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深纺织A(000045)_公司公告_深纺织B：2025年年度审计报告(英文版)

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深纺织B：2025年年度审计报告(英文版)（下载公告）
公告日期:2026-03-30

ShenzhenTextile(Holdings)Co.,Ltd.FinancialStatementsandAuditReportFortheyearendedDecember31,2025

FinancialStatementsandAuditReportFortheyearendedDecember31,2025ContentPageAuditReport1-4Consolidatedandparentcompany'sbalancesheet5-7Consolidatedandparentcompany'sincomestatement8-9Consolidatedandparentcompany'sstatementofcashflows10-11Consolidatedandparentcompany'sstatementofchangesinshareholders'equity12-15Notestothefinancialstatements16-108

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AuditReport

DSB(S)Z(26)No.P[]

(Page1of4)AllshareholdersofShenzhenTextile(Holdings)Co.,Ltd.I.AuditopinionsWehaveauditedthefinancialstatementsofShenzhenTextile(Holdings)Co.,Ltd.(hereinafterreferredtoasthe"ShenzhenTextile"),includingtheconsolidatedandparentcompany'sbalancesheetasatDecember31,2025,theconsolidatedandparentcompany'sincomestatement,consolidatedandparentcompany'sstatementofcashflows,consolidatedandparentcompany'sstatementofchangesinshareholders'equityandrelatednotestothefinancialstatementsfortheyearthenended.Inouropinion,theattachedfinancialstatementsareprepared,inallmaterialrespects,inaccordancewithAccountingStandardsforBusinessEnterprisesandpresentfairlythefinancialpositionoftheCompanyasatDecember31,2025anditsoperatingresultsandcashflowsfortheyearthenended.II.BasisfortheauditopinionWehaveconductedourauditinaccordancewiththeChineseAuditingStandardsforCertifiedPublicAccountants.Ourresponsibilitiesunderthesestandardsarefurtherdescribedinthe"CertifiedPublicAccountant'sResponsibilitiesfortheAuditofFinancialStatements"sectionoftheauditreport.InaccordancewiththeIndependenceStandardforChineseCertifiedPublicAccountantsNo.1-RequirementsforIndependenceinAuditandReviewofFinancialStatementandtheCodeofEthicsforChineseCertifiedPublicAccountants,weareindependentofShenzhenTextileandhavefulfilledotherethicalresponsibilities.Wehavecompliedwiththeindependencerequirementsforauditsofpublicinterestentitiesduringtheaudit.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.III.KeyauditmattersKeyauditmattersarethosemattersthat,inourprofessionaljudgment,areofmostsignificanceinourauditofthefinancialstatementsofthecurrentyear.Thesemattersareaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.Wehaveidentifiedthefollowingmattersaskeyauditmatterstobecommunicatedintheauditreport.

1.RecognitionofrevenuefromsalesofpolarizersAsdescribedintheNote(V).40tothefinancialstatements,in2025,theoperatingrevenueofShenzhenTextileaspresentedintheconsolidatedfinancialstatementswasRMB3,241,380,430.62,ofwhichtherevenuefromsalesofpolarizerswasRMB3,067,530,570.03,accountingfor94.64%ofthetotalrevenue.TherevenuefromsalesofpolarizersofShenzhenTextileisrecognizedwhenthecustomerobtainscontroloftherelevantgoods.Duetotheimportanceofrevenuefromsalesofpolarizerstotheconsolidatedfinancialstatementsasawhole,andthefactthattherevenueisoneofthekeyperformanceindicatorsofShenzhenTextile,thereisaninherentriskthatmanagementmaymanipulatetherevenuerecognition,inordertoachievespecificgoalsorexpectations.Therefore,wehaveidentifiedtherecognitionofrevenuefromsalesofpolarizersasakeyauditmatterintheauditoftheconsolidatedfinancialstatements.

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AuditReport-Continued

DSB(S)Z(26)No.P[]

(Page2of4)III.Keyauditmatters-Continued

1.Recognitionofrevenuefromsalesofpolarizers-ContinuedInresponsetotheabovekeyauditmatters,theauditproceduresweperformedmainlyinclude:

?Testandevaluatetheeffectivenessoftheoperationofinternalcontrolrelatedtothesalesbusinessof

polarizer;?Checkthesalescontractssignedwithmajorcustomers,identifythetermsandconditionsofthecontracts

relatedtothetransferofrightofcontrolofthegoods,andevaluatewhethertheaccountingpoliciesfor

recognitionofrevenuefromsalesofpolarizersmeettherequirementsoftheAccountingStandardsfor

BusinessEnterprises;?Executeanalyticalproceduresfortherevenuefromsalesofpolarizersbyproductionline,producttypeand

customerrespectively,andanalyzetherationalityofthechangeinrevenuefromsalesofpolarizersin

combinationwithmarketsellingpriceandotherfactors;?Extractsamplestoperformdetailtestsontherevenuefromsalesofpolarizers,checkthesupporting

documentssuchasinvoices,deliveryordersandreceiptsrelatedtotherecognitionofrevenuefromsalesof

polarizers,andconductletterofconfirmationonthesalesamountofmajorcustomerstoverifythe

authenticityofrevenuefromsalesofpolarizers;?Selectsamplesforsalestransactionsbeforeandafterthebalancesheetdate,checksupportingdocuments

suchasdeliveryorders,receiptsandinvoices,andevaluatewhethertherevenuefromsalesofpolarizersis

recordedintheappropriateaccountingperiod.

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AuditReport-Continued

DSB(S)Z(26)No.P[]

(Page3of4)IV.OtherinformationThemanagementofShenzhenTextileisresponsibleforotherinformation.Otherinformationincludesinformationcoveredinthe2025AnnualReportofShenzhenTextile,butexcludesthefinancialstatementsandourauditreport.Ourauditopiniononthefinancialstatementsdoesnotcovertheotherinformationandwedonotexpressanyformofassuranceconclusionthereon.Inconnectionwithourauditoffinancialstatements,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwithfinancialstatementsorourknowledgeobtainedduringtheauditorotherwiseappearstobemateriallymisstated.If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementoftheotherinformation,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.IV.ResponsibilitiesofthemanagementandthosechargedwithgovernanceforfinancialstatementsThemanagementofShenzhenTextileisresponsibleforpreparingthefinancialstatementsinaccordancewiththerequirementsofAccountingStandardsforBusinessEnterprisestoachieveafairpresentation,andfordesigning,implementingandmaintaininginternalcontrolthatisnecessarytoensurethatthefinancialstatementsarefreefrommaterialmisstatements,whetherduetofraudsorerrors.Inpreparingthefinancialstatements,themanagementisresponsibleforassessingthegoing-concernabilityofShenzhenTextile,disclosingmattersrelatedtogoingconcern(ifapplicable)andapplyingthegoingconcernbasis,unlessthemanagementplanstoliquidateShenzhenTextile,terminateitsoperationsorhasnootherrealisticalternative.ThosechargedwithgovernanceareresponsibleforoverseeingthefinancialreportingprocessofShenzhenTextile.VI.ResponsibilitiesofcertifiedpublicaccountantsfortheauditoffinancialstatementsOurobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditreportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewiththeauditstandardswillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorinaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.Wehaveexercisedprofessionaljudgmentandmaintainedprofessionalskepticisminperformingourauditundertheauditingstandards.Atthesametime,wealsoimplementthefollowingwork:

(1)Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.

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AuditReport-Continued

DSB(S)Z(26)No.P[]

(Page4of4)VI.Responsibilitiesofcertifiedpublicaccountantsfortheauditoffinancialstatements-Continued

(2)Understandtheinternalcontrolrelatedtotheaudit,soastodesignappropriateauditprocedures.

(3)Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebythemanagement.

(4)Drawconclusionsontheappropriatenessofthemanagement'suseofthegoingconcernbasis.Atthesametime,basedontheauditevidenceobtained,aconclusionisdrawnastowhetherthereisamaterialuncertaintyineventsorcircumstancesthatmaygiverisetosignificantdoubtaboutthegoing-concernabilityofShenzhenTextile.Ifweconcludethatamaterialuncertaintyexists,wearerequiredto,inourauditreport,drawattentionoftheusersofstatementstotherelateddisclosuresinthefinancialstatements;ifsuchdisclosuresareinadequate,weshouldmodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditreport.However,futureeventsorcircumstancesmaycauseShenzhenTextiletoceasetocontinueasagoingconcern.

(5)Evaluatetheoverallpresentation(includingdisclosures),structureandcontentofthefinancialstatements,andwhetherthefinancialstatementsfairlyreflecttherelevanttransactionsandmatters.

(6)ObtainsufficientandappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithinShenzhenTextiletoexpressanopiniononthefinancialstatements.Weareresponsibleforthedirection,supervisionandperformanceofthegroupaudit.Weremainsolelyresponsibleforourauditopinion.Wecommunicatewiththosechargedwithgovernanceregardingtheplannedscopeandtimingoftheaudit,significantauditfindingsandothermatters,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andtherelatedsafeguards(ifapplicable).Fromthematterscommunicatedwiththosechargedwithgovernance,wehavedeterminedwhichmattersareofmostsignificancetotheauditofthefinancialstatementsinthecurrentyearandthusconstitutethekeyauditmatters.Wedescribethesemattersintheauditreportunlesslawsandregulationsprohibitpublicdisclosureofthesematters,orinextremelyrarecircumstances,ifitisreasonablyexpectedthatthenegativeconsequencesofcommunicatingamatteroutweighthebenefitstothepublicinterestintheauditreport,wedeterminenottodoso.

DeloitteToucheTohmatsuCertifiedPublicAccountantsLLPCertifiedPublicAccountantofChina
(Engagementpartner)
Shanghai,China
CertifiedPublicAccountantofChina
March26,2026

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ConsolidatedBalanceSheetDecember31,2025

ConsolidatedBalanceSheet

RMB

ShenzhenTextile(Holdings)Co.,Ltd.Notes

NotesBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Currentassets:
Monetaryfunds(V).1449,964,450.38340,961,443.82
Financialassetsheldfortrading(V).2736,341,286.18731,419,904.42
Notesreceivable(V).385,980,246.5247,305,221.88
Accountsreceivable(V).4761,807,949.52863,731,936.89
Receivablesfinancing(V).522,584,820.726,804,603.68
Advancestosuppliers(V).629,141,210.578,176,724.70
Otherreceivables(V).74,324,973.023,596,543.96
Including:interestreceivable--
Dividendsreceivable--
Inventories(V).8884,642,355.51789,756,700.88
Othercurrentassets(V).985,649,096.6221,461,736.14
Totalcurrentassets3,060,436,389.042,813,214,816.37
Non-currentassets:
Long-termequityinvestments(V).10107,583,586.91114,828,026.04
Otherequityinstrumentinvestments(V).11159,261,600.00165,402,900.00
Investmentproperties(V).12105,730,781.63115,993,390.19
Fixedassets(V).131,657,314,603.811,873,552,843.91
Constructioninprogress(V).14179,954,389.785,814,012.03
Right-of-useassets(V).1516,894,843.6015,338,117.86
Intangibleassets(V).1631,224,598.2035,207,791.95
Goodwill(V).17--
Long-termdeferredexpenses(V).187,030,847.016,084,115.87
Deferredtaxassets(V).1955,777,290.8958,920,511.20
Othernon-currentassets(V).2037,086,785.9027,793,871.91
Totalnon-currentassets2,357,859,327.732,418,935,580.96
Totalassets5,418,295,716.775,232,150,397.33

ShenzhenTextile(Holdings)Co.,Ltd.

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ConsolidatedBalanceSheet-ContinuedDecember31,2025

ConsolidatedBalanceSheet-Continued

RMB

NotesBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Currentliabilities:
Derivativefinancialliabilities(V).224,071,800.191,278,559.35
Notespayable(V).23-31,095,540.29
Accountspayable(V).24344,656,835.89304,812,580.55
Advancesfromcustomers(V).25769,227.071,051,491.96
Contractliabilities(V).263,132,419.01490,562.97
Employeecompensationpayable(V).2752,647,315.7456,685,289.92
Taxespayable(V).285,806,818.556,853,730.84
Otherpayables(V).29159,826,234.73160,296,989.98
Including:interestpayable--
Dividendspayable--
Non-currentliabilitiesmaturingwithinoneyear(V).3065,964,666.2863,347,555.03
Othercurrentliabilities(V).3188,386,795.2754,072,022.27
Totalcurrentliabilities725,262,112.73679,984,323.16
Non-currentliabilities:
Long-termborrowings(V).32261,718,054.81162,388,870.00
Leaseliabilities(V).3310,415,997.179,496,564.12
Deferredincome(V).3483,469,949.0396,349,196.26
Deferredtaxliabilities(V).1947,064,430.1648,610,809.66
Totalnon-currentliabilities402,668,431.17316,845,440.04
Totalliabilities1,127,930,543.90996,829,763.20
Shareholders'equity:
Equity(V).35506,521,849.00506,521,849.00
Capitalreserve(V).361,961,599,824.631,961,599,824.63
Othercomprehensiveincome(V).37102,271,832.32106,877,807.32
Surplusreserves(V).38106,805,904.93104,262,315.64
Undistributedprofits(V).39302,520,158.30272,608,113.66
Totalequityattributabletoshareholdersoftheparentcompany2,979,719,569.182,951,869,910.25
Minorityinterests1,310,645,603.691,283,450,723.88
Totalshareholders'equity4,290,365,172.874,235,320,634.13
Totalliabilitiesandshareholders'equity5,418,295,716.775,232,150,397.33

Thenotesareanintegralpartofthefinancialstatements

_________________________________________________________________
PrincipalChiefFinanceOfficerChiefAccountant

ShenzhenTextile(Holdings)Co.,Ltd.

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BalanceSheetoftheParentCompanyDecember31,2025

BalanceSheetoftheParentCompany

RMB

NotesBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Currentassets:
Monetaryfunds24,473,234.7013,630,974.26
Financialassetsheldfortrading736,341,286.18731,419,904.42
Accountsreceivable(XVI).18,714,374.3413,028,987.63
Advancestosuppliers149,618.7399,904.79
Otherreceivables(XVI).22,014,545.651,534,395.80
Including:interestreceivable--
Dividendsreceivable--
Inventories46,562.0539,835.05
Totalcurrentassets771,739,621.65759,754,001.95
Non-currentassets:
Long-termequityinvestments(XVI).32,033,445,567.582,040,690,006.71
Otherequityinstrumentinvestments146,548,800.00152,221,200.00
Investmentproperties86,463,450.6294,773,462.23
Fixedassets1,910,229.222,099,585.67
Right-of-useassets2,498,988.67-
Intangibleassets48,270.7583,350.98
Long-termdeferredexpenses4,756,358.344,448,190.05
Othernon-currentassets25,760,086.2725,860,862.33
Totalnon-currentassets2,301,431,751.452,320,176,657.97
Totalassets3,073,171,373.103,079,930,659.92
Currentliabilities:
Accountspayable194,131.97411,743.57
Advancesfromcustomers540,673.07540,673.07
Employeecompensationpayable19,879,990.7717,955,509.70
Taxespayable4,337,326.825,619,509.34
Otherpayables93,730,387.6687,029,351.12
Including:interestpayable--
Dividendspayable--
Non-currentliabilitiesmaturingwithinoneyear478,582.75-
Totalcurrentliabilities119,161,093.04111,556,786.80
Non-currentliabilities:
Leaseliabilities2,070,057.60-
Deferredincome-100,000.00
Deferredtaxliabilities32,534,099.0134,086,313.51
Totalnon-currentliabilities34,604,156.6134,186,313.51
Totalliabilities153,765,249.65145,743,100.31
Shareholders'equity:
Equity506,521,849.00506,521,849.00
Capitalreserve1,577,392,975.961,577,392,975.96
Othercomprehensiveincome93,862,232.3298,116,532.32
Surplusreserves106,805,904.93104,262,315.64
Undistributedprofits634,823,161.24647,893,886.69
Totalshareholders'equity2,919,406,123.452,934,187,559.61
Totalliabilitiesandshareholders'equity3,073,171,373.103,079,930,659.92

Thenotesareanintegralpartofthefinancialstatements

ShenzhenTextile(Holdings)Co.,Ltd.

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ConsolidatedIncomeStatementFortheyearendedDecember31,2025

ConsolidatedIncomeStatement

RMB

NotesAmountforthecurrentyearAmountforthepreviousyear
I.Operatingrevenue(V).403,241,380,430.623,335,283,008.68
Less:operatingcosts(V).402,756,367,676.812,795,859,934.82
Taxesandsurcharges(V).4111,543,145.7910,235,505.65
Sellinganddistributionexpenses(V).4234,660,033.7442,260,603.47
G&Aexpenses(V).43128,612,089.80134,347,821.58
R&Dexpenses(V).44103,974,839.00103,811,822.91
Financialexpenses(V).4513,239,709.0812,121,156.05
Including:interestexpenses6,944,766.3017,858,022.73
Interestincome4,941,271.947,272,362.76
Plus:otherincome(V).4640,845,334.5341,484,107.53
Investmentincome(loss)(V).47(1,198,003.94)(165,313.89)
Including:investmentincome(losses)inassociatesandjointventures(7,010,989.13)(10,701,895.08)
Gainsfromderecognitionoffinancialassetsmeasuredatamortizedcosts--
Gains(losses)fromchangesinfairvalue(V).48(936,994.72)1,134,503.45
Creditlossgains(V).498,447,592.805,100,446.66
Assetimpairmentgains(losses)(V).50(138,340,722.92)(132,423,108.75)
Gainsfromdisposalofassets1,164,099.59-
II.Operatingprofit102,964,241.74151,776,799.20
Plus:non-operatingrevenue(V).516,395,734.451,805,086.92
Less:non-operatingexpenses(V).52940,862.88698,017.71
III.Totalprofit108,419,113.31152,883,868.41
Less:incometaxexpenses(V).5312,805,570.489,827,102.03
IV.Netprofit95,613,542.83143,056,766.38
(I)Classifiedbyoperatingsustainability:
1.Netprofitfromcontinuingoperations95,613,542.83143,056,766.38
2.Netprofitfromdiscontinuedoperations--
(II)Classifiedbyownership:
1.Netprofitattributabletoshareholdersoftheparentcompany68,418,663.0289,371,134.24
2.Minorityinterests27,194,879.8153,685,632.14
V.Netoftaxofothercomprehensiveincome(V).37(4,605,975.00)13,270,426.51
Netoftaxofothercomprehensiveincomeattributabletoshareholdersoftheparentcompany(4,605,975.00)13,270,426.51
(I)Othercomprehensiveincomethatcannotbereclassifiedintoprofitorloss(4,605,975.00)14,560,500.00
1.Changesinre-measurementofdefinedbenefitplans--
2.Othercomprehensiveincomethatcannotbetransferredtoprofitorlossundertheequitymethod--
3.Changesinfairvalueofotherequityinstrumentinvestments(4,605,975.00)14,560,500.00
4.Changesinfairvalueoftheenterprise'sowncreditrisk--
(II)Othercomprehensiveincomethatwillbereclassifiedintoprofitorloss-(1,290,073.49)
1.Othercomprehensiveincomethatcanbetransferredtoprofitorlossundertheequitymethod--
2.Changesinfairvalueofotherdebtinvestments--
3.Amountoffinancialassetsreclassifiedandincludedinothercomprehensiveincome--
4.Provisionforcreditimpairmentofotherdebtinvestments--
5.Reserveforcashflows--
6.Differencesarisingfromtranslationofforeign-currencyfinancialstatements-(1,290,073.49)
7.Others--
Netoftaxofothercomprehensiveincomeattributabletominorityshareholders--
VI.Totalcomprehensiveincome91,007,567.83156,327,192.89
Totalcomprehensiveincomeattributabletoshareholdersoftheparentcompany63,812,688.02102,641,560.75
Totalcomprehensiveincomeattributabletominorityshareholders27,194,879.8153,685,632.14
VII.Earningspershare
Basicearningspershare(RMB/share)0.140.18
Dilutedearningspershare(RMB/share)0.140.18

Thenotesareanintegralpartofthefinancialstatements

ShenzhenTextile(Holdings)Co.,Ltd.

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IncomeStatementoftheParentCompanyFortheyearendedDecember31,2025

IncomeStatementoftheParentCompany

RMB

NotesAmountforthecurrentyearAmountforthepreviousyear
I.Operatingrevenue(XVI).477,639,760.8777,167,496.95
Less:operatingcosts(XVI).411,627,229.4910,205,157.84
Taxesandsurcharges3,033,498.023,069,369.36
Sellinganddistributionexpenses85,663.09476,938.50
G&Aexpenses46,236,884.0646,124,842.97
Financialexpenses161,947.16(1,179,537.25)
Including:interestexpenses527,112.25422,950.59
Interestincome399,594.681,698,292.14
Plus:otherincome150,758.85164,150.75
Investmentincome(XVI).513,965,225.5412,077,902.81
Including:investmentincome(losses)inassociatesandjointventures(7,010,989.13)(10,701,895.08)
Gainsfromderecognitionoffinancialassetsmeasuredatamortizedcosts--
Gainsfromchangesinfairvalue2,425,205.472,413,062.80
Creditimpairmentgains(losses)66,651.82(26,291,403.84)
Assetimpairmentgains(losses)(564,480.00)(20,243,658.34)
Gainsfromdisposalofassets--
II.Operatingprofit(loss)32,537,900.73(13,409,220.29)
Plus:non-operatingrevenue2,089,299.551,124,656.60
Less:non-operatingexpenses41,754.5893,185.54
III.Totalprofit(loss)34,585,445.70(12,377,749.23)
Less:incometaxexpenses9,149,552.77(3,885,606.10)
IV.Netprofit(loss)25,435,892.93(8,492,143.13)
(I)Netprofit(loss)fromcontinuingoperations25,435,892.93(8,492,143.13)
(II)Netprofitfromdiscontinuedoperations--
V.Netoftaxofothercomprehensiveincome(4,254,300.00)14,486,701.51
(I)Othercomprehensiveincomethatcannotbereclassifiedintoprofitorloss(4,254,300.00)15,776,775.00
1.Changesinre-measurementofdefinedbenefitplans--
2.Othercomprehensiveincomethatcannotbetransferredtoprofitorlossundertheequitymethod--
3.Changesinfairvalueofotherequityinstrumentinvestments(4,254,300.00)15,776,775.00
4.Changesinfairvalueoftheenterprise'sowncreditrisk--
5.Others--
(II)Othercomprehensiveincomethatwillbereclassifiedintoprofitorloss-(1,290,073.49)
1.Othercomprehensiveincomethatcanbetransferredtoprofitorlossundertheequitymethod--
2.Changesinfairvalueofotherdebtinvestments--
3.Amountoffinancialassetsreclassifiedandincludedinothercomprehensiveincome--
4.Provisionforcreditimpairmentofotherdebtinvestments--
5.Reserveforcashflows--
6.Differencesarisingfromtranslationofforeign-currencyfinancialstatements-(1,290,073.49)
7.Others--
VI.Totalcomprehensiveincome21,181,592.935,994,558.38

Thenotesareanintegralpartofthefinancialstatements

ShenzhenTextile(Holdings)Co.,Ltd.

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ConsolidatedStatementofCashFlowsFortheyearendedDecember31,2025

ConsolidatedStatementofCashFlows

RMB

NotesAmountforthecurrentyearAmountforthepreviousyear
I.Cashflowsfromoperatingactivities:
Cashreceivedfromsaleofgoodsandrenderingofservices3,308,223,415.703,390,788,584.83
Refundsoftaxesandsurchargesreceived13,163,610.0921,049,133.80
Othercashreceivedrelatedtooperatingactivities(V).54(1)132,944,006.5887,008,969.95
Sub-totalofcashinflowsfromoperatingactivities3,454,331,032.373,498,846,688.58
Cashpaidforpurchaseofgoodsandreceiptofservices2,705,656,832.582,842,864,632.73
Cashpaidtoandonbehalfofemployees254,545,354.48238,890,310.33
Cashpaidfortaxesandsurcharges55,145,150.9732,071,014.09
Othercashpaidrelatedtooperatingactivities(V).54(1)91,190,097.08153,756,206.34
Sub-totalofcashoutflowsfromoperatingactivities3,106,537,435.113,267,582,163.49
Netcashflowsfromoperatingactivities(V).55(1)347,793,597.26231,264,525.09
II.Cashflowsfrominvestingactivities:
Cashreceivedfromrecoveryofinvestment-1,349,489.37
Cashreceivedfrominvestmentincome17,323,464.6311,747,113.36
Netcashreceivedfromdisposaloffixedassets,intangibleassets,andotherlong-termassetsNetcashreceivedfromdisposalofotherlong-termassets3,373,824.24(18.74)
Netcashreceivedfromdisposalofsubsidiariesandotherbusinessunits--
Othercashreceivedrelatedtoinvestingactivities(V).54(2)1,149,136,738.421,697,000,000.00
Sub-totalofcashinflowsfrominvestingactivities1,169,834,027.291,710,096,583.99
Cashpaidtoacquireandconstructfixedassets,intangibleassetsandotherlong-termassets238,969,979.7329,441,167.62
Cashpaidforinvestments--
Netcashpaidtoacquiresubsidiariesandotherbusinessunits--
Othercashpaidrelatedtoinvestingactivities(V).54(2)1,163,389,759.351,605,454,000.00
Sub-totalofcashoutflowsfrominvestingactivities1,401,639,235.531,634,895,167.62
Netcashflowsfromtheinvestingactivities(231,805,208.24)75,201,416.37
III.Cashflowsfromfinancingactivities:
Cashreceivedfromabsorptionofinvestments--
Including:cashreceivedbysubsidiariesfromabsorptionofinvestmentsofminorityshareholders--
Cashreceivedfromacquisitionofborrowings141,755,054.19-
Othercashreceivedrelatedtofinancingactivities--
Sub-totalofcashinflowsfromfinancingactivities141,755,054.19-
Cashpaidfordebtrepayments41,473,530.00406,216,304.56
Cashpaidfordistributionofdividendsandprofitsorpaymentofinterests42,123,749.1650,633,653.38
Including:dividendsandprofitspaidtominorityshareholdersbysubsidiaries--
Othercashpaidrelatedtofinancingactivities(V).54(3)12,484,469.339,508,462.57
Sub-totalofcashoutflowsfromfinancingactivities96,081,748.49466,358,420.51
Netcashflowsfromfinancingactivities45,673,305.70(466,358,420.51)
IV.Effectoffluctuationinexchangerateoncashandcashequivalents(13,768,475.71)556,861.07
V.Netincrease(decrease)incashandcashequivalents(V).55(1)147,172,715.46(159,335,617.98)
Plus:balanceofcashandcashequivalentsatthebeginningoftheyear(V).55(2)302,084,839.35461,420,457.33
VI.Balanceofcashandcashequivalentsattheendoftheyear(V).55(2)449,257,554.81302,084,839.35

Thenotesareanintegralpartofthefinancialstatements

ShenzhenTextile(Holdings)Co.,Ltd.

-11-

StatementofCashFlowsoftheParentCompanyFortheyearendedDecember31,2025

StatementofCashFlowsoftheParentCompany

RMB

NotesAmountforthecurrentyearAmountforthepreviousyear
I.Cashflowsfromoperatingactivities:
Cashreceivedfromsaleofgoodsandrenderingofservices89,344,780.9880,553,754.68
Refundsoftaxesandsurchargesreceived--
Othercashreceivedrelatedtooperatingactivities4,971,695.977,902,075.25
Sub-totalofcashinflowsfromoperatingactivities94,316,476.9588,455,829.93
Cashpaidforpurchaseofgoodsandreceiptofservices4,419,294.842,842,492.81
Cashpaidtoandonbehalfofemployees40,520,746.7435,045,305.67
Cashpaidfortaxesandsurcharges17,342,747.6613,926,380.37
Othercashpaidrelatedtooperatingactivities10,077,755.4915,727,708.36
Sub-totalofcashoutflowsfromoperatingactivities72,360,544.7367,541,887.21
Netcashflowsfromoperatingactivities21,955,932.2220,913,942.72
II.Cashflowsfrominvestingactivities:
Cashreceivedfromrecoveryofinvestment-1,554,056.96
Cashreceivedfrominvestmentincome16,348,614.117,790,814.29
Netcashreceivedfromdisposaloffixedassets,intangibleassets,andotherlong-termassetsNetcashreceivedfromdisposalofotherlong-termassets--
Netcashreceivedfromdisposalofsubsidiariesandotherbusinessunits--
Othercashreceivedrelatedtoinvestingactivities1,160,427,138.421,373,585,151.73
Sub-totalofcashinflowsfrominvestingactivities1,176,775,752.531,382,930,022.98
Acquisitionandconstructionoffixedassets,intangibleassetsandotherlong-termassetsCashpaid1,242,473.572,993,281.20
Cashpaidforinvestments--
Netcashpaidtoacquiresubsidiariesandotherbusinessunits--
Othercashpaidrelatedtoinvestingactivities1,150,516,500.001,363,000,000.00
Sub-totalofcashoutflowsfrominvestingactivities1,151,758,973.571,365,993,281.20
Netcashflowsfromtheinvestingactivities25,016,778.9616,936,741.78
III.Cashflowsfromfinancingactivities:
Cashreceivedfromabsorptionofinvestments--
Cashreceivedfromacquisitionofborrowings--
Othercashreceivedrelatedtofinancingactivities--
Sub-totalofcashinflowsfromfinancingactivities--
Cashpaidfordebtrepayments--
Cashpaidfordistributionofdividendsandprofitsorpaymentofinterests35,968,738.7733,346,867.31
Othercashpaidrelatedtofinancingactivities159,356.17-
Sub-totalofcashoutflowsfromfinancingactivities36,128,094.9433,346,867.31
Netcashflowsfromfinancingactivities(36,128,094.94)(33,346,867.31)
IV.Effectoffluctuationinexchangerateoncashandcashequivalents(2,355.80)1,356.80
V.Netincreaseincashequivalents10,842,260.444,505,173.99
Plus:balanceofcashandcashequivalentsatthebeginningoftheyear13,630,974.269,125,800.27
VI.Balanceofcashandcashequivalentsattheendoftheyear24,473,234.7013,630,974.26

Thenotesareanintegralpartofthefinancialstatements

ShenzhenTextile(Holdings)Co.,Ltd.

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ConsolidatedStatementofChangesinShareholders'EquityFortheyearendedDecember31,2025

ConsolidatedStatementofChangesinShareholders'Equity

RMB

ItemAmountforthecurrentyear
EquityattributabletoshareholdersoftheparentcompanyMinorityinterestsTotalshareholders'equity
EquityCapitalreserveOthercomprehensiveincomeSurplusreservesUndistributedprofits
I.Balanceasattheendofthepreviousyear506,521,849.001,961,599,824.63106,877,807.32104,262,315.64272,608,113.661,283,450,723.884,235,320,634.13
Plus:changesinaccountingpolicies-------
Correctionofpriorperioderrors-------
Others-------
II.Balanceatthebeginningofthecurrentyear506,521,849.001,961,599,824.63106,877,807.32104,262,315.64272,608,113.661,283,450,723.884,235,320,634.13
III.Increase/decreaseinthecurrentyear--(4,605,975.00)2,543,589.2929,912,044.6427,194,879.8155,044,538.74
(I)Totalcomprehensiveincome--(4,605,975.00)-68,418,663.0227,194,879.8191,007,567.83
(II)Capitalcontributedorreducedbyshareholders-------
1.Ordinarysharesinvestedbyshareholders-------
2.Amountofshare-basedpaymentsincludedinshareholders'equity-------
3.Others-------
(III)Profitdistribution---2,543,589.29(38,506,618.38)-(35,963,029.09)
1.Withdrawalofsurplusreserves---2,543,589.29(2,543,589.29)--
2.Profitsdistributedtoshareholders----(35,963,029.09)-(35,963,029.09)
3.Others-------
(IV)Internaltransferofshareholders'equity-------
1.Conversionofcapitalreserveintosharecapital-------
2.Conversionofsurplusreserveintosharecapital-------
3.Surplusreservesoffsettinglosses-------
4.Transferofothercomprehensiveincomeintoretainedearnings-------
5.Others-------
(V)Specialreserves-------
1.Withdrawalinthecurrentyear-------
2.Useinthecurrentyear-------
(VI)Others-------
IV.Balanceasattheendofthecurrentyear506,521,849.001,961,599,824.63102,271,832.32106,805,904.93302,520,158.31,310,645,603.694,290,365,172.87

ShenzhenTextile(Holdings)Co.,Ltd.

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ConsolidatedStatementofChangesinShareholders'Equity-ContinuedFortheyearendedDecember31,2025

ConsolidatedStatementofChangesinShareholders'Equity-Continued

RMB

ItemAmountforthepreviousyear
EquityattributabletoshareholdersoftheparentcompanyMinorityinterestsTotalshareholders'equity
EquityCapitalreserveOthercomprehensiveincomeSurplusreservesUndistributedprofits
I.Balanceasattheendofthepreviousyear506,521,849.001,961,599,824.6393,607,380.81104,262,315.64216,160,896.141,229,765,091.744,111,917,357.96
Plus:changesinaccountingpolicies-------
Correctionofpriorperioderrors-------
Others-------
II.Balanceatthebeginningofthecurrentyear506,521,849.001,961,599,824.6393,607,380.81104,262,315.64216,160,896.141,229,765,091.744,111,917,357.96
III.Increase/decreaseinthecurrentyear--13,270,426.51-56,447,217.5253,685,632.14123,403,276.17
(I)Totalcomprehensiveincome--13,270,426.51-89,371,134.2453,685,632.14156,327,192.89
(II)Capitalcontributedorreducedbyshareholders-------
1.Ordinarysharesinvestedbyshareholders-------
2.Amountofshare-basedpaymentsincludedinshareholders'equity-------
3.Others-------
(III)Profitdistribution----(32,923,916.72)-(32,923,916.72)
1.Withdrawalofsurplusreserves-------
2.Profitsdistributedtoshareholders----(32,923,916.72)-(32,923,916.72)
3.Others-------
(IV)Internaltransferofshareholders'equity-------
1.Conversionofcapitalreserveintosharecapital-------
2.Conversionofsurplusreserveintosharecapital-------
3.Surplusreservesoffsettinglosses-------
4.Transferofothercomprehensiveincomeintoretainedearnings-------
5.Others-------
(V)Specialreserves-------
1.Withdrawalinthecurrentyear-------
2.Useinthecurrentyear-------
(VI)Others-------
IV.Balanceasattheendofthecurrentyear506,521,849.001,961,599,824.63106,877,807.32104,262,315.64272,608,113.661,283,450,723.884,235,320,634.13

Thenotesareanintegralpartofthefinancialstatements

ShenzhenTextile(Holdings)Co.,Ltd.

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StatementofChangesinShareholders'EquityoftheParentCompanyFortheyearendedDecember31,2025

StatementofChangesinShareholders'EquityoftheParentCompany

RMB

ItemAmountforthecurrentyear
EquityCapitalreserveOthercomprehensiveincomeSurplusreservesUndistributedprofitsTotalshareholders'equity
I.Balanceasattheendofthepreviousyear506,521,849.001,577,392,975.9698,116,532.32104,262,315.64647,893,886.692,934,187,559.61
Plus:changesinaccountingpolicies------
Correctionofpriorperioderrors------
Others------
II.Balanceatthebeginningofthecurrentyear506,521,849.001,577,392,975.9698,116,532.32104,262,315.64647,893,886.692,934,187,559.61
III.Increase/decreaseinthecurrentyear--(4,254,300.00)2,543,589.29(13,070,725.45)(14,781,436.16)
(I)Totalcomprehensiveincome--(4,254,300.00)-25,435,892.9321,181,592.93
(II)Capitalcontributedorreducedbyshareholders------
1.Ordinarysharesinvestedbyshareholders------
2.Amountofshare-basedpaymentsincludedinshareholders'equity------
3.Others------
(III)Profitdistribution---2,543,589.29(38,506,618.38)(35,963,029.09)
1.Withdrawalofsurplusreserves---2,543,589.29(2,543,589.29)-
2.Profitsdistributedtoshareholders----(35,963,029.09)(35,963,029.09)
3.Others------
(IV)Internaltransferofshareholders'equity------
1.Conversionofcapitalreserveintosharecapital------
2.Conversionofsurplusreserveintosharecapital------
3.Surplusreservesoffsettinglosses------
4.Transferofothercomprehensiveincomeintoretainedearnings------
5.Others------
(V)Specialreserves------
1.Withdrawalinthecurrentyear------
2.Useinthecurrentyear------
(VI)Others------
IV.Balanceasattheendofthecurrentyear506,521,849.001,577,392,975.9693,862,232.32106,805,904.93634,823,161.242,919,406,123.45

StatementofChangesinShareholders'EquityoftheParentCompany-ContinuedFortheyearendedDecember31,2025

StatementofChangesinShareholders'EquityoftheParentCompany-Continued

RMB

ItemAmountforthepreviousyear
EquityCapitalreserveOthercomprehensiveSurplusreservesUndistributedprofitsTotalshareholders'equity

ShenzhenTextile(Holdings)Co.,Ltd.

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income
I.Balanceasattheendofthepreviousyear506,521,849.001,577,392,975.9683,629,830.81104,262,315.64689,309,946.542,961,116,917.95
Plus:changesinaccountingpolicies------
Correctionofpriorperioderrors------
Others------
II.Balanceatthebeginningofthecurrentyear506,521,849.001,577,392,975.9683,629,830.81104,262,315.64689,309,946.542,961,116,917.95
III.Increase/decreaseinthecurrentyear--14,486,701.51-(41,416,059.85)(26,929,358.34)
(I)Totalcomprehensiveincome--14,486,701.51-(8,492,143.13)5,994,558.38
(II)Capitalcontributedorreducedbyshareholders------
1.Ordinarysharesinvestedbyshareholders------
2.Amountofshare-basedpaymentsincludedinshareholders'equity------
3.Others------
(III)Profitdistribution----(32,923,916.72)(32,923,916.72)
1.Withdrawalofsurplusreserves------
2.Profitsdistributedtoshareholders----(32,923,916.72)(32,923,916.72)
3.Others------
(IV)Internaltransferofshareholders'equity------
1.Conversionofcapitalreserveintosharecapital------
2.Conversionofsurplusreserveintosharecapital------
3.Surplusreservesoffsettinglosses------
4.Transferofothercomprehensiveincomeintoretainedearnings------
5.Others------
(V)Specialreserves------
1.Withdrawalinthecurrentyear------
2.Useinthecurrentyear------
(VI)Others------
IV.Balanceasattheendofthecurrentyear506,521,849.001,577,392,975.9698,116,532.32104,262,315.64647,893,886.692,934,187,559.61

Thenotesareanintegralpartofthefinancialstatements

-16-

(I)BasicinformationoftheCompany

1.CompanyprofileShenzhenTextile(Holdings)Co.,Ltd.(hereinafterreferredtoas"theCompany")isajointstocklimitedcompanyregisteredinGuangdongProvince.TheCompanywaslistedonShenzhenStockExchangeinAugust1994.TheCompanyhaspubliclyissuedRMBordinaryshares(Ashares)anddomesticallylistedforeignshares(Bshares)tothedomesticandforeignpublicrespectively,andlistedfortrading.HeadquarteredinShenzhen,GuangdongProvince,theCompanyanditssubsidiaries(hereinafterreferredtoas"theGroup")areprincipallyengagedintheresearchanddevelopment,productionandmarketingofpolarizersforliquidcrystaldisplays,aswellaspropertymanagement,whicharemainlylocatedintheprosperouscommercialareaofShenzhen.

2.ApprovaldateoffinancialstatementsTheconsolidatedandparentcompany'sfinancialstatementsoftheCompanywereapprovedbytheBoardofDirectorsonMarch26,2026.(II)Basisforthepreparationoffinancialstatements

1.BasisforpreparationTheGroupimplementstheAccountingStandardsforBusinessEnterprisesandrelatedprovisionsissuedbytheMinistryofFinance.Inaddition,theGroupalsodisclosesrelevantfinancialinformationinaccordancewiththeRulesfortheCompilationandReportingofInformationDisclosurebyCompaniesIssuingSecuritiestothePublicNo.15-GeneralProvisionsonFinancialReports(Revisedin2023).

2.GoingconcernTheGrouphasevaluateditsgoing-concernabilityfor12monthsfromDecember31,2025andhasnotfoundanymattersorcircumstancesthatcastsignificantdoubtonthegoing-concernability.Therefore,thefinancialstatementshavebeenpreparedonthegoingconcernbasis.

3.AccountingbasisandvaluationprincipleTheaccountingoftheGroupisbasedontheaccrualbasis.Exceptforcertainfinancialinstrumentsmeasuredatfairvalue,thefinancialstatementsaremeasuredathistoricalcost.Intheeventofanyassetimpairment,aprovisionforimpairmentwillbemadeinaccordancewithrelevantprovisions.Underthehistoricalcostmeasurement,assetsaremeasuredattheamountofcashorcashequivalentspaidorthefairvalueoftheconsiderationpaidatthetimeofacquisition.Liabilitiesaremeasuredattheamountofmoneyorassetsactuallyreceivedforassumingcurrentobligations,orthecontractamountofassumingcurrentobligations,ortheamountofcashorcashequivalentsexpectedtobepaidtorepayliabilitiesindailyactivities.Fairvalueisthepricereceivedfromthesaleofanassetorpaidforthetransferofaliabilitybyamarketparticipantinanorderlytransactionoccurringonthemeasurementdate.Regardlessofwhetherthefairvalueisobservableorestimatedbyusingvaluationtechniques,thefairvaluemeasuredanddisclosedinthesefinancialstatementsisdeterminedonthisbasis.

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(II)Basisforthepreparationoffinancialstatements-Continued

3.Accountingbasisandvaluationprinciple-ContinuedForfinancialassetswherethetransactionpriceistakenasthefairvalueatinitialrecognitionandvaluationtechniquesinvolvingunobservableinputvalueareusedinthesubsequentmeasurementoffairvalue,thevaluationtechniquesarecorrectedduringthevaluationprocesstomaketheinitialrecognitionresultdeterminedbythevaluationtechniquesequaltothetransactionprice.Thefairvaluemeasurementisdividedintothreelevelsbasedontheobservabilityoftheinputvalueofthefairvalueandtheimportanceofsuchinputvaluetothefairvaluemeasurementasawhole:

?Level1inputvalueistheunadjustedquotedpriceinactivemarketsforidenticalassetsorliabilitiesthatareavailableonthemeasurementdate.?Level2inputvalueisthedirectlyorindirectlyobservableinputvalueoftherelevantassetsorliabilitiesexceptforthelevel1inputvalue.?Level3inputvalueistheunobservableinputvalueoftherelevantassetsorliabilities.(III)Importantaccountingpoliciesandaccountingestimates

1.StatementofcompliancewiththeAccountingStandardsforBusinessEnterprisesThefinancialstatementspreparedbytheCompanymeettherequirementsoftheAccountingStandardsforBusinessEnterprises,andtrulyandcompletelyreflecttheCompany'sconsolidatedandparentcompany'sfinancialpositionasatDecember31,2025,andtheconsolidatedandparentcompany'soperatingresults,changesinconsolidatedandparentcompany'sshareholders'equityandconsolidatedandparentcompany'scashflowsfortheyearthenended.

2.AccountingperiodTheCompanyadoptstheGregoriancalendaryearforitsaccountingyear,thatis,fromJanuary1toDecember31ofeachyear.

3.OperatingcycleOperatingcyclereferstotheperiodfromthepurchaseofassetsforprocessingtotherealizationofcashorcashequivalentsbytheenterprise.TheoperatingcycleoftheCompanyis12months.

4.RecordingcurrencyRMBisthecurrencyinthemaineconomicenvironmentinwhichtheCompanyanditsdomesticsubsidiariesoperate.TheCompanyanditsdomesticsubsidiariesadoptRMBastherecordingcurrency.TheCompany'soverseassubsidiariesdetermineRMBastheirrecordingcurrencybasedonthecurrencyinthemaineconomicenvironmentinwhichtheyoperate.ThecurrencyusedbytheCompanyinpreparingthesefinancialstatementsisRMB.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

5.Importancecriteriadeterminationmethodandselectionbasis

ItemImportancecriteria
SignificantaccountsreceivablewiththeprovisionforbaddebtsmadeonanindividualbasisTheindividualbookbalanceaccountsformorethan0.5%ofthetotalassets
RecoveryorreversalamountofprovisionforbaddebtsofsignificantaccountsreceivableTheindividualrecoveryorreversalamountaccountsformorethan10%ofthetotalamountofprovisionforbaddebtsrecoveryorreversalofthecorrespondingaccountsreceivableandtheamountexceedsRMB10million
Advancestosupplierswithagingover1yearandofsignificantamountIndividualamountaccountsformorethan0.5%oftotalassets
SignificantconstructioninprogressprojectThebalanceofasingleconstructioninprogressaccountsforover10%ofthetotalbalanceofconstructioninprogressandtheamountismorethanRMB100,000,000.00.
Importantaccountspayable,advancesfromcustomers,contractliabilitiesandotherpayableswithagingover1yearIndividualamountaccountsformorethan0.5%oftotalassets
OthercashreceivedrelatedtosignificantinvestingactivitiesTheamountexceedsRMB50million
OthercashpaidrelatedtosignificantinvestingactivitiesTheamountexceedsRMB50million
Majornon-wholly-ownedsubsidiariesThetotalassets,totalrevenueortotalprofitofthenon-wholly-ownedsubsidiaryaccountformorethan10%oftheamountofthecorrespondingitemsintheconsolidatedfinancialstatementsoftheGroup
SignificantjointventuresorassociatesThebookvalueofthelong-termequityinvestmentsoftheenterpriseattheendoftheyearaccountsformorethan5%ofthenetassetsoftheconsolidatedfinancialstatementsoftheGroup

6.AccountingtreatmentsforbusinesscombinationsundercommoncontrolandthosenotundercommoncontrolBusinesscombinationsarecategorizedintothoseundercommoncontrolandthosenotundercommoncontrol.

6.1BusinesscombinationsundercommoncontrolIf,beforeandafterthebusinesscombination,allpartiesinvolvedareultimatelycontrolledbythesamepartyorthesamegroupofpartiesandsuchcontrolisnottemporary,thecombinationisconsideredundercommoncontrol.Theassetsandliabilitiesobtainedinthebusinesscombinationaremeasuredattheirbookvalueasrecordedintheconsolidatedfinancialstatementsoftheultimatecontrolleronthecombinationdate.Anydifferencebetweenthebookvalueofthenetassetsacquiredbythecombiningpartyandthebookvalueoftheconsiderationpaidisadjustedagainstthesharepremiumincapitalreserve.Iftheequitypremiumisinsufficient,thedifferenceisadjustedagainstretainedearnings.Alldirectexpensesincurredforthepurposeofthebusinesscombinationarerecognizedincurrentprofitorlossastheyoccur.

6.2BusinesscombinationsnotundercommoncontrolandgoodwillWhentheentitiesinvolvedinthecombinationarenotundertheultimatecontrolofthesamepartyorthesamegroupofpartiesbeforeandafterthecombination,itisconsideredabusinesscombinationnotundercommoncontrol.Thecombinationcostreferstothefairvalueoftheassetspaid,theliabilitiesincurredorassumed,andtheequityinstrumentsissuedbytheacquirertoobtaintherightofcontroloftheacquiree.Anyintermediaryfeesforbusinesscombination,includingbutnotlimitedtoaudit,legal,andvaluationconsultingservices,andotherrelatedG&Aexpensesincurredbytheacquirerarechargedtocurrentprofitorlossastheyarise.Anyidentifiableassets,liabilities,andcontingentliabilitiesoftheacquireethatmeettherecognitioncriteriaandareobtainedbytheacquirerinthecombinationaremeasuredatfairvalueontheacquisitiondate.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

6.Accountingtreatmentsforbusinesscombinationsundercommoncontrolandthosenotundercommoncontrol-Continued

6.2Businesscombinationsnotundercommoncontrolandgoodwill-ContinuedIfthecombinationcostexceedstheacquiree'sfairvalueshareofnetidentifiableassetsobtained,thisdifferenceisrecognizedasgoodwillandinitiallymeasuredatcost.Ifthecombinationcostislessthantheacquiree'sfairvalueshareofnetidentifiableassetsobtained,theacquirershallfirstreassessthefairvaluesofallidentifiableassets,liabilities,andcontingentliabilitiesoftheacquiree,aswellasthemeasurementofthecombinationcost.Afterreassessment,ifthecombinationcostisstilllessthanacquiree'sfairvalueshareofnetidentifiableassetsobtained,thedifferenceisincludedincurrentprofitorloss.Goodwillarisingfromabusinesscombinationispresentedseparatelyintheconsolidatedfinancialstatementsandismeasuredatcostlessanyaccumulatedprovisionforimpairment.

7.Criteriafordeterminingcontrolandmethodsforpreparingconsolidatedfinancialstatements

7.1CriteriaforcontroljudgmentControlmeansthataninvestorhaspowerovertheinvestee,derivesvariablereturnsbyparticipatingintheinvestee'srelevantactivities,andcanusethatpowertoaffecttheamountofreturns.Wheneverchangesinrelevantfactsandcircumstancesalteranyelementofthisdefinitionofcontrol,theGroupwillreassessthesituation.

7.2MethodsofpreparingconsolidatedfinancialstatementsTheconsolidationscopeintheconsolidatedfinancialstatementsisdeterminedonthebasisofcontrol.AsubsidiaryisconsolidatedfromthedatetheGroupobtainstherightofcontroloverituntilthedatesuchrightislost.ForsubsidiariesthattheGroupdisposesof,operatingresultsandcashflowspriortothedisposaldate(thedatewhenthelossofcontroloccurs)areappropriatelyincludedintheconsolidatedincomestatementandconsolidatedcashflowstatement.Forsubsidiariesacquiredinabusinesscombinationnotundercommoncontrol,theiroperatingresultsandcashflowsfromtheacquisitiondate(thedatewhentherightofcontrolisobtained)areappropriatelyincludedintheconsolidatedincomestatementandconsolidatedcashflowstatement.Forsubsidiariesacquiredinabusinesscombinationundercommoncontrol,regardlessofthepointintimeduringthereportingperiodatwhichthecombinationtakesplace,thesubsidiaryisdeemedtohavebeenundertheGroup'sconsolidationscopefromthedateitcameundertheultimatecontroller.Itsoperatingresultsandcashflowsfromtheearliestbeginningdateofthereportingperiodareappropriatelyincludedintheconsolidatedincomestatementandconsolidatedcashflowstatement.TheprimaryaccountingpoliciesandreportingperiodsadoptedbythesubsidiariesaredeterminedinaccordancewiththeuniformaccountingpoliciesandreportingperiodssetbytheCompany.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

7.Criteriafordeterminingcontrolandmethodsforpreparingconsolidatedfinancialstatements-Continued

7.2Methodsforpreparingconsolidatedfinancialstatements-ContinuedAnyeffectsontheconsolidatedfinancialstatementsfromintercompanytransactionsbetweentheCompanyanditssubsidiaries,oramongthesubsidiariesthemselves,areeliminateduponconsolidation.Thesharesofthesubsidiary'sownershipinterestthatarenotpartoftheparentcompanyareshownasminorityinterestsundertheitem"minorityinterests"undertheitemonshareholders'equityintheconsolidatedbalancesheet.theshareofthesubsidiary'snetprofitorlossattributabletominorityinterestsispresentedintheconsolidatedincomestatementunderthenetprofititemas"minorityinterestincome".Ifthelossesbornebyminorityshareholdersexceedtheshareofowners'equitytheyholdatthebeginningofthesubsidiary'speriod,theexcesscontinuestobedeductedfromtheminorityinterests.Transactionsinvolvingthepurchaseofasubsidiary'sminorityinterestsorthepartialdisposalofasubsidiary'sequityinvestmentswithoutlosingtherightofcontrolareaccountedforasequitytransactions.Thebookvalueoftheparentcompany'sowners'equityandtheminorityinterestsareadjustedtoreflectthechangesintheirrespectiveownershipinthesubsidiary.Anydifferencebetweentheadjustmenttominorityinterestsandthefairvalueoftheconsiderationpaidorreceivedisadjustedagainstthecapitalreserve.Ifthecapitalreserveisinsufficient,thedifferenceisadjustedagainstretainedearnings.

8.JointventurearrangementsJointventurearrangementsareclassifiedaseitherjointoperationsorjointventures,basedontherightsandobligationsoftheparties—determinedbyfactorssuchasthearrangement'sstructure,legalform,andcontractualterms.Ajointoperationisajointarrangementinwhichthepartieshaverightstotherelatedassetsandobligationsfortherelatedliabilities.Ajointoperationreferstothosejointventurearrangementsunderwhichthejointventureisentitledtorelevantassetsandberesponsibleforrelevantliabilities.Ajointventureisajointventurearrangementinwhichthepartiesareentitledonlytothearrangement'snetassets.TheGroupaccountsforinvestmentsinjointventuresusingtheequitymethod.Forfurtherdetails,refertoNote(III),Section17.3.2,"Long-termequityinvestmentsaccountedforundertheequitymethod."

9.CriteriafordeterminingcashandcashequivalentsCashreferstocashonhandanddepositsreadilyavailableforpayment.Cashequivalentsrefertoshort-term(generallymaturingwithinthreemonthsfromthepurchasedate),highlyliquidinvestmentsheldbytheGroupthatareeasilyconvertibleintoknownamountsofcashandsubjecttoaninsignificantriskofvaluechanges.

10.Foreigncurrencytransactionsandtranslationofforeigncurrencystatements

10.1ForeigncurrencytransactionsForeigncurrencytransactionsareinitiallyrecognizedatanexchangeratesimilartothespotexchangerateonthedateofthetransaction,andtheexchangeratesimilartothespotrateonthedateofthetransactionisdeterminedinasystematicandreasonablemanner.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

10.Foreigncurrencytransactionsandtranslationofforeigncurrencystatements-Continued

10.1Foreigncurrencytransactions-ContinuedAteachbalancesheetdate,foreigncurrencymonetaryitemsaretranslatedintoRMBatthespotrateonthatdate.Anyexchangedifferencesarisingfromchangesinthespotexchangerate(comparedtotherateatinitialrecognitionorthepreviousbalancesheetdate)arerecognizedincurrentprofitorloss,exceptfor:(1)exchangedifferencesonforeign-currency-specificborrowingsthatqualifyforcapitalization,whicharecapitalizedaspartofthecostoftherelatedassetduringthecapitalizationperiod;(2)exchangedifferencesonhedginginstrumentsusedtohedgeforeignexchangerisk,whichareaccountedforunderhedgeaccounting;(3)foreignexchangedifferencesarisingfromchangesinthebookbalanceofmonetaryitemsclassifiedasmeasuredatfairvaluethroughothercomprehensiveincome,exceptforamortizedcosts,arerecognizedincurrentprofitorloss.Whenpreparingconsolidatedfinancialstatementsinvolvingforeignoperations,ifaforeigncurrencymonetaryitemessentiallyconstitutesanetinvestmentinaforeignoperation,anyexchangedifferencesarisingfromfluctuationinexchangerateareincludedunder"Exchangedifferencesontranslationofforeigncurrencystatements"inothercomprehensiveincome.Upondisposaloftheforeignoperation,thesedifferencesarerecognizedinprofitorlossforthedisposalperiod.Foreigncurrencynon-monetaryitemsmeasuredathistoricalcostcontinuetobemeasuredusingthespotexchangerateinrecordingcurrencyonthetransactiondate.Forforeigncurrencynon-monetaryitemsmeasuredatfairvalue,thespotexchangerateonthedatethefairvalueisdeterminedisusedfortranslation.Anydifferencebetweenthetranslatedamountinrecordingcurrencyandtheoriginalcurrencyistreatedasafairvaluechange(includingfluctuationinexchangerate)andisrecognizedincurrentprofitorlossorothercomprehensiveincome,asappropriate.

10.2TranslationofforeigncurrencyfinancialstatementsToprepareconsolidatedfinancialstatements,foreign-currencyfinancialstatementsofoverseasoperationsaretranslatedintoRMBasfollows:allassetsandliabilitiesinthebalancesheetaretranslatedatthespotexchangerateonthebalancesheetdate;shareholders'equityitemsaretranslatedatthespotexchangerateonthedateofoccurrence;allitemsintheincomestatementanditemsreflectingprofitdistributionaretranslatedusinganexchangerateapproximatingthespotexchangerateonthetransactiondate;anydifferencebetweenthesumoftranslatedassetsandthesumoftranslatedliabilitiesplusequityitemsisrecognizedasothercomprehensiveincomeandincludedinshareholders'equity.Foreigncurrencycashflowsandthecashflowsofoverseassubsidiariesaretranslatedusinganexchangerateapproximatingthespotexchangerateonthedateofthecashflow.Theimpactoffluctuationinexchangerateoncashandcashequivalentsispresentedseparatelyinthestatementofcashflowsunder"Effectofexchangeratechangesoncashandcashequivalents".Thefiguresfortheprioryear-endandtheactualamountsforthepreviousyeararepresentedaccordingtotheamountstranslatedinthepreviousyear'sfinancialstatements.WhentheGroupdisposesofitsentireowners'equityinaforeignoperationorotherwiselosestherightofcontroloveraforeignoperation—whetherbypartiallydisposingofequityinvestmentsorforanyotherreason—alldifferencesontranslationofforeigncurrencystatementsrelatedtothatforeignoperationandpresentedundershareholders'equity(attributabletotheparentcompany)inthebalancesheetaretransferredinfulltoprofitorlossforthedisposalperiod.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

10.Foreigncurrencytransactionsandtranslationofforeigncurrencystatements-Continued

10.2Translationofforeigncurrencystatements-ContinuedWhendisposingofpartofanequityinvestmentsorinothercircumstancesthatreducetheGroup'sownershipinterestinanoverseasoperationwithoutlosingtherightofcontroloverthatoperation,anydifferencesontranslationofforeigncurrencystatementsrelatedtothedisposedportionareattributedtominorityinterestsandarenottransferredtoprofitorlossforthecurrentperiod.Whendisposingofaportionofequityinanoverseasoperationthatisclassifiedasanassociateorajointventure,thedifferencesontranslationofforeigncurrencystatementsrelatedtothatoperationaretransferredtoprofitorlossinthedisposalperiod,inproportiontothepercentageofequitydisposed.

11.FinancialinstrumentsTheGrouprecognizesafinancialassetorfinancialliabilitywhenitbecomesapartytothecontractualprovisionsofafinancialinstrument.Forpurchasesorsalesoffinancialassetsintheordinarycourseofbusiness,theGrouprecognizestheassetstobereceivedandtheliabilitiestobeassumedonthetradedate,orderecognizestheassetssoldonthetradedate.Financialassetsandfinancialliabilitiesaremeasuredatfairvalueuponinitialrecognition(seeNote(II)"Basisofaccountingandvaluationprinciples"fordetailsondeterminingfairvalue).Forfinancialassetsandliabilitiesmeasuredatfairvaluethroughprofitorloss,transactioncostsarerecognizeddirectlyinprofitorlossforthecurrentperiod;forothercategoriesoffinancialassetsandliabilities,therelevanttransactioncostsareincludedintheinitialrecognitionamount.WhentheGroupinitiallyrecognizesaccountsreceivablethatdonotincludeasignificantfinancingcomponent,orwhenthefinancingcomponentofacontractnotexceedingoneyearisdisregardedunderAccountingStandardsforBusinessEnterprisesNo.14-Revenue(hereinafterreferredtoas“RevenueStandard”),suchreceivablesareinitiallymeasuredatthetransactionpriceasdefinedintheRevenueStandard.Theeffectiveinterestmethodisthemethodusedtocalculatetheamortizedcostofafinancialassetorliabilityandtoallocatetheinterestincomeorinterestexpensesovertherelevantaccountingperiods.Theeffectiveinterestrateistheratethatdiscountstheestimatedfuturecashflowsovertheexpectedlifeofafinancialassetorliabilitytothefinancialasset'sbookbalanceorthefinancialliability'samortizedcost.Indeterminingtheeffectiveinterestrate,theGroupestimatesexpectedcashflowsbasedonallcontractualtermsofthefinancialassetorliability(e.g.,earlyrepayment,extension,calloptions,orothersimilaroptions),butdoesnotfactorinexpectedcreditlosses.Theamortizedcostofafinancialassetorliabilityistheinitialrecognizedamountminusanyrepaidprincipal,plusorminustheaccumulatedamortizationofthedifferencebetweentheinitialrecognizedamountandtheamountatmaturityusingtheeffectiveinterestmethod,andthenminustheaccumulatedprovisionforlosses(applicableonlytofinancialassets).

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

11.Financialinstruments-Continued

11.1Classification,recognitionandmeasurementoffinancialassetsAfterinitialrecognition,theGroupsubsequentlymeasuresdifferentcategoriesoffinancialassetsatamortizedcost,atfairvaluethroughothercomprehensiveincome,oratfairvaluethroughprofitorloss.Ifthecontractualtermsofafinancialassetstipulatethat,onspecifieddates,cashflowscomprisesolelypaymentsofprincipalandinterestontheoutstandingprincipal,andtheGroup'sbusinessmodelformanagingthisfinancialassetistocollectthecontractualcashflows,theGroupclassifiesthisfinancialassetasmeasuredatamortizedcost.Suchfinancialassetsmainlyincludemonetaryfunds,notesreceivable,accountsreceivable,andotherreceivables.Ifthecontractualtermsofafinancialassetstipulatethat,onspecifieddates,cashflowscomprisesolelypaymentsofprincipalandinterestontheoutstandingprincipal,andtheGroup'sbusinessmodelformanagingthefinancialassetisbothtocollectcontractualcashflowsandtosellthefinancialasset,thentheGroupclassifiesthisassetasmeasuredatfairvaluethroughothercomprehensiveincome.Suchfinancialassetswithamaturityofmorethanoneyearfromthedateofacquisitionarepresentedas"Otherdebtinvestments,"whilethosematuringwithinoneyear(inclusive)fromthebalancesheetdatearepresentedunder"Non-currentassetsduewithinoneyear."Accountsreceivableandnotesreceivableclassifieduponacquisitionasmeasuredatfairvaluethroughothercomprehensiveincomearepresentedunder"Receivablesfinancing,"andanyotheritemsacquiredwithamaturityofoneyear(inclusive)orlessarepresentedunder"Othercurrentassets."Atinitialrecognition,onanindividualfinancialassetbasis,theGroupmayirrevocablydesignateanon-tradingequityinstrumentinvestment,otherthananycontingentconsiderationrecognizedinabusinesscombinationnotundercommoncontrol,asmeasuredatfairvaluethroughothercomprehensiveincome.Suchfinancialassetsarepresentedas"Otherequityinstrumentinvestments."Ifafinancialassetmeetsanyofthefollowingconditions,itindicatesthattheGroupholdsthisassetfortradingpurposes:

?Themainpurposeofacquiringthefinancialassetistosellitinthenearterm.?Uponinitialrecognition,thefinancialassetispartofanidentifiableportfoliooffinancialinstrumentsthatiscollectivelymanaged,andthereisobjectiveevidenceofarecentpatternofshort-termprofit-taking.?Thefinancialassetisaderivative,exceptforderivativesthatmeetthedefinitionofafinancialguaranteecontractoraredesignatedaseffectivehedginginstruments.Financialassetsmeasuredatfairvaluethroughprofitorlossincludethoseclassifiedassuchandthosedesignated

assuch:

?Anyfinancialassetthatdoesnotmeettheclassificationcriteriaformeasurementatamortizedcostoratfairvalue

throughothercomprehensiveincomeisclassifiedasmeasuredatfairvaluethroughprofitorloss.?Atinitialrecognition,toeliminateorsignificantlyreduceaccountingmismatches,theGroupmayirrevocablydesignateafinancialassetasmeasuredatfairvaluethroughprofitorloss.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

11.Financialinstruments-Continued

11.1Classification,recognitionandmeasurementoffinancialassets-ContinuedFinancialassetsmeasuredatfairvaluethroughprofitorlossarepresentedunder"Financialassetsheldfortrading."Thosedueinmorethanoneyearfromthebalancesheetdate(orwithnofixedmaturity)andexpectedtobeheldformorethanoneyeararepresentedunder"Othernon-currentfinancialassets."

11.1.1FinancialassetsmeasuredbyamortizedcostFinancialassetsmeasuredatamortizedcostaresubsequentlymeasuredatamortizedcostusingtheeffectiveinterestmethod,andanygainorlossarisingfromimpairmentorderecognitionisrecognizedinprofitorloss.TheGrouprecognizesinterestincomeonfinancialassetsmeasuredatamortizedcostusingtheeffectiveinterestmethod.Forpurchasedororiginatedfinancialassetsthatarealreadycredit-impaired,theGroupdeterminesinterestincomefromthedateofinitialrecognitionbasedontheasset'samortizedcostandacredit-adjustedeffectiveinterestrate.Forallotherfinancialassets,theGroupcalculatesinterestincomebymultiplyingthebookbalanceoftheassetbytheeffectiveinterestrate.

11.1.2FinancialassetsmeasuredatfairvaluethroughothercomprehensiveincomeForafinancialassetclassifiedasmeasuredatfairvaluethroughothercomprehensiveincome,anyimpairmentlossorgainandinterestincomecalculatedusingtheeffectiveinterestmethodarerecognizedinprofitorloss,whileallotherfairvaluechangesarerecognizedinothercomprehensiveincome.Theamountrecognizedinprofitorlosseachperiodisthesameasiftheassethadbeenmeasuredatamortizedcostthroughoutitslife.Whensuchafinancialassetisderecognized,thecumulativegainsorlossespreviouslyrecognizedinothercomprehensiveincomearetransferredfromothercomprehensiveincometoprofitorloss.Foranon-tradingequityinstrumentinvestmentdesignatedasmeasuredatfairvaluethroughothercomprehensiveincome,fairvaluechangesarerecognizedinothercomprehensiveincome.Whenthefinancialassetisderecognized,thecumulativegainsorlossespreviouslyrecognizedinothercomprehensiveincomearetransferredoutofothercomprehensiveincomeandintoretainedearnings.DuringtheperiodtheGroupholdsthisnon-tradingequityinstrumentinvestment,iftherighttoreceivedividendsisestablished,therelatedeconomicbenefitsarelikelytoflowtotheGroup,andtheamountofdividendscanbemeasuredreliably,thentheGrouprecognizesdividendincomeinprofitorloss.

11.1.3FinancialassetsmeasuredatfairvaluethroughthecurrentprofitorlossFinancialassetsmeasuredatfairvaluethroughprofitorlossaresubsequentlymeasuredatfairvalue;gainsorlossesarisingfromfairvaluechanges,aswellasanydividendandinterestincomerelatedtotheseassets,arerecognizedinprofitorloss.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

11.Financialinstruments-Continued

11.2ImpairmentoffinancialinstrumentsTheGrouprecognizesimpairmentallowancesandprovisionforlossesbasedonexpectedcreditlossesforfinancialassetsmeasuredatamortizedcost,financialassetsclassifiedasfairvaluethroughothercomprehensiveincome,andleasereceivables.ForallnotesreceivableandaccountsreceivablearisingfromtransactionsgovernedbytheRevenueStandard,aswellasoperatingleasereceivablesarisingfromtransactionsgovernedbyAccountingStandardsforBusinessEnterprisesNo.21-Leases,theGroupmeasurestheprovisionforlossatanamountequaltothelifetimeexpectedcreditlosses.Forotherfinancialinstruments,exceptforthosepurchasedororiginatedwithcreditloss,theGroupevaluateschangesincreditrisksinceinitialrecognitionateachbalancesheetdate.Ifthecreditriskofsuchafinancialinstrumenthassignificantlyincreasedsinceinitialrecognition,theGroupmeasurestheprovisionforlossatanamountequaltothelifetimeexpectedcreditlosses;ifithasnotsignificantlyincreased,theGroupmeasurestheprovisionforlossatanamountequaltothe12-monthexpectedcreditlosses.Exceptforfinancialassetsclassifiedasfairvaluethroughothercomprehensiveincome,anyincreaseorreversaloftheprovisionforcreditlossesisrecognizedasanimpairmentlossorgaininthecurrentperiod'sprofitorloss.Forfinancialassetsclassifiedasfairvaluethroughothercomprehensiveincome,theGrouprecognizestheprovisionforcreditlossesinothercomprehensiveincomeandrecordstheimpairmentlossorgaininprofitorloss,withoutreducingtheasset'sbookvalueinthebalancesheet.If,inapriorperiod,theGroupmeasuredtheprovisionforlossatanamountequaltothelifetimeexpectedcreditlosses(duetoasignificantincreaseincreditrisksinceinitialrecognition),butatthecurrentbalancesheetdatethatsignificantincreaseincreditrisknolongerapplies,thentheGroupmeasurestheprovisionforlossatanamountequaltothe12-monthexpectedcreditlosses.Theamountofanyresultingreversalisrecognizedasanimpairmentgaininprofitorloss.

11.2.1SignificantincreaseincreditriskTheGroupusesreasonableandsupportableforward-lookinginformationtocomparetheriskofdefaultonafinancialinstrumentatthebalancesheetdatewiththeriskofdefaultatinitialrecognition,inordertodeterminewhetherthecreditriskhassignificantlyincreasedsinceinitialrecognition.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

11.Financialinstruments-Continued

11.2Impairmentoffinancialinstruments-Continued

11.2.1Significantincreaseincreditrisk-ContinuedWhentheGroupassesseswhethercreditriskhasincreasedsignificantly,itconsidersthefollowingfactors:

(1)Whetherinternalpriceindicatorsresultingfromchangesincreditriskhaveundergoneasignificantchange.

(2)Whether,ifanexistingfinancialinstrumentiseffectivelyoriginatedorissuedasanewfinancialinstrumentonthebalancesheetdate,thereisasignificantchangeintheinterestrateorothertermsofthatinstrument(e.g.,morestringentcontractualterms,increasedcollateralorguarantees,orahigheryield).

(3)Whetherexternalmarketindicatorsofcreditriskforthesamefinancialinstrument,orsimilarinstrumentswiththesameexpectedterm,havechangedsignificantly.Suchindicatorsincludecreditspreads,creditdefaultswap(CDS)pricesfortheborrower,thelengthoftimeandextenttowhichafinancialasset'sfairvalueisbelowitsamortizedcost,andothermarketinformationrelatedtotheborrower(e.g.,changesinthepricesoftheborrower'sdebtorequityinstruments).

(4)Whethertheexternalcreditratingofthefinancialinstrumenthasactuallychangedorisexpectedtochangesignificantly.

(5)Whethertherehasbeenadowngradeinthedebtor'sinternalcreditrating,eitheractualoranticipated.

(6)Whethertherehasbeenanadversechangeinthedebtor'sbusiness,financial,oreconomicconditionsthatisexpectedtosignificantlyaffectthedebtor'sabilitytomeetitsdebtobligations.

(7)Whetherthedebtor'soperatingperformance,whetheractualorexpected,haschangedsignificantly.

(8)Whetherthecreditriskofotherfinancialinstrumentsissuedbythesamedebtorhasincreasedsignificantly.

(9)Whethertherehasbeenasignificantlyadversechangeintheregulatory,economic,ortechnologicalenvironmentinwhichthedebtoroperates.

(10)Whetherthevalueofcollateralsecuringthedebt,orthequalityofathird-partyguaranteeorcreditenhancement,haschangedsignificantly.Suchchangesareexpectedtoreducethedebtor'seconomicincentivetorepayunderthecontractualscheduleoraffecttheprobabilityofdefault.

(11)Whethertherehasbeenasignificantchangeinfactorsthatwouldreducetheborrower'seconomicincentivetorepayinaccordancewiththecontractualterms.

(12)Whethertheloancontractisexpectedtobemodified,includingthepotentialreleaseoramendmentofcontractualobligationsduetoanticipatedbreachesofcontract,grantinginterest-freeperiods,raisinginterestrates,requiringadditionalcollateralorguarantees,orotherwisemodifyingthecontractualframeworkofthefinancialinstrument.

(13)Whetherthereisasignificantchangeinthedebtor'sexpectedperformanceorrepaymentbehavior.

(14)WhethertheGroup'screditmanagementapproachforthefinancialinstrumenthaschanged.Regardlessoftheoutcomeoftheaboveassessment,ifpaymentsunderthefinancialinstrument'scontractaremorethan(orequalto)30dayspastdue,itindicatesthatthefinancialinstrument'screditriskhasincreasedsignificantly.Onthebalancesheetdate,iftheGroupconcludesthatafinancialinstrumenthasonlylowcreditrisk,itpresumesthecreditriskhasnotincreasedsignificantlysinceinitialrecognition.Afinancialinstrumentisconsideredtohavelowcreditriskifitsriskofdefaultislow,theborrowerhasastrongcapacitytomeetitscontractualcashflowobligationsintheshortterm,andevenoveralongerperiod,adversechangesineconomicandoperatingconditionswouldnotnecessarilyreducetheborrower'sabilitytomeetthoseobligations.(III)Significantaccountingpoliciesandaccountingestimates-Continued

11.Financialinstruments-Continued

11.2Impairmentoffinancialinstruments-Continued

11.2.2Financialassetswithcreditloss

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WhenoneormoreeventsoccurthattheGroupexpectstoadverselyaffectthefuturecashflowsofafinancialasset,thatassetisconsideredcredit-impaired.Evidenceforacredit-impairedfinancialassetincludesthefollowingobservableinformation:

(1)Thedebtorbreachesacontract,suchasdefaultordelinquencyininterestorprincipalpayments.

(2)Thedebtorbreachesthecontract,suchasdefaultordelayinrepaymentofinterestorprincipal.

(3)Thecreditorgivesthedebtorconcessionsundereconomicorcontractualconsiderationsrelatingtothedebtor'sfinancialdifficultiesthatwouldnothavebeenmadeunderanyothercircumstances;

(4)Thedebtorishighlylikelytogobankruptorundertakeotherfinancialrestructuring.

(5)Theissuer'sordebtor'sfinancialdifficultiesleadtothedisappearanceofanactivemarketforthefinancialasset.

(6)Afinancialassetispurchasedororiginatedatasubstantialdiscount,reflectingthefactthatacreditlosshasoccurred.BasedontheGroup'sinternalcreditriskmanagement,ifinternalrecommendationsorexternallyobtainedinformationindicatesthatthedebtorofafinancialinstrumentcannotfullyrepayallcreditors,includingtheGroup(regardlessofanyguaranteeobtainedbytheGroup),theGroupconsidersthisadefaultevent.Regardlessoftheaboveassessment,ifpaymentsunderthefinancialinstrument'scontractaremorethan(orequalto)90dayspastdue,theGrouppresumestheinstrumentisindefault.

11.2.3DeterminationofexpectedcreditlossesForfinancialassetsandleasereceivables,theexpectedcreditlossisthepresentvalueofthedifferencebetweenthecontractualcashflowstheGroupisentitledtoreceiveandthecashflowstheGroupactuallyexpectstoreceive.Whenmeasuringtheexpectedcreditlossesonfinancialinstruments,theGroup'smethodreflects:anunbiased,probability-weightedaveragedeterminedbyevaluatingarangeofpossibleoutcomes;thetimevalueofmoney;andreasonableandsupportableinformationaboutpastevents,currentconditions,andforecastsoffutureeconomicconditions,availablewithoutunduecostoreffortatthebalancesheetdate.

11.2.4Write-offoffinancialassetsIftheGroupnolongerreasonablyexpectstorecoverallorpartofthecontractualcashflowsofafinancialasset,theGroupwritesoffthebookbalanceofthefinancialassetdirectly.Thiswrite-offconstitutesderecognitionoftherelevantfinancialasset.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

11.Financialinstruments-Continued

11.3TransferoffinancialassetsAfinancialassetisderecognizedifoneofthefollowingconditionsismet:(1)thecontractualrighttoreceivecashflowsfromthefinancialassetexpires;(2)thefinancialassethasbeentransferredandsubstantiallyalltherisksandrewardsofownershipoftheassethavebeentransferredtothetransferee;or(3)thefinancialassethasbeentransferred,andalthoughtheGrouphasneithertransferrednorretainedsubstantiallyalltherisksandrewardsofownership,ithasnotretainedcontrolovertheasset.IftheGrouphasneithertransferrednorretainedsubstantiallyalltherisksandrewardsofownershipofthefinancialassetbutretainscontrolofit,theGroupcontinuestorecognizethetransferredfinancialassettotheextentofitscontinuinginvolvement,andrecognizesacorrespondingliability.TheGroupmeasuresthatliabilityasfollows:

?Wherethetransferredfinancialassetismeasuredatamortizedcost,thebookvalueoftherelatedliability

equalsthebookvalueoftheassetinwhichtheGroupcontinuestobeinvolvedminustheamortizedcostofanyrightsretainedbytheGroup(iftheGroupretainedsuchrightsduetothetransfer)andplustheamortizedcostofanyobligationsassumedbytheGroup(iftheGroupassumedsuchobligationsduetothetransfer).Suchliabilitiesarenotdesignatedasfinancialliabilitiesmeasuredatfairvaluethroughprofitorloss.?Wherethetransferredfinancialassetismeasuredatfairvalue,thebookvalueoftherelatedliabilityequals

thebookvalueoftheassetinwhichtheGroupcontinuestobeinvolvedminusthefairvalueofanyrightsretainedbytheGroup(iftheGroupretainedsuchrightsduetothetransfer)andplusthefairvalueofanyobligationsassumedbytheGroup(iftheGroupassumedsuchobligationsduetothetransfer).Thefairvaluesofsuchrightsandobligationsaremeasuredonastand-alonebasis.Whenthefulltransferofafinancialassetqualifiesforderecognition,thedifferencebetweenthebookvalueofthetransferredfinancialassetonthederecognitiondateandthesumoftheconsiderationreceivedandthecorrespondingportionofthecumulativefairvaluechangespreviouslyrecognizedinothercomprehensiveincomeisrecognizedinprofitorloss.IfthetransferredassetbytheGroupisanon-tradingequityinstrumentinvestmentdesignatedasmeasuredatfairvaluethroughothercomprehensiveincome,anycumulativegainsorlossespreviouslyrecognizedinothercomprehensiveincomearetransferredoutofothercomprehensiveincomeandintoretainedearnings.Whenapartialtransferofafinancialassetqualifiesforderecognition,thebookvalueoftheoriginalassetbeforetransferisallocatedbetweentheportionbeingderecognizedandtheportionthatcontinuestoberecognized,basedontherelativefairvaluesofeachportiononthetransferdate.Thedifferencebetween(a)theconsiderationreceivedforthederecognizedportionplusthecorrespondingportionofthecumulativefairvaluechangespreviouslyrecognizedinothercomprehensiveincomeand(b)thebookvalueofthederecognizedportiononthederecognitiondateisrecognizedinprofitorloss.IfthetransferredassetbytheGroupisanon-tradingequityinstrumentinvestmentdesignatedasmeasuredatfairvaluethroughothercomprehensiveincome,anycumulativegainsorlossespreviouslyrecognizedinothercomprehensiveincomearetransferredoutofothercomprehensiveincomeandintoretainedearnings.Ifafulltransferofafinancialassetdoesnotsatisfythederecognitioncriteria,theGroupcontinuestorecognizetheentiretransferredfinancialassetandrecognizestheconsiderationreceivedasaliability.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

11.Financialinstruments-Continued

11.4ClassificationoffinancialliabilitiesandequityinstrumentsBasedonthecontractualtermsandtheeconomicsubstanceoftheissuedfinancialinstrumentratherthanmerelyitslegalformandinconjunctionwiththedefinitionsoffinancialliabilitiesandequityinstruments,theGroupclassifiesthefinancialinstrument(oritscomponents)aseitherafinancialliabilityoranequityinstrumentatinitialrecognition.

11.4.1Classification,recognitionandmeasurementoffinancialliabilitiesUponinitialrecognition,financialliabilitiesareclassifiedasfinancialliabilitiesmeasuredatfairvaluethroughprofitorlossorotherfinancialliabilities.

11.4.1.1FinancialliabilitiesmeasuredatfairvaluethroughprofitorlossFinancialliabilitiesmeasuredatfairvaluethroughprofitorlossincludefinancialliabilitiesheldfortrading(includingderivativesclassifiedasfinancialliabilities)andthosedesignatedasmeasuredatfairvaluethroughprofitorloss.Exceptforderivativefinancialliabilities,whicharepresentedseparately,financialliabilitiesmeasuredatfairvaluethroughprofitorlossarepresentedasfinancialliabilitiesheldfortrading.Ifafinancialliabilitymeetsanyofthefollowingconditions,itindicatesthattheGrouphasassumedthisliabilityfortradingpurposes:

?Theprimarypurposeofassumingthefinancialliabilityistorepurchaseitinthenearterm.?Uponinitialrecognition,thefinancialliabilityispartofanidentifiableportfoliooffinancialinstrumentsthatiscollectivelymanaged,andthereisobjectiveevidenceofarecentpatternofshort-termprofit-taking.?Thefinancialliabilityisaderivative,exceptforderivativesthatmeetthedefinitionofafinancialguaranteecontractoraredesignatedaseffectivehedginginstruments.Atinitialrecognition,ifanyofthefollowingconditionsaremet,theGroupmaydesignateafinancialliabilityasmeasuredatfairvaluethroughprofitorloss:(1)thedesignationcaneliminateorsignificantlyreduceaccountingmismatches;(2)undertheGroup'sformallydocumentedriskmanagementorinvestmentstrategy,portfoliosoffinancialliabilitiesorcombinedportfoliosoffinancialassetsandliabilitiesaremanagedandevaluatedonafairvaluebasis,andthisisreportedinternallytokeyofficers;or(3)itispartofaneligiblehybridcontractcontaininganembeddedderivative.Financialliabilitiesheldfortradingaresubsequentlymeasuredatfairvalue,withanygainsorlossesarisingfromfairvaluechanges,alongwithdividendsorinterestexpensesrelatedtotheseliabilities,recognizedinprofitorloss.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

11.Financialinstruments-Continued

11.4Classificationoffinancialliabilitiesandequityinstruments-Continued

11.4.1Classification,recognitionandmeasurementoffinancialliabilities-Continued

11.4.1.1Financialliabilitiesmeasuredatfairvaluethroughprofitorloss-ContinuedForafinancialliabilitydesignatedasmeasuredatfairvaluethroughprofitorloss,theportionofthefairvaluechangeattributabletotheGroup'sowncreditriskisrecognizedinothercomprehensiveincome,whileotherchangesinfairvaluearerecognizedinprofitorloss.Whenthefinancialliabilityisderecognized,theaccumulatedfairvaluechangeattributabletochangesintheGroup'sowncreditriskthatwaspreviouslyrecordedinothercomprehensiveincomeistransferredtoretainedearnings.Anydividendsorinterestexpensesrelatedtosuchfinancialliabilitiesarerecognizedinprofitorloss.Iftreatingtheeffectofchangesintheliability'sowncreditriskinthismannercreatesorenlargesanaccountingmismatchinprofitorloss,theGrouprecognizesallgainsorlossesontheliability(includingthoserelatedtochangesinitsowncreditrisk)inprofitorloss.

11.4.1.2OtherfinancialliabilitiesExceptforfinancialliabilitiesarisingfromthetransferoffinancialassetsthatdonotmeetderecognitioncriteria,orwheretheGroupcontinuestobeinvolvedintransferredfinancialassets,otherfinancialliabilitiesareclassifiedasfinancialliabilitiesmeasuredatamortizedcost.Theyaresubsequentlymeasuredatamortizedcost,andanygainsorlossesfromderecognitionoramortizationarerecognizedinprofitorloss.IftheGroupmodifiesorrenegotiatesacontractwithacounterparty,anditdoesnotresultinthederecognitionofafinancialliabilitysubsequentlymeasuredatamortizedcostbutleadstochangesinthecontractualcashflows,theGrouprecalculatesthebookvalueofthefinancialliabilityandrecognizesanyrelatedgainorlossinprofitorloss.Forrecalculatedbookvalue,theGroupshalldetermineitbydiscountingtherenegotiatedormodifiedcontractualcashflowsattheoriginaleffectiveinterestrateofthefinancialliability.Foranycostsorfeesincurredasaresultofmodifyingorrenegotiatingthecontract,theGroupshalladjustthebookvalueofthemodifiedfinancialliabilityandamortizethemovertheremainingtermthereof.

11.4.2DerecognitionoffinancialliabilitiesIfthepresentobligationofafinancialliabilityisfullyorpartiallydischarged,theliability(orthedischargedportion)isderecognized.IftheGroup(asborrower)signsanagreementwithalendertoreplacetheoriginalfinancialliabilitywithanewone,andthetermsofthenewliabilitydiffersubstantiallyfromthoseoftheoriginalliability,theGroupderecognizestheoriginalliabilityandrecognizesthenewone.Whenafinancialliabilityisfullyorpartiallyderecognized,thedifferencebetweenthebookvalueofthederecognizedportionandtheconsiderationpaid(includinganynon-cashassetstransferredornewfinancialliabilitiesassumed)isrecognizedinprofitorlossforthecurrentperiod.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

11.Financialinstruments-Continued

11.4Classificationoffinancialliabilitiesandequityinstruments-Continued

11.4.3EquityinstrumentsAnequityinstrumentisacontractthatevidencesaresidualinterestintheGroup'sassetsafterdeductingallliabilities.TheGrouptreatstheissuance(includingrefinancing),repurchase,sale,orcancellationofitsequityinstrumentsaschangesinequity.TheGroupdoesnotrecognizefairvaluechangesinequityinstruments.Transactioncostsdirectlyattributabletoequitytransactionsaredeductedfromequity.TheGroup'sdistributionsmadetoholdersofequityinstrumentsaretreatedasprofitdistribution,andanyissuedstockdividendsdonotaffectthetotalshareholders'equity.

11.5DerivativesDerivatives,includingforwardforeignexchangecontracts,areinitiallymeasuredatfairvalueonthecontractdateandsubsequentlymeasuredatfairvalue.

11.6OffsettingfinancialassetsandfinancialliabilitiesWhentheGrouphasalegalrighttooffsetrecognizedfinancialassetsandliabilities,andthatrightiscurrentlyenforceable,andtheGroupintendstosettleonanetbasisortorealizetheassetandsettletheliabilitysimultaneously,thefinancialassetsandliabilitiesarepresentedonthebalancesheetatthenetamount.Otherwise,financialassetsandfinancialliabilitiesarepresentedseparatelyinthebalancesheetwithoutoffset.

12.Notesreceivable

12.1MethodfordeterminingexpectedcreditlossesonnotesreceivableandtherelatedaccountingtreatmentsFornotesreceivablewithsignificantlyincreasedcreditrisk,suchasthosepastdueandnotacceptedorwherethereisclearevidencethattheacceptorislikelyunabletofulfillitsacceptanceobligation,theGroupevaluatescreditlossesonanindividualbasis.Othernotesreceivableareevaluatedbasedontheircreditriskcharacteristicsasagroup.Anyincreaseorreversaloftheprovisionforexpectedcreditlossesonnotesreceivableisrecognizedasacreditlossorgaininprofitorloss.

12.2CombinationcategoriesandbasisfordeterminingprovisionforcreditlossesaccordingtocreditriskcharacteristiccombinationApartfromthosenotesreceivablewhosecreditlossesaredeterminedonanindividualbasis,theGroupclassifiestheremainingnotesreceivableintodifferentgroupsbasedonsharedcreditriskcharacteristics:

CombinationcategoryDeterminationbasis
Combination1Bankacceptancebills
Combination2Commercialacceptancebills

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

13.Accountsreceivable

13.1MethodfordeterminingexpectedcreditlossesonaccountsreceivableandtherelatedaccountingtreatmentsTheGroupusesanimpairmentmatrixatthegroupleveltodetermineexpectedcreditlossesforaccountsreceivable.Anyincreaseorreversaloftheprovisionforexpectedcreditlossesofaccountsreceivableisrecognizedasacreditlossorgaininprofitorloss.

13.2Combinationcategoriesandbasisfordeterminingprovisionforcreditlossesaccordingtocreditriskcharacteristiccombination.TheGroupclassifiesaccountsreceivableintoCombination1andCombination2basedonthecreditriskcharacteristicsofcounterpartiesunderdifferentbusinesssegments.Combination1referstoaccountsreceivablearisingfromthepolarizerbusinessrevenue,whereprovisionsforcreditlossesaremadebasedonoverdueagingrelativetothecreditterm.Combination2referstoaccountsreceivablearisingfrompropertyleasingandotherbusinessrevenue,whereprovisionsforcreditlossesaremadebasedonnaturalaging.

13.3CalculationmethodofagingforcreditriskcharacteristicsportfoliorecognizedbyagingTheGroupusesboththenaturalagingofaccountsreceivableandtheoverdueagingrelativetothecredittermascreditriskcharacteristics,applyinganimpairmentmatrixtodetermineexpectedcreditlosses.Naturalagingiscalculatedstartingfromthedateofinitialrecognitionoftheaccountsreceivable,whileoverdueagingbeginsoncethenaturalagingexceedsthecredittermgrantedtothecustomer.Ifthetermsandconditionsofanaccountsreceivablearemodifiedbutdonotleadtoderecognition,theagingcontinuestoaccumulate.

13.4CriteriaforindividualassessmentofprovisionforcreditlossesTheGroupindividuallydeterminescreditlossesforaccountsreceivablewherethereisevidenceofasignificantincreaseincreditrisk.

14.Receivablesfinancing

14.1MethodfordeterminingexpectedcreditlossesonreceivablesfinancingandtherelatedaccountingtreatmentsTheGroupdeterminescreditlossesforreceivablesfinancingonanindividual-assetbasis.TheGrouprecognizestheprovisionforcreditlossesforreceivablesfinancinginothercomprehensiveincomeandrecordsanycreditlossorgaininprofitorloss,withoutreducingthebookvaluepresentedinthebalancesheet.

14.2CriteriaforindividualassessmentofprovisionforcreditlossesBasedonthecreditstatusoftheacceptingbankforbankacceptancebills,theGroupindividuallyassessesanddeterminescreditlossesforreceivablesfinancing.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

15.Otherreceivables

15.1MethodfordeterminingexpectedcreditlossesonotherreceivablesandtherelatedaccountingtreatmentsTheGroupdeterminescreditlossesforotherreceivablesonagroupbasis.Anyincreaseorreversaloftheprovisionforexpectedcreditlossesonotherreceivablesisrecognizedasacreditlossorgaininprofitorloss.

15.2CombinationcategoriesandbasisfordeterminingprovisionforcreditlossesaccordingtocreditriskcharacteristiccombinationTheGroupdividesotherreceivablesintodifferentcombinationsbasedoncommoncreditriskcharacteristics.CommoncreditriskcharacteristicsusedbytheGroupincludeinitialrecognitiondate,remainingcontractterm,andlengthofoverdueperiod.

15.3MethodforcalculatingagingwhendeterminingcreditriskcharacteristiccombinationTheagingiscalculatedfromthedateofinitialrecognition.Ifthetermsandconditionsofotherreceivablesaremodifiedbutdonotleadtoderecognition,theagingcontinuestoaccumulate.

16.Inventories

16.1Typesofinventories,methodsofcostingforissuance,inventorysystem,andmethodsforamortizinglow-valueconsumablesandpackagingmaterials

16.1.1TypesofinventoriesTheGroup'sinventoriesmainlyincluderawmaterials,workinprogress,finishedproducts,andmaterialsprocessedonconsignment.Inventoriesareinitiallymeasuredatcost,whichincludespurchasecosts,processingcosts,andotherexpendituresincurredtobringtheinventoriestotheircurrentlocationandcondition.

16.1.2MethodofcostingforissuedinventoriesWheninventoriesareissued,theactualcostisdeterminedusingtheweightedaveragemethod.

16.1.3InventorysystemTheGroupusesaperpetualinventorysystem.

16.1.4Amortizationmethodsforlow-valueconsumablesandpackagingmaterialsLow-valueconsumablesandpackagingmaterialsareamortizedusingthestraight-linemethodorarewrittenoffinfullatonce.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

16.Inventories-Continued

16.2CriteriaforrecognizingandmethodsformakingprovisionforinventorydepreciationOnthebalancesheetdate,inventoriesaremeasuredatthelowerofcostandnetrealizablevalue.Ifnetrealizablevalueislowerthancost,aprovisionforinventorydepreciationismade.Netrealizablevalueistheestimatedsellingpriceofinventoriesintheordinarycourseofbusiness,lesstheestimatedcoststocomplete,theestimatedsellinganddistributionexpenses,andrelatedtaxes.Whendeterminingthenetrealizablevalueofinventories,theGroupusesconclusiveevidencewhileconsideringthepurposeofholdingtheinventoriesandtheimpactofeventsafterthebalancesheetdate.Aftertheprovisionsfortheinventorydepreciationaremade,thefactorscausinganywrite-downofinventoryvaluehavedisappeared,leadingtothenetrealizablevaluesofinventorieshigherthanitsbookvalue,theamountofwrite-downshallberesumedandbereversedfromtheoriginalprovisionforinventorydevaluationwiththereversalbeingincludedincurrentprofitorloss.Generally,provisionsforinventorydepreciationaremadeonanitem-by-itembasis.

17.Long-termequityinvestments

17.1CriteriafordeterminingcommoncontrolandsignificantinfluenceControlmeansthataninvestorhaspowerovertheinvestee,derivesvariablereturnsbyparticipatingintheinvestee'srelevantactivities,andcanusethatpowertoaffecttheamountofreturns.Commoncontrolreferstosharedcontroloveranarrangementunderrelevantagreements,wheredecisionsaboutthearrangement'srelevantactivitiesrequiretheunanimousconsentofthepartiessharingtherightofcontrol.Significantinfluencereferstothepowertoparticipateindecisionsonaninvestee'sfinancialandoperatingpolicies,butnottocontrolorcommonlycontroltheformationofthosepolicies.Whendeterminingwhethertheinvestorcanexercisecontrolorsignificantinfluenceovertheinvestee,thepotentialvotingrightsarisingfromconvertiblecorporatebondsorexercisablewarrantscurrentlyheldbytheinvestororotherpartiesaretakenintoaccount.

17.2DeterminationofinitialinvestmentcostForalong-termequityinvestmentacquiredinabusinesscombinationundercommoncontrol,theinitialinvestmentcostisdeterminedonthecombinationdatebasedontheshareofthebookvalueoftheacquiree'sowners'equityintheultimatecontroller'sconsolidatedfinancialstatements.Anydifferencebetweentheinitialinvestmentcostofthelong-termequityinvestmentandthebookvalueofthecashpaid,non-cashassetstransferred,orliabilitiesassumedisadjustedagainstcapitalreserve.Ifthecapitalreserveisinsufficient,thedifferenceisadjustedagainstretainedearnings.Whereequitysecuritiesareissuedasconsiderationforthecombination,onthecombinationdate,theinitialinvestmentcostofthelong-termequityinvestmentisdeterminedbasedontheshareofthebookvalueoftheacquiree'sowners'equityintheultimatecontroller'sconsolidatedfinancialstatements.Thetotalparvalueoftheissuedsharesisrecognizedassharecapital,andanydifferencebetweentheinitialinvestmentcostandthetotalparvalueofthesharesissuedisadjustedagainstcapitalreserve.Ifthecapitalreserveisinsufficient,thedifferenceisadjustedagainstretainedearnings.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

17.Long-termequityinvestments-Continued

17.2Determinationofinitialinvestmentcost-ContinuedForalong-termequityinvestmentacquiredinabusinesscombinationnotundercommoncontrol,ontheacquisitiondatetheinitialinvestmentcostisdeterminedbasedonthecombinationcost.Audit,legal,valuation,consulting,andotherrelatedG&Aexpensesincurredbytheacquirerorpurchaserforthebusinesscombinationarerecognizedinprofitorlosswhentheyoccur.Long-termequityinvestmentsobtainedthroughmethodsotherthanabusinesscombinationareinitiallymeasuredatcost.Whereaninvestorgainssignificantinfluenceorcommoncontrolbutnotcontroloveraninvesteethroughadditionalinvestment,thecostofthelong-termequityinvestmentisthesumofthefairvalueofthepreviouslyheldequityinvestment(asdeterminedinaccordancewithAccountingStandardsforBusinessEnterprisesNo.22-RecognitionandMeasurementofFinancialInstruments)andthenewinvestmentcost.

17.3Subsequentmeasurementandrecognitionmethodofprofitorloss

17.3.1Long-termequityinvestmentsaccountedforunderthecostmethodIntheparentcompany'sfinancialstatements,long-termequityinvestmentsinsubsidiariesaremeasuredusingthecostmethod.AsubsidiaryisaninvesteeoverwhichtheGroupcanexercisecontrol.Underthecostmethod,long-termequityinvestmentsaremeasuredattheirinitialinvestmentcost.Anyadditionalinvestmentorcapitalrecoveryadjuststhecostofthelong-termequityinvestment.Currentinvestmentincomeisrecognizedbasedontheamountofcashdividendsorprofitsdeclaredanddistributedbytheinvestee.

17.3.2Long-termequityinvestmentsmeasuredusingtheequitymethodTheGroupappliestheequitymethodtoitsinvestmentsinassociatesandjointventures.AnassociateisaninvesteeoverwhichtheGrouphassignificantinfluence,andajointventureisajointventurearrangementunderwhichtheGrouphasrightstothenetassetsofthearrangement.Undertheequitymethod,iftheinitialinvestmentcostofthelong-termequityinvestmentexceedstheshareofthefairvalueoftheinvestee'sidentifiablenetassetsatthetimeofinvestment,theinitialinvestmentcostisnotadjusted.Iftheinitialinvestmentcostislessthantheshareofthefairvalueoftheinvestee'sidentifiablenetassetsatthetimeofinvestment,thedifferenceisrecognizedincurrentprofitorloss,andthecostofthelong-termequityinvestmentisadjustedaccordingly.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

17.Long-termequityinvestments-Continued

17.3Subsequentmeasurementandrecognitionmethodofprofitorloss-Continued

17.3.2Long-termequityinvestmentsmeasuredusingtheequitymethod-ContinuedWhentheequitymethodisadoptedforaccounting,theGroup,basedonitsattributableshareofthenetprofitorlossandothercomprehensiveincomerealizedbytheinvestee,respectivelyrecognizetheinvestmentincomeandothercomprehensiveincome,andsimultaneouslyadjustthebookvalueofthelong-termequityinvestment.COOECshallcalculatethesharesaccordingtoprofitsorcashdividendsdeclaredbytheinvesteeandcorrespondinglyreducethebookvalueoflong-termequityinvestments;astoanychangeinowners'equityoftheinvesteeotherthannetprofitorloss,othercomprehensiveincomeandprofitdistribution,theGroupshalladjustthebookvalueofthelong-termequityinvestmentandincludesuchchangeincapitalreserves.Whenrecoginzingtheattributableshareofnetprofitorlossoftheinvestee,theGroupshall,basedonthefairvalueofidentifiablenetassetoftheinvesteewhenitobtainstheinvestment,recognizethenetprofitsoftheinvesteeafteradjustment.IfaccountingpoliciesandaccountingperiodsadoptedbytheinvesteeareinconsistentwiththoseoftheCompany,thefinancialstatementsoftheinvesteeshallbeadjustedaccordingtotheaccountingpoliciesandaccountingperiodsoftheCompanyandinvestmentincomeandothercomprehensiveincomeetc.shallberecognizedonsuchbasis.FortransactionsbetweentheGroupandassociatesandjointventures,iftheinvestedorsoldassetsdonotconstitutebusiness,theunrealizedprofitorlossfrominternaltransactionswillbeoffsetatthepartattributabletotheGroupandtheinvestmentprofitorlosswillberecognizedonthatbasisHowever,theunrealizedlossesfrominternaltransactionsbetweentheGroupandanyinvesteeshallnotbeoffsetiftheybelongtothelossesfromtheimpairmentofthetransferredassets.Whenrecognizingthenetlossesoccurredintheinvesteethatshallbeshared,thereductionvalueofbookvalueoflong-termequityinvestmentsandotherlong-termequitiesthatconstitutenetinvestmentsintheinvesteewillbethelimituntilitbecomeszero.Inaddition,iftheGrouphastheobligationtoassumeextra-amountlossesfortheinvestee,theestimatedliabilitiesarerecognizedaccordingtotheestimatedobligationsandincludedinthecurrentinvestmentlosses.Wheretheinvesteerealizesnetprofitsinthesubsequentperiod,theGroupshallrestoretheincomesharedaftermakingupforunrecognizedlossesundertakenbysuchincome.

17.4Disposaloflong-termequityinvestmentsWhenalong-termequityinvestmentisdisposedof,thedifferencebetweenitsbookvalueandtheactualproceedsisrecognizedincurrentprofitorloss.Ifalong-termequityinvestmenthasbeenaccountedforusingtheequitymethodandtheremainingequityafterdisposalisstillaccountedforusingtheequitymethod,anyothercomprehensiveincomepreviouslyrecognizedundertheequitymethodistreatedonthesamebasisasiftheinvesteehaddirectlydisposedoftherelatedassetsorliabilities,andistransferredproportionately.Anyotherchangesinowners'equityoftheinvestee,otherthannetprofitorloss,othercomprehensiveincome,andprofitdistribution,whichwerepreviouslyrecognized,aretransferredproportionatelytothecurrentprofitorloss.Ifalong-termequityinvestmentisaccountedforusingthecostmethodandtheremainingequityafterdisposalcontinuestobeaccountedforusingthecostmethod,anyothercomprehensiveincomerecognizedbeforetheGroupgainedcontrol,undereithertheequitymethodortheaccountingstandardsforrecognizingandmeasuringfinancialinstruments,istreatedonthesamebasisasiftheinvesteehaddirectlydisposedoftherelatedassetsorliabilities,andistransferredproportionately.Otherchangesinowners'equityotherthannetprofitorloss,othercomprehensiveincomeandprofitdistributioninnetassetoftheinvesteeaccountedforandrecognizedbyusingtheequitymethodshallbecarriedforwardtothecurrentprofitorloss.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

17.Long-termequityinvestments-Continued

17.4Disposaloflong-termequityinvestments-ContinuedWheretheGrouplosesthecontrolovertheinvesteeduetothedisposalofpartoftheequityinvestments,whenitpreparesseparatefinancialstatements,theremainingequityafterdisposalthatcancommonlycontrolorhavesignificantinfluenceontheinvesteewillbemeasuredundertheequitymethod,andtheremainingequityshallbedeemedtohavebeenadjustedundertheequitymethodonacquisition.Iftheremainingequityafterdisposalcannotexercisecommoncontrolorsignificantinfluenceontheinvestee,suchequitywillbechangedtobeaccountedforaccordingtorecognitionandmeasurementstandardsoffinancialinstrumentsandthedifferencebetweenfairvalueandbookvalueonthedateoflossofthecontrolshallbeincludedinthecurrentprofitorloss.ForothercomprehensiveincomerecognizedbyusingtheequitymethodorfinancialinstrumentsrecognitionandmeasurementstandardsbeforetheGroupobtainsthecontrolovertheinvestee,accountingtreatmentshallbemadeonthesamebasisasthatfordirectdisposalofrelevantassetsorliabilitiesbytheinvesteewhentheGrouplosesthecontrolovertheinvestee.Otherchangesinowners'equityotherthannetprofitorloss,othercomprehensiveincomeandprofitdistributioninnetassetoftheinvesteerecognizedbyusingtheequitymethodshallbecarriedforwardtothecurrentprofitorlosswhenthecontrolovertheinvesteeislost.Wheretheremainingequitiesafterdisposalareaccountedforundertheequitymethod,theothercomprehensiveincomeandotherowners'equityshallbecarriedforwardinproportion.Iftheremainingequityafterdisposalischangedtobeaccountedforaccordingtotherecognitionandmeasurementstandardsofthefinancialinstruments,theothercomprehensiveincomeandotherowner'sequityshallbefullycarriedforward.Incasethecommoncontrolorsignificantinfluenceovertheinvesteeislostfordisposingpartofequityinvestments,theremainingequitywillbechangedtobeaccountedforaccordingtotherecognitionandmeasurementprinciplesoffinancialinstruments.Thedifferencebetweenthefairvalueandthebookvalueonthedateofthelossofcommoncontrolorsignificantinfluenceshallbeincludedinthecurrentprofitorloss.Anyothercomprehensiveincomepreviouslyrecognizedundertheequitymethodfortheoriginalequityinvestmentisaccountedforonthesamebasisasiftheinvesteehaddirectlydisposedofrelatedassetsorliabilitiesoncetheequitymethodceasestoapply.Allotherchangesinowners'equityrecognizedduetofactorsotherthannetprofitorloss,othercomprehensiveincome,andprofitdistributionoftheinvesteearetransferredinfulltocurrentinvestmentincomewhentheequitymethodisnolongerapplied.WheretheGroupdisposesofequityinvestmentsinsubsidiariesthroughmultipletransactionsandbystagesuntillossofcontrol,iftheabovetransactionsbelongtoapackageoftransactions,accountingtreatmentshallbemadeonthetransactionsasatransactiontodisposeequityinvestmentsofsubsidiariesandlosethecontrol.Thedifferencebetweeneachdisposalcostandthebookvalueoflong-termequityinvestmentscorrespondingtodisposedequitiesbeforethelossofcontrolshallbefirstlyrecognizedasothercomprehensiveincomeandthentransferredintothecurrentprofitorlossatthelossofcontrol.

18.InvestmentpropertiesInvestmentpropertyreferstopropertyheldtoearnrentalsorforcapitalappreciation,orboth,andincludesleasedlanduserightsandleasedbuildings.Investmentpropertyisinitiallymeasuredatcost.Subsequentexpensesrelatedtotheinvestmentproperty,iftheeconomicbenefitsrelatedtotheassetarelikelytoflowinandthecostcanbemeasuredreliably,shallbeincludedinthecostoftheinvestmentproperty.Othersubsequentexpensesshallbeincludedinthecurrentprofitorlosswhenincurred.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

18.Investmentproperties-ContinuedTheGroupusesthecostmodelforsubsequentmeasurementofinvestmentpropertyandprovidesfordepreciationonastraight-linebasisoveritsservicelife.Thedepreciationmethod,usefullife,estimatedresidualvalue,andannualdepreciationratesforeachcategoryofinvestmentpropertyareasfollows:

TypeDepreciationmethodDepreciationlife(years)Residualvaluerate(%)Annualdepreciationrate(%)
HousesandbuildingsStraight-linemethod10-400.00-4.002.40-10.00

Whenaninvestmentpropertyisbeingdisposedoforpermanentlywithdrawsfromusewithoutanyeconomicbenefitsexpectedfromthedisposal,theinvestmentpropertyshallbederecognized.Thedifferencebetweenthedisposalproceedsofaninvestmentproperty(throughsale,transfer,retirement,ordamage)anditsbookvalue,netofrelatedtaxesandfees,isrecognizedincurrentprofitorloss.

19.Fixedassets

19.1RecognitionconditionsFixedassetsrefertotangibleassetsheldforthepurposeofproducinggoods,providingservices,rentingoroperatingmanagement,withaservicelifeexceedingonefiscalyear.FixedassetswillonlyberecognizedwhentheeconomicbenefitsassociatedwithsuchassetsarelikelytoflowintotheGroupandthecostcanbemeasuredreliably.Afixedassetisinitiallymeasuredatcost.Forthesubsequentexpensesrelatedtothefixedassets,iftheeconomicbenefitsrelatedtothefixedassetsarelikelytoflowinandthecostcanbemeasuredreliably,theyshallbeincludedinthecostofthefixedassets,andthebookvalueofthereplacedpartshallbederecognized,Othersubsequentexpensesshallbeincludedintothecurrentprofitorlosswhenincurred.

19.2DepreciationmethodFromthemonthfollowingthedateafixedassetisinworkingconditionforintendeduse,theGroupdepreciatestheassetonastraight-linebasisoveritsservicelife.Thedepreciationmethod,serviceyear,estimatedresidualvalue,andannualdepreciationratesforeachcategoryoffixedassetsareasfollows:

TypeDepreciationmethodDepreciationlife(years)Residualvaluerate(%)Annualdepreciationrate(%)
BuildingsandconstructionsStraight-linemethod10-400.00-4.002.40-10.00
MachineryequipmentStraight-linemethod10-144.006.86-9.60
TransportationequipmentStraight-linemethod84.0012.00
ElectronicequipmentandothersStraight-linemethod54.0019.20

EstimatednetresidualvaluereferstotheamountobtainedbytheGroupfromthedisposalofthefixedassetsatpresentafterdeductingtheestimateddisposalexpenses,assumingthattheestimatedservicelifeofthefixedassethasexpiredandthefixedassetisintheexpectedstateattheendofitsservicelife.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

19.Fixedassets-Continued

19.3OtherexplanationsWhenthefixedassetsaredisposedoforitisexpectedthatnoeconomicbenefitscanbegeneratedthroughuseordisposal,thefixedassetsshallbederecognized.Thedifferenceoftherevenuefromdisposaloffixedassetssuchassales,transfer,retirementordamagedeductingtheirbookvalueandrelatedtaxesshallbeincludedintothecurrentprofitorloss.TheGroupwillreviewservicelife,estimatednetresidualvalueanddepreciationmethodsofthefixedassetsattheendofeachyear.Changes,ifany,shallbehandledaschangesinaccountingestimates.

20.ConstructioninprogressTheconstructioninprogressismeasuredatactualcost,whichincludesvariousprojectexpendituresincurredduringtheconstructionperiod,capitalizedborrowingcostsbeforetheprojectreachesworkingconditionforintendeduse,andotherrelatedcosts.Nodepreciationismadeforconstructioninprogress.Theconstructioninprogressshallbecarriedforwardtothefixedassetsafteritreachestheworkingconditionforintendeduse.Thecriteriaandtimingfortheconversionofvarioustypesofconstructioninprogressintofixedassetsareasfollows:

TypeCriteriaforconversiontofixedassetsTimepointofconversionintofixedassets
InstallationofmachineryequipmentThemachineryequipmentshallbecarriedforwardtothefixedassetswhenithasbeenacceptedandthefollowingconditionsaremet:(1)Themachineryequipmentanditssupportingfacilitieshavebeeninstalled;(2)Aftercommissioning,themachineryequipmentcanmaintainnormalandstableoperationorproducequalifiedproductsforaperiodoftime.Reachworkingconditionforintendeduse

21.BorrowingcostsThecapitalizationoftheborrowingcoststhatcanbedirectlyattributabletotheacquisition,constructionorproductionofassetsthatmeetthecapitalizationconditionswillstartwhentheassetexpenditurehasincurred,theborrowingcostshaveincurred,andtheacquisition,constructionorproductionactivitiesnecessaryfortheassettoreachtheintendedusableorsalablestatehavebegun;thecapitalizationshallbeceasedwhentheacquiredandconstructedorproducedassetseligibleforcapitalizationhavereachedtheirworkingconditionforintendeduseorsalescondition.Theremainingborrowingcostsarerecognizedasexpensesonoccurrence.Forspecializedborrowings,thecapitalizationamountisbasedontheactualinterestexpensesincurredinthecurrentperiod,afterdeductingtheinterestincomeearnedfromunusedborrowingfundsdepositedinthebankorinvestmentincomeearnedfromtemporaryinvestments;generalborrowingsshallbedeterminedbymultiplyingtheweightedaverageofassetdisbursementsofthepartofaccumulatedassetdisbursementsexceedingspecialborrowingsbythecapitalizationrateofusedgeneralborrowings,andonthisbasis,thecapitalizationamountisdetermined.Thecapitalizationrateiscalculatedandrecognizedaspertheweightedaverageinterestrateofgeneralborrowing.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

22.Intangibleassets

22.1Servicelifeanditsbasisfordetermination,estimate,amortizationmethodorreviewprocedureIntangibleassetsincludelanduseright,softwareandpatentrights,etc.Theintangibleassetsshallbeinitiallymeasuredatthecosts.Forintangibleassetswithlimitedservicelife,theoriginalvalueshallbeevenlyamortizedbystraight-linemethodwithintheexpectedservicelifefromthetimewhentheyareavailableforuse.Theintangibleassetswithuncertainservicelifeshallnotbeamortized.Theamortizationmethod,servicelifeandresidualvaluerateofvariousintangibleassetsareasfollows:

TypeAmortizationmethodServicelife(year)andbasisofdeterminationResidualvaluerate(%)
LanduserightsStraight-linemethod50(Determinetheservicelifebasedonthestatutoryservicelife)-
SoftwareStraight-linemethod5(Determinetheservicelifebasedontheperiodexpectedtobringeconomicbenefits)-
PatentrightStraight-linemethod15(Determinetheservicelifebasedontheperiodexpectedtobringeconomicbenefits)-

Attheendoftheperiod,theservicelifeandamortizationmethodofintangibleassetswithlimitedservicelifeshallbereviewedandadjustedifnecessary.

22.2ThecollectionscopeandrelatedaccountingtreatmentsforresearchexpendituresTheexpendituresinresearchphasewillbeincludedincurrentprofitorlossonoccurrence.Expendituresinthedevelopmentstagewillberecognizedasintangibleassetsonlywhenthefollowingconditionsaresimultaneouslysatisfied,andincludedincurrentprofitorlossifthefollowingconditionsarenotsatisfied:

(1)Itistechnicallyfeasibletocompletetheintangibleassetssothatitcanbeusedorsold;

(2)Ithastheintentiontocompletetheintangibleassetsanduseorsellthem;

(3)Themannerinwhichanintangibleassetgenerateseconomicbenefitsincludestheabilitytoprovethatthereisamarketfortheproductsproducedthroughtheuseofthisintangibleassetoramarketfortheintangibleassetitself.Inthecasethattheintangibleassetwillbeusedinternally,itsusefulnessshallbeproven.

(4)Withthesupportofsufficienttechnology,financialresourcesandotherresources,itisabletocompletethedevelopmentoftheintangibleassets,anditisabletouseorselltheintangibleassets;

(5)Theexpendituresattributabletotheintangibleassetsinthedevelopmentstagecanbemeasuredreliably.Wheretheresearchexpendituresandthedevelopmentexpendituresareindistinguishable,theCOOECshallincluderesearchexpendituresanddevelopmentexpendituresincurredincurrentprofitorloss.Thecostoftheintangibleassetsformedbyinternaldevelopmentactivitiesonlyincludesthetotalexpenditureincurredfromthetimewhenthecapitalizationconditionsaremettothetimewhentheintangibleassetsreachtheintendeduse.Theexpensesrecognizedinprofitorlossbeforemeetingthecapitalizationconditionsduringthedevelopmentforthesameintangibleassetwillnotbeadjusted.ThescopeofR&Dexpenditureincludeswages,salaries,andwelfareexpensesofpersonneldirectlyengagedinR&Dactivities,materials,fuelandpowercostsdirectlyconsumedinR&Dactivities,anddepreciationexpensesofinstrumentsandequipmentforR&Dactivities,etc.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

23.Impairmentoflong-termassetsOneachbalancesheetdate,theGroupcheckswhetherthereisanyindicationthatlong-termequityinvestments,investmentpropertiesmeasuredbythecostmodel,fixedassets,constructioninprogress,right-of-useassetsandintangibleassetswithadefiniteservicelifemayhaveimpairment.Ifthereareindicationsofimpairmentofsuchassets,therecoverableamountshallbeestimated.Intangibleassetswithindefiniteservicelifeandintangibleassetsthathavenotyetreachedausablestatearesubjecttoimpairmenttestingeveryyearregardlessofwhetherthereareindicationsofimpairment.Therecoverableamountoftheestimatedassetisbasedonasingleasset.Ifitisdifficulttoestimatetherecoverableamountofasingleasset,therecoverableamountoftheassetgroupshallbedeterminedonthebasisoftheassetgrouptowhichtheassetbelongs.Therecoverableamountisthehigherofthenetamountobtainedbydeductingthedisposalexpensesfromthefairvalueofanassetoranassetgroupandthepresentvalueofitsexpectedfuturecashflows.Iftherecoverableamountoftheassetislowerthanitsbookvalue,theprovisionforassetimpairmentshallbemadeatthedifferenceandincludedinthecurrentprofitorloss.Thegoodwillshallbetestedforimpairmentatleastattheendofeachyear.Theimpairmenttestofgoodwillshallbecarriedoutincombinationwiththeassetgrouporcombinationofassetgroupsrelatedtoit.Thatis,fromtheacquisitiondate,thebookvalueofgoodwillshallbeallocatedusingareasonablemethodtotheassetgrouporportfolioofassetgroupsthatbenefitfromthesynergiesofthebusinesscombination.Iftherecoverableamountoftheassetgrouporgroupofassetgroupsincludingtheallocatedgoodwillislowerthanitsbookvalue,thecorrespondingimpairmentlossesshallberecognized.Amountofimpairmentlossesshallbefirstlyusedtodeductthebookvalueofgoodwillallocatedtotheassetgrouporportfolioofassetgroups,andthendeductbookvalueofotherassetsaccordingtotheproportionofthebookvaluesofotherassets(exceptforgoodwill)intheassetgrouporportfolioofassetgroups.Theabovelossesfromassetsimpairmentwillnotbereversedinsubsequentaccountingperiodsoncerecognized.

24.Long-termdeferredexpensesLong-termdeferredexpensesrefertotheexpenseswhichhavebeenalreadyincurredbutwillbeborneinthecurrentperiodandinthefuturewithanamortizationperiodofover1year.Long-termdeferredexpensesareamortizedevenlyovertheexpectedbenefitperiod.

25.ContractliabilitiesContractliabilitiesrefertotheobligationoftheGrouptotransfergoodsorservicestocustomersforconsiderationreceivedorreceivablefromcustomers.Contractassetsandcontractliabilitiesunderthesamecontractarepresentedbytheirnetamounts.

26.Employeeremuneration

26.1Accountingtreatmentsforshort-termcompensationDuringtheaccountingperiodwhenemployeesprovideservicesfortheGroup,theGrouprecognizestheshort-termcompensationactuallyincurredasliabilitiesandincludesitinthecurrentprofitorlossorrelatedassetcosts.TheemployeewelfareexpensesincurredbytheGroupshallbeincludedinthecurrentprofitorlossorrelatedassetcostsaccordingtotheactualamountincurred.Iftheemployeebenefitsarenon-monetarybenefits,theyshallbemeasuredatfairvalue.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

26.Employeeemployeecompensation-Continued

26.1Accountingtreatmentsforshort-termcompensation-ContinuedForthemedicalinsurancepremiums,work-relatedinjuryinsurancepremiums,maternityinsurancepremiumsandothersocialinsurancepremiumsandhousingprovidentfundspaidbytheGroupforemployees,aswellasthelaborunionfundsandemployeeeducationexpenseswithdrawnbytheGroupinaccordancewiththeprovisions,thecorrespondingemployeecompensationamountshallbecalculatedanddeterminedaccordingtotheprescribedaccrualbasisandaccrualratioduringtheaccountingperiodwhenemployeesprovideservicesfortheGroup,andthecorrespondingliabilitiesshallberecognizedandincludedinthecurrentprofitorlossorrelatedassetcosts.

26.2Accountingtreatmentsforpost-employmentbenefitsPost-employmentbenefitsarealldefinedcontributionplans.DuringtheaccountingperiodwhenemployeesprovideservicesfortheGroup,theGrouprecognizestheamountpayablecalculatedaccordingtothedefinedcontributionplansasaliabilityandincludesitinthecurrentprofitorlossorrelatedassetcosts.

26.3AccountingtreatmentsfordismissalbenefitsWhentheGroupprovidesdismissalbenefitstoemployees,theemployeecompensationliabilityarisingfromthedismissalbenefitsshallberecognizedattheearlierofthefollowingdatesandincludedinthecurrentprofitorloss:

whentheGroupcannotunilaterallywithdrawthedismissalbenefitsprovidedduetotheterminationoflaborrelationshipplanorthelayoffproposal;whentheGrouprecognizesthecostsorexpensesrelatedtotherestructuringinvolvingthepaymentofdismissalbenefits.

27.EstimatedliabilitiesWhentheobligationrelatedtothecontingencysuchasproductqualityguaranteeisacurrentobligationoftheGroup,andtheperformanceofsuchobligationislikelytoresultintheoutflowofeconomicbenefits,andtheamountofsuchobligationcanbemeasuredreliably,itisrecognizedasestimatedliabilities.Onthebalancesheetdate,byconsideringtherisks,uncertaintyandtimevalueofmoneyandotherfactorsrelatedtocontingency,theestimatedliabilitieswillbemeasuredaccordingtothebestestimateoftherequiredexpendituresforperformaceofrelevantpresentobligation.Ifthetimevalueofmoneyissignificant,thebestestimateshallbedeterminedbytheamountdiscountedbytheestimatedfuturecashflows.

28.Revenue

28.1AccountingpoliciesadoptedforrevenuerecognitionandmeasurementdisclosedbybusinesstypeWhentheGrouphasfulfilleditsperformanceobligationsunderthecontract,thatis,whenthecustomerobtainsrightofcontroloftherelevantgoodsorservices,therevenueisrecognizedbasedonthetransactionpricesallocatedtothespecificperformanceobligation.PerformanceobligationsrefertothecontractualcommitmentsinwhichtheGrouptransfersclearlydistinguishablegoodsorservicestothecustomers.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

28.Revenue-Continued

28.1Accountingpoliciesadoptedforrevenuerecognitionandmeasurementdisclosedbybusinesstype-ContinuedTheGroupevaluatesthecontractonthecontractcommencementdate,identifieseachindividualperformanceobligationcontainedinthecontract,anddetermineswhethereachindividualperformanceobligationisperformedwithinacertainperiodoftimeoratacertainpointintime.Ifoneofthefollowingconditionsismet,itisaperformanceobligationperformedwithinacertainperiodoftime,andtheGrouprecognizesrevenuewithinacertainperiodoftimeaccordingtotheperformanceprogress:(1)thecustomerobtainsandconsumestheeconomicbenefitsbroughtbytheGroupatthesametimeastheGroupperformsthecontract;(2)ThecustomerisabletocontrolthegoodsunderconstructioninthecourseoftheGroup'sperformance;(3)ThegoodsproducedduringtheperformanceoftheGrouphaveirreplaceableuses,andtheGrouphastherighttoreceivepaymentfortheperformanceaccumulatedtodatethroughoutthecontractperiod.Otherwise,theGrouprecognizestherevenueatthepointwhenthecustomerobtainstherightofcontroloftherelevantgoodsorservices.Forgoodssoldtocustomers,theGrouprecognizesrevenuewhentherightofcontrolofthegoodsistransferred,thatis,whenthegoodsaredeliveredtothedesignatedplaceoftheotherpartyandsignedbytheotherparty.Forpropertyservice,theGrouprecognizesrevenueinthecourseofprovidingpropertyservice.TransactionpricesrefertotheamountofconsiderationthattheGroupisexpectedtobeentitledtoreceiveasaresultofthetransferofgoodsorservicestocustomers,butdoesnotincludetheamountreceivedonbehalfofthirdpartiesandtheamountexpectedtobereturnedtocustomersbytheGroup.Whendeterminingthetransactionprices,theGroupconsiderstheimpactofvariableconsideration,significantfinancingcomponentsinthecontract,non-cashconsideration,considerationpayabletocustomersandotherfactors.Ifthecontractcontainstwoormoreperformanceobligations,theGroupshall,onthecommencementdateofthecontract,allocatethetransactionpricestoeachindividualperformanceobligationaccordingtotherelativeratiooftheindividualsellingpriceofthegoodsorservicespromisedbyeachindividualperformanceobligation.However,ifthereisconclusiveevidencethatthecontractualdiscountorvariableconsiderationisonlyrelatedtooneormore(butnotall)performanceobligationsinthecontract,theGroupshallallocatethecontractualdiscountorvariableconsiderationtotherelevantoneormoreperformanceobligations.IndividualsellingpricereferstothepriceatwhichtheGroupsellsgoodsorservicestocustomersseparately.Iftheindividualsellingpricecannotbedirectlyobserved,theGroupwillcomprehensivelyconsideralltheinformationthatcanbereasonablyobtainedandestimatetheindividualsellingpricebymaximizingtheuseofobservableinputvalue.Forsaleswithsalesreturnclauses,theGrouprecognizesrevenueattheamountofconsiderationexpectedtobeentitledtoreceiveduetothetransferofgoodstothecustomer(i.e.,excludingtheamountexpectedtobereturnedduetosalesreturn)whenthecustomerobtainstherelevantcontrolovergoods,andrecognizesliabilitiesattheamountexpectedtobereturnedduetosalesreturn;atthesametime,thebalanceofthebookvalueoftheexpectedgoodstobereturnedatthetimeoftransferafterdeductingtheexpectedcostofrecoveringthegoods(includingtheimpairmentofthevalueofthereturnedgoods)isrecognizedasanasset.Thenetamountafterdeductingthecostoftheaboveassetwillbetransferredascostbasedonthebookvalueofthetransferredgoods.Forsaleswithqualityassuranceclauses,ifthequalityassuranceprovidesaseparateserviceinadditiontoassuringthecustomerthatthegoodsorservicessoldmeettheestablishedstandards,thequalityassuranceconstitutesasingleperformanceobligation.Otherwise,theGroupshallconductaccountingtreatmentforthequalityassuranceliabilityinaccordancewiththeAccountingStandardsforBusinessEnterprisesNo.13-Contingencies.TheGroupdetermineswhetheritistheprincipalortheagentwhenengagingintransactionsbasedonwhetherithastherightofcontroloverthegoodsorservicesbeforetransferringthemtothecustomer.IftheGroupcancontrolthegoodsorservicesbeforetransferringthemtothecustomer,theGroupisthemainresponsiblepersonandrecognizestherevenueaccordingtothetotalconsiderationreceivedorreceivable;otherwise,theGroupisanagentandrecognizesrevenuebasedontheexpectedcommissionsorservicefeeitisentitledtoreceive.Thisamountisdeterminedbysubtractingthepricepayabletootherrelatedpartiesfromthetotalconsiderationreceivedorreceivable.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

28.Revenue-Continued

28.1Accountingpoliciesadoptedforrevenuerecognitionandmeasurementdisclosedbybusinesstype-ContinuedIftheGroupreceivespaymentinadvancefromcustomersforsalesofgoodsorservices,thepaymentisfirstrecognizedasaliabilityandthentransferredtorevenuewhentherelevantperformanceobligationsarefulfilled.WhentheGroup'sadvancesfromcustomersdonotneedtobereturnedandthecustomermaywaiveallorpartofitscontractualrights,theGroupexpectstobeentitledtotheamountrelatedtothecontractualrightswaivedbythecustomer,andrecognizestheaboveamountasrevenueinratioaccordingtothemodeofthecustomer'sexerciseofcontractualrights;otherwise,theGroupwillonlytransfertherelevantbalanceoftheabove-mentionedliabilitiestorevenuewhenitishighlyunlikelythatthecustomerwillrequestthefulfillmentoftheremainingperformanceobligations.

29.GovernmentsubsidiesGovernmentsubsidiesrefertothemonetaryassetsandnon-monetaryassetsobtainedbytheGroupfromthegovernmentforfree.Governmentsubsidiesarerecognizedwhentheycanmeettheconditionsattachedtogovernmentsubsidiesandcanbereceived.Thegovernmentsubsidiesconsideredasmonetaryassetsaremeasuredattheamountreceivedorreceivable.

29.1JudgmentbasisandaccountingtreatmentsforgovernmentsubsidiesrelatedtoassetsThesubsidiesfroproductionlineandequipmentintheGroup'sgovernmentsubsidiescanformlong-termassets,sosuchgovernmentsubsidiesareasset-relatedgovernmentsubsidies.Governmentsubsidiesrelatedtoassetsarerecognizedasdeferredincomeandincludedinthecurrentprofitorlossbystagesaccordingtothestraight-linemethodwithintheservicelifeoftherelevantassets.

29.2JudgmentbasisandaccountingtreatmentsforgovernmentsubsidiesrelatedtoincomeTheindustrydevelopmentsupportfundsandenterprisedevelopmentsupportfundsintheGroup'sgovernmentsubsidiescannotformlong-termassets,sosuchgovernmentsubsidiesareincome-relatedgovernmentsubsidies.Income-relatedgovernmentsubsidiesusedtocompensateforrelevantcostsandlossesinsubsequentperiodsarerecognizedasdeferredincomeandincludedinthecurrentprofitorlossintheperiodwhentherelevantcostsorexpensesarerecognized;ifitisusedtocompensatetherelevantcostsandlossesincurred,itshallbedirectlyincludedinthecurrentprofitorloss.GovernmentsubsidiesrelatedtothedailyactivitiesoftheGroupareincludedinotherincomeaccordingtotheessenceofeconomicbusiness.GovernmentsubsidiesunrelatedtothedailyactivitiesoftheGroupareincludedinthenon-operatingrevenue.Whentherecognizedgovernmentsubsidiesneedtobereturned,ifthereisrelevantdeferredincomebalance,thebookbalanceofrelevantdeferredincomeshallbeoffset,andtheexcessshallbeincludedinthecurrentprofitorloss;ifthereisnorelevantdeferredincome,itshallbedirectlyincludedinthecurrentprofitorloss.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

30.LeasesLeasesreferstoacontractinwhichthelessortransferstherightofuseoftheassettothelesseeforconsiderationwithinacertainperiodoftime.Atthecommencementdateofthecontract,theGroupassesseswhetherthecontractisaleasecontractorcontainsalease.Unlessthetermsandconditionsofthecontractchange,theGroupdoesnotreassesswhetherthecontractisaleasecontractorcontainsalease.

30.1TheGroupasalessee

30.1.1Spin-offoftheleaseWhenacontractcontainsoneormoreleaseandnon-leaseparts,theGroupwillsplittheindividualleaseandnon-leasepartsandallocatethecontractconsiderationaccordingtotherelativeratioofthesumoftheindividualpriceofeachleasepartandtheindividualpriceofthenon-leasepart.

30.1.2Right-of-useassetsExceptforshort-termleases,theGrouprecognizestheright-of-useassetsoftheleaseontheleasecommencementdate.TheleasecommencementdatereferstothestartingdatewhenthelessorprovidestheleasedassetsforusebytheGroup.Right-of-useassetsareinitiallymeasuredatcost.Thecostincludes:

Theinitialmeasurementamountoftheleaseliabilities;theleasepaymentsmadeonorbeforetheleasecommencementdate,ortherelevantamountafterdeductingtheleaseincentivealreadyenjoyedifany;InitialdirectexpensesincurredbytheGroup;TheestimatedcostsincurredbytheGroupfordismantlingandremovingtheleasedassets,restoringthepremiseswheretheleasedassetsarelocatedorrestoringtheleasedassetstothestateagreedintheleaseclauses.TheGroupdepreciatesrightright-of-useassetswithreferencetothedepreciationprovisionsofAccountingStandardsforBusinessEnterprisesNo.4—FixedAssets.IftheGroupcanreasonablydeterminethattheownershipofleasedassetswillbeobtainedattheexpirationoftheleaseterm,theright-of-useassetsshallbedepreciatedwithintheremainingservicelifeoftheleasedassets.Ifitisnotreasonablycertainthatownershipofleasedassetswillbeobtainedattheexpirationoftheleaseterm,thedepreciationshallbeaccruedduringtheshorteroftheleasetermandremainingservicelifeleasedassets.TheGroupdetermineswhethertheright-of-useassetsareimpairmentinaccordancewiththeAccountingStandardsforBusinessEnterprisesNo.8-AssetImpairmentandperformsaccountingtreatmentontheidentifiedimpairmentlosses.

30.1.3LeaseliabilitiesExceptforshort-termleases,theGroupmakesinitialmeasurementoftheleaseliabilitiesontheleasecommencementdateaccordingtothepresentvalueoftheleasepaymentsthathavenotbeenpaidonthatdate.Whencalculatingthepresentvalueofleasepayments,theGroupusestheinterestrateimplicitinleaseasthediscountrate,andiftheinterestrateimplicitinleasecannotbedetermined,theincrementalborrowingrateisusedasthediscountrate.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

30.Leases-continued

30.1TheGroupasalessee-Continued

30.1.3Leaseliabilities-ContinuedLeasepaymentsrefertothepaymentsmadebytheGrouptothelessorinconnectionwiththerighttousetheleasedassetsduringtheleaseterm,including:

Fixedpaymentamountandsubstantialfixedpaymentamount.Ifthereisleaseincentive,therelevantamountofleaseincentiveshallbededucted;Variableleasepaymentamountdependingonindexorratio;TheexercisepriceoftheoptionreasonablydeterminedbytheGrouptobeexercised;TheamounttobepaidtoterminatetheleasewhentheleasetermreflectsthattheGroupwillexercisetheoption;TheamountexpectedtobepaidaccordingtotheresidualvalueoftheguaranteeprovidedbytheGroup.Aftertheleasecommencementdate,theGroupcalculatestheinterestexpensesoftheleaseliabilitiesforeachperiodoftheleasetermatafixedcyclicalinterestrateandincludesitinthecurrentprofitorlossorrelatedassetcosts.Aftertheleasecommencementdate,ifanyofthefollowingcircumstancesoccurs,theGroupshallremeasuretheleaseliabilitiesandadjustthecorrespondingright-of-useassets.Ifthebookvalueoftheright-of-useassetshasbeenreducedtozero,buttheleaseliabilitiesstillneedstobefurtherreduced,theGroupshallincludethedifferenceinthecurrentprofitorloss:

Iftheleasetermchangesortheevaluationresultofthepurchaseoptionchanges,theGroupwillre-measuretheleaseliabilitiesaccordingtothepresentvaluecalculatedbythechangedleasepaymentamountandthereviseddiscountrate;Iftheestimatedpayableamountaccordingtotheguaranteeresidualvalueortheindexorproportionusedtodeterminetheleasepaymentchanges,theGroupwillre-measuretheleaseliabilitiesaccordingtothepresentvaluecalculatedbythechangedleasepaymentamountandtheoriginaldiscountrate.

30.1.4Asthebasisforjudgmentandaccountingtreatmentsforthesimplifiedtreatmentofshort-termleasesbythelesseeTheGroupchoosesnottorecognizeright-of-useassetsandleaseliabilitiesforshort-termleasesofsomeplantsandsomeleasedwarehouses.Short-termleasereferstoaleasethatlastsfornomorethan12monthsandincludesnopurchaseoptionsattheleasecommencementdate.TheGroupincludestheleasepaymentsofshort-termleasesinthecurrentprofitorlossorrelatedassetcostsaccordingtothestraight-linemethodineachperiodoftheleaseterm.

30.1.5LeasemodificationIftheleaseismodifiedandthefollowingconditionsaremetatthesametime,theGroupwillaccountfortheleasemodificationasaseparatelease:

?Theleasemodificationexpandsthescopeoftheleasebyaddingoneormorerightofuseoftheleasedassets;?Theincreasedconsiderationisequivalenttotheindividualpriceoftheexpandedpartadjustedaccordingto

thecontract.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

30.Leases-continued

30.1TheGroupasalessee-Continued

30.1.5Leasemodifications-ContinuedIftheleasemodificationisnotaccountedforasaseparatelease,ontheeffectivedateoftheleasemodification,theGroupre-apportionstheconsiderationofthemodifiedcontract,re-determinestheleaseterm,andre-measurestheleaseliabilitiesatthepresentvaluecalculatedaccordingtothemodifiedleasepaymentsandthereviseddiscountrate.Iftheleasemodificationresultsinareductioninthescopeoftheleaseortheleaseterm,theGroupshallreducethebookvalueoftheright-of-useassetsaccordingly,andincludetherelevantgainsorlossesofpartialorcompleteterminationofleasesintothecurrentprofitorloss.Iftheleaseliabilitiesareremeasuredduetootherleasemodification,theGroupshalladjustthebookvalueoftheright-of-useassetsaccordingly.

30.2TheGroupasalessor

30.2.1Spin-offoftheleaseIfthecontractcontainsboththeleaseandnon-leaseparts,theGroupshallallocatethecontractconsiderationaccordingtotheprovisionsoftherevenuestandardsontheallocationoftransactionprices,andthebasisofallocationshallbetheseparatepriceoftheleasepartandthenon-leasepart.

30.2.2ClassificationcriteriaandaccountingtreatmentsasalessorLeasesthatsubstantiallytransfersubstantiallyalloftherisksandrewardsassociatedwiththeownershipofleasedassetsarefinancingleasesLeasesotherthanfinancingleaseareoperatingleases.

30.2.2.1TheGrouprecordsoperatingleasesasalessorDuringeachperiodoftheleaseterm,theGrouprecognizestheleasereceiptsofoperatingleasesasrentalincomebyusingthestraight-linemethod.TheinitialdirectcostsincurredbytheGroupinconnectionwithoperatingleasesarecapitalizedwhenincurred,amortizedonthesamebasisasrentalincomerecognitionduringtheleaseterm,andincludedinthecurrentprofitorlossininstallments.ThevariableleasereceiptsrelatedtooperatingleasesacquiredbytheGroupandnotincludedintheleasereceiptsareincludedinthecurrentprofitorlosswhenactuallyincurred.

30.2.3LeasemodificationIftheoperatingleaseischanged,theGroupwillaccountforitasanewleasefromtheeffectivedateofthechange,andtheadvanceorreceivableleasereceiptsrelatedtotheleasebeforethechangewillberegardedasthereceiptamountofthenewlease.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

31.DeferredtaxassetsanddeferredtaxliabilitiesIncometaxexpensesincludecurrentincometaxanddeferredincometax.

31.1CurrentincometaxOnthebalancesheetdate,thecurrentincometaxliabilities(orassets)formedinthecurrentandpriorperiodsaremeasuredattheexpectedincometaxpayable(orrefundable)calculatedinaccordancewiththetaxlaw.

31.2DeferredtaxassetsanddeferredtaxliabilitiesForthedifferencebetweenthebookvalueofcertainassetsandliabilitiesandtheirtaxbases,andthetemporarydifferencesarisingfromthedifferencebetweenthebookvalueandtaxbaseofitemsthatarenotrecognizedasassetsandliabilitiesbutwhosetaxbasescanbedeterminedinaccordancewiththetaxlaw,thebalancesheetliabilitymethodisadoptedtorecognizedeferredtaxassetsanddeferredtaxliabilities.Ingeneral,therelevantdeferredincometaxesarerecognizedforalltemporarydifferences.However,fordeductibletemporarydifferences,theGrouprecognizestherelevantdeferredtaxassetstotheextentofthetaxableincomethatislikelytobeobtainedtooffsetthedeductibletemporarydifferences.Inaddition,deferredtaxassetsorliabilitiesarenotrecognizedfortemporarydifferencesassociatedwiththeinitialrecognitionofgoodwillandwiththeinitialrecognitionofassetsorliabilitiesarisingfromtransactionsthatareneitherbusinesscombinationsnoraffectaccountingprofitortaxableincome(ordeductiblelosses)anddonotresultinequaltaxabletemporarydifferencesanddeductibletemporarydifferences.Fordeductiblelossandtaxcreditsthatcanbecarriedforwardtosubsequentyears,thecorrespondingdeferredtaxassetsarisingtherefromarerecognizedtotheextentthatfuturetaxableincomewillbeprobabletobeavailableagainstdeductiblelossesandtaxcredits.TheGrouprecognizesdeferredtaxliabilitiesarisingfromtaxabletemporarydifferencesassociatedwithsubsidiaries,associatesandinvestmentsinjointventures,unlesstheGroupisabletocontrolthetimingofthereversalofthetemporarydifferencesanditisprobablethatthetemporarydifferenceswillnotbereversedintheforeseeablefuture.Fordeductibletemporarydifferencesrelatedtosubsidiaries,associatesandinvestmentsinjointventures,theGrouprecognizesdeferredtaxassetsonlyifitisprobablethatthetemporarydifferenceswillreverseintheforeseeablefutureanditisprobablethattaxableincomewillbeavailabletooffsetthedeductibletemporarydifferencesinthefuture.Onthebalancesheetdate,deferredtaxassetsanddeferredtaxliabilitiesshouldbemeasuredattheapplicabletaxrateduringtheperiodofexpectedrecoveryoftherelevantassetsorliquidationoftherelevantassetsaccordingtotheprovisionsoftaxlaws.Exceptforthecurrentincometaxanddeferredincometaxesrelatedtotransactionsandeventsdirectlyincludedinothercomprehensiveincomeorshareholders'equity,whichareincludedinothercomprehensiveincomeorshareholders'equity,andthebookvalueofdeferredincometaxesarisingfrombusinesscombinationtoadjustgoodwill,theremainingcurrentincometaxanddeferredincometaxexpensesorincomeareincludedinthecurrentprofitorloss.Onthebalancesheetdate,thebookvalueofthedeferredtaxassetsshallbereviewed.Ifitislikelythatsufficienttaxableincomewillnotbeavailableinthefuturetooffsetthebenefitsofthedeferredtaxassets,thebookvalueofthedeferredtaxassetsshallbewrittendown.Whenitislikelytoearnsufficienttaxableincome,thewrittendownamountisreversed.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

31.Deferredtaxassetsanddeferredtaxliabilities-Continued

31.3OffsetofincometaxWhentheGrouphasalegalrighttosettleonanetbasisandintendstosettlewithnetamountoracquireassetsandpayoffliabilitiessimultaneously,theGroupreportsthenetamountofcurrentincometaxassetsandcurrenttaxliabilitiesafteroffsetting.WhentheGrouphasthelegalrighttosettlecurrentincometaxassetsandcurrentincometaxliabilitiesonanetbasis,andthedeferredtaxassetsanddeferredtaxliabilitiesarerelatedtotheincometaxleviedbythesametaxcollectionauthorityonthesametaxpayerorondifferenttaxpayers,butineachimportantfutureperiodofreversalofdeferredtaxassetsandliabilities,theinvolvedtaxpayerintendstosettlecurrentincometaxassetsandliabilitiesonanetbasisortoobtainassetsandsettleliabilitiesatthesametime,thedeferredtaxassetsanddeferredtaxliabilitiesoftheGrouparepresentedatthenetamountafteroffset.

32.Changesinsignificantaccountingpoliciesandaccountingestimates

32.1Adjustmentsforchangesinsignificantaccountingpolicies

32.1.1TheInterpretationNo.19oftheAccountingStandardsforBusinessEnterprisesOnDecember5,2025,theMinistryofFinanceissuedtheInterpretationNo.19oftheAccountingStandardsforBusinessEnterprises,hereinafterreferredtoasthe"InterpretationNo.19").InterpretationNo.19specifiestheassessmentofthecashflowcharacteristicsoffinancialassetcontractsandrelateddisclosures,aswellasthedisclosuresforequityinstrumentsdesignatedtobemeasuredatfairvaluewithchangesrecordedinothercomprehensiveincome,anditwillcomeintoeffectonJanuary1,2026.AssessmentofthecontractualcashflowcharacteristicsoffinancialassetsandrelateddisclosureToassesseswhetherthecontractualcashflowsofafinancialassetareconsistentwithabasiclendingarrangement,theentitymayneedtoconsiderthedifferentcomponentsofinterest.Theassessmentofinterestshouldfocusonwhattheentityisbeingcompensatedfor,ratherthantheamountofcompensation,althoughthelattermayindicatethattheentityisbeingcompensatedforfactorsotherthanthebasiclendingrisksandcosts.Ifthecontractualcashflowsarelinkedtovariablesotherthanthebasiclendingrisksorcosts(suchasthevalueofanequityinstrumentorthepriceofacommodity),orifthecontractualcashflowsrepresentaportionofthedebtor'srevenueorprofit,thenthecontractualcashflowsareinconsistentwiththebasiclendingarrangement.TheGroupwillimplementthisprovisionasofJanuary1,2026,andbelievesthattheadoptionoftheaboveprovisionshasnomaterialimpactontheGroup'sfinancialstatements.DisclosureofdesignatedequityinstrumentsmeasuredatfairvaluewithchangesrecognizedinothercomprehensiveincomeInterpretationNo.19stipulatesthatanentityshall,ataminimum,disclosebycategorythefairvalueofdesignatedinvestmentinequityinstrumentsmeasuredatfairvaluethroughothercomprehensiveincomeattheendofthereportingperiod,andthechangesintheirfairvalueduringthereportingperiod,andmaymakefurtherdisclosurebyitembasedontheprincipleofmaterialityandinconjunctionwiththeentity'sactualsituation.Amongthese,theamountofchangerelatedtoinvestmentsderecognizedduringthereportingperiodandtheamountofchangerelatedtoinvestmentsheldattheendofthereportingperiodshallbedisclosedseparately.Theentityshallalsodisclosethetransferofcumulativegainsorlossesincludedinequityrelatedtoinvestmentsderecognizedduringthereportingperiod.TheGroupwillimplementthisprovisionasofJanuary1,2026,andbelievesthattheadoptionoftheaboveprovisionshasnomaterialimpactontheGroup'sfinancialstatements.

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(III)Significantaccountingpoliciesandaccountingestimates-Continued

32.Changesinsignificantaccountingpoliciesandaccountingestimates-Continued

32.2ChangesinaccountingestimatesTheGrouphasnosignificantchangesinaccountingestimatesduringtheyear.(IV)Taxes

1.Maintaxtypesandtaxrates

TaxtypeTaxbasisTaxrate
Value-addedtaxBalanceofoutputtaxminusdeductibleinputtax;taxexemption,offsetandrefundmeasuresareapplicabletothesalesofexportproductsTheoutputtaxfordomesticsalesiscalculatedat13%,9%,6%,and5%ofthesalesamountaccordingtorelevanttaxregulations,andtheexportproducttaxrebaterateis13%
UrbanmaintenanceandconstructiontaxTurnovertaxpayable7%
EducationsurchargeTurnovertaxpayable3%
LocaleducationsurtaxTurnovertaxpayable2%
CorporateincometaxTaxableincome25%、20%、15%、8.25%
PropertytaxesTHERESIDUALVALUEAFTERDEDUCTING30%FROMTHEORIGINALVALUEOFTHEPROPERTYATONCE1.2%

Notestothetaxpayerswithdifferentcorporateincometaxrates:

NameoftaxpayerIncometaxrate
TheCompany25%
ShenzhenShenfangPropertyManagementCo.,Ltd.20%(Note1)
ShenzhenMeibainianGarmentCo.,Ltd.20%(Note1)
ShenzhenLisiIndustrialDevelopmentCo.,Ltd.20%(Note1)
ShenzhenShenfangSungangPropertyManagementCo.,Ltd.20%(Note1)
SATO(HongKong)Limited8.25%(Note2)
ShenzhenSAPOPhotoelectricCo.,Ltd.(hereinafterreferredtoas"SAPOPhotoelectric")15%(Note3)

Note1:SeeNote(IV)and2(2)fordetails.Note2:accordingtotheInlandRevenueOrdinanceofHongKong,SATO(HongKong)Limitedissubjecttoatwo-tierprofitstaxsystem.ThefirstHKD2millionoftaxableprofitsshalltaxedatarateof8.25%,andtheprofitsgeneratedthereaftershallbetaxedatarateof16.5%.Note3:SeeNote(IV)and2(1)fordetails.

2.Taxincentives

(1)In2025,SAPOPhotoelectric,asubsidiaryoftheCompany,wasjointlyrecognizedasIndustryandInformationTechnologyBureauofShenzhenMunicipality,ShenzhenFinanceBureauandShenzhenTaxService,StateTaxationAdministration,respectively,withacertificationperiodof3years,andthecertificatenumbersofGR202544204289respectively.SinceSAPOPhotoelectricwasrecognizedasahigh-techenterprise,itiseligibleforthetaxincentivesforhigh-techenterprisesforthreeyears.Afterfilingwiththecompetenttaxbureau,SAPOPhotoelectrichaspaidcorporateincometaxatataxrateof15%.

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(IV)Taxes-continued

2.Taxincentives-continued

(2)TheCompany'ssubsidiaries,ShenzhenMeibainianGarmentCo.,Ltd.,ShenzhenLisiIndustrialDevelopmentCo.,Ltd.,ShenzhenShenfangSungangPropertyManagementCo.,Ltd.andShenzhenShenfangPropertyManagementCo.,Ltd.arequalifiedsmalllow-profitenterprises.AccordingtotheAnnouncementoftheMinistryofFinanceandtheStateTaxationAdministrationofTaxationonFurtherImplementingPreferentialPoliciesforCorporateIncomeTaxofSmallandMicroEnterprises(No.13,2022)andtheAnnouncementoftheMinistryofFinanceandtheStateTaxationAdministrationonPreferentialPoliciesforCorporateIncomeTaxofSmallandMicroEnterprisesandIndividualIndustrialandCommercialHouseholds(No.6,2023),thepartoftheannualtaxableincomenotexceedingRMB3millionwillbeincludedinthetaxableincomeafterdeducting25%,andcorporateincometaxwillbepaidatataxrateof20%.

(3)InaccordancewiththerelevantprovisionsoftheNoticeoftheStateAdministrationofTaxationoftheGeneralAdministrationofCustomsofMinistryofFinanceonImportTaxPoliciesforSupportingtheDevelopmentoftheNewDisplayDeviceIndustry(No.19[2021]CaiGuanShui),SAPOPhotoelectric,asubsidiaryoftheCompany,meetstherelevantconditionsandenjoysthepolicyofexemptionfromimportdutiesforrelatedproductsfromJanuary1,2021toDecember31,2030.

(4)AccordingtotheAnnouncementonthePolicyofAdditionalValue-AddedTaxDeductionforAdvancedManufacturingEnterprises(CZBSWZJGG[2023]No.43)issuedbytheMinistryofFinanceandtheStateTaxationAdministrationinSeptember2023,fromJanuary1,2023toDecember31,2027,advancedmanufacturingenterprisesareallowedtodeductthevalue-addedtaxpayableby5%ofthedeductibleinputtaxforthecurrentperiod.SAPOPhotoelectric,asubsidiaryoftheCompany,meetstherelevantconditionsandenjoyedthepolicyofadditionaldeductionofvalue-addedtax(VAT)in2025.(V)Notestofinancialstatementsitems

1.Monetaryfunds

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Cashonhand:15,510.214,751.69
RMB15,451.504,691.50
HKD58.7160.19
Bankdeposits(Note1):449,263,543.52302,111,853.17
RMB291,041,371.64245,621,517.80
USD93,081,165.2540,462,152.89
JPY64,400,647.0215,265,963.38
HKD740,359.61762,219.10
Othermonetaryfunds(Note2):685,396.6538,844,838.96
RMB685,394.4510,920,461.06
JPY2.2027,924,377.90
Total449,964,450.38340,961,443.82
Including:totalamountdepositedabroad--

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(V)Notestofinancialstatements-continued

1.Monetaryfunds-continuedNote1:OnDecember31,2025,thebankdepositsincludeinterestincomefromcurrentdeposits,agreementdepositand7-daynoticedepositsamountingtoRMB21,498.92(onDecember31,2024:RMB31,765.51).Note2:OnDecember31,2025,theGroup'sothermonetaryfundsincludedRMB684,860.26(December31,2024:

RMB3,401,500.00)restrictedinuseduetoaccountfreezing,andRMB536.39(December31,2024:RMB35,443,338.96)depositsforbillsandlettersofcredit.

2.Financialassetsheldfortrading

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Financialassetsmeasuredatfairvaluethroughcurrentprofitorloss736,341,286.18731,419,904.42
Including:moneyfunds,structureddepositsandwealthmanagementproducts736,341,286.18731,419,904.42

3.Notesreceivable

(1)Classificationofnotesreceivable

RMB

CategoryBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Bankacceptancebills85,980,246.5247,305,221.88

(2)AsatDecember31,2025,theGrouphasnopledgednotesreceivable.

(3)AsofDecember31,2025,notesreceivableendorsedordiscountedbytheGroupandnotyetdueonthebalancesheetdateattheendoftheperiod.

RMB

ItemAmountderecognizedattheendoftheperiodAmountnotderecognizedattheendoftheperiod
Bankacceptancebills-53,001,736.07

(4)Disclosurebyprovisionmethodforbaddebts

RMB

CategoryBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
BookbalanceProvisionforbaddebtsBookvalueBookbalanceProvisionforbaddebtsBookvalue
AmountRatio(%)AmountProvisionratio(%)AmountRatio(%)AmountProvisionratio(%)
Provisionforbaddebtsaccruedonanindividualbasis----------
Provisionforbaddebtsmadebyportfolio85,980,246.52100.00--85,980,246.5247,305,221.88100.00--47,305,221.88
Including:bankacceptancebills85,980,246.52100.00--85,980,246.5247,305,221.88100.00--47,305,221.88
Total85,980,246.52100.00-85,980,246.5247,305,221.88100.00-47,305,221.88

(5)In2025,theGrouphasnoactualwrite-offofnotesreceivable.

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(V)Notestofinancialstatements-continued

4.Accountsreceivable

(1)Disclosurebyaging

RMB

AgingBookbalanceattheendoftheyearBookbalanceattheendofthepreviousyear
Within1year777,768,360.91888,265,598.53
1-2years362,522.04368,365.12
2to3years126,149.29-
Over3years13,513,950.9713,565,696.79
Total791,770,983.21902,199,660.44

(2)Disclosurebyprovisionmethodforbaddebts

RMB

CategoryBalanceasattheendofthecurrentyear
BookbalanceProvisionforbaddebtsBookvalue
AmountRatio(%)AmountProvisionratio(%)
Provisionforbaddebtsaccruedonanindividualbasis38,464,614.514.8618,450,283.6847.9720,014,330.83
Provisionforbaddebtsmadebyportfolio753,306,368.7095.1411,512,750.01741,793,618.69
Including:portfolio1743,510,570.7093.9011,247,868.501.51732,262,702.20
Combination29,795,798.001.24264,881.512.709,530,916.49
Total791,770,983.21100.0029,963,033.69761,807,949.52

RMB

CategoryBalanceasattheendofthepreviousyear
BookbalanceProvisionforbaddebtsBookvalue
AmountRatio(%)AmountProvisionratio(%)
Provisionforbaddebtsaccruedonanindividualbasis35,622,829.913.9517,870,018.3750.1617,752,811.54
Provisionforbaddebtsmadebyportfolio866,576,830.5396.0520,597,705.18845,979,125.35
Including:portfolio1854,782,067.6694.7420,338,340.212.38834,443,727.45
Combination211,794,762.871.31259,364.972.2011,535,397.90
Total902,199,660.44100.0038,467,723.55863,731,936.89

AsofDecember31,2025,theCompanyhasnosignificantaccountsreceivablewithindividualprovisionforbaddebts.AsofDecember31,2025,thecreditriskandprovisionforbaddebtsofaccountsreceivableofPortfolio1areasfollows:

RMB

TypeBalanceasattheendofthecurrentyear
Expectedaveragelossrate(%)BookbalanceProvisionforbaddebtsBookvalue
Withinthecreditperiod1.28711,685,368.769,123,382.28702,561,986.48
1-30daysoverdue1.6329,661,939.99484,532.2729,177,407.72
31-60daysoverdue13.98220,361.7130,804.63189,557.08
61-90daysoverdue82.541,911,084.011,577,333.09333,750.92
Morethan90daysoverdue(withimpairment)100.0031,816.2331,816.23-
Total743,510,570.7011,247,868.50732,262,702.20

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(V)Notestofinancialstatements-continued

4.Accountsreceivable-continued

(2)Disclosurebyprovisionmethodforbaddebts-ContinuedAsofDecember31,2025,thecreditriskandprovisionforbaddebtsofaccountsreceivableofPortfolio2areasfollows:

RMB

AgingBalanceasattheendofthecurrentyear
Expectedaveragelossrate(%)BookbalanceProvisionforbaddebtsBookvalue
Within1year1.559,271,692.90143,294.189,128,398.72
1-2years6.90358,039.0024,692.50333,346.50
2to3years30.0098,816.1029,644.8369,171.27
Over3years100.0067,250.0067,250.00-
Total9,795,798.00264,881.519,530,916.49

AsofDecember31,2025,provisionforbaddebtsismadebasedonthesimplifiedexpectedcreditlossesmodel

RMB

ProvisionforbaddebtsWholedurationExpectedcreditlosses(Nocreditloss)WholedurationExpectedcreditlosses(Withcreditloss)Total
Balanceatthebeginningoftheyear24,828,685.5413,639,038.0138,467,723.55
Balanceatthebeginningoftheyear---
-Transfertocreditlossincurred---
-Reversalofcreditlossnotincurred---
Withdrawalinthecurrentyear5,012,530.89-5,012,530.89
Reversalinthecurrentyear(13,392,133.71)(125,087.04)(13,517,220.75)
Charge-offinthecurrentyear---
Write-offinthecurrentyear---
Otherchanges---
Balanceasattheendofthecurrentyear16,449,082.7213,513,950.9729,963,033.69

(3)Provisionforbaddebts

RMB

TypeBalanceatthebeginningoftheyearChangesinthecurrentyearBalanceasattheendofthecurrentyear
ProvisionRecoveryorreversalResaleorwrite-offOtherchanges
Provisionforbaddebts38,467,723.555,012,530.89(13,517,220.75)--29,963,033.69

Therewasnosignificantamountofprovisionforbaddebtsrecoveredorreversedthisyear.

(4)Therearenoaccountsreceivableactuallywrittenoffthisyear.

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(V)Notestofinancialstatements-continued

4.Accountsreceivable-continued

(5)Top5accountsreceivableintermsoftheendingbalancesbydebtors

RMB

EntitynameBookbalanceattheendoftheyearProportioninaccountsreceivableRatioofbalanceattheendoftheyear(%)ProvisionforbaddebtsBalanceasattheendofthecurrentyear
Customer1128,443,330.4316.221,653,660.98
Customer2100,119,032.8712.641,287,356.61
Customer390,314,120.5011.411,170,120.08
Customer484,819,285.1510.711,127,277.20
Customer573,851,813.879.33949,605.87
Total477,547,582.8260.316,188,020.74

5.Receivablesfinancing

(1)Presentationofreceivablesfinancingbycategory

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Bankacceptancebills22,584,820.726,804,603.68

TheGroupbelievesthatthebankacceptancebillsitholdsareissuedbybankswithhighcreditratingsandcarrynosignificantcreditrisk;therefore,noprovisionforbaddebtshasbeenmade.AsatDecember31,2025,theGrouphasnopledgedreceivablesfinancing.

(3)AsofDecember31,2025,receivablesfinancingendorsedordiscountedbytheGroupandnotyetdueonthebalancesheetdateattheendoftheperiod

RMB

ItemAmountderecognizedattheendoftheperiodAmountnotderecognizedattheendoftheperiod
Bankacceptancebills76,263,471.66-

(4)In2025,theGrouphasnoreceivablesfinancingwithactualwrite-off.

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(V)Notestofinancialstatements-continued

6.Advancestosuppliers

(1)Disclosureofadvancestosuppliersbyaging

RMB

AgingBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
AmountRatio(%)AmountRatio(%)
Within1year28,531,062.7797.917,233,035.7088.46
1-2years440,626.721.51873,375.4710.68
2to3years99,375.470.348,227.730.10
Over3years70,145.610.2462,085.800.76
Total29,141,210.57100.008,176,724.70100.00

AsofDecember31,2025,theGrouphasnoadvancestosupplierswithanagingofmorethan1yearandanimportantamount.

(2)Top5advancestosuppliersintermsoftheendingbalancesbyprepaymentobjectsThetotalamountofthetopfiveprepaymentscategorizedbyprepaymentobjectsasoftheendoftheyearwasRMB24,076,887.09,accountingfor77.27%oftheendingbalanceofadvancestosuppliers.

7.Otherreceivables

(1)Disclosurebyaging

RMB

AgingBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Within1year3,292,434.092,878,553.22
1-2years439,728.28227,729.90
2to3years179,540.3137,922.15
Over3years18,454,569.4618,436,540.75
Total22,366,272.1421,580,746.02
Less:provisionforbaddebts18,041,299.1217,984,202.06
Bookvalue4,324,973.023,596,543.96

(2)Disclosurebynatureofpayment

RMB

NatureofpaymentBookbalanceattheendoftheyearBookbalanceattheendofthepreviousyear
Currentaccounts15,455,577.4115,422,685.97
Guaranteeanddeposits2,373,756.822,523,551.88
Exporttaxrebate709,028.48709,028.48
Pettycashandemployeeborrowings293,128.97296,058.95
Others3,534,780.462,629,420.74
Total22,366,272.1421,580,746.02

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(V)Notestofinancialstatements-continued

7.Otherreceivables-continued

(3)ProvisionforbaddebtsAsofDecember31,2025,provisionforbaddebtsismadebasedongeneralmodelofexpectedcreditlosses

RMB

ProvisionforbaddebtsPhaseIPhaseIIPhaseIIITotal
Expectedcreditlossesoverthenext12monthsTheentireexpectedcreditlossoverthelifeoftheinstruments(Nocreditloss)Theentireexpectedcreditlossoverthelifeoftheinstruments(Withcreditloss)
Balanceatthebeginningoftheyear146,991.5039,206.7817,798,003.7817,984,202.06
Balanceatthebeginningoftheyear
-TransfertophaseII(23,085.73)23,085.73--
-TransfertophaseIII-(7,445.09)7,445.09-
-ReversaltophaseII----
-ReversaltophaseI----
Withdrawalinthecurrentyear22,343.5636,164.892,425.0060,933.45
Reversalinthecurrentyear-(3,836.39)(3,836.39)
Charge-offinthecurrentyear----
Write-offinthecurrentyear--
Otherchanges---
Balanceasattheendofthecurrentyear146,249.3387,175.9217,807,873.8718,041,299.12

AsofDecember31,2025,provisionforbaddebtsshallbemadeaccordingtothecreditriskcharacteristiccombination

RMB

ItemBalanceasattheendofthecurrentyear
Expectedaveragelossrate(%)BookbalanceProvisionforbaddebtsBookvalue
ProvisionforbaddebtsbasedoncreditriskcharacteristiccombinationProvisionforotherreceivables80.6622,366,272.1418,041,299.124,324,973.02

AsofDecember31,2025,thecreditriskandprovisionforbaddebtsofotherreceivablesareasfollows:

RMB

AgingBalanceasattheendofthecurrentyear
Expectedaveragelossrate(%)BookbalanceProvisionforbaddebtsBookvalue
Within1year4.443,292,434.09146,249.333,146,184.76
1-2years10.70439,728.2847,050.92392,677.36
2to3years22.35179,540.3140,125.00139,415.31
Over3years96.5018,454,569.4617,807,873.87646,695.59
Total22,366,272.1418,041,299.124,324,973.02

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(V)Notestofinancialstatements-continued

7.Otherreceivables-continued

(4)Provisionforbaddebts

RMB

TypeBalanceatthebeginningoftheyearChangesinthecurrentyearBalanceasattheendofthecurrentyear
ProvisionRecoveryorreversalResaleorwrite-offOtherchanges
Provisionforbaddebts17,984,202.0660,933.45(3,836.39)--18,041,299.12

Thereisnoprovisionforbaddebtsrecoveryorreversalofsignificantamountinthecurrentyear.

(5)Therearenootherreceivablesactuallywrittenoffthisyear.

(6)Topfiveentitiesintermsofendingbalanceofotherreceivablesbydebtors

RMB

nameBalanceasattheendofthecurrentyearProportionofotherreceivables(%)BalanceasattheendofthecurrentyearNatureofamountAgingProvisionforbaddebtsBalanceasattheendofthecurrentyear
Customer111,389,044.6050.92IntercoursepaymentOver3years11,389,044.60
Customer21,800,000.008.05IntercoursepaymentOver3years1,800,000.00
Customer31,100,000.004.92IntercoursepaymentWithin1year55,000.00
Customer41,018,295.374.55IntercoursepaymentOver3years1,018,295.37
Customer5980,461.064.38OthersOver3years980,461.06
Total16,287,801.0372.8215,242,801.03

8.Inventories

(1)Classificationofinventories

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
BookbalanceProvisionforinventorydepreciationBookvalueBookbalanceProvisionforinventorydepreciationBookvalue
Rawmaterials507,546,211.9736,085,589.06471,460,622.91453,134,126.8114,875,137.34438,258,989.47
Productsinprogress356,737,261.9858,000,907.47298,736,354.51335,115,507.5366,220,022.55268,895,484.98
Finishedproducts140,769,463.0432,736,881.09108,032,581.95121,746,047.8540,357,658.5981,388,389.26
Entrustedprocessingmaterials6,920,970.30508,174.166,412,796.141,710,557.68496,720.511,213,837.17
Total1,011,973,907.29127,331,551.78884,642,355.51911,706,239.87121,949,538.99789,756,700.88

Note:asofDecember31,2025,thebookbalanceofthepolarizerinventorieswasRMB1,006,015,410.72(December31,2024:RMB905,482,857.11),withacorrespondingprovisionforinventorydepreciationofRMB121,613,439.13(December31,2024:RMB115,967,084.94).

(2)Provisionforinventorydepreciation

RMB

ItemBalanceatthebeginningoftheyearIncreaseinthecurrentyearDecreaseinthecurrentyearBalanceasattheendofthecurrentyear
ProvisionOthersReversalorwrite-offOthers

-59-

Rawmaterials14,875,137.3421,310,338.94-99,887.22-36,085,589.06
Productsinprogress66,220,022.5535,879,526.66-44,098,641.74-58,000,907.47
Finishedproducts40,357,658.5981,139,403.67-88,760,181.17-32,736,881.09
Entrustedprocessingmaterials496,720.5111,453.65---508,174.16
Total121,949,538.99138,340,722.92-132,958,710.13-127,331,551.78

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(V)Notestofinancialstatements-continued

8.Inventories-continued

(2)Provisionforinventorydepreciation-ContinuedSpecificbasisfordeterminingthenetrealizablevalueofinventoriesandthereasonsforreversalorwrite-offoftheprovisionforinventorydepreciationduringthecurrentyear:

ItemSpecificbasisfordeterminingnetrealizablevalueReasonsforreversingorwritingoffprovisionforinventorydepreciationthisyear
Rawmaterials,goodsinprocessandconsignedprocessingmaterialsThenetrealizablevalueisdeterminedbytheestimatedsellingpriceoftherelevantfinishedproductsminustheestimatedcosttobeincurreduntilcompletion,estimatedsellinganddistributionexpensesandrelevanttaxes.Receivedorsoldinthecurrentyear
FinishedproductsThenetrealizablevalueisdeterminedbytheestimatedsellingpriceoftheinventoriesminustheestimatedsellinganddistributionexpensesandrelatedtaxes.Itissoldormarketvalueisrecoveredinthecurrentyear

(3)AsofDecember31,2025,thereisnoamountinthebalanceofinventoriesusedforguaranteeandnoamountofcapitalizationofborrowingcosts.

9.Othercurrentassets

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Value-addedtaxtobedeductedandinputtaxtobecertified56,593,276.802,100,314.86
Costofreturnreceivable29,008,785.2319,314,386.69
Prepaidincometax47,034.5947,034.59
Total85,649,096.6221,461,736.14

10.Long-termequityinvestments

RMB

InvesteesBalanceatthebeginningoftheyearChangesinthecurrentyearBalanceasattheendofthecurrentyearProvisionforimpairmentBalanceasattheendofthecurrentyear
AdditionalinvestmentReducedinvestmentInvestmentprofitorlossrecognizedundertheequitymethodOthercomprehensiveincomeadjustmentChangesinotherequityCashdividendsorprofitsdeclaredtobepaidProvisionforimpairmentOthers
I.Jointventures
ShenzhenGuanhuaPrintingandDyeingCo.,Ltd.111,555,887.28--(7,280,934.44)-----104,274,952.84-
Sub-total111,555,887.28--(7,280,934.44)-----104,274,952.84-
II.Associates
ShenzhenChanglianfaPrintingandDyeingCo.,Ltd.3,272,138.76--269,945.31--(233,450.00)--3,308,634.07-
Sub-total3,272,138.76--269,945.31--(233,450.00)--3,308,634.07-
Total114,828,026.04--(7,010,989.13)--(233,450.00)--107,583,586.91-

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(V)Notestofinancialstatements-continued

11.Otherequityinstrumentinvestments

(1)Detailsofotherequityinstrumentinvestments

RMB

ItemBalanceatthebeginningoftheyearChangesinthecurrentyearBalanceasattheendofthecurrentyearDividendincomerecognizedinthecurrentperiodAccumulativegainsaccruedtoothercomprehensiveincomeAccumulativelossesaccruedtoothercomprehensiveincomeReasonsdesignatedasbeingmeasuredatfairvaluethroughothercomprehensiveincome
AdditionalinvestmentReducedinvestmentGainsaccruedtoothercomprehensiveincomeinthecurrentyearLossaccruedtoothercomprehensiveincomeinthecurrentyearOthers
HualianDevelopmentGroupCo.,Ltd.129,884,000.00---(6,680,600.00)-123,203,400.00-120,603,400.00-TheGroupplanstoholditforalongtime
ShenzhenDailisiUnderwearCo.,Ltd.19,642,900.00--1,278,300.00--20,921,200.001,037,735.8518,361,343.74-TheGroupplanstoholditforalongtime
ShenzhenNanfangTextileCo.,Ltd.13,181,700.00---(468,900.00)-12,712,800.00869,411.1711,212,800.00-TheGroupplanstoholditforalongtime
ShenzhenXinfangKnittingFactoryCo.,Ltd.2,694,300.00---(270,100.00)-2,424,200.00198,000.001,900,200.00-TheGroupplanstoholditforalongtime
JintianIndustry(Group)Co.,Ltd.---------(14,831,681.50)TheGroupplanstoholditforalongtime
Total165,402,900.00--1,278,300.00(7,419,600.00)-159,261,600.002,105,147.02152,077,743.74(14,831,681.50)

(2)DescriptionofderecognitioninthecurrentyearThereisnoderecognitionofotherequityinstrumentinvestmentsthisyear.

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(V)Notestofinancialstatements-continued

12.Investmentproperties

(1)Investmentpropertiesmeasuredatthecostmode

RMB

ItemHousesandbuildings
I.Totaloriginalbookvalue
1.Balanceatthebeginningoftheyear350,367,442.40
2.Increaseinthecurrentyear-
(1)Outsourcing-
(2)Transferoffixedassets-
3.Decreaseinthecurrentyear903,094.00
(1)Disposal903,094.00
(2)Othertransfer-out-
4.Balanceattheendoftheyear349,464,348.40
II.Accumulateddepreciationandaccumulatedamortization
1.Balanceatthebeginningoftheyear234,374,052.21
2.Increaseinthecurrentyear9,578,063.55
(1)Provisionoramortization9,578,063.55
(2)Transferoffixedassets-
3.Decreaseinthecurrentyear218,548.99
(1)Disposal218,548.99
(2)Othertransfer-out-
4.Balanceattheendoftheyear243,733,566.77
III.Provisionforimpairment
1.Balanceatthebeginningoftheyear-
2.Increaseinthecurrentyear-
(1)Provision-
3.Decreaseinthecurrentyear-
(1)Disposal-
4.Balanceattheendoftheyear-
IV.Bookvalue
1.Bookvalueattheendoftheyear105,730,781.63
2.Bookvalueatthebeginningoftheyear115,993,390.19

(2)Investmentpropertieswithoutcertificateoftitle

RMB

ItemBookvalueReasonsforfailuretoobtainthecertificateoftitle
Housesandbuildings10,174,628.79Warrantsnotobtainedforhistoricalreasons

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(V)Notestofinancialstatements-continued

13.Fixedassets

(1)Fixedassets

RMB

ItemBuildingsandconstructionsMachineryequipmentTransportationequipmentElectronicequipmentandOthersTotal
I.Totaloriginalbookvalue
1.Balanceatthebeginningoftheyear737,314,323.442,742,755,668.6017,296,480.9744,961,075.883,542,327,548.89
2.Increaseinthecurrentyear-10,670,402.981,769,234.301,920,350.2614,359,987.54
(1)Purchase-5,699,245.911,462,223.021,920,350.269,081,819.19
(2)Transferfromconstructioninprogress-4,971,157.07307,011.28-5,278,168.35
(3)Otherchanges-----
3.Decreaseinthecurrentyear1,200,082.6650,002,603.71899,097.771,561,435.5953,663,219.73
(1)Disposalorscrapping1,200,082.6650,002,603.71899,097.771,561,435.5953,663,219.73
(2)Otherchanges-----
4.Balanceattheendoftheyear736,114,240.782,703,423,467.8718,166,617.5045,319,990.553,503,024,316.70
II.Accumulateddepreciation
1.Balanceatthebeginningoftheyear212,518,046.331,378,019,063.839,666,345.3136,492,325.521,636,695,780.99
2.Increaseinthecurrentyear23,096,381.84199,623,463.692,160,850.053,486,951.33228,367,646.91
(1)Provision23,096,381.84199,623,463.692,160,850.053,486,951.33228,367,646.91
(2)Otherchanges-----
3.Decreaseinthecurrentyear402,358.8345,088,586.69753,558.591,310,319.8547,554,823.96
(1)Disposalorscrapping402,358.8345,088,586.69753,558.591,310,319.8547,554,823.96
(2)Otherchanges-----
4.Balanceattheendoftheyear235,212,069.341,532,553,940.8311,073,636.7738,668,957.001,817,508,603.94
III.Provisionforimpairment
1.Balanceatthebeginningoftheyear9,919,769.4221,721,908.037,228.57430,017.9732,078,923.99
2.Increaseinthecurrentyear-----
(1)Provision-----
3.Decreaseinthecurrentyear99,508.163,643,617.601,102.16133,587.123,877,815.04
(1)Disposalorscrapping99,508.163,643,617.601,102.16133,587.123,877,815.04
4.Balanceattheendoftheyear9,820,261.2618,078,290.436,126.41296,430.8528,201,108.95
IV.Bookvalue
1.Bookvalueattheendoftheyear491,081,910.181,152,791,236.617,086,854.326,354,602.701,657,314,603.81
2.Bookvalueatthebeginningoftheyear514,876,507.691,343,014,696.747,622,907.098,038,732.391,873,552,843.91

(2)Fixedassetswithoutcertificateoftitle

RMB

ItemBookvalueReasonsforfailuretoobtainthecertificateoftitle
Housesandbuildings10,438,495.07Warrantsnothandledforhistoricalreasons

(3)FixedassetsofmortgageandguaranteeAsatDecember31,2025,theGroup'sfixedassetsmortgagedforbankborrowingsaredetailedinNote(V)21"AssetswithRestrictedOwnershiporRightofUse".

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(V)Notestofinancialstatements-continued

14.Constructioninprogress

14.1Summaryofconstructioninprogress

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Constructioninprogress179,954,389.785,814,012.03

14.2Constructioninprogress

(1)Statusofconstructioninprogress

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
BookbalanceProvisionforimpairmentNetbookvalueBookbalanceProvisionforimpairmentNetbookvalue
Installationofmachineryequipment179,954,389.78-179,954,389.785,814,012.03-5,814,012.03

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(V)Notestofinancialstatements-continued

14.2Statusofconstructioninprogress-continued

(2)Changesinmajorprojectsunderconstructioninthecurrentyear

RMB

ProjectBudgetBeginningbalanceIncreaseinthecurrentyearAmounttransferredtofixedassetsinthecurrentyearOtherdecreasesincurrentyearEndingbalanceProportionoftheprojectaccumulativeinputinbudget(%)Progressofconstruction(%)AccumulatedcapitalizationamountofinterestIncluding:theamountofthecapitalizedinterestsinthecurrentyearCapitalizationrateofinterestinthisyear(%)Sourceoffunds
1.49m-widepolarizerproductionlineproject(Line8)1,333,600,000.00-179,954,389.78--179,954,389.7813.4913.49176,406.29176,406.292.24Self-ownedfundsandborrowings

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(V)Notestofinancialstatements-continued

15.Right-of-useassets

RMB

ItemBuildingsandconstructionsMachineryequipmentTotal
I.Totaloriginalbookvalue:
1.Balanceatthebeginningoftheyear36,483,426.471,799,631.6438,283,058.11
2.Increaseinthecurrentyear9,977,227.431,438,279.2811,415,506.71
(1)Addition9,977,227.431,438,279.2811,415,506.71
3.Decreaseinthecurrentyear1,520,405.161,249,146.482,769,551.64
(1)Terminationofleases1,520,405.161,249,146.482,769,551.64
4.Balanceattheendoftheyear44,940,248.741,988,764.4446,929,013.18
II.Accumulateddepreciation
1.Balanceatthebeginningoftheyear21,398,599.291,546,340.9622,944,940.25
2.Increaseinthecurrentyear9,120,156.88738,624.099,858,780.97
(1)Provision9,120,156.88738,624.099,858,780.97
3.Decreaseinthecurrentyear1,520,405.161,249,146.482,769,551.64
(1)Terminationofleases1,520,405.161,249,146.482,769,551.64
4.Balanceattheendoftheyear28,998,351.011,035,818.5730,034,169.58
III.Provisionforimpairment
1.Balanceatthebeginningoftheyear---
2.Increaseinthecurrentyear---
(1)Provision---
3.Decreaseinthecurrentyear---
4.Balanceattheendoftheyear---
IV.Bookvalue
1.Bookvalueattheendoftheyear15,941,897.73952,945.8716,894,843.60
2.Bookvalueatthebeginningoftheyear15,084,827.18253,290.6815,338,117.86

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(V)Notestofinancialstatements-continued

16.Intangibleassets

(1)Detailsofintangibleassets

RMB

ItemLanduserightsSoftwarePatentrightTotal
I.Totaloriginalbookvalue
1.Balanceatthebeginningoftheyear48,258,239.0022,819,127.7011,825,200.0082,902,566.70
2.Increaseinthecurrentyear-471,775.41-471,775.41
(1)Purchase-471,775.41-471,775.41
3.Decreaseinthecurrentyear----
4.Balanceattheendoftheyear48,258,239.0023,290,903.1111,825,200.0083,374,342.11
II.Accumulatedaccumulation
1.Balanceatthebeginningoftheyear17,057,278.9918,812,295.7611,825,200.0047,694,774.75
2.Increaseinthecurrentyear891,565.323,563,403.84-4,454,969.16
(1)Provision891,565.323,563,403.84-4,454,969.16
3.Decreaseinthecurrentyear----
4.Balanceattheendoftheyear17,948,844.3122,375,699.6011,825,200.0052,149,743.91
III.Provisionforimpairment
1.Balanceatthebeginningoftheyear----
2.Increaseinthecurrentyear----
3.Decreaseinthecurrentyear----
4.Balanceattheendoftheyear----
IV.Bookvalue
1.Bookvalueattheendoftheyear30,309,394.69915,203.51-31,224,598.20
2.Bookvalueatthebeginningoftheyear31,200,960.014,006,831.94-35,207,791.95

AsatDecember31,2025,fortheintangibleassetspledgedbytheGroupduetobankborrowings,pleaserefertoNote(V),21"Assetswithrestrictedownershiporrightofuse"fordetails.

17.Goodwill

(1)Originalbookvalueofgoodwill

RMB

NameoftheinvesteesormattersforminggoodwillBalanceatthebeginningoftheyearIncreaseincurrentyearDecreaseincurrentyearBalanceasattheendofthecurrentyear
SAPOPhotoelectric9,614,758.55--9,614,758.55
ShenzhenMeibainianGarmentCo.,Ltd.2,167,341.21--2,167,341.21
Total11,782,099.76--11,782,099.76

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(V)Notestofinancialstatements-continued

17.Goodwill-continued

(2)Provisionforimpairmentofgoodwill

RMB

NameoftheinvesteesormattersforminggoodwillBalanceatthebeginningoftheyearIncreaseincurrentyearDecreaseincurrentyearBalanceasattheendofthecurrentyear
SAPOPhotoelectric9,614,758.55--9,614,758.55
ShenzhenMeibainianGarmentCo.,Ltd.2,167,341.21--2,167,341.21
Total11,782,099.76--11,782,099.76

18.Long-termdeferredexpenses

RMB

ItemBalanceatthebeginningoftheyearIncreaseinthecurrentyearAmortizationamountforthecurrentyearOtherdecreasesBalanceasattheendofthecurrentyear
Decorationandfacilityrenovationcosts6,084,115.872,653,265.771,706,534.63-7,030,847.01

19.Deferredtaxassetsanddeferredtaxliabilities

(1)Deferredtaxassetswithoutoffset

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
DeductibletemporarydifferencesDeferredtaxAssetsDeductibletemporarydifferencesDeferredtaxAssets
Provisionforcreditlosses47,068,758.518,605,770.4555,500,808.399,874,641.13
Provisionforassetimpairment151,835,215.2322,775,282.28146,194,722.6821,929,208.40
Unrealizedprofitsofinternaltransactions1,967,734.40295,160.162,056,848.93308,527.34
Employeecompensationpayable4,469,827.001,117,456.754,173,800.001,043,450.00
Deferredincome83,392,067.0712,508,810.0695,821,558.5814,373,233.79
Deductiblelosses84,464,489.2412,669,673.3896,771,113.5214,515,667.03
Fairvaluechangesofinvestmentsinotherequityinstruments14,831,681.503,707,920.3814,831,681.503,707,920.38
Leaseliabilities17,683,257.082,907,352.6016,381,050.712,457,157.61
Changesinfairvalueofderivativefinancialliabilities3,362,200.19504,330.031,278,559.35191,783.90
Provision14,370,007.842,155,501.189,451,090.401,417,663.56
Total423,445,238.0667,247,257.27442,461,234.0669,819,253.14

BasedontheGroup'sprofitforecastforthefutureperiods,theGroupbelievesthatitishighlyprobabletoobtainsufficienttaxableincometoutilizetheabove-mentioneddeductibletemporarydifferencesanddeductiblelossesinthefutureperiods,sotherelevantdeferredtaxassetsarerecognized.

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(V)Notestofinancialstatements-continued

19.Deferredtaxassetsanddeferredtaxliabilities-continued

(2)Deferredtaxliabilitieswithoutoffset

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
TaxabletemporarydifferencesDeferredtaxLiabilitiesTaxabletemporarydifferencesDeferredtaxLiabilities
Differencebetweeninitialrecognitioncostandtaxbaseoflong-termequityinvestments62,083,693.3615,520,923.3462,083,693.3615,520,923.34
Fairvaluechangesofinvestmentsinotherequityinstruments152,077,743.7438,019,435.94158,219,043.7439,554,760.94
Rentreceivable6,414,441.921,603,610.488,532,598.562,133,149.64
Right-of-useassets16,894,843.602,784,125.4115,338,117.862,300,717.68
Changesinfairvalueoffinancialassetsheldfortrading2,425,205.47606,301.37--
Total239,895,928.0958,534,396.54244,173,453.5259,509,551.60

(3)Deferredtaxassetsorliabilitieslistednetamountafterwrite-offs

RMB

ItemDeductionamountofdeferredtaxassetsandliabilitiesattheendofthecurrentyearEndingbalanceofdeferredtaxassetsorliabilitiesafterwrite-offofthecurrentyearDeductionamountofdeferredtaxassetsandliabilitiesattheendofthepreviousyearBalanceofdeferredtaxassetsorliabilitiesafteroffsetattheendofthepreviousyear
Deferredtaxassets(11,469,966.38)55,777,290.89(10,898,741.94)58,920,511.20
Deferredtaxliabilities(11,469,966.38)47,064,430.16(10,898,741.94)48,610,809.66

(4)Unrecognizeddeferredtaxassets

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Deductibletemporarydifferences9,402,132.7715,750,990.01
Deductiblelosses325,441,799.20365,594,502.67
Total334,843,931.97381,345,492.68

(5)Deductiblelossesfromunrecognizeddeferredtaxassetswillbeexpiredinthefollowingyears

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
2025--
2026126,219,867.4683,168,900.37
202710,067,397.5010,067,397.50
202813,479,346.6613,479,346.66
202985,276,427.23132,565,644.36
203014,316,545.7075,352,814.24
2031years--
2032--
203350,960,399.5450,960,399.54
2034--
2035years25,121,815.11-
Total325,441,799.20365,594,502.67

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(V)Notestofinancialstatements-continued

20.Othernon-currentassets

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
BookbalanceProvisionforimpairmentBookvalueBookbalanceProvisionforimpairmentBookvalue
Advancesforprojectsandequipment11,326,699.63-11,326,699.632,033,785.64-2,033,785.64
Investmentfundstobeliquidated25,760,086.27-25,760,086.2725,760,086.27-25,760,086.27
Total37,086,785.90-37,086,785.9027,793,871.91-27,793,871.91

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(V)Notestofinancialstatements-continued

21.Assetswithrestrictionsontheownershiporuseright

ItemAttheendofcurrentyearAttheendofthepreviousyear
BookbalanceBookvalueRestrictedtypeRestrictedconditionBookbalanceBookvalueRestrictedtypeRestrictedcondition
Monetaryfunds685,396.65685,396.65RestrictedrightofuseAccountfreezingandguarantee38,844,838.9638,844,838.96RestrictedrightofuseAccountfreezingandguarantee
Notesreceivable53,001,736.0753,001,736.07RestrictedrightofuseBillendorsementhasnotbeenderecognized30,291,952.7630,291,952.76RestrictedrightofuseBillendorsementhasnotbeenderecognized
Fixedassets581,895,750.64432,224,852.53RestrictedrightofuseMortgage581,895,750.64448,156,480.33RestrictedrightofuseMortgage
Intangibleassets44,770,083.0030,309,394.69RestrictedrightofuseMortgage44,770,083.0031,200,960.01RestrictedrightofuseMortgage
Total680,352,966.36516,221,379.94695,802,625.36548,494,232.06

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(V)Notestofinancialstatements-continued

22.Derivativefinancialliabilities

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Forwardforeignexchangecontracts4,071,800.191,278,559.35

23.Notespayable

RMB

BilltypeBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Bankacceptancebills-31,095,540.29

TheGrouphadnonotespayableduebutunpaidattheendoftheyear.

24.Accountspayable

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Paymentforgoods315,492,749.54282,510,771.35
Servicefee17,809,719.5915,645,017.04
Paymentforoutsourcingprocessing8,954,077.383,489,364.64
Royalties1,949,556.002,006,578.00
Others450,733.381,160,849.52
Total344,656,835.89304,812,580.55

AsatDecember31,2025,theGrouphadnosignificantaccountspayablewithagingofover1yearoroverdue.

25.Advancesfromcustomers

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Rentandothers769,227.071,051,491.96

AsatDecember31,2025,theGrouphadnosignificantadvancesfromcustomerswithagingofover1year.

26.Contractliabilities

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Paymentforgoods3,132,419.01490,562.97

AsatDecember31,2025,theGrouphadnosignificantcontractliabilitieswithagingofmorethan1year.

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(V)Notestofinancialstatements-continued

27.Employeecompensationpayable

(1)Presentationofemployeecompensationpayable

RMB

ItemBalanceatthebeginningoftheyearIncreaseincurrentyearDecreaseincurrentyearBalanceasattheendofthecurrentyear
Short-termcompensation53,625,879.32227,614,006.70230,183,092.6451,056,793.38
Post-employmentbenefits-definedcontributionplans700,000.0022,812,522.2623,512,522.26-
Dismissalwelfare2,359,410.60-768,888.241,590,522.36
Total56,685,289.92250,426,528.96254,464,503.1452,647,315.74

(2)Presentationofshort-termcompensation

RMB

ItemBalanceatthebeginningoftheyearIncreaseincurrentyearDecreaseincurrentyearBalanceasattheendofthecurrentyear
Salaries,bonuses,allowancesandsubsidies51,400,482.93199,876,062.05202,797,724.3848,478,820.60
Employeewelfareexpenses-7,519,689.147,490,204.6429,484.50
Socialinsurancepremiums-5,173,319.355,173,319.35-
Including:medicalinsurancepremiums-3,818,635.713,818,635.71-
Maternityinsurancepremiums-640,272.20640,272.20-
Work-relatedinjuryinsurancepremiums-714,411.44714,411.44-
Housingprovidentfund-10,180,132.0910,180,132.09-
Unionfundsandemployeeeducationfunds2,225,396.394,864,804.074,541,712.182,548,488.28
Total53,625,879.32227,614,006.70230,183,092.6451,056,793.38

(3)Presentationofdefinedcontributionplans

RMB

ItemBalanceatthebeginningoftheyearIncreaseincurrentyearDecreaseincurrentyearBalanceasattheendofthecurrentyear
Basicendowmentinsurancepremiums700,000.0019,234,522.6919,934,522.69-
Supplementaryendowmentinsurancepremiums-2,800,406.182,800,406.18-
Unemploymentinsurancepremium-777,593.39777,593.39-
Total700,000.0022,812,522.2623,512,522.26-

TheGroupparticipatesintheendowmentinsuranceandunemploymentinsuranceplansestablishedbygovernmentagenciesinaccordancewiththeregulations.Accordingtotheplans,theGroupmakescontributionstosuchplansinaccordancewiththeprescribedstandards.Exceptfortheabovemonthlycontributions,theGrouphasnofurtherpaymentobligations.Thecorrespondingexpensesareincludedinthecurrentprofitorlossorthecostofrelatedassetswhenincurred.TheGroupshallpayRMB19,234,522.69andRMB777,593.39totheendowmentinsuranceandunemploymentinsuranceplansrespectivelyforthecurrentyear(2024:RMB15,756,686.06andRMB691,145.34).AsofDecember31,2025,theGrouphasfullypaidtheamountofpensioninsuranceandunemploymentinsuranceplanspayableduringthereportingperiod.

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(V)Notestofinancialstatements-continued

28.Taxespayable

RMB

TaxationBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Corporateincometax3,763,975.344,720,967.29
Individualincometax670,592.00751,443.34
Value-addedtax251,065.10592,143.28
Othertaxes1,121,186.11789,176.93
Total5,806,818.556,853,730.84

29.Otherpayables

(1)Otherpayablesbynatureofpayment

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Engineeringequipmentpayment43,922,031.0656,213,373.95
Currentaccounts46,981,495.0053,333,604.97
Guaranteeanddeposits57,213,864.0437,775,687.75
Others11,708,844.6312,974,323.31
Total159,826,234.73160,296,989.98

(2)AsatDecember31,2025,theGrouphadnosignificantotherpayableswithagingofmorethan1yearoroverdue.

30.Non-currentliabilitiesmaturingwithinoneyear

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Long-termborrowingsmaturingwithinoneyear(Note(V),32)48,033,108.5847,011,978.04
Leaseliabilitiesmaturingwithinoneyear(Note(V),33)7,267,259.916,884,486.59
Estimatedliabilitiesduewithinoneyear10,664,297.799,451,090.40
Total65,964,666.2863,347,555.03

31.Othercurrentliabilities

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Endorsedbutundueacceptancebills53,001,736.0730,291,952.76
Payablesforreturnedgoods31,679,349.1523,747,757.33
Productqualityassurance3,705,710.05-
Outputtaxtobecarriedforwardinthevalue-addedtax-32,312.18
Total88,386,795.2754,072,022.27

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(V)Notestofinancialstatements-continued

32.Long-termborrowings

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyearInterestraterange
Guaranteedborrowings(Note)167,899,085.74209,400,848.043.26%-3.31%
Creditborrowings141,852,077.65-2.24%
Total309,751,163.39209,400,848.04
Less:long-termborrowingsmaturingwithinoneyear48,033,108.5847,011,978.04
Long-termborrowingsdueafteroneyear261,718,054.81162,388,870.00

Note:SAPOPhotoelectric,asubsidiaryoftheCompany,obtainedtheloanbymortgagingtherealestatesuchastheplantitheld,andtheCompanyandHengmeiOptoelectronicsCo.,Ltd.provided60%and40%jointandseveralliabilityguaranteefortheloanrespectively.

33.Leaseliabilities

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Leaseliabilities17,683,257.0816,381,050.71
Total17,683,257.0816,381,050.71
Less:Leaseliabilitymaturingwithinoneyear7,267,259.916,884,486.59
Leaseliabilitiesdueafteroneyear10,415,997.179,496,564.12

TheGroup'sleaseliabilitiesarepresentedasfollowsaccordingtothematurityofundiscountedremainingcontractualobligations:

RMB

Within1month1-3months3-12months1-5yearsOver5yearsTotal
Balanceasattheendofthecurrentyear1,049,935.942,078,351.344,688,581.149,705,967.441,937,423.1319,460,258.99
Balanceasattheendofthepreviousyear1,105,714.512,425,877.503,879,671.647,808,943.063,098,158.9718,318,365.68

34.Deferredincome

RMB

ItemBalanceatthebeginningoftheyearIncreaseincurrentyearDecreaseincurrentyearBalanceasattheendofthecurrentyearFormationcauses
Governmentsubsidies96,349,196.263,940,329.8416,819,577.0783,469,949.03Governmentsubsidiesreceived

35.Sharecapital

RMB

ItemBalanceatthebeginningoftheyearChangesinthecurrentyearBalanceasattheendofthecurrentyear
NewsharesissuedBonusissueConversionofprovidentfundintosharesOthersSub-total
Totalshares506,521,849.00-----506,521,849.00

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(V)Notestofinancialstatements-continued

36.Capitalreserve

RMB

ItemBalanceatthebeginningoftheyearIncreaseincurrentyearDecreaseincurrentyearBalanceasattheendofthecurrentyear
Equitypremium1,826,482,608.54--1,826,482,608.54
Othercapitalreserves135,117,216.09--135,117,216.09
Total1,961,599,824.63--1,961,599,824.63

37.Othercomprehensiveincome

RMB

ItemBalanceatthebeginningoftheyearAmountbeforeincometaxthisyearAmountforthecurrentyearBalanceasattheendofthecurrentyear
Less:theamountincludedinothercomprehensiveincomeinpriorperiodandtransferredtocurrentprofitorlossLess:retainedincomeincludedinothercomprehensiveincomeinpriorperiodsandtransferredtocurrentprofitorlossLess:incometaxexpensesAttributabletoparentcompanyaftertaxAttributabletominorityshareholdersaftertax
I.Othercomprehensiveincomethatcannotbereclassifiedintoprofitorloss106,877,807.32(6,141,300.00)--(1,535,325.00)(4,605,975.00)-102,271,832.32
1.Changesinfairvalueofotherequityinstrumentinvestments106,877,807.32(6,141,300.00)--(1,535,325.00)(4,605,975.00)-102,271,832.32
II.Othercomprehensiveincometobereclassifiedintoprofitorlosslater--------
Totalofothercomprehensiveincome106,877,807.32(6,141,300.00)--(1,535,325.00)(4,605,975.00)-102,271,832.32

38.Surplusreserves

RMB

ItemBalanceatthebeginningoftheyearIncreaseincurrentyearDecreaseincurrentyearBalanceasattheendofthecurrentyear
Statutorysurplusreserve104,262,315.642,543,589.29-106,805,904.93

39.Undistributedprofits

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Undistributedprofitsatthebeginningoftheyearbeforeadjustment272,608,113.66216,160,896.14
Totaladjustedundistributedprofitsatthebeginningoftheyear--
Adjustedundistributedprofitatthebeginningoftheyear272,608,113.66216,160,896.14
Plus:netprofitattributabletoshareholdersoftheparentcompanyinthecurrentyear68,418,663.0289,371,134.24
Less:Withdrawalofstatutorysurplusreserves2,543,589.29-
Distributionofdividendsofordinaryshares(Note)35,963,029.0932,923,916.72
Undistributedprofitsattheendoftheyear302,520,158.30272,608,113.66

Note:AccordingtotheresolutionoftheGeneralMeetingofShareholdersonMay19,2025,theCompanydistributedacashdividendofRMB0.71(includingtax)forevery10shares,totallyRMB35,963,029.09(includingtax)basedonthesharecapitalof506,521,849sharesasofDecember31,2024.

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(V)Notestofinancialstatements-continued

40.Operatingrevenueandoperatingcosts

(1)Operatingrevenueandoperatingcosts

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
RevenueCostRevenueCost
Primarybusiness3,177,244,941.552,708,436,607.173,275,150,434.052,748,312,498.75
Otherbusiness64,135,489.0747,931,069.6460,132,574.6347,547,436.07
Total3,241,380,430.622,756,367,676.813,335,283,008.682,795,859,934.82

(2)Primarybusinessbyproduct

RMB

ProducttypeAmountforthecurrentyearAmountforthepreviousyear
IncomefromprimarybusinessCostofprimarybusinessIncomefromprimarybusinessCostofprimarybusiness
Polarizersalesbusiness3,067,530,570.032,682,406,961.723,161,332,478.082,720,719,735.99
Propertyleasingandothers109,714,371.5226,029,645.45113,817,955.9727,592,762.76
Total3,177,244,941.552,708,436,607.173,275,150,434.052,748,312,498.75

(3)Primarybusinessbyregion

RMB

MainbusinessareaAmountforthecurrentyearAmountforthepreviousyear
IncomefromprimarybusinessCostofprimarybusinessIncomefromprimarybusinessCostofprimarybusiness
Domestic2,807,874,318.292,418,697,219.083,113,083,695.452,621,542,725.57
Overseas369,370,623.26289,739,388.09162,066,738.60126,769,773.18
Total3,177,244,941.552,708,436,607.173,275,150,434.052,748,312,498.75

(4)DescriptionofperformanceobligationsTheGroup'sbusinessesaremainlytheproductionandsalesofpolarizers.Forgoodssoldtocustomers,theGrouprecognizesrevenuewhentherightofcontrolofthegoodsistransferred,thatis,whenthegoodsaredeliveredtothedesignatedplaceoftheotherpartyandsignedbytheotherparty.TheGrouprecognizesareceivablewhenthegoodsaredeliveredtothecustomerbecausethedeliveryofthegoodstothecustomerrepresentsanunconditionalrighttoreceivethecontractualconsideration,andthematurityofthepaymentdependsonlyonthepassageoftime.Whenthecustomermakesaprepaymentforgoods,theGrouprecognizesthetransactionamountreceivedasacontractliabilityandrecognizestherevenuewhenthegoodsaredeliveredtothecustomer.TheGroupprovidespropertyservicestocustomers,andsuchservicesrepresentperformanceobligationsperformedoveraperiodoftime.Forpropertyservice,theGrouprecognizesrevenueinthecourseofprovidingpropertyservice.

(5)DescriptionofallocationtoremainingperformanceobligationsAsofDecember31,2025,theamountofcontractliabilitiescorrespondingtotheperformanceobligationsthattheGrouphasalreadysignedcontractsforbuthasnotyetfulfilledorhasnotfullyfulfilledisRMB3,132,419.01,whichwillberecognizedasrevenuewhenthecustomerobtainsthecontrolovergoods.

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(V)Notestofinancialstatements-continued

41.Taxesandsurcharges

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Propertytaxes8,545,385.607,240,576.84
Urbanmaintenanceandconstructiontax375,243.29397,643.06
Educationsurcharge267,606.86287,055.45
Othertaxes2,354,910.042,310,230.30
Total11,543,145.7910,235,505.65

42.Sellingexpenses

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Employeecompensation13,859,259.0015,245,568.88
Salesservicefee14,066,794.7219,491,891.54
Businessentertainmentexpenses1,130,045.941,117,751.47
Others5,603,934.086,405,391.58
Total34,660,033.7442,260,603.47

43.G&Aexpenses

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Employeecompensation91,924,691.0490,301,081.26
Depreciationcost11,209,271.6710,962,929.91
Professionalservicefees5,540,619.7710,520,874.85
Amortizationofintangibleassets4,454,969.164,575,688.69
Propertyleasingandutilities2,751,267.572,441,383.42
Businessentertainmentexpenses649,200.791,193,877.91
Others12,082,069.8014,351,985.54
Total128,612,089.80134,347,821.58

44.R&Dexpenses

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Employeecompensation17,031,748.8915,844,594.49
Materialconsumption81,524,391.1883,483,679.76
Depreciationcost2,056,127.283,275,385.23
Others3,362,571.651,208,163.43
Total103,974,839.00103,811,822.91

TheGrouphasnodevelopmentexpensesofR&Dprojectsthatmeetthecapitalizationrequirements.

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(V)Notestofinancialstatements-continued

45.Financialexpenses

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Interestexpenses(Note)7,121,172.5917,858,022.73
Less:capitalizedinterest176,406.29-
Interestincome4,941,271.947,272,362.76
Exchangedifferences9,266,532.25(3,772,940.12)
Servicefeeandothers1,969,682.475,308,436.20
Total13,239,709.0812,121,156.05

Note:Theinterestexpensesoftheleaseliabilitiesin2025isRMB715,255.07.

46.Otherincome

RMB

ClassificationbynatureAmountforthecurrentyearAmountforthepreviousyear
Transfer-inofdeferredincome16,497,827.0716,401,790.63
Supportfundsforindustrydevelopment(Note1)5,200,000.007,988,744.44
Supportfundsforenterprisedevelopment(Note2)124,784.96989,098.49
Taxincentives18,484,146.1016,014,588.22
Others538,576.4089,885.75
Total40,845,334.5341,484,107.53

Note1:ThesupportfundsofindustrydevelopmentmainlyincludethesubsidyforthegreenmanufacturingpilotdemonstrationprojectoftheIndustryandInformationTechnologyBureauofShenzhenMunicipalityandthesubsidyfortheatmosphericenvironmentqualityimprovementoftheEcologyandEnvironmentBureauofShenzhenMunicipality.Note2:Thesupportfundsofenterprisedevelopmentmainlyincludethesocialsecurityandpostsubsidiesforemployingpeopleliftedoutofpovertyandtheone-timeemploymentexpansionsubsidyfor2025fromtheHumanResourcesBureauofPingshanDistrict,ShenzhenMunicipality.

47.Investmentincome(loss)

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Lossesonlong-termequityinvestmentsaccountedforunderequitymethod(7,010,989.13)(10,701,895.08)
Investmentincomefromdisposaloflong-termequityinvestments-833,613.28
Investmentincomeobtainedduringholdingthefinancialassetsheldfortrading14,540,478.8213,846,181.90
Investmentlossfromderecognitionofderivativefinancialliabilities(10,832,640.65)(6,454,000.00)
Dividendincomefrominvestmentsinotherequityinstrumentduringtheholdingperiod2,105,147.022,310,786.01
Total(1,198,003.94)(165,313.89)

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(V)Notestofinancialstatements-continued

48.Gains(losses)fromchangesinfairvalue

RMB

SourcesofgainsfromchangesinfairvalueAmountforthecurrentyearAmountforthepreviousyear
Financialassetsheldfortrading2,425,205.472,413,062.80
Derivativefinancialliabilities(3,362,200.19)(1,278,559.35)
Total(936,994.72)1,134,503.45

49.Creditimpairmentgains

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Gainsonimpairmentofaccountsreceivable(Note(V),4(2))8,504,689.865,093,840.35
Gainsonimpairmentofotherreceivables(Note(V),7(3))(57,097.06)6,606.31
Total8,447,592.805,100,446.66

50.Assetimpairmentgains(losses)

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Inventorydepreciationloss(138,340,722.92)(123,538,967.06)
Fixedassetimpairmentloss-(6,863,474.54)
Otherassetimpairmentloss-(2,020,667.15)
Total(138,340,722.92)(132,423,108.75)

51.Non-operatingrevenue

RMB

ItemAmountforthecurrentyearAmountforthepreviousyearAmountincludedinthecurrentnon-recurringprofitorloss
Gainsfromunclaimedpayables5,108,649.831,439,654.315,108,649.83
Liquidateddamages1,121,434.64275,672.991,121,434.64
Insurancecompensation20,692.2224,911.3120,692.22
Gainsfromthedamageandscrappingofnon-currentassets13,057.39341.4213,057.39
Others131,900.3764,506.89131,900.37
Total6,395,734.451,805,086.926,395,734.45

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(V)Notestofinancialstatements-continued

52.Non-operatingexpenses

RMB

ItemAmountforthecurrentyearAmountforthepreviousyearAmountincludedinthecurrentnon-recurringprofitorloss
Lossesonscrappingofnon-currentassets39,914.1751,361.8739,914.17
Amercementoutlay3,390.6644,000.003,390.66
Compensationexpenses842,646.03468,146.00842,646.03
Otherlosses54,912.02134,509.8454,912.02
Total940,862.88698,017.71940,862.88

53.Incometaxexpenses

(1)Listofincometaxexpenses

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Incometaxexpensesforthecurrentperiod9,673,404.678,562,225.60
Deferredtaxexpenses3,132,165.811,264,876.43
Total12,805,570.489,827,102.03

(2)Adjustmentprocessofaccountingprofitsandincometaxexpenses

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Totalprofits108,419,113.31152,883,868.41
Incometaxexpensescalculatedatstatutorytaxrate27,104,778.3338,220,967.10
Influenceofdifferenttaxratesapplicabletosubsidiaries(8,786,686.81)(15,431,945.83)
Influenceofadjustmentstotheincometaxfortheprioryears954,565.40(27,243.77)
Influenceofnon-taxableincome(1,122,137.29)(3,079,800.79)
Influenceofnondeductiblecosts,expensesandlosses1,777,866.905,591,965.60
Utilizationofunrecognizeddeductiblelossesanddeductibletemporarydifferencesfrompriorperiodsandtheirtaxeffects(1,383,582.51)(7,061,678.51)
Taxeffectsofunrecognizeddeductiblelossesanddeductibletemporarydifferences6,890,154.914,078,341.28
AdditionaldeductionforR&Dexpenses(12,633,463.47)(12,458,381.02)
Others4,075.02(5,122.03)
Incometaxexpenses12,805,570.489,827,102.03

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(V)Notestofinancialstatements-continued

54.Notestoitemsinstatementofcashflows

(1)CashrelatedtooperatingactivitiesOthercashreceivedrelatedtooperatingactivities

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Guaranteeanddeposit95,357,705.4230,652,489.87
Interestincome4,972,503.269,057,486.70
Governmentsubsidies9,265,114.8024,242,842.93
Currentaccountsandothers23,348,683.1023,056,150.45
Total132,944,006.5887,008,969.95

Othercashpaidrelatedtooperatingactivities

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Guaranteeanddeposit39,437,305.2457,908,823.39
Out-of-pocketexpenses49,378,916.9968,667,614.18
Currentaccountsandothers2,373,874.8527,179,768.77
Total91,190,097.08153,756,206.34

(2)CashrelatedtoinvestingactivitiesOthercashreceivedrelatedtosignificantinvestingactivities

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Structureddepositsandwealthmanagementproducts1,000,000,000.00950,000,000.00
Monetaryfund148,427,138.42747,000,000.00
Certificatesofdepositandothers709,600.00-
Total1,149,136,738.421,697,000,000.00

Othercashpaidrelatedtosignificantinvestingactivities

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Structureddepositsandwealthmanagementproducts1,150,000,000.00950,000,000.00
Monetaryfund-649,000,000.00
Forwardforeignexchangecontracts13,389,759.356,454,000.00
Total1,163,389,759.351,605,454,000.00

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(V)Notestofinancialstatements-continued

55.Notestoitemsinstatementofcashflows-continued

(2)Cashrelatedtoinvestingactivities-continuedOthercashreceivedrelatedtoinvestingactivities

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Wealthmanagementinvestment,structureddepositsandothers1,149,136,738.421,697,000,000.00

Othercashpaidrelatedtoinvestingactivities

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Structureddepositsandwealthmanagementproducts1,150,000,000.00950,000,000.00
Monetaryfund-649,000,000.00
Forwardforeignexchangecontracts13,389,759.356,454,000.00
Total1,163,389,759.351,605,454,000.00

(3)CashrelatedtofinancingactivitiesOthercashpaidrelatedtofinancingactivities

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Leasepayments12,484,469.339,508,462.57

Changesinvariousliabilitiesarisingfromfinancingactivities

RMB

ItemBalanceatthebeginningoftheyearIncreaseincurrentyearDecreaseincurrentyearBalanceasattheendofthecurrentyear
CashchangesNon-cashchangesCashchangesNon-cashchanges
Long-termborrowings(Note)209,400,848.04141,755,054.196,373,365.3447,778,104.18-309,751,163.39
Leaseliabilities(Note)16,381,050.71-12,130,761.7810,828,555.41-17,683,257.08
Total225,781,898.75141,755,054.1918,504,127.1258,606,659.59-327,434,420.47

Note:long-termborrowingsandleaseliabilitiesincludethosematuringwithinoneyear.

(4)TheGroupdoesnotpresentcashflowsonanetbasis.

(5)TheGrouphasnosignificantactivitiesthatdonotinvolvecurrentcashreceiptsandpaymentsbutaffectthefinancialpositionoftheenterpriseormayaffectthecashflowsoftheenterpriseinthefuture.

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(V)Notestofinancialstatements-continued

55.Supplementaryinformationtostatementofcashflows

(1)Supplementaryinformationtothestatementofcashflows

RMB

SupplementaryinformationAmountforthecurrentyearAmountforthepreviousyear
1.Adjustmentofnetprofittocashflowsfromoperatingactivities:
Netprofit95,613,542.83143,056,766.38
Plus:provisionforassetsimpairment138,340,722.92132,423,108.75
Provisionforcreditlosses(8,447,592.80)(5,100,446.66)
Depreciationoffixedassetsandinvestmentproperties237,945,710.46237,717,328.95
Depreciationofright-of-useassets9,858,780.979,651,343.75
Amortizationofintangibleassets4,454,969.164,575,688.69
Amortizationoflong-termdeferredexpenses1,706,534.632,934,915.74
Losses(gains)fromdisposaloffixedassets,intangibleassetsandotherlong-termassets(1,164,099.59)-
Losses(gains)onretirementofnon-currentassets26,856.7851,020.45
Lossesfromchangesinfairvalue(income)936,994.72(1,134,503.45)
Financialexpenses(income)20,713,242.0117,301,161.66
Investmentloss(income)1,198,003.94165,313.89
Decrease(increase)indeferredtaxassets3,143,220.311,684,854.22
Increase(decrease)indeferredtaxliabilities(11,054.50)(419,977.79)
Decrease(increase)ininventories(233,226,377.55)(176,903,495.67)
Decrease(increase)inoperatingreceivables(34,639,831.51)29,434,877.96
Increase(decrease)inoperatingpayables111,343,974.48(164,173,431.78)
Netcashflowsfromoperatingactivities347,793,597.26231,264,525.09
2.Netchangesincashandcashequivalents:
Endingbalanceofcashandcashequivalents449,257,554.81302,084,839.35
Less:beginningbalanceofcashandcashequivalents302,084,839.35461,420,457.33
Netincrease(decrease)incashandcashequivalents147,172,715.46(159,335,617.98)

(2)Compositionofcashandcashequivalents

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
I.Cash449,257,554.81302,084,839.35
Including:cashonhand15,510.214,751.69
Unrestrictedbankdeposits449,242,044.60302,080,087.66
Otherunrestrictedmonetaryfunds--
II.Cashequivalents--
III.Balanceofcashandcashequivalentsattheendoftheyear449,257,554.81302,084,839.35

(3)Asoftheendoftheyear,theGrouphadnocashandcashequivalentswithrestrictedusethatwerestillpresentedassuch.

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(V)Notestofinancialstatements-continued

55.Supplementaryinformationtothestatementofcashflows-continued

(4)Monetaryfundsotherthancashandcashequivalents

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyearReason
BillandL/Cguarantee536.3935,443,338.96Notavailableforpaymentatanytime
Interestondemandandagreementdepositsand7-daynoticedeposits21,498.9231,765.51Notavailableforpaymentatanytime
Others684,860.263,401,500.00Accountfreezing
Total706,895.5738,876,604.47

56.Foreigncurrencymonetaryitems

(1)Foreigncurrencymonetaryitems

RMB

ItemForeigncurrencybalanceattheendofthecurrentyearExchangerateofconversionConversionattheendofthecurrentyearRMBbalance
Monetaryfunds158,222,232.79
Including:USD13,242,824.567.028893,081,165.25
JPY1,437,610,760.100.044864,400,649.22
HKD819,754.120.9032740,418.32
Accountsreceivable77,112,536.74
Including:USD10,935,180.157.028876,861,194.24
HKD278,280.000.9032251,342.50
Otherreceivables495,717.51
Including:USD70,526.627.0288495,717.51
Accountspayable178,353,317.24
Including:USD242,062.437.02881,701,408.41
JPY3,943,122,965.000.0448176,651,908.83
Otherpayables6,125,444.55
Including:USD867,786.007.02886,099,494.24
JPY15,131.000.0448677.87
HKD27,981.000.903225,272.44

57.Leases

(1)AsalesseeTheGroupleasesanumberofassets,includinghousesandbuildings,forleasetermsof1to10years.Theaboveright-of-useassetscannotbeusedforpurposessuchasborrowingmortgages,guarantees,etc.TheGrouphadnovariableleasepaymentsthatwerenotincludedinthemeasurementofleaseliabilities.

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(V)Notestofinancialstatements-continued

57.Leases-continued

(1)Asalessee-continuedTheshort-termleaseexpensessubjecttosimplifiedaccountingtreatmentandrecognizedinthecurrentprofitorlossinthisyearamountedtoRMB1,218,112.00(previousyear:RMB950,508.89).ThetotalcashoutflowsrelatedtoleasesinthecurrentyearamountedtoRMB13,702,581.33(previousyear:

RMB10,458,971.46).

(2)AsalessorOperatingleaseaslessor

RMB

ItemLeaseincomeIncluding:revenuerelatedtovariableleasepaymentsnotincludedinleasereceipts
Buildingsandconstructions96,149,109.79-

TheoperatingleasesoftheGroupasthelessorarerelatedtohousesandbuildings,withleasetermsrangingfrom1to15years.TherevenuerelatedtooperatingleasesinthecurrentyearamountedtoRMB96,149,109.79(previousyear:RMB96,066,371.44),ofwhichtherevenuerelatedtovariableleasepaymentsnotincludedintheleasereceiptsamountedtoRMB0(previousyear:RMB0).

RMB

ItemUndiscountedleasereceipts
AmountattheendofcurrentyearAmountattheendofthepreviousyear
Thefirstyearafterthebalancesheetdate62,836,298.4366,825,466.35
Thesecondyearafterthebalancesheetdate42,497,987.1149,946,457.62
Thethirdyearafterthebalancesheetdate31,889,090.7131,103,495.38
Thefourthyearafterthebalancesheetdate9,303,836.508,785,825.58
Thefifthyearafterthebalancesheetdate5,911,687.526,625,510.75
Subsequentyears4,518,270.005,106,929.55
Totalundiscountedleasereceipts156,957,170.27168,393,685.23

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（VI）R&Dexpenditures

(1)Presentedbynatureofexpenses

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Employeecompensation17,031,748.8915,844,594.49
Materialconsumption81,524,391.1883,483,679.76
Depreciationcost2,056,127.283,275,385.23
Others3,362,571.651,208,163.43
Total103,974,839.00103,811,822.91
Including:expensedR&Dexpenditures103,974,839.00103,811,822.91
CapitalizedR&Dexpenditures--

(2)TheGrouphasnodevelopmentexpensesofR&Dprojectsthatmeetthecapitalizationrequirements.

(3)TheGrouphasnosignificantoutsourcedprojectsunderresearch.(VII)ChangesinthescopeofconsolidationTheCompany'ssubsidiary,ShenzhenHuaqiangHotelCo.,Ltd,completeditsliquidationanddistributionin2024andisnolongerincludedinthescopeofconsolidationthisyear.(VIII)Interestsinotherentities

1.Interestinsubsidiary

(1)Structureoftheenterprisegroup

NameofsubsidiariesMainpremiseRegisteredcapital(RMB)RegistrationplaceBusinessnatureShareholdingratiooftheCompany(%)Methodofacquisition
DirectIndirect
ShenzhenLisiIndustrialDevelopmentCo.,Ltd.ShenzhenRMB2,360,000.00ShenzhenPropertyleasing100.00-Establishment
ShenzhenShenfangPropertyManagementCo.,Ltd.ShenzhenRMB1,600,400.00ShenzhenPropertymanagement100.00-Establishment
ShenzhenMeibainianGarmentCo.Ltd.ShenzhenRMB13,000,000.00ShenzhenProductionandsalesoftextiles100.00-Establishment
ShenzhenShenfangSungangPropertyManagementCo.,Ltd.ShenzhenRMB1,000,000.00ShenzhenPropertymanagement100.00-Establishment
ShenzhenSAPOPhotoelectricCo.,Ltd.ShenzhenRMB583,333,333.00ShenzhenProductionandsalesofpolarizers60.00-Acquisition
SATO(HongKong)LimitedHongKongHKD10,000.00HongKongPolarizersales-100.00Establishment

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(VIII)Interestsinotherentities-continued

1.Interestsinsubsidiaries-continued

(2)Significantnon-wholly-ownedsubsidiaries

RMB

NameofsubsidiariesShareholdingratiobyminorityshareholdersProfitorlossattributabletominorityshareholdersinthecurrentyearDividendsdeclaredtobedistributedtominorityshareholdersinthecurrentyearBalanceofminorityinterestsattheendofthecurrentyear
ShenzhenSAPOPhotoelectricCo.,Ltd.40.00%27,194,879.81-1,310,645,603.69

(3)Keyfinancialinformationofsignificantnon-wholly-ownedsubsidiaries

RMB

ItemSAPOPhotoelectric
Balanceasattheendofthecurrentyear/AmountforthecurrentyearBalanceasattheendofthepreviousyear/Amountforthepreviousyear
Currentassets2,277,246,004.302,039,673,042.84
Non-currentassets1,960,766,749.971,998,903,130.31
Totalassets4,238,012,754.274,038,576,173.15
Currentliabilities613,303,419.14567,603,106.30
Non-currentliabilities353,456,061.45267,706,992.70
Totalliabilities966,759,480.59835,310,099.00
Operatingrevenue3,137,568,960.103,230,006,072.51
Netprofit67,987,199.53134,214,080.34
Totalcomprehensiveincome67,987,199.53134,214,080.34
Cashflowsfromoperatingactivities322,248,751.41205,666,636.23

(VIII)Interestsinotherentities-continued

2.EquityinjointventuresorassociatesSummarizedfinancialinformationofinsignificantjointventuresandassociates

RMB

ItemBalanceasattheendofthecurrentyear/AmountforthecurrentyearBalanceasattheendofthepreviousyear/Amountforthepreviousyear
Jointventures:
Totalofinvestmentbookvalue104,274,952.84111,555,887.28
Totalamountsofthefollowingitemscalculatedatshareholdingratio
-Netprofit(loss)(7,280,934.44)(10,814,606.80)
-Othercomprehensiveincome--
-Totalcomprehensiveincome(7,280,934.44)(10,814,606.80)

Associates:

Associates:
Totalofinvestmentbookvalue3,308,634.073,272,138.76
Totalamountsofthefollowingitemscalculatedatshareholdingratio
-Netprofit36,495.31112,711.72
-Othercomprehensiveincome--
-Totalcomprehensiveincome36,495.31112,711.72

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(IX)Governmentgrants

(1)AsofDecember31,2025,theGrouphadnogovernmentsubsidiesrecognizedattheamountreceivable.

(2)Liabilityitemsinvolvinggovernmentsubsidies

RMB

LiabilitiesAmountatthebeginningoftheyearSubsidiesincreasedinthecurrentyearAmountincludedinnon-operatingrevenueinthecurrentyearAmountincludedinotherincomeinthecurrentyearOtherchangesinthecurrentyearAmountattheendofcurrentyearRelatedtoassets/Relatedtoincome
Deferredincome96,349,196.263,940,329.84-16,497,827.07(321,750.00)83,469,949.03Relatedtoassets

(3)Governmentsubsidiesincludedinthecurrentprofitorloss

RMB

GrantsAmountforthecurrentyearAmountforthepreviousyear
Otherincome21,822,612.0325,379,633.56

(X)RisksassociatedwithfinancialinstrumentsTHEGROUP'SMAINFINANCIALINSTRUMENTSINCLUDEMONETARYFUNDS,FINANCIALASSETSHELDFORTRADING,NOTESRECEIVABLE,ACCOUNTSRECEIVABLE,RECEIVABLESFINANCING,OTHERRECEIVABLES,OTHEREQUITYINSTRUMENTINVESTMENTS,SHORT-TERMBORROWINGS,DERIVATIVEFINANCIALLIABILITIES,NOTESPAYABLE,ACCOUNTSPAYABLE,OTHERPAYABLES,OTHERCURRENTLIABILITIESANDLONG-TERMBORROWINGS,ETC.ATTHEENDOFTHEYEAR,THEFINANCIALINSTRUMENTSHELDBYTHEGROUPAREASFOLLOWS,ANDTHEDETAILSAREDESCRIBEDINNOTE(V).RISKSASSOCIATEDWITHTHESEFINANCIALINSTRUMENTSANDTHERISKMANAGEMENTPOLICIESADOPTEDBYTHEGROUPTOMITIGATETHESERISKSAREDESCRIBEDBELOW.THEGROUP'SMANAGEMENTMANAGESANDMONITORSTHESEEXPOSURESTOENSURETHATTHERISKSARECONTROLLEDWITHINCERTAINLIMITS.

-90-

(X)Risksassociatedwithfinancialinstruments-continued

RMB

ItemAmountattheendofcurrentyearAmountattheendofthepreviousyear
Financialassets
Measuredatfairvaluethroughcurrentprofitorloss
Financialassetsheldfortrading736,341,286.18731,419,904.42

Measuredatfairvaluethroughothercomprehensiveincome

Measuredatfairvaluethroughothercomprehensiveincome
Receivablesfinancing22,584,820.726,804,603.68
Otherequityinstrumentinvestments159,261,600.00165,402,900.00

Measuredatamortizedcosts

Measuredatamortizedcosts
Monetaryfunds449,964,450.38340,961,443.82
Notesreceivable85,980,246.5247,305,221.88
Accountsreceivable761,807,949.52863,731,936.89
Otherreceivables4,324,973.023,596,543.96

Financialliabilities

Financialliabilities
Measuredatfairvaluethroughcurrentprofitorloss
Derivativefinancialliabilities4,071,800.191,278,559.35

Measuredatamortizedcosts

Measuredatamortizedcosts
Notespayable-31,095,540.29
Accountspayable344,656,835.89304,812,580.55
Otherpayables159,826,234.73160,296,989.98
Othercurrentliabilities53,001,736.0730,291,952.76
Long-termborrowings309,751,163.39209,400,848.04

THEGROUPUSESSENSITIVITYANALYSISTECHNIQUESTOANALYZETHEPOSSIBLEIMPACTOFREASONABLEANDPOSSIBLECHANGESINRISKVARIABLESONTHECURRENTPROFITORLOSSANDSHAREHOLDERS'EQUITY.ASANYRISKVARIABLESELDOMCHANGESINISOLATION,ANDTHECORRELATIONBETWEENTHEVARIABLESWILLHAVEASIGNIFICANTEFFECTONTHEFINALAFFECTEDAMOUNTOFTHECHANGEOFARISKVARIABLE,THEFOLLOWINGCONTENTSARECARRIEDOUTUNDERTHEASSUMPTIONTHATTHECHANGEOFEACHVARIABLEISINDEPENDENTLY:

1.Riskmanagementobjectives,policiesandprocedures,andchangesinthecurrentyearTHEGROUP'SOBJECTIVEINRISKMANAGEMENTISTOACHIEVEANAPPROPRIATEBALANCEBETWEENRISKANDRETURN,MINIMIZETHENEGATIVEIMPACTOFRISKONTHEGROUP'SOPERATINGPERFORMANCE,ANDMAXIMIZETHEINTERESTSOFSHAREHOLDERSANDOTHEREQUITYINVESTORS.BASEDONTHISRISKMANAGEMENTOBJECTIVE,THEBASICSTRATEGYOFTHEGROUP'SRISKMANAGEMENTISTOIDENTIFYANDANALYZEVARIOUSRISKSFACEDBYTHEGROUP,ESTABLISHANAPPROPRIATERISKTOLERANCEBOTTOMLINEANDCONDUCTRISKMANAGEMENT,ANDTIMELYANDRELIABLYSUPERVISEVARIOUSRISKSTOCONTROLRISKSWITHINALIMITEDSCOPE.

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(X)Risksassociatedwithfinancialinstruments-continued

1.RISKMANAGEMENTOBJECTIVES,POLICIESANDPROCEDURES,ANDCHANGESINTHECURRENTYEAR-CONTINUED

1.1MARKETRISK

1.1.1FOREIGNEXCHANGERISKForeignexchangeriskreferstotheriskoflossesarisingfromtheexchangeratefluctuation.TheGroup'sexposuretoforeignexchangeriskismainlyrelatedtotheUSD,theJPYandtheHKD.ExceptforsomeoftheGroup'simportpurchasesandexportsalesinChinesemainland,whichweremainlysettledinUSD,JPYandHKD,theGroup'sothermajorbusinessactivitiesweresettledinRMB.AsofDecember31,2025,exceptfortheforeigncurrencymonetaryitemsinNote(V),56,theassetsandliabilitiesoftheGroupwereallinRMB.Theforeigncurrencybalancesofassetsandliabilities(convertedintoRMB)listedinthetablebelowmayexposetheGrouptoforeignexchangerisksthatcouldimpactitsoperatingperformance.

RMB

ItemBalanceasattheendofthecurrentyear
AssetsLiabilities
USD170,438,077.007,800,902.65
JPY64,400,649.22176,652,586.70
HKD991,760.8225,272.44

TheGroupcloselymonitorstheimpactofexchangeratechangesontheGroup'sforeignexchangeriskandwilltakemeasurestoavoidforeignexchangeriskaccordingtotheactualsituation.SensitivityanalysisofforeignexchangeriskWithothervariablesunchanged,thepre-taximpactofreasonablechangesinexchangeratesonthecurrentprofitorlossandshareholders'equityisasfollows:

RMB

ITEMFLUCTUATIONINEXCHANGERATECURRENTYEARPREVIOUSYEAR
IMPACTONPROFITIMPACTONSHAREHOLDERS'EQUITYIMPACTONPROFITIMPACTONSHAREHOLDERS'EQUITY
ALLFOREIGNCURRENCIESREVALUATIONAGAINSTRMBBY5%2,567,586.262,567,586.26(2,401,052.54)(2,401,052.54)
ALLFOREIGNCURRENCIESDEPRECIATIONAGAINSTRMBBY5%(2,567,586.26)(2,567,586.26)2,401,052.542,401,052.54

1.1.2.Interestraterisk-riskofchangesincashflowsTheGroup'sriskofchangesincashflowsoffinancialinstrumentsduetochangesininterestratesismainlyrelatedtobankborrowingswithfloatingrates.TheGroupcontinuestocloselymonitortheimpactofinterestratechangesontheGroup'sinterestraterisk.TheGroup'spolicyistomaintainthefloatingrateoftheseborrowings,andtherearecurrentlynointerestrateswaparrangements.

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(X)Risksassociatedwithfinancialinstruments-continued

1.RISKMANAGEMENTOBJECTIVES,POLICIESANDPROCEDURES,ANDCHANGESINTHECURRENTYEAR-CONTINUED

1.1MARKETRISK-CONTINUED

1.1.2.Interestraterisk-riskofchangesincashflow-continuedSENSITIVITYANALYSISOFINTERESTRATERISK:

WITHOTHERVARIABLESUNCHANGED,THEPRE-TAXIMPACTOFREASONABLECHANGESININTERESTRATESONTHECURRENTPROFITORLOSSANDSHAREHOLDERS'EQUITYISASFOLLOWS:

RMB

ITEMFLUCTUATIONINEXCHANGERATECURRENTYEARPREVIOUSYEAR
IMPACTONPROFITIMPACTONSHAREHOLDERS'EQUITYIMPACTIMPACTONPROFITIMPACTONSHAREHOLDERS'EQUITYIMPACT
FLOATINGRATEBORROWINGSUP1%(3,094,866.74)(3,094,866.74)(2,092,051.50)(2,092,051.50)
FLOATINGRATEBORROWINGSDOWN1%3,094,866.743,094,866.742,092,051.502,092,051.50

1.2.CreditriskAsofDecember31,2025,themaximumcreditriskexposurethatmaycausefinanciallossestotheGroupmainlycomesfromthelossesoftheGroup'sfinancialassetsduetothefailureoftheotherpartytothecontracttoperformitsobligations,including:monetaryfunds,financialassetsheldfortrading,notesreceivable,accountsreceivable,receivablesfinancingandotherreceivables.Onthebalancesheetdate,thebookvalueoftheGroup'sfinancialassetsrepresentsitsmaximumcreditriskexposure.Inordertoreducethecreditrisk,theGrouparrangesspecialpersonneltodeterminethecreditline,conductcreditapproval,andimplementothermonitoringprocedurestoensurethatnecessarymeasuresaretakentorecoveroverduedebts.Inaddition,theGroupreviewstherecoveryoffinancialassetsoneachbalancesheetdatetoensurethatadequateprovisionforcreditlosseshasbeenmadefortherelevantfinancialassets.Therefore,themanagementoftheGroupbelievesthatthecreditriskassumedbytheGrouphasbeengreatlyreduced.TheGroup'smonetaryfundsaredepositedinbankswithhighcreditratings,sothemonetaryfundsonlyhavelowcreditrisk.AsofDecember31,2025,thebalanceofaccountsreceivablefromthetopfivecustomersoftheGroupwasRMB477,547,582.82,accountingfor60.31%ofthebalanceofaccountsreceivableoftheGroup.Inaddition,theGrouphasnoothersignificantcreditriskexposureconcentratedinasinglefinancialassetoraportfoliooffinancialassetswithsimilarcharacteristics.

1.3.LiquidityriskWhenmanagingliquidityrisk,theGroupmaintainscashandcashequivalentsthatthemanagementbelievesaresufficientandmonitorsthemtomeettheGroup'soperationalneedsandreducetheimpactoffluctuationsincashflows.TheGroup'smanagementmonitorstheuseofbankborrowingsandensurescompliancewithloanagreements.

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(X)Risksassociatedwithfinancialinstruments-continued

1.RISKMANAGEMENTOBJECTIVES,POLICIESANDPROCEDURES,ANDCHANGESINTHECURRENTYEAR-CONTINUED

1.3.Liquidityrisk-continuedASOFDECEMBER31,2025,THEUNUSEDCOMPREHENSIVEBANKCREDITLINEOFTHEGROUPWASRMB113,649.52.THEGROUP'SFINANCIALLIABILITIESHELDAREPRESENTEDASFOLLOWSBASEDONTHEMATURITYOFUNDISCOUNTEDREMAININGCONTRACTUALOBLIGATIONS:

RMB

ItemWithin1year1-5yearsOver5yearsTotal
Accountspayable344,656,835.89--344,656,835.89
Otherpayables159,826,234.73--159,826,234.73
Othercurrentliabilities53,001,736.07--53,001,736.07
Long-termborrowings55,787,469.56269,158,669.95-324,946,139.51
Leaseliabilities7,816,868.429,705,967.441,937,423.1319,460,258.99
Derivativefinancialliabilities4,071,800.19--4,071,800.19

2.Transferoffinancialassets

2.1Classificationoftransfermethods

RMB

TransfermethodNatureoftransferredfinancialassetsAmountoftransferredfinancialassetsDerecognitionJudgmentbasisforderecognition
TransferbyendorsementOutstandingbankacceptancebillsclassifiedasreceivablesfinancing76,263,471.66Derecognized

Thecreditriskleveloftheacceptancebankofthebankacceptancebilltransferredbyendorsementisrelativelyhigh,andalmostalltherisksandrewardsoftheownershipofthecorrespondingreceivablesfinancinghavebeen

transferred

TransferbyendorsementOutstandingbankacceptancebillsclassifiedasnotesreceivable53,001,736.07NotderecognizedThecreditriskleveloftheacceptancebankofthebankacceptancebilltransferredbyendorsementisnothigh,andalmostalltherisksandrewardsoftheownershipoftherelevantnotesreceivableareretained
Total129,265,207.73

2.2Financialassetsderecognizedduetotransfer

RMB

ItemTransfermethodoffinancialassetsAmountofderecognizedfinancialassetsGainsorlossesrelatedtoderecognition
ReceivablesfinancingTransferbyendorsement76,263,471.66-

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(X)Risksassociatedwithfinancialinstruments-continued

2.Transferoffinancialassets-continued

2.3Transferoffinancialassetswithcontinuedinvolvement

RMB

ItemAssettransfermethodAmountofassetsarisingfromcontinuedinvolvementAmountofliabilitiesarisingfromcontinuedinvolvement
NotesreceivableTransferbyendorsement53,001,736.0753,001,736.07

(XI)Disclosureoffairvalue

1.Fairvalueofassetsandliabilitiesmeasuredatfairvalueattheendoftheyear

RMB

ItemFairvalueattheendofcurrentyear
Measuredatthefairvalueofthe1stlevelMeasuredatthefairvalueofthe2ndlevelMeasuredatthefairvalueofthe3rdlevelTotal
Continuousfairvaluemeasurement
(I)Financialassetsheldfortrading-736,341,286.18-736,341,286.18
(II)Receivablesfinancing--22,584,820.7222,584,820.72
(III)Otherequityinstrumentinvestments--159,261,600.00159,261,600.00
Totalassetsconstantlymeasuredatfairvalue-736,341,286.18181,846,420.72918,187,706.90
(IV)Derivativefinancialliabilities-4,071,800.19-4,071,800.19
Totalliabilitiesconstantlymeasuredatfairvalue-4,071,800.19-4,071,800.19

2.Qualitativeandquantitativevaluationtechniquesandimportantparametersofsustainableandnon-sustainableitemsmeasuredonthebasisoffairvalueoflevel2

RMB

ItemFairvalueattheendofcurrentyearValuationtechniquesInputvalue
Financialassetsheldfortrading736,341,286.18DiscountedcashflowmethodExpectedrateofreturn
Derivativefinancialliabilities4,071,800.19DiscountedcashflowmethodThecontracteddeliveryexchangerateunderforwardforeignexchangecontractsandthemarketforwardexchangerateasofthebalancesheetdate

3.Qualitativeandquantitativevaluationtechniquesandimportantparametersofsustainableandnon-sustainableitemsmeasuredonthebasisoffairvalueoflevel3

RMB

ItemFairvalueattheendofcurrentyearValuationtechniquesInputvalue
Receivablesfinancing22,584,820.72DiscountedcashflowmethodDiscountrate
Otherequityinstrumentinvestments159,261,600.00ComparablePublicCompanyMethodP/Bratioofsimilarlistedcompanies
ComparableearningsmethodMarketprice
StatementadjustmentmethodBookvalue

-95-

(XI)Disclosureoffairvalue-continued

4.ConditionoffairvalueoffinancialassetsandfinancialliabilitiesnotmeasuredatfairvalueFinancialassetsandliabilitiesnotmeasuredatfairvaluemainlyinclude:monetaryfunds,notesreceivable,accountsreceivable,otherreceivables,notespayable,accountspayable,otherpayables,othercurrentliabilitiesandlong-termborrowings,etc.TheGroup'smanagementbelievesthatthebookvalueoffinancialassetsandfinancialliabilitiesmeasuredatamortizedcostsinthefinancialstatementsisclosetothefairvalueofsuchassetsandliabilities.(XII)Relatedpartiesandrelatedpartytransactions

1.Parentcompany

NameRegistrationplaceBusinessnatureRegisteredcapital(RMB10,000)Parentcompany'sshareholdingratiointheCompany(%)ProportionofvotingrightsoftheparentcompanyintheCompany(%)
ShenzhenInvestmentHoldingsCo.,Ltd.Floor18,InvestmentBuilding,ShennanRoad,FutianDistrict,ShenzhenEquityinvestments,realestatedevelopment,etc.3,358,600.0046.2146.21

ParentcompanyoftheCompany:theparentcompanyoftheCompanyisawhollystate-ownedcompanyapprovedandauthorizedbytheShenzhenMunicipalGovernment,whichexercisesthefunctionsoftheinvestorinaccordancewiththelawforthestate-ownedenterpriseswithintheauthorizedscope.Duringthereportingperiod,theregisteredcapitaloftheparentcompanychangedasfollows:

RMB10,000

BalanceatthebeginningoftheyearIncreaseincurrentyearDecreaseincurrentyearBalanceasattheendofthecurrentyear
3,318,600.0040,000.00-3,358,600.00

2.SubsidiariesSeeNote(VIII),1fordetailsofthesubsidiary.

3.JointventuresandassociatesoftheCompanySeeNote(V),10fordetailsoftheCompany'sjointventuresandassociates.

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(XII)Relatedpartiesandrelated-partytransactions-continued

4.OtherrelatedpartiesoftheCompany

NameofrelatedpartyRelationshipwiththeCompany
ShenzhenShentouPropertyDevelopmentCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenSegLongyanEnergyTechnologyCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
GuorenP&CInsuranceCo.,Ltd.ShenzhenBranchSubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenTalentServiceCenter(ShenzhenTalentMarket)SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenPropertyManagementCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenCulturalEnterpriseDevelopmentCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenInvestmentHoldingsDevelopmentCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenInvestmentHoldingsDigitalTechnologyCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenLeaguerEducationCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenLegalTrainingCenterCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenInvestmentHoldingsSportsEventDevelopmentCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenSilverLakeConventionCenter(Hotel)Co.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
WuzhouGuestHouseOperationBranchofShenzhenWuzhouInternationalHotelManagementGroupCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
JiazhihuaCenterCinemaofShenzhenCulturalEnterpriseDevelopmentCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenPenglaoHumanResourcesManagementCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenTalentRecruitmentInternational(Group)Co.,Ltd.(formerlyknownasShenzhenTalentRecruitmentInternationalCo.,Ltd.)SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
ShenzhenGuohuiHotelCo.,Ltd.SubsidiaryoftheparentcompanyoftheCompany,ShenzhenInvestmentHoldingsCo.,Ltd.
XinmeiFontanaHolding(HongKong)LimitedOneofthedirectorsoftheCompanyisadirectorofSAPOPhotoelectric
KunshanXinmeiOpticalTechnologyCo.,Ltd.OneofthedirectorsoftheCompanyisadirectorofSAPOPhotoelectric
HengmeiOptoelectronicsCo.,Ltd.MinorityshareholderoftheCompany'ssubsidiarySAPOPhotoelectric;oneofthedirectorsoftheCompanyisadirectorofSAPOPhotoelectric
FuzhouHengmeiOptoelectronicsCo.,Ltd.AsubsidiaryofaminorityshareholderofSAPOPhotoelectric,asubsidiaryoftheCompany
HaoshengHengxin(Wuxi)MaterialsCo.,Ltd.AsubsidiaryofaminorityshareholderofSAPOPhotoelectric,asubsidiaryoftheCompany
HoardsunAdvancedMaterialsKoreaLLCAsubsidiaryofaminorityshareholderofSAPOPhotoelectric,asubsidiaryoftheCompany
ShenzhenXinfangKnittingFactoryCo.,Ltd.TheCompany'sparticipatedcompany
ShenzhenDailisiUnderwearCo.,Ltd.TheCompany'sparticipatedcompany

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(XII)Relatedpartiesandrelated-partytransactions-continued

5.Relatedpartytransactions

(1)Procurementofgoods/receiptoflaborservices

RMB

RelatedpartyContentofrelatedpartytransactionsAmountforthecurrentyearAmountforthepreviousyear
HengmeiOptoelectronicsCo.,Ltd.Equipmentcosts,opticalfilmmaterialsandprocessing179,843,047.652,874.60
XinmeiFontanaHolding(HongKong)LimitedRawmaterials177,573,836.05-
KunshanXinmeiOpticalTechnologyCo.,Ltd.Rawmaterials18,328,566.87-
HoardsunAdvancedMaterialsKoreaLLCRawmaterials5,388,320.92-
FuzhouHengmeiOptoelectronicsCo.,Ltd.Opticalfilmmaterials1,370,344.95-
ShenzhenSegLongyanEnergyTechnologyCo.,Ltd.Purchaseofelectricity1,061,155.371,146,803.41
ShenzhenInvestmentHoldingsDevelopmentCo.,Ltd.Rentalandpropertymanagementfees618,425.1865,786.40
GuorenP&CInsuranceCo.,Ltd.ShenzhenBranchInsurancepremiums431,262.04285,104.25
ShenzhenTalentServiceCenter(ShenzhenTalentMarket)Outsourcingservicefee128,290.23125,596.14
ShenzhenInvestmentHoldingsDigitalTechnologyCo.,Ltd.Informationconstruction102,031.3678,655.84
ShenzhenPenglaoHumanResourcesManagementCo.,Ltd.Labordispatchfees148,088.54-
ShenzhenLegalTrainingCenterCo.,Ltd.Trainingexpenses61,136.9934,597.00
ShenzhenLeaguerEducationCo.,Ltd.Trainingexpenses27,944.7020,449.02
ShenzhenPropertyManagementCo.,Ltd.Propertymanagementfee25,899.7647,258.75
ShenzhenCulturalEnterpriseDevelopmentCo.,Ltd.Equipmentcosts,exhibitionfees23,416.00136,298.00
ShenzhenTalentRecruitmentInternational(Group)Co.,Ltd.(formerlyknownasShenzhenTalentRecruitmentInternationalCo.,Ltd.)Campusrecruitmentfees14,342.157,000.00
ShenzhenSilverLakeConventionCenter(Hotel)Co.,Ltd.Servicefee10,904.00-
WuzhouGuestHouseOperationBranchofShenzhenWuzhouInternationalHotelManagementGroupCo.,Ltd.Servicefee8,352.00-
ShenzhenGuanhuaPrintingandDyeingCo.,Ltd.Interestexpenses3,316.319,025.99
JiazhihuaCenterCinemaofShenzhenCulturalEnterpriseDevelopmentCo.,Ltd.Servicefee3,040.00-
ShenzhenGuohuiHotelCo.,Ltd.Servicefee1,200.00-
ShenzhenInvestmentHoldingsSportsEventDevelopmentCo.,Ltd.Marketingexpenses-80,000.00
ShenzhenPropertyManagementCo.,Ltd.Propertymanagementfee-47,258.75
Total385,172,921.072,039,449.40

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(XII)Relatedpartiesandrelated-partytransactions-continued

5.Relatedpartytransactions-continued

(2)Salesofgoods/renderingofservices

RMB

RelatedpartyContentofrelatedpartytransactionsAmountforthecurrentyearAmountforthepreviousyear
HaoshengHengxin(Wuxi)MaterialsCo.,Ltd.Processingfees7,267,737.20-
FuzhouHengmeiOptoelectronicsCo.,Ltd.Processingfees910,142.37-
HengmeiOptoelectronicsCo.,Ltd.Processingfees577,658.64-
ShenzhenXinfangKnittingFactoryCo.,Ltd.Lease11,428.57-
ShenzhenChanglianfaPrintingandDyeingCo.,Ltd.Lease11,428.57-
Total8,778,395.35-

(3)RelatedpartyleasesTheGroupaslessor

RMB

LesseeTypeofleasedassetLeaseincomerecognizedinthisperiodLeaseincomerecognizedinpreviousperiod
ShenzhenXinfangKnittingFactoryCo.,Ltd.Housesandbuildings11,428.57-
ShenzhenChanglianfaPrintingandDyeingCo.,Ltd.Housesandbuildings11,428.57-
Total22,857.14-

TheGroupaslessee

RMB

LessorTypeofleasedassetAmountinthecurrentperiod
Rentalcostsforshort-termleasesandlow-valueassetleasesforsimplifiedprocessing(ifapplicable)Variableleasepaymentsnotincludedinthemeasurementofleaseliabilities(ifapplicable)PaidrentsInterestexpenseonleaseliabilitiesassumedIncreaseinright-of-useassets
ShenzhenInvestmentHoldingsDevelopmentCo.,Ltd.Housesandbuildings389,545.30-440,134.577,295.942,541,344.41

RMB

LessorTypeofleasedassetAmountinthecurrentperiod
Rentalcostsforshort-termleasesandlow-valueassetleasesforsimplifiedprocessing(ifapplicable)Variableleasepaymentsnotincludedinthemeasurementofleaseliabilities(ifapplicable)PaidrentsInterestexpenseonleaseliabilitiesassumedIncreaseinright-of-useassets
ShenzhenInvestmentHoldingsDevelopmentCo.,Ltd.Housesandbuildings65,786.40-65,786.40--

(4)Loansfromandtorelatedparties

RMB

RelatedpartyAmountborrowedStartdateMaturitydateNotes
Borrowedfrom
ShenzhenGuanhuaPrintingandDyeingCo.,Ltd.3,806,454.17July30,2019July31,2025Annualinterestrate0.15%

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(XII)Relatedpartiesandrelated-partytransactions-continued

5.Relatedpartytransactions-continued

(5)Remunerationofkeymanagementpersonnel

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Remunerationofkeyofficers6,322,000.006,932,991.00

6.Accountsreceivable,accountspayabletorelatedpartiesandotherunsettleditems

(1)Receivables

RMB

ProjectRelatedpartyBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
BookbalanceProvisionforbaddebtsBookbalanceProvisionforbaddebts
AccountsreceivableHaoshengHengxin(Wuxi)MaterialsCo.,Ltd.3,255,772.7241,863.57--
FuzhouHengmeiOptoelectronicsCo.,Ltd.1,028,460.87848,850.89--
HengmeiOptoelectronicsCo.,Ltd.652,754.27538,757.54--
ShenzhenShentouPropertyDevelopmentCo.,Ltd.6,027.001,808.106,027.00602.70
Total4,943,014.861,431,280.106,027.00602.70
AdvancestosuppliersKunshanXinmeiOpticalTechnologyCo.,Ltd.4,745,325.94---
ShenzhenInvestmentHoldingsDigitalTechnologyCo.,Ltd.96,500.00---
ShenzhenInvestmentHoldingsDevelopmentCo.,Ltd.53,118.73---
Total4,894,944.67---
OtherreceivablesShenzhenDailisiUnderwearCo.,Ltd.1,100,000.0055,000.001,100,000.0055,000.00
ShenzhenInvestmentHoldingsDevelopmentCo.,Ltd.106,237.44568.3773,096.003,910.64
Total1,206,237.4455,568.371,173,096.0058,910.64

(2)Payables

RMB

ProjectRelatedpartyBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
AccountspayableXinmeiFontanaHolding(HongKong)Limited14,853,562.10-
FuzhouHengmeiOptoelectronicsCo.,Ltd.1,370,344.95-
HengmeiOptoelectronicsCo.,Ltd.633,118.20-
Total16,857,025.25-
OtherpayablesShenzhenGuanhuaPrintingandDyeingCo.,Ltd.3,806,454.173,816,981.88
ShenzhenChanglianfaPrintingandDyeingCo.,Ltd.2,281,299.952,281,299.95
ShenzhenXinfangKnittingFactoryCo.,Ltd.244,789.85244,789.85
ShenzhenInvestmentHoldingsDigitalTechnologyCo.,Ltd.51,840.0037,735.84
ShenzhenInvestmentHoldingsDevelopmentCo.,Ltd.18,417.0029,238.40
ShenzhenCulturalEnterpriseDevelopmentCo.,Ltd.6,536.00-
ShenzhenInvestmentHoldingsSportsEventDevelopmentCo.,Ltd.-80,000.00
ShenzhenPropertyManagementCo.,Ltd.-7,934.52
Total6,409,336.976,497,980.44

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(XIII)Commitmentsandcontingencies

1.Importantcommitments

(1)Capitalcommitments

RMB

ItemAmountattheendofcurrentyearAmountattheendofpreviousyear
Contractedbutnotrecognizedinthefinancialstatements
Commitmentonconstructionandpurchaseoflong-livedassets7,977,917.5053,374.76

2.ContingenciesAsofDecember31,2025,theGrouphadnocontingenciessuchaspendinglitigationsandexternalguaranteestobediscolsed.(XIV)Eventsafterthebalancesheetdate

1.ProfitdistributionafterthebalancesheetdateOnMarch26,2026,theprofitdistributionproposalfortheyear2025wasapprovedbytheBoardoftheCompany.ItisproposedthattheCompanydistributecashdividendsofRMB0.48pertenshares(taxinclusive)toallshareholdersbasedonthetotalsharecapitalof506,521,849sharesasofDecember31,2025,resultingintotalcashdividendsofRMB24,313,048.75(taxinclusive).TheprofitdistributionplanissubjecttotheconsiderationandapprovaloftheCompany'sGeneralMeeting.

RMB

ItemAmount
Profitordividendtobedistributed24,313,048.75
Profitordividenddeclaredtobegrantedupondeliberationandapproval-

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(XV)Othersignificantmatters

1.Segmentinformation

(1)DeterminationbasisandaccountingpoliciesforreportingsegmentsAccordingtotheinternalorganizationalstructure,managementrequirementsandinternalreportingsystemoftheGroup,theGroup'soperatingbusinessisdividedintotwooperatingsegments.ThemanagementoftheGroupregularlyevaluatestheoperatingresultsofthesesegmentstodecideontheallocationofresourcestothemandevaluatetheirperformance.Onthebasisofoperatingsegments,theGrouphasidentifiedthefollowingtworeportingsegments,polarizerbusiness,propertyleasingbusinessandotherbusiness.Informationonsegmentreportingisdisclosedaccordingtotheaccountingpoliciesandmeasurementstandardsadoptedbyeachsegmentwhenreportingtothemanagement,andthesemeasurementbasesareconsistentwiththeaccountingandmeasurementbaseswhenpreparingthefinancialstatements.

(2)Financialinformationofreportingsegments

RMB

CurrentyearorendofcurrentyearPolarizerPropertyleasingandothersOffsetTotal
Operatingrevenue:
Revenuefromexternaltransactions3,128,737,095.55112,643,335.07-3,241,380,430.62
Revenuefromtransactionsbetweensegments-3,578,055.92(3,578,055.92)-
Totaloperatingrevenueofsegments3,128,737,095.55116,221,390.99(3,578,055.92)3,241,380,430.62
Operatingexpenses(Note)2,964,660,493.7686,976,269.15(3,239,268.69)3,048,397,494.22
Operatingprofit67,696,577.6040,317,571.37(5,049,907.23)102,964,241.74
Netprofit67,893,144.8532,905,892.39(5,185,494.41)95,613,542.83
Totalassetsofsegments4,231,298,575.883,142,462,542.68(1,955,465,401.79)5,418,295,716.77
Totalliabilitiesofsegments966,686,977.47196,395,831.31(35,152,264.88)1,127,930,543.90

Previousyearorthebeginningofcurrent

year

PreviousyearorthebeginningofcurrentyearPolarizerPropertyleasingandothersOffsetTotal
Operatingrevenue:
Revenuefromexternaltransactions3,219,211,416.65116,071,592.03-3,335,283,008.68
Revenuefromtransactionsbetweensegments-4,239,345.09(4,239,345.09)-
Totaloperatingrevenueofsegments3,219,211,416.65120,310,937.12(4,239,345.09)3,335,283,008.68
Operatingexpenses(Note)3,007,500,292.3695,037,109.98(3,900,557.86)3,098,636,844.48
Operatingprofit136,015,568.69(20,628,307.04)36,389,537.55151,776,799.20
Netprofit134,120,025.66(15,831,104.78)24,767,845.50143,056,766.38
Totalassetsofsegments4,031,861,994.763,149,618,569.49(1,949,330,166.92)5,232,150,397.33

-102-

Totalliabilitiesofsegments835,237,595.88191,159,171.74(29,567,004.42)996,829,763.20

Note:thisitemincludesoperatingcosts,taxesandsurcharges,G&Aexpenses,R&Dexpenses,sellinganddistributionexpensesandfinancialexpenses.

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(XV)Otherimportantmatters-Continued

2.Othersignificanteventsaffectingthedecision-makingofinvestorsBasedonthecurrentoperatingstatusofShenzhenXieliAutomobileEnterpriseCo.,Ltd.(hereinafterreferredtoas"ShenzhenXieli"),theCompanyappliedtothePeople'sCourtofLuohuDistrict,Shenzhen(hereinafterreferredtoasthe"Court")forcompulsoryliquidationofShenzhenXielionJanuary7,2026.TheCourtacceptedthecaseonJanuary22,2026,andthecaseiscurrentlyundercompulsoryliquidationproceedings.(XVI)Notestothemainitemsoftheparentcompany'sfinancialstatements

1.Accountsreceivable

(1)Disclosurebyaging

RMB

AgingBookbalanceattheendoftheyearBookbalanceatthebeginningoftheyear
Within1year8,710,793.2410,649,986.34
1-2years--
2to3years--
3-4years-2,485,076.00
4to5years118,603.99-
Total8,829,397.2313,135,062.34

(2)Disclosurebyprovisionmethodforbaddebts

RMB

CategoryBalanceasattheendofthecurrentyear
BookbalanceProvisionforbaddebtsBookvalue
AmountRatio(%)AmountProvisionratio(%)
Provisionforbaddebtsaccruedonanindividualbasis-----
Provisionforbaddebtsmadebyportfolio8,829,397.23100.00115,022.891.308,714,374.34
Total8,829,397.23100.00115,022.898,714,374.34

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(XVI)Notestothemainitemsoftheparentcompany'sfinancialstatements-Continued

1.Accountsreceivable-Continued

(2)Disclosurebyprovisionmethodforbaddebts-Continued

RMB

CategoryBalanceasattheendofthepreviousyear
BookbalanceProvisionforbaddebtsBookvalue
AmountRatio(%)AmountProvisionratio(%)
Provisionforbaddebtsaccruedonanindividualbasis-----
Provisionforbaddebtsmadebyportfolio13,135,062.34100.00106,074.710.8113,028,987.63
Total13,135,062.34100.00106,074.7113,028,987.63

AsofDecember31,2025,accountsreceivablewithprovisionforbaddebtsaccruedonaportfoliobasis:

RMB

AgingBalanceasattheendofthecurrentyear
Expectedaveragelossrate(%)BookbalanceProvisionforbaddebtsBookvalue
Within1year1.328,710,793.24115,022.898,595,770.35
4to5years-118,603.99-118,603.99
Total8,829,397.23115,022.898,714,374.34

AsofDecember31,2025,provisionforbaddebtsismadebasedonthesimplifiedexpectedcreditlossesmodel

RMB

ProvisionforbaddebtsWholedurationExpectedcreditlosses(Nocreditloss)WholedurationExpectedcreditlosses(Withcreditloss)Total
Balanceatthebeginningoftheyear106,074.71-106,074.71
Balanceatthebeginningoftheyear---
-Transfertocreditlossincurred---
-Reversalofcreditlossnotincurred---
Withdrawalinthecurrentyear8,948.18-8,948.18
Reversalinthecurrentyear---
Charge-offinthecurrentyear---
Write-offinthecurrentyear---
Otherchanges---
Balanceasattheendofthecurrentyear115,022.89-115,022.89

(3)Provisionforbaddebts

RMB

TypeBalanceatthebeginningoftheyearChangesinthecurrentyearBalanceasattheendofthecurrentyear
ProvisionRecoveryorreversalResaleorwrite-offOtherchanges
Provisionforbaddebts106,074.718,948.18---115,022.89

Therewasnosignificantamountofprovisionforbaddebtsrecoveredorreversedthisyear.

-105-

(XVI)Notestothemainitemsoftheparentcompany'sfinancialstatements-Continued

1.Accountsreceivable-Continued

(4)Therearenoaccountsreceivableactuallywrittenoffthisyear.

(5)Topfiveentitiesintermsoftheendingbalanceofaccountsreceivablebydebtor

RMB

EntitynameBookbalanceattheendoftheyearRatiointotalaccountsreceivable(%)Balanceofprovisionforbaddebtsasattheendofthecurrentyear
CustomerA6,980,341.0479.0693,757.57
CustomerB1,227,979.8813.91-
CustomerC118,603.991.34-
CustomerD117,394.641.335,869.73
CustomerE81,272.440.92-
Total8,525,591.9996.5699,627.30

2.Otherreceivables

(1)Disclosurebyaging

RMB

AgingBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
Within1year1,973,476.5015,129,726.66
1-2years13,636,400.01273,000.00
2to3years273,000.002,204,641.09
Over3years27,509,236.2025,380,195.11
Total43,392,112.7142,987,562.86
Less:provisionforbaddebts41,377,567.0641,453,167.06
Bookvalue2,014,545.651,534,395.80

(2)Disclosurebynatureofpayment

RMB

NatureofpaymentBookbalanceattheendoftheyearBookbalanceattheendofthepreviousyear
Transactionswithrelatedpartieswithintheconsolidationscope26,114,041.1026,189,641.10
Transactionswithexternalunits15,455,577.4115,422,435.97
Guaranteeanddeposits10,000.0010,000.00
Others1,812,494.201,365,485.79
Total43,392,112.7142,987,562.86

(3)ProvisionforbaddebtsAsofDecember31,2025,provisionforbaddebtswasmadeinaccordancewiththegeneralmodelofexpectedcreditloss.

RMB

ProvisionforbaddebtsStage1Stage2Stage3Total
Expectedcreditlossforthenext12monthsLifetimeexpectedcreditloss(withoutcreditimpairment)Lifetimeexpectedcreditloss(credit-impaired)
Balanceatthebeginningoftheyear13,711,066.342,477,641.0925,264,459.6341,453,167.06
Balanceatthebeginningofthecurrentyear
--TransferredtoStage2(13,636,400.01)13,636,400.01--
--TransferredtoStage3-(2,204,641.09)2,204,641.09-
--ReclassifiedtoStage2----
--ReclassifiedtoStage1----
Provisionfortheyear----

-106-

Reversedduringtheyear--(75,600.00)(75,600.00)
Writtenoffduringtheyear----
Writtenoffduringtheyear----
Otherchanges----
Balanceattheendoftheyear74,666.3313,909,400.0127,393,500.7241,377,567.06

AsofDecember31,2025,provisionforbaddebtsshallbemadeaccordingtothecreditriskcharacteristiccombination

RMB

PhaseBalanceasattheendofthecurrentyear
Expectedaveragelossrate(%)BookbalanceProvisionforbaddebtsBookvalue
ProvisionforbaddebtsbasedoncreditriskcharacteristiccombinationProvisionforotherreceivables95.3643,392,112.7141,377,567.062,014,545.65

-107-

(XVI)Notestothemainitemsoftheparentcompany'sfinancialstatements-Continued

2.Otherreceivables-continued

(3)Provisionforbaddebts-continuedAsofDecember31,2025,thecreditriskandprovisionforbaddebtsofotherreceivablesareasfollows:

RMB

AgingBalanceasattheendofthecurrentyear
Expectedaveragelossrate(%)BookbalanceProvisionforbaddebtsBookvalue
Within1year3.781,973,476.5074,666.331,898,810.17
1-2years100.0013,636,400.0113,636,400.01-
2to3years100.00273,000.00273,000.00-
Over3years99.5827,509,236.2027,393,500.72115,735.48
Total43,392,112.7141,377,567.062,014,545.65

(4)Changesinprovisionforbaddebts

RMB

TypeBalanceatthebeginningoftheyearChangesinthecurrentyearBalanceasattheendofthecurrentyear
ProvisionRecoveryorreversalResaleorwrite-offOtherchanges
Provisionforbaddebts41,453,167.06-(75,600.00)--41,377,567.06

(5)Therewerenootherreceivablesactuallywrittenoffthisyear.

(6)Topfiveentitiesintermsofendingbalanceofotherreceivablesbydebtors

RMB

EntitynameBalanceasattheendofthecurrentyearProportionofotherreceivablesBalanceasattheendofthecurrentyearratio(%)NatureofamountAgingProvisionforbaddebtsBalanceasattheendofthecurrentyear
CustomerA26,114,041.1060.18IntercoursepaymentOver1-3years26,114,041.10
CustomerB11,389,044.6026.25IntercoursepaymentOver3years11,389,044.60
CustomerC1,800,000.004.15IntercoursepaymentOver3years1,800,000.00
CustomerD1,100,000.002.54IntercoursepaymentWithin1year55,000.00
CustomerE1,018,295.372.35IntercoursepaymentOver3years1,018,295.37
Total41,421,381.0795.4740,376,381.07

3.Long-termequityinvestments

RMB

ItemBalanceasattheendofthecurrentyearBalanceasattheendofthepreviousyear
BookbalanceProvisionforimpairmentBookvalueBookbalanceProvisionforimpairmentBookvalue
Investmentinsubsidiaries1,963,252,748.3137,390,767.641,925,861,980.671,962,688,268.3136,826,287.641,925,861,980.67
Investmentsinjointventures104,274,952.84-104,274,952.84111,555,887.28-111,555,887.28
Investmentsinassociates3,308,634.07-3,308,634.073,272,138.76-3,272,138.76
Total2,070,836,335.2237,390,767.642,033,445,567.582,077,516,294.3536,826,287.642,040,690,006.71

-108-

(XVI)Notestothemainitemsoftheparentcompany'sfinancialstatements-Continued

3.Long-termequityinvestments-Continued

(1)Investmentinsubsidiaries

RMB

InvesteesBalanceatthebeginningoftheyearIncreaseincurrentyearDecreaseincurrentyearProvisionforimpairmentinthecurrentyearBalanceasattheendofthecurrentyearProvisionforimpairmentBalanceasattheendofthecurrentyear
SAPOPhotoelectric1,910,247,781.94---1,910,247,781.9414,415,288.09
ShenzhenLisiIndustrialDevelopmentCo.,Ltd.8,073,388.25---8,073,388.25-
ShenzhenMeibainianGarmentCo.,Ltd.-564,480.00-564,480.00-22,975,479.55
ShenzhenShenfangPropertyManagementCo.,Ltd.1,713,186.55---1,713,186.55-
ShenzhenShenfangSungangPropertyManagementCo.,Ltd.5,827,623.93---5,827,623.93-
Total1,925,861,980.67564,480.00-564,480.001,925,861,980.6737,390,767.64

(2)Investmentinassociatesandjointventures

RMB

InvesteesBalanceatthebeginningoftheyearChangesinthecurrentyearBalanceasattheendofthecurrentyearBalanceofprovisionforimpairmentasattheendofthecurrentyear
AdditionalinvestmentReducedinvestmentInvestmentprofitorlossrecognizedundertheequitymethodOthercomprehensiveincomeadjustmentChangeinotherequityCashdividendsorprofitsdeclaredtobepaidProvisionforimpairmentOthers
Jointventures
ShenzhenGuanhuaPrintingandDyeingCo.,Ltd.111,555,887.28--(7,280,934.44)-----104,274,952.84-
Sub-total111,555,887.28--(7,280,934.44)-----104,274,952.84-
Associates
ShenzhenChanglianfaPrintingandDyeingCo.,Ltd.3,272,138.76--269,945.31--(233,450.00)--3,308,634.07-
Sub-total3,272,138.76--269,945.31--(233,450.00)--3,308,634.07-
Total114,828,026.04--(7,010,989.13)--(233,450.00)--107,583,586.91-

NotestothefinancialstatementsFortheyearendedDecember31,2025

-109-

(XVI)Notestothemainitemsoftheparentcompany'sfinancialstatements-Continued

4.Operatingrevenueandoperatingcosts

(1)Operatingrevenueandoperatingcosts

RMB

ShenzhenTextile(Holdings)Co.,Ltd.

Item

ItemAmountforthecurrentyearAmountforthepreviousyear
RevenueCostRevenueCost
Primarybusiness76,736,666.8710,942,684.4877,167,496.9510,205,157.84
Otherbusiness903,094.00684,545.01--
Total77,639,760.8711,627,229.4977,167,496.9510,205,157.84

(2)Primarybusinessbyproduct

RMB

ProductsAmountforthecurrentyearAmountforthepreviousyear
IncomefromprimarybusinessCostofprimarybusinessIncomefromprimarybusinessCostofprimarybusiness
Propertyleasing76,736,666.8710,942,684.4877,167,496.9510,205,157.84

(3)Primarybusinessbyregion

RMB

RegionAmountforthecurrentyearAmountforthepreviousyear
IncomefromprimarybusinessCostofprimarybusinessIncomefromprimarybusinessCostofprimarybusiness
Domestic76,736,666.8710,942,684.4877,167,496.9510,205,157.84

5.Investmentincome

RMB

ItemAmountforthecurrentyearAmountforthepreviousyear
Long-termequityinvestmentincomecalculatedundertheequitymethod(7,010,989.13)(10,701,895.08)
Incomefromlong-termequityinvestmentsundercostmethod5,200,000.004,700,000.00
Investmentincomefromtherecoveryoflong-termequityinvestments-5,838,587.94
Investmentincomeobtainedduringholdingthefinancialassetsheldfortrading14,540,478.8210,795,474.10
Dividendincomefrominvestmentsinotherequityinstrumentduringtheholdingperiod1,235,735.851,445,735.85
Total13,965,225.5412,077,902.81

NotestothefinancialstatementsFortheyearendedDecember31,2025

1.Breakdownofcurrentnon-recurringprofitorlossAccordingtotheInterpretiveAnnouncementNo.1onInformationDisclosureofCompaniesIssuingSecuritiestothePublic-Non-recurringProfitorLoss(Revision2024)(hereinafterreferredtoas"InterpretiveAnnouncementNo.1")issuedbytheChinaSecuritiesRegulatoryCommission,theGroup'snon-recurringprofitorlossfor2025areasfollows:

RMB

ShenzhenTextile(Holdings)Co.,Ltd.

Item

ItemAmountforthecurrentyear
Profitorlossfromdisposalofnon-currentassets,includingthewriting-offpartforwhichtheassetimpairmentprovisionismade1,137,242.81
Governmentsubsidiesincludedinthecurrentprofitorloss(exceptforthosethatarecloselyrelatedtotheCompany'snormalbusinessoperations,complywithnationalpoliciesandregulations,areenjoyedaccordingtodeterminedstandards,andhaveasustainedimpactontheCompany'sprofitorloss)6,426,316.96
Profitorlossfromchangesinfairvalueoffinancialassetsandliabilitiesheldbynon-financialenterprisesandprofitorlossfromthedisposaloffinancialassetsandfinancialliabilities,exceptforeffectivehedgingoperationsrelatedtotheCompany'snormalbusinessoperations(11,769,635.37)
Reversalofprovisionforimpairmentofaccountsreceivablesubjecttoseparateimpairmenttest4,371,571.58
Non-operatingrevenueandexpensesotherthantheabove-mentioneditems5,481,728.35
Totalnon-recurringprofitorloss5,647,224.33
Less:incometaxeffectofnon-recurringprofitorloss906,584.80
Netamountofnon-recurringprofitorloss4,740,639.53
Less:neteffectofnon-recurringprofitorlossattributabletominorityshareholders(aftertax)(243,998.88)
Non-recurringprofitorlossattributabletotheCompany'sordinaryshareholders4,984,638.41

2.ReturnonnetassetsandearningspershareThisreturnonnetassetsandearningspersharetableispreparedbyShenzhenTextile(Holdings)Co.,Ltd.inaccordancewiththeRulesfortheCompilationandReportingofInformationDisclosurebyCompaniesIssuingSecuritiesinPublic(No.9)-CalculationandDisclosureofReturnonNetAssetsandEarningsperShare(Revision2010)issuedbytheChinaSecuritiesRegulatoryCommission.

RMB

ProfitinthereportingperiodWeightedaveragerateofreturnonnetassets%Earningspershare
BasicearningspershareDilutedearningspershare
NetprofitattributabletoordinaryshareholdersoftheCOOEC2.310.140.14
NetprofitattributabletoordinaryshareholdersoftheCompanyafterdeductingnon-recurringprofitorloss2.140.130.13

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