Shenzhen Textile (Holdings) Co., Ltd.
Auditor’s Report
Grant Thornton International Ltd（Special General Partnership）
Table of contents
| Auditor’ s Report | 3-7 |
| Consolidated and Company Balance sheet | 8-11 |
| Consolidated and company Income statement | 12-15 |
| Consolidated and company Cash flow statement | 16-18 |
| Consolidated and company Statement on Change in Owners’Equity | 19-23 |
| Notes to financial statements | 24-145 |
Auditor’ s Report
Zhi Tong Shen Zi（2021）No.441A002830
To all shareholders of Shenzhen Textile (Holdings) Co., Ltd：
I. Opinion
We have audited the financial statements of Shenzhen Textile (Holdings) Co., Ltd . (hereinafter referredto as "the Company"), which comprise the balance sheet as at December 31, 2020, and the income statement,the statement of cash flows and the statement of changes in owners' equity for the year then ended and notesto the financial statements.In our opinion, the attached financial statements are prepared, in all material respects, in accordancewith Accounting Standards for Business Enterprises and present fairly the financial position of the Companyas at December 31, 2020 and its operating results and cash flows for the year then ended.II. Basis for Our OpinionWe conducted our audit in accordance with the Auditing Standards for Certified Public Accountants inChina. Our responsibilities under those standards are further described in the Auditor's Responsibilities forthe Audit of the Financial Statements section of our report. According to the Code of Ethics for Chinese CPA,we are independent of the Company in accordance with the Code of Ethics for Chinese CPA and we havefulfilled our other ethical responsibilities in accordance with these requirements. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance in ouraudit of the financial statements of the current period. These matters were addressed in the context of ouraudit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide aseparate opinion on these matters.(I) Recognition of revenuePlease refer to Note III, 26 and Note V, 35 to the financial statement for details of the relevantinformation disclosure.
1.Description of matters
The operating income of Shenzhen Textile in 2020 was RMB 2,108,964,700, of which the mainbusiness income was RMB 2,097,432,900, accounting for 99.45%. As revenue is one of the key performanceindicators of Shenzhen Textile, there is inherent risk that the Company's management manipulates revenuerecognition in order to achieve specific goals or expectations, and since the main business income is large, weidentify revenue recognition as a key audit item.
2. Response to the audit
For revenue recognition, we mainly implemented the following audit procedures:
(1) Understand, evaluate and test the design effectiveness and operation effectiveness of internal controlrelated to sales revenue cycle;
(2) Obtain the main sales contracts according to the products and business types, check the relevantclauses related to revenue recognition, and interview the management to evaluate whether the revenuerecognition meets the requirements of accounting standards;
(3) Implement analytical procedures, compare the changes of income between this year and last yearaccording to product types, observe the fluctuations of income between months and the changes of importantcustomers in this period, and analyze the rationality of income changes based on factors such as thecompany's production capacity, market expansion and industry trends;
(4) Perform detailed tests to check whether the basis related to sales revenue recognition is sufficient,including checking sales contracts or performing detailed tests, including checking sales contracts or orders,delivery orders, customs declarations and other supporting documents, evaluate the authenticity andaccuracy of revenue recognition, and evaluate the authenticity and accuracy of revenue recognition;
(5) Perform cut-off test to evaluate whether income is recorded in the proper accounting period;
(6) Select samples from major customers on this recognition procedures, and perform alternative testson the non-replied parts to judge the authenticity of sales revenue.(II) Inventory falling price reserves
Please refer to Note III, 12 and Note V, 8 to the financial statement for details of the relevantinformation disclosure.
1.Description of matters
As of December 31, 2020, the balance of inventory depreciation reserve of Shenzhen Textile is RMB75,474,600. As the inventory depreciation reserve and its changes have a significant influence on thefinancial statements, the determination of the net realizable value of inventory involves the major judgmentand estimation of the management, so we identify the inventory depreciation reserve as a key audit item.
2. Response to the audit
The audit process implemented for inventory falling price reserves includes mainly:
(1) Understand, evaluate and test the design and operation effectiveness of internal control related toinventory depreciation reserve;
(2) Understand and evaluate the appropriateness of the Company's accrual policy for inventorydepreciation reserve;
(3) Understand and inquire about inventory storage location and inventory accounting method, anddetermine the scope of inventory supervision; Implement inventory supervision procedures to check whetherthe inventory is damaged, obsolete, outdated, defective, etc.;
(4) Obtain the inventory year-end inventory age list, and carry out analytical review of inventory ageaccording to the status of products to analyze whether the inventory depreciation reserve is reasonable;
(5) Review and evaluate the rationality of the major estimates made by the management whendetermining the net realizable value;
(6) Obtain the calculation table of inventory depreciation reserve, check whether the accrual ofinventory depreciation reserve is implemented according to relevant accounting policies, and recalculate the
inventory depreciation reserve; Check the changes of inventory depreciation accrued in previous years,evaluate the rationality of estimated selling price and estimated related taxes and fees as key parameters ofnet realizable value, review the sufficiency of basis of estimated selling price, and analyze the rationality ofinventory depreciation reserve.IV. Other informationThe management of the Company is responsible for the other information. The other informationcomprises information of the Company's annual report in 2019, but excludes the financial statements and ourauditor's report.Our opinion on the financial statements does not cover the other information and we do not and will notexpress any form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the otherinformation identified above and, in doing so, consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to bematerially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date ofthis auditor's report, we conclude that there is a material misstatement of this other information, we arerequired to report that fact. We have nothing to report in this regardV. Responsibilities of Management and Those Charged with Governance for the Financial StatementsThe Company's management is responsible for preparing the financial statements in accordance with therequirements of Accounting Standards for Business Enterprises to achieve a fair presentation, and fordesigning, implementing and maintaining internal control that is necessary to ensure that the financialstatements are free from material misstatements, whether due to frauds or errors.In preparing the financial statements, management of the Company is responsible for assessing theCompany's ability to continue as a going concern, disclosing matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate the Company or to ceaseoperations, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company's financial reportingprocess.VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor's report that includesour opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conductedin accordance with the audit standards will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,they could reasonably be expected to influence the economic decisions of users taken on the basis of thesefinancial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintainprofessional scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due tofraud 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 materialmisstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,forgery, omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by management of the Company.
(4) Conclude on the appropriateness of using the going concern assumption by the management of theCompany, and conclude, based on the audit evidence obtained, whether a material uncertainty exists relatedto events or conditions that may cast significant doubt on the Company's ability to continue as a goingconcern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.However, future events or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and events in amanner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Company to express an opinion on the financial statements and bear all liabilityfor the opinion.
We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit matters, including any significant deficiencies in internalcontrol that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.
From the matters communicated with those charged with governance, we determine those matters thatwere of most significance in the audit of the financial statements of the current period and are therefore thekey audit matters.
We describe these matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication
| Grant Thornton International Ltd.(Special General Partnership ） | Chinese C.P.A.： Project Partner Chinese C.P.A.： |
| Beijing China | March 10,2021 | |
| Balance Sheet(Consolidated and Parent) | |||||
| December 31,2020 | |||||
| Prepared by: Shenzhen Textile (Holdings) Co., Ltd. | In RMB | ||||
| Iterms | Note V | December 31,2020 | December 31,2019 | ||
| Consolidated | Parent | Consolidated | Parent | ||
| Current asset: | |||||
| Monetary fund | （1） | 279,087,236.95 | 113,560,327.21 | 409,564,847.52 | 27,979,338.37 |
| Transactional financial assets | （2） | 684,617,260.06 | 514,277,000.82 | 830,000,000.00 | 650,000,000.00 |
| Notes receivable | （3） | 16,813,657.28 | 40,424,601.97 | ||
| Account receivable | （4） | 547,310,217.90 | 1,461,400.20 | 365,325,029.38 | 522,931.04 |
| Financing of receivables | （5） | 102,051,314.08 | 17,933,597.98 | ||
| Prepayments | （6） | 16,902,516.39 | 18,706.17 | 18,445,857.53 | 768,099.94 |
| Other account receivable | （7） | 5,265,002.71 | 7,450,934.40 | 12,440,761.13 | 17,039,506.00 |
| Incl：Interest receivable | 7,610,043.19 | 7,329,228.31 | |||
| Dividend receivable | |||||
| Inventories | （8） | 480,847,581.44 | 8,808.00 | 391,717,935.12 | |
| Assets held for sales | |||||
| Non-current asset due within 1 year | |||||
| Other current asset | （9） | 77,482,083.47 | 140,821,609.72 | ||
| Total of current assets | 2,210,376,870.28 | 636,777,176.80 | 2,226,674,240.35 | 696,309,875.35 | |
| Non-current assets: | |||||
| Debt investment | |||||
| Other investment on bonds | |||||
| Long-term receivable | |||||
| Long term share equity investment | （10） | 147,929,137.2 | 2,103,977,343 | 152,209,929.7 | 2,102,430,511 |
| 3 | .32 | 2 | .88 | ||
| Other equity instruments investment | （11） | 190,607,427.54 | 177,142,433.45 | 248,781,946.73 | 206,816,952.64 |
| Other non-current financial assets | （12） | 30,650,943.40 | |||
| Property investment | （13） | 110,572,471.92 | 101,644,481.93 | 112,730,320.90 | 107,199,622.80 |
| Fixed assets | （14） | 790,183,905.38 | 21,876,099.34 | 903,229,077.83 | 25,500,695.77 |
| Construction in progress | （15） | 1,301,750,141.12 | 839,866,275.92 | 19,552.00 | |
| Production physical assets | |||||
| Oil & gas assets | |||||
| Intangible assets | （16） | 36,048,978.91 | 492,923.62 | 36,517,996.34 | 659,937.75 |
| Development expenses | |||||
| Goodwill | （17） | ||||
| Long-term expenses to be amortized | （18） | 2,876,561.53 | 2,692,750.67 | 800,858.17 | |
| Deferred income tax asset | （19） | 5,243,425.26 | 5,097,360.00 | 5,618,026.43 | 5,466,478.06 |
| Other non-current asset | （20） | 143,307,689.66 | 96,871,196.43 | 3,079,321.10 | |
| Total of non-current assets | 2,759,170,681.95 | 2,507,101,838.09 | 2,304,725,645.64 | 2,448,894,609.07 | |
| Total of assets | 4,969,547,552.23 | 3,143,879,014.89 | 4,531,399,885.99 | 3,145,204,484.42 |
Legal Representative: Person-in-charge of the accounting work: Person-in -charge of the accounting organ:
| Balance Sheet(Consolidated and Parent)-continued | |||||
| December 31,2020 | |||||
| Prepared by: Shenzhen Textile (Holdings) Co., Ltd. | In RMB | ||||
| Iterms | Note V | December 31,2020 | December 31,2019 | ||
| Consolidated | Parent | Consolidated | Parent | ||
| Current liabilities: | |||||
| Short-term loans | |||||
| Transactional financial liabilities | |||||
| Notes payable | |||||
| Account payable | (21) | 329,468,601.90 | 411,743.57 | 241,297,770.64 | 411,743.57 |
| Advance receipts | (22) | 3,542,394.33 | 2,875,936.58 | 30,530,117.62 | 2,878,936.58 |
| Contract liabilities | (23) | 279,631.27 | |||
| Employees’ wage payable | (24) | 55,642,549.53 | 14,824,723.81 | 38,556,180.20 | 11,910,175.11 |
| Tax payable | (25) | 12,198,522.02 | 11,497,591.21 | 22,545,550.33 | 20,801,961.18 |
| Other account payable | (26) | 156,118,440.42 | 95,023,378.12 | 152,645,780.14 | 119,984,209.60 |
| Incl:Interest payable | |||||
| Dividend payable | |||||
| Liabilities held for sales | |||||
| Non-current liability due within 1 year | |||||
| Other current liability | |||||
| Total of current liability | 557,250,139.47 | 124,633,373.29 | 485,575,398.93 | 155,987,026.04 | |
| Non-current liabilities: | |||||
| Long-term loan | (27) | 343,100,174.35 | |||
| Bond payable | |||||
| Long-term payable | |||||
| Expected liabilities | |||||
| Deferred income | (28) | 110,740,322.21 | 500,000.00 | 121,264,571.22 | 600,000.00 |
| Deferred income tax liability | (19) | 59,141,666.58 | 56,150,418.06 | 69,944,345.66 | 66,953,097.14 |
| Other non-current liabilities | |||||
| Total non-current liabilities | 512,982,163.14 | 56,650,418.06 | 191,208,916.88 | 67,553,097.14 | |
| Total of liability | 1,070,232,302.61 | 181,283,791.35 | 676,784,315.81 | 223,540,123.18 | |
| Owners' equity: | (29) | 507,772,279.00 | 507,772,279.00 | 509,338,429.00 | 509,338,429.00 |
| Share capital | (30) | 1,967,514,358.53 | 1,583,307,509.86 | 1,974,922,248.03 | 1,589,869,499.36 |
| Less：Shares in stock | (31) | 7,525,438.20 | 7,525,438.20 | 16,139,003.40 | 16,139,003.40 |
| Other comprehensive income | (32) | 116,605,932.42 | 107,632,186.85 | 119,737,783.31 | 110,764,037.74 |
| Special reserve | |||||
| Surplus reserves | (33) | 94,954,652.14 | 94,954,652.14 | 90,596,923.39 | 90,596,923.39 |
| Retained profit | (34) | 86,912,390.50 | 676,454,033.89 | 49,307,764.03 | 637,234,475.15 |
| Total of owner’s equity belong to the parent company | 2,766,234,174.39 | 2,962,595,223.54 | 2,727,764,144.36 | 2,921,664,361.24 | |
| Minority shareholders’ equity | 1,133,081,075.23 | 1,126,851,425.82 | |||
| Total of owners' equity | 3,899,315,249.62 | 2,962,595,223.54 | 3,854,615,570.18 | 2,921,664,361.24 | |
| Total of liabilities and owners’ equity | 4,969,547,552.23 | 3,143,879,014.89 | 4,531,399,885.99 | 3,145,204,484.42 |
Legal Representative: Person-in-charge of the accounting work: Person-in -charge of the accounting organ:
| Income Statement(Consolidated and Parent) | |||||
| 2020 | |||||
| Prepared by: Shenzhen Textile (Holdings) Co., Ltd. | In RMB | ||||
| Iterms | Note V | Year 2020 | Year 2019 | ||
| Consolidated | Parent | Consolidated | Parent | ||
| I. Income from the key business | (35) | 2,108,964,687.80 | 61,296,888.21 | 2,158,184,855.71 | 123,585,753.10 |
| Less:Business income | (35) | 1,814,298,395.02 | 10,666,274.44 | 1,973,495,608.35 | 60,654,551.98 |
| Business tax and surcharge | (36) | 7,347,125.65 | 2,435,257.11 | 8,466,143.40 | 3,088,345.17 |
| Sales expense | (37) | 28,644,230.87 | - | 20,785,078.66 | |
| Administrative expense | (38) | 105,094,934.36 | 38,680,586.21 | 96,870,842.37 | 38,275,813.43 |
| R & D expense | (39) | 67,160,964.22 | - | 53,178,714.33 | |
| Financial expenses | (40) | 8,287,888.28 | -1,020,628.37 | 15,862,799.64 | -2,114,743.82 |
| Including：Interest expense | 234,815.67 | 13,780.96 | 4,893,018.58 | 476,191.57 | |
| Interest income | 3,702,735.59 | 1,012,329.64 | 8,593,894.58 | 2,611,348.37 | |
| Add：Other income | (41) | 29,506,252.69 | 117,006.72 | 27,547,902.92 | 106,720.83 |
| Investment gain（“-”for loss） | (42) | 22,599,670.74 | 35,656,479.65 | 78,038,530.25 | 68,053,467.35 |
| Including: investment gains from affiliates | -3,446,613.86 | -3,964,766.27 | -7,404,083.27 | -7,404,083.27 | |
| Financial assets measured at amortized cost cease to be recognized as income | |||||
| Net exposure hedging income | |||||
| Changing income of fair value | (43) | 2,687,518.74 | 392,767.12 | ||
| Credit impairment loss | (44) | -10,394,533 | -799,858.92 | 7,005,890.93 | -194,490.83 |
| .65 | |||||
| Impairment loss of assets | (45) | -72,412,477.63 | -95,343.40 | -97,172,532.71 | |
| Assets disposal income | (46) | 276,544.73 | 286,963.56 | 3,967.97 | 280.00 |
| III. Operational profit（“-”for loss） | 50,394,125.02 | 46,093,413.55 | 4,949,428.32 | 91,647,763.69 | |
| Add ：Non-operational income | (47) | 1,445,662.38 | 562,910.99 | 5,003,548.34 | 146,868.07 |
| Less: Non-operating expense | (48) | 138,421.27 | 27,244.40 | 420,575.07 | |
| IV. Total profit(“-”for loss) | 51,701,366.13 | 46,629,080.14 | 9,532,401.59 | 91,794,631.76 | |
| Less：Income tax expenses | (49) | 8,203,720.98 | 7,746,152.13 | 28,059,080.22 | 25,628,936.32 |
| V. Net profit | 43,497,645.15 | 38,882,928.01 | -18,526,678.63 | 66,165,695.44 | |
| (I) Classification by business continuity | |||||
| 1.Net continuing operating profit | 43,497,645.15 | 38,882,928.01 | -18,526,678.63 | 66,165,695.44 | |
| 2.Termination of operating net profit | |||||
| (II) Classification by ownership | |||||
| 1.Net profit attributable to the owners of parent company | 37,267,995.74 | 38,882,928.01 | 19,679,910.43 | 66,165,695.44 | |
| 2.Minority shareholders’ equity | 6,229,649.41 | -38,206,589.06 | |||
| VI. Net after-tax of other comprehensive income | -3,131,850.89 | -3,131,850.89 | -52,500,997.28 | -52,500,997.28 | |
| Net of profit of other comprehensive income attributable to owners of the parent company | -3,131,850.89 | -3,131,850.89 | -52,500,997.28 | -52,500,997.28 | |
| (I) Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period | -2,815,824.67 | -2,815,824.67 | -52,715,913.64 | -52,715,913.64 | |
| 1.Re-measurement of defined benefit plans of changes in net debt or net assets | |||||
| 2.Other comprehensive income under the equity method investee can not be reclassified into profit or loss. |
| 3.Changes in the fair value of investments in other equity instruments | -2,815,824.67 | -2,815,824.67 | -52,715,913.64 | -52,715,913.64 | |
| 4.Changes in the fair value of the company’s credit risks | |||||
| 5.Other | |||||
| (II) Other comprehensive income that will be reclassified into profit or loss | -316,026.22 | -316,026.22 | 214,916.36 | 214,916.36 | |
| 1.Other comprehensive income under the equity method investee can be reclassified into profit or loss. | |||||
| 2.Changes in the fair value of investments in other debt obligations | |||||
| 3.Gains and losses from changes in fair value available for sale financial assets | |||||
| 4.Other comprehensive income arising from the reclassification of financial assets | |||||
| 5.Held-to-maturity investments reclassified to gains and losses of available for sale financial assets | |||||
| 6.Allowance for credit impairments in investments in other debt obligations | -316,026.22 | -316,026.22 | 214,916.36 | 214,916.36 | |
| 7. Reserve for cash flow hedges | |||||
| 8.Translation differences in currency financial statements | |||||
| 9.Other | |||||
| Net of profit of other comprehensive income attributable to Minority shareholders’ equity | |||||
| VII. Total comprehensive income | 40,365,794.26 | 35,751,077.12 | -71,027,675.91 | 13,664,698.16 | |
| Total comprehensive income attributable to the owner of the parent company | 34,136,144.85 | 35,751,077.12 | -32,821,086.85 | 13,664,698.16 | |
| Total comprehensive income attributable minority shareholders | 6,229,649.41 | -38,206,589.06 | |||
| VIII. Earnings per share |
| (I)Basic earnings per share | 0.07 | 0.04 | |||
| (II)Diluted earnings per share | 0.07 | 0.04 |
Legal Representative: Person-in-charge of the accounting work: Person-in -charge of the accounting organ:
| Cash flow statement(Consolidated and Parent) | |||||
| 2020 | |||||
| Prepared by: Shenzhen Textile (Holdings) Co., Ltd. | In RMB | ||||
| Iterms | Note V | Year 2020 | Year 2019 | ||
| Consolidated | Parent | Consolidated | Parent | ||
| I.Cash flows from operating activities: | |||||
| Cash received from sales of goods or rending of services | 1,827,292,276.43 | 64,167,036.73 | 2,239,603,149.40 | 76,051,827.26 | |
| Tax returned | 116,428,895.93 | - | 37,887,179.50 | ||
| Other cash received from business operation | (50) | 123,408,000.43 | 6,524,378.62 | 61,696,291.74 | 16,144,244.57 |
| Sub-total of cash inflow | 2,067,129,172.79 | 70,691,415.35 | 2,339,186,620.64 | 92,196,071.83 | |
| Cash paid for purchasing of merchandise and services | 1,742,576,211.51 | 4,462,365.49 | 1,664,396,359.07 | 5,479,277.51 | |
| Cash paid to staffs or paid for staffs | 181,692,353.93 | 27,619,751.65 | 163,768,856.39 | 22,463,068.76 | |
| Taxes paid | 43,712,017.07 | 34,788,061.46 | 31,514,698.29 | 20,712,126.49 | |
| Other cash paid for business activities | (50) | 97,217,657.52 | 8,944,859.88 | 96,360,918.39 | 25,827,850.33 |
| Sub-total of cash outflow from business activities | 2,065,198,240.03 | 75,815,038.48 | 1,956,040,832.14 | 74,482,323.09 | |
| Net cash generated from /used in operating activities | 1,930,932.76 | -5,123,623.13 | 383,145,788.50 | 17,713,748.74 | |
| II. Cash flow generated by investing: | |||||
| Cash received from investment retrieving | 6,437,640.00 | 6,437,640.00 | 60,428,769.00 | 72,428,769.00 | |
| Cash received as investment gains | 2,908,856.94 | 1,957,306.47 | 5,821,323.94 | 2,715,003.90 | |
| Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets | 2,800,914.39 | 2,759,267.00 | 298,580.00 | 34,500.00 | |
| Net cash received from disposal of subsidiaries or other operational | - | - | |||
| units | |||||
| Other investment-related cash received | (50) | 3,240,861,003.37 | 1,623,459,188.57 | 4,164,457,418.70 | 1,448,303,833.93 |
| Sub-total of cash inflow due to investment activities | 3,253,008,414.70 | 1,634,613,402.04 | 4,231,006,091.64 | 1,523,482,106.83 | |
| Cash paid for construction of fixed assets, intangible assets and other long-term assets | 564,014,103.94 | 2,528,077.97 | 618,799,656.48 | 10,991,096.71 | |
| Cash paid as investment | - | 3,555,968.96 | |||
| Net cash received from subsidiaries and other operational units | - | - | |||
| Other cash paid for investment activities | (50) | 3,008,065,275.20 | 1,530,015,275.20 | 4,556,430,000.00 | 1,580,000,000.00 |
| Sub-total of cash outflow due to investment activities | 3,572,079,379.14 | 1,536,099,322.13 | 5,175,229,656.48 | 1,590,991,096.71 | |
| Net cash flow generated by investment | -319,070,964.44 | 98,514,079.91 | -944,223,564.84 | -67,508,989.88 | |
| III.Cash flow generated by financing: | |||||
| Cash received as investment gains | |||||
| Including: Cash received as investment from minor shareholders | |||||
| Cash received as loans | 342,660,000.00 | 86,033,453.75 | |||
| Other financing –related cash received | (50) | 6,545,900.00 | 203,775,154.17 | 3,806,454.17 | |
| Sub-total of cash inflow from financing activities | 342,660,000.00 | 6,545,900.00 | 289,808,607.92 | 3,806,454.17 | |
| Cash to repay debts | 536,552,100.76 | ||||
| Cash paid as dividend, profit, or interests | 3,511,622.58 | 11,231.64 | 43,473,617.45 | 356,766.80 | |
| Including: Dividend and profit paid by subsidiaries to minor shareholders | - | - | |||
| Other cash paid for financing activities | (50) | 9,344,136.30 | 14,344,136.30 | 13,791,675.60 | 11,091,675.60 |
| Sub-total of cash outflow due to financing activities | 12,855,758.88 | 14,355,367.94 | 593,817,393.81 | 11,448,442.40 |
| Net cash flow generated by financing | 329,804,241.12 | -7,809,467.94 | -304,008,785.89 | -7,641,988.23 | |
| IV. Influence of exchange rate alternation on cash and cash equivalents | -2,973,560.67 | 158,915.19 | |||
| V.Net increase of cash and cash equivalents | 9,690,648.77 | 85,580,988.84 | -864,927,647.04 | -57,437,229.37 | |
| Add: balance of cash and cash equivalents at the beginning of term | 268,646,588.18 | 27,979,338.37 | 1,133,574,235.22 | 85,416,567.74 | |
| VI. Balance of cash and cash equivalents at the end of term | 278,337,236.95 | 113,560,327.21 | 268,646,588.18 | 27,979,338.37 |
Legal Representative: Person-in-charge of the accounting work: Person-in -charge of the accounting organ:
| Consolidated Statement on Change in Owners’ Equity | |||||||||
| 2020 | |||||||||
| Prepared by: Shenzhen Textile (Holdings) Co., Ltd. | In RMB | ||||||||
| Iterms | Year 2020 | ||||||||
| Owner’s equity Attributable to the Parent Company | Minor shareholders’ equity | Total of owners’ equity | |||||||
| share capital | Capital reserves | Less: Shares in stock | Other Comprehensive Income | Specialized reserve | Surplus reserves | Retained profit | |||
| I.Balance at the end of last year | 509,338,429.00 | 1,974,922,248.03 | 16,139,003.40 | 119,737,783.31 | - | 90,596,923.39 | 49,307,764.03 | 1,126,851,425.82 | 3,854,615,570.18 | |
| Add: Change of accounting policy | - | |||||||||
| Correcting of previous errors | - | |||||||||
| Merger of entities under common control | - | |||||||||
| Other | - | |||||||||
| II.Balance at the beginning of current year | 509,338,429.00 | 1,974,922,248.03 | 16,139,003.40 | 119,737,783.31 | - | 90,596,923.39 | 49,307,764.03 | 1,126,851,425.82 | 3,854,615,570.18 | |
| III.Changed in the current year | -1,566,150.00 | -7,407,889.50 | -8,613,565.20 | -3,131,850.89 | - | 4,357,728.75 | 37,604,626.47 | 6,229,649.41 | 44,699,679.44 | |
| （1）Total comprehensive income | 1,562,508.59 | 37,267,995.74 | 6,229,649.41 | 45,060,153.74 | ||||||
| （II）Investment or decreasing of capital by owners | -1,566,150.00 | -7,407,889.50 | -8,613,565.20 | - | - | - | - | - | -360,474.30 |
| 1．Ordinary Shares invested by shareholders | - | |||||||||
| 2．Amount of shares paid and accounted as owners’ equity | - | |||||||||
| 3．Other | -1,566,150.00 | -7,407,889.50 | -8,613,565.20 | -360,474.30 | ||||||
| （III）Profit allotment | - | - | - | - | - | 3,888,292.80 | -3,888,292.80 | - | - | |
| 1.Providing of surplus reserves | 3,888,292.80 | -3,888,292.80 | - | |||||||
| 2．Allotment to the owners (or shareholders) | - | |||||||||
| 3．Other | - | |||||||||
| (IV) Internal transferring of owners’ equity | - | - | - | -4,694,359.48 | - | 469,435.95 | 4,224,923.53 | - | - | |
| 1. Capitalizing of capital reserves (or to capital shares) | - | |||||||||
| 2. Capitalizing of surplus reserves (or to capital shares) | - | |||||||||
| 3．Making up losses by surplus reserves. | - | |||||||||
| 4.Change amount of defined benefit plans that carry forward | -4,694,359.48 | 469,435.95 | 4,224,923.53 |
| retained earnings | ||||||||||
| 5.Other | - | |||||||||
| (V) Special reserves | - | - | - | - | - | - | - | - | - | |
| 1. Provided this year | - | |||||||||
| 2．Used this term | - | |||||||||
| （VI）Other | - | |||||||||
| IV. Balance at the end of this term | 507,772,279.00 | 1,967,514,358.53 | 7,525,438.20 | 116,605,932.42 | - | 94,954,652.14 | 86,912,390.50 | 1,133,081,075.23 | 3,899,315,249.62 |
Legal Representative: Person-in-charge of the accounting work: Person-in -charge of the accounting organ:
| Consolidated Statement on Change in Owners’ Equity | ||||||||
| 2019 | ||||||||
| Prepared by: Shenzhen Textile (Holdings) Co., Ltd. | In RMB | |||||||
| Year 2019 | ||||||||
| Owner’s equity Attributable to the Parent Company | Minor shareholders’ equity | Total of owners’ equity | ||||||
| share capital | Capital reserves | Less: Shares in stock | Other Comprehensive Income | Specialized reserve | Surplus reserves | Retained profit | ||
| 511,274,149.00 | 1,865,716,983.63 | 27,230,679.00 | 1,339,208.41 | 80,004,803.23 | -57,774,473.41 | 1,086,150,534.88 | 3,459,480,526.74 | ||
| 170,899,572.18 | 3,975,550.61 | 35,779,955.53 | 210,655,078.32 | ||||||
| - | |||||||||
| - | |||||||||
| - | |||||||||
| 511,274,149.00 | 1,865,716,983.63 | 27,230,679.00 | 172,238,780.59 | - | 83,980,353.84 | -21,994,517.88 | 1,086,150,534.88 | 3,670,135,605.06 | |
| -1,935,720.00 | 109,205,264.40 | -11,091,675.60 | -52,500,997.28 | - | 6,616,569.55 | 71,302,281.91 | 40,700,890.94 | 184,479,965.12 | |
| 5,737,943.75 | 19,679,910.43 | -38,206,589.06 | -12,788,734.88 | ||||||
| -1,935,720.00 | -9,155,955.60 | -11,091,675.60 | - | - | - | - | - | - | |
| - | |||||||||
| - | |||||||||
| -1,935,720.00 | -9,155,955.60 | -11,091,675.60 | - | ||||||
| - | - | - | - | - | 6,616,569.55 | -6,616,569.55 | - | - | |
| 6,616,569.55 | -6,616,569.55 | - | |||||||
| - | |||||||||
| - | |||||||||
| - | - | - | -58,238,941.03 | - | - | 58,238,941.03 | - | - |
| - | |||||||||
| - | |||||||||
| - | |||||||||
| -58,238,941.03 | 58,238,941.03 | ||||||||
| - | |||||||||
| - | - | - | - | - | - | - | - | - | |
| - | |||||||||
| - | |||||||||
| 118,361,220.00 | 78,907,480.00 | 197,268,700.00 | |||||||
| 509,338,429.00 | 1,974,922,248.03 | 16,139,003.40 | 119,737,783.31 | - | 90,596,923.39 | 49,307,764.03 | 1,126,851,425.82 | 3,854,615,570.18 |
Legal Representative: Person-in-charge of the accounting work: Person-in -charge of the accounting organ:
Notes to financial statements
I. Basic Information of the Company
1.Company profile
Shenzhen Textile (Group) Co., Ltd. (hereinafter referred to as "Company" or "the Company") is ajoint-stock company registered in Guangdong Province with a registered capital of RMB 511.274149 millionand a unified social credit code of 91440300192173749Y. The Company has publicly issued RMB commonshares (A shares) and domestic listed foreign shares (B shares) to the public at home and abroad, and listedand traded them. The Company is headquartered address are 6/F,Shenfang Building, No.3 Huaqiang Road.North, Futian District, Shenzhen.The company was previously the Shenzhen Textile Industry Company, on April 13, 1994, approved bythe Letter(1994)No.15 issued by Shenzhen Municipal People's Government, the Company was restructuredand named as Shenzhen Textile (Group) Co., Ltd. ，As of December 31, 2020, the Company has issued atotal of 507,772,279.00 shares.
The Company has established the corporate governance structure of General Meeting of Shareholders,Board of Directors and Board of Supervisors, and currently has the Board Office, Office, StrategicDevelopment Department, Operation and Management Department, Finance Department, Audit Department,Human Resources Department and other departments.
the Company is mainly engaged in high-tech industry focusing on R&D, production and marketing ofpolarizers for liquid crystal display, management of properties in bustling business districts of Shenzhen andreserved high-class textile and garment business.
The financial statements have been authorized for issuance of the 2n meeting of the 8th Board ofDirectors of the Group on March 10,2021.
2.Scope of consolidated financial statements
As of December 31, 2020, A total of 8 subsidiaries of the Company are included in the scope ofconsolidation. For details, please refer to Note VII "Rights and Interests in Other Subjects". Theconsolidation scope of the Company this year has increased by one compared with the previous year. Fordetails, please refer to Note VI "Change of Consolidation Scope".II.Basis for the preparation of financial statements
The financial statements are prepared in accordance with the Accounting Standards for BusinessEnterprises promulgated by the Ministry of Finance and its application guidelines, interpretations and otherrelevant provisions (collectively referred to as the "Accounting Standards for Business Enterprises"). Inaddition, the Company also disclosed relevant financial information in accordance with the Rules No.15 forthe Information Disclosure and Compilation of Companies Offering Securities Public Issuance - GeneralProvisions on Financial Report (revised in 2014) issued by China Securities Regulatory Commission.
The financial statements are presented on the basis of going concern.
The accounting of the Company is based on accrual basis. Except for some financial instruments, thefinancial statements are based on historical costs. In case of asset impairment, impairment provision shall bemade in accordance with relevant regulations.III. Important accounting policies and estimations
According to its own production and operation characteristics, the Company determines the policies ofdepreciation of fixed assets, amortization of intangible assets and revenue recognition. See Note III. 16, III.19 and III. 26 for specific accounting policies.
1. Statement on complying with corporate accounting standards
This financial statement conforms to the requirements of Accounting Standards for Business Enterprises, andtruly and completely reflects the combination and financial status of the Company on December 31, 2020, aswell as the combination and operating results and cash flow of the Company in 2020.
2.Fiscal Year
The Company adopts the Gregorian calendar year commencing on January 1 and ending on December31 as the fiscal year.
3. Operating cycle
The operating cycle of the Company is 12 months.
4. Accounting standard money
The Company and its domestic subsidiaries use RMB as their bookkeeping base currency. The overseassubsidiaries of the Company determine RMB as their bookkeeping base currency according to the currencyin the main economic environment in which they operate. The currency used by the Company in preparingthe financial statements is RMB.
5. Accounting process method of enterprise consolidation under same and different controlling.
（1）Enterprise merger under same control：
For business combination under the same control, the assets and liabilities of the combined partyacquired by the merging party during the combination shall be measured according to the book value of thecombined party in the consolidated financial statements of the final controlling party on the combination date,except for the adjustment due to different accounting policies. The difference between the book value of thecombination consideration and the book value of the net assets obtained in the combination adjusts the capitalreserve. If the capital reserve is insufficient to offset, the retained earnings will be adjusted.
Business combination under the same control shall be achieved step by step through multipletransactions
In individual financial statements, the share of the book value of the net assets of the combined party inthe consolidated financial statements of the ultimate controlling party shall be taken as the initial investmentcost of the investment on the combination day calculated by the shareholding ratio on the combination day;Adjust the capital reserve for the difference between the initial investment cost and the book value of theinvestment held before the combination plus the book value of the consideration paid on the new day of thecombination. If the capital reserve is insufficient to offset, adjust the retained earnings.
In the consolidated financial statements, the assets and liabilities of the combined party acquired by themerging party in the combination shall be measured according to the book value in the consolidated financialstatements of the ultimate controlling party on the combination date, except for the adjustment due todifferent accounting policies; The difference between the book value of the investment held before thecombination plus the book value of the consideration paid on the new day of the combination and the bookvalue of the net assets obtained during the combination will be adjusted for capital reserve. If the capitalreserve is insufficient to offset, the retained earnings will be adjusted. For the long-term equity investmentheld by the merging party before obtaining the control right of the combined party, the relevant profits and
losses, other comprehensive income and other changes in owner's equity have been recognized from the dateof obtaining the original equity and the date when the merging party and the combined party are under thesame final control to the combination date, and the initial retained earnings or current profits and lossesduring the comparative report period shall be offset respectively.
(2) Business combination involving entities not under common control
For business combination not under the same control, the combination cost refers to the assets paid,liabilities incurred or assumed, and fair value of the issued equity securities in order to gain control over theacquiree on the acquisition date. On the acquisition date, the acquired assets, liabilities and contingentliabilities of the acquiree are recognized at fair value.The difference between the combination cost and the fair value share of identifiable net assets acquiredin the combination is recognized as goodwill, and the accumulated impairment provision is deducted by costfor subsequent measurement; The difference between the combination cost and the fair value share ofidentifiable net assets acquired by the acquiree in the combination shall be recorded into the current profitsand losses after review.Business combination under the same control shall be achieved step by step through multipletransactionsIn individual financial statements, the sum of the book value of the equity investment held by theacquiree before the acquisition date and the new investment cost on the acquisition date is taken as the initialinvestment cost of the investment. Other comprehensive income recognized by the equity investment heldbefore the acquisition date due to accounting by the equity method is not treated on the acquisition date, andaccounting treatment is carried out on the same basis as that of the investee's direct disposal of related assetsor liabilities; The owner's equity recognized due to the change of owner's equity of the investee except netprofit and loss, other comprehensive income and profit distribution shall be transferred to the current profitand loss during the disposal period when the investment is disposed. If the equity investment held before theacquisition date is measured by fair value, the accumulated changes in fair value originally included in othercomprehensive income will be transferred to the current profits and losses when accounting by cost method.In the consolidated financial statements, the consolidated cost is the sum of the consideration paid on theacquisition date and the fair value of the equity of the acquiree held before the acquisition date on theacquisition date. The equity of the acquiree held before the acquisition date shall be re-measured according tothe fair value of the equity on the acquisition date, and the difference between the fair value and its bookvalue shall be included in the current income; Equity of the acquiree held before the acquisition date involvesother comprehensive income, and other changes in owner's equity are converted into current income on theacquisition date, except for other comprehensive income arising from the remeasurement of net liabilities orchanges in net assets of the set income plan by the investee.
(3) Treatment of transaction costs in business combination
Intermediary expenses such as auditing, legal services, evaluation and consultation, and other relatedmanagement expenses incurred for business combination are included in the current profits and losses whenthey occur. Transaction costs of equity securities or debt securities issued as combination consideration areincluded in the initial recognition amount of equity securities or debt securities.
6 .Compilation method of consolidated financial statements
(1)The scope of consolidation
The consolidation scope of consolidated financial statements is determined on the basis of control.Control refers to that the company has the power over the investee, enjoys variable returns by participating inthe related activities of the investee, and has the ability to use the power over the investee to affect its returnamount. Subsidiaries refer to subjects controlled by the Company (including enterprises, divisible parts ofinvestee, structured subjects, etc.).The consolidation scope of consolidated financial statements is determined on the basis of control.Control refers to that the company has the power over the investee, enjoys variable returns by participating inthe related activities of the investee, and has the ability to use the power over the investee to affect its returnamount. Subsidiaries refer to subjects controlled by the Company (including enterprises, divisible parts ofinvestee, structured subjects, etc.).
(2) Compilation method of consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and itssubsidiaries, and are prepared by the Company according to other relevant information. When preparing theconsolidated financial statements, the accounting policies and accounting period requirements of theCompany and its subsidiaries are consistent, and major transactions and current balances between companiesare offset.
During the reporting period, the subsidiaries and businesses increased due to the business combinationunder the same control shall be deemed to be included in the consolidation scope of the Company from thedate when they are controlled by the ultimate controller, and their operating results and cash flows from thedate when they are controlled by the ultimate controller shall be included in the consolidated incomestatement and the consolidated cash flow statement respectively.
During the reporting period, the income, expenses and profits of subsidiaries and businesses increasedfrom the acquisition date to the end of the reporting period due to business combination not under the samecontrol during the reporting period are included in the consolidated income statement, and their cash flowsare included in the consolidated cash flow statement.
The part of shareholders' equity of subsidiaries that is not owned by the Company is listed separately asminority shareholders' equity in the consolidated balance sheet; The share of minority shareholders' equity inthe current net profit and loss of subsidiaries is listed as "minority shareholders' profit and loss" under the netprofit item in the consolidated income statement. If the loss of subsidiary shared by minority shareholdersexceeds the share enjoyed by minority shareholders in the initial owner's equity of such subsidiary, thebalance still offsets minority shareholders' equity.
(3) Acquisition of minority shareholders' equity of subsidiaries
The capital reserve in the consolidated balance sheet shall be adjusted for the difference between thenewly acquired long-term equity investment cost due to the acquisition of minority shares and the share ofnet assets continuously calculated by subsidiaries from the acquisition date or combination date, and thedifference between the disposal price obtained from partial disposal of equity investment in subsidiarieswithout losing control and the share of net assets continuously calculated by subsidiaries from the acquisitiondate or combination date corresponding to the disposal of long-term equity investment. If the capital reserveis insufficient to offset, the retained earnings shall be adjusted.
(4) Treatment of losing control over subsidiaries
If the control over the original subsidiary is lost due to the disposal of part of the equity investment orother reasons, the remaining equity shall be re-measured according to its fair value on the date of loss of
control; The sum of the consideration obtained from the disposal of equity and the fair value of remainingequity, minus the sum of the share of the original subsidiary's book value of net assets calculatedcontinuously from the acquisition date and goodwill calculated according to the original shareholding ratio,and the difference formed is included in the investment income of the current period of loss of control.Other comprehensive income related to the original subsidiary's equity investment will be transferred tothe current profits and losses when the control right is lost, except for other comprehensive income generatedby the investee's remeasurement of the net liabilities or changes in net assets of the set income plan.
7.Joint venture arrangements classification and Co-operation accounting treatment
Joint venture arrangement refers to an arrangement under the joint control of two or more participants.The joint venture arrangement of the Company is divided into joint operation and joint venture.
(1) Joint operation
Joint operation refers to the joint venture arrangement in which the Company is entitled to the assetsrelated to the arrangement and bears the liabilities related to the arrangement.
The Company recognizes the following items related to the share of interests in joint operation, andcarries out accounting treatment in accordance with the relevant accounting standards for businessenterprises:
A. Recognize assets held separately and assets held jointly according to their shares;
B. Recognize the liabilities undertaken separately, and recognize the liabilities jointly undertakenaccording to their shares;
C. Recognize the income generated from the sale of its share of joint operating output;
D. Recognize the income generated by the sale of output from joint operation according to their shares;
E. Recognize the expenses incurred separately, and recognize the expenses incurred in joint operationaccording to their shares.
(2) Joint venture
A joint venture refers to a joint venture arrangement in which the Company only has rights to the netassets of the arrangement.
The Company shall carry out accounting treatment on the investment of the joint venture in accordancewith the provisions on accounting of long-term equity investment by the equity method.
8.Recognition Standard of Cash & Cash Equivalents
Cash refers to cash on hand and deposits that can be used for payment at any time. Cash equivalentsrefer to investments held by the Company with short term, strong liquidity, easy conversion into known cashand little risk of value change.
9.Foreign currency transaction
In case of foreign currency business of the Company, the exchange rate determined by a systematic andreasonable method which is similar to the spot exchange rate on the transaction date shall be used to convertit into the bookkeeping base currency amount.
Balance sheet date: foreign currency monetary items shall be converted at the spot exchange rate on thebalance sheet date. Exchange differences arising from the difference between the spot exchange rate on the
balance sheet date and the spot exchange rate at the time of initial recognition or the previous balance sheetdate are included in the current profits and losses; For foreign currency non-monetary items measured athistorical cost, the spot exchange rate on the transaction date is still adopted; Foreign currency non-monetaryitems measured at fair value are converted at the spot exchange rate on the fair value determination date, andthe difference between the converted bookkeeping base currency amount and the original bookkeeping basecurrency amount is included in the current profits and losses.
10.Financial instruments
Financial instruments refer to contracts that form financial assets of one party and financial liabilities orequity instruments of other parties.
(1) Recognition and derecognition of financial instruments
When the Company becomes a party to a financial instrument contract, a financial asset or financialliability is recognized.
Financial assets that meet one of the following conditions shall be derecognized:
① Termination of the contractual right to receive cash flow from the financial asset;
② The financial asset has been transferred and the following conditions for derecognition of financialasset transfer are met.
If all or part of the current obligations of a financial liability have been discharged, the financial liabilityor part of it shall be derecognized. If the Company (debtor) signs an agreement with the creditor to replace theexisting financial liabilities by assuming new financial liabilities, and the contract terms of the new financialliabilities are substantially different from those of the existing financial liabilities, the existing financialliabilities shall be derecognized and the new financial liabilities shall be recognized at the same time.
When trading the financial assets in a conventional way, accounting recognition and derecognition shallbe carried out according to the trading day.
(2) Classification and measurement of financial assets
According to the business model of managing financial assets and the contractual cash flowcharacteristics of financial assets, the Company divides financial assets into the following three categories:
financial assets measured at amortized cost, financial assets measured at fair value with changes included inother comprehensive income, and financial assets measured at fair value with changes included in currentprofits and losses.
Financial assets measured at amortized cost
The Company classifies the financial assets that meet the following conditions and are not designated tobe measured at fair value with changes included in current profits and losses as financial assets measured atamortized cost:
The Company's business model of managing such financial assets is to collect contract cash flow as thegoal;
According to the contract terms of the financial asset, the cash flow generated on a specific date is onlythe payment of principal and interest based on the unpaid principal amount.
After initial recognition, such financial assets are measured in amortized cost by the effective interestrate method. Gains or losses arising from financial assets measured in amortized cost that are not part of any
hedging relationship are included in current profits and losses when derecognition, amortization according tothe effective interest rate method, or impairment recognition.
Financial assets measured at fair value and changes included in other comprehensive incomeThe Company classifies financial assets that meet the following conditions and are not designated to bemeasured at fair value with changes included in current profits and losses as financial assets measured at fairvalue with changes included in other comprehensive income:
The company's business model of managing the financial assets aims at both collecting contract cashflow and selling the financial assets;According to the contract terms of the financial asset, the cash flow generated on a specific date is onlythe payment of principal and interest based on the unpaid principal amount.After initial recognition, the fair value of such financial assets is subsequently measured. Interest,impairment losses or gains and exchange gains and losses calculated by the effective interest rate method areincluded in the current profits and losses, while other gains or losses are included in other comprehensiveincome. Upon termination of recognition, the accumulated gains or losses previously included in othercomprehensive income shall be transferred out of other comprehensive income and included in currentprofits and losses.Financial assets measured at fair value with changes included in current profits and lossesExcept for the above financial assets measured at amortized cost and at fair value with changes includedin other comprehensive income, the Company classifies all other financial assets as financial assets measuredat fair value with changes included in current profits and losses. At the time of initial recognition, in order toeliminate or significantly reduce accounting mismatch, the Company irrevocably designated some financialassets that should have been measured at amortized cost or at fair value with changes included in othercomprehensive income as financial assets measured at fair value with changes included in current profits andlosses.
After initial recognition, the financial assets are subsequently measured at fair value, and the resultinggains or losses (including interest and dividend income) are included in the current profits and losses, unlessthe financial assets are part of the hedging relationship.
However, for non-trading equity instrument investments, the Company can irrevocably designate themas financial assets measured at fair value with changes included in other comprehensive income upon initialrecognition. The designation is made on the basis of a single investment, and the relevant investmentconforms to the definition of equity instruments from the perspective of the issuer.
After initial recognition, the fair value of such financial assets is subsequently measured. Dividendincome that meets the requirements is included in profit or loss, and other gains or losses and changes in fairvalue are included in other comprehensive income. Upon termination of recognition, the accumulated gainsor losses previously included in other comprehensive income shall be transferred out of other comprehensiveincome and included in retained income.
The business model of managing financial asset refers to how the Company manages financial assets togenerate cash flow. The business model determines whether the cash flow of financial assets managed by theCompany comes from contract cash flow, sale of financial assets or both. The Company determines the
business model of managing financial assets based on objective facts and specific business objectives ofmanaging financial assets decided by key management personnel.The Company evaluates the contractual cash flow characteristics of financial assets to determinewhether the contractual cash flow generated by related financial assets on a specific date is only the paymentof principal and interest based on the unpaid principal amount. Where, the principal refers to the fair value offinancial assets at initial recognition; Interest includes consideration for the time value of money, credit riskrelated to the unpaid principal amount in a specific period, and other basic borrowing risks, costs and profits.In addition, the Company evaluates the contract clauses that may cause changes in the time distribution oramount of cash flow of financial assets contracts to determine whether they meet the requirements of theabove-mentioned contract cash flow characteristics.Only when the Company changes its business model for managing financial assets, all affected financialassets shall be reclassified on the first day of the first reporting period after the business model changes,otherwise, financial assets shall not be reclassified after initial recognition.Financial assets are measured at fair value upon initial recognition. For financial assets measured at fairvalue, whose changes are included in current profits and losses, relevant transaction costs are directlyincluded in current profits and losses; For other types of financial assets, relevant transaction costs areincluded in the initial recognition amount. Accounts receivable arising from the sale of products or theprovision of labor services that do not include or take into account significant financing components areinitially recognized by the Company in accordance with the amount of consideration that the Company isexpected to be entitled to receive.
(3) Classification and measurement of financial liabilities
At initial recognition, the financial liabilities of the Company are classified into: financial liabilitiesmeasured at fair value with changes included in current profits and losses, and financial liabilities measuredat amortized cost. For financial liabilities that are not classified as measured at fair value with changesincluded in current profits and losses, relevant transaction costs are included in their initial recognitionamount.
Financial liabilities measured at fair value with changes included in the current profits and losses
Financial liabilities measured at fair value with changes included in current profits and losses includetransactional financial liabilities and financial liabilities designated at fair value at initial recognition withchanges included in current profits and losses. Such financial liabilities are subsequently measured accordingto fair value, and the gains or losses caused by changes in fair value and dividends and interest expensesrelated to such financial liabilities are included in current profits and losses.
Financial liabilities measured in amortized cost
Other financial liabilities are subsequently measured according to the amortized cost by the effectiveinterest rate method, and the gains or losses arising from derecognition or amortization are included in thecurrent profits and losses.
Distinction between financial liabilities and equity instruments
Financial liabilities refer to liabilities that meet one of the following conditions:
① Contract obligation to deliver cash or other financial assets to other parties.
② The contractual obligation to exchange financial assets or financial liabilities with other parties underpotential unfavorable conditions.
③ Non-derivative contracts that need to be settled or can be settled by the enterprise's own equityinstruments in the future, for which the enterprise will deliver a variable number of its own equityinstruments according to this contract.
④ Derivative contracts that need to be settled or can be settled by the enterprise's own equityinstruments in the future, except for derivative contracts that exchange a fixed amount of its own equityinstruments for a fixed amount of cash or other financial assets.
Equity instruments refer to contracts that can prove ownership of an enterprise's residual equity in assetsafter deducting all liabilities.
If the Company can't unconditionally avoid delivering cash or other financial assets to fulfill acontractual obligation, the contractual obligation meets the definition of financial liabilities.
If a financial instrument needs to be settled or can be settled by the Company's own equity instrument, itshall be considered whether its own equity instrument used to settle the instrument is a substitute for cash orother financial assets, or it is to enable the holder of such instrument to be entitled to the remaining equity inthe assets after all liabilities are deducted by the issuer. In the former case, the instrument is the financialliability of the Company; In the latter case, the instrument is the equity instrument of the Company.
(4) Derivative financial instruments and embedded derivative instruments
Initially, it is measured at the fair value on the day when the derivative transaction contract is signed,and then measured at its fair value. Derivative financial instruments with positive fair value are recognized asan asset, while those with negative fair value are regarded as an liability. Any gains or losses arising fromchanges in fair value that do not meet the requirements of hedge accounting are directly included in thecurrent profits and losses.
For mixed instruments including embedded derivative, if the main contract is financial assets, therelevant provisions of financial asset classification shall apply to the mixed instruments as a whole. If themain contract is not a financial asset, and the mixed instrument is not measured at fair value with changesincluded in the current profits and losses for accounting treatment, the embedded derivative is not closelyrelated to the main contract in terms of economic characteristics and risks, and has the same conditions as theembedded derivative, and if the independent instrument meets the definition of derivative, the embeddedderivative is split from the mixed instrument and treated as a separate derivative financial instrument. If theembedded derivative cannot be separately measured at the time of acquisition or on the subsequent balancesheet date, the mixed instruments as a whole are designated as financial assets or financial liabilitiesmeasured at fair value with changes included in the current profits and losses.
(5) Fair value of financial instruments
See Note III. 11 for the determination method of the fair value of financial assets and financialliabilities.
(6) Impairment of financial assets
Based on the expected credit loss, the Company will carry out impairment accounting treatment on thefollowing items and recognize the loss reserve:
① Financial assets measured at amortized cost;
② Receivables and debt investments measured at fair value and included in other comprehensiveincome;
③ Lease receivables;
④ Financial guarantee contracts (except those which are measured at fair value with changes includedin current profits and losses, in which the transfer of financial assets does not meet the conditions forderecognition, or those formed by continuing to involve the transferred financial assets).
Measurement of expected credit loss
Expected credit loss refers to the weighted average of the credit losses of financial instruments weightedby the risk of default. Credit loss refers to the difference between the cash flow of all contracts discountedaccording to the original real interest rate and the expected cash flow of all contracts receivable according tothe contract, that is, the present value of all cash shortages.
The Company takes into account reasonable and reliable information on historical events, currentsituation and future economic situation forecasts, and uses the risk of default as the weight to calculate theprobability weighted amount of the present value of the difference between the cash flow receivable from thecontract and the cash flow expected to be received to recognize the expected credit loss.
The Company separately measures the expected credit losses of financial instruments at different stages.If the credit risk of financial instruments has not increased significantly since the initial recognition, it is inthe first stage. The Company measures the loss reserve according to the expected credit loss in the next 12months; If the credit risk of a financial instrument has increased significantly since its initial recognition butno credit impairment has occurred, it is in the second stage. The Company measures the loss reserveaccording to the expected credit loss of the instrument throughout the duration; If a financial instrument hassuffered credit impairment since its initial recognition, it is in the third stage. The Company measures the lossreserve according to the expected credit loss of the instrument throughout the duration.
For financial instruments with low credit risk on the balance sheet date, the Company assumes that theircredit risk has not increased significantly since the initial recognition, and measures the loss reserveaccording to the expected credit loss in the next 12 months.
The expected credit loss in the whole duration refers to the expected credit loss caused by all possibledefault events in the whole expected duration of financial instruments. The expected credit loss in the next 12months refers to the expected credit loss caused by the financial instrument default event that may occurwithin 12 months after the balance sheet date (or within the expected duration if the expected duration of thefinancial instrument is less than 12 months), which is a part of the expected credit loss in the whole duration.
When measuring the expected credit loss, the longest period that the Company needs to consider is thelongest contract period during which the enterprise is subject to credit risk (including the option to renew thecontract).
For financial instruments in the first and second stages and with low credit risk, the Company calculatesinterest income based on the book balance before deducting impairment provisions and the actual interestrate. For financial instruments in the third stage, the interest income shall be calculated according to theirbook balance minus the amortized cost after impairment provision and the actual interest rate.
For notes receivable and accounts receivable, regardless of whether there is significant financingcomponent, the Company always measures the loss reserve according to the amount equivalent to theexpected credit loss in the whole duration.When a single financial asset cannot evaluate the expected credit loss information at a reasonable cost,the Company divides the notes receivable and accounts receivable into portfolios according to the credit riskcharacteristics, calculates the expected credit loss on the basis of the combinations, and determines thecombination on the following basis:
A. Notes receivable
Notes receivable portfolio 1: bank acceptance bill
Notes receivable portfolio 2: commercial acceptance bill
B. Accounts receivable
Accounts receivable portfolio 1: polarizer sales receivable
Accounts receivable portfolio 2: textile and garment sales receivable
Accounts receivable portfolio 3: operating funds receivable from self-own property
Accounts receivable portfolio 4: other receivables
For notes receivable divided into portfolios, the Company refers to the historical credit loss experience,and calculates the expected credit loss through the default risk exposure and the expected credit loss rate ofthe whole duration based on the current situation and forecasts the future economic situation.
For accounts receivable divided into combinations, the Company refers to the historical credit lossexperience, combines the current situation with the forecast of future economic situation, compiles acomparison table of aging/overdue days of accounts receivable and the expected credit loss rate for the wholeduration, and calculates the expected credit loss.
Other receivables
The Company classifies other receivables into several combinations according to the credit riskcharacteristics, and calculates the expected credit losses based on the portfolios. The basis for determiningthe portfolio is as follows:
Other receivables portfolio: aging portfolio
For other receivables classified as portfolios, the Company calculates the expected credit loss throughthe default risk exposure and the expected credit loss rate in the next 12 months or the whole duration.
Debt investment and other debt investment
For creditor's rights investment and other creditor's rights investment, the Company calculates theexpected credit loss according to the nature of the investment, the counterparty and various types of riskexposure and based on the expected credit loss rate in the next 12 months or the whole duration.
Evaluation of significant increase in credit risk
By comparing the risk of default of financial instruments on the balance sheet date with the risk ofdefault on the initial recognition date, the Company determines the relative change of default risk of financialinstruments in the expected duration, and evaluates whether the credit risk of financial instruments hasincreased significantly since initial recognition.
When determining whether the credit risk has increased significantly since the initial recognition, thecompany considers to obtain reasonable and reliable information without unnecessary extra costs or efforts,including forward-looking information. Information considered by the Company includes:
The debtor fails to pay the principal and interest according to the expiration date of the contract;
Serious deterioration of external or internal credit rating (if any) of financial instruments that hasoccurred or is expected;
Serious deterioration of the debtor's operating results that has occurred or is expected;
Changes in existing or expected technology, market, economic or legal environment, and significantadverse effects on the debtor's repayment ability of the Company.
According to the nature of financial instruments, the Company assesses whether credit risks haveincreased significantly on the basis of individual financial instruments or financial instrument portfolios.When evaluating on the basis of financial instrument portfolio, the Company can classify financialinstruments based on common credit risk characteristics, such as overdue information and credit risk rating.
Financial assets with credit impairment
On the balance sheet date, the Company evaluates whether the financial assets measured at amortizedcost and the creditor's rights investments measured at fair value with changes included in othercomprehensive income have suffered credit impairment. When one or more events that adversely affect theexpected future cash flow of a financial asset occur, the financial asset becomes a financial asset with creditimpairment. Evidence of credit impairment of financial assets includes the following observable information:
The issuer or debtor has major financial difficulties;
The debtor violates the contract, such as default or overdue payment of interest or principal;
The Company gives concessions that the debtor will not make under any other circumstances due toeconomic or contractual considerations related to the debtor's financial difficulties;
The debtor is likely to go bankrupt or undergo other financial restructuring;
The financial difficulties of the issuer or debtor cause the active market of the financial assets todisappear.
Presentation of expected credit loss provision
In order to reflect the change of credit risk of financial instruments after initial recognition, theCompany re-measures the expected credit loss on each balance sheet date, and the resulting increase orreversal amount of loss reserve shall be included in the current profits and losses as impairment losses orgains. For financial assets measured in amortized cost, the loss reserve shall be offset against the book valueof the financial assets listed in the balance sheet; For creditor's rights investments measured at fair value withchanges included in other comprehensive income, the Company recognizes its loss reserve in othercomprehensive income, which does not offset the book value of the financial asset.
Cancel after verification
If the Company no longer reasonably expects the contract cash flow of financial assets to be fully orpartially recovered, it will directly write down the book balance of the financial assets. This write-downconstitutes the derecognition of related financial assets. It usually happens when the Company determinesthat the debtor has no assets or income sources to generate enough cash flow to repay the amount to be
written down. However, according to the Company's procedures for recovering the due amount, thewritten-down financial assets may still be affected by the implementation activities.If the written-down financial assets are recovered later, they will be included in profits and losses of thecurrent recovery period as the reversal of impairment losses.
(7) Transfer of financial assets
Transfer of financial assets refers to the transfer or delivery of financial assets to another party(transferee) other than the issuer of the financial assets.If the company has transferred almost all risks and rewards in the ownership of the financial asset to thetransferee, the recognition of the financial asset shall be terminated; If almost all risks and rewards on theownership of a financial asset are retained, the financial asset shall not be derecognized.If the Company has neither transferred nor retained almost all risks and rewards in the ownership offinancial assets, it shall be dealt with as follows: if the control of the financial assets is abandoned, thefinancial assets shall be derecognized and the resulting assets and liabilities shall be recognized; If the controlof the financial assets is not abandoned, the relevant financial assets shall be recognized according to theextent of their continued involvement in the transferred financial assets, and the relevant liabilities shall berecognized accordingly.
(8) Offset of financial assets and financial liabilities
When the Company has the legal right to offset the recognized financial assets and financial liabilities,which can be enforced at present, and the Company plans to settle by net amount or at the same time realizesuch financial assets and pay off such financial liabilities, the financial assets and financial liabilities arelisted in the balance sheet with the amount after offset. In addition, financial assets and financial liabilities arelisted separately in the balance sheet and will not be offset against each other.
11.Fair value measurement
Fair value refers to the price that a market participant must pay to sell or transfer a liability in an orderlytransaction that occurs on the measurement date.
The Company measures related assets or liabilities at fair value, assuming that the orderly transaction ofselling assets or transferring liabilities is conducted in the main market of related assets or liabilities; If thereis no major market, the Company assumes that the transaction will be conducted in the most favorable marketof related assets or liabilities. The main market (or the most favorable market) is the trading market that theCompany can enter on the measurement day. The Company adopts the assumptions used by marketparticipants to maximize their economic benefits when pricing the assets or liabilities.
If there are financial assets or financial liabilities in an active market, the fair value of the financialassets or financial liabilities shall be determined by the quotation in the active market by the Company. Forfinancial instruments with active market, the Company adopts valuation technology to determine their fairvalues.
When measuring non-financial assets at fair value, the ability of market participants to apply the assetsfor the best purpose to generate economic benefits or the ability to sell the assets to other market participantsfor the best purpose to generate economic benefits shall be considered.
The Company adopts the valuation technology which is applicable in the current situation and supportedby sufficient available data and other information, and gives priority to the relevant observable input values,and only uses the unobservable input values when the observable input values are unavailable or impractical.
For assets and liabilities measured or disclosed at fair value in financial statements, the fair value level isdetermined according to the lowest level input value which is of great significance to fair value measurementas a whole: The first-level input value is the unadjusted quotation of the same assets or liabilities that can beobtained on the measurement date in an active market; The second-level input value is directly or indirectlyobservable input value of related assets or liabilities except the first-level input value; The third-level inputvalue is the unobservable input value of related assets or liabilities.On each balance sheet date, the Company reassesses the assets and liabilities recognized in the financialstatements that are continuously measured at fair value to determine whether there is a conversion betweenthe fair value measurement levels.
12.Inventory
1.Investories class
The Company's inventory includes raw materials, in-process products, low-value consumables,packaging materials, inventory goods, and issued goods.
(2) Pricing method of issued inventory
The Company's inventory is priced at the actual cost when it is acquired. The weighted average methodis adopted when raw materials and inventory goods are issued.
(3) Determination basis of net realizable value of inventory and accrual method of inventorydepreciation reserve
The net realizable value of inventory is the estimated selling price of inventory minus the estimatedcosts to be incurred upon completion, estimated sales expenses and related taxes. For determination of the netrealizable value of inventories, the solid evidence shall serve as the basis, and the purpose of holdinginventories and the influence of events after the balance sheet date shall be considered.
On the balance sheet date, if the inventory cost is higher than its net realizable value, inventorydepreciation reserve shall be made. The Company usually accrues the inventory depreciation reserveaccording to individual inventory items. On the balance sheet date, if the influencing factors of previousinventory value written down have disappeared, the inventory depreciation reserve will be returned withinthe originally accrued amount.
(4) Inventory system of inventory
Perpetual inventory system is adopted for the Company's inventory system.
(5) Amortization method of low-value consumables and packaging materials
Low-value consumables and packaging materials of the Company are amortized by one-time write-offmethod.
13.Held for sale and discontinuing operation
(1) Classification and measurement of non-current assets or disposal groups held for sale
When the book value of a non-current asset or disposal group is recovered by the Company mainly byselling it (including the exchange of non-monetary assets with commercial nation) rather than continuouslyusing it, the non-current asset or disposal group is classified as held for sale.
The above-mentioned non-current assets do not include investment real estate measured by fair valuemodel, biological assets measured by net amount of fair value minus selling expenses, assets formed by
employee compensation, financial assets, deferred income tax assets and rights arising from insurancecontracts.
The disposal group refers to a group of assets disposed of together by sale or other means in atransaction as a whole, and liabilities directly related to these assets transferred in the transaction. Undercertain circumstances, the disposal group includes goodwill obtained in business combination, etc.Meanwhile, non-current assets or disposal groups that meet the following conditions are classified asheld-for-sale: according to the practice of selling such assets or disposal groups in similar transactions, thenon-current assets or disposal groups can be sold immediately under the current situation; The sale is verylikely to happen, that is, a resolution has been made on a sale plan and a certain purchase commitment hasbeen obtained, and it is expected that the sale will be completed within one year. If the control oversubsidiaries is lost due to the sale of investments in subsidiaries, whether or not the Company retains part ofthe equity investments after the sale, when the investment in subsidiaries to be sold meets the classificationconditions of holding for sale, the investment in subsidiaries will be classified as held-for-sale as a whole inindividual financial statements, and all assets and liabilities of subsidiaries will be classified as held-for-salein consolidated financial statements.
When the non-current assets or disposal groups held for sale are initially measured or re-measured onthe balance sheet date, the difference between the book value and the net amount after deduction of the salesexpenses from the fair value is recognized as the asset impairment loss. For the amount of asset impairmentloss recognized by the disposal group held for sale, the book value of goodwill in the disposal group is offsetfirst, and then the book value of non-current assets in the disposal group is offset proportionally.
If the net amount of non-current assets held for sale or disposal group's fair value minus sales expensesincreases on the subsequent balance sheet date, the previously written-down amount will be restored andreversed within the amount of asset impairment loss recognized after being classified as held-for-sale, andthe reversed amount will be included in the current profits and losses. The book value of offset goodwill shallnot be reversed.
Non-current assets held for sale and assets in disposal group held for sale are not depreciated oramortized; Interest and other expenses of liabilities in disposal group held for sale continue to be recognized.All or part of the investments of associated enterprises or joint ventures classified as held for sale shall beaccounted for by the equity method for those classified as held for sale, while those retained (not classified asheld for sale) shall continue to be accounted for by the equity method; When the Company loses significantinfluence on the associated enterprises and joint ventures due to the sale, it shall stop using the equity method.
If a certain non-current asset or disposal group is classified as held-for-sale, but the classificationconditions of held-for-sale are no longer met, the Company will stop classifying it as held-for-sale andmeasure it according to the lower of the following two amounts:
① The book value of the asset or disposal group before it is classified as held-for-sale, and the amountadjusted according to the depreciation, amortization or impairment that should have been recognized withoutbeing classified as held-for-sale;
② Recoverable amount.
(2) Discontinuing operation
Discontinuing operation refers to the components that have been disposed of by the Company orclassified as held-for-sale by the Company and can be distinguished separately, which meet one of thefollowing conditions:
① Such component represents an independent main business or a separate main business area.
② Such component is part of an associated plan to dispose an independent main business or a separatemain business area.
③ Such component is a subsidiary acquired for resale.
(3) Presentation
In the balance sheet, the Company presents the non-current assets held for sale or the assets in thedisposal group held for sale as "assets held for sale", and presents the liabilities in the disposal group held forsale as "liabilities held for sale".
The Company separately presents the profit and loss from continuing operations and the profit and lossfrom discontinuing operations in the income statement. For non-current assets or disposal groups held forsale that do not meet the definition of discontinuing operation, the impairment loss, reversal amount anddisposal profit and loss are presented as the profit and loss of continuing operations. Operating profit and lossand disposal profit and loss such as impairment loss and reversal amount of discontinuing operation arepresented as discontinuing operation profits and losses.
A disposal group that intends to terminate its use instead of selling and meets the conditions of relevantcomponents in the definition of discontinuing operation shall be presented as discontinuing operation fromthe date when it ceases to use.
For the discontinuing operation reported in the current period, in the current financial statements, theinformation originally presented as the profits and losses of continuing operation is re-presented as the profitsand losses of discontinuing operation in the comparable accounting period. If the discontinuing operation nolonger meets the classification conditions of holding for sale, the information originally presented as theprofits and losses of discontinuing operation in the current financial statements will be presented again as theprofits and losses of continuing operation in the comparable accounting period.
14.Long-term equity investments
Long-term equity investment includes equity investment in subsidiaries, joint ventures and associatedenterprises. If the Company can exert significant influence on the investee, it is an associated enterprise of theCompany.
(1) Determination of initial investment cost
Long-term equity investment forming business combination: the long-term equity investment obtainedby business combination under the same control shall be taken as the investment cost according to the bookvalue share of the owner's equity of the combined party in the consolidated financial statements of the finalcontrolling party on the combination date; Long-term equity investment obtained by business combinationnot under the same control shall be regarded as the investment cost of long-term equity investment accordingto the combination cost.
For long-term equity investment obtained by other means: For long-term equity investment obtained bypayment in cash, the actual purchase price is taken as the initial investment cost; For long-term equity
investment obtained by issuing equity securities, the fair value of issuing equity securities is taken as theinitial investment cost.
(2) Subsequent measurement and profit and loss recognition method
Investment in subsidiaries shall be accounted by cost method, unless the investment meets theconditions of holding for sale; Investment in associated enterprises and joint ventures shall be accounted forby equity method.For the long-term equity investment calculated by the cost method, except for the cash dividends orprofits that have been declared but not yet issued and that included in the actual payment or consideration, thecash dividends or profits declared and distributed by the investee are recognized as investment income andincluded in the current profits and losses.If the initial investment cost of long-term equity investment accounted by equity method is greater thanthe fair value share of identifiable net assets of the investee, the investment cost of long-term equityinvestment shall not be adjusted; If the initial investment cost is less than the fair value share of theidentifiable net assets of the investee at the time of investment, the book value of the long-term equityinvestment shall be adjusted, and the difference shall be included in the profit and loss of the currentinvestment period.
In case of accounting by equity method, the investment income and other comprehensive income arerecognized respectively according to the share of net profits and losses and other comprehensive incomerealized by the investee, and the book value of long-term equity investment is adjusted at the same time;According to the profit or cash dividend declared and distributed by the investee, the part to be entitled toshall be calculated, and the book value of long-term equity investment shall be reduced correspondingly; Theinvestee adjusts the book value of long-term equity investment for other changes in owner's equity except netprofits and losses, other comprehensive income and profit distribution and includes them in capital reserve(other capital reserve). When recognizing the share of the net profit and loss of the investee, the fair value ofidentifiable assets of the investee at the time of investment is taken as the basis, and the net profit of theinvestee is recognized after adjustment according to the accounting policies and accounting periods of theCompany.
If it can exert significant influence on the investee due to additional investment or implement jointcontrol but does not constitute control, on the conversion date, the sum of the fair value of the original equityplus the new investment cost shall be taken as the initial investment cost calculated by the equity methodinstead. The difference between the fair value and book value of the original equity on the conversion date, aswell as the accumulated fair value changes originally included in other comprehensive income, aretransferred to the current profits and losses accounted for by the equity method.
If the joint control or significant influence on the investee is lost due to the disposal of some equityinvestments, the remaining equity after disposal shall be accounted for according to Accounting Standardsfor Business Enterprises No.22-Recognition and Measurement of Financial Instruments on the date of loss ofjoint control or significant influence, and the difference between fair value and book value shall be includedin the current profits and losses. Other comprehensive income recognized by the original equity investmentdue to the adoption of the equity method shall be accounted for on the same basis as the direct disposal ofrelated assets or liabilities by the investee when the equity method is terminated; Changes in other owners'equity related to the original equity investment are transferred into current profits and losses.
If the control over the investee is lost due to the disposal of part of equity investment, and the remainingequity after disposal can jointly control or exert significant influence on the investee, it shall be accounted for
according to the equity method instead, and the remaining equity shall be regarded as being adjusted by theequity method when it is acquired; If the remaining equity after disposal cannot exercise joint control or exertsignificant influence on the investee, it shall be accounted for according to the relevant provisions ofAccounting Standards for Business Enterprises No.22-Recognition and Measurement of FinancialInstruments, and the difference between its fair value and book value on the date of loss of control shall beincluded in the current profits and losses.If the Company's shareholding ratio decreases due to capital increase of other investors, causing loss ofcontrol, but it can exercise joint control or exert significant influence on the investee, the share of net assetsincreased by the investee due to capital increase and share expansion shall be recognized according to thenew shareholding ratio, and the difference between the original book value of long-term equity investmentcorresponding to the decreased shareholding ratio shall be included in the current profits and losses; Then,according to the new shareholding ratio, it is regarded as being adjusted by the equity method when theinvestment is obtained.
For unrealized internal transaction gains and losses between the Company and its associated enterprisesand joint ventures, the portion attributable to the Company shall be calculated according to the shareholdingratio, and investment gains and losses shall be recognized on the basis of offset. However, if the unrealizedinternal transaction losses between the Company and the investee are the impairment losses of the transferredassets, they will not be offset.
(3) Basis for determination of joint control and significant influence on the investee
Joint control refers to the common control of an arrangement in accordance with the relevant agreement,and the relevant activities of such arrangement must be unanimously agreed by the participants who share thecontrol rights before any decision is made. When judging whether there is common control, firstly, judgewhether all participants or a combination of participants collectively control the arrangement, and secondly,judge whether the decision-making of activities related to the arrangement must be unanimously agreed bythe participants who collectively control the arrangement. If all participants or a group of participants mustact in concert to decide the relevant activities of an arrangement, it is considered that all participants or agroup of participants collectively control the arrangement; If two or more participants can collectivelycontrol an arrangement, it does not constitute joint control. When judging whether it is joint control, theprotective rights entitled to are not considered.
Significant influence means that the investor has the right to participate in the decision-making on thefinancial and operating policies of the investee, but cannot control or jointly control the formulation of thesepolicies with other parties. When determining whether it can exert significant influence on the investee, theinfluence of the voting shares of the investee directly or indirectly held by the investor and the currentexecutable potential voting rights held by the investor and other parties shall be considered, including theinfluence of the current convertible warrants, share options and convertible corporate bonds issued by theinvestee.
When the Company directly or indirectly owns more than 20% (including 20%) but less than 50% of thevoting shares of the investee, it is generally considered to have a significant influence on the investee, unlessthere is clear evidence that it cannot participate in the production and operation decisions of the investeeunder such circumstances, in which case it does not have a significant influence; When the Company ownsless than 20% (excluding) of the voting shares of the investee, it is generally not considered to have asignificant influence on the investee, unless there is clear evidence that it can participate in the productionand operation decisions of the investee under such circumstances, in which case it has a significant influence.
(4) Equity investment held for sale
If all or part of the equity investment in an associated enterprise or joint venture is classified as assetsheld for sale, please refer to Note III. 13 for relevant accounting treatment.For the remaining equity investments that are not classified as assets held for sale, the equity method isadopted for accounting treatment.
If the equity investment in an associated enterprise or joint venture that has been classified as held forsale no longer meets the classification conditions of assets held for sale, the equity method shall be used forretrospective adjustment from the date that it is classified as assets held for sale.
(5) Test method for impairment and accrual method for impairment provision
For investment in subsidiaries, associated enterprises and joint ventures, please refer to Note III. 21 forthe accrual method for impairment provision.
15.Investment real estate
Investment real estate refers to real estate held for rent or capital appreciation, or both. The Company'sinvestment real estate includes leased land use rights, land use rights transferred after holding and preparingfor appreciation, and leased buildings.
The Company's investment real estate is initially measured according to the cost at the time ofacquisition, and depreciation or amortization is accrued on schedule according to the relevant provisions offixed assets or intangible assets.
For investment real estate that is subsequently measured by cost model, please refer to Note III. 21 forthe accrual method of asset impairment.
The difference between the disposal income from the sale, transfer, scrapping or damage of investmentreal estate after deduction of its book value and related taxes shall be included in the current profits andlosses.
16.Fixed assets
(1) Recognition conditions of fixed assets
The Company's fixed assets refer to tangible assets held for the production of commodities, provision oflabor services, leasing or operation and management, with a service life exceeding one fiscal year.
Only when the economic benefits related to the fixed assets are likely to flow into the enterprise and thecost of the fixed assets can be measured reliably, can the fixed assets be recognized.
The fixed assets of the Company are initially measured according to the actual cost at the time ofacquisition.
(2) Depreciation methods of various fixed assets
The Company adopts the life average method to accrue depreciation. Depreciation of fixed assets beginswhen they reach the intended usable state, and stops when they are derecognized or classified as non-currentassets held for sale. Without considering the impairment provision, according to the category, estimatedservice life and estimated residual value of fixed assets, the Company determines the annual depreciation rateof various fixed assets as follows:
| Category | Expected useful life（Year） | Estimated residual value | Depreciation |
| House and Building-- Production | 35 | 4.00 | 2.74 |
| House and Building-Non- Production | 40 | 4.00 | 2.40 |
| Decoration of Fixed assets | 10 | 10.00 | |
| Machinery and equipment | 10-14 | 4.00 | 9.60-6.86 |
| Transportation equipment | 8 | 4.00 | 12.00 |
| Electronic equipment | 8 | 4.00 | 12.00 |
| Other equipment | 8 | 4.00 | 12.00 |
For the fixed assets with the impairment provision withdrawn, the accumulative amount of thewithdrawn fixed assets impairment provision shall be also deducted to calculate and determine the rate ofdepreciation.
(3) See Note III. 21 for the impairment test method and accrual method for impairment provision offixed assets.
(4) Identification basis, valuation method and depreciation method of fixed assets leased by financing
Fixed assets leased by the Company shall be recognized as fixed assets acquired under finance leaseswhen they meet one or more of the following criteria:
① Upon expiration of the lease term, the ownership of the leased assets shall be transferred to theCompany.
② The Company has the option right to purchase the leased assets, and the concluded purchase price isexpected to be far lower than the fair value of the leased assets when exercising the option right. Therefore,the exercise of this option right by the Company can be determined reasonably on the starting date of thelease.
③ Even though the ownership of the assets is not transferred, the lease term accounts for most of theservice life of the leased assets.
④ The present value of the minimum lease payment of the Company on the lease start date is almostequal to the fair value of the leased assets on the lease start date.
⑤ In case of special properties of the leased assets and no large alteration, only the Company can usethem.
Fixed assets leased by finance lease shall be recorded at the lower of the fair value of the leased assets onthe lease start date and the present value of the minimum lease payment. The minimum lease payment istaken as the recorded value of long-term payables, and the difference is taken as unrecognized financingexpenses. Initial direct expenses such as handling fees, attorney fees, travel expenses, stamp duty, etc., whichoccur during the lease negotiation and signing of the lease contract, are included in the value of the leasedassets. Unrecognized financing expenses are amortized by the effective interest rate method in each period ofthe lease term.
Fixed assets leased by financing shall be depreciated by adopting policies consistent with theself-owned fixed assets. If it can be reasonably determined that the ownership of the leased asset will beacquired upon the expiration of the lease term, depreciation shall be accrued within the serviceable life of theleased asset; If it is impossible to reasonably determine that the ownership of the leased asset can be acquiredat the expiration of the lease term, depreciation shall be accrued within the shorter of the lease term and theserviceable life of the leased asset.
(5) At the end of each year, the Company rechecks the service life, estimated net salvage value anddepreciation method of fixed assets.
If the estimated service life is different from the original estimate, the service life of fixed assets shall beadjusted; If the estimated net salvage value is different from the original estimate, the estimated net salvagevalue shall be adjusted.
(6) Major repair cost
The major repair cost incurred by the Company in carrying out regular inspections of fixed assets, ifthere is conclusive evidence showing that they meet the conditions for recognition of fixed assets, shall beincluded in the cost of fixed assets, while those that do not meet the conditions for recognition of fixed assetsshall be included in the profits and losses of the current period. Fixed assets shall be depreciated during theinterval between regular overhaul.
17.Construction in progress
The cost of construction in progress of the Company is determined according to the actual projectexpenditure, including all necessary project expenditures incurred during the construction period, borrowingcosts that should be capitalized before the project reaches the intended usable state, and other relatedexpenses.
Construction in progress is transferred to fixed assets when it reaches the scheduled usable state.
See Note III. 21 for the method of depreciation of assets in construction in progress.
18.Borrowing costs
(1) Recognition principle of capitalization of borrowing costs
If the borrowing costs incurred by the Company can be directly attributed to the purchase, constructionor production of assets that meet the capitalization conditions, they will be capitalized and included in therelevant asset costs; Other borrowing costs, when incurred, are recognized as expenses according to theamount incurred, and included in current profits and losses. Borrowing costs shall be capitalized if they meetthe following conditions at the same time:
① Asset expenditure has already occurred, including the expenditure incurred in the form of payment incash, transfer of non-cash assets or assumption of interest-bearing debts for the purchase, construction orproduction of assets that meet the capitalization conditions;
② Borrowing costs have already occurred;
③ The purchase, construction or production activities necessary to make the assets reach the intendedusable or saleable state have started.
(2) Capitalization period of borrowing costs
Capitalization of borrowing costs shall be stopped when assets eligible for capitalization acquired,constructed or produced by the Company reach the intended usable or saleable state. Borrowing costsincurred after the assets in line with the capitalization conditions reach the intended usable or saleable stateshall be recognized as expenses according to the amount incurred when they occur, and shall be included incurrent profits and losses.If the assets that meet the capitalization conditions are abnormally interrupted in the process of purchase,construction or production, and the interruption lasts exceeds 3 months, the capitalization of borrowing costsshall be suspended; Borrowing costs during normal interruption period continue to be capitalized.
(3) Capitalization rate of borrowing costs and calculation method of capitalization amount
The interest expenses actually incurred in the current period of special borrowing shall be capitalizedafter deducting the interest income from the unused borrowing funds deposited in the bank or the investmentincome from temporary investment; The capitalization amount of general borrowings is determined bymultiplying the weighted average of the accumulated asset expenditure over the special loan by thecapitalization rate of the occupied general borrowings. Capitalization rate is calculated and determinedaccording to the weighted average interest rate of general borrowings.
During the capitalization period, all the exchange differences of special borrowings in foreign currencyare capitalized; Exchange differences of general borrowings in foreign currency are included in currentprofits and losses.
19.Intangible assets
The intangible assets of the Company include land use rights, proprietary technology and software.
Intangible assets are initially measured at cost, and their service life is analyzed and judged when theyare acquired. If the service life is limited, the intangible assets shall be amortized within the expected servicelife by the amortization method that can reflect the expected realization mode of the economic benefitsrelated to the assets from the time when they are available for use; If it is impossible to reliably determine theexpected realization mode, they shall be amortized by straight-line method; Intangible asset\s with uncertainservice life are not amortized.
Amortization methods of intangible assets with limited service life are as follows:
| Items | Useful life（year） | Amortization method | Notes |
| Land use right | 50 | Straight | |
| Special technoloogy | 15 | Straight | |
| Software | 5 | Straight |
At the end of each year, the Company rechecks the service life and amortization method of intangibleassets with limited service life, adjusts the original estimate if it is different from the previous estimate, andhandles the change according to the accounting estimate.
On the balance sheet date, if it is estimated that an intangible asset can no longer bring future economicbenefits to the enterprise, all the book value of the intangible asset will be transferred to the current profitsand losses.
See Note III. 21 for the method of depreciation of intangible assets.
20.Research and development expenditure
The Company divides the expenditure of internal research and development projects into expendituresin research stage and expenditures in development stage.
Expenditures in research stage are included in current profits and losses when they occurs.
Expenditures in development stage can only be capitalized if they meet the following conditions: it istechnically feasible to complete the intangible assets so that they can be used or sold; There is the intention tocomplete the intangible assets and use or sell them; The ways in which intangible assets generate economicbenefits, including those that can prove the existence of market for products produced by the intangible assetsor the existence of market for the intangible assets themselves, and that for the intangible assets that will beused internally, their usefulness can be proved; There are sufficient technical, financial and other resources tocomplete the development of the intangible assets and the ability to use or sell the intangible assets;Expenditures attributable to the development stage of the intangible assets can be measured reliably.Development expenditures that do not meet the above conditions are included in current profits and losses.
The research and development project of the Company will enter the development stage after the aboveconditions are met and a project is approved through technical feasibility and economic feasibility study.
Capitalized expenditures in development stage are listed as development expenditures on the balancesheet, and are converted into intangible assets from the date when the project reaches the intended purpose.
21. Assets Impairment
The asset impairment of long-term equity investment of subsidiaries, associated enterprises and jointventures, investment real estate, fixed assets, construction in progress, intangible assets, goodwill, etc.(except inventory, investment real estate measured according to fair value model, deferred income tax assetsand financial assets) shall be determined according to the following methods:
On the balance sheet date, judge whether there is any sign of possible impairment of assets. If there isany sign of impairment, the Company will estimate its recoverable amount and conduct impairment test. Thegoodwill formed by business combination, intangible assets with uncertain service life and intangible assetsthat have not yet reached the usable state are tested for impairment every year regardless of whether there isany sign of impairment.
The recoverable amount is determined according to the higher of the net amount of the fair value of theasset minus the disposal expenses and the present value of the estimated future cash flow of the asset. TheCompany estimates its recoverable amount on the basis of individual assets; If it is difficult to estimate therecoverable amount of a single asset, the recoverable amount of the asset group shall be determined based onthe asset group to which the asset belongs. The identification of asset group is based on whether the maincash inflow generated by asset group is independent of cash inflow of other assets or asset groups.
When the recoverable amount of an asset or asset group is lower than its book value, the Company willwrite down its book value to the recoverable amount, and the written-down amount will be included in thecurrent profits and losses, and the corresponding asset impairment provision will be accrued at the same time.
As far as the impairment test of goodwill is concerned, the book value of goodwill formed by businesscombination is amortized to relevant asset groups according to a reasonable method from the acquisition date;If it is difficult to amortize to the related asset group, it shall be amortized to the related asset group portfolio.The related asset group or asset group portfolio is one that can benefit from the synergy effect of businesscombination, and is not larger than the reporting segment determined by the Company.
In the impairment test, if there are signs of impairment in the asset group or asset group portfolio relatedto goodwill, firstly, the asset group or asset group portfolio without goodwill shall be tested for impairment,the recoverable amount shall be calculated, and the corresponding impairment loss shall be recognized. Thenimpairment test shall be carried out on the asset group or asset group portfolio containing goodwill, and itsbook value shall be compared with the recoverable amount. If the recoverable amount is lower than the bookvalue, the impairment loss of goodwill shall be recognized.Once the asset impairment loss is recognized, it will not be reversed in future accounting periods.
22.Long-term deferred expenses
The long-term deferred expenses incurred by the Company are priced at actual cost and amortizedequally according to the expected benefit period. For long-term deferred expense items that cannot benefitfuture accounting periods, all their amortized values are included in current profits and losses.
23. remuneration
(1) Scope of employee remuneration
Employee compensation refers to various forms of remuneration or compensation given by enterprisesto obtain services provided by employees or to terminate labor relations. Employee remuneration includesshort-term salary, post-employment benefits, dismissal benefits and other long-term employee benefits.Benefits provided by enterprises to spouses, children, dependents, family dependants of deceased employeesand other beneficiaries are also employee remuneration.
According to liquidity, employee remuneration is listed in the "Payable Employee Remuneration" and"Long-term Payable Employee Remuneration" in the balance sheet.
(2) Short term remuneration
During the accounting period when employees provide services, the Company recognizes the actualwages, bonuses, social insurance premiums such as medical insurance premiums, work-related injuryinsurance premiums and maternity insurance premiums paid for employees and housing provident funds asliabilities, and includes them in current profits and losses or related asset costs. If the liability is not expectedto be fully paid within twelve months after the end of the annual reporting period when employees providerelevant services, and the financial impact is significant, the liability will be measured at the discountedamount.
(3) Post-employment benefits
After-service benefit plan includes defined contribution plan and defined benefit plans. Where the setdeposit plan refers to the post-employment benefits plan in which the enterprise no longer undertakes furtherpayment obligations after paying fixed fees to independent funds; Set benefit plan refers to thepost-employment benefits plan except the set deposit plan.
Set deposit plan
The set deposit plan includes basic old-age insurance, unemployment insurance and enterprise annuityplan, etc.
In addition to the basic old-age insurance, the Company establishes an enterprise annuity plan ("annuityplan") according to the relevant policies of the national enterprise annuity system, and employees canvoluntarily participate in the annuity plan. Moreover, the Company has no other significant social securitycommitments for employees.
During the accounting period when employees provide services, the amount that should be paidaccording to the set deposit plan is recognized as a liability and included in the current profits and losses orrelated asset costs.
Set benefit plan
For set benefit plans, an actuarial valuation is conducted by an independent actuary on the annualbalance sheet date, and the cost of benefit provision is determined by the expected cumulative benefit unitmethod. The employee remuneration cost caused by set benefit plans of the Company includes the followingcomponents:
① Service cost, including current service cost, past service cost and settlement gain or loss. Where: thecurrent service cost refers to the increase of the present value of set benefit plan obligations caused by theemployees providing services in the current period; Past service cost refers to the increase or decrease of thepresent value of set benefit plan obligations related to employee service in previous period caused by themodification of set benefit plans.
② The net interest of set benefit plan's net liabilities or net assets, including interest income of plannedassets, interest expense of set benefit plan obligations and interest affected by asset ceiling.
③ Changes arising from remeasurement of net liabilities or net assets of set benefit plans.
Unless other accounting standards require or allow employee benefit costs to be included in asset costs,the Company will include the above items ① and ② in current profits and losses; Include item ③ in othercomprehensive income and such item will not be transferred back to profit or loss in the subsequentaccounting period. When the original set benefit plan is terminated, all the parts originally included in othercomprehensive income will be carried forward to undistributed profits within the scope of equity.
(4) Dismissal benefits
If the Company provides dismissal benefits to employees, the employee remuneration liabilities arisingfrom the dismissal benefits shall be recognized and included in the current profits and losses on the earlier ofthe following dates: When the Company cannot unilaterally withdraw the dismissal benefits provided by thetermination of labor relations plan or layoff proposal; When the Company recognizes the costs or expensesrelated to the reorganization involving the payment of dismissal benefits.
If the employee's internal retirement plan is implemented, the economic compensation before theofficial retirement date is the dismissal benefit. From the day when the employee stops providing services tothe normal retirement date, the wages of the retired employees and the social insurance premiums paid willbe included in the current profits and losses at one time. Economic compensation after the official retirementdate (such as normal pension) shall be treated as post-employment benefits.
(5) Other long-term benefits
If other long-term employee benefits provided by the Company to employees meet the conditions for theset deposit plan, they shall be handled in accordance with the above-mentioned relevant provisions on the setdeposit plan. If it meets the set benefit plans, it shall be handled in accordance with the above-mentionedrelevant regulations on set benefit plans, but the part of the related employee remuneration cost, which is "thechange caused by remeasurement of set benefit plan's net liabilities or net assets", shall be included in thecurrent profits and losses or related asset costs.
24. Estimated Liabilities
If the obligation related to contingencies meets the following conditions at the same time, the Companywill recognize it as estimated liabilities:
(1) Such obligation is the current obligation undertaken by the Company;
(2) The performance of such obligation is likely to lead to the outflow of economic benefits from theCompany;
(3) The amount of such obligation can be measured reliably.
Estimated liabilities are initially measured according to the best estimate of expenditure required tofulfill relevant current obligations, and factors such as risks, uncertainties and time value of money related tocontingencies are comprehensively considered. If the time value of money has great influence, the bestestimate is determined by discounting the related future cash outflow. The Company rechecks the book valueof the estimated liabilities on the balance sheet date, and adjusts the book value to reflect the current bestestimate.
If all or part of the expenses required to pay off the recognized estimated liabilities are expected to becompensated by a third party or other parties, the compensation amount can only be recognized as an assetwhen it is basically confirmed that it can be received. The recognized compensation amount shall not exceedthe book value of the recognized liabilities.
25.Share-based payment and equity instruments
(1) Types of share-based payment
The share-based payment of the Company is divided into equity-settled share-based payment andcash-settled share-based payment.
(2) Method for determining fair value of equity instruments
The fair value of equity instruments such as options granted by the Company with active market isdetermined according to the quoted price in the active market. The fair value of granted equity instrumentssuch as options without active market is determined by option pricing model. The selected option pricingmodel considers the following factors: A. The exercise price of options; B. The validity period of the option;C. The current price of the underlying shares; D. Estimated volatility of share price; E. Expected dividend ofshares; F. Risk-free interest rate within the validity period of the option.
(3) Basis for determining the best estimation of feasible equity instruments
On each balance sheet date during the waiting period, the Company makes the best estimate based onthe latest available follow-up information such as changes in the number of employees with feasible rights,and revises the estimated number of equity instruments with feasible rights. On the vesting date, the finalestimated number of vesting rights and interests instruments shall be consistent with the actual number ofvesting rights.
(4) Accounting treatment related to implementation, modification and termination of share-basedpayment plan
Equity-settled share-based payment is measured at the fair value of equity instruments granted toemployees. If the right is exercised immediately after the grant, the relevant costs or expenses shall beincluded in the fair value of equity instruments on the grant date, and the capital reserve shall be increasedaccordingly. If the rights can be exercised only after the services within the waiting period are completed or
the specified performance conditions are met, on each balance sheet date within the waiting period, based onthe best estimate of the number of equity instruments available, the services obtained in the current periodshall be included in the relevant costs or expenses and capital reserve according to the fair value on the grantdate of equity instruments. After the vesting date, the recognized related costs or expenses and the totalowner's equity will not be adjusted.Equity-settled share-based payment shall be measured according to the fair value of liabilities calculatedand determined on the basis of shares or other equity instruments undertaken by the Company. If the right isexercised immediately after the grant, the fair value of the liabilities assumed by the Company shall beincluded in the relevant costs or expenses on the grant date, and the liabilities shall be increased accordingly.For cash-settled share-based payment that is feasible only after the service within the waiting period iscompleted or the specified performance conditions are met, on each balance sheet date within the waitingperiod, based on the best estimation of the feasibility and according to the fair value of the liabilities assumedby the Company, the services obtained in the current period are included in the costs or expenses andcorresponding liabilities. On each balance sheet date and settlement date before the settlement of relatedliabilities, the fair value of liabilities shall be re-measured, and the changes shall be included in the currentprofits and losses.When the Company modifies the share-based payment plan, if the fair value of the granted equityinstruments is increased by modification, the increase of the services obtained shall be recognized accordingto the increase of the fair value of the equity instruments; If the number of granted equity instruments isincreased by modification, the fair value of the increased equity instruments will be recognized as theincrease in services obtained accordingly. The increase of fair value of equity instruments refers to thedifference between the fair values of equity instruments before and after modification on the modificationdate. If the total fair value of share-based payment is reduced by modification or the terms and conditions ofthe share-based payment plan are modified in other ways that are unfavorable to employees, the accountingtreatment of the obtained services will continue, as if with no changes unless the Company cancels some orall of the granted equity instruments.During the waiting period, if the granted equity instruments are cancelled (except those cancelled due tonon-market conditions that do not meet the feasible rights conditions), the Company will treat thecancellation of the granted equity instruments as an accelerated exercise, and immediately record the amountto be recognized in the remaining waiting period into the current profits and losses, and recognize the capitalreserve at the same time. If the employee or other party can choose to meet the non-feasible right conditionbut fails to meet it during the waiting period, the Company will treat it as a cancellation for granting equityinstruments.
① Distinction between financial liabilities and equity instruments
According to the contract terms of the issued financial instruments and their economic essence, not onlyin legal form, but also in combination with the definitions of financial assets, financial liabilities and equityinstruments, the Company classifies the financial instruments or their components as financial assets,financial liabilities or equity instruments at the time of initial recognition.
② Accounting treatment of other financial instruments such as preferred shares and perpetual bonds
The financial instruments issued by the Company are initially recognized and measured according to thefinancial instrument standards; After that, interest is accrued or dividends are distributed on each balancesheet date, which shall be handled according to relevant accounting standards for specific enterprises. That is,to determine the accounting treatment of interest expense or dividend distribution of such instrument based
on the classification of issued financial instruments. For financial instruments classified as equityinstruments, their interest expenses or dividend distribution are regarded as the profit distribution of theCompany, and their repurchase and cancellation are treated as changes in equity; For financial instrumentsclassified as financial liabilities, the interest expense or dividend distribution shall be treated according to theborrowing costs in principle, and the profit or loss arising from repurchase or redemption shall be included inthe current profits and losses.When the Company issues financial instruments, the transaction expenses such as handling fees andcommissions, which are classified as debt instruments and measured in amortized cost, are included in theinitial measurement amount of the issued instruments; If it is classified as an equity instrument, it will bededucted from equity.
26. Revenue
(1) General principles
The Company has fulfilled the performance obligation in the contract, that is, to recognize the revenuewhen the customer obtains the control right of related goods or services.If the contract contains two or more performance obligations, the Company will amortize the transactionprice to each individual performance obligation according to the relative proportion of the individual sellingprice of the goods or services promised by each individual performance obligation on the contract start date,and measure the income according to the transaction price amortized to each individual performanceobligation.
When one of the following conditions is met, the Company will fulfill its performance obligationswithin a certain period of time; Otherwise, it performs the performance obligation at a certain time:
① The customer obtains and consumes the economic benefits brought by the Company's performance atthe same time of the its performance.
② Customers can control the goods under construction during the performance of the Company.
③ The commodities produced during the performance of the Company have irreplaceable uses, and theCompany has the right to collect payment for the performance part accumulated so far during the wholecontract period.
For the performance obligations performed within a certain period of time, the Company recognizes theincome according to the performance progress within that period. If the performance progress cannot bereasonably determined, and the cost incurred of the Company is expected to be compensated, the incomeshall be recognized according to the amount of the cost incurred until the performance progress can bereasonably determined.
For obligations performed at a certain time, the Company shall recognize the income at the time whenthe customer obtains control of the relevant goods or services. When judging whether a customer hasobtained control of goods or services, the Company will consider the following signs:
① The Company has the current right to receive payment for the goods or services, that is, the customerhas the current payment obligation for the goods or services.
② The Company has transferred the legal ownership of the goods to the customer, that is, the customerhas the legal ownership of the goods.
③ The Company has transferred the physical goods to the customer, that is, the customer has physicallytaken possession of the goods.
④ The Company has transferred the main risks and rewards on the ownership of the goods to thecustomer, that is, the customer has obtained the main risks and rewards on the ownership of the goods.
⑤ The customer has accepted the goods.
⑥ Other signs that the customer has obtained control of the goods.
The Company has transferred goods or services to customers and has the right to receive consideration(and the right depends on other factors except the passage of time) as contract assets, and the contract assetsare depreciated on the basis of expected credit losses. The right of the Company to collect consideration fromcustomers unconditionally (only depending on the passage of time) is listed as receivables. The obligation ofthe Company to transfer goods or services to customers for received or receivable consideration fromcustomers shall be regarded as a contractual liability.
Contract assets and contract liabilities under the same contract are listed in net amount. If the net amountis debit balance, they are listed in "Contract Assets" or "Other Non-current Assets" according to theirliquidity; If the net amount is the credit balance, it shall be listed in "Contract Liabilities" or "OtherNon-current Liabilities" according to its liquidity.
(2) Specific method
The specific method of revenue recognition of the Company is as follows:
Polarizer/Textile and garment sales contract:
Domestic sales: When the goods are delivered to the customer and the customer has accepted the goods,the customer obtains the control of the goods, and the Company recognizes the revenue.
Export: A. When the customer receives goods in China, the revenue recognition is the same as "RevenueRecognition for Domestic Sales"; B. When the delivery place of customer is outside the country, theCompany mainly adopts FOB. When the goods are delivered from the warehouse and have been exported forcustoms declaration, the Company recognizes the revenue.
Revenue from property/accommodation services:
In the process of property/accommodation service provision, the Company recognizes revenue bystages.
27.Contract costs
Contract costs include incremental costs incurred for obtaining contracts and contract performancecosts.
The incremental cost incurred for obtaining the contract refers to the cost that the Company will notincur without obtaining the contract (such as sales commission, etc.). If the cost is expected to be recovered,the Company will recognize it as the contract acquisition cost as an asset. Other expenses incurred by theCompany to obtain the contract except the incremental cost expected to be recovered are included in thecurrent profits and losses when incurred.
If the cost incurred for the performance of the contract does not fall within the scope of other accountingstandards for enterprises such as inventory and meets the following conditions at the same time, theCompany will recognize it as the contract performance cost as an asset:
① Such cost is directly related to a current or expected contract, including direct labor, direct materials,manufacturing expenses (or similar expenses), costs clearly borne by the customer, and other costs incurredonly due to this contract;
② Such cost increases the resources of the Company for fulfilling its performance obligations in thefuture;
③ The cost is expected to be recovered.
Assets recognized by contract acquisition cost and assets recognized by contract performance cost(hereinafter referred to as "Assets Related to Contract Cost") shall be amortized on the same basis as therevenue recognition of goods or services related to the assets, and shall be included in current profits andlosses.
When the book value of the assets related to the contract cost is higher than the difference between thefollowing two items, the Company will accrue impairment provision of the excess and recognize it as theasset impairment loss:
① The remaining consideration expected to be obtained by the Company due to the transfer of goods orservices related to the asset;
② The estimated cost to be incurred for transferring the related goods or services.
The contract performance cost recognized as an asset shall be amortized for no more than one year orone normal business cycle at the time of initial recognition, which shall be listed in "Inventory", and theamortization period for more than one year or one normal business cycle at the time of initial recognitionshall be listed in "Other Non-current Assets".
The contract acquisition cost recognized as an asset shall be amortized for no more than one year or onenormal business cycle at initial recognition, and shall be listed in "Other Current Assets". The amortizationperiod for initial recognition shall exceed one year or one normal business cycle, and shall be listed in "OtherNon-current Assets".
28.Government subsidy
Government subsidies are recognized when they meet the conditions attached to government subsidiesand can be received.
Government subsidies for monetary assets shall be measured according to the amount received orreceivable. Government subsidies for non-monetary assets are measured at fair value; If the fair value cannotbe obtained reliably, it shall be measured according to the nominal amount RMB 1.
Government subsidies related to assets refer to government subsidies obtained by the Company forpurchasing and building or forming long-term assets in other ways; In addition, as a government subsidyrelated to income.
Where the government documents do not specify the object of the subsidy, and the subsidy can formlong-term assets, the part of the government subsidies corresponding to the value of the assets shall beregarded as the government subsidy related to the assets, and the rest shall be regarded as the governmentsubsidies related to the income; where it is difficult to be distinguished, government subsidies as a whole aretreated as income-related government subsidies.
Government subsidies related to assets offset the book value of related assets, or are recognized asdeferred income and included in profits and losses by stages according to a reasonable and systematic method
within the service life of related assets. Government subsidies related to income, which are used tocompensate related costs or losses that have occurred, are included in current profits and losses or offsetrelated costs; If used to compensate related costs or losses in later periods, they will be included in thedeferred income, and included in the current profits and losses or offset related costs during the recognitionperiod of related costs or losses. Government subsidies measured in nominal amount are directly included incurrent profits and losses. The Company adopts a consistent approach to the same or similar governmentsubsidy business.Government subsidies related to daily activities are included in other income or offset related costsaccording to the nature of economic business. Government subsidies irrelevant to routine activities shall beincluded into the non-operating receipt and disbursement.When the recognized government subsidy needs to be returned, if the book value of related assets isoffset during initial recognition, the book value of assets will be adjusted; If there is a relevant deferredincome balance, the book balance of the relevant deferred income will be offset, and the excess will beincluded in the current profits and losses; In other cases, it is directly included in the current profits andlosses.
For the discount interest of preferential policy loans, if the finance allocates the discount interest fundsto the lending bank, the actually received loan amount is taken as the recorded value of the loan, and theborrowing costs are calculated according to the loan principal and preferential policy interest rate. If thefinance directly allocates the discount interest funds to the Company, the discount interest will offset theborrowing costs.
29.The Deferred Tax Assets / The deferred Tax Liabilities
Income tax includes current income tax and deferred income tax. Except for adjusted goodwill arisingfrom business combination or deferred income tax related to transactions or matters directly included inowner's equity, they are all included in current profits and losses as income tax expenses.
According to the temporary difference between the book value of assets and liabilities and the tax basison the balance sheet date, the Company adopts the balance sheet liability method to confirm deferred incometax.
All taxable temporary differences are recognized as related deferred income tax liabilities, unless thetaxable temporary differences are generated in the following transactions:
(1) Initial recognition of goodwill, or the initial recognition of assets or liabilities arising fromtransactions with the following characteristics: the transaction is not a business combination, and thetransaction does not affect accounting profits or taxable income when it occurs;
(2) For taxable temporary differences related to investments of subsidiaries, joint ventures andassociated enterprises, the time for the temporary differences to be reversed can be controlled and thetemporary differences will probably not be reversed in the foreseeable future.
For deductible temporary differences, deductible losses and tax deductions that can be carried forwardto later years, the Company shall recognize the deferred income tax assets arising therefrom to the extent thatit is likely to obtain the future taxable income used to offset the deductible temporary differences, deductiblelosses and tax deductions, unless the deductible temporary differences are generated in the followingtransactions:
(1) The transaction is not a business combination, and it does not affect accounting profit or taxableincome when the transaction occurs;
(2) For deductible temporary differences related to investments of subsidiaries, joint ventures andassociated enterprises, corresponding deferred income tax assets are recognized if the following conditionsare met at the same time: temporary differences are likely to be reversed in the foreseeable future, and taxableincome used to offset the deductible temporary differences is likely to be obtained in the future.
On the balance sheet date, the Company measures deferred income tax assets and deferred income taxliabilities according to the applicable tax rate during the expected period of recovering the assets or payingoff the liabilities, and reflects the income tax impact of the expected way of recovering the assets or payingoff the liabilities on the balance sheet date.
On the balance sheet date, the Company rechecks the book value of deferred income tax assets. If it isunlikely that sufficient taxable income will be obtained in the future period to offset the benefits of deferredincome tax assets, the book value of deferred income tax assets will be written down. When sufficient taxableincome is likely to be obtained, the written-down amount shall be reversed.
30.Operating lease and financing lease
The Company recognizes the leases that have substantially transferred all risks and rewards related toasset ownership as financial leases, and other leases except financial leases as operating leases.
(1) The Company serves as the lessor
In the financial lease, at the beginning date of the lease term, the Company takes the sum of theminimum lease payment and the initial direct expenses as the recorded value of the financial lease receivable,and records the unsecured residual value; The difference between the sum of the minimum lease paymentamount, initial direct expenses and unsecured residual value and its present value is recognized as unrealizedfinancing income. For the unrealized financing income, the current financing income shall be calculated andrecognized as per the effective interest method in all periods within the lease term.
For the rent in the operating lease, the Company recognizes the current profits and losses according tothe straight-line method in each period of the lease term. The initial direct expenses incurred are included incurrent profits and losses.
(2) The Company serves as the lessee
In financial leasing, at the beginning date of the lease term, the Company take the lower of the fair valueof leased assets and the present value of the minimum lease payment as the recorded value of leased assets,and the minimum lease payment as the recorded value of long-term payables, and the difference betweenthem as unrecognized financing expenses. The initial direct cost shall be included into the value of the leasedassets. For the unrecognized financing cost, the current financing cost shall be calculated and recognized asper the effective interest method in all periods within the lease term. The Company adopts the depreciationpolicy consistent with that of the self-owned fixed assets to withdraw the depreciation of the leased assets.
The rent in the operating lease is included in the relevant asset cost or current profits and losses by theCompany according to the straight-line method in each period of the lease term; The initial direct expensesincurred are included in current profits and losses.
(3) Rent concession caused by COVID-19 outbreak
For rent concessions such as rent reduction or exemption and deferred payment reached between theCompany and the lessee on the existing lease contract directly caused by the COVID-19 outbreak, and thefollowing conditions are met, the Company adopts simplified methods for leasing houses and buildings:
① The lease consideration after concession is reduced or basically unchanged compared with thatbefore concession, in which the lease consideration is not discounted or is discounted at the discount ratebefore concession;
② After comprehensive consideration of qualitative and quantitative factors, it is determined that thereis no significant change in other terms and conditions of the lease.
The Company does not evaluate whether there is any lease change.
When the Company serves as the lessor, for operating lease, the Company continues to recognize theoriginal contract rent as lease revenue in the same way as before the concession. In case of rent reduction orexemption, the Company will take the reduced rent as contingent rent and offset the lease revenue during thereduction or exemption period. In case of rent reduction or exemption, the Company will take the reducedrent as contingent rent, and when the concession agreement is reached and other rights to collect the originalrent are waived, the original recognized lease revenue will be offset.
31.Share repurchase
The repurchased shares of the Company shall be managed as treasury shares before cancellation ortransfer, and all expenses for repurchased shares shall be converted into treasury shares cost. Where theconsideration and transaction costs paid in share repurchase reduce the owner's equity, when repurchasing,transferring or canceling the Company's shares, the gains or losses are not recognized.
Transfer of treasury stock shall be included in the capital reserve according to the difference between theactually received amount and the book amount of the treasury stock. If the capital reserve is insufficient tooffset, the surplus reserve and undistributed profits shall be offset. For write-off of treasury stocks, reducecapital stock according to par value and number of cancelled stocks, and write off capital reserve according tothe difference between book balance and par value of cancelled treasury stocks. If capital reserve isinsufficient to write off, write off surplus reserve and undistributed profits.
32.Restricted stocks
In the equity incentive plan, the Company grants restricted stocks to the incentive object, and theincentive object subscribes for stocks first. If the unlocking conditions specified in the equity incentive planare not met later, the Company will repurchase the stocks at the price agreed in advance. If the restrictedstocks issued to employees have gone through the registration and other capital increase proceduresaccording to relevant regulations, on the grant date, the Company will recognize the capital stock and capitalreserve (capital stock premium) according to the share subscription payment by employees; At the same time,the treasury stocks and other payables are recognized for repurchase obligations.
33.Significant accounting judgments and estimates
Based on historical experience and other factors, including reasonable expectations for future events,the Company continuously evaluates the important accounting estimates and key assumptions adopted.Important accounting estimates and key assumptions that are likely to cause significant adjustment risks tothe book value of assets and liabilities in the next fiscal year are listed as follows:
Classification of financial assets
The major judgments involved in determining the classification of financial assets by the Companyinclude the analysis of business model and contract cash flow characteristics.The Company determines the business model of managing financial assets at the level of financial assetportfolio. The factors considered include the way of evaluating and reporting the financial asset performanceto key managers, the risks affecting the financial asset performance and their management methods, and theway of getting remuneration for relevant business managers.
When evaluating whether the contractual cash flow of financial assets is consistent with the basic loanarrangement, the Company focuses on the following main judgments: Whether the time distribution oramount of the principal may change during the duration due to prepayment and other reasons; Whetherinterest only includes the time value of money, credit risk, other basic borrowing risks, and considerationwith costs and profits. For example, whether the prepayment amount only reflects the unpaid principal andinterest based on the unpaid principal, and the reasonable compensation paid for the early termination of thecontract.
Measurement of expected credit loss of accounts receivable
The Company calculates the expected credit loss of accounts receivable through the default riskexposure and expected credit loss rate of accounts receivable, and determines the expected credit loss ratebased on the default probability and loss given default. The Company uses internal historical credit lossexperience and other data to determine the expected credit loss rate, and adjusts the historical data based onthe current situation and forward-looking information. When considering forward-looking information, theindicators used by the Company include the risk of economic downturn, and changes in external marketenvironment, technical environment and customer conditions. The Company regularly monitors andrechecks the assumptions related to the calculation of expected credit losses.
Deferred income tax assets
Deferred income tax assets shall be recognized for all unused tax losses to the extent that it is likely thatthere will be enough taxable profits to offset the losses. It requires a lot of judgments from the management toestimate the time and amount of future taxable profits, and to determine the amount of deferred income taxassets that should be recognized based on the tax planning strategies.
Determination of fair value of unlisted equity investment
The fair value of unlisted equity investment is the estimated future cash flow discounted according tothe current discount rate of items with similar terms and risk characteristics. This valuation requires theCompany to estimate the expected future cash flow and discount rate, so it is uncertain. Under limitedcircumstances, if the information used to determine fair value is insufficient, or the possible estimatedamount of fair value is widely distributed, and the cost represents the best estimate of fair value within therange, such cost can represent its proper estimate of fair value within the distribution range.
34.Changes in important accounting policies and accounting estimates
(1) Changes in important accounting policies
① New income standards
The Ministry of Finance promulgated the Accounting Standards for Business Enterprises No.14-Income(Revised) in 2017 (hereinafter referred to as the "New Income Standards"). The Company implemented suchStandards from January 1, 2020 after deliberation and approval by the 27th meeting of the Seventh Board ofDirectors, and adjusted the relevant contents of accounting policies.
The Company has fulfilled the performance obligation in the contract, that is, to recognize the revenuewhen the customer obtains the control right of related goods or services. When certain conditions are met, theCompany will perform its performance obligations within a certain period of time; Otherwise, it will performits performance obligations at a certain time. If the contract contains two or more performance obligations,the Company will amortize the transaction price to each individual performance obligation according to therelative proportion of the individual selling price of the goods or services promised by each individualperformance obligation on the contract start date, and measure the revenue according to the transaction priceamortized to each individual performance obligation.
The Company has adjusted the relevant accounting policies according to the specific provisions onspecific matters or transactions in the new income standards.
The Company has transferred goods to customers and has the right to receive consideration, and suchright is listed as contract assets depending on other factors except the passage of time. The Company'sobligation to transfer goods to customers for received or receivable consideration from customers is listed asa contractual liability.
According to the cumulative impact of the first implementation of the New Income Standards, theCompany adjusted the amount of retained earnings and other related items in the financial statements at thebeginning of 2020, but did not adjust the data of the comparative financial statements. The Company onlyadjusted its retained earnings at the beginning of 2020 and the amount of other related items in the financialstatements for the cumulative impact of unfinished contracts on January 1, 2020. Due to the implementationof the New Income Standards, the Company reclassified the advance receipts related to the sales of goods andthe provision of labor services as contract liabilities.
| Contents and causes of changes in accounting policies | Affected report items | Affected amount (January 1, 2020) |
| Due to the implementation of the New Income Standards, the Company reclassified the advance receipts related to the sales of goods and the provision of labor services as contract liabilities. | Contract liabilities | 2,349,448.90 |
| Advance receipts | -2,349,448.90 |
Compared with the original income standards, the impact of implementing the New Income Standardson related items in the 2020 financial statements is as follows:
| Affected balance sheet items | Affected amount December 31, 2020 |
| Contract liabilities | 2,511,466.76 |
| Advance receipts | -2,511,466.76 |
| Affected income statement items | Affected amoun Year 2020t |
| None |
② Interpretation of Accounting Standards for Business Enterprises No.13
In December 2019, the Ministry of Finance issued the Interpretation of Accounting Standards forBusiness Enterprises No.13 (CS [2019] No.21) (hereinafter referred to as "Interpretation No.13").Interpretation No.13 revised the three elements constituting the business, refined the judgmentconditions of the business, and introduced the method of "concentration test" to the acquirer of businesscombination not under the same control when judging whether the acquired operating activities or assetportfolios constitute a business.
Interpretation No.13 clarifies that the related parties of an enterprise include joint ventures or associatedenterprises of other common member units (including parent companies and subsidiaries) of the enterprise towhich the enterprise is affiliated, and joint ventures or associated enterprises of investors who jointly controlthe enterprise.
Interpretation No.13 will be implemented as of January 1, 2020, and the Company will adopt the futureapplicable law for accounting treatment of the above changes in accounting policies.
The adoption of Interpretation No.13 has no significant impact on the financial position, operatingresults and related party disclosure of the Company.
③ In June 2020, the Ministry of Finance issued the Notice on Printing and Distributing the "AccountingTreatment Regulations for Rent Concessions Due to COVID-19" (CS [2020] No.10), which allows asimplified method for rent concessions due to COVID-19 according to the accounting treatment regulations.
The Company has adopted the simplified method in the accounting treatment regulations (see Notes III.
30. (3)) for the rent concessions related to the house lease since January 1, 2020, and recorded the relevantrent concessions into profit and loss during the concession period or when the relevant rights and obligationsare released and abandoned when the concession agreement is reached. The amount of impact of thesimplified method on the current profit is RMB 10,113,923.47.
The above simplified treatment method is not applicable to the rent concessions occurred for theCompany before January 1, 2020.
II. Changes in accounting estimates
None
（3）Adjustments to the Financial Statements at the Beginning of the First Execution Year of any NewStandards Governing Financial Instruments, Revenue or Leases
Consolidated balance sheet
| Items | December 31,2019 | January 1,2020 | Amount involved in the adjustment |
| Current asset： | |||
| Monetary fund | 409,564,847.52 | 409,564,847.52 | |
| Transactional financial assets | 830,000,000.00 | 830,000,000.00 | |
| Derivative financial assets | |||
| Notes receivable | 40,424,601.97 | 40,424,601.97 |
| Items | December 31,2019 | January 1,2020 | Amount involved in the adjustment |
| Account receivable | 365,325,029.38 | 365,325,029.38 | |
| Financing of receivables | 17,933,597.98 | 17,933,597.98 | |
| Prepayments | 18,445,857.53 | 18,445,857.53 | |
| Other account receivable | 12,440,761.13 | 12,440,761.13 | |
| Including：Interest receivable | 7,610,043.19 | 7,610,043.19 | |
| Dividend receivable | |||
| Inventories | 391,717,935.12 | 391,717,935.12 | |
| Contract assets | |||
| Assets held for sales | |||
| Non-current asset due within 1 year | |||
| Other current asset | 140,821,609.72 | 140,821,609.72 | |
| Total of current assets | 2,226,674,240.35 | 2,226,674,240.35 | |
| Non-current assets： | |||
| Creditor's right investment | |||
| Other investment on bonds | |||
| Long-term receivable | |||
| Net assets for defined benefit plan | |||
| Long term share equity investment | 152,209,929.72 | 152,209,929.72 | |
| Other equity instruments investment | 248,781,946.73 | 248,781,946.73 | |
| Other non-current financial assets | |||
| Real estate investment | 112,730,320.90 | 112,730,320.90 | |
| Fixed assets | 903,229,077.83 | 903,229,077.83 | |
| Construction in progress | 839,866,275.92 | 839,866,275.92 | |
| Production physical assets | |||
| Oil & gas assets | |||
| Intangible assets | 36,517,996.34 | 36,517,996.34 |
| Items | December 31,2019 | January 1,2020 | Amount involved in the adjustment |
| Development expenses | |||
| Goodwill | |||
| Long-germ expenses to be amortized | 2,692,750.67 | 2,692,750.67 | |
| Deferred income tax asset | 5,618,026.43 | 5,618,026.43 | |
| Other non-current asset | 3,079,321.10 | 3,079,321.10 | |
| Total of non-current assets | 2,304,725,645.64 | 2,304,725,645.64 | |
| Total of assets | 4,531,399,885.99 | 4,531,399,885.99 | |
| Current liabilities | |||
| Short-term loans | |||
| Transactional financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Account payable | 241,297,770.64 | 241,297,770.64 | |
| Advance receipts | 30,530,117.62 | 28,180,668.72 | -2,349,448.90 |
| Contract liabilities | 2,349,448.90 | 2,349,448.90 | |
| Employees’ wage payable | 38,556,180.20 | 38,556,180.20 | |
| Tax payable | 22,545,550.33 | 22,545,550.33 | |
| Other account payable | 152,645,780.14 | 152,645,780.14 | |
| Including：Interest payable | |||
| Dividend payable | |||
| Liabilities held for sales | |||
| Non-current liability due within 1 year | |||
| Other current liability | |||
| Total of current liability | 485,575,398.93 | 485,575,398.93 | |
| Non-current liabilities： | |||
| Long-term loan |
| Items | December 31,2019 | January 1,2020 | Amount involved in the adjustment |
| Bond payable | |||
| Including：preferred stock | |||
| Sustainable debt | |||
| Long-term payable | |||
| Long-term remuneration payable to staff | |||
| Expected liabilities | |||
| Deferred income | 121,264,571.22 | 121,264,571.22 | |
| Deferred income tax liability | 69,944,345.66 | 69,944,345.66 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 191,208,916.88 | 191,208,916.88 | |
| Total of liability | 676,784,315.81 | 676,784,315.81 | |
| Owners’ equity： | |||
| Share capital | 509,338,429.00 | 509,338,429.00 | |
| Other equity instruments | |||
| Including：preferred stock | |||
| Sustainable debt | |||
| Capital reserves | 1,974,922,248.03 | 1,974,922,248.03 | |
| Less：Shares in stock | 16,139,003.40 | 16,139,003.40 | |
| Other comprehensive income | 119,737,783.31 | 119,737,783.31 | |
| Special reserve | |||
| Surplus reserves | 90,596,923.39 | 90,596,923.39 | |
| Retained profit | 49,307,764.03 | 49,307,764.03 | |
| Total of owner’s equity belong to the parent company | 2,727,764,144.36 | 2,727,764,144.36 | |
| Minority shareholders’ equity | 1,126,851,425.82 | 1,126,851,425.82 | |
| Total of owners’ equity | 3,854,615,570.18 | 3,854,615,570.18 | |
| Total of liabilities and owners’ equity | 4,531,399,885.99 | 4,531,399,885.99 |
Parent Company Balance Sheet
| Items | 2019.12.31 | 2020.01.01 | Amount involved in the adjustment |
| Current asset： | |||
| Monetary fund | 27,979,338.37 | 27,979,338.37 | |
| Transactional financial assets | 650,000,000.00 | 650,000,000.00 | |
| Derivative financial assets | |||
| Notes receivable | |||
| Account receivable | 522,931.04 | 522,931.04 | |
| Financing of receivables | |||
| Prepayments | 768,099.94 | 768,099.94 | |
| Other account receivable | 17,039,506.00 | 17,039,506.00 | |
| Including：Interest receivable | 7,329,228.31 | 7,329,228.31 | |
| Dividend receivable | |||
| Inventories | |||
| Assets held for sales | |||
| Non-current asset due within 1 year | |||
| Other current asset | |||
| Total of current assets | 696,309,875.35 | 696,309,875.35 | |
| Non-current assets： | |||
| Creditor's right investment | |||
| Other investment on bonds | |||
| Long-term receivable | |||
| Net assets for defined benefit plan | |||
| Long term share equity investment | 2,102,430,511.88 | 2,102,430,511.88 | |
| Other equity instruments investment | 206,816,952.64 | 206,816,952.64 | |
| Other non-current financial |
| Items | 2019.12.31 | 2020.01.01 | Amount involved in the adjustment |
| assets | |||
| Real estate investment | 107,199,622.80 | 107,199,622.80 | |
| Fixed assets | 25,500,695.77 | 25,500,695.77 | |
| Construction in progress | 19,552.00 | 19,552.00 | |
| Production physical assets | |||
| Oil & gas assets | |||
| Intangible assets | 659,937.75 | 659,937.75 | |
| Development expenses | |||
| Goodwill | |||
| Long-germ expenses to be amortized | 800,858.17 | 800,858.17 | |
| Deferred income tax asset | 5,466,478.06 | 5,466,478.06 | |
| Other non-current asset | |||
| Total of non-current assets | 2,448,894,609.07 | 2,448,894,609.07 | |
| Total of assets | 3,145,204,484.42 | 3,145,204,484.42 | |
| Current liabilities | |||
| Short-term loans | |||
| Transactional financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Account payable | 411,743.57 | 411,743.57 | |
| Advance receipts | 2,878,936.58 | 639,024.58 | -2,239,912.00 |
| Contract Liabilities | -2,239,912.00 | 2,239,912.00 | |
| Employees’ wage payable | 11,910,175.11 | 11,910,175.11 | |
| Tax payable | 20,801,961.18 | 20,801,961.18 | |
| Other account payable | 119,984,209.60 | 119,984,209.60 | |
| Including：Interest payable | |||
| Dividend payable |
| Items | 2019.12.31 | 2020.01.01 | Amount involved in the adjustment |
| Liabilities held for sales | |||
| Non-current liability due within 1 year | |||
| Other current liability | |||
| Total of current liability | 155,987,026.04 | 155,987,026.04 | |
| Non-current liabilities： | |||
| Long-term loan | |||
| Bond payable | |||
| Including：preferred stock | |||
| Sustainable debt | |||
| Long-term payable | |||
| Long-term remuneration payable to staff | |||
| Expected liabilities | |||
| Deferred income | 600,000.00 | 600,000.00 | |
| Deferred income tax liability | 66,953,097.14 | 66,953,097.14 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 67,553,097.14 | 67,553,097.14 | |
| Total of liability | 223,540,123.18 | 223,540,123.18 | |
| Owners’ equity | |||
| Share capital | 509,338,429.00 | 509,338,429.00 | |
| Other equity instruments | |||
| Including：preferred stock | |||
| Sustainable debt | |||
| Capital reserves | 1,589,869,499.36 | 1,589,869,499.36 | |
| Less：Shares in stock | 16,139,003.40 | 16,139,003.40 | |
| Other comprehensive income | 110,764,037.74 | 110,764,037.74 | |
| Special reserve | |||
| Surplus reserves | 90,596,923.39 | 90,596,923.39 |
| Items | 2019.12.31 | 2020.01.01 | Amount involved in the adjustment |
| Retained profit | 637,234,475.15 | 637,234,475.15 | |
| Total of owners’ equity | 2,921,664,361.24 | 2,921,664,361.24 | |
| Total of liabilities and owners’ equity | 3,145,204,484.42 | 3,145,204,484.42 |
IV. Taxes of the Company
1. Main taxes categories and tax rate
| Taxes | Tax references | Applicable tax rates |
| VAT | The taxable turnover | 13，6，5 |
| City construction tax | Turnover tax to be paid allowances | 7 |
| Education surcharge | Turnover tax to be paid allowances | 3 |
| Local education surcharge | Turnover tax to be paid allowances | 2 |
| Business income tax | Taxable income | 25，20，16.5，15 |
| Name of taxpayer | Income tax rates |
| Shenzhen Textile (Holdings) Co., Ltd | 25% |
| Shenzhen Lisi Industrial Co., Ltd. | 20% |
| Shenfang Property Management Co., Ltd. | 20% |
| Shenfang Property Management Co., Ltd. | 20% |
| Shenzhen Huaqiang Hotel | 20% |
| Shenzhen Beauty Century Garment Co., Ltd. | 20% |
| SAPO Photoelectric Co., Ltd. | 15% |
| Shenzhen Shenfang Imports & Exports Co., Ltd. | 25% |
| Shengtou （HK）Co., Ltd. | 16.5% |
2. Tax preference and approval file
(2).In accordance with relevant provisions of the Notice of Ministry of Finance, General Administration of Customs and State Taxation Administration Regarding Tax Preference Policies for Further Supportingthe Development of New-type Display Device Industry (Cai Guan Shui (2016) No. 62), Shenzhen Shengbo Optoelectronic Technology Co., Ltd. manufactured key materials and parts for the upstream industry of new-type display devices including colorful light filter coating and polarizer sheet that comply with the planning for independent development of domestic industries may enjoy the preferential policies of exemption fro
m import tariff for the import of raw materials and consumables for the purpose of self use and production that can not be produced domestically from January 1, 2016 and December 31, 2020.SAPO Photoelectric Co., Ltd. the subsidiary company of our company, has been qualified as nationalhigh-tech enterprise since 2019 ,High-tech and enterprise certificate No.: GR201944205666 ,The certificateis valid for three years, The enterprise income tax rate of this year is 15%.Shenzhen Beauty Century Garment Co., Ltd., Shenzhen Huaqiang Hotel Garment Co., Ltd. andShenzhen Lisi Industrial Development Co., Ltd., subsidiaries of the Company, are all small and low-profitenterprises as stipulated in the Notice of the Ministry of Finance and the State Administration of Taxation onImplementing Inclusive Tax Concession Policy for Small and Micro Enterprises (CS [2019] No.13). For thepart of the taxable income of this year that does not exceed RMB 1 million, the taxable income is reduced to25%, and the enterprise income tax is paid at a rate of 20%; For the taxable income of this year that exceedsRMB 1 million but does not exceed RMB 3 million, the taxable income is reduced to 50% and the enterpriseincome tax is paid at a rate of 20%.V. Notes of consolidated financial statement
1.Monetary Capital
| Items | 2020.12.31 | 2019.12.31 | |
| Cash at hand | 4,127.10 | 11,091.94 | |
| Bank deposit | 271,085,025.10 | 272,366,495.29 | |
| Other monetary funds | 7,998,084.75 | 137,187,260.29 | |
| Total | 279,087,236.95 | 409,564,847.52 | |
| Including : The total amount of deposit abroad | 7,829,822.78 | 3,272,384.31 | |
Note: At the end of the period, RMB 750,000.00 of other monetary funds of the Company is the L/Csecurity deposit, except for which there is no mortgage, pledge or freezing, or money deposited abroad withrestricted repatriation.
2. Transactional financial assets
| Items | 2020.12.31 | 2019.12.31 |
| Structure deposit | 200,536,575.34 | 830,000,000.00 |
| Monetary funds | 484,080,684.72 | -- |
| Total | 684,617,260.06 | 830,000,000.00 |
3. Notes receivable
| Category | 2020.12.31 | 2019.12.31 | ||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |
| Bank acceptance | -- | -- | -- | 40,424,601.97 | -- | 40,424,601.97 |
| .Commercial acceptance bill | 16,898,148.02 | 84,490.74 | 16,813,657.28 | -- | -- | -- |
| Total | 16,898,148.02 | 84,490.74 | 16,813,657.28 | 40,424,601.97 | -- | 40,424,601.97 |
Note：
1.The company has no Notes receivable pledged.
（2）Notes receivable which had endorsed by the Company or had discounted and had not due on thebalance sheet date at the period-en
| Category | Amount of recognition termination at the period-end | Amount of not terminated recognition at the period-end |
| Bank acceptance | 60,260,489.10 | -- |
（3）At the end of the period, the Company has no bills transferred to accounts receivable due to thedrawer's non-performance
(4) Classification by accrual method for bad debts
| Category | 2020.12.31 | 2019.12.31 | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion(%) | Amount | Expected credit loss rate (%) | Amount | Proportion(%) | Amount | Credit loss rate (%) | |||
| Bad debt provision is accrued according to individual items | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- |
| Bad debt provision is accrued according to portfolios | ||||||||||||
| Including： | ||||||||||||
| Commercial acceptance bill | 16,898,148.02 | 100.00 | 84,490.74 | 0.50 | 16,813,657.28- | -- | -- | -- | -- | -- | ||
| Bank acceptance | -- | -- | -- | -- | -- | 40,424,601.97 | 100.00 | -- | -- | 40,424,601.97 | ||
| Total | 16,898,148.02 | 100.00 | 84,490.74 | 0.50 | 16,813,657.28 | 40,424,601.97 | 100.00 | -- | -- | 40,424,601.97 | ||
Note：
Accrual of bad debt provision by portfolio:
Portfolio accrual items: commercial acceptance bills
| Name | 2020.12.31 | 2019.12.31 | ||||
| Notes receivable | Bad-debt provision | Expected credit loss rate (%) | Notes receivable | Bad-debt provision | Expected credit loss rate (%) | |
| .Commercial acceptance bill | 16,898,148.02 | 84,490.74 | 0.50 | -- | -- | -- |
(5) Bad debt provision accrued, recovered or reversed in the current period
| Amount of bad-debt provision | |
| 2019.12.31 | |
| Current accrual | 84,490.74 |
| 2020.12.31 | 84,490.74 |
(6) There is no actual write-off of notes receivable in the current period
4. Account receivable
（1）Disclosure by aging
| Aging | 2020.12.31 | 2019.12.31 |
| Within 1 year | 567,264,103.99 | 382,065,942.05 |
| 1-2 years | 6,063,040.66 | 813,122.40 |
| 2-3 years | 103,011.28 | 1,076.93 |
| 3-4 years | 389.73 | 6,728.70 |
| 4-5 years | 6,728.70 | 4,636,402.32 |
| Over 5 years | 12,483,245.35 | 7,930,426.56 |
| Subtotal | 585,920,519.71 | 395,453,698.96 |
| Less：Bad debt provision | 38,610,301.81 | 30,128,669.58 |
| Total | 547,310,217.90 | 365,325,029.38 |
（2）Disclosure by classification according to the bad debt accrual method
| Types | 2020.12.31 | 2019.12.31 | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion(%) | Amount | Expected credit loss rate (%) | Amount | Proportion(%) | Amount | Expected credit loss rate (%) | |||
| Bad debt provision is accrued according to individual items | 20,641,002.24 | 3.52 | 13,552,865.25 | 65.66 | 7,088,136.99 | 12,753,137.41 | 3.22 | 10,823,862.18 | 84.87 | 1,929,275.23 |
| Bad debt provision is accrued according to portfolios | 565,279,517.47 | 96.48 | 25,057,436.56 | 4.43 | 540,222,080.90 | 382,700,561.55 | 96.78 | 19,304,807.40 | 5.04 | 363,395,754.15 |
| Total | 585,920,519.71 | 100.00 | 38,610,301.81 | 6.59 | 547,310,217.89 | 395,453,698.96 | 100.00 | 30,128,669.58 | 7.62 | 365,325,029.38 |
Accrual of bad debt provision by single item:：
| Unit name | 2020.12.31 | |||
| Book balane | Bad-debt provision | Expected credit loss rate (%) | Accrual reason | |
| Dongguan Xiangteng New Material Technology Co., Ltd. | 6,961,050.25 | 397,710.96 | 5.71 | There is a dispute between the two parties that the net recovery after deducting the amount payable is extremely unlikely and bad debts have been fully accrued on the net portion |
| Dongguan Yaxing Semiconductor Co., Ltd. | 2,797,016.81 | 2,797,016.81 | 100.00 | The credit period is exceeded by a long time, |
| and the possibility of recovery is extremely slim | ||||
| Dongguan Fair LCD Co., Ltd. | 1,698,449.31 | 1,698,449.31 | 100.00 | The credit period is exceeded by a long time, and the possibility of recovery is extremely slim |
| Guangdong Ruili Baolai Technology Co., Ltd. | 1,298,965.36 | 1,298,965.36 | 100.00 | The credit period is exceeded by a long time, and the possibility of recovery is extremely slim |
| Jiangsu Xiangteng New Material Co., Ltd. | 1,049,595.40 | 524,797.70 | 50.00 | The credit period is exceeded by a long time, and the possibility of recovery is extremely slim |
| Total of other individual accrual units | 6,835,925.11 | 6,835,925.11 | 100.00 | The credit period is exceeded by a long time, and the possibility of recovery is extremely slim |
| Total | 20,641,002.24 | 13,552,865.25 | 65.66 |
Accrual of bad debt provision by portfolio:
Portfolio accrual items:
| 2020.12.31 | 2019.12.31 | |||||
| Receivable | Bad-debt provision | Expected credit loss rate (%) | Receivable | Bad-debt provision | Expected credit loss rate (%) | |
| Within 1 year | 564,591,259.21 | 24,862,108.87 | 4.40 | 382,032,402.05 | 19,101,620.10 | 5.00 |
| 1-2 years | 688,258.26 | 195,327.69 | 28.38 | 668,159.50 | 203,187.30 | 30.41 |
| Total | 565,279,517.47 | 25,057,436.56 | 4.43 | 382,700,561.55 | 19,304,807.40 | 5.04 |
(3) Bad debt provision accrued, recovered or reversed in the current period
| Amount of bad-debt provision | |
| 2019.12.31 | 30,128,669.58 |
| Adjustment amount for the first implementation of the New Income Standards | |||
| -- | |||
| 2020.01.01 | 30,128,669.58 | ||
| Current accrual | 8,481,632.23 | ||
| Withdrawal or reversal in current period | -- | ||
| 2020.12.31 | 38,610,301.81 | ||
(4) There is no account receivable actually written off in the current period
(5) The top five units of the closing balance of accounts receivable collected by the arrears
| Unit name | Nature of payment | Other receivable closing balance | Aging | Proportion of total closing balance of other receivables (%) | Bad-debt provision Closing balance |
| Top 1 | Goods | 132,428,291.01 | Within 1 year | 22.60% | 5,840,087.63 |
| Top 2 | Goods | 68,516,402.40 | Within 1 year | 11.69% | 3,021,573.35 |
| Top 3 | Goods | 51,794,178.25 | Within 1 year | 8.84% | 2,284,123.26 |
| Top 4 | Goods | 39,315,045.56 | Within 1 year | 6.71% | 1,733,793.51 |
| Top 5 | Goods | 38,777,319.65 | Within 1 year | 6.62% | 1,710,079.80 |
| Total | -- | 330,831,236.87 | -- | 56.46% | 14,589,657.55 |
（6）No account receivable which terminate the recognition owning to the transfer of the financialassets
(7)The amount of the assets and liabilities formed by the transfer and the continues involvement ofaccounts receivable
5.Receivable financing
| Items | 2020.12.31 | 2019.12.31 |
| Notes receivable | 102,051,314.08 | 17,933,597.98 |
Some subsidiaries of the Company discount and endorse some bank acceptance bills according to theneeds of their daily fund management, therefore the bank acceptance bills of the subsidiaries are classified asfinancial assets measured at fair value with changes included in other comprehensive income.
There is no single bank acceptance bill with impairment provision of the Company. On December 31,2020, the Company considered that there was no significant credit risk in the bank acceptance bills held by it,and there would be no significant loss due to bank default.
6.Prepayments
(1)Disclosure by age
| Aging | 2020.12.31 | 2019.12.31 | ||
| Amount | Proportion% | Amount | Proportion% | |
| Within 1 year | 14,934,263.03 | 88.35 | 16,750,558.60 | 90.82 |
| 1-2 years | 557,043.06 | 3.30 | 729,266.20 | 3.95 |
| 2-3 years | 540,748.42 | 3.20 | 15,494.14 | 0.08 |
| Over 3 years | 870,461.88 | 5.15 | 950,538.59 | 5.15 |
| Total | 16,902,516.39 | 100.00 | 18,445,857.53 | 100.00 |
Note: As of December 31, 2020, there is no large prepayment for more than 1 year in the balance ofprepayments.
(2) The top five ending balances of prepayments collected according to prepaid objects totaled RMB12,005,147.74, accounting for 71.03% of the total closing balances of prepayments
7．Other receivale
| Items | 2020.12.31 | 2019.12.31 | |
| Interest receivable | -- | 7,610,043.19 | |
| Other receivavble | 5,265,002.71 | 4,830,717.94 | |
| Total | 5,265,002.71 | 12,440,761.13 | |
（1）Interest receivable
1) Category of interest receivable
| Items | 2020.12.31 | 2019.12.31 | |
| Fixed deposit | -- | 109,425.24 | |
| Structure deposit | -- | 7,500,617.95 | |
| Subtotal | -- | 7,610,043.19 | |
| Less：Bad debt provision | -- | -- | |
| Total | -- | 7,610,043.19 | |
（2）Other receivable
(1)Category of Other receivable
| Aging | 2020.12.31 | 2019.12.31 | |
| Within 1 year | 5,011,410.31 | 2,250,037.41 | |
| 1-2 years | 550,486.21 | 1,213,773.48 |
| 2-3 years | 697,124.67 | 647,494.79 |
| 3-4 years | 173,007.52 | 1,837,174.29 |
| 4-5 years | 1,802,920.64 | 1,015,782.04 |
| Over 5 years | 14,827,417.02 | 13,835,408.91 |
| Subtotal | 23,062,366.37 | 20,799,670.92 |
| Less：Bad debt provision | 17,797,363.66 | 15,968,952.98 |
| Total | 5,265,002.71 | 4,830,717.94 |
(2)Other accounts receivable classified by the nature of accounts
| Items | 2020.12.31 | 2019.12.31 |
| Book balance | Book Balance | |
| Export rebate | 1,658,146.29 | 1,191,949.50 |
| Unit account | 16,369,395.10 | 15,674,175.33 |
| Deposit | 2,585,585.87 | 2,435,689.74 |
| Reserve fund and staff loansLoans | 379,477.97 | 428,019.47 |
| Other | 2,069,761.14 | 1,069,836.88 |
| Subtotal | 23,062,366.37 | 20,799,670.92 |
| Less：Bad debt provision | 17,797,363.66 | 15,968,952.98 |
| Total | 5,265,002.71 | 4,830,717.94 |
(3）Bad-debt provision
At the end of the period, bad debt provision in the first stage:
| Types | Book Balance | Bad-debt provision | Book value |
| Bad debt provision accrued by aging portfol | 5,838,599.72 | 573,597.01 | 5,265,002.71 |
| Total | 5,838,599.72 | 573,597.01 | 5,265,002.71 |
At the end of the period, the Company does not have interest receivable, dividend receivable and otherreceivables in the second stage;
At the end of the period, bad debt provision in the third stage:
| Types | Book Balance | Bad-debt provision | Book value | Reason | |
| Bad debt provision is accrued according to individual items | 17,223,766.65 | 17,223,766.65 | -- | Long aging and low possibility of recovery | |
| Total | 17,223,766.65 | 17,223,766.65 | -- | ||
On December 31, 2019, bad debt provisions are as follows:
Bad debt provision in the first stage:
| Types | Book Balance | Bad-debt provision | Book value |
| Bad debt accrued by aging portfolios | 6,406,385.55 | 1,575,667.61 | 4,830,717.94 |
| Total | 6,406,385.55 | 1,575,667.61 | 4,830,717.94 |
As of December 31, 2019, the Company has no interest receivable, dividend receivable and otherreceivables in the second stage.As of December 31, 2019,，Bad debt provision in the third stage:
| Types | Book Balance | Bad-debt provision | Book value | Reason | |
| Bad debt provision is accrued according to individual items | 14,393,285.37 | 14,393,285.37 | -- | Long aging and low possibility of recovery | |
| Total | 14,393,285.37 | 14,393,285.37 | -- |
④ Bad debt provision accrued, recovered or reversed in the current period
| Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses over the next 12 months | Expected credit loss over life (no credit impairment) | Expected credit losses for the entire duration (credit |
| impairment occurred) | ||||
| Balance as at December 31,2019 | 1,575,667.61 | -- | 14,393,285.37 | 15,968,952.98 |
| Balance as at December 31,2019In current | -- | -- | -- | -- |
| ——Transfer to stage II | -- | -- | -- | -- |
| ——Transfer to stage III | -1,059,367.39 | -- | 1,059,367.39 | -- |
| ——Transfer to stage II | -- | -- | -- | -- |
| ——Transfer to stage I | -- | -- | -- | -- |
| Provision in the current period | 57,296.79 | -- | 1,771,113.89 | 1,828,410.68 |
| Turn back in the current period | -- | -- | -- | -- |
| Reseller in the current period | -- | -- | -- | -- |
| Write - off in the current period | -- | -- | -- | -- |
| Other | -- | -- | -- | -- |
| Balance as at December 31,2020 | 573,597.01 | -- | 17,223,766.65 | 17,797,363.66 |
(5) Other account receivables actually cancel after write-off :Nil
(6)Top 5 of the closing balance of the other accounts receivable collected according to the arrears party
| Name | Nature | Year-end balance | Age | Portion in total other receivables(%) | Bad debt provision of year-end balance | |
| Top 1 | Unit account | 11,389,044.60 | Over 5 years | 49.38% | 11,389,044.60 | |
| Top 2 | Unit account | 1,800,000.00 | 4-5 years | 7.80% | 1,800,000.00 | |
| Top 3 | Unit account | 1,100,000.00 | Within 1 year | 4.77% | 55,000.00 | |
| Top 4 | Unit account | 1,018,295.37 | 1-2 years，2-3 years,3-4 years | 4.42% | 349,497.32 | |
| Top 5 | Deposit | 980,461.06 | Over 5 years | 4.25% | 980,461.06 | |
| Total | -- | 16,287,801.03 | -- | 70.63% | 14,574,002.98 | |
(7) No Accounts receivable involved with government subsidies
(8) No other account receivable which terminate the recognition owning to the transfer of the financialassets
(9) The amount of the assets and liabilities formed by the no transfer and the continues involvement ofother accounts receivable
8.Inventory
1）Inventories types
| Items | 2020.12.31 | 2019.12.31 | |||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | ||
| Raw materials | 258,191,196.82 | 13,788,646.60 | 244,402,550.22 | 212,371,911.48 | 31,148,714.05 | 181,223,197.43 | |
| Processing products | 132,780,479.72 | 43,914,789.90 | 88,865,689.82 | 135,636,148.29 | 53,692,060.27 | 81,944,088.02 | |
| Finished product | 2,715,845.96 | -- | 2,715,845.96 | 5,962,105.18 | -- | 5,962,105.18 | |
| Semi-finished product | 131,069,647.77 | 14,613,640.62 | 116,456,007.15 | 130,209,635.92 | 36,196,938.50 | 94,012,697.42 | |
| Goods in transit | 524,698.46 | -- | 524,698.46 | 1,618,894.41 | 48,491.27 | 1,570,403.14 | |
| Commissioned materials | 31,040,280.45 | 3,157,490.62 | 27,882,789.83 | 30,643,409.60 | 3,637,965.67 | 27,005,443.93 | |
| Total | 556,322,149.18 | 75,474,567.74 | 480,847,581.44 | 516,442,104.88 | 124,724,169.76 | 391,717,935.12 | |
（2）Inventory Impairment provision
| Items | 2020.01.01 | Increased in current | Decreased in current period | 2020.12.31 | ||
| Provision | Other | Transferred back | Other | |||
| Raw materials | 31,148,714.05 | 3,666,817.13 | -- | 21,026,884.58 | -- | 13,788,646.60 |
| Finished product | 53,692,060.27 | 27,366,959.59 | -- | 37,144,229.96 | -- | 43,914,789.90 |
| Semi-finished product | 36,196,938.50 | 34,909,052.14 | -- | 56,492,350.02 | -- | 14,613,640.62 |
| Goods in transit | 48,491.27 | -- | -- | 48,491.27 | -- | -- |
| Commissioned materials | 3,637,965.67 | -- | -- | 480,475.05 | -- | 3,157,490.62 |
| Total | 124,724,169.76 | 65,942,828.86 | -- | 115,192,430.88 | -- | 75,474,567.74 |
（2）Inventory Impairment provision（Continue)
| Items | Specific basis for determining the net realizable value/remaining consideration and the cost to be incurred | Reversal or resale in current period Reason for provision for inventor |
| Raw materials | Net realizable value is lower than inventory cost | Use of relevant materials |
| Finished product | Net realizable value is lower than inventory cost | Sales of related finished products |
| Semi-finished product | Net realizable value is lower than inventory cost | Sales of related semi-finished products |
| Goods in transit | Net realizable value is lower than inventory cost | Sales of related finished products |
| Commissioned materials | Net realizable value is lower than inventory cost | Collection of relevant consigned processing materials |
9.Other current assets
| Items | 2020.12.31 | 2019.12.31 | |
| After the deduction of input VAT | 77,482,083.47 | 140,821,609.72 | |
| Total | 77,482,083.47 | 140,821,609.72 | |
10.Long-term equity investment
| Investees | 2019.12.31 | Increase/decrease | 2020.12.31 | Closing balance of impairment provision | |||||||
| Additional investment | Negative investment | Investment profit and loss recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced to issue | Withdrawal of impairment provision | Other | ||||
| I. Joint venture | |||||||||||
| Anhui Huapeng Textile Co.,Ltd. | 10,098,833.77 | 698,189.37 | 10,797,023.14 | ||||||||
| Shenzhen Guanhua Printing & Dyeing Co., Ltd. | 129,623,072.69 | -1,716,907.52 | 127,906,165.17 | ||||||||
| Subtotal | 139,721,906.46 | -1,018,718.15 | 138,703,188.31 | ||||||||
| 2. Affiliated Company | |||||||||||
| Shenzhen Changlianfa Printing & dyeing Company | 2,450,676.14 | 255,586.24 | 2,706,262.38 | ||||||||
| Jordan Garment | 902,269.19 | -904,422.99 | 2,153.80 | ||||||||
| Factory | |||||||||||
| Hongkong Yehui International Co., Ltd. | 9,135,077.93 | -2,297,211.37 | -318,180.02 | 6,519,686.54 | |||||||
| Subtotal | 12,488,023.26 | -2,946,048.12 | -316,026.22 | 9,225,948.92 | |||||||
| Total | 152,209,929.72 | -3,964,766.27 | -316,026.22 | 147,929,137.23 |
11. Other equity instruments investment
| Items | 2020.12.31 | 2019.12.31 |
| FUAO（000030） | 10,129,390.84 | 6,568,923.76 |
| Shenzhen Dailishi Underwear Co., Ltd. | 12,315,939.61 | 12,315,939.61 |
| Union Development Group Co., Ltd. | 152,469,200.00 | 152,469,200.00 |
| Shenzhen Xiangjiang Trade Co., Ltd. | -- | 7,474,900.00 |
| Shenzhen Xinfang Knitting Co., Ltd. | 2,227,903.00 | 2,227,903.00 |
| Jintian Industry（Group）Co., Ltd. | -- | -- |
| Shenzhen Jiafeng Textile Industry Co., ltd. | -- | -- |
| Shenzhen Xieli Auto Co., Ltd. | -- | 25,760,086.27 |
| Shenzhen South Textile Co., Ltd. | 13,464,994.09 | 13,464,994.09 |
| Changxing Junying Investment Partnership | -- | 28,500,000.00 |
| Total | 190,607,427.54 | 248,781,946.73 |
As the above items are investments that the Company plans to hold for a long time for strategic purposes,the Company designates them as financial assets measured at fair value with changes included in othercomprehensive income.
| Items | Recognized dividend income | Accumulating income | Accumulating losses | Amount of other comprehensive income transferred to retained earnings | Reason |
| Fuao（000030） | 234,604.42 | 1,188,792.53 |
| Shenzhen Dailishi Underwear Co., Ltd. | 1,037,735.85 | 9,756,083.35 | |||
| Union Development Group Co., Ltd. | 208,000.00 | 149,869,200.00 | |||
| Shenzhen Xiangjiang Trade Co., Ltd. | 358,702.05 | 7,314,900.00 | 4,694,359.48 | Disposal | |
| Shenzhen Xinfang Knitting Co., Ltd. | 156,000.00 | 1,703,903.00 | |||
| Jintian Industry（Group）Co., Ltd. | 14,831,681.50 | ||||
| Shenzhen Jiafeng Textile Industry Co., ltd. | 16,800,000.00 | ||||
| Shenzhen Xieli Auto Co., Ltd. | 21,516,380.83 | Disposal | |||
| Shenzhen South Textile Co., Ltd. | 951,550.47 | 11,964,994.09 |
12. Other non-current financial assets
| Types | 2020.12.31 | 2019.12.31 |
| Financial assets measured at fair value with changes included in current profits and losses | 30,650,943.40 | -- |
| Total | 30,650,943.40 | -- |
13. Investment real estate
(1) Investment real estate adopted the cost measurement mode
| Items | House, Building |
| I. Original price | |
| 1.2019.12.31 | 257,183,260.74 |
| 2. Increase in the current period | 4,559,679.79 |
| (1) Purchase | 4,559,679.79 |
| 3.Decreased amount of the period | -- |
| 4.2020.12.31 | 261,742,940.53 |
| II.Accumulated amortization | |
| 1.2019.12.31 | 144,452,939.84 |
| 2.Increased amount of the period | 6,717,528.77 |
| (1) Withdrawal | 6,717,528.77 |
| 3.Decreased amount of the period | -- |
| 4.2020.12.31 | 151,170,468.61 |
| IV.Book value | |
| 1.Book value at period -end | 110,572,471.92 |
| 2.Book value at period-beginning | 112,730,320.90 |
(2) Fixed assets without property right certificate
| Items | Book value | Reasons for failing to obtain the property right certificate |
| House, Building | 11,145,270.23 | Unable to apply for warrants due to historical reasons |
14. Fixed assets
| Items | 2020.12.31 | 2019.12.31 |
| Fixed assets | 790,183,905.38 | 903,229,077.83 |
| Total | 790,183,905.38 | 903,229,077.83 |
Fixed assets
1.Fixed assets
| Items | Houses & buildings | Machinery equipment | Transportations | Other equipment | Total |
| I.Original price | |||||
| 1.2019.12.31 | 548,661,452.06 | 1,017,917,028.03 | 10,160,884.32 | 39,760,701.71 | 1,616,500,066.12 |
| 2.Increased amount of the period | 105,312.66 | 1,971,675.05 | 1,721,088.34 | 3,144,439.59 | 6,942,515.64 |
| (1) Purchase | 105,312.66 | 1,971,675.05 | 1,721,088.34 | 3,144,439.59 | 6,942,515.64 |
| （3）Other | |||||
| 3.Decreased amount of the period | 2,869,833.47 | 2,195,270.12 | 502,243.58 | 484,468.16 | 6,051,815.33 |
| （1）Disposal | 2,759,267.00 | 2,090,183.17 | 500,725.00 | 439,068.16 | 5,789,243.33 |
| （2）Other | 110,566.47 | 105,086.95 | 1,518.58 | 45,400.00 | 262,572.00 |
| 4.2020.12.31 | 545,896,931.25 | 1,017,693,432.96 | 11,379,729.08 | 42,420,673.14 | 1,617,390,766.43 |
| II. Accumulated depreciation | |||||
| 1.2019.12.31 | 140,171,992.87 | 545,911,130.40 | 2,841,269.42 | 24,225,958.94 | 713,150,351.63 |
| 2.Increased amount of the period (1) Withdrawal | 20,033,362.68 | 86,571,277.07 | 855,148.09 | 3,262,794.71 | 110,722,582.55 |
| (1) Withdrawal | 20,033,362.68 | 86,571,277.07 | 855,148.09 | 3,262,794.71 | 110,722,582.55 |
| （2）Other |
| 3.Decrease in the reporting period | 286,963.56 | 1,964,902.60 | 479,386.65 | 404,469.05 | 3,135,721.86 | |
| （1）Disposal | 286,963.56 | 1,964,902.60 | 479,386.65 | 404,469.05 | 3,135,721.86 | |
| （2）Other | ||||||
| 4.2020.12.31 | 159,918,391.99 | 630,517,504.87 | 3,217,030.86 | 27,084,284.60 | 820,737,212.32 | |
| III. Impairment provision | ||||||
| 1.2019.12.31 | 120,636.66 | -- | -- | -- | 120,636.66 | |
| 2.Increase in the reporting period | -- | 6,373,080.81 | -- | 96,567.92 | 6,469,648.73 | |
| (1)Withdrawal | -- | 6,373,080.81 | -- | 96,567.92 | 6,469,648.73 | |
| （2）Other | -- | -- | -- | -- | -- | |
| 3.Decrease in the reporting period | 120,636.66 | -- | -- | -- | 120,636.66 | |
| （1）Disposal | -- | -- | -- | -- | -- | |
| （2）Other | 120,636.66 | -- | -- | -- | 120,636.66 | |
| 4.2020.12.31 | -- | 6,373,080.81 | -- | 96,567.92 | 6,469,648.73 | |
| IV. Book value | ||||||
| 1.2020.12.31Book value | 385,978,539.26 | 380,802,847.28 | 8,162,698.22 | 15,239,820.62 | 790,183,905.38 |
| 2.2019.12.31Book value | 408,368,822.53 | 472,005,897.63 | 7,319,614.90 | 15,534,742.77 | 903,229,077.83 |
(2) Fixed assets without property right certificate
| Items | Book value | Reasons for failing to obtain the property right certific |
| Houses and buildings | 21,195,008.77 | Unable to apply for warrants due to historical reasons |
15. Construction in progress
| Items | 2020.12.31 | 2019.12.31 |
| Construction in progress | 1,301,750,141.12 | 839,866,275.92 |
| Total | 1,301,750,141.12 | 839,866,275.92 |
（1）Construction in progress(1) List of construction in progress
| Items | 2020.12.31 | 2019.12.31 | ||||
| Book balance | Provision for devaluation | Book Net value | Book balance | Provision for devaluation | Book Net value | |
| Industrialization project of polaroid for super large size TV (Line 7) | 1,301,693,689.12 | -- | 1,301,693,689.12 | 839,443,318.50 | -- | 839,443,318.50 |
| Other | 56,452.00 | -- | 56,452.00 | 422,957.42 | -- | 422,957.42 |
| Total | 1,301,750,141.12 | -- | 1,301,750,141.12 | 839,866,275.92 | -- | 839,866,275.92 |
（2）Changes of significant construction in progress
| Name | 2019.12.31 | Increase at this period | Transferred to fixed assets | Other decrease | Capitalisation of interest accumulated balance | Including：Current amount of capitalization of interest | Capitalisation of interest ratio（%) | 2020.12.31 |
| Industrialization project of polaroid for super large size TV (Line 7) | 839,443,318.50 | 462,250,370.62 | -- | -- | 3,940,565.29 | 3,940,565.29 | 0 | 1,301,693,689.12 |
| Total | 839,443,318.50 | 462,250,370.62 | -- | -- | 3,940,565.29 | 3,940,565.29 | 1,301,693,689.12 |
Changes of significant construction in progress（Continuous）
| Name | Budget | Proportion(%) | Progress of work | Source of funds |
| Industrialization project of polaroid for super large size TV (Line 7) | 1,959。50 million | 66.43% | Basic completion of civil engineering, primary acceptance of clean area of main production workshop; process equipment, extension machine, coating machine, counter inspection machine and other main equipment have been installed and completed and into the commissioning stage, the overall commissioning is expected to be completed in March 2021 into trial production | Self |
| Total | 1,959。50 million |
16. Intangible assets
(1) Information
| Items | Land use right | Software | Patent right | Total |
| I. Original price | ||||
| 1.2019.12.31 | 48,258,239.00 | 2,936,607.54 | 11,825,200.00 | 63,020,046.54 |
| 2.Increase in the current period | ||||
| (1) Purchase | 1,143,346.16 | 1,143,346.16 | ||
| 3.Decreased amount of the period | ||||
| 4.2020.12.31 | 48,258,239.00 | 4,079,953.70 | 11,825,200.00 | 64,163,392.70 |
| II.Accumulated amortization | ||||
| 1.2019.12.31 | 12,591,751.27 | 2,085,098.93 | 11,825,200.00 | 26,502,050.20 |
| 2. Increase in the current period |
| (1) Withdrawal | 895,440.00 | 716,923.59 | 1,612,363.59 | |
| 3.Decreased amount of the period | ||||
| 4. 2020.12.31 | 13,487,191.27 | 2,802,022.52 | 11,825,200.00 | 28,114,413.79 |
| III. Impairment provision | ||||
| 1.2019.12.31 | ||||
| 2. Increase in the current period | ||||
| 3.Decreased amount of the period | ||||
| 4.2020.12.31 | ||||
| 4. Book value | ||||
| 1.2020.12.31Book value | 34,771,047.73 | 1,277,931.18 | -- | 36,048,978.91 |
| 2.2019.12.31 Book value | 35,666,487.73 | 851,508.61 | -- | 36,517,996.34 |
17. Goodwill
(1) Original book value of goodwill
| Name of the investees or the events formed goodwill | 2019.12.31 | Increase | Decrease | 2020.12.31 |
| SAPO Photoelectric | 9,614,758.55 | 9,614,758.55 | ||
| Shenzhen Beauty Century Garment Co., Ltd. | 2,167,341.21 | 2,167,341.21 | ||
| Shenzhen Shenfang Import and Export Co., Ltd. | 82,246.61 | 82,246.61 | ||
| Total | 11,864,346.37 | 11,864,346.37 |
（2）Impairment of goodwill
| Investee | 2019.12.31 | Increased at this period | .Decreased at this period | 2020.12.31 |
| SAPO Photoelectric | 9,614,758.55 | 9,614,758.55 | ||
| Shenzhen Beauty Century Garment Co., Ltd. | 2,167,341.21 | 2,167,341.21 | ||
| Shenzhen Shenfang Import and Export Co., Ltd. | 82,246.61 | 82,246.61 | ||
| Total | 11,864,346.37 | 11,864,346.37 |
18. Long term amortize expenses
| Items | 2019.12.31 | Increa | Decreased at this period | 2020.12. |
| se in this period | Amortized expenses | Other loss | 31 | ||
| Decoration fee | 96,994.84 | 40,000.00 | 25,452.99 | 111,541.85 | |
| Renovation fee | 1,595,771.58 | 330,816.84 | 1,264,954.74 | ||
| Other | 999,984.25 | 726,329.58 | 226,248.89 | - | 1,500,064.94 |
| Total | 2,692,750.67 | 766,329.58 | 582,518.72 | 2,876,561.53 |
19. Deferred income tax assets/deferred income tax liabilities
（1）Details of the un-recognized deferred income tax assets
| Items | 2020.12.31 | 2019.12.31 | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Deferred income tax assets | ||||
| Assets depreciation reserves | 18,865,669.84 | 4,709,761.70 | 17,933,263.39 | 4,478,077.03 |
| Unattained internal sales profits | 2,413,307.05 | 361,996.06 | 2,502,421.73 | 375,363.26 |
| Changes in fair value of investments in other equity instruments | -- | -- | 2,371,674.55 | 592,918.64 |
| Restricted stock repurchase interest | 686,670.00 | 171,667.50 | 686,670.00 | 171,667.50 |
| Subtotal | 21,965,646.89 | 5,243,425.26 | 23,494,029.67 | 5,618,026.43 |
| Deferred income tax liabilities | ||||
| The difference between the initial recognition cost and tax base of long-term equity investment | 62,083,693.36 | 15,520,923.34 | 77,651,921.36 | 19,412,980.34 |
| Changes in fair value of investments in other equity instruments | 174,482,972.97 | 43,620,743.24 | 202,125,461.26 | 50,531,365.32 |
| Total | 236,566,666.33 | 59,141,666.58 | 279,777,382.62 | 69,944,345.66 |
(2)Details of the un-recognized deferred income tax liabilities
| Items | 2020.12.31 | 2019.12.31 |
| Deductible temporary difference | 122,887,462.20 | 156,410,415.69 |
| Deductible loss | 682,013,840.25 | 605,506,184.05 |
| Total | 804,901,302.45 | 761,916,599.74 |
(3)Deductible losses of the un-recognized deferred income tax asset will expire in the following years
| Year | 2020.12.31 | 2019.12.31 | Remark |
| 2021 | -- | 1,128,868.47 | |
| 2023 | 129,226,944.33 | 129,226,944.33 | |
| 2024 | 148,095,898.11 | 148,095,898.11 | |
| 2025 | 83,287,153.64 | 83,287,153.64 | |
| 2026 | 120,820,767.06 | 120,820,767.06 | |
| 2028 | 22,594,586.97 | 22,594,586.97 | |
| 2029 | 100,351,965.47 | 100,351,965.47 | |
| 2030 | 77,636,524.67 | —— | |
| Total | 682,013,840.25 | 605,506,184.05 |
20 .Other non-current assets
| Items | 2020.12.31 | 2019.12.31 |
| Advance payment for equipment fund | 47,483,219.83 | 3,079,321.10 |
| Certificate of deposit for more than 1 year | 70,064,383.56 | -- |
| Other | 25,760,086.27 | -- |
| Total | 143,307,689.66 | 3,079,321.10 |
22. Accounts payable
| Items | 2020.12.31 | 2019.12.31 |
| Within 1 year | 325,354,275.46 | 238,370,055.75 |
| 1-2 years | 1,912,000.86 | 196,392.86 |
| 2-3 years | 96,543.25 | 1,691,830.35 |
| 3-4 years | 1,093,369.87 | 37,402.40 |
| 4-5 years | 37,402.40 | 35,075.05 |
| Over 5 years | 975,010.06 | 967,014.23 |
| Total | 329,468,601.90 | 241,297,770.64 |
No Significant accounts payable that aged over one year
22.Advance account
| Items | 2020.12.31 | 2019.12.31 |
| Within 1 year | 671,534.26 | 29,824,350.33 |
| 1-2 years | -- | 16,004.11 |
| 2-3 years | -- | 30,171.98 |
| Over 3 years | 639,024.58 | 659,591.20 |
| Total | 1,310,558.84 | 30,530,117.62 |
23.Contract liabilities
| Items | 2020.12.31 | 2019.12.31 |
| Goods | 200,000.00 | -- |
| Rent received in advance | 2,311,466.76 | -- |
| Less：Contractual liabilities charged to other non-current liabilities | -- | -- |
| Total | 2,511,466.76 | -- |
24.Payable Employee wage
| Items | 2019.12.31 | Increase in this period | Decrease in this period | 2020.12.31 |
| Short-term employee benefits | 38,556,180.20 | 188,713,147.25 | 171,626,777.92 | 55,642,549.53 |
| Post-employment benefits | -- | 7,080,075.35 | 7,080,075.35 | -- |
| Termination benefit | -- | 2,985,500.66 | 2,985,500.66 | -- |
| Total | 38,556,180.20 | 199,149,610.77 | 181,692,353.93 | 55,642,549.53 |
（2）Short-term remuneration
| Items | 2019.12.31 | Increase in this period | Decrease in this period | 2020.12.31 |
| Wages, bonuses, allowances and subsidies | 36,751,528.90 | 169,798,753.71 | 153,256,730.67 | 53,293,551.94 |
| Employee welfare | -- | 6,351,145.22 | 6,310,052.02 | 41,093.20 |
| Social insurance premiums | -- | 2,682,417.92 | 2,682,417.92 | -- |
| Including：1.Medical insurance | -- | 2,220,227.06 | 2,220,227.06 | -- |
| 2.Maternity insurance | -- | 100,867.74 | 100,867.74 | -- |
| 3.Work injury insurance | -- | 324,403.12 | 324,403.12 | -- |
| 4．Supplementary medical insurance | -- | 36,920.00 | 36,920.00 | -- |
| Public reserves for housing | -- | 6,020,759.24 | 6,020,759.24 | -- |
| .Union funds and staff education fee | 1,804,651.30 | 3,860,071.16 | 3,356,818.07 | 2,307,904.39 |
| Total | 38,556,180.20 | 188,713,147.25 | 171,626,777.92 | 55,642,549.53 |
（2）Defined contribution plans listed
| Items | 2019.12.31 | Increase in this period | Decrease in this period | 2020.12.31 |
| After-service benefits | -- | 7,080,075.35 | 7,080,075.35 | -- |
| 1. Basic old-age insurance premiums | -- | 4,962,621.48 | 4,962,621.48 | -- |
| 2.Unemployment insurance | -- | 168,614.71 | 168,614.71 | -- |
| 3. Annuity payment | -- | 1,948,839.16 | 1,948,839.16 | -- |
| Total | -- | 7,080,075.35 | 7,080,075.35 | -- |
25.Tax Payable
| Items | 2020.12.31 | 2019.12.31 |
| Enterprise Income tax | 11,219,726.43 | 18,567,808.63 |
| Individual Income tax | 469,169.71 | 441,485.02 |
| VAT | 286,928.75 | 2,992,712.57 |
| House property Tax | 102,146.02 | 127,685.17 |
| City Construction tax | 48,751.30 | 209,489.81 |
| Education surcharge | 33,386.49 | 149,635.58 |
| Stamp tax | 36,370.02 | 54,690.21 |
| Land use tax | 2,043.30 | 2,043.34 |
| Total | 12,198,522.02 | 22,545,550.33 |
26.Other payable
| Items | 2020.12.31 | 2019.12.31 |
| Other payable | 156,118,440.42 | 152,645,780.14 |
| Total | 156,118,440.42 | 152,645,780.14 |
（1）Other payable
| Items | 2020.12.31 | 2019.12.31 |
| Project equipment funds | 32,713,413.76 | 36,025,975.90 |
| Unit current | 48,394,939.72 | 51,891,693.06 |
| Deposit | 36,130,306.12 | 27,258,145.87 |
| Restrictive stock repurchase obligations | 7,844,373.00 | 16,825,673.40 |
| Other | 31,035,407.82 | 20,644,291.91 |
| Total | 156,118,440.42 | 152,645,780.14 |
27.Long-term borrowings
| Items | 2020.12.31 | Interest rate interval | 2019.12.31 | Interest rate interval |
| Mortgage+Deposit | 343,100,174.35 | 4.41% | -- | -- |
| Subtotal | 343,100,174.35 | -- | -- | -- |
| Less：Long-term borrowings due within 1 year | -- | -- | -- | -- |
| Total | 343,100,174.35 | -- | -- | -- |
28.Deferred income
| Items | 2019.12.31 | Increase at this period | Decrease at this period | 2020.12.31 | Reason |
| Govemment Subsidy | 121,264,571.22 | 1,710,000.00 | 12,234,249.01 | 110,740,322.21 |
Note: See Note XIV. 2, Government Subsidies for details of government subsidies included in deferredincome.
29.Stock capital
| Items | 2019.12.31 | Changed（+，-） | 2020.12.31 | |||||
| Issuance of new share | Bonus shares | Capitalization of public reserve | Other | Subtotal | ||||
| Total shares | 509,338,429.00 | -1,566,150.00 | -1,566,150.00 | 507,772,279.00 | ||||
Note: This year, 1,566,150.00 restricted shares which have been granted but not unlocked have beenrepurchased and cancelled, and the share capital has been reduced by RMB 1,566,150.00, which has beenverified by the same accounting firm (special general partnership), and the capital verification report (ZTY Zi(2020) No. 441ZC00334) was issued on September 11, 2020.
30.Capital reserve
| Items | 2019.12.31 | Increase in the current period | Decrease in the current period | 2020.12.31 |
| Share premium | 1,839,805,031.94 | -- | 7,407,889.50 | 1,832,397,142.4443 |
| Other | 135,117,216.09 | -- | -- | 135,117,216.09 |
| Total | 1,974,922,248.03 | -- | 7,407,889.50 | 1,967,514,358.53 |
Note: The change of capital stock premium in the current period is from the repurchase and cancellationof some restricted stocks granted by the Company's restricted stock incentive plan in 2017.
31. Treasury stock
| Items | 2019.12.31 | Increase in the current period | Decrease in the current period | 2020.12.31 |
| Treasury stock | 16,139,003.40 | -- | 8,613,565.20 | 7,525,438.20 |
Note: The change of capital stock premium in the current period is from the repurchase and cancellationof some restricted stocks granted by the Company's restricted stock incentive plan in 2017.
32.Other Comprehensive incom
| Items | 2019.12.31 | Amount of current period | 2020.12.31 | |||||
| Amount incurred before income tax | Less：Amount transferred into profit | Less：Prior period included in other composite income transfer to | Less：Income tax expenses | After-tax attribute to the parent company | After-tax attribute to | |||
| and loss in the current period that recognied into other comprehensive income in prior period | retained income in the current period | minority shareholder | ||||||
| 1. Other comprehensive income that cannot be reclassified in the loss and gain in the future | 118,183,658.54 | -1,925,707.92 | 16,137,285.62 | 890,116.75 | -18,953,110.29 | -- | 99,230,548.25 | |
| Changes in fair value of investments in other equity instruments | 118,183,658.54 | -1,925,707.92 | 16,137,285.62 | 890,116.75 | -18,953,110.29 | -- | 99,230,548.25 | |
| 2.Other comprehensive income reclassifiable to profit or loss in subsequent periods | 1,554,124.77 | -316,026.22 | -- | -- | -316,026.22 | -- | 1,238,098.55 | |
| Translation differences of financial statements denominated | 1,554,124.77 | -316,026.22 | -- | -- | -316,026.22 | -- | 1,238,098.55 |
| 2.Energy Menthod | ||||||||
| Total of other comprehensive income | 119,737,783.31 | -2,241,734.14 | 16,137,285.62 | 890,116.75 | -19,269,136.51 | -- | 100,468,646.80 |
33. Surplus reserves
| Items | 2019.12.31 | Adjustment | 2020.01.01 | Increase in the current period | Decrease in the current period | 2020.12.31 |
| Statutory surplus reserve | 90,596,923.39 | -- | -- | 4,346,566.05 | 94,943,489.44 |
34.Retained profits
| Items | Amount of current period | Amount of previous period | Proportion% | |
| Before adjustments: Retained profits at the period end | 49,307,764.03 | -57,774,473.41 | -- | |
| Adjustment: Total unappropriated profits at the beginning of the year | -- | 35,779,955.53 | -- | |
| After adjustments: Retained profits at the period beginning | 49,307,764.03 | -21,994,517.88 | -- | |
| Add: Net profit attributable to owners of the Company for the period | 37,267,995.74 | 19,679,910.43 | -- | |
| Other consolidated earnings carried forward to retained earnings for the current year | 20,362,209.15 | 58,238,941.03 | -- | |
| Less: Appropriation to statutory surplus reserve | 3,888,292.80 | 6,616,569.55 | 10% | |
| Retained profits at the period end | 103,049,676.12 | 49,307,764.03 | -- | |
35.Business income, Business cost
（1）Business income, Business cost
| Items | Amount of current period | Amount of previous period |
| Income | Cost | Income | Cost | |
| Main business cost | 2,097,432,885.06 | 1,808,092,705.48 | 2,099,197,694.45 | 1,915,880,730.30 |
| Other business cost | 11,531,802.74 | 6,205,689.54 | 58,987,161.26 | 57,614,878.05 |
| Total | 2,108,964,687.80 | 1,814,298,395.02 | 2,158,184,855.71 | 1,973,495,608.35 |
（2）Main business（Industry）
| Name | Amount of current period | Amount of previous period | ||
| Business income | Business cost | Business income | Business cost | |
| Domestic and foreign trade | -- | -- | 517,020,991.54 | 483,603,729.67 |
| Manufacturing | 2,012,255,019.03 | 1,786,199,780.24 | 1,475,804,647.66 | 1,408,148,827.10 |
| Property management, leasing | 85,177,866.03 | 21,892,925.24 | 106,372,055.25 | 24,128,173.53 |
| Subtotal | 2,097,432,885.06 | 1,808,092,705.48 | 2,099,197,694.45 | 1,915,880,730.30 |
（3）Main business（Production）
| Name | Amount of current period | Amount of previous period | ||
| Business income | Business cost | Business income | Business cost | |
| Property and rental income | 85,177,866.03 | 21,892,925.24 | 106,372,055.25 | 24,128,173.53 |
| Textile income | 60,503,325.78 | 48,466,207.78 | 46,047,351.10 | 39,166,964.15 |
| Polaroid income | 1,951,751,693.25 | 1,737,733,572.46 | 1,429,757,296.56 | 1,368,981,862.95 |
| Trade income | -- | -- | 517,020,991.54 | 483,603,729.67 |
| Subtotal | 2,097,432,885.06 | 1,808,092,705.48 | 2,099,197,694.45 | 1,915,880,730.30 |
（4）Main Business（Area）
| Name | Amount of current period | Amount of previous period | |||
| Business income | Business cost | Business income | Business cost | ||
| Domestic | 1,756,659,062.01 | 1,526,209,625.21 | 1,922,327,308.13 | 1,751,836,922.09 | |
| Oversea | 340,773,823.05 | 281,883,080.27 | 176,870,386.32 | 164,043,808.21 | |
| Total | 2,097,432,885.06 | 1,808,092,705.48 | 2,099,197,694.45 | 1,915,880,730.30 | |
36.Business tax and subjoin
| Items | Amount of current period | Amount of previous period |
| House taxes | 4,338,584.18 | 5,772,193.68 |
| Urban construction tax | 718,695.23 | 665,327.79 |
| Education surcharge | 517,483.70 | 477,821.51 |
| Other | 1,772,362.54 | 1,550,800.42 |
| Total | 7,347,125.65 | 8,466,143.40 |
37.Sales expenses
| Items | Amount of current period | Amount of previous period |
| Wage | 12,958,215.67 | 3,900,045.35 |
| Transportation changes | -- | 6,328,597.94 |
| Business expenses | 668,407.23 | 380,985.91 |
| Sell | 12,697,476.62 | 3,077,231.50 |
| Other | 2,320,131.35 | 7,098,217.96 |
| Total | 28,644,230.87 | 20,785,078.66 |
Note: The increase in sales expenses and wages this year is mainly due to the department adjustment ofthe Company and the better benefit of the subsidiary SAPO Photoelectric; The increase of sales service fee ismainly due to the increase of new customers, which leads to the increase of new agents.
38.Administrative expenses
| Items | Amount of current period | Amount of previous period |
| Wage | 74,848,348.24 | 57,632,391.81 |
| Depreciation of fixed assets | 9,794,203.66 | 11,714,741.86 |
| Water and electricity | 2,576,447.96 | 2,736,839.25 |
| Intermediary organ | 3,271,775.61 | 6,188,892.57 |
| Intangible assets amortization | 1,612,363.59 | 1,362,819.51 |
| Travel expenses | 408,221.21 | 1,506,687.67 |
| Office expenses | 946,055.89 | 878,072.35 |
| Business entertainment | 615,454.09 | 922,668.63 |
| Lawsuit expenses | 144,161.32 | 327,254.72 |
| Repair charge | 1,366,609.60 | 2,030,445.26 |
| Property insurance | 380,689.81 | 483,245.82 |
| Other | 9,130,603.38 | 11,086,782.92 |
| Total | 105,094,934.36 | 96,870,842.37 |
39.R & D costs
| Items | Amount of current period | Amount of previous period |
| Wage | 13,177,489.03 | 13,430,653.87 |
| Material | 49,679,847.18 | 34,839,486.54 |
| Depreciation | 2,984,978.79 | 2,782,174.41 |
| Fuel & Power | 1,017,795.21 | 1,447,036.66 |
| Travel expenses | 226,949.44 | 356,165.02 |
| Other | 73,904.57 | 323,197.83 |
| Total | 67,160,964.22 | 53,178,714.33 |
40.Financial Expenses
| Items | Amount of current period | Amount of previous period |
| Interest expenses | 4,175,380.96 | 4,893,018.58 |
| Less：Interest Capitalization | 3,940,565.29 | |
| Interest income | -3,702,735.59 | -8,593,894.58 |
| Exchange loss | 8,108,404.80 | 16,760,131.65 |
| Fees and other | 3,647,403.40 | 2,803,543.99 |
| Total | 8,287,888.28 | 15,862,799.64 |
41.Other income
| Subsidy items (source of other income) | Amount incurred in current period | Amount incurred in previous period | Related to assets/ Related to income |
| Amortization of textile special funds | 142,857.16 | 142,857.16 | Related to assets |
| Amortization of subsidy funds for industrialization items of TFT-LCD polarizer | 1,300,000.00 | 1,300,000.00 | Related to assets |
| Amortization of subsidy funds for narrow line (Line 5) of TFT-LCD polarizer phase I project | 500,000.00 | 500,000.00 | Related to assets |
| Amortization for purchasing imported equipment and technical subsidies | 175,090.20 | 175,090.20 | Related to assets |
| Amortization of innovation and venture funds for TFT-LCD polarizer phase I project | 50,000.00 | 50,000.00 | Related to assets |
| Amortization of innovation and venture funds in Shenzhen polarized materials and technology engineering laboratory | 50,000.00 | 50,000.00 | Related to assets |
| Amortization of polarized materials and technical engineering laboratory in Shenzhen | 500,000.00 | 500,000.00 | Related to assets |
| Amortization of subsidy funds for technical center construction | 300,000.00 | 300,000.00 | Related to assets |
| Amortization of subsidy funds for introducing advanced technology | 14,388.10 | 14,388.10 | Related to assets |
| Amortization of local supporting funds for TFT-LCD polarizer phase II project (Line 6) | 1,500,000.00 | 1,500,000.00 | Related to assets |
| Amortization of innovation and venture funds for TFT-LCD polarizer phase II project (Line 6) | 50,000.00 | 50,000.00 | Related to assets |
| Amortization of subsidy funds for key technology R&D equipment of optical compensation film for polarizer | 500,000.00 | 500,000.00 | Related to assets |
| Amortization of national subsidy for TFT-LCD polarizer phase II project (Line 6) | 1,000,000.00 | 1,000,000.00 | Related to assets |
| Amortization of funds for pilot projects of regional agglomeration development of strategic emerging industries in Guangdong Province | 2,500,000.00 | 2,500,000.00 | Related to assets |
| Amortization of subsidies for new production lines and purchased equipment in the phase II project of polarizer for TFT-LCD | 3,000,000.00 | 3,000,000.00 | Related to assets |
| Amortization of subsidy funds for energy-saving transformation | 29,642.93 | 29,642.93 | Related to assets |
| Amortization of subsidy funds for old elevator renovation | 142,255.72 | 142,255.72 | Related to assets |
| Special fund subsidies for improving the quality of atmospheric environment in Shenzhen | 468,931.57 | -- | Related to assets |
| 2020 Subsidy for special technical transformation investment project of multiplication by technical transformation | 11,083.33 | -- | Related to assets |
| Subsidy for post stabilization | 160,712.86 | 174,114.77 | Related to Income |
| Sewage fee refund | 597,362.55 | -- | Related to Income |
| Tax bureau fee refund | 24,898.73 | 416,818.25 | Related to Income |
| Subsidy for cost reduction of industrial and commercial electricity in Shenzhen | 6,952,943.71 | 6,486,248.28 | Related to Income |
| Maternity allowance returned to the employees by Social Security Bureau | 32,609.51 | -- | Related to Income |
| Insurance premium refund by Social Security Bureau | 1,815 | Related to Income | |
| Second batch of epidemic grants from Pingshan District Finance Bureau | 759 | Related to Income |
| Water saving carrier award fund from Shenzhen Water Affairs Bureau in 2019 | 374,102.00 | -- | Related to Income |
| Harmonious labor relations enterprise incentive fund from Shenzhen Pingshan District Finance Bureau in 2018 | 1,000,000.00 | -- | Related to Income |
| Enterprise R&D Funds from Shenzhen Science and Technology Innovation Committee in 2018 | 1,278,000.00 | -- | Related to Income |
| High-tech enterprise certification award from Pingshan District Science and Technology Innovation Bureau in 2019 | 50,000.00 | -- | Related to Income |
| Subsidies for working in lieu of by training in Pingshan District | 1,645,500.00 | -- | Related to Income |
| Trial post training subsidy of Human Resources Bureau of Pingshan District, Shenzhen City | 111,600.00 | -- | Related to Income |
| 2020 Pingshan district foreign trade stable growth funds of the Financial Bureau of Pingshan District, Shenzhen City | 1,200,000.00 | 360,000.00 | Related to Income |
| Received refund of unemployment benefits from the social security bureau to the enterprises affected by the epidemic | 2,709,874.84 | -- | Related to Income |
| The second batch of patent grants from the Market Supervision Administration in 2018 | 9,000.00 | -- | Related to Income |
| Government subsidies for epidemic protection articles | 10,000.00 | -- | Related to Income |
| Cultural tourism stabilization support subsidy | 100,000.00 | -- | Related to Income |
| The first batch of special funds for scientific and technological innovation in 2019 | 966,000.00 | -- | Related to Income |
| Received subsidies from the Public Employment Service Center to help enterprises stabilize their posts | 1,425.20 | -- | Related to Income |
| Received the award for epidemic prevention effect from the Bureau of Industry and Information Technology | 20,000.00 | -- | Related to Income |
| Received epidemic prevention subsidy from the Housing and Construction Bureau of Luohu District, Shenzhen for #145 residential building on Fenghuang Road | 5,638.00 | -- | Related to Income |
| Received epidemic prevention subsidy from Shenzhen Luohu District Housing and Construction Bureau for Shenzhen Textile Courtyard at No.52 Tianbei Second Road | 8,531.45 | -- | Related to Income |
| Halved urban construction tax and surcharges | 1,047.51 | -- | Related to Income |
| Halved stamp duty | 183.32 | -- | Related to Income |
| Epidemic prevention subsidy in Luohu District | 10,000.00 | -- | Related to Income |
| Shenzhen standard special funds | -- | 360,000.00 | Related to Income |
| The first batch of premium subsidies for new materials | -- | 4,806,400.00 | Related to Income |
| Cuizhu Street 2018 old residential property management support project qualified property Tianbei courtyard | -- | 30,000.00 | Related to Income |
| The second batch of enterprise R&D subsidy funds of Shenzhen Municipal Finance Committee | -- | 1,935,000.00 | Related to Income |
| Other | -- | 25,087.51 | Related to Income |
| National subsidy fund for special project of industrialization of new flat panel display devices | -- | 1,000,000.00 | Related to assets |
| Matching funds for high-tech industrialization demonstration projects | -- | 200,000.00 | Related to income |
| Total | 29,506,252.69 | 27,547,902.92 |
42. Investment income
| Items | Amount of this period | Amount of last period |
| Long-term equity investment returns accounted for by equity method | -3,446,613.86 | -7,404,083.27 |
| Investment income from the disposal of long-term equity investment | -- | 55,481,817.13 |
| Dividend income earned during investment holdings in other equity instruments | 2,946,592.79 | 4,654,009.67 |
| structured deposit interest | 18,231,107.84 | 25,306,786.72 |
| Interest income on term deposits over 1 year | 853,205.47 | |
| Net monetary gains | 4,015,378.50 | -- |
| Total | 22,599,670.74 | 78,038,530.25 |
43. Income from change in income fair value
| Sources of income from changes in fair value | Amount of this period | Amount of last period |
| Other non-current financial assets | ||
| Where: Financial assets measured at fair value with changes included in current profits and losses | 2,687,518.74 | -- |
| Total | 2,687,518.74 | -- |
44. Credit impairment loss
| Items | Amount of this period | Amount of last period |
| Lossof bad debt notes receivable | -84,490.74 | |
| Loss of bad debts account receivable | -8,481,632.23 | 6,929,467.72 |
| Other | -1,828,410.68 | 76,423.21 |
| Total | -10,394,533.65 | 7,005,890.93 |
45. Losses from asset impairment
| Items | Amount of this period | Amount of last period |
| Loss of inventory price | -65,942,828.90 | -97,172,532.71 |
| Loss on impairment of fixed assets | -6,469,648.73 | -- |
| Total | -72,412,477.63 | -97,172,532.71 |
46. Asset disposal income
| Items | Amount of current period | Amount of previous period |
| Gains& losses on the disposal of fixed assets | 276,544.73 | 3,967.97 |
47. Non-Operation income
| Items | Amount of current period | Amount of previous period | Amount included in non-recurrent gains and losses for the year |
| Loss of end-of-life gains on non-current assets | -- | 39,823.01 | -- |
| Insurance compensation | -- | 4,033,846.00 | -- |
| Payable without payment | 1,371,678.99 | 597,578.12 | 1,371,678.99 |
| Other | 73,983.39 | 332,301.21 | 73,983.39 |
| Total | 1,445,662.38 | 5,003,548.34 | 1,445,662.38 |
48.Non-current expenses
| Items | Amount of current period | Amount of previous period | Amount included in non-recurrent gains and losses for the year |
| Non-current asset Disposition loss | 3,315.15 | 414,453.28 | 3,315.15 |
| Fine expenses | 115,314.20 | 6,000.00 | 115,314.20 |
| Other | 19,791.92 | 121.79 | 19,791.92 |
| Total | 138,421.27 | 420,575.07 | 138,421.27 |
49.Income tax expenses
(1)Income tax expenses
| Items | Amount of current period | Amount of previous period |
| Current income tax calculated according to tax law and relevant regulations | 8,422,038.43 | 28,069,828.99 |
| Deferred income tax expense | -218,317.45 | -10,748.77 |
| Total | 8,203,720.98 | 28,059,080.22 |
(2) The relationship between income tax expense and total profit is as follows:
| Items | Amount of current period | Amount of previous period |
| Total profits | 51,701,366.13 | 9,532,401.59 |
| Income tax expenses calculated at the applicable tax rate (total profit *25%) | 12,925,341.53 | 2,383,100.40 |
| Influence of different tax rates applied by some subsidiaries | -1,928,531.95 | 9,445,356.09 |
| Adjustment of current income tax in previous periods | 21,090.96 | 178,201.63 |
| Profit and loss of joint ventures and associated enterprises accounted by equity method | 991,191.57 | 3,794,799.87 |
| Income not subject to tax | -630,419.57 | -322,906.47 |
| Non-deductible costs, expenses and losses | 295,317.96 | 221,237.56 |
| The influence of tax rate change on the balance of deferred income tax at the beginning | -1,222.02 | 5,458.59 |
| Tax impact by the unrecognized deductible losses and deductible temporary differences in previous years | -173,798.62 | -775,053.15 |
| Tax impact of unrecognized deductible losses and deductible temporary differences | 5,073,772.21 | 19,522,497.03 |
| Tax impact of research and development fee plus deduction | -7,555,608.48 | -5,982,605.36 |
| Income tax fee reduction and exemption | -813,412.61 | -411,005.97 |
| Income tax fee | 8,203,720.98 | 28,059,080.22 |
50. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities
| Items | Amount of current period | Amount of previous period | |
| Letter of Credit Deposit | 95,971,397.61 | 32,712,277.24 | |
| Interest income and other | 3,812,160.83 | 9,787,432.90 | |||
| Government Subsidy | 10,319,059.97 | 8,107,420.53 | |||
| Current account | 4,476,707.73 | 7,629,683.54 | |||
| Other | 4,817,267.42 | 3,459,477.53 | |||
| Total | 119,396,593.56 | 61,696,291.74 | |||
(2).Other cash paid related to operating activities
| Items | Amount of current period | Amount of previous period |
| Letter of Credit Deposit | 50,257,183.69 | 42,928,583.04 |
| Cash charges | 37,855,834.17 | 39,178,178.19 |
| Other | 9,104,639.66 | 14,254,157.16 |
| Total | 97,217,657.52 | 96,360,918.39 |
(3)Other Cash received related to investment activities
| Items | Amount of current period | Amount of previous period |
| Structured deposits, financial products, principal and income | 3,112,161,370.37 | 4,093,427,051.70 |
| L/C margin for purchase of line 7 equipment | 126,799,633.00 | 71,030,367.00 |
| Credit deposit for non-Line 7 equipment | 1,900,000.00 | -- |
| Total | 3,240,861,003.37 | 4,164,457,418.70 |
(4).Cash paid related to other investment activities
| Items | Amount of current period | Amount of previous period |
| Structured deposits, financial products, principal and income | 3,004,000,000.00 | 4,360,000,000.00 |
| L/C margin for purchase of line 7 equipment | 2,150,000.00 | 196,430,000.00 |
| Credit deposit for non-Line 7 equipment | 1,900,000.00 | -- |
| Stock transaction cost | 15,275.20 | -- |
| Total | 3,008,065,275.20 | 4,556,430,000.00 |
（5）Other cash received in relation to financing activities
| Items | Amount of current period | Amount of previous period |
| Performance compensation | -- | 197,268,700.00 |
| Borrowing funds | -- | 6,506,454.17 |
| Total | -- | 203,775,154.17 |
（6）Cash paid related with financing activities
| Items | Amount of current period | Amount of previous period |
| Restricted stock of stock repurchase incentive object | 9,344,136.30 | 11,091,675.60 |
| Borrowing funds | 2,700,000.00 | |
| Total | 9,344,136.30 | 13,791,675.60 |
51.Supplement Information for cash flow statement
（1）Supplement Information for cash flow statemen
| Supplement Information | Amount of current period | Amount of previous period |
| I. Adjusting net profit to cash flow from operating activities | ||
| Net profit | 43,497,645.15 | -18,526,678.63 |
| Add: Impairment loss provision of assets | 72,412,477.63 | 97,172,532.71 |
| Credit impairment losses | 10,394,533.65 | -7,005,890.93 |
| Depreciation of fixed assets, oil and gas assets and consumable biological assets | 117,440,111.32 | 120,272,039.47 |
| Amortization of intangible assets | 1,612,363.59 | 1,362,819.51 |
| Amortization of Long-term deferred expenses | 582,518.72 | 505,932.97 |
| Loss on disposal of fixed assets, intangible assets and other long-term deferred assets | -276,544.73 | -3,967.97 |
| Loss on scrap of fixed assets | 3,315.15 | 374,630.27 |
| Loss on fair value changes | -2,687,518.74 | -- |
| Financial cost | 455,850.38 | 4,734,103.39 |
| Loss on investment | -22,599,670.74 | -78,038,530.25 |
| Decrease in deferred income tax assets | 374,601.17 | 351,508.05 |
| Increased of deferred income tax liabilities | -10,802,679.08 | 1,478,752.30 |
| Decrease of inventories | -39,880,044.30 | 12,010,403.04 |
| Decease of operating receivables | -188,437,910.96 | 289,069,889.61 |
| Increased of operating Payable | 15,830,477.68 | -40,611,755.04 |
| Other | -- | |
| Net cash flows arising from operating activities | -2,080,474.11 | 383,145,788.50 |
| II. Significant investment and financing activities that without cash flows: | - | |
| Debt-to-capital conversion | -- | -- |
| Convertible loan due within 1 year | -- | -- |
| Fixed assets acquired under financial lease | -- | -- |
| 3．Movement of cash and cash equivalents： | ||
| Ending balance of cash | 274,325,830.08 | 268,646,588.18 |
| Less: Beginning balance of cash equivalents | 268,646,588.18 | 1,133,574,235.22 |
| Add：Ending balance of cash equivalents | -- | |
| Less: Beginning balance of cash equivalents | -- | |
| Net increase of cash and cash equivalents | 5,679,241.90 | -864,927,647.04 |
(2)Composition of cash and cash equivalents
| Items | Year-end balance | Year-beginning balance |
| I. Cash | 274,325,830.08 | 268,646,588.18 |
| Including：Cash at hand | 4,127.10 | 11,091.94 |
| Demand bank deposit | 274,085,025.1 | 268,424,080.67 |
| Demand other monetary funds | 236,677.88 | 211,415.57 |
| II. Cash equivalents | -- | -- |
| III. Balance of cash and cash equivalents at the period end | 274,325,830.08 | 268,646,588.18 |
52. The assets with the ownership or use right restricted
| Items | Book value at the end of the period | Restricted reason |
| Monetary fund | 750,000.00 | Letter of Credit margin |
| Fixed assets | 330,744,828.51 | Mortgage |
| Intangible assets产 | 34,771,047.73 | Mortgage |
| Construction in process | 1,301,880,727.03 | Mortgage |
| Total | 1,668,146,603.27 |
53.Foreign currency monetary items
(1)Foreign currency monetary items
| Items | Closing foreign currency balance | Exchange rate | Closing convert to RMB balance |
| Monetary funds |
| Including：USD | 8,843,259.32 | 6.5249 | 57,701,382.74 |
| Yen | 78,877,109.00 | 0.063236 | 4,987,872.86 |
| HKD | 811,727.03 | 0.84164 | 683,181.94 |
| Account receivable | |||
| Including：USD | 18,973,368.14 | 6.5249 | 123,799,329.78 |
| HKD | 278,280.00 | 0.84164 | 234,211.58 |
| Advance payments | |||
| Including：USD | 257,305.00 | 6.5249 | 1,678,889.39 |
| Euro | 805,500.00 | 8.025 | 6,464,137.50 |
| Other receivable | |||
| Including：USD | 37,399.02 | 6.5249 | 244,024.87 |
| Account payable | |||
| Including：USD | 4,530,318.93 | 6.5249 | 29,559,877.99 |
| Yen | 2,680,544,919.88 | 0.063236 | 169,506,938.56 |
| Other payable | |||
| Including：USD | 676,686.00 | 6.5249 | 4,415,308.48 |
| HKD | 1,986,068.33 | 0.84164 | 1,671,554.55 |
| Yen | 3,381,983.93 | 0.063236 | 213,863.14 |
| Euro | 22,500.00 | 8.025 | 180,562.50 |
VI. Change in consolidation scopeOn August 24, 2020, the Company established Shenzhen Textile Sungang Property Management Co.,Ltd. with a registered capital of RMB 1,000,000.00, which was included in the consolidation scope in thisperiod.VII. Equity in other entity
1. Equity in subsidiary
（1）Constitute of enterprise
| Subsidiary | Main operation | Registered place | Business nature | Share-holding ratio | Acquired way | ||
| Directly | Indirectly | ||||||
| Shenzhen Lishi Industry Development Co., Ltd | Shenzhen | Shenzhen | Domestic trade, Property Management | 100 | Establish | ||
| Shenzhen | Shen | Shen | Accommodation | 100 | Esta | ||
| Huaqiang Hotel | zhen | zhen | , restaurants, business center; | blish | ||
| Shenfang Property Management Co., Ltd. | Shenzhen | Shenzhen | Property Management | 100 | Establish | |
| Shenzhen Beauty Century Garment Co., Ltd. | Shenzhen | Shenzhen | Production of fully electronic jacquard knitting whole shape | 100 | Establish | |
| Shenzhen Shenfang Sungang Property Management Co., Ltd. | Shenzhen | Shenzhen | Property Management | 100 | Establish | |
| SAPO Photoelectric Co., Ltd | Shenzhen | Shenzhen | Operating import and export business | 60 | Purchase | |
| Shenzhen Shenfang Import & export Co., Ltd. | Shenzhen | Shenzhen | Operating import and export business | 100 | Establish | |
| Shengtou (Hongkong) Co.,Ltd. | Hongkong | Hongkong | Production and sales of polarizer | 100 | Establish |
2.Equity in joint venture arrangement or associated enterprise
1．Joint venture or associated enterprise
| Joint venture or associated enterprise | Place of operation | Place of registration | Nature | Share-holding ratio | The accounting treatment of investment in associates | |
| Directly | Indirectly | |||||
| Joint venture： | ||||||
| Shenzhen Guanhua Printing & Dyeing Co.,Ltd. | Shenzhen | Shenzhen | Property leasing | 50.16 | Equity method | |
| Anhui Huapeng Textile Co., Ltd. | Anhui | Anhui | Manufacturing | 50.00 | Equity method | |
| Associated enterprise | ||||||
| Shenzhen Changlianfa Printing and dyeing Company | Shenzhen | Shenzhen | Property leasing | 40.25 | Equity method | |
| Jordan Garment Factory | Jordan | Jordan | Manufacturing | 35.00 | Equity method | |
| Yehui International Co., Ltd. | Hongkong | Hongkong | Manufacturing | 22.75 | Equity method |
2.Key financial information of significant joint venture or associated enterprise
| Items | Shenzhen Guanhua Printing & Dyeing Co.,Ltd | |
| 2020.12.31 | 2019.12.31 | |
| Current assets | 19,854,144.21 | 10,286,534.45 |
| Non-current assets | 242,190,971.30 | 254,848,270.68 |
| Total asseats | 262,045,115.51 | 265,134,805.13 |
| Current liabilities | 12,261,343.60 | 10,815,587.15 |
| Non-current liabilities | 37,356,444.69 | 39,522,035.69 |
| Total liabilities | 49,617,788.29 | 50,337,622.84 |
| Net assets | 212,427,327.23 | 214,797,182.29 |
| including：Minority shareholders' rights | -- | -- |
| Attributable to shareholders of the parent company | 212,427,327.23 | 214,797,182.29 |
| Share of net assets calculated by stake | 106,553,547.34 | 107,742,266.64 |
| Adjustment | ||
| Including：Goodwill | 21,595,462.44 | 21,595,462.44 |
| Unrealized internal transaction gains and losses | -- | -- |
| Impairment preparation | -- | -- |
| Other | 285,343.61 | 285,343.61 |
| Book value of equity investment in joint ventures | 128,434,353.39 | 129,623,072.69 |
Continue：
| Items | Shenzhen Guanhua Printing & Dyeing Co.,Ltd | |
| Amount of current period | Amount of previous period | |
| Operating revenue | 14,623,800.97 | 4,434,022.16 |
| Financial expenses | -39,339.28 | -18,017.22 |
| Income tax expenses | -2,118,023.83 | 1,624,193.25 |
| Net profit | -3,422,861.88 | -7,457,362.64 |
| Net profit from termination | -- | -- |
| -Other Comprehensive income | -- | -- |
| Total comprehensive income | -3,422,861.88 | -7,457,362.64 |
| Dividends received from joint ventures this period | -- | -- |
VIII. Risks Related to Financial InstrumentsThe Company's main financial instruments include monetary funds, notes receivable, accountsreceivable, receivables financing, other receivables, trading financial assets, investment in other equityinstruments, accounts payable, other payables and long-term loans. Details of various financial instrumentshave been disclosed in relevant notes. The risks related to these financial instruments and the riskmanagement policies adopted by the Company to reduce these risks are as follows. The management of theCompany manages and monitors these risks to ensure that the above risks are controlled within a limitedrange.
1. Risk management objectives and policies
The objective of the Company in risk management is to strike a proper balance between risks andbenefits, and strive to reduce the adverse impact of financial risks on the Company's financial performance.Based on this risk management objective, the Company has formulated risk management policies to identifyand analyze the risks faced by the Company, set appropriate risk acceptable levels and design correspondinginternal control procedures to monitor the risk level of the Company. The Company will regularly reviewthese risk management policies and related internal control systems to adapt to changes in market conditionsor business activities of the Company. The internal audit department of the Company also regularly orrandomly checks whether the implementation of the internal control system complies with the riskmanagement policy.The main risks caused by the Company's financial instruments are credit risk, liquidity risk and marketrisk (including exchange rate risk, interest rate risk and commodity price risk).The Board of Directors is responsible for planning and establishing the Company's risk managementframework, formulating the Company's risk management policies and relevant guidelines, and supervisingthe implementation of risk management measures. The Company has formulated risk management policiesto identify and analyze the risks faced by the Company. These risk management policies clearly define
specific risks, covering many aspects such as market risk, credit risk and liquidity risk management. TheCompany regularly evaluates changes in the market environment and its business activities to decide whetherto update the risk management policies and systems. The risk management of the Company is carried out bythe Risk Management Committee in accordance with the policies approved by the Board of Directors. TheRisk Management Committee identifies, evaluates and avoids relevant risks through close cooperation withother business departments of the Company. The internal audit department of the Company regularly reviewsthe risk management control and procedures, and reports the review results to the Audit Committee of theCompany.The Company disperses the risks of financial instruments through appropriate diversified investmentand business portfolio, and reduces the risks concentrated in a single industry, a specific region or a certaincounterparty by formulating corresponding risk management policies.
(1) Credit risk
Credit risk refers to the risk that the counterparty fails to fulfill its contractual obligations, resulting infinancial losses of the Company.The Company manages credit risk according to portfolio classification. Credit risks mainly arise frombank deposits, notes receivable, accounts receivable and other receivables.The bank deposits of the Company are mainly deposited in state-owned banks and other large andmedium-sized listed banks, and such bank deposits are not expected to have significant credit risks.For notes receivable, accounts receivable, other receivables and long-term receivables, the Companysets relevant policies to control credit risk exposure. The Company evaluates customers' credit qualificationsbased on their financial status, credit records and other factors such as current market conditions, and setscorresponding credit periods. The Company will regularly monitor customers' credit records. For customerswith bad credit records, the Company will adopt written dunning, shortening of credit period or cancellationof credit period to ensure that the overall credit risk of the Company is within the controllable range.Debtors of accounts receivable of the Company are customers distributed in different industries andregions. The Company continuously evaluates the financial status of accounts receivable and purchasescredit guarantee insurance when appropriate.The maximum credit risk exposure the company is subject to is the book amount of each financial assetin the balance sheet. The Company has not provided any other guarantee that may expose the Company tocredit risk.
Among the accounts receivable of the Company, the accounts receivable of the top five customersaccounted for 56.46% of the total accounts receivable of the Company (in 2019: 65.56%); Among the otherreceivables of the Company, the other receivables of the top five companies in arrears accounted for 74.16%of the total other receivables of the Company (in 2019: 75.87%).
(2) Liquidity risk
Liquidity risk refers to the risk of shortage of funds when the Company fulfills its obligation to settle bydelivering cash or other financial assets.
The member companies of the Company are responsible for their own cash management, includingshort-term investment of cash surplus and raising loans to meet the estimated cash demand (if the loanamount exceeds certain preset authorization limits, it needs to be approved by the Board of Directors of theCompany). In addition, the Company will also consider negotiating with suppliers to reduce part of the debt
amount, or obtain funds in advance by selling long-aged accounts receivable, so as to reduce the cash flowpressure of the Company. The Company's policy is to regularly monitor the short-term and long-termliquidity demand and whether it meets the requirements of the loan agreement, so as to ensure that sufficientcash reserves and securities that can be realized at any time are maintained, and at the same time, to obtainsufficient reserve funds that major financial institutions promise to provide, so as to meet the short-term andlong-term liquidity demand.The Company raises working capital through funds generated from business operations and bank andother loans. On December 31, 2020, the unused bank loan amount of the Company was RMB 456,899,800(December 31, 2019: not applicable).At the end of the period, the financial assets, financial liabilities and off-balance sheet guarantee itemsheld by the Company are analyzed according to the maturity period of the undiscounted remaining contractcash flow as follows (In RMB10,000):
| items | 2020.12.31 | |||
| Within 1 year | 1 year to Within 5 years | Over 5 years | Total | |
| Finance liabilities： | ||||
| Account payable | 32,946.86 | 32,946.86 | ||
| Other payable | 13,035.84 | 13,035.84 | ||
| Long-term loans | -- | 34,310.02 | -- | 34,310.02 |
| Total of Finance liabilities | 45,982.70 | 34,310.02 | -- | 80,292.72 |
At the beginning of the period, the financial assets, financial liabilities and off-balance sheet guaranteeitems held by the Company are analyzed according to the maturity period of the undiscounted remainingcontract cash flow as follows (In RMB10,000):
| Items | 2019.12.31 | |||
| Within 1 year | 1 year to Within 5 years | Over 5 years | Total | |
| Finance liabilities： | ||||
| Account payable | 24,129.78 | -- | -- | 24,129.78 |
| Other payable | 15,264.58 | -- | -- | 15,264.58 |
| Total of Finance liabilities | 39,394.36 | -- | -- | 39,394.36 |
The amount of financial liabilities disclosed in the above table is the undiscounted contract cash flow,therefore it may be different from the book amount in the balance sheet.
(3) Market risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow of financialinstruments will fluctuate due to market price changes, including interest rate risk, exchange rate risk andother price risks.Interest rate riskInterest rate risk refers to the risk that the fair value or future cash flow of financial instruments willfluctuate due to changes in market interest rates. Interest rate risk can be caused by recognizedinterest-bearing financial instruments and unrecognized financial instruments (such as certain loancommitments).
The Company's interest rate risk mainly arises from long-term bank loans. Financial liabilities withfloating interest rate expose the Company to cash flow interest rate risk, while financial liabilities with fixedinterest rate expose the Company to fair value interest rate risk.
The Company pays close attention to the impact of interest rate changes on its interest rate risk. Atpresent, the Company has not adopted interest rate hedging policy. However, the management is responsiblefor monitoring interest rate risk and will consider hedging significant interest rate risk when necessary.
The interest-bearing financial instruments held by the Company are as follows (In RMB10,000):
| Item | Number of this year | Number of last year | |
| Floating-rate financial instruments | |||
| Financial liabilities | 34,310.02 | -- | |
| Including: long-term loans | 34,310.02 | -- | |
On December 31, 2020, if the borrowing rate calculated by floating interest rate increases or decreasesby 25 basis points, while other factors remain unchanged, the net profit and shareholders' equity of theCompany will decrease or increase by about RMB 857,800 (December 31, 2019: not applicable).
For financial instruments held on the balance sheet date, which expose the Company to fair valueinterest rate risk, the impact of net profit and shareholders' equity in the above sensitivity analysis is theimpact of remeasuring the financial instruments according to the new interest rate, assuming that the interestrate changes on the balance sheet date. For the floating interest rate non-derivative instruments held on thebalance sheet date, which expose the Company to cash flow interest rate risk, the impact of the abovesensitivity analysis on net profit and shareholders' equity is the impact of the above interest rate changes onthe annual estimated interest expense or income. Last year's analysis was based on the same assumptions andmethods.
Exchange rate risk
Exchange rate risk refers to the risk that the fair value or future cash flow of financial instruments willfluctuate due to the change of foreign exchange rate. Exchange rate risk can be derived from financialinstruments denominated in foreign currencies other than the functional currency.
Exchange rate risk mainly refers to the impact of foreign exchange rate fluctuations on the financialposition and cash flow of the Company. The ratio of foreign currency assets and liabilities held by theCompany to the total assets and liabilities is not significant. Therefore, the Company believes that theexchange rate risk it faces is not significant.
2. Capital management
The objective of the Company's capital management policy is to ensure that the Company can continueto operate, thereby providing returns to shareholders and benefiting other stakeholders, while maintaining thebest capital structure to reduce the capital cost.In order to maintain or adjust the capital structure, the Company may adjust the financing method, adjustthe dividend amount paid to shareholders, return capital to shareholders, issue new shares and other equityinstruments or sell assets to reduce debts.The Company monitors the capital structure on the basis of asset-liability ratio (i.e. total liabilitiesdivided by total assets). On December 31, 2020, the asset-liability ratio of the Company was 21.52%(December 31, 2019: 14.94%).
IX.Fair value
According to the input value of the lowest level which is of great significance to the whole measurementin fair value measurement, the fair value level can be divided into:
Level I: Quotes of the same assets or liabilities in active markets (unadjusted).
Level II: Use observable input values other than the market quotation of assets or liabilities in the LevelI directly (i.e. price) or indirectly (i.e. derived from price).
Level III: Assets or liabilities use any input value that is not based on observable market data(unobservable input value).
(1) Items and amounts measured at fair value
On December 31, 2020, the assets and liabilities measured at fair value are listed as follows according tothe above three levels:
| Item | Level I fair value measurement | Level II fair value measurement | Level III fair value measurement | Total |
| I. Continuous fair value measurement | ||||
| (I) Transactional financial assets | -- | -- | 684,617,260.06 | 684,617,260.06 |
| 1. Financial assets measured at fair value with changes included in current profits and losses | -- | -- | 684,617,260.06 | 684,617,260.06 |
| (II) Receivable financing | -- | -- | 102,051,314.08 | 102,051,314.08 |
| (III) Investment in other | 10,129,3 | 180,478,0 | 190,607,42 |
| equity instruments | 90.84 | 36.70 | 7.54 | |
| Total assets continuously measured at fair value | 10,129,390.84 | 967,146,610.84 | 977,276,001.68 |
X. Related parties and related-party transactions
1.Parent company information of the enterprise
| Name | Registered address | Nature | Registered capital （RMB10,000) | The parent company of the Company's shareholding ratio | The parent company of the Company’s vote ratio | |
| Shenzhen Investment Holdings Co.,Ltd. | 18/F, Investment Building, Shennan Road, Futian District, Shenzhen | Equity investment , Real-estate Development and Guarantee | 2,800,900.00 | 45.96 | 45.96 | |
The company is authorized and approved to be state-owned independent company by ShenzhenGovernment, and it Executes financial contributor function on state-owned enterprise within authorizationscope.
During the reporting period, the registered capital of the parent company changed as follows:
In 10,000
| Year-beginning balance | Increase in the current period | Decrease in the current period | Year-end balance |
| RMB 27,649 million | 36,000.00 | -- | 2,800,900.00 |
2.Subsidiaries of the Company
Details refer to the Note VII-1, Interest in the subsidiary
3. Information on the joint ventures and associated enterprises of the Company
Details refer to the Note VII-2, Interests in joint ventures or associates
4.Other Related parties information
| Other related party | Relationship to the Company |
| Shenzhen Shenchao Technology Investment Co., Ltd. | Subject to the same party controls |
| Shenzhen City Construction and Development (Group) Co., Ltd | Subject to the same party controls |
| Shenzhen Tianma Microelectronics Co., Ltd. | Chairman of the Board Is the Vice Chairman of the Company |
| Hangzhou Jinjiang Group Co., Ltd. | The controlling party of SAPO Photoelectric Shareholder |
| Lan Xi Jinxin Investment Management Co., Ltd. | A subsidiary of Hangzhou Jinjiang Group Co., Ltd. |
| Shengbo （HK）Co., Ltd. | The Company Executives are Director of the company |
| Zhejiang Hengjie Industry Co., Ltd. | A subsidiary of Hangzhou Jinjiang Group Co., Ltd. |
| Hengmei Photoelectri Co., Ltd. | A subsidiary of Hangzhou Jinjiang Group Co., Ltd. |
| Shenzhen Xinfang Knitting Co., Ltd. | Sharing Company |
| Shenzhen Dailishi Underwear Co., Ltd. | Sharing Company |
5. Related transactions.
（1）Related transactions on purchasing goods and receiving services
Acquisition of goods and reception of labor service
| Related party | Content | Current amount | Last amount |
| Hengmei Photoelectri Co., Ltd. | Polarized | 204,282,036.36 | 143,888,209.10 |
Related transactions on sale goods and receiving services
| Related parties | Content of related transaction | Amount of current period | Amount of previous period |
| Shenzhen Tianma Microelectronics Co., Ltd. | Sales polarizer sheet | 1,485,995.60 | 1,444,346.74 |
| Hengmei Photoelectri Co., Ltd. | Polarized | 110,545,214.28 | 141,106,466.92 |
(2) Related-party guarantee
(2) Related guarantee
| Guaranteed party | Amount | Guarantee start date | Guarantee end date | Whether the guarantee has been fulfilled | |
| SAPO Photoelectric | 342,660,000.00 | 2020.09.08 | Two years from the expiration of the debt performance period | No | |
(3) Inter-bank lending of capital of related parties：
| Related party | Amount | Start date | Expiring date | Note |
| Borrowing fund：： | ||||
| Shenzhen Guanhua Printing & Dyeing Co., Ltd. | 3,806,454.17 | 2019.07.30 | Not yet agreed | The annual lending rate is 0.30% |
(4). Rewards for the key management personnel
| Items | Amount of current period | Amount of previous period | ||
| Rewards for the key management personnel | 8.2102 million | 6.1638million | ||
6. Receivables and payables of related parties
（1）Receivables
| Name | Related party | 2020.12.31 | 2019.12.31 | ||
| Balance of Book | Bad debt Provision | Balance of Book | Bad debt Provision | ||
| Account receivable | Shenzhen Tianma Microelectronics | 581,696.96 | 25,652.84 | 733,038.52 | 36,651.93 |
| Account receivable | Hengmei Photoelectri Co., Ltd. | 20,879,229.37 | 1,578,235.08 | 53,893,840.80 | 2,694,692.04 |
| Other receivable | Anhui Huapeng Textile Company | 1,800,000.00 | 1,800,000.00 | 1,800,000.00 | 1,800,000.00 |
| Other receivable | Shenzhen Dailishi Underwear Co., Ltd | 1,100,000.00 | 55,000.00 | 404,780.23 | 20,239.01 |
（2）Payables
| Name | Related party | 2020.12.31 | 2019.12.31 | |
| Account payable | Hengmei Photoelectri Co., Ltd | 35,787,643.44 | 56,245,028.58 | |
| Other payable | Shenzhen Xinfang Knitting Co., Ltd. | 244,789.85 | 244,789.85 | |
| Other payable | Shenzhen Changlianfa Printing and dyeing Co., Ltd. | 1,580,949.95 | 1,580,949.95 | |
| Other payable | Yehui International Co.,Ltd. | 1,143,127.81 | 1,216,719.38 | |
| Other payable款 | SAPO （Hongkong）Co., Ltd. | 315,000.00 | 315,000.00 | |
| Other payable | Shenzhen Guanhua Printing & Dyeing Co., Ltd. | 3,811,240.92 | 3,811,053.20 | |
XI.Share payment
1. Overall situation of share payment
| Total amount of various equity instruments granted by the company during the current period | |
| Total amount of various equity instruments that the company exercises during the period | |
| Total amount of various equity instruments that have expired in the current period | 1,566,150 shares |
| The scope of executive price of the company’s outstanding share options at the end of the period and the remaining term of the contract | |
| The scope of executive price of the company’s other equity instruments at the end of the period and the remaining term of the contract | 5.73 yuan/share， 1 year |
On December 14, 2017, the company's 3rd Extraordinary General Meeting of Shareholders in 2017passed the Proposal on ‘Shenzhen Textile (Group) Co., Ltd. 2017 Restricted Stock Incentive Plan (Draft) andAbstract’; on December 14, 2017, the board of directors of the company reviewed and passed the Proposal on
Adjusting the List of Incentive Objects of Restricted Stock Incentive Plans and the Number of EquityGranted of 2017, and the Proposal on Granting Restrictive Shares to Incentive Objects. On December 14,2017, the company granted 4,752,300 restricted shares to the incentive object, the grant price was 5.73yuan/share. Restrictions shall be lifted at the rate of 40%, 30%, and 30% respectively after 12 months, 24months, and 36 months after the first transaction date of 24 months after the completion of the registration.The company's performance assessment for the restricted shares granted each period is as follows:
| Restriction lifting period | Performance assessment goals |
| The first restriction lifting period | In 2018, the earnings per share shall be no less than 0.07 yuan, and shall not be lower than the 75 fractiles level of the comparable listed companies in the same industry; the growth rate of operating revenue in 2018 compared with 2016 is not less than 70%, and is not lower than the 75 fractiles level of comparable listed companies in the same industry; in 2018, the proportion of optical film business such as polarizers to operating revenue is no less than 70%. |
| The second restriction lifting period | In 2019, earnings per share shall be no less than 0.08 yuan, and shall not be lower than the 75 fractiles level of the comparable listed companies in the same industry; the growth rate of operating revenue in 2019 compared with 2016 is not less than 130%, and is not lower than the 75 fractiles level of comparable listed companies in the same industry; in 2019, the proportion of optical film business such as polarizers to operating revenue is not less than 75%. |
| The third restriction lifting period | In 2020, the earnings per share shall be no less than 0.20 yuan, and shall not be lower than the 75 fractiles level of comparable listed companies in the same industry; the growth rate of operating revenue in 2020 is not less than 200% compared to 2016, and is not lower than the 75 fractiles level of comparable listed companies in the same industry. In 2020, the proportion of optical film business such as polarizers to operating revenue will be no less than 80%. |
Note: Earnings per share=net profit/total capital stock attributable to common shareholders of theCompany upon deduction of non-recurring profit and loss.
On January 16, 2020, the Company convened the first extraordinary shareholders' meeting in 2020 toconsider and pass the Proposal on Repurchase and Cancellation of Some Restricted Shares and agreed torepurchase and cancel 69,900 shares of restricted shares held by 3 original incentive objects who left thecompany for personal reasons at a repurchase price of 5.73 yuan per share.
On March 12, 2020, the 27th meeting of the Seventh Board of Directors of the Company deliberated andapproved the Proposal on Repurchase and Cancellation of Some Restricted Stocks, on which related directorsZhu Jun, Zhu Meizhu and Ning Maozai avoided voting according to relevant laws, regulations and theArticles of Association of the Company. The company plans to repurchase and cancel a total of 1,313,340restricted stocks held by 110 incentive targets that have not reached the conditions for lifting the restrictionson sales. The repurchase price is calculated at the grant price of RMB 5.73/share plus the bank depositinterest for the same period; A total of 120,000 restricted stocks which have been granted to the 3 resignedemployees but have not yet lifted the restrictions on sale are planned to be repurchased and cancelled, at arepurchase price of RMB 5.73/share. A total of 1,433,340 restricted stocks were repurchased and cancelledby the Company. Independent directors of the Company issued independent opinions and lawyers issuedlegal opinions.On April 3, 2020, the Company held the second extraordinary general meeting of shareholders in 2020 toreview and approve the Proposal on Repurchase and Cancellation of Some Restricted Stocks, and agreed thatthe Company held a total of 1,313,340 restricted stocks that failed to lift the restrictions on sales in Phase II of110 incentive objects at a repurchase price of RMB 6.01/share; It is agreed that the Company will repurchaseand cancel a total of 120,000 restricted stocks that have been granted to the 3 resigned employees but havenot yet lifted the restrictions on sale at a repurchase price of RMB 5.73/share, and a total of 1,433,340restricted stocks will be repurchased and cancelled.On June 8, 2020, the Company held the 30th meeting of the Seventh Board of Directors and the 21stmeeting of the Seventh Board of Supervisors. The Board of Directors deliberated and approved the Proposalon Repurchase and Cancellation of Some Restricted Stocks, and proposed to repurchase and cancel 57,150restricted stocks held by the 5 original incentive objects who resigned for personal reasons at a repurchaseprice of RMB 5.73/share; It is proposed to repurchase and cancel 5,760 restricted stocks held by 1 retiredoriginal incentive object at the repurchase price of RMB 6.14/share. Independent directors of the Companyexpressed their agreed independent opinions. The Board of Supervisors deliberated and approved theProposal on Repurchase and Cancellation of Some Restricted Stocks, verified the number of repurchased andcancelled stocks and the list of incentive targets, and issued verification opinions, and lawyers issued legalopinions.
On June 29, 2020, the company held the 2019 Annual General Meeting of Shareholders to deliberateand approve the Proposal on Repurchase and Cancellation of Some Restricted Stocks, and agreed torepurchase and cancel 57,150 restricted stocks held by the 5 original incentive objects who resigned forpersonal reasons at a repurchase price of RMB 5.73/share; It is agreed to repurchase and cancel 5,760restricted stocks held by 1 retired original incentive object at the repurchase price of RMB 6.14/share, and atotal of 62,910 restricted stocks will be repurchased and cancelled.
2. Equity-settled share-based payment
| Determination method of the fair value of equity instruments on the grant date | The closing price of the company's stock on grant date - grant price |
| Determination basis of the number of vesting equity instruments | On each balance sheet date of the waiting period, it is determined based on the latest information such as the change in the number of people that can be released from restrictions and the completion of performance indicators |
| The reasons for the significant difference between the current estimate and the previous estimate | |
| Equity-settled share-based payment is included in the accumulated amount of capital reserve | -- |
| Total amount of fees confirmed by equity-settled share-based payments in the current period | -- |
XII. Commitments
1. Significant commitments
As of December 31,2020,The company does not disclose the pension plan undisclosed matter shouldexist.
2. Contingency
As of December 31,2020,The company does not disclose the pension plan undisclosed matter shouldexist.
XIII. Events after balance sheet date
The Company has no events after the balance sheet date that should be disclosed.
XIV. Other significant events
1. Segment information
According to the Company's internal organizational structure, management requirements and internalreporting system, the Company's business includes 4 reporting segments: polarizer, textile, property leasingand trade. These reporting segments are determined based on the financial information required by theCompany's daily internal management. The management of the Group regularly evaluates the operatingresults of these reporting segments, so as to decide to allocate resources to them and evaluate theirperformance. Segment profit or loss, assets and liabilities are as follows:
| Current period or end of current period | Polarizer | Property lease | Textile | Trade | Offset | otal |
| Operating income | 1,954,299,275.90 | 95,691,578.25 | 60,503,325.78 | -- | -1,529,492.13 | 2,108,964,687.80 |
| Including: revenue from foreign transaction | 1,954,299,275.90 | 94,195,699.39 | 60,469,712.51 | -- | -- | 2,108,964,687.80 |
| Revenue from inter-segment transactions | -- | 1,495,878.86 | 33,613.27 | -- | -1,529,492.13 | -- |
| Including: revenue from main business | 1,954,299,275.90 | 86,707,358.16 | 60,503,325.78 | -- | -4,077,074.78 | 2,097,432,885.06 |
| Operating cost | 1,737,374,562.38 | 28,134,125.79 | 49,877,951.65 | -- | -1,088,244.80 | 1,814,298,395.02 |
| Including: main business cost | 1,737,374,562.38 | 21,928,436.25 | 49,877,951.65 | -- | -1,088,244.80 | 1,808,092,705.48 |
| Operating profit | 9,491,199.52 | 39,054,820.16 | 2,119,203.22 | -257,812.90 | -371,420.53 | 50,394,125.02 |
| Total assets | 3,676,840,413.21 | 3,190,112,708.39 | 38,262,097.35 | 28,781,153.62 | -1,964,319,763.74 | 4,969,547,552.23 |
| Total indebtedness | 878,156,778.18 | 177,919,940.25 | 20,735,649.08 | 19,444,715.13 | -26,024,780.03 | 1,070,232,302.61 |
2. Government subsidy
Government subsidies included in deferred income are subsequently measured by the total amountmethod
| Subsidy item | 2019.12.31 | New subsidy amount in the current period | Amount carried forward to profit or loss in the current period | Others Changes | 2020.12.31 | Listed items carried forward into profit | Asset-related/revenue-related |
| or loss in the current period | |||||||
| Amortization of textile special funds | 428,571.41 | -- | 142,857.16 | -- | 285,714.25 | Other income | Related to assets |
| Amortization of subsidy funds for industrialization items of TFT-LCD polarizer | 3,033,333.34 | -- | 1,300,000.00 | -- | 1,733,333.34 | Other income | Related to assets |
| Amortization of subsidy funds for narrow line (Line 5) of TFT-LCD polarizer phase I project | 1,500,000.00 | -- | 500,000.00 | -- | 1,000,000.00 | Other income | Related to assets |
| Amortization for purchasing imported equipment and technical subsidies | 501,926.58 | -- | 175,090.20 | -- | 326,836.38 | Other income | Related to assets |
| Amortization of innovation and venture funds for TFT-LCD polarizer phase I project | 150,000.00 | -- | 50,000.00 | -- | 100,000.00 | Other income | Related to assets |
| Amortization of innovation and venture funds in Shenzhen polarized | 262,500.00 | -- | 50,000.00 | -- | 212,500.00 | Other income | Related to assets |
| materials and technology engineering laboratory | |||||||
| Amortization of polarized materials and technical engineering laboratory in Shenzhen | 2,625,000.00 | -- | 500,000.00 | -- | 2,125,000.00 | Other income | Related to assets |
| Amortization of subsidy funds for technical center construction | 1,575,000.00 | -- | 300,000.00 | -- | 1,275,000.00 | Other income | Related to assets |
| Amortization of subsidy funds for introducing advanced technology | 43,164.31 | -- | 14,388.10 | -- | 28,776.21 | Other income | Related to assets |
| Amortization of local supporting funds for TFT-LCD polarizer phase II project (Line 6) | 12,750,000.00 | -- | 1,500,000.00 | -- | 11,250,000.00 | Other income | Related to assets |
| Amortization of innovation and venture funds for TFT-LCD polarizer phase II project (Line 6) | 425,000.00 | -- | 50,000.00 | -- | 375,000.00 | Other income | Related to assets |
| Amortization of subsidy funds for key technology R&D equipment of optical compensation film for polarizer | 3,625,000.00 | -- | 500,000.00 | -- | 3,125,000.00 | Other income | Related to assets |
| Amortizatio | 8,500,0 | -- | -- | O | Related to assets |
| n of national subsidy for TFT-LCD polarizer phase II project (Line 6) | 00.00 | 1,000,000.00 | 7,500,000.00 | ther income | |||
| Amortization of funds for pilot projects of regional agglomeration development of strategic emerging industries in Guangdong Province | 21,250,000.00 | -- | 2,500,000.00 | -- | 18,750,000.00 | Other income | Related to assets |
| Amortization of subsidies for new production lines and purchased equipment in the phase II project of polarizer for TFT-LCD | 25,500,000.00 | -- | 3,000,000.00 | -- | 22,500,000.00 | Other income | Related to assets |
| Amortization of subsidy funds for energy-saving transformation | 56,815.63 | -- | 29,642.93 | -- | 27,172.70 | Other income | Related to assets |
| Amortization of subsidy funds for old elevator renovation | 1,004,752.95 | -- | 142,255.72 | -- | 862,497.23 | Other income | Related to assets |
| Investment funds in the central budget of polarization industrialization project for super-large TV (Line 7) | 30,000,000.00 | -- | -- | 30,000,000.00 | Other income | Related to assets |
| R&D subsidy for key technologies of polarizers for ultra-thin IPS smart phone terminals | 2,000,000.00 | -- | -- | 2,000,000.00 | Other income | Related to assets | ||
| Shenzhen Municipal Finance Committee (R&D key technologies of high-performance polarizers for C2018N007 large-size display panels) | 5,000,000.00 | 1,000,000.00 | -- | 6,000,000.00 | Other income | Related to assets | ||
| Special fund subsidy for improving atmospheric environmental quality in Shenzhen - SAPO Photoelectric | 1,033,507.00 | -- | 442,931.57 | -- | 590,575.43 | Other income | Related to assets | |
| Special fund subsidies for improving the quality of atmospheric environment in Shenzhen-Meibainian | -- | 520,000.00 | 26,000.00 | -- | 494,000.00 | Other income | Related to assets | |
| Subsidy for special technical transformation investment project of multiplication by technical transformation | -- | 190,000.00 | 11,083.33 | -- | 178,916.67 | Other income | Related to assets | |
| Tota | 121,26 | 1,710 | 12,23 | -- | 110,74 | |||
| l | 4,571.22 | ,000.00 | 4,249.01 | 0,322.21 |
(III)Other important matters affecting investors' decision-making
(1) Arbitration between the company and Jinjiang Group
At the end of 2016, the Company introduced Jinjiang Group as a strategic investor for SAPOPhotoelectric' capital increase and share expansion. The Company, SAPO Photoelectric, Jinjiang Group andthe limited partnership named Hangzhou Jinhang Equity Investment Fund Partnership (Limited Partnership)(hereinafter referred to as "Jinhang Investment") established by the Jinjiang Group as actual controllers,signed the Cooperation Agreement. Jinjiang Group made a commitment to the performance of SAPOPhotoelectric from 2017 to 2019 and Jinjiang Group undertook to make up the difference between thepromised net profit and the actual profit in cash if the promised income and net profit were not fulfilled. In2018 and 2019, Jinjiang Group did not complete its performance commitments as agreed. The performancecompensation company in 2018 has been received in 2019 as agreed, totaling RMB 197,268,700; As for theperformance compensation in 2019, Jinjiang Group believes that it cannot dominate the operation andmanagement of SAPO Photoelectric, which leads to the failure of the contractual purpose of the CooperationAgreement, and applies to Shenzhen International Arbitration Court for arbitration. Request: ① To award theapplicant to be exempted from fulfilling the 2019 annual performance compensation obligation stipulated inArticle 3.1 of the Cooperation Agreement, that is, the applicant no longer pays RMB 244,783,800 to SAPOPhotoelectric; ② If the arbitration tribunal finds that it will not support the first arbitration request mentionedabove, then, request an award to rescind Article 3.1 of the Cooperation Agreement; The respondent shallcompensate the applicant RMB 197,268,700 paid by the applicant in 2018; And the respondent shallcompensate the applicant for the profit loss of RMB 202,340,700 that it could have obtained; ③ To award therespondent to bear the arbitration fee and the actual expenses of the arbitration tribunal. As of the reportingdate, the above arbitration has not yet been finalized.
(2) Undelivered property of Shenzhen Xieli Automobile Enterprise Co., Ltd. (hereinafter referred to as"Xieli Automobile")
Shenzhen Xieli Automobile Co., Ltd. (hereinafter referred to as "Shenzhen Xieli") is a Sino-foreignjoint venture invested by the Company and Hong Kong Xieli Maintenance Co., Ltd in 1981, with a registeredcapital of RMB 3.12 million, and 50% equity held by the Company. The business term of the company endedin 2008 and its business license was revoked in 2014. The main asset of the company is real estate. In March2020, the Industrial and Commercial license of Shenzhen Xieli was cancelled, but how to dispose of threeproperties under its name needs to be resolved upon further negotiation between shareholders of both parties.
XV. Notes s of main items in financial reports of parent company
(1) Account receivable
1. Aging disclosure
| Aging | 2020.12.31 | 2019.12.31 |
| Within 1 year | 1,538,316.00 | 550,453.73 |
| Less：Bad debt provision | 76,915.80 | 27,522.69 |
| Total | 1,461,400.20 | 522,931.04 |
（2）Disclosure by classification according to the bad debt accrual metho
| Types | 2020.12.31 | 2019.12.31 | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion(%) | Amount | Expected credit loss rate (%) | Amount | Proportion(%) | Amount | Expected credit loss rate (%) | |||
| Bad debt provision is accrued according to individual items | 1,538,316.00 | 100.00 | 76,915.80 | 5.00 | 1,461,400.20 | 550,453.73 | 100.00 | 27,522.69 | 5.00 | 522,931.04 |
Bad debt provision is accrued according to portfoliosAccrual of bad debt provision by single item:：
| 2020.12.31 | 2019.12.31 | |||||
| Book balane | Bad-debt provision | Expected credit loss rate (%) | Book balane | Bad-debt provision | Expected credit loss rate (%) | |
| Within 1 year | 1,538,316.00 | 76,915.80 | 5.00 | 550,453.73 | 27,522.69 | 5.00 |
(3) Bad debt provision accrued, recovered or reversed in the current period
| Amount of bad-debt provision | |
| 2019.12.31 | 27,522.69 |
| Adjustment amount for the first implementation of the New Income Standards | -- |
| 2020.01.01 | 27,522.69 |
| Current accrual | 49,393.11 |
| Withdrawal or reversal in current period | -- |
| 2020.12.31 | 76,915.80 |
(4) There is no account receivable actually written off in the current period
(5) The top five units of the closing balance of accounts receivable collected by the arrearsThe total amount of the top five accounts receivable collected by the Company according to thearrearage party was 1,538,316.00 yuan, accounting for 100% of the total year-end balance of accountsreceivable, and all the top five arrears were rental of houses. The sum of the closing balance of thecorresponding provision for bad debts is 76915.80 yuan
（6）No account receivable which terminate the recognition owning to the transfer of the financialassets
(7)The amount of the assets and liabilities formed by the transfer and the continues involvement ofaccounts receivable
2.Other receivale
| Items | 2020.12.31 | 2019.12.31 | |
| Interest receivable | -- | 7,329,228.31 | |
| Other receivavble | 7,450,934.40 | 9,710,277.69 | |
| Total | 7,450,934.40 | 17,039,506.00 | |
（1）Interest receivable
1) Category of interest receivable
| Items | 2020.12.31 | 2019.12.31 |
| Fixed deposit | -- | -- |
| Structure deposit | -- | 7,329,228.31 |
| Subtotal： | -- | 7,329,228.31 |
| Less：Bad debt provisio | -- | -- |
| Total | -- | 7,329,228.31 |
（2）Other receivable
(1)Category of Other receivable
| Aging | 2020.12.31 | 2019.12.31 |
| Within 1 year | 5,011,410.31 | 5,143,593.73 | |
| 1-2 years | 2,410,316.25 | 3,828,819.36 | |
| 2-3 years | 328,819.35 | 1,830,359.77 | |
| 3-4 years | 454,759.77 | 1,810,047.30 | |
| 4-5 years | 1,800,000.00 | -- | |
| Over 5 years | 12,461,099.73 | 12,476,252.43 | |
| Subtotal | 23,580,195.11 | 25,089,072.59 | |
| Less：Bad debt provision | 16,129,260.71 | 15,378,794.90 | |
| Total | 7,450,934.40 | 9,710,277.69 | |
(2)Other accounts receivable classified by the nature of accounts
| Items | 2020.12.31 | 2019.12.31 |
| Book balance | Book Balance | |
| Export rebate | 7,175,600.00 | 9,366,582.51 |
| Unit account | 16,369,395.10 | 15,678,175.33 |
| Deposit | 10,000.00 | -- |
| Other | 25,200.01 | 44,314.75 |
| Subtotal | 23,580,195.11 | 25,089,072.59 |
| Less：Bad debt provision | 16,129,260.71 | 15,378,794.90 |
| Total | 7,450,934.40 | 9,710,277.69 |
(3）Bad-debt provision
At the end of the period, bad debt provision in the first stage:
| Types | Book Balance | Bad-debt provision | Book value |
| Bad debt provision accrued by aging portfol | 8,468,948.79 | 1,018,014.39 | 7,450,934.4 |
| Total | 8,468,948.79 | 1,018,014.39 | 7,450,934.4 |
At the end of the period, the Company does not have interest receivable, dividend receivable and otherreceivables in the second stage;
At the end of the period, bad debt provision in the third stage:
| Types | Book Balance | Bad-debt provision | Book value | Reason | |
| Bad debt provision is accrued according to individual items | 15,111,246.32 | 15,111,246.32 | -- | Long aging and low possibility of recovery | |
| Total | 15,111,246.32 | 15,111,246.32 | -- | ||
On December 31, 2019, bad debt provisions are as follows:
Bad debt provision in the first stage:
| Types | Book Balance | Bad-debt provision | Book value |
| Bad debt accrued by aging portfolios | 10,996,121.64 | 1,285,843.95 | 9,710,277.69 |
| Total | 10,996,121.64 | 1,285,843.95 | 9,710,277.69 |
As of December 31, 2019, the Company has no interest receivable, dividend receivable and otherreceivables in the second stage.As of December 31, 2019,，Bad debt provision in the third stage:
| Types | Book Balance | Bad-debt provision | Book value | Reason | |
| Bad debt provision is accrued according to individual items | 14,092,950.95 | 14,092,950.95 | -- | Long aging and low possibility of recovery | |
| Total | 14,092,950.95 | 14,092,950.95 | -- |
④ Bad debt provision accrued, recovered or reversed in the current period
| Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses over the next 12 months | Expected credit loss over life (no credit impairment) | Expected credit losses for the entire duration (credit impairment |
| occurred) | ||||
| Balance as at December 31,2019 | 1,285,843.95 | -- | 14,092,950.95 | 15,378,794.90 |
| Balance as at December 31,2019In current | -- | -- | -- | -- |
| ——Transfer to stage II | -- | -- | -- | -- |
| ——Transfer to stage III | -181,045.68 | -- | 181,045.68 | -- |
| ——Transfer to stage II | -- | -- | -- | -- |
| ——Transfer to stage I | -- | -- | -- | -- |
| Provision in the current period | -- | -- | 837,249.69 | 837,249.69 |
| Turn back in the current period | 86,783.88 | -- | -- | 86,783.88 |
| Reseller in the current period | -- | -- | -- | -- |
| Write - off in the current period | -- | -- | -- | -- |
| Other | -- | -- | -- | -- |
| Balance as at December 31,2020 | 1,018,014.39 | -- | 15,111,246.32 | 16,129,260.71 |
(5) Other account receivables actually cancel after write-off :Nil
(6)Top 5 of the closing balance of the other accounts receivable collected according to the arrearsparty
| Name | Nature | Year-end balance | Age | Portion in total other receivables(%) | Bad debt provision of year-end balance |
| Top 1 | Unit account | 11,389,044.60 | Over 5 years | 48.30% | 11,389,044.60 |
| Top 2 | Unit account | 7,175,600.00 | Within 1 year，1-2 years | 30.43% | -- |
| Top 3 | Unit account | 1,800,000.00 | 4-5 years | 7.63% | 1,800,000.00 |
| Top 4 | Unit account | 1,100,000.00 | Within 1 year | 4.66% | 55,000.00 |
| Top 5 | Deposit | 1,018,295.37 | 1-2 year，2-3 years，3-4 years | 4.32% | 349,497.32 |
| Total | 22,482,939.97 | 95.35% | 13,593,541.92 |
(7) No Accounts receivable involved with government subsidies
(8) No other account receivable which terminate the recognition owning to the transfer of the financialassets
(9) The amount of the assets and liabilities formed by the no transfer and the continues involvement ofother accounts receivable
3.Long-term equity investment
| Items | 2020.12.31 | 2019.12.31 | ||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |
| Investment to the subsidiary | 1,972,630,835.39 | 16,582,629.30 | 1,956,048,206.09 | 1,966,803,211.46 | 16,582,629.30 | 1,950,220,582.16 |
| Investment to joint ventures | 138,703,188.31 | 138,703,188.31 | 139,721,906.46 | 139,721,906.46 | ||
| Investment to associated enterprises | 9,225,948.92 | 9,225,948.92 | 12,488,023.26 | 12,488,023.26 | ||
| Total | 2,120,559,972.62 | 16,582,629.30 | 2,103,977,343.32 | 2,119,013,141.18 | 16,582,629.30 | 2,102,430,511.88 |
（1）Investment to the subsidiary
| Name | 2019.12.31 | Increase | Decrease | 2020.12.31 | Withdrawn impairment provision in the reporting period | Closing balance of impairment provision |
| SAPO Photoelectric | 1,924,663,070.03 | 1,924,663,070.03 | 14,415,288.09 | |||
| Shenzhen Lisi Industrial Development Co., Ltd. | 8,073,388.25 | 8,073,388.25 | ||||
| Shenzhen Beauty Century Garment Co., Ltd. | 16,864,215.55 | 16,864,215.55 | 2,167,341.21 | |||
| Shenzhen Huaqiang Hotel | 15,489,351.08 | 15,489,351.08 | ||||
| Shenfang Property Management Co., Ltd. | 1,713,186.55 | 1,713,186.55 | ||||
| Shenfang Sungang Property Management Co., Ltd. | 5,827,623.93 | 5,827,623.93 | ||||
| Total | 1,966,803,211.46 | 5,827,623.93 | 1,972,630,835.39 | 16,582,629.30 |
（2）Investment to joint ventures and associated enterprises
| Name | 2019.12.31 | Increase /decrease in reporting period | 2020.12.31 | Closing balance of impairm | |||||||
| Add investment | Decreased investment | Gain/loss of Investment | Adjustment of other comprehensive income | Other equity changes | Declaration of cash dividends or profit | Withdrawn impairmen | Other | ||||
| t provision | ent provision | ||||||||||
| I. Joint ventures | |||||||||||
| Anhui Huapeng Textile Co.,Ltd. | 10,098,833.77 | 698,189.37 | 10,797,023.14 | ||||||||
| Shenzhen Guanhua Printing & Dyeing Co., Ltd. | 129,623,072.69 | -1,716,907.52 | 127,906,165.17 | ||||||||
| Subtotal | 139,721,906.46 | -1,018,718.15 | 138,703,188.31 | ||||||||
| II. Associated enterprises | |||||||||||
| Shenzhen Changlianfa Printing and dyeing Company | 2,450,676.14 | 255,586.24 | 2,706,262.38 | ||||||||
| Jordan Garnent Factory | 902,269.19 | -904,422.99 | 2,153.80 | ||||||||
| Yehui International Co., Ltd. | 9,135,077.93 | -2,297,211.37 | -318,180.02 | 6,519,686.54 | |||||||
| Subtotal | 12,488,023.26 | -2,946,048.12 | -316,026.22 | 9,225,948.92 | |||||||
| Total | 152,209,929.72 | -3,964,766.27 | -316,026.22 | 147,929,137.23 |
4.Business income, Business cost
（1）Business income, Business cost
| Items | Amount of current period | Amount of previous period | ||
| Income | Cost | Income | Cost | |
| Main business cost | 57,649,817.53 | 7,019,203.76 | 71,861,233.77 | 8,340,126.19 |
| Other business cost | 3,647,070.68 | 3,647,070.68 | 51,724,519.33 | 52,314,425.79 |
| Total | 61,296,888.21 | 10,666,274.44 | 123,585,753.10 | 60,654,551.98 |
（2）Main business（Industry）
| Name | Amount of current period | Amount of previous period | ||
| Business income | Business cost | Business income | Business cost | |
| Property rental | 57,649,817.53 | 7,019,203.76 | 71,861,233.77 | 8,340,126.19 |
（3）Main business（Production）
| Name | Amount of current period | Amount of previous period | ||
| Business income | Business cost | Business income | Business cost | |
| Property rental | 57,649,817.53 | 7,019,203.76 | 71,861,233.77 | 8,340,126.19 |
（4）Main Business（Area）
| Name | Amount of current period | Amount of previous period | ||
| Business income | Business cost | Business income | Business cost | |
| Shenzhen | 57,649,817.53 | 7,019,203.76 | 71,861,233.77 | 8,340,126.19 |
5.Investment income
| Items | Amount of current period | Amount of previous period |
| Income from long-term equity investment measured by adopting the Cost method | 18,304,138.91 | -- |
| Income from long-term equity investment measured by adopting the equity method | -3,446,613.86 | -7,404,083.27 |
| Investment income from the disposal of long-term equity investment | -- | 55,481,817.13 |
| Dividend income earned during investment holdings in other equity instruments | 1,995,042.32 | 1,558,400.13 |
| Structured deposit interest | 14,919,678.58 | 18,417,333.36 |
| Net monetary gains | 3,884,233.70 | -- |
| Total | 35,656,479.65 | 68,053,467.35 |
XVI. Supplement information
1. Particulars about current non-recurring gains and loss
| Items | Amount | Notes |
| Non-current asset disposal gain/loss | 273,229.58 | |
| Govemment subsidy recognized in current gain and loss(excluding those closely related to the Company’s business and granted under the state’s policies) | 29,506,252.69 | Mainly due to recognize other income from government subsidies related to the main business. |
| Other non-business income and expenditures other than the above | 1,310,556.26 | |
| Net amount of non-operating income and expense except the aforesaid items | -- | |
| Other non-recurring Gains/loss items | 31,090,038.53 | |
| Less：Income tax impact on non-current gains & losse | 53,313.37 |
| Net non-current gains & losses | 31,036,725.16 | |
| Less：Net impact of non-current gains & losses attributable to minority shareholders (after tax) | 11,853,336.46 | |
| Non-current gains & losses attributable to common shareholders of the company | 19,183,388.70 |
2. Return on net asset and earnings per share
| Profit of report period | Weighted average returns equity(%) | Earnings per share | |
| Basic earnings per share(RMB/share） | Diluted earnings per share(RMB/share) | ||
| Net profit attributable to the Common stock shareholders of Company. | 1.36 | 0.07 | 0.07 |
| Net profit attributable to the Common stock shareholders of Company after deducting of non-recurring gain/loss. | 0.66 | 0.04 | 0.04 |
Shenzhen Textile (Holdings) Co., Ltd.
March 10, 2021