 10,520,874.85 8,841,449.74
Amortization of intangible assets 4,575,688.69 4,891,672.68
Property leasing and utilities 2,441,383.42 4,086,627.39
Business entertainment expenses 1,193,877.91 1,439,231.97
Others 14,351,985.54 13,002,616.44
Total 134,347,821.58 134,371,410.53
RMB
Amount for the Amount for the
Item
current year previous year
Employee compensation 15,844,594.49 14,827,264.16
Material consumption 83,483,679.76 85,216,243.35
Depreciation cost 3,275,385.23 3,389,328.35
Others 1,208,163.43 1,220,205.06
Total 103,811,822.91 104,653,040.92
The Group has no development expenses of R&D projects that meet the capitalization requirements.
- 75 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
RMB
Amount for the current Amount for the previous
Item
year year
Interest expenses (Note) 17,858,022.73 27,339,804.17
Less: interest income 7,272,362.76 12,947,471.64
Exchange differences (3,772,940.12) 4,332,702.63
Service fee and others 5,308,436.20 5,674,466.00
Total 12,121,156.05 24,399,501.16
Note: The interest expenses of the lease liabilities in 2024 is RMB 721,945.56.
RMB
Amount for the current Amount for the previous
Classification by nature
year year
Transfer-in of deferred income 16,401,790.63 22,107,734.21
Support funds for industry development (Note 1) 7,988,744.44 11,049,910.96
Support funds for enterprise development (Note 2) 989,098.49 553,455.00
Tax incentives 16,014,588.22 16,881,612.68
Others 89,885.75 147,651.06
Total 41,484,107.53 50,740,363.91
Note 1: The support funds for industry development mainly include the 2024 Special Science and Technology
Innovation Funds (the first batch) funded by the Science and Technology Innovation Bureau of Pingshan District,
Shenzhen City, the Foreign Trade Quality Growth Support Plan of the Bureau of Commerce, and the Industry Standard
Formulation Project Subsidies of the Shenzhen Administration for Market Regulation.
Note 2: The support funds for enterprise development mainly include the Steady Growth Funds of Industry and
Information Technology Bureau of Shenzhen Municipality and the One-time Subsidy for Job Expansion of Guangdong
Provincial Social Insurance Fund Administration.
RMB
Amount for the current Amount for the previous
Item
year year
Losses on long-term equity investments accounted for
(10,701,895.08) (6,898,983.89)
under equity method
Investment income from disposal of long-term equity
investments
Investment income obtained during holding the financial
assets held for trading
Investment income (loss) from derecognition of derivative
(6,454,000.00) -
financial liabilities
Dividend income from investments in other equity
instrument during the holding period
Total (165,313.89) 10,828,635.56
- 76 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
RMB
Amount for the Amount for the
Sources of gains from changes in fair value
current year previous year
Financial assets held for trading 2,413,062.80 2,151,780.82
Derivative financial liabilities (1,278,559.35) -
Total 1,134,503.45 2,151,780.82
RMB
Amount for the Amount for the
Item
current year previous year
Gains on impairment of accounts receivable (Note (V), 4 (2)) 5,093,840.35 4,133,136.51
Gains on impairment of other receivables (Note (V), 7 (3)) 6,606.31 402,638.63
Total 5,100,446.66 4,535,775.14
RMB
Amount for the Amount for the
Item
current year previous year
Inventory depreciation loss (123,538,967.06) (126,089,709.42)
Fixed asset impairment loss (6,863,474.54) -
Other asset impairment loss (2,020,667.15) -
Total (132,423,108.75) (126,089,709.42)
RMB
Amount for the Amount for the Amount included in
Item
current year previous year the current non-
recurring profit or loss
Gains from unclaimed payables 1,439,654.31 768,398.45 1,439,654.31
Liquidated damages 275,672.99 252,000.00 275,672.99
Insurance compensation 24,911.31 193,275.48 24,911.31
Gains from the damage and scrapping 341.42
of non-current assets
Others 64,506.89 236,205.33 64,506.89
Total 1,805,086.92 1,449,879.26 1,805,086.92
- 77 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
RMB
Amount included in
Amount for the Amount for the
Item the current non-
current year previous year
recurring profit or
loss
Losses on scrapping of non-current
assets
Amercement outlay 44,000.00 42,319.72 44,000.00
Compensation expenses 468,146.00 7,926,787.08 468,146.00
Other losses 134,509.84 121,152.72 134,509.84
Total 698,017.71 8,205,801.51 698,017.71
(1) List of income tax expenses
RMB
Amount for the current Amount for the
Item
year previous year
Income tax expenses for the current period 8,562,225.60 8,563,917.13
Deferred tax expenses 1,264,876.43 10,843,814.34
Total 9,827,102.03 19,407,731.47
(2) Adjustment process of accounting profits and income tax expenses
RMB
Amount for the Amount for the
Item
current year previous year
Total profits 152,883,868.41 146,544,210.05
Income tax expenses calculated at statutory tax rate 38,220,967.10 36,636,052.51
Influence of different tax rates applicable to subsidiaries (15,431,945.83) (14,393,929.80)
Influence of adjustments to the income tax for the prior years (27,243.77) 27,700.05
Influence of non-taxable income (3,079,800.79) (1,126,262.45)
Influence of nondeductible costs, expenses and losses 5,591,965.60 2,266,174.69
Utilization of unrecognized deductible losses and deductible
(7,061,678.51) (25,587.79)
temporary differences from prior periods and their tax effects
Tax effects of unrecognized deductible losses and deductible
temporary differences
Changes in deferred tax assets/liabilities at the beginning of the
- (21,128.84)
period due to tax rate adjustments
Additional deduction for R&D expenses (12,458,381.02) (13,995,916.51)
Others (5,122.03) (113,416.28)
Income tax expenses 9,827,102.03 19,407,731.47
- 78 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(1) Cash related to operating activities
Other cash received related to operating activities
RMB
Amount for the Amount for the
Item
current year previous year
Letter of credit guarantee and deposit 30,652,489.87 37,450,879.69
Interest income 9,057,486.70 18,578,870.77
Government grants 24,242,842.93 16,029,942.02
Current accounts and others 23,056,150.45 15,217,631.42
Total 87,008,969.95 87,277,323.90
Other cash paid related to operating activities
RMB
Amount for the Amount for the
Item
current year previous year
Letter of credit guarantee and deposit 57,908,823.39 34,639,361.27
Out-of-pocket expenses 68,667,614.18 71,894,532.84
Current accounts and others 27,179,768.77 10,910,080.05
Total 153,756,206.34 117,443,974.16
(2) Cash related to investing activities
Other cash received related to significant investing activities
RMB
Amount for the Amount for the
Item
current year previous year
Structural deposits 950,000,000.00 950,000,000.00
Monetary fund 747,000,000.00 245,000,000.00
Certificates of deposit and others - 259,000,000.00
Total 1,697,000,000.00 1,454,000,000.00
Other cash paid related to significant investing activities
RMB
Amount for the Amount for the
Item
current year previous year
Structural deposits 950,000,000.00 1,400,000,000.00
Monetary fund 649,000,000.00 290,500,000.00
Foreign exchange forward contract 6,454,000.00 -
Certificates of deposit and others - 150,000,000.00
Total 1,605,454,000.00 1,840,500,000.00
- 79 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(2) Cash related to investing activities - continued
Other cash received related to investing activities
RMB
Amount for the Amount for the
Item
current year previous year
Wealth management investment and structured deposits 1,697,000,000.00 1,454,000,000.00
Other cash paid related to investing activities
RMB
Amount for the Amount for the
Item
current year previous year
Wealth management investment and structured deposits 1,605,454,000.00 1,840,500,000.00
(3) Cash related to financing activities
Other cash paid related to financing activities
RMB
Amount for the Amount for the
Item
current year previous year
Lease payments 9,508,462.57 8,776,024.71
Changes in various liabilities arising from financing activities
RMB
Balance at the Increase in current year Decrease in current year Balance as at the
Item beginning of the Non-cash Non-cash end of the
Cash changes Cash changes
year changes changes current year
Short-term
borrowings
Long-term
borrowings (Note)
Lease liabilities
(Note)
Total 628,368,384.77 - 31,888,524.38 434,475,010.40 - 225,781,898.75
Note: long-term borrowings and lease liabilities include those maturing within one year.
(4) The Group does not present cash flows on a net basis.
(5) The Group has no significant activities that do not involve current cash receipts and payments but affect the
financial position of the enterprise or may affect the cash flows of the enterprise in the future.
- 80 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(1) Supplementary information to the statement of cash flows
RMB
Amount for the Amount for the
Supplementary information
current year previous year
activities:
Net profit 143,056,766.38 127,136,478.58
Plus: provision for assets impairment 132,423,108.75 126,089,709.42
Provision for credit losses (reversal) (5,100,446.66) (4,535,775.14)
Depreciation of fixed assets and investment properties 237,717,328.95 235,884,938.02
Amortization of right-of-use assets 9,651,343.75 8,257,857.90
Amortization of intangible assets 4,575,688.69 4,891,672.68
Amortization of long-term deferred expenses 2,934,915.74 2,160,430.42
Losses (gains) from disposal of fixed assets, intangible
- (1.72)
assets and other long-term assets
Losses (gains) on retirement of non-current assets 51,020.45 113,290.32
Losses from changes in fair value (income) (1,134,503.45) (2,151,780.82)
Financial expenses (income) 17,301,161.66 26,883,671.86
Investment loss (income) 165,313.89 (10,828,635.56)
Decrease (increase) in deferred tax assets 1,684,854.22 9,218,448.87
Increase (decrease) in deferred tax liabilities (419,977.79) 1,625,365.47
Decrease (increase) in inventories (176,903,495.67) (304,034,232.92)
Decrease (increase) in operating receivables 29,434,877.96 (126,515,773.08)
Increase (decrease) in operating payables (164,173,431.78) 90,571,075.50
Net cash flows from operating activities 231,264,525.09 184,766,739.80
Ending balance of cash and cash equivalents 302,084,839.35 461,420,457.33
Less: beginning balance of cash and cash equivalents 461,420,457.33 874,474,834.46
Net increase (decrease) in cash and cash equivalents (159,335,617.98) (413,054,377.13)
(2) Composition of cash and cash equivalents
RMB
Balance as at the end Balance as at the end
Item
of the current year of the previous year
I. Cash 302,084,839.35 461,420,457.33
Including: cash on hand 4,751.69 1,710.40
Unrestricted bank deposits 302,080,087.66 461,418,746.93
Other unrestricted monetary funds - -
II. Cash equivalents - -
III. Balance of cash and cash equivalents at the end of the year 302,084,839.35 461,420,457.33
(3) As of the end of the year, the Group had no cash and cash equivalents with restricted use that were still presented as
such.
- 81 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(4) Monetary funds other than cash and cash equivalents
RMB
Balance as at the end Balance as at the end
Item Reason
of the current year of the previous year
Not available for
Bill and L/C guarantee 35,443,338.96 5,905,118.06
payment at any time
Demand interest and 7-day notice Not available for
deposit interest payment at any time
Others 3,401,500.00 3,400,000.00 Account freezing
Total 38,876,604.47 10,853,990.67
(1) Foreign currency monetary items
RMB
Foreign currency Conversion at the end
Exchange rate of
Item balance at the end of of the current year
conversion
the current year RMB balance
Monetary funds 84,414,773.46
Including: USD 5,628,812.10 7.1884 40,462,152.89
JPY 934,188,594.29 0.0462 43,190,341.28
HKD 823,195.78 0.9260 762,279.29
Accounts receivable 38,996,397.54
Including: USD 5,389,057.25 7.1884 38,738,699.13
HKD 278,280.00 0.9260 257,698.41
Other receivables 506,973.56
Including: USD 70,526.62 7.1884 506,973.56
Accounts payable 165,329,381.79
Including: USD 2,549,681.14 7.1884 18,328,127.89
JPY 3,179,297,798.00 0.0462 146,988,475.10
HKD 13,800.00 0.9260 12,778.80
Other payables 6,609,813.60
Including: USD 879,786.00 7.1884 6,324,253.68
JPY 5,555,131.00 0.0462 256,830.37
HKD 31,025.43 0.9260 28,729.55
(1)As a lessee
The Group leases a number of assets, including houses and buildings, for lease terms of 1 to 10 years. The above right-
of-use assets cannot be used for purposes such as borrowing mortgages, guarantees, etc.
The Group had no variable lease payments that were not included in the measurement of lease liabilities.
- 82 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(V) Notes to financial statements - continued
(1) As a lessee - continued
The short-term lease expenses subject to simplified accounting treatment and recognized in the current profit or loss in
this year amounted to RMB 950,508.89 (previous year: RMB 558,957.38).
The total cash outflows related to leases in the current year amounted to RMB 10,458,971.46 (previous year: RMB
(2) As a lessor
Operating lease as lessor
RMB
Including: revenue related
to variable lease payments
Item Lease income
not included in lease
receipts
Buildings and constructions 96,066,371.44 -
The operating leases of the Group as the lessor are related to houses and buildings, with lease terms ranging from 1 to 15
years.
The revenue related to operating leases in the current year amounted to RMB 96,066,371.44 (previous year: RMB
RMB 0 (previous year: RMB 0).
RMB
Undiscounted lease receipts
Item Amount at the end of Amount at the end of the
current year previous year
The first year after the balance sheet date 66,825,466.35 74,399,477.80
The second year after the balance sheet date 49,946,457.62 54,475,653.29
The third year after the balance sheet date 31,103,495.38 44,564,404.34
The fourth year after the balance sheet date 8,785,825.58 29,708,115.33
The fifth year after the balance sheet date 6,625,510.75 9,346,233.32
Subsequent years 5,106,929.55 7,327,310.40
Total undiscounted lease receipts 168,393,685.23 219,821,194.48
- 83 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
（VI） R&D expenditures
(1) Presented by nature of expenses
RMB
Amount for the current Amount for the previous
Item
year year
Employee compensation 15,844,594.49 14,827,264.16
Material consumption 83,483,679.76 85,216,243.35
Depreciation cost 3,275,385.23 3,389,328.35
Others 1,208,163.43 1,220,205.06
Total 103,811,822.91 104,653,040.92
Including: expensed R&D expenditures 103,811,822.91 104,653,040.92
Capitalized R&D expenditures - -
(2) The Group has no development expenses of R&D projects that meet the capitalization requirements.
(3) The Group has no significant outsourced projects under research.
（VII） Changes in the scope of consolidation
The consolidation scope of the Group has not changed.
（VIII） Equity in other entities
(1) Structure of the enterprise group
Shareholding ratio of Method
Registered capital Registration the Company (%) of
Name of subsidiaries Main premise Business nature
(RMB) place acquisitio
Direct Indirect
n
Shenzhen Lisi Industrial Establish
Shenzhen RMB 2,360,000.00 Shenzhen Property leasing 100.00 -
Development Co., Ltd. ment
Shenzhen Huaqiang Hotel Establish
Shenzhen RMB 10,005,300.00 Shenzhen Property leasing 100.00 -
Co., Ltd. ment
Shenzhen Shenfang Property Establish
Shenzhen RMB 1,600,400.00 Shenzhen Property management 100.00 -
Management Co., Ltd. ment
Shenzhen MCENTURY Production and sales of Establish
Shenzhen RMB 13,000,000.00 Shenzhen 100.00 -
Garment Co., Ltd. textiles ment
Shenzhen Shenfang Sungang
Establish
Property Management Co., Shenzhen RMB 1,000,000.00 Shenzhen Property management 100.00 -
ment
Ltd.
Production and sales of Acquisiti
SAPO Photoelectric Shenzhen RMB 583,333,333.00 Shenzhen 60.00 -
polarizers on
Establish
SATO (Hong Kong) Limited Hong Kong HKD 10,000.00 Hong Kong Polarizer sales - 100.00
ment
- 84 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(VIII) Interests in other entities - continued
(2) Significant non-wholly-owned subsidiaries
RMB
Profit or loss Dividends declared to
Balance of minority
Name of Shareholding ratio by attributable to be distributed to
interests at the end of
subsidiaries minority shareholders minority shareholders minority shareholders
the current year
in the current year in the current year
SAPO
Photoelectric
(3) Key financial information of significant non-wholly-owned subsidiaries
RMB
SAPO Photoelectric
Balance as at the end Balance as at the end
Item of the current year/ of the previous year/
Amount for the Amount for the
current year previous year
Current assets 2,039,673,042.84 2,224,998,868.32
Non-current assets 1,998,903,130.31 2,215,651,449.74
Total assets 4,038,576,173.15 4,440,650,318.06
Current liabilities 567,603,106.30 762,685,435.65
Non-current liabilities 267,706,992.70 608,912,888.60
Total liabilities 835,310,099.00 1,371,598,324.25
Operating revenue 3,230,006,072.51 2,944,147,907.27
Net profit 134,214,080.34 119,670,570.33
Total comprehensive income 134,214,080.34 119,968,303.83
Cash flows from operating activities 205,666,636.23 168,163,478.05
Summarized financial information of insignificant joint ventures and associates
RMB
Balance as at the end Balance as at the end
of the current year/ of the previous year/
Item
Amount for the Amount for the
current year previous year
Joint ventures:
Total of investment book value 111,555,887.28 122,370,494.08
Total amounts of the following items calculated at shareholding
ratio
- Net profit (loss) (10,814,606.80) (7,135,777.68)
-Other comprehensive income - -
-Total comprehensive income (10,814,606.80) (7,135,777.68)
Associates:
Total of investment book value 3,272,138.76 5,311,526.62
Total amounts of the following items calculated at shareholding
ratio
-Net profit 112,711.72 236,793.79
-Other comprehensive income - 99,168.85
-Total comprehensive income 112,711.72 335,962.64
- 85 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
（IX） Government grants
(1) As at December 31, 2024, the Group had no government grants recognized at the amount receivable.
(2) Liability items involving government grants
RMB
Amount at the Amount included in Amount included
Other changes in Amount at the end of Related to assets/
Liabilities beginning of the New grants in the non-operating in other income
the current year current year Related to income
year current year revenue in the in the current
current year year
Deferred
income
Total 97,485,986.89 15,265,000.00 - 16,401,790.63 - 96,349,196.26
(3) Government grants included in the current profit or loss
RMB
Amount for the current Amount for the
Grants
year previous year
Other income 25,379,633.56 33,711,100.17
（X） Risks associated with financial instruments
The group's main financial instruments include monetary funds, financial assets held for trading, notes receivable,
accounts receivable, receivables financing, other receivables, other equity instrument investments, short-term
borrowings, derivative financial liabilities, notes payable, accounts payable, other payables, other current liabilities and
long-term borrowings, etc. At the end of the year, the financial instruments held by the group are as follows, and the
details are described in note (v). Risks associated with these financial instruments and the risk management policies
adopted by the group to mitigate these risks are described below. The group's management manages and monitors these
exposures to ensure that the risks are controlled within certain limits.
- 86 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(X) Risks related to financial instruments - continued
RMB
Amount at the end of Amount at the end of the
Item
current year previous year
Financial assets
Measured at fair value through current profit or loss
Financial assets held for trading 731,419,904.42 821,946,114.68
Measured at fair value through other comprehensive
income
Receivables financing 6,804,603.68 22,839,459.13
Other equity instrument investments 165,402,900.00 145,988,900.00
Measured at amortized costs
Monetary funds 340,961,443.82 472,274,448.00
Notes receivable 47,305,221.88 50,963,943.01
Accounts receivable 863,731,936.89 820,134,833.95
Other receivables 3,596,543.96 3,219,287.77
Financial liabilities
Measured at fair value through current profit or loss
Derivative financial liabilities 1,278,559.35 -
Measured at amortized costs
Short-term borrowings - 8,000,000.00
Notes payable 31,095,540.29 31,049,291.49
Accounts payable 304,812,580.55 408,548,136.24
Other payables 160,296,989.98 184,528,344.55
Other current liabilities 30,291,952.76 42,665,954.11
Long-term borrowings 209,400,848.04 608,190,812.09
The group uses sensitivity analysis techniques to analyze the possible impact of reasonable and possible changes in risk
variables on the current profit or loss and shareholders' equity. As any risk variable seldom changes in isolation, and the
correlation between the variables will have a significant effect on the final affected amount of the change of a risk
variable, the following contents are carried out under the assumption that the change of each variable is independently:
The group's objective in risk management is to achieve an appropriate balance between risk and return, minimize the
negative impact of risk on the group's operating performance, and maximize the interests of shareholders and other
equity investors. Based on this risk management objective, the basic strategy of the group's risk management is to
identify and analyze various risks faced by the group, establish an appropriate risk tolerance bottom line and conduct
risk management, and timely and reliably supervise various risks to control risks within a limited scope.
- 87 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(X) Risks related to financial instruments - continued
CURRENT YEAR - CONTINUED
Foreign exchange risk refers to the risk of losses arising from the exchange rate fluctuation. The Group's exposure to
foreign exchange risk is mainly related to the USD, the JPY and the HKD. Except for some of the Group's import
purchases and export sales in Chinese mainland, which were mainly settled in USD, JPY and HKD, the Group's other
major business activities were settled in RMB.
As of December 31, 2024, except for the foreign currency monetary items in Note (V), 57, the assets and liabilities of
the Group were all in RMB. The foreign currency balances of assets and liabilities (converted into RMB) listed in the
table below may expose the Group to foreign exchange risks that could impact its operating performance.
RMB
Balance as at the end of the current
Item year
Assets Liabilities
USD 79,707,825.58 24,652,381.57
JPY 43,190,341.28 147,245,305.47
HKD 1,019,977.70 41,508.35
The Group closely monitors the impact of exchange rate changes on the Group's foreign exchange risk and will take
measures to avoid foreign exchange risk according to the actual situation.
Sensitivity analysis of foreign exchange risk
With other variables unchanged, the pre-tax impact of reasonable changes in exchange rates on the current profit or loss
and shareholders' equity is as follows:
RMB
CURRENT YEAR PREVIOUS YEAR
FLUCTUATION IN
ITEM IMPACT ON IMPACT ON IMPACT ON IMPACT ON
EXCHANGE RATE
PROFIT SHAREHOLDERS PROFIT SHAREHOLDERS
' EQUITY ' EQUITY
ALL
REVALUATION
FOREIGN
AGAINST RMB BY (2,401,052.54) (2,401,052.54) (11,522,564.42) (11,522,564.42)
CURREN
CIES
ALL
DEPRECIATION
FOREIGN
AGAINST RMB BY 2,401,052.54 2,401,052.54 11,522,564.42 11,522,564.42
CURREN
CIES
The Group's risk of changes in cash flows of financial instruments due to changes in interest rates is mainly related to
bank borrowings with floating rates. The Group continues to closely monitor the impact of interest rate changes on the
Group's interest rate risk. The Group's policy is to maintain the floating rate of these borrowings, and there are currently
no interest rate swap arrangements.
- 88 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(X) Risks related to financial instruments - continued
CURRENT YEAR - CONTINUED
SENSITIVITY ANALYSIS OF INTEREST RATE RISK:
WITH OTHER VARIABLES UNCHANGED, THE PRE-TAX IMPACT OF REASONABLE CHANGES IN
INTEREST RATES ON THE CURRENT PROFIT OR LOSS AND SHAREHOLDERS' EQUITY IS AS FOLLOWS:
RMB
CURRENT YEAR PREVIOUS YEAR
FLUCTUATION
ITEM IN EXCHANGE IMPACT ON IMPACT ON IMPACT ON IMPACT ON
RATE PROFIT SHAREHOLDER PROFIT SHAREHOLDER
S' EQUITY S' EQUITY
FLOATING
RATE UP 1% (2,092,051.50) (2,092,051.50) (6,154,214.55) (6,154,214.55)
BORROWINGS
FLOATING
RATE DOWN 1% 2,092,051.50 2,092,051.50 6,154,214.55 6,154,214.55
BORROWINGS
As of December 31, 2024, the maximum credit risk exposure that may cause financial losses to the Group mainly comes
from the losses of the Group's financial assets due to the failure of the other party to the contract to perform its
obligations, including: monetary funds, financial assets held for trading, notes receivable, accounts receivable,
receivables financing and other receivables. On the balance sheet date, the book value of the Group's financial assets
represents its maximum credit risk exposure.
In order to reduce the credit risk, the Group arranges special personnel to determine the credit line, conduct credit
approval, and implement other monitoring procedures to ensure that necessary measures are taken to recover overdue
debts. In addition, the Group reviews the recovery of financial assets on each balance sheet date to ensure that adequate
provision for credit losses has been made for the relevant financial assets. Therefore, the management of the Group
believes that the credit risk assumed by the Group has been greatly reduced.
The Group's monetary funds are deposited in banks with high credit ratings, so the monetary funds only have low credit
risk.
As of December 31, 2024, the balance of accounts receivable from the top five customers of the Group was RMB
no other significant credit risk exposure concentrated in a single financial asset or a portfolio of financial assets with
similar characteristics.
When managing liquidity risk, the Group maintains cash and cash equivalents that the management believes are
sufficient and monitors them to meet the Group's operational needs and reduce the impact of fluctuations in cash flows.
The Group's management monitors the use of bank borrowings and ensures compliance with loan agreements.
- 89 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(X) Risks related to financial instruments - continued
CURRENT YEAR - CONTINUED
AS AT DECEMBER 31, 2024, THE UNUSED COMPREHENSIVE BANK CREDIT LINE OF THE GROUP WAS
RMB 1,380,340,000
THE GROUP'S FINANCIAL LIABILITIES HELD ARE PRESENTED AS FOLLOWS BASED ON THE MATURITY
OF UNDISCOUNTED REMAINING CONTRACTUAL OBLIGATIONS:
RMB
Item Within 1 year 1 - 5 years Over 5 years Total
Notes payable 31,095,540.29 - - 31,095,540.29
Accounts payable 304,812,580.55 - - 304,812,580.55
Other payables 160,296,989.98 - - 160,296,989.98
Other current liabilities 30,291,952.76 - - 30,291,952.76
Long-term borrowings 52,192,649.82 169,663,448.78 - 221,856,098.60
Lease liabilities 7,411,263.65 7,808,943.06 3,098,158.97 18,318,365.68
Derivative financial
liabilities
RMB
Transfer Nature of transferred Amount of
Derecognition Judgment basis for derecognition
method financial assets transferred financial
assets
After the accounts receivable is factored, the factor
has no right to recover from the Group, and almost
Factoring Accounts receivable 59,923,300.74 Derecognized
all the risks and rewards of the ownership of the
accounts receivable have been transferred
The credit risk level of the acceptance bank of the
Transfer by Outstanding bank bank acceptance bill transferred by endorsement is
endorsemen acceptance bills classified 34,926,518.99 Derecognized relatively high, and almost all the risks and
t as receivables financing rewards of the ownership of the corresponding
receivables financing have been transferred
The credit risk level of the acceptance bank of the
Transfer by Outstanding bank bank acceptance bill transferred by endorsement is
endorsemen acceptance bills classified 30,291,952.76 Not derecognized not high, and almost all the risks and rewards of
t as notes receivable the ownership of the relevant notes receivable are
retained
Total 125,141,772.49
RMB
Amount of Gains or losses
Transfer method
Item derecognized related to
of financial assets
financial assets derecognition
Transfer by
Receivables financing 34,926,518.99 -
endorsement
Accounts receivable Factoring 59,923,300.74 -
Total 94,849,819.73 -
- 90 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(X) Risks related to financial instruments - continued
RMB
Amount of assets Amount of
Asset transfer arising from liabilities arising
Item
method continued from continued
involvement involvement
Transfer by
Notes receivable 30,291,952.76 30,291,952.76
endorsement
Total 30,291,952.76 30,291,952.76
（XI） Disclosure of fair value
RMB
Fair value at the end of current year
Item Measured at the Measured at the Measured at the
Total
fair value of the fair value of the fair value of the
Continuous fair value measurement
(I) Financial assets held for trading - 731,419,904.42 - 731,419,904.42
(II) Receivables financing - - 6,804,603.68 6,804,603.68
(III) Other equity instrument
- - 165,402,900.00 165,402,900.00
investments
Total assets constantly measured at
- 731,419,904.42 172,207,503.68 903,627,408.10
fair value
(IV) Derivative financial liabilities - 1,278,559.35 - 1,278,559.35
Total liabilities constantly measured
- 1,278,559.35 - 1,278,559.35
at fair value
sustainable items measured on the basis of fair value of level 2
RMB
Fair value at the
Item Valuation techniques Input value
end of current
year
Financial assets held Discounted cash flow
for trading method
The contracted delivery exchange rate
Derivative financial Discounted cash flow under forward foreign exchange contracts
liabilities method and the market forward exchange rate as
of the balance sheet date
sustainable items measured on the basis of fair value of level 3
RMB
Fair value at the end
Item Valuation techniques Input value
of current year
Receivables financing 6,804,603.68 Discounted cash flow method Discount rate
P/B ratio of similar listed
Comparable Public Company Method
Other equity instrument companies
investments Comparable earnings method Market price
Statement adjustment method Book value
- 91 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(XI) Disclosure of fair value
Disclosure of fair value - continued
Financial assets and liabilities not measured at fair value mainly include: monetary funds, notes receivable, accounts
receivable, other receivables, notes payable, accounts payable, other payables, other current liabilities and long-term
borrowings, etc.
The Group's management believes that the book value of financial assets and financial liabilities measured at amortized
costs in the financial statements is close to the fair value of such assets and liabilities.
（XII） Related parties and related party transactions
Registered Proportion of voting
Parent company's
Name Registration place Business nature capital rights of the parent
shareholding ratio in
(RMB '0,000) company in the
the Company (%)
Company (%)
Floor 18, Investment Equity
Shenzhen Investment Holdings Building, Shennan investments,
Co., Ltd. Road, Futian District, real estate
Shenzhen development, etc.
Parent company of the Company: the parent company of the Company is a wholly state-owned company approved and
authorized by the Shenzhen Municipal Government, which exercises the functions of the investor in accordance with the
law for the state-owned enterprises within the authorized scope.
During the reporting period, the registered capital of the parent company changed as follows:
RMB '0,000
Balance at the beginning Balance as at the end of
Increase in current year Decrease in current year
of the year the current year
See Note (VIII), 1 for details of the subsidiary.
See Note (V), 10 for details of the Company's joint ventures and associates.
- 92 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(XII) Related parties and related party transactions - continued
Name of related party Relationship with the Company
The Company's participated company, whose chairman is appointed by the
Shenzhen Xinfang Knitting Factory Co., Ltd.
Group
The Company's participated company, whose chairman is appointed by the
Shenzhen Dailisi Underwear Co., Ltd.
Group
Minority shareholder of the Company's subsidiary SAPO Photoelectric; one of
Hengmei Optoelectronics Co., Ltd.
the directors of the company is a supervisor of SAPO Photoelectric
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Shentou Property Development Co., Ltd.
Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Seg Longyan Energy Technology Co., Ltd.
Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Guoren P&C Insurance Co., Ltd. Shenzhen Branch
Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Talent Service Center (Shenzhen Talent Market)
Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Property Management Co., Ltd.
Holdings Co., Ltd.
Shenzhen Cultural Enterprise Development Co., Ltd. Subsidiary of the parent company of the Company, Shenzhen Investment
(Headquarters) Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Investment Holdings Development Co., Ltd.
Holdings Co., Ltd.
Shenzhen Investment Holdings Digital Technology Co., Subsidiary of the parent company of the Company, Shenzhen Investment
Ltd. Holdings Co., Ltd.
Shenzhen Talent Recruitment International Co., Ltd. Subsidiary of the parent company of the Company, Shenzhen Investment
(Headquarters) Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Leaguer Education Co., Ltd. (Headquarters)
Holdings Co., Ltd.
Shenzhen Legal Training Center Co., Ltd. Subsidiary of the parent company of the Company, Shenzhen Investment
Holdings Co., Ltd.
Shenzhen Investment Holdings Sports Event Development Subsidiary of the parent company of the Company, Shenzhen Investment
Co., Ltd. Holdings Co., Ltd.
Shenzhen Investment Building Hotel Co., Ltd. Subsidiary of the parent company of the Company, Shenzhen Investment
Holdings Co., Ltd.
Shenzhen Investment Building Property Management Co., Subsidiary of the parent company of the Company, Shenzhen Investment
Ltd. Holdings Co., Ltd.
(1) Procurement of goods/receipt of labor services
Amount for the Amount for the
Related party Related party transactions
current year previous year
Shenzhen Seg Longyan Energy Technology Co., Ltd. Purchase of electricity 1,146,803.41 1,075,289.19
Guoren P&C Insurance Co., Ltd. Shenzhen Branch Insurance premiums 285,104.25 -
Shenzhen Cultural Enterprise Development Co., Ltd.
Exhibition fees 136,298.00 -
(Headquarters)
Shenzhen Talent Service Center (Shenzhen Talent
Outsourcing service fee 125,596.14 -
Market)
Shenzhen Investment Holdings Sports Event
Marketing expenses 80,000.00 -
Development Co., Ltd.
Shenzhen Investment Holdings Digital Technology
Information construction 78,655.84 -
Co., Ltd.
Shenzhen Investment Holdings Development Co., Ltd. Rental 65,786.40 -
Shenzhen Property Management Co., Ltd. Property management fee 47,258.75 -
Shenzhen Legal Training Center Co., Ltd. Training expenses 34,597.00 -
Shenzhen Leaguer Education Co., Ltd. (Headquarters) Training expenses 20,449.02 -
Shenzhen Guanhua Printing and Dyeing Co., Ltd. Interest expenses 9,025.99 16,237.39
Shenzhen Talent Recruitment International Co., Ltd.
Training expenses 7,000.00 -
(Headquarters)
Optical film materials and
Hengmei Optoelectronics Co., Ltd. 2,874.60 4,540,435.30
processing
Total 2,039,449.40 5,631,961.88
- 93 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(XII) Related parties and related party transactions - continued
(2) Sale of goods
RMB
Related party Amount for the Amount for the
Related party
transactions current year previous year
Hengmei Optoelectronics Co., Ltd. Polarizer - 4,744,631.12
Shenzhen Investment Building Hotel
Textiles - 163,729.20
Co., Ltd.
Shenzhen Shentou Property
Textiles - 65,634.51
Development Co., Ltd.
Shenzhen Investment Building
Textiles - 35,522.12
Property Management Co., Ltd.
Shenzhen Investment Holdings Co.,
Textiles - 15,371.68
Ltd.
Total - 5,024,888.63
(3) Loans from and to related parties
RMB
Amount
Related party Start date Maturity date Notes
borrowed
Borrowed from
Shenzhen Guanhua Printing and Dyeing Annual interest
Co., Ltd. rate 0.15%
(4) Remuneration of key officers
RMB
Item Amount for the current year Amount for the previous year
Remuneration of key officers 6,932,991.00 8,557,258.00
(1) Receivables
RMB
Balance as at the end of the Balance as at the end of the
current year previous year
Project Related party
Provision for Provision for
Book balance Book balance
bad debts bad debts
Accounts Shenzhen Shentou Property
receivable Development Co., Ltd.
Shenzhen Dailisi Underwear
Other receivables 1,100,000.00 55,000.00 1,100,000.00 58,850.00
Co., Ltd.
Shenzhen Investment Holdings
Other receivables 73,096.00 3,910.64 - -
Development Co., Ltd.
Shenzhen Guanhua Printing and
Other receivables - - 41,325.00 -
Dyeing Co., Ltd.
Total 1,173,096.00 58,910.64 1,141,325.00 58,850.00
- 94 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(XII) Related parties and related party transactions - continued
(2) Payables
RMB
Balance as at the end of Balance as at the end of
Project Related party
the current year the previous year
Shenzhen Guanhua Printing and Dyeing
Other payables 3,816,981.88 3,811,272.20
Co., Ltd.
Shenzhen Changlianfa Printing and
Dyeing Co., Ltd.
Shenzhen Xinfang Knitting Factory Co.,
Ltd.
Shenzhen Investment Holdings Co., Ltd. - 485,189.00
Shenzhen Investment Holdings Sports
Event Development Co., Ltd.
Shenzhen Investment Holdings Digital
Technology Co., Ltd.
Shenzhen Investment Holdings
Development Co., Ltd.
Shenzhen Property Management Co., Ltd. 7,934.52 -
Yehui International Co., Ltd. - 1,124,656.60
Total 6,497,980.44 7,689,607.60
（XIII） Commitments and contingencies
(1) Capital commitments
RMB
Amount at the end of Amount at the end of
Item
current year previous year
Contracted but not recognized in the financial
statements
- Commitment to purchase and construct long-term
assets
As of December 31, 2024, the Group had no contingencies such as pending litigations and external guarantees to be
discolsed.
- 95 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
（XIV） Events after the balance sheet date
On March 26 2025, the profit distribution proposal for the year 2024 was approved by the Board of the Company. It is
proposed that the Company distribute cash dividends of RMB 0.71 per share (tax inclusive) to all shareholders based on
the total share capital of 506,521,849 shares as of December 31, 2024, resulting in total cash dividends of RMB
General Meeting.
RMB
Item Amount
Profit or dividend to be distributed 35,963,051.28
Profit or dividend declared to be granted upon deliberation and approval -
（XV） Other significant matters
(1) Determination basis and accounting policies for reporting segments
According to the internal organizational structure, management requirements and internal reporting system of the Group,
the Group's operating business is divided into two operating segments. The management of the Group regularly
evaluates the operating results of these segments to decide on the allocation of resources to them and evaluate their
performance. On the basis of operating segments, the Group has identified the following two reporting segments,
polarizer business, property leasing business and other business.
Information on segment reporting is disclosed according to the accounting policies and measurement standards adopted
by each segment when reporting to the management, and these measurement bases are consistent with the accounting
and measurement bases when preparing the financial statements.
(2) Financial information of reporting segments
RMB
Current year or end Property leasing and
Polarizer Offset Total
of current year others
Operating revenue:
Revenue from
external 3,219,211,416.65 116,071,592.03 - 3,335,283,008.68
transactions
Revenue from
transactions - 4,239,345.09 (4,239,345.09) -
between segments
Total operating
revenue of 3,219,211,416.65 120,310,937.12 (4,239,345.09) 3,335,283,008.68
segments
Operating expenses
(Note)
Operating profit 136,015,568.69 (20,628,307.04) 36,389,537.55 151,776,799.20
Net profit 134,120,025.66 (15,831,104.78) 24,767,845.50 143,056,766.38
Total assets of
segments
Total liabilities of
segments
Note: this item includes operating costs, taxes and surcharges, G&A expenses, R&D expenses, selling and distribution
expenses and financial expenses.
- 96 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(XV) Other significant events - continued
(1) Real estate not yet disposed of by Shenzhen Xieli Automobile Enterprise Co., Ltd. (hereinafter referred to as
"Shenzhen Xieli")
Our company has invested with Hong Kong Xieli Maintenance Company (hereinafter referred to as "Hong Kong Xieli")
to establish a Sino foreign joint venture, Shenzhen Xieli Automobile Enterprise Co., Ltd. (hereinafter referred to as
"Shenzhen Xieli"). In March 2020, Shenzhen Xieli was deregistered by the Shenzhen Municipal Administration for
Market Regulation. In July 2020, our company filed an administrative action with the Yantian District People's Court in
Shenzhen, Guangdong Province to revoke the approval of the Shenzhen Market Supervision Administration for the
cancellation of Shenzhen Xieli.
In December 2022, the People's Court of Yantian District, Shenzhen, Guangdong Province, reviewed the first instance
judgment and revoked the administrative action approving the cancellation of Shenzhen Xieli's registration. In January
Guangdong Province. Later, due to Hong Kong Xieli's failure to pay the case acceptance fee in advance, the Shenzhen
Intermediate People's Court issued an administrative ruling, ruling that the appeal should be withdrawn by Hong Kong
Xieli. The retrial judgment of the first instance has taken effect on March 22, 2023. At present, Shenzhen Xieli has
resumed its business registration status, but its future direction still needs to be negotiated among all shareholders.
（XVI） Notes to the main items of the parent company's financial statements
(1) Disclosure by aging
RMB
Book balance at the end Book balance at the
Aging
of the year beginning of the year
Within 1 year 10,649,986.34 10,190,859.62
Total 13,135,062.34 12,675,935.62
(2) Disclosure by provision method for bad debts
RMB
Balance as at the end of the current year
Book balance Provision for bad debts
Category
Provision ratio Book value
Amount Ratio (%) Amount
(%)
Provision for bad debts - - -
accrued on an individual - -
basis
Provision for bad debts
made by portfolio
Total 13,135,062.34 100.00 106,074.71 13,028,987.63
- 97 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(XVI) Notes to the main items of the parent company's financial statements - continued
(2) Disclosure by provision method for bad debts - continued
RMB
Balance as at the end of the previous year
Book balance Provision for bad debts
Category
Provision ratio Book value
Amount Ratio (%) Amount
(%)
Provision for bad debts
accrued on an individual - - - - -
basis
Provision for bad debts
made by portfolio
Total 12,675,935.62 100.00 4,311.97 12,671,623.65
As of December 31, 2024, accounts receivable with provision for bad debts accrued on a portfolio basis:
RMB
Balance as at the end of the current year
Aging Expected average Provision for bad
Book balance Book value
loss rate (%) debts
Within 1 year 1.00 10,649,986.34 106,074.71 10,543,911.63
Total 13,135,062.34 106,074.71 13,028,987.63
As of December 31, 2024, provision for bad debts is made based on the simplified expected credit losses model
RMB
Whole duration Whole duration
Provision for bad debts Expected credit losses Expected credit losses Total
(No credit loss) (With credit loss)
Balance at the beginning of the
year
Balance at the beginning of the
- - -
year
- Transfer to credit loss
- - -
incurred
- Reversal of credit loss not
- - -
incurred
Withdrawal in the current year 101,762.74 - 101,762.74
Reversal in the current year - - -
Charge-off in the current year - - -
Write-off in the current year - - -
Other changes - - -
Balance as at the end of the
current year
(3) Provision for bad debts
RMB
Balance at the Changes in the current year Balance as at the
Type beginning of the Recovery or Resale or write- end of the current
Provision Other changes
year reversal off year
Provision for bad
debts
There was no significant amount of provision for bad debts recovered or reversed this year.
- 98 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(XVI) Notes to the main items of the parent company's financial statements - continued
(4) There are no accounts receivable with actual write-off this year.
(5) Top five entities in terms of the ending balance of accounts receivable by debtor
RMB
Provision for bad
At the end of debts
Ratio in total
Entity name current year Balance as at the
accounts
Book balance end of the current
receivable (%)
year
Total amount of the top five accounts receivables as
of December 31, 2024.
(1) Disclosure by aging
RMB
Balance as at the end Balance as at the end
Aging
of the current year of the previous year
Within 1 year 15,129,726.66 1,683,810.52
Over 3 years 25,380,195.11 15,279,395.10
Total 42,987,562.86 29,277,078.91
Less: provision for bad debts 41,453,167.06 15,263,525.96
Book value 1,534,395.80 14,013,552.95
(2) Disclosure by nature of payment
RMB
Book balance at the
Book balance at the
Nature of payment end of the previous
end of the year
year
Transactions with related parties within the consolidation scope 26,189,641.10 12,553,241.09
Transactions with external units 15,422,435.97 15,349,339.97
Guarantee and deposits 10,000.00 10,000.00
Others 1,365,485.79 1,364,497.85
Total 42,987,562.86 29,277,078.91
(3) Provision for bad debts
As of December 31, 2024, provision for bad debts shall be made according to the credit risk characteristic combination
RMB
Balance as at the end of the current year
Phase Expected average loss Provision for bad
Book balance Book value
rate (%) debts
Provision for bad debts based on
credit risk characteristic
combination
Provision for other receivables
- 99 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(XVI) Notes to the main items of the parent company's financial statements - continued
(3) Provision for bad debts - continued
As of December 31, 2024, the credit risk and provision for bad debts of other receivables are as follows:
RMB
Balance as at the end of the current year
Aging Expected average Provision for bad
Book balance Book value
loss rate (%) debts
Within 1 year 90.62 15,129,726.66 13,711,066.34 1,418,660.32
Over 3 years 99.54 25,380,195.11 25,264,459.63 115,735.48
Total 42,987,562.86 41,453,167.06 1,534,395.80
(4) Changes in provision for bad debts
RMB
Balance at the Changes in the current year Balance as at the
Type beginning of the Recovery or Resale or end of the
Provision Other changes
year reversal write-off current year
Provision for bad debts 15,263,525.96 26,189,641.10 - - - 41,453,167.06
(5) There were no other receivables actually written off this year.
(6) Top five entities in terms of ending balance of other receivables by debtors
RMB
Other Provision for
receivables bad debts
Ratio in the total
Entity name Nature of payment Balance as at Aging Balance as at
ending balance of
the end of the the end of the
other receivables in
current year current year
the current year (%)
Receivables from
Total amount of the top five Within 1 year, 1 - 2
external entities
other receivables as of 41,496,981.06 years, 2 - 3 years, over 96.53 40,514,681.06
and internal
December 31, 2024. 3 years
receivables
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in
subsidiaries
Investments in joint
ventures
Investments in
associates
Total 2,077,516,294.35 36,826,287.64 2,040,690,006.71 2,104,115,440.09 16,582,629.30 2,087,532,810.79
- 100 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
Year ended December 31, 2024
(XVI) Notes to the main items of the parent company's financial statements - continued
(1) Investment in subsidiaries
RMB
Provision for Provision for impairment
Balance at the beginning Increase in Decrease in Balance as at the end of
Investees impairment in the Balance as at the end of the
of the year current year current year the current year
current year current year
SAPO Photoelectric 1,910,247,781.94 - - - 1,910,247,781.94 14,415,288.09
Shenzhen Lisi Industrial Development Co.,
Ltd.
Shenzhen MCENTURY Garment Co., Ltd. 18,499,458.34 1,744,200.00 - 20,243,658.34 - 22,410,999.55
Shenzhen Huaqiang Hotel Co., Ltd. 15,489,351.08 - 15,489,351.08 - - -
Shenzhen Shenfang Property Management
Co., Ltd.
Shenzhen Shenfang Sungang Property
Management Co., Ltd.
Total 1,959,850,790.09 1,744,200.00 15,489,351.08 20,243,658.34 1,925,861,980.67 36,826,287.64
(2) Investment in associates and joint ventures
RMB
Changes in the current year
Provision for
Other
Balance at the Investment profit Cash dividends Provision Balance as at impairment
comprehensi Other
Investees beginning of Additional Reduced or loss recognized or profits Provision Othe the end of the Balance as at
ve changes in
the year investment investment under the equity declared to be for rs current year the end of the
income equity
method paid impairment current year
adjustment
Joint ventures
Shenzhen Guanhua Printing
and Dyeing Co., Ltd.
Sub-total 122,370,494.08 - - (10,814,606.80) - - - - - 111,555,887.28 -
Associates
Shenzhen Changlianfa
Printing and Dyeing Co., 3,358,117.09 - - 260,171.67 - - 346,150.00 - - 3,272,138.76 -
Ltd.
Yehui International Co.,
Ltd.
Sub-total 5,311,526.62 - 1,805,949.58 112,711.72 - - 346,150.00 - - 3,272,138.76 -
Total 127,682,020.70 - 1,805,949.58 (10,701,895.08) - - 346,150.00 - - 114,828,026.04 -
- 101 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2023
(XVI) Notes to the main items of the parent company's financial statements - continued
(1) Operating revenue and operating costs
RMB
Amount for the current year Amount for the previous year
Item
Revenue Cost Revenue Cost
Primary business 77,167,496.95 10,205,157.84 77,822,508.75 9,822,306.53
(2) Income from primary business and cost of primary business by product
RMB
Amount for the current year Amount for the previous year
Products Income from Cost of primary Income from Cost of primary
primary business business primary business business
Property leasing 77,167,496.95 10,205,157.84 77,822,508.75 9,822,306.53
(3) Income from primary business and cost of primary business by region
RMB
Amount for the current year Amount for the previous year
Region Income from Cost of primary Income from Cost of primary
primary business business primary business business
Domestic 77,167,496.95 10,205,157.84 77,822,508.75 9,822,306.53
RMB
Amount for the Amount for the
Item
current year previous year
Long-term equity investment income calculated under the equity
(10,701,895.08) (6,898,983.89)
method
Income from long-term equity investments under cost method 4,700,000.00 9,989,533.92
Investment income from disposal of long-term equity investments 5,838,587.94 -
Investment income obtained during holding the financial assets
held for trading
Dividend income from investments in other equity instrument
during the holding period
Total 12,077,902.81 19,300,515.95
- 102 -
Shenzhen Textile (Holdings) Co., Ltd.
Supplementary information
Year ended December 31, 2024
According to the Interpretive Announcement No. 1 on Information Disclosure of Companies Issuing Securities to the
Public - Non-recurring Profit or Loss (Revision 2023) (hereinafter referred to as "Interpretive Announcement No. 1")
issued by the China Securities Regulatory Commission, the Group's non-recurring profit or loss for 2024 are as follows:
RMB
Amount for the
Item
current year
Profit or loss from disposal of non-current assets, including the writing-off part for which
the asset impairment provision is made
Government grants included in the current profit or loss (except for those that are closely
related to the Company's normal business operations, comply with national policies and
regulations, are enjoyed according to determined standards, and have a sustained impact on
the Company's profit or loss)
Profit or loss from changes in fair value of financial assets and liabilities held by non-
(5,319,496.55)
financial enterprises and profit or loss from the disposal of financial assets and financial
liabilities, except for effective hedging operations related to the Company's normal
business operations
Reversal of provision for impairment of accounts receivable subject to separate
impairment test
Non-operating revenue and expenses other than the above-mentioned items 1,107,069.21
Total non-recurring profit or loss 21,003,508.69
Less: income tax effect of non-recurring profit or loss 2,998,978.10
Net amount of non-recurring profit or loss 18,004,530.59
Less: net effect of non-recurring profit or loss attributable to minority shareholders
(after tax)
Non-recurring profit or loss attributable to the Company's ordinary shareholders 12,342,648.48
This return on net assets and earnings per share table is prepared by Shenzhen Textile (Holdings) Co., Ltd. in accordance
with the Rules for the Compilation and Reporting of Information Disclosure by Companies Issuing Securities in Public
(No. 9) - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010) issued by the
China Securities Regulatory Commission.
RMB
Earnings per share
Weighted average
Profit in the reporting period Basic earnings per Diluted earnings per
rate of return on net
share share
assets
Net profit attributable to ordinary
shareholders of the COOEC
Net profit attributable to ordinary
shareholders of the Company after
deducting non-recurring profit or loss
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