Shenzhen Textile (Holdings) Co. Ltd.2024 Annual Report March 20252024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd.Section I Important Notes Table of Contents and Interpretations The Board of Directors Board of Supervisors directors supervisors and senior officers of the Company guarantee the authenticity accuracy and completeness of the contents of the annual report and bear individual and joint legal liabilities for any false records misleading statements or major omissions.The Principal Yin Kefei the Chief Finance Officer Liu Yu and the Chief Accountant (accounting supervisor) Huang Min declare that they will ensure the authenticity accuracy and completeness of the financial report in this annual report.In addition to the following directors other directors personally attended the Board meeting at which the Annual Report was considered.Names of directors not Positions of directors not Reasons for not attending the Name of principal present in person present in person meeting in person Wang Chuan Director Business Related Wei Junfeng Meng Fei Director Business Related Liu Yu Forward-looking statements such as future development plans involved in this report do not constitute a substantial commitment by the Company to investors. Investors and related persons should maintain sufficient risk awareness and understand the differences between plans forecasts and commitments.Investors are requested to pay attention to investment risks.The Company is exposed to macroeconomic risks market risks raw materials risks and intensified competition risks. Investors are advised to pay attention to investment risks. For details please refer to "XI. Outlook for the Company's Future Development (III) Possible Risks" in "Section III Management Discussion and Analysis" of this report.The profit distribution plan reviewed and approved by the Company at the Board is: based on 506521849 shares distribute cash dividends of 0.71RMB (including tax) for every 10 shares to all shareholders and distribute 0 bonus shares (including tax) without converting the provident fund into share capital. 22024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. This report is prepared in Chinese and English respectively. In case of any ambiguity between the Chinese and foreign versions the Chinese version shall prevail. 32024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Table of Contents Section I Important Notes Table of Contents and In....2 Section II Company Profile and Major Financial Ind... 7 Section III Management's Discussion and Analysis ... 11 Section IV Corporate Governance .................... 29 Section V Environment and Social Responsibilities ...49 Section VI Important Matters ....................... 54 Section VII Changes in Shares and Shareholders ..... 65 Section VIII Preferred shares .......................71 Section IX Bonds ................................... 71 Section X Financial Reports .........................72 42024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. List of Documents Available for Inspection I. Accounting statements bearing the signatures and seals of the legal representative Finance Director and Chief Accountant of the Company; II. The original audit report bearing the seal of the accounting firm and the signature and seal of the certified public accountant; III. The original of all the Company's documents and the original of the announcement that have been publicly disclosed by the Company on the website designated by the China Securities Regulatory Commission during the reporting period.The above-mentioned documents are kept in the office of the Board of Directors for reference. 52024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Interpretations Items Refers to Interpretations Company/ the Company / Shenzhen Refers to Shenzhen Textile (Holdings) Co. Ltd.Textile Articles of Association of Shenzhen Textile Articles of Association Refers to (Holdings) Co. Ltd.State-owned Assets Supervision and Actual owner / Shenzhen SASAC Refers to Administration Commission of Shenzhen Municipal People's Government Controlling shareholder / Shenzhen Refers to Shenzhen Investment Holdings Co. Ltd.Investment Holdings Shenzhen Shenchao Technology Investment Shenchao Technology Refers to Co. Ltd.SAPO Photoelectric Refers to Shenzhen SAPO Photoelectric Co. Ltd.MCENTURY Refers to Shenzhen MCENTURY Garment Co. Ltd.Hengmei Optoelectronics Refers to Hengmei Optoelectronics Co. Ltd.Line 4 Refers to Polarizer for TFT-LCD Phase I Line 4 Project Line 5 Refers to Polarizer for TFT-LCD Phase I Line 5 Project Line 6 Refers to Polarizer for TFT-LCD Phase II Line 6 Project Polarizer industry project for ultra-large-size Line 7 Refers to TV China Securities Regulatory Commission Refers to China Securities Regulatory Commission This report Refers to 2024 Annual Report 62024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Section II Company Profile and Major Financial Indicators I. Information about the Company Shenzhen Textile A Stock name Stock code 000045、200045 Shenzhen Textile B Stock name before the change (if None any) Stock exchange where the Shenzhen Stock Exchange Company's stocks are listed Chinese name Shenzhen Textile (Holdings) Co. Ltd.Abbreviation in Chinese Shenzhen Textile Foreign name of the Company (if SHENZHEN TEXTILE(HOLDINGS)CO.LTD any) Abbreviation of the Company's STHC foreign name (if any) Legal representative Yin Kefei Room A1203 Tower A China State-owned Capital Venture Building No. 2 Hengsheng Street Registered address Nanshan Street Qianhai Shenzhen-Hong Kong Cooperation Zone Shenzhen Postal code 518052 1. On April 27 2023 the registered address of the Company was changed from "6th Floor Shen Fang Building No. 3 Huaqiang North Road Futian District Shenzhen" to "708M Building 8 Qianhai Excellence Financial Center (Phase I) No. 5033 Menghai Avenue Nanshan Sub-district Qianhai Shenzhen-Hong Kong Cooperation Zone Shenzhen"; 2. upon the review and approval of the 36th Meeting of the 8th Board of Directors of the Company Historical changes in the held on January 24 2025 and the 2025 First Extraordinary General Meeting held on February 18 Company's registered address 2025 the registered address of the Company was changed from "708M Building 8 Qianhai Excellence Financial Center (Phase I) No. 5033 Menghai Avenue Nanshan Sub-district Qianhai Shenzhen-Hong Kong Cooperation Zone Shenzhen" to "A1203 Tower A China Venture Capital Fund Tower No. 2 Hengsheng Street Nanshan Sub-district Qianhai Shenzhen-Hong Kong Cooperation Zone Shenzhen".Office address Floor 6 Block A Shen Fang Building No. 3 Huaqiang North Road Futian District Shenzhen Postal code 518031 Official website http://www.chinasthc.com E-mail szfzjt@chinasthc.com II. Contact person and contact information Secretary of the Board of Directors Securities affairs representative Name Jiang Peng Li Zhenyu Contact Floor 6 Block A Shen Fang Building No. 3 Huaqiang Floor 6 Block A Shen Fang Building No. 3 Huaqiang address North Road Futian District Shenzhen North Road Futian District Shenzhen Tel. 0755-83776043 0755-83776043 Fax 0755-83776139 0755-83776139 E-mail jiangp@chinasthc.com lizy@chinasthc.com III. Information disclosure and storage location Stock exchange websites where companies Shenzhen Stock Exchange (http://www.szse.cn/) 72024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. disclose annual reports Name and website of the media where the Securities Times China Securities Journal Shanghai Securities News Securities Daily Company discloses its annual report and Cninfo (http://www.cninfo.com.cn) Storage location of annual reports Office of the Board of Directors IV. Registration changes Unified social credit 91440300192173749Y code In July 2012 with the approval of Shenzhen Administration for Market Regulation the Company's business scope was changed to: production and processing of textiles knitwear clothing decorative fabrics belts trademark belts and handicrafts (excluding restricted items); Department stores textile industry special equipment textile equipment and accessories instruments standard parts textile raw materials dyes electronic products chemical products mechanical and electrical equipment textile products office supplies Changes in primary and domestic trade (excluding exclusive special control and monopolized goods); import and export business since the business. In December 2018 with the approval of Shenzhen Administration for Market Regulation the listing of the Company Company's business scope was changed to: production and operation of polarizer and other optical film (if any) products; hotel property leasing and management; production and processing of textiles knits clothing decorative fabrics belts trademark belts and handicrafts (excluding restricted items); Department stores textile industry special equipment textile equipment and accessories instruments standard parts textile raw materials dyes electronic products chemical products mechanical and electrical equipment textile products office supplies and domestic trade (excluding exclusive special control and monopolized goods); import and export business.In October 2004 according to the Decision on the Establishment of Shenzhen Investment Holdings Co. Ltd.issued by the Shenzhen State-owned Assets Supervision and Administration Commission of the Shenzhen Previous changes of Municipal People's Government (SGZW (2004) No. 223) the controlling shareholder of the Company controlling shareholder Shenzhen Investment & Management Company was merged and reorganized together with Shenzhen (if any) Construction Holdings Company and Shenzhen Commerce and Trade Holdings Company to form Shenzhen Investment Holdings Co. Ltd.V. Other relevant information Accounting firm engaged by the Company Name Deloitte Touche Tohmatsu Certified Public Accountants (LLP) Floor 30 No. 222 Yan'an East Road Huangpu District Office address Shanghai Signing accountants Huang Tianyi Chen Junheng Sponsor engaged by the Company to perform continuous supervision during the reporting period □Applicable□Not applicable Financial consultant engaged by the Company to perform continuous supervision during the reporting period □Applicable□Not applicable VI. Main accounting data and financial indicators Whether the Company needs to retroactively adjust or restate the accounting data of previous years □Yes□No Increase/decrease this year Year 2024 Year 2023 Year 2022 compared with last year Operating revenue (RMB) 3335283008.68 3079678375.45 8.30% 2837988264.36 Net profit attributable to the 89371134.24 79268250.45 12.75% 73309182.94 82024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. shareholders of the listed company (RMB) Net profit attributable to shareholders of listed companies after deducting non- 77028485.76 62328667.73 23.58% 61951894.68 recurring profit or loss (RMB) Net cash flows from operating activities 231264525.09184766739.8025.17%490238550.60 (RMB) Basic earnings per share (RMB/share) 0.18 0.16 12.50% 0.14 Diluted earnings per share (RMB/share) 0.18 0.16 12.50% 0.14 Weighted average rate of return on net 3.06%2.77%0.29%2.59% assets Increase/decrease at the end of this As at the end of As at the end of As at the end of 2024 year compared 20232022 with the end of last year Total assets (RMB) 5232150397.33 5649822363.44 -7.39% 5617137367.90 Net assets attributable to shareholders of 2951869910.252882152266.222.42%2849264555.21 the listed company (RMB) The net profit of the Company in the last three fiscal years before and after deducting non-recurring profit or loss is negative and the audit report of the latest year shows that the going-concern ability of the Company is uncertain □ Yes □ No The lower of net profit before and after deducting non-recurring profit or loss is negative □ Yes □ No VII.Differences between accounting data under domestic and foreign accounting standards 1. Differences in net profit and net assets in the financial reports disclosed in accordance with the international accounting standards and the Chinese accounting standards □Applicable□Not applicable During the reporting period of the Company there was no difference in net profits and net assets in financial reports disclosed in accordance with international accounting standards and Chinese accounting standards 2. Differences in net profit and net assets in financial reports disclosed in accordance with both the international accounting standards and Chinese accounting standards □Applicable□Not applicable During the reporting period of the Company there was no difference in net profits and net assets in financial reports disclosed in accordance with the international accounting standards and Chinese accounting standards VIII. Main financial indicators by quarter Unit: RMB Q1 Q2 Q3 Q4 Operating revenue 761350922.92 862033228.98 898708470.32 813190386.46 Net profit attributable to shareholders 20777352.8523116722.3835007531.1410469527.87 of the listed company Net profit attributable to shareholders 16974425.78 18283331.01 34873170.40 6897558.57 of listed companies after deducting 92024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. non-recurring profit or loss Net cash flows from operating 31638249.21-19803399.27155500217.2063929457.95 activities Whether the above financial indicators or their aggregate are significantly different from the financial indicators related to the Company's disclosed quarterly and semi-annual reports □ Yes □ No IX. Non-recurring profit or loss items and amounts □ Applicable □ Not applicable Unit: RMB Amount in Amount in Amount in Item Notes 202420232022 Profit or loss on disposal of non-current assets (including 833613.281.7231264.60 write-off of provision for asset impairment) Government grants included in the current profit or loss (except for those that are closely related to the Company's normal business operations comply with national policies Mainly government 10454530.1219927836.0211048569.36 and regulations are enjoyed according to determined grants.standards and have a sustained impact on the Company's profit or loss) Mainly refers to the fair value change Profit or loss from changes in fair value of financial assets gains and losses and liabilities held by non-financial enterprises and profit generated by the or loss from the disposal of financial assets and financial -5319496.55 2151780.82 0.00 company's holding liabilities except for effective hedging operations related of trading financial to the Company's normal business operations assets and derivative financial liabilities.Reversal of provision for impairment of accounts 13927792.6315031480.150.00 receivable subject to separate impairment test Non-operating revenue and expenses other than the above- 1107069.21-6755922.257516025.10 mentioned items Less: income tax effects 2998978.10 3478333.83 3294064.39 Affected amount of minority interests (after tax) 5661882.11 9937259.91 3944506.41 Total 12342648.48 16939582.72 11357288.26 -- Specific circumstances of other profit or loss items that meet the definition of non-recurring profit or loss: □Applicable□Not applicable The Company had no specific profit or loss items that meet the definition of non-recurring profit or loss.Notes on the definition of the non-recurring profit or loss items listed in the "Interpretive Announcement No. 1 on Information Disclosure of Companies Issuing Securities to the Public - Non-recurring Profit or Loss" as recurring profit or loss items □Applicable□Not applicable The Company had no circumstances of definition of the non-recurring profit or loss items listed in the "Interpretive Announcement No. 1 on Information Disclosure of Companies Issuing Securities to the Public - Non-recurring Profit or Loss" as recurring profit or loss items. 102024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Section III Management's Discussion and Analysis I. Industry status during the reporting period The polarizer is also called polarized light sheet which can control the polarization direction of a specific beam. When the natural light passes through the polarizer the light with the vibration direction perpendicular to the polarizer transmission axis will be absorbed and only the polarized light with the vibration direction parallel to the polarizer transmission axis will be transmitted. The downstream applications of polarizers are mainly in the panel industry. According to different panel types polarizer are mainly classified into TN type STN type TFT type and OLED type. At present the global polarizer market is mainly based on polarizers for TFT-LCD panels.One LCD panel requires two polarizers while one OLED panel requires one polarizer.The high-quality development of the polarizer industry has a profound impact on the entire display industry. As one of the three core raw materials of the display panel the demand for polarizer is directly affected by the fluctuation of the display panel market. In recent years with the accelerated transfer of the global display panel industry to China China's polarizer industry has ushered in a stage of rapid development. The production capacity and process technology level of domestic polarizer manufacturers have continuously jumped.China's polarizer industry has significantly improved its position and influence in the global market. Chinese mainland has become the world's largest polarizer production base.The Company is one of the main polarizer R&D production and sales enterprises in China. It is the pioneer of China's polarizer industry.Now it has developed into a leading enterprise in China's polarizer industry and has become an important supplier of mainstream panel enterprises in the world. In 2024 the global economic and geopolitical situation will remain complex and volatile. Affected by the severe and complex economic and political situation in the world the global display panel and terminal market demand will slowly recover and the polarizer industry will continue to expand its production capacity. However it still faces risks such as intensified industry competition rising raw materials costs and raw materials supply security.II. Main business engaged in by the Company during the reporting period (I) Main business of the Company The Company's main business is a high-tech industry focusing on the R&D production and sales of polarizers for OLED and LCD display the operation and management of its own properties and textile and clothing business.During the reporting period there was no significant change in the Company's primary business. First the Company actively adjusted its product structure implemented a product differentiation strategy and increased the sales proportion of high-value-added products. It has achieved an industry-leading position in OLED TV polarizer sales volume and the sales volume of ultra-large-size products has surged significantly; second the Company made every effort to overcome quality problems improve customer satisfaction reduce product return losses and management costs and at the same time played a sales-driven role to promote sales by production and the production and sales volume repeatedly hit a record high; third the Company strengthened the on-site technical management level and enhanced the process stability. The improvement of broken film of each production line was remarkable and the average frequency of broken film decreased significantly year-on-year which has reached a higher level in the industry. fourth the Company continued to strengthen innovation leadership driving the development and mass production of cutting-edge products. It focused on breakthroughs in key technologies and successfully achieved the development and mass production of high-performance OLED TV polarizers with high transmittance and low reflection in 55-inch 65-inch and 77-inch sizes. Additionally it completed the development of highly alkali- resistant polarizers for OLED mobile phones and the development of display polarizers that meet the U.S. Energy Star 9.0 energy efficiency standards; fifth the Company actively phased out subsidiaries with "non-core businesses and inefficient assets" steadily implemented the performance-based selection mechanism promoted the shifting of resources from non-core businesses to core businesses and achieved rational use of resources; Sixth the Company strengthened supervision and management focused on work safety prepared safety management systems strengthened safety training and education carried out safety risk identification and hidden danger investigation and management consolidated weak links and prevented accidents; Seventh continuously improved the quality of property management service improve tenant satisfaction strived to maintain the Company's property rental rate at a high level and ensured the stability of the Company's property leasing management business income.(II) Main products of the Company and their uses Currently the Company has 7 mass-production polarizer production lines and its products cover TN STN TFT OLED 3D dye films optical films for touch screens and other fields. These products are mainly applied to products such as TVs laptops navigators monitors vehicles industrial controls instruments and meters smartphones wearable devices 3D glasses and sunglasses. By continuously strengthening the expansion of sales channels and the construction of its own brand the Company has become a qualified supplier for mainstream panel enterprises such as CSOT BOE LGD Xianyang Caihong HKC Tianma Microelectronics Sharp and so on.The main product types and applications of the Company's polarizer production lines are as follows: 112024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Production lines Address Product width Planned capacity Main product type Line 1 Pingshan 500mm 600000 square meters TN/STN/dye films Line 2 Pingshan 500mm 1.2 million square meters TN/STN/CSTN Line 3 Pingshan 650mm 1 million square meters TFT Line 4 Pingshan 1490mm 6 million square meters TFT/OLED Line 5 Pingshan 650mm 2 million square meters TFT/OLED Line 6 Pingshan 1490mm 10 million square meters TFT/OLED Line 7 Pingshan 2500mm 32 million square meters TFT/OLED (III) Business model of the Company The polarizer industry is gradually shifting from the traditional business model of R&D production and sales to a customer-centric joint R&D and comprehensive service business model. By understanding customer needs the Company jointly develops and carries out high- standard production management manufactures high-quality products uses advanced polarizer roll-on equipment to cooperate with downstream panel manufacturers' production lines optimizes production and logistics links reduces production and transportation costs creates value for customers and achieves win-win cooperation.(IV) Main performance drivers of the Company See "III. Core Competitiveness Analysis" in this section for details.(V) Market position of the Company's products The Company is one of the main domestic enterprises in the R&D production and sales of polarizers. It began its polarizer business in 1995 and achieved the first mass production of polarizers in China in 1998 becoming a pioneer in China's polarizer industry. The Company has mastered core technologies for the R&D and production of TN/STN TFT-LCD and OLED display polarizers. It is one of the few domestic polarizer manufacturers with the capability to produce a full range of polarizer products in large medium and small sizes. The Company was the first to achieve mass production of polarizers for OLED TVs and OLED mobile phones filling a gap in the domestic market.The Company's main products are medium and large-sized polarizers for TFT-LCD. Its Line 7 is one of the few 2500mm ultra-wide polarizer production lines in the world capable of meeting the needs of high-generation panel production lines such as 8.5/8.6 10.5/11 generations globally. Especially it offers the best economic production efficiency for 10.5/11 generation lines and has an industry- leading advantage in the technology and production capacities for ultra-large and large-sized products.(VI) Competitive advantages and disadvantages 1. Advantages of competition See "III. Core Competitiveness Analysis" in this section for details. 2. Disadvantages of competition See "(III) Possible risks of XI. Outlook for the Company's future development" in this chapter for details.III. Analysis of core competitiveness (I) Technical advantages. SAPO Photoelectric is one of the earliest national high-tech enterprises in China to enter the field of display polarizer research and development and production. It has 29 years of polarizer industry operation experience and its products cover mainstream display applications such as TN type STN type TFT type OLED etc. It has a complete set of proprietary technology and independent intellectual property rights for polarizers that can meet customer needs and has the production capacity of a full range of polarizers in large medium and small sizes. As of the end of the reporting period SAPO Photoelectric has been granted 109 patents including: 21 domestic invention patents 86 domestic utility model patents and 2 overseas utility model patents. 4 national standards and 2 industry standards were independently drafted and formulated by SAPO Photoelectric and approved for implementation; in addition it participated in the drafting and formulation of 1 industry standard which has been approved for implementation.SAPO Photoelectric has three innovation platforms including "Guangdong Provincial Engineering Research Center" "Shenzhen Polarization Material and Technology Engineering Laboratory" and "Shenzhen Enterprise Technology Center". The platforms focus on 122024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. the R&D and industrialization of the core production technologies of polarizers for OLED and LCD as well as the localization research of raw materials for polarizer production. Among them the projects of polarizers for OLED TVs and OLED mobile phones have successfully achieved mass production breaking the monopoly of Japan and South Korea and filling the domestic gap. It has a leading edge compared with other polarizer manufacturers. Based on the successful development of OLED polarizer products the Company's A Polarizer for Improving the Contrast Ratio of OLED Displays was granted a national patent in 2023. Trough in-depth research and elaborate design of the material structure and optical path of the OLED polarizer this patent has successfully solved key technical problems in the industry and promoted technological progress in the field of OLED polarizers possessing high commercial value and application prospects.(II) Talent advantages. In order to comply with the high-quality development of the company the Company promotes the construction of talent team in an all-round and multi-level way deeply explores the potential of existing talents fully stimulates their vitality continuously improves the core competitiveness of the enterprise and lays a solid foundation for the high-quality development of the company. The Company has always taken independent innovation as its core development strategy and has built a set of scientific and efficient own R&D management system and gathered a professional team with excellent skills rich experience and international vision covering polarizer management talents and senior technicians. First focus on talent training and team forging attach great importance to talent training and team building and strive to build a technical team with high efficiency excellent cooperation and strong creativity and successfully develop a series of innovative products with influence in the industry such as polarizer for ultra-large-size TVs and polarizer for OLED. Second continuously enrich the team of middle-level cadres and core backbone talents. Supplement and equip core backbone talents through diversified channels such as market-oriented recruitment public recruitment and internal selection to inject strong impetus into the company's development. Third actively promote internal personnel exchanges and learning. In combination with the actual situation of the Group in 2024 the two-way exchange and training activities for cadres and talents of the Group and its affiliated enterprises were continuously carried out to effectively strengthen talent communication between enterprises improve the comprehensive ability and duty performance ability of employees of the Company and further stimulate the overall vitality of the cadre team. Fourth adhere to the "strategy-traction performance-based and fair and impartial" assessment and distribution principle and continuously improve the compensation assessment and distribution mechanism of "efficiency priority justice integration balanced evaluation system appropriate adjustment and combination with incentives and constraints". By scientifically and reasonably determining the salary structure and level an effective incentive and constraint mechanism for determining value distribution based on value creation has been formed and the work enthusiasm and creativity of employees have been fully mobilized.(III) Market advantages. The Company has a good customer base in the domestic and foreign markets. Compared with foreign advanced peers the biggest advantage lies in the localized supporting capacity close to the panel market and the strong support of the national industrial policy. In terms of market demand with the successive mass production of high-generation TFT-LCD panel production lines such as domestic 10.5-generation and 11-generation lines as well as the accelerated development of larger-sized panels and terminal products the demand for polarizers especially ultra-large-size polarizers in the domestic market has shown a steady growth trend. The Company possesses one of the few 2500mm ultra-wide polarizer production lines in the world maintaining an industry-leading advantage in both technology and production capacity for ultra-large and large-size products which enables the Company to better align with the market demand for the ultra-large-size polarizers. With the continuous breakthrough of cutting-edge technology the demand for high-end polarizer products such as OLED and vehicle-mounted polarizer is growing rapidly and is becoming a blue ocean market for polarizer companies to compete. The Company has achieved mass production breakthroughs in OLED TVs and mobile phone products and has accumulated rich experience in the production of high-quality automotive polarizers which will put it in a favorable position in future market competition. In terms of market development the Company focuses on customer needs continuously optimizes the production process and product structure improves quality control organically combines production and sales establishes a rapid response mechanism gives full play to the advantages of localization effectively provides point-to-point professional services and promotes the verification of various models around the overall strategic deployment to form a stable supply chain and continuously improve market share.(IV) Quality advantages. The Company always adheres to the quality policy of "meeting customer needs pursuing excellent quality; implementing green manufacturing and achieving continuous improvement" pays attention to product quality control and the products are comparable to international quality standards. The Company strictly controls product performance indicators standardizes incoming inspection standards and takes quality improvement and consumption reduction as the starting point to achieve simultaneous improvement of output and quality; introduces modern management system and passes ISO9001 quality management system ISO14001 environmental management system ISO450001 occupational health and safety management system QCO80000 hazardous substance management system and ISO50001 energy management system certification; The product has passed the CTI test meets the environment protection requirements of RoHS directive and realizes the standardized management of the whole process from raw materials supply manufacturing marketing to customer service so as to ensure the stability of product quality.(V) Management advantages. The Company has been deeply involved in the industry for more than 20 years and has accumulated rich management experience in the production and manufacturing of polarizers. It has a domestic leading polarizer production management process control system quality management system and stable raw materials supply channels. The Company has carried out in-depth and comprehensive benchmarking work organized management personnel to learn advanced experience from customers and peers 132024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. vigorously promoted standardized management refined management processes and learned from the management experience of domestic and overseas polarizer enterprises to optimize the company's organizational structure reduce management levels and further improve the company's management efficiency; The Company continues to implement advanced management systems and reasonable incentive mechanisms to improve decision-making efficiency enhance market response speed and refine the R&D reward system. In addition it achieves a deeper integration of corporate value and employee value stimulating new business vitality; the Company steadily promotes strategic transformation optimizes resource allocation and orderly phases out "non-core businesses and inefficient assets"; the Company has improved the efficiency of production management and enhanced the production stability with significant progress in film-breaking reduction across production lines reaching a industry-leading level; the Company has strengthened quality management leading to a significant reduction in customer complaints and return rates earning multiple quality improvement awards from multiple key customers; through the approach of listing tasks based on project initiation the Company has effectively improved efficiency and quality resulting in noticeable reductions in material costs and an increase in product yield rates.(VI) Policy advantages. Polarizer is an important part of the new display industry. The continuous development of the Company's polarizer business has improved the overall supply capacity of domestic polarizer greatly reduced the dependence of domestic panel enterprises on imported polarizer maintained the safety of the country's new display industry played a positive role in enhancing the overall competitiveness of China's new display industry chain and boosted the coordinated development of the whole industrial chain of "20+8" ultra-high-definition video display industry cluster in Shenzhen. The Company's polarizer business unit SAPO Photoelectric has continued to receive recognition as a national high-tech enterprise and its polarizer projects have received multiple policy and financial supports from national and local governments; in addition SAPO Photoelectric also enjoys the preferential policy of import duty exemptions on key raw materials.IV. Analysis of primary business 1. Overview 2024 is a crucial year for the company to achieve the goals and tasks of the 14th Five Year Plan and also a year for the company to forge ahead towards high-quality development. Over the past year facing a severe and complex economic situation the company's board focused on the "14th Five Year Plan" strategic plan insisting on deepening the main business of polarizing film fully promoting the continuous improvement of production capacity and technological level and the continuous innovation of cutting-edge technology striving to turn challenges into opportunities continuously optimizing business quality steadily improving operational efficiency and achieving an overall improvement in the business situation laying a solid foundation for the company's further transformation and development.In 2024 the company will focus on its main business of polarizing films and achieve steady growth in performance through measures such as optimizing product structure improving product quality enhancing operational efficiency promoting the development and mass production of cutting-edge products and strengthening on-site technical management. During the reporting period the company achieved a revenue of 3.335 billion yuan a year-on-year increase of 8.30%; The net profit attributable to shareholders of the listed company was 89.3711 million yuan a year-on-year increase of 12.75%.The key work reviewed by the Company in 2024 as follows: (I) Deeply cultivated the operation and management of polarizer and drove high-quality development with differentiation strategy In 2024 first the Company actively adjusted its product structure implemented a product differentiation strategy and increased the sales proportion of high-value-added products. It has achieved an industry-leading position in OLED TV polarizer sales volume and the sales volume of ultra-large-size products has surged significantly; second the Company continued to promote lean management strictly controlled manufacturing costs reduced material losses made every effort to overcome quality problems and improved customer satisfaction; third the Company continued to strengthen innovation leadership driving the development and mass production of cutting- edge products. It focused on breakthroughs in key technologies and successfully achieved the development and mass production of high- performance OLED TV polarizers with high transmittance and low reflection in 55-inch 65-inch and 77-inch sizes. Additionally it completed the development of highly alkali-resistant polarizers for OLED mobile phones and the development of display polarizers that meet the U.S. Energy Star 9.0 energy efficiency standards; fourth the Company strengthened the on-site technical management level and enhanced the process stability. The improvement of broken film of each production line was remarkable and the average frequency of broken film decreased significantly year-on-year which has reached a higher level in the industry.(II) Consolidated the technological innovation ecosystem and empowered domestic substitution for breakthrough of key technologies In 2024 the Company actively cooperated with upstream and downstream enterprises in the industry chain consolidated the innovation ecosystem and undertook technical research projects. First in conjunction with upstream optical film material manufacturers and downstream panel enterprises the project of OLED circular polarizer and optical compensation film technology research and development has been carried out and has received national funding. The project was expected to make important contributions to the localization of key materials for OLED polarizer and the industrialization of domestic OLED polarizer; second accelerated the research and development of key technologies such as low color deviation circular polarizer for fixed curvature AMOLED and key technologies for vehicle display polarizer. By the end of 2024 the fixed curvature AMOLED polarizer project completed the product development and entered the mass production stage and the performance of the on-board polarizer products was preliminarily verified by customers. 142024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. In 2024 the Company completed 15 new patent applications including 7 invention patents and 8 utility model patents; obtained 5 authorized patents including 3 invention patents and 2 utility model patents. By the end of 2024 the Company had obtained a total of 109 authorized patents including 21 invention patents and 88 utility model patents. (III) Maintained the stable development of the leasing industry and improved tenant satisfaction with high service quality In 2024 the leasing market situation was grim the vacancy rate continued to rise and rents generally declined. The property management enterprises affiliated to the Company continuously improved their management and their operation and development have made steady progress. First judged the development trend of the future leasing market analyzed the potential customer demand and scientifically and reasonably formulated the annual property leasing plan based on the actual situation of the property enterprise; second strengthened management designed flexible lease terms and flexible payment methods and ensured the refined implementation and landing of the annual lease plan; third continuously improved the quality of property management service timely responded to the needs of tenants upgraded hardware and software facilities and enhanced tenant satisfaction. The Company's property leasing and management business achieved steady development throughout the year contributing stable cash flows.(IV) Focus on the main business to optimize the asset structure and the Company's transformation and development results have been achieved In 2024 the Company steadily promoted strategic transformation optimized resource allocation and promoted high-quality development.First continued to steadily and orderly promoted the improvement of textile business operation and basically completed personnel optimization; second the orderly liquidation of "non-core businesses and non-performing assets" and the participating enterprises Yehui International Co. Ltd. has substantially completed the liquidation procedures; third revitalized idle assets and made full use of vacant properties.(V) Terminate major asset reorganization projects and safeguard the interests of shareholders and the Company Since the planning and first announcement of the Company's acquisition of 100% equity in Hengmei Optoelectronics Co. Ltd. by issuing shares and paying cash (hereinafter referred to as the "Restructuring") the Company and relevant intermediaries have always adhered to the perspective of safeguarding the interests of all shareholders actively communicated with the counterparty in terms of transaction plans and core terms of the transaction.As the restructuring plan is complex and involves many counterparties by May 2024 the transaction has not completed the approval procedures of all parties to the transaction and the validity period of the financial data of the target company has expired. From the perspective of safeguarding the interests of all shareholders and listed companies the company has prudently demonstrated and friendly negotiated with all parties to the transaction.(VI) Build a firm concept of work safety and take multiple measures to strengthen work safety management In 2024 the Company firmly established the concept of safety development adhered to the safety red line awareness and bottom line thinking comprehensively consolidated the safety foundation improved the safety management level and created a good safety environment for production and operation. First improved the safety management system optimized the safety management system established and improved the work safety responsibility system compacted the responsibilities at all levels and ensured that all safety measures are implemented in place; second strengthened safety education and training carried out in-depth safety education and skill training for all employees through diversified training forms and effectively improved employees' safety awareness and operation ability; Third improved emergency response capabilities organized and carried out multi-level and multi-scenario emergency drills and strengthened employees' emergency response skills and emergency response capabilities; fourth deepened risk prevention and control and hidden danger investigation comprehensively carried out safety risk identification and hidden danger investigation and governance and formulated special rectification measures for weak links to ensure that safety control measures are in place.(VII) Improved the quality of party building and led the high-quality development of enterprises In 2024 the Company unswervingly strengthened party building further promoted the Party's innovative theoretical armament steadily carried out Party discipline learning and education continued to deepen the construction of party conduct and clean government solidly carried out Party building research and gave full play to the vanguard and exemplary role of grassroots party organizations as fighting bastions and party members and cadres; continuously strengthened the overall service adhered to the focus on party building around the center focused on straightening out the relationship between diversified shareholders of important subsidiary and formed a joint force for the company's development; adhered to the party building-led innovation drive to create differentiated competitive advantages; adhered to strengthening responsibility with party building empowerment forged a loyal and responsible cadre team and led the Company's high-quality development through high-quality party building. 2. Revenue and cost (1) Composition of operating revenue Unit: RMB Year 2024 Year 2023 YoY Percentage of Percentage of Amount Amount change operating revenue operating revenue Total operating revenue 3335283008.68 100% 3079678375.45 100% 8.03% By industry 152024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Manufacturing 3222007352.76 96.60% 2968884717.77 96.40% 8.53% Property leasing 113275655.92 3.40% 110793657.68 3.60% 2.24% By product Polarizer sales business 3161332478.08 94.78% 2885625542.77 93.70% 9.55% Property leasing and 173950530.605.22%194052832.686.30%-10.36% other business By region Domestic 3173216270.08 95.14% 2963091439.22 96.21% 7.09% Overseas 162066738.60 4.86% 116586936.23 3.79% 39.01% Subsales model Credit sales 3088206699.28 92.59% 2948168591.89 95.73% 4.75% Cash sales 247076309.40 7.41% 131509783.56 4.27% 87.88% (2) Industry product region and sales model accounting for more than 10% of the company's operating revenue or operating profit □Applicable □ Not applicable Unit: RMB YoY change in YoY change Gross YoY change in Operating revenue Operating costs operating in gross margin operating costs revenue margin By industry Manufacturing 3222007352.76 2770623790.28 14.01% 8.53% 9.09% -0.44% By product Polarizer sales 3161332478.082720719735.9913.94%9.55%10.46%-0.70% business By region Domestic 3173216270.08 2669090161.64 15.89% 7.09% 8.10% -0.78% Subsales model Credit sales 3088206699.28 2633299467.78 14.73% 4.75% 5.33% -0.47% Under the circumstances that the calculation method of the Company's main business data is adjusted during the reporting period the Company's main business data for the latest period is adjusted according to the calculation method at the end of the reporting period □Applicable □ Not applicable (3) Whether the company's physical sales revenue is greater than the revenue of labor services □Yes □No Industry Item Unit Year 2024 Year 2023 YoY change classification Ten thousand Sales volume 4511.36 4067.17 10.92% square meters Ten thousand Production volume 4519.80 4059.98 11.33% Polarizer square meters Ten thousand Inventory 113.66 105.22 8.02% square meters Reasons for the YoY change of more than 30% in relevant data □Applicable □Not applicable (4) Performance of major sales contracts and major procurement contracts signed by the Company as of the reporting period □Applicable □Not applicable 162024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. (5) Composition of operating costs Industry and product classification Industry and product classification Unit: RMB Industry Year 2024 Year 2023 YoY classificatio Item Proportion in Proportion in n Amount Amount change operating costs operating costs Manufacturi Polarizer and 2770623790.2899.10%2539763710.9299.15%9.09% ng textile Property Property leasing 25236144.540.90%21868133.610.85%15.40% leasing and others Unit: RMB Year 2024 Year 2023 Product Item Proportion in YoY change classification Proportion inAmount operating Amount operating costs costs Polarizer sales Direct 2249737862.6082.69%2001392768.8281.25%12.41% business materials Polarizer sales Direct 56860547.472.09%56414151.282.29%0.79% business labor Polarizer sales Power cost 69419996.74 2.55% 74399845.18 3.02% -6.69% business Manufactu Polarizer sales ring 344701329.18 12.67% 330930582.77 13.44% 4.16% business expenses Notes None (6) Whether there was any change in the consolidation scope during the reporting period □Yes □No (7) Information about significant changes or adjustments in the Company's business products or services during the reporting period □Applicable □Not applicable (8) Main sales customers and suppliers Main sales customers of the Company Total sales amount of top five customers (RMB) 2378354555.09 Ratio of top 5 customers' sales to total annual sales 71.31% Ratio of related party sales among top 5 customers to total 0.00% annual sales Information on the Company's top 5 customers No. Customer name Sales amount (RMB) Ratio in total annual sales 1 Customer 1 837268230.79 25.10% 2 Customer 2 711021831.51 21.32% 172024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. 3 Customer 3 384654504.42 11.53% 4 Customer 4 310802454.14 9.32% 5 Customer 5 134607534.23 4.04% Total -- 2378354555.09 71.31% Other information of main customers □Applicable □Not applicable Main suppliers of the Company Total purchase amount of top five suppliers (RMB) 1136388239.76 Ratio of total purchase amount of the top five suppliers in the 44.72% total annual purchase amount Ratio of related party purchases among top 5 suppliers to total 0.00% annual purchases Information on the Company's top 5 suppliers Ratio in the annual purchase No. Supplier name Purchase amount (RMB) amount 1 Supplier I 380858912.59 14.99% 2 Supplier II 249144324.52 9.80% 3 Supplier III 217940190.61 8.58% 4 Supplier IV 147054553.77 5.79% 5 Supplier V 141390258.27 5.56% Total -- 1136388239.76 44.72% Other information of main suppliers □Applicable □Not applicable 3. Costs Unit: RMB Year 2024 Year 2023 YoY change Explanation of significant changes Selling and distribution Mainly due to the increase in sales 42260603.4734195670.6123.58% expenses service fees.G&A expenses 134347821.58 134371410.53 -0.02% Mainly due to reduced interest Financial expenses 12121156.05 24399501.16 -50.32% expenses and exchange rate fluctuations.R&D expenses 103811822.91 104653040.92 -0.80% 4. R&D investment □Applicable □Not applicable Name of main R&D Project Expected impact on the Purpose of the project Objectives to be achieved project progress company's future development High-transparency and high- Satisfy the demands of terminals Development of high- Follow the deviation TV products have for low-energy-consumption transmittance and high- development trend of Completed been developed and mass- display products and stabilize the deviation TV products the industry.produced. market position of the enterprise.Development of ultra- Complete the development Solve the issue of wide new VA and introduction of materials Broaden sources of material having a single Completed compensation film and achieve the mass supply.supplier.product production and delivery of 182024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. products.Complete the product It is conducive to seizing market Follow the MNT product development and share and laying a foundation for development trend of Completed development introduction and achieve further product technological the industry.mass production and delivery. update.Enter the medium and Improve the Company's market Development of wide high-end NB market Complete the verification of position in small and medium- width brightening NB and strengthen the Completed customer materials. sized markets especially in the products layout of the NB NB field.market.Component certification will Further enhance the company's OLED TV product Match the customer's In progress be completed in June 2025 to market position in the field of the development development strategy.achieve mass production. polarizer for OLED.Implement the Company's AMOLED circular Complete material process strategy of cost reduction and Dual development of polarizer product Completed verification and customer-side efficiency improvement and meet core components.development verification. the localization requirements of the customer.Complete the development of PVA high transparency Improve the cutting the extended process for thin Improve utilization while Completed process development utilization rate. PVA in the wide-width reducing production costs.production line.The Company has enriched and Complete the design and Improve the weather perfected its core technology of High-durability PVA verification of the formula of resistance index of the Completed polarizer production and kept up water glue high-durability PVA water product. with the international advanced glue.level of the industry.Under the condition of Improve the moisture matching high machine speed Improve the competitiveness of Development of highly resistance and Completed the interlayer adhesion and the Company's products and reliable UV adhesive interlayer adhesion of reliability of the product are broaden the scope of application.large-size products.stable.Ensure that the internal test Achieve breakthroughs Development of full performance of the developed Lay a foundation for opening the in technical solutions lamination vehicle- Completed products meets the high-end market of on-board and break foreign mounted products requirements of full - fit on - products.monopoly.board products.Develop eye protection Complete the product Diversify the Company's products SGF eye care product products to enhance development and Completed and improve the competitiveness development product introduction and achieve of the Company's products.competitiveness. mass production and delivery.R&D personnel of the Company Year 2024 Year 2023 Change ratio Number of R&D personnel 174 178 -2.25% Proportion of R&D personnel 12.53% 12.57% -0.04% R&D investment Year 2024 Year 2023 Change ratio Amount of R&D investment (RMB) 103811822.91 104653040.92 -0.80% Ratio of R&D investment to 3.11%3.40%-0.29% operating revenue (%) Amount of capitalized R&D 0.000.000.00% investment (RMB) Ratio of capitalized R&D investment 0.00%0.00%0.00% to R&D investment Reasons and impact of major changes in the composition of the Company's R&D personnel 192024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. □Applicable □Not applicable Reasons for the significant change in the proportion of total R&D investment to operating revenue compared with the previous year □Applicable □Not applicable Reasons for the significant change in the capitalization rate of R&D investment and its rationality explanation □Applicable □Not applicable 5.Cash flows Unit: RMB Item Year 2024 Year 2023 YoY change Sub-total of cash inflows from 3498846688.583078145063.0913.67% operating activities Sub-total of cash outflows from 3267582163.492893378323.2912.93% operating activities Net cash flows from operating 231264525.09184766739.8025.17% activities Sub-total of cash inflows from 1710096583.991467781075.5916.51% investing activities Sub-total of cash outflows from 1634895167.621904569967.97-14.16% investing activities Net cash flows from the investing 75201416.37-436788892.38117.22% activities Sub-total of cash inflows from 0.008000000.00-100.00% financing activities Sub-total of cash outflows from 466358420.51169488356.86175.16% financing activities Net cash flows from financing -466358420.51-161488356.86-188.79% activities Net increase in cash and cash -159335617.98-413054377.1361.43% equivalents Description of main influencing factors of significant YoY changes in relevant data □Applicable □Not applicable The net cash flows from investing activities increased by 117.22% YoY mainly due to the purchase of structured deposits and bank wealth management products in the same period last year; The net cash flows from financing activities decreased by 188.79% YoY mainly due to the prepayment of loan principal during the reporting period; The net increase in cash and cash equivalents increased by 61.43% YoY mainly due to the increase in cash inflows from the maturity of the company's wealth management products during the reporting period.Explanation of the reasons for the significant difference between the net cash flow generated from the operating activities of the Company and the net profit of the current year during the reporting period □Applicable □Not applicable V. Analysis of non-primary business □Applicable □Not applicable Unit: RMB Ratio of total Whether it is Amount Formation reasons profit sustainable 202024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. It is mainly due to the loss of participating Investment income -165313.89 -0.11% Sustainable.enterprises during the reporting period.It is mainly due to the income and fair value Gains/losses on changes obtained by the Company from changes in fair 1134503.45 0.74% purchasing financial products and the Not sustainable.value unexpired part of forward foreign exchange contracts during the reporting period.It was mainly due to the provision for inventory depreciation made by the Asset impairment -132423108.75 -86.62% Company in accordance with the Sustainable.accounting policies during the reporting period.It is mainly due to the liquidated damages Non-operating 1805086.92 1.18% received by the Company during the Not sustainable. revenue reporting period.It is mainly due to the liquidated damages Non-operating 698017.71 0.46% paid by the Company during the reporting Not sustainable. expenses period.It is mainly due to the government grants received by and the preferential policy of Other income 41484107.53 27.13% additional value-added tax deduction Sustainable.enjoyed by the Company during the reporting period.VI. Analysis of assets and liabilities 1. Major changes in asset composition Unit: RMB As at the end of 2024 Early 2024 Increase/decre Explanation of Ratio of Ratio of ase in significant Amount Amount total assets total assets percentage changes Monetary funds 340961443.82 6.52% 472274448.00 8.36% -1.84% Accounts 863731936.8916.51%820134833.9514.52%1.99% receivable Inventories 789756700.88 15.09% 736392172.27 13.03% 2.06% Investment 115993390.192.22%125603207.182.22%0.00% properties Long-term equity 114828026.042.19%127682020.702.26%-0.07% investments Fixed assets 1873552843.91 35.81% 2066006237.73 36.57% -0.76% Construction in 5814012.030.11%31307060.740.55%-0.44% progress Right-of-use 15338117.860.29%11999466.570.21%0.08% assets Short-term 0.000.00%8000000.000.14%-0.14% borrowings Contract 490562.970.01%1436943.340.03%-0.02% liabilities It is mainly due to the early Long-term 162388870.00 3.10% 505578314.56 8.95% -5.85% repayment of borrowings loans by the Company during 212024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. the reporting period.Lease liabilities 9496564.12 0.18% 6687317.22 0.12% 0.06% Financial assets 731419904.4213.98%821946114.6814.55%-0.57% held for trading Other payables 160296989.98 3.06% 184528344.55 3.27% -0.21% High proportion of overseas assets □Applicable□Not applicable 2. Assets and liabilities measured at fair value □Applicable □Not applicable Unit: RMB Profit or Cumulative Amount loss from Impairment Amount changes in purchased Beginning changes in provision in sold in the Other Ending Item fair value in the balance fair value in the current current changes balance included in current the current period period equity period period Financial assets 1. Financial assets held for trading 82194611 2413062.8 16054540 16983932 73141990 0.000.000.00 (excluding 4.68 0 00.00 73.06 4.42 derivative financial assets) 4. Other equity 1459889019414000.16540290 instrument 0.00 0.00 0.00 0.00 0.00 0.00000.00 investments Sub-total of 96793501 2413062.8 19414000. 16054540 16983932 89682280 0.000.00 financial assets 4.68 0 00 00.00 73.06 4.42 Total of the 96793501 2413062.8 19414000. 16054540 16983932 89682280 0.000.00 above 4.68 0 00 00.00 73.06 4.42 -- Financial 0.001278559.30.000.000.000.000.001278559.3 liabilities 55 Other changes None Whether there were significant changes in the measurement attributes of the Company's major assets during the reporting period □Yes □No 3. Restrictions on asset rights as of the end of the reporting period Restricted assets as of the end of the reporting period are monetary funds notes receivable fixed assets and intangible assets of which: (1) The restricted monetary funds mainly include the funds equivalent to RMB 3401500.00 due to the freezing of accounts and the bill guarantee of RMB 35443338.96. (2) Restricted notes receivable are notes receivable that have been endorsed by the Company and have not yet matured on the balance sheet date. (3) The restricted fixed assets and intangible assets are mainly the mortgage loans applied for subsidiary SAPO Photoelectric with part of its self-owned properties from the syndicate led by Bank of Communications Co. Ltd. Shenzhen Branch and the guarantee provided by the Company for the mortgage loans. For details please refer to the Announcement on the Provision of Guarantees by the Company for Subsidiaries to Apply for Bank Mortgage Loans (No. 2020-19) and the Announcement on the Progress of the Provision of Guarantees by 222024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. the Company for Subsidiaries (No. 2020-46) published by the Company on Cninfo (http://www.cninfo.com.cn).VII. Analysis of investment status 1. Overall situation □Applicable □Not applicable 2. Major equity investments acquired during the reporting period □Applicable □Not applicable 3. Major non-equity investments in progress during the reporting period □Applicable □Not applicable 4. Investment in the financial assets (1) Securities investment □Applicable □Not applicable The Company had no securities investment during the reporting period. (2) Derivative investment □Applicable □Not applicable The Company had no derivative investment during the reporting period. 5. Use of funds raised □Applicable □Not applicable The Company had no use of funds raised during the reporting period.VIII. Sales of major assets and equities 1. Sales of major assets □Applicable □Not applicable The Company did not sell major assets during the reporting period. 2. Sale of major equity □Applicable □Not applicable IX. Analysis of major holding and participating companies □Applicable □Not applicable Major subsidiaries and participating companies with an impact of 10% or more on the Company's net profit Unit: RMB 232024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Company Company Main Registered Operating Operating Total assets Net assets Net profit name type business capital revenue profit Shenzhen Production SAPO Subsidiarie 58333333 40385761 32032660 32300060 13610962 13421408 and sales of Photoelectric s 3.00 73.15 74.15 72.51 3.37 0.34 polarizers Co. Ltd.Information on acquisition and disposal of subsidiaries during the reporting period □Applicable □Not applicable Methods of acquisition and disposal of Impact on overall production operation Company name subsidiaries during the reporting period and performance It conforms to the Company's strategic planning and has no significant impact Shenzhen Huaqiang Hotel Co. Ltd. Liquidation on the Company's overall production operation and performance.Notes to main holding and participating companies The financial data of the subsidiary SAPO Photoelectric in the above table are the data of its consolidated financial statements. For details of its performance fluctuations and reasons for changes please refer to "IV Analysis of primary business" in "Section III Management Discussion and Analysis".X. Structured entities controlled by the Company □Applicable □Not applicable XI. Prospects for the future development of the Company (i) Industry competition pattern and development trend 1. Industry competition pattern The polarizer industry is a highly concentrated industry. At present there are about 10 major polarizer manufacturers in the world mainly located in Chinese mainland Japan and Taiwan. With the transfer of production capacity and the continuous expansion of production by manufacturers from Chinese mainland China has become the world's largest polarizer production base. According to the latest data from Omdia by the end of 2024 the global share of polarizer production capacity in Chinese mainland will further increase to about 58.5% and it is expected that by 2027 the share of polarizer production capacity in Chinese mainland will be close to 72%. In the competition for ultra-wide polarizer production line driven by the rapid growth of demand for large-size display products of 65 inches and above Chinese mainland continues to maintain its leading position in the industry. 2. Industry development trend With the recovery of the global economy the gradual recovery of the consumer electronics market and the increasing maturity of various types of display technologies and products in multiple scenarios the global display industry has entered a recovery upward channel. At present the "national subsidy" policy continues to advance and the policy coverage will be further expanded in 2025. New consumer electronic products such as mobile phones and tablets will be added as subsidy objects. At the same time the accelerated breakthrough of artificial intelligence technology at the application end stimulates consumer demand to further promote the renewal and upgrading of display products directly driving the demand growth of display panel and its upstream industrial chain. As one of the key raw materials upstream of the display panel polarizers are expected to fully benefit from the recovery of the industry and technological progress and enter a new round of demand growth.In recent years due to the continuous expansion of production capacity by major panel manufacturers in Chinese mainland the market demand for domestic polarizer has grown rapidly. Similar to the development trend of the global panel industry overseas polarizer manufacturers are also accelerating their contraction and withdrawal. Domestic polarizer manufacturers have occupied an advantageous position in the field of LCD polarizer and are gradually catching up in differentiated markets such as high-end LCD polarizer and OLED polarizer. There is still a large space for domestic substitution in the future which brings good development opportunities for polarizer manufacturers from Chinese mainland with market advantages scale advantages policy advantages and geographical advantages.With the upgrading of consumption ultra-large-size display products can better meet the needs of consumers for high-quality display effects which has led to the continuous growth of demand for 65-inch and above large-size TVs bringing huge demand for ultra-wide polarizer products. Market institution Omdia predicts that from 2024 to 2027 the annual compound growth rate of global demand area of 65-inch and above polarizers will be about 10%. It is expected that by 2027 the demand for large-size panel of 65 inches and above will increase to about 100mn square meters and the corresponding demand for ultra-wide polarizers will exceed 200mn square meters.At the same time the shipment of OLED panels in the field of smartphone screens in 2024 exceeded that of LCD panels for the first time.OLED displays have achieved high penetration in the field of smartphone and are accelerating the penetration to medium and large sizes. 242024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. In addition the multi-screen demand brought about by the continuous evolution of automobile intelligence and electrification as well as the actual layout of OLED IT products actively promoted by Apple domestic and foreign leading panel manufacturers are also accelerating the investment and construction of 8.6 generation OLED panel production lines which will drive the rapid growth of market demand for high-end products such as OLED and polarizers for vehicle use becoming a blue ocean market for polarizer companies to compete. In the future manufacturers with large-size polarizer products as well as high-end and cutting-edge polarizer technology reserves and mass production capabilities such as OLED and vehicle will occupy greater competitive advantages.(II) Development strategy of the Company The Company strengthens strategic leadership relying on the existing business foundation through the two major paths of stock business potential expansion and incremental business investment empowerment actively plans business innovation and upgrading vigorously implements the "polarizer +" strategy flexibly uses the capital operation mode promotes the core business of polarizer to become bigger better and stronger and extends to the upstream raw materials of polarizer at the right time and actively expands to other advanced new material sub-sectors with better industry track higher economic benefits and faster performance release and thus to achieve "industry + capital" two-wheel drive to strive to build a world-class new material technology group.(III) Possible risks 1. Macroeconomic risks At present the domestic economy is stable and progressing and the overall situation is repairing. However the international environment is complex and severe geopolitical tensions and global economic growth is facing slowdown pressure. As one of the upstream manufacturers in the display product market the Company cannot rule out the risk that unpredictable macroeconomic fluctuations may affect the Company's performance. 2. Market risks The polarizer industry is an important part of China's new display industry. The demand for display panels and the development of corresponding technologies are changing rapidly. The process of domestic substitution in the polarizer industry is underway. With the development of new display technologies such as ultra-large size displays OLED displays and vehicle displays if the Company's technology and products cannot respond to the needs of the application field in a timely manner the new product development and application are weaker than expected or the intensified market competition leads to the decline in the price of display products and the downward pressure on the price is transmitted to the polarizer market which will have an adverse impact on the Company. 3. Raw materials risks There are high barriers to the core production technology of upstream materials of polarizers which are mostly monopolized by foreign manufacturers and the localization rate is not high. At present the key raw materials required for the manufacture of polarizers such as PVA film TAC film and other optical films are basically monopolized by Japanese enterprises. The price of the main optical film materials is affected by the production capacity of Japanese suppliers market demand and the exchange rate of Japanese yen thus affecting the unit cost of the Company's products. 4. Risks of intensified competition With the accelerated production of new and expanded production lines by major domestic polarizer manufacturers in recent years polarizer production capacity especially large-size polarizer production capacity will continue to grow in the future. If the recovery of downstream consumer markets is weaker than expected the competition in the polarizer industry will further intensify.(IV) Priorities in 2025 1. Adhere to innovation-driven approach and promote the main business of polarizers to become stronger and better Adhere to focusing on the main business of polarizer and effectively promote the measures of "capacity scale product differentiation innovation ecology and management lean". First continuously strengthen the research of cutting-edge technologies focus on key technologies such as high penetration high contrast flexible folding and high durability promote the product development of cutting- edge products and seize the development opportunities of the blue ocean market of new displays; second continue to improve the production process technology level further improve the speed and yield of Lines improve the mass production capacity of ultra-large size polarizers and steadily promote the optimization and transformation of existing production lines; third strengthen diversified technological innovation cooperation promote collaborative research with upstream and downstream enterprises of the industrial chain and accelerate the breakthrough of key technology research projects such as OLED circular polarizers and optical compensation films and vehicle-mounted polarizers; fourth promote lean management effectively promote quality improvement cost reduction and efficiency improvement reduce process losses remove sluggish inventory improve product quality import domestic materials and enhance the anti-risk ability of operation. 2. The property leasing business is stable and progressive providing effective support for the Company's development Property management companies actively carry out market research formulate refined annual leasing plans in combination with market and the Company's conditions further optimize the working mechanism continuously implement refined management innovate and tap potential open up revenue and reduce expenditure improve the service quality and management level of property management companies and improve operating efficiency. 3. Strengthen the governance of loss-making enterprises and the disposal of "non-core/non-competitive businesses and inefficient/non- performing assets" Carry out the demobilization work in an orderly and steady manner. First actively promote the disposal of textile business inventories the public listing of fixed assets and the liquidation of claims and debts; second extensively seek interested acquirers and promote the transfer of small equity in some participating enterprises; thirdly actively revitalize the low-efficiency property stock assets optimize 252024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. asset allocation and improve asset operation efficiency so as to lay a solid foundation for the Company to focus on the main business of polarizers and seek transformation and development. 4. Strengthen the construction of talent team and ensure development with talent-driven innovation Deeply implement the talent-driven strategy optimize the structure of the cadre team and improve capacity building. First vigorously select cadres and talents with both integrity and ability increase the introduction of high-end talents cultivate compound talents and broaden the development path; second innovate the incentive mechanism release the potential of talents benchmark the management experience of advanced enterprises and implement flexible and diversified medium and long-term incentives; third create an environment of "recognizing talents cherishing talents loving talents and using talents" give full play to the professional intellectual and resource advantages of talents empower the Company's high-quality development with a high-quality talent team and comprehensively enhance the Company's core competitiveness. 5. Strengthen safety management and build a firm safety defense line Always adhere to the work safety policy of "safety first prevention oriented and comprehensive governance" firmly establish the concept of safety development continuously improve the safety management system of the Company closely follow the update of national and local work safety regulations refine the safety management system further strengthen the on-site safety supervision and rewards and punishments vigorously carry out safety education and training carry out various forms of safety inspections continuously improve the Company's safety management capabilities enhance the safety awareness and emergency response capabilities of all employees and comprehensively build a firm line of defense for work safety. 6. Improve the risk control compliance system and enhance the ability of comprehensive risk prevention and control Comprehensively improve the compliance management system make multi-dimensional efforts from organization system mechanism to cultural construction implement special compliance management for key areas explore the establishment of coordination mechanisms for compliance legal affairs and risk control and improve management efficiency through efficient coordination. At the same time strengthen the cornerstone of legal management strictly control the legality and compliance of major decisions and effectively improve the level of business support and risk prevention and control. Strengthen the legal affairs and compliance team enhance the compliance awareness and ability of all employees through regular training promote the deep integration of business laws and help the Company develop steadily. 7. Enhance market value management level and promote high-quality development of the company Focusing on improving the operational quality of the company efforts will be made to optimize the "three meetings and one layer" governance mechanism improve the internal control system enhance the quality of information disclosure strengthen investor relations management formulate market value management system and assessment system and lay a solid foundation for the sustainable and high-quality development of listed companies. At the same time timely and compliant use of mergers and acquisitions equity incentives cash dividends investor relations management share repurchases and other methods to promote the increase of investment value of listed companies achieve market recognition of the company's investment value and inject vitality into the company's high-quality development. 8. Strengthen the leadership of party building and innovate corporate culture In strict accordance with the unified deployment and arrangement of the Party Central Committee and the superior Party Committee give full play to the leadership role of the Party Committee in overseeing the overall situation and coordinating all parties and promote the Party's latest theoretical achievements into the enterprise the front line and the team; make every effort to build a characteristic party building brand of enterprises in the field of mixed ownership competition and play a vanguard and exemplary leading role of party members in core key positions such as production line and scientific research and innovation; pay close attention to the construction of the work style of the cadre team promote the improvement and implementation of the Company's system promote the clarity and implementation of the corporate strategy and lay a solid foundation and provide guarantee for the healthy development of the Company.XII. Reception survey communication interview and other activities during the reporting period □Applicable □Not applicable Type of Main contents Index of basic Reception Reception Reception receptio Reception object discussed and information of the time place mode n object information provided survey Shenzhen Chuanghua Main contents Qisheng Co. Ltd.: Li discussed: prosperity For details please Junhui of the polarizer refer to the Investor Meeting； Shenzhen Dexun industry future Relations Activity room on the March 29 Field Instituti Securities Consulting Co. development trend Record Form (No.sixth floor 2024 survey on Ltd.: Ruan Shiwang Chang impact of panel price 2024-01) published of the Jianwu Zeng Xianwei fluctuations on by Shenzhen Textile Company； Hexun Information polarizer price the (Holdings) Co. Ltd.Technology Co. Ltd.: Ye Company's product on Cninfo Xiaofei Wang Yanqiu; structure the (http://www.cninfo.c 262024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Shanghai Chuhua Capital Company's major om.cn).Co. Ltd.: Li Xianhong customers etc. Data provided: none.Main contents For details please Value discussed: progress of refer to the Investor Online Online restructuring whether Relations Activity communic (https://ww the textile business is Record Form (No.April 19 ation on w.ir- Others General investors divested when to 2024-02) published 2024 the online.cn/) change its name how by Shenzhen Textile network network to realize strategic (Holdings) Co. Ltd.platform interaction planning etc. Data on Cninfo provided: none. (http://www.cninfo.c om.cn).For details please Value refer to the Investor Online Main contents Online Relations Activity communic discussed: reasons for (https://ww Record Form (No.May 19 ation on termination of w.ir- Others General investors 2024-03) published 2024 the restructuring corporate online.cn/) by Shenzhen Textile network planning etc. Data network (Holdings) Co. Ltd.platform provided: none.interaction on Cninfo (http://www.cninfo.c om.cn).The prosperity of LCD polarizer industry the For details please market space of OLED refer to the Investor Li Jie Xue Zhao and Shang Meeting TV polarizers the Relations Activity Yingna from Beijing room on the progress of vehicle- Record Form (No.July 30 Field Instituti Fundamentals Private sixth floor mounted polarizers 2024-04) published 2024 survey on Equity Fund Management of the and the Company's by Shenzhen Textile Center (Limited Company competitive advantages (Holdings) Co. Ltd.Partnership) compared with its on Cninfo peers. Data provided: (http://www.cninfo.c none. om.cn).The net profit growth For details please Panorama business-driven sector; refer to the Investor "Investor Online measures to deal with Relations Activity Relations communic price fluctuations of Record Form (No.December Interactive ation on Others General investors raw materials; how to 2024-05) published 12 2024 Platform" the maintain a competitive by Shenzhen Textile (https://ir.p5 network advantage; when to (Holdings) Co. Ltd.w.net platform change the name etc. on Cninfo ） Data provided: none. ( Http://www.cninfo.com.cn).XIII. Formulation and implementation of market value management system and valuation improvement plan Whether the Company has formulated a market value management system.□Yes □No Whether the Company has disclosed plans for valuation enhancement.□Yes □No 272024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. XIV. Implementation of the action plan of "double improvement of quality return".Whether the company has disclosed the announcement of the action plan of "double improvement of quality return".□Yes □No 282024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Section IV Corporate Governance I. Basic status of corporate governance During the reporting period the Company operated in strict accordance with the requirements of the Securities Law the Company Law the Code of Corporate Governance for Listed Companies the Guidelines for Self-Regulation of Companies Listed on Shenzhen Stock Exchange No. 1 - Standardized Operation of Companies Listed on the Main Board and other relevant laws regulations and normative documents strengthened risk management and control and ensured the healthy and stable development of the Company. At present the Company's various governance systems are basically sound its operation is standardized and its legal person governance structure is perfect which meets the requirements of the normative documents on the corporate governance of listed companies issued by the China Securities Regulatory Commission.(I) Operation of the general meeting In 2024 the Company held a total of 4 general meetings in strict accordance with the provisions and requirements of the Company Law the Company's Articles of Association and the Rules of Procedure for the General Meeting on the convening and holding of general meeting and the voting procedures were standardized and the resolutions were legal and valid. The Company actively protects the voting right of small and medium-sized investors and all the general meetings are held on-site and online to fully protect the exercise of rights of small and medium-sized investors.(II) Operation of the Board of Directors In 2024 the Board of Directors of the Company held a total of 9 meetings. The convening holding and voting procedures of the Board of Directors were carried out in strict accordance with the provisions of the Articles of Association and the Rules of Procedures of the Board of Directors of the Company. All directors performed their duties as directors exercised their rights as directors conscientiously attended relevant meetings actively participated in training and were familiar with relevant laws and regulations in a conscientious diligent and honest manner. The independent directors independently performed their duties in strict accordance with relevant laws regulations and the Company's Articles of Association the Independent Directors System and other regulations and prudently and carefully deliberated on major matters of the Company and with their independent and objective perspective and rich professional knowledge put forward constructive opinions and suggestions. The Board of Directos has established strategic planning audit remuneration assessment and nomination committees. All specialzed committees operate normally and perform earnestly their relevant duties such as internal audit and remuneration assessment providing scientific and professional advice for the Board's decision-making.(III) Operation of the Board of Supervisors In 2024 the Board of Supervisors of the Company held 6 meetings. The Board of Supervisors in strict accordance with the requirements of relevant laws regulations the Articles of Association and the Rules of Procedure of the Board of Supervisors supervised the legality and compliance of the Company's financial affairs and the performance of duties by the Company's directors managers and other senior officers to safeguard the legitimate rights and interests of the Company and shareholders. All supervisors conscientiously performed their obligations and exercised their rights as supervisors according to law. The convening holding and voting procedures of the Board of Supervisors were legal and the resolutions were legal and valid. The establishment and implementation of the Company's Board of Supervisors organization and system have played a positive role in improving the corporate governance structure and standardizing the Company's operation.(IV) Operation of the management The management of the Company performed its duties in strict accordance with the Company Law the Guidelines for Self-Regulation of Companies Listed on Shenzhen Stock Exchange No. 1 - Standardized Operation of Companies Listed on the Main Board the Articles of Association and the Working Rules of the General Manager. The Company conducted internal information communication through the weekly general manager's office meeting and reviewed performance and gave feedback on budget implementation through quarterly business analysis meetings to ensure that all kinds of information were transmitted in a timely and effective manner within the Company.The management is fully responsible for the production and operation management of the Company diligently and dutifully performs its duties effectively implements the decisions of the Board of Directors and the division of labor among the management is clear diligent and responsible and there is no "insider control".(V) Information disclosure and transparency In 2024 the Company further improved information transparency and strengthened investor communication. During the reporting period the Company strictly complied with the Articles of Association the Measures for the Administration of Information Disclosure of Listed Companies and other relevant provisions abided by the principle of "openness fairness and impartiality" in information disclosure fulfilled its information disclosure obligations in a true accurate complete and timely manner continuously improved the quality of information disclosure improved investor relations management and specific measures to protect investors' interests and promoted the standardized development of the Company. The Company strengthened the management of inside information carried out continuous education and publicity confidentiality before information disclosure and registration and filing of insiders so as to prevent the disclosure of inside information from the source to ensure that all shareholders have equal rights and opportunities to access information; the Company attached great importance to the management of investor relations made full use of various platforms such as telephone and e-mail especially the Shenzhen Stock Exchange's investor relations interactive platform timely and patiently answered questions 292024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. raised by investors and timely reported the needs suggestions and reasonable demands of investors to the management. At the same time the Company continued to improve the voting mechanism for small and medium investors. The votes of small and medium investors were counted separately at the 4 general meetings of the Company in 2024 and the results of the separate counting were publicly disclosed in the resolution announcement of the general meeting fully protecting the rights of small and medium investors.Whether there is any significant difference between the actual status of corporate governance and the laws administrative regulations and the provisions issued by the China Securities Regulatory Commission on the governance of listed companies □Yes □No There are no significant differences between the actual status of corporate governance and the laws administrative regulations and the provisions issued by the China Securities Regulatory Commission on the governance of listed companies II. The independence of the Company from the controlling shareholder and actual owner in terms of assets personnel finance organization and business During the reporting period the controlling shareholders of the Company behaved in a standard manner and did not directly or indirectly intervene in the Company's decision-making and operating activities beyond the general meeting. The Company has independent and complete business and independent operation abilities and can achieve "five separations" in terms of personnel finance assets institutions and business.III. Horizontal competitions □Applicable □Not applicable V. Relevant information of the annual general meeting and extraordinary general meeting held during the reporting period 1. General meetings during the reporting period Investor Meeting Date of Session attendance Date of meeting Resolutions made at the meeting type disclosure ratio The First Extraordin For details please refer to the Announcement Extraordinary ary February 28 February 28 49.56% No. 2024-06 published by the Company on General Meeting in general 2024 2024 Cninfo (http://www.cninfo.com.cn). 2024 meeting Annual For details please refer to the Announcement 2023 Annual General general 49.64% May 29 2024 May 30 2024 No. 2024-26 published by the Company on Meeting meeting Cninfo (http://www.cninfo.com.cn).The Second Extraordin For details please refer to the Announcement Extraordinary ary 49.78% July 23 2024 July 24 2024 No. 2024-36 published by the Company on General Meeting in general Cninfo (http://www.cninfo.com.cn). 2024 meeting The Third Extraordin For details please refer to the Announcement Extraordinary ary December 25 December 26 49.91% No. 2024-51 published by the Company on General Meeting in general 2024 2024 Cninfo (http://www.cninfo.com.cn). 2024 meeting 2. The preferred shareholders whose voting rights have been restored requested to convene an extraordinary general meeting.□Applicable □Not applicable 302024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. V. Directors supervisors and senior officers 1. Basic information Numbe r of Numbe shares Number Number r of Other Reasons held at of shares of shares shares increas for Emplo Beginnin Ending the increased reduced held at Gende e/decre increase Name Age Position yment g date of date of beginni the in the the end r ase or status term term ng of current current of the (shares decrease the period period period ) in share period (shares) (shares) (shares (shares ) ) Secretary of the Party Incumb February Yin Kefei Male 50 0 0 0 0 0 Committee ent 10 2021 and Chairman Deputy Secretary of the Party Incumb February Ma Jie Male 47 Committee 0 0 0 0 0 ent 18 2025 Director and General Manager Deputy Secretary of Wei Incumb February Male 45 the Party 0 0 0 0 0 Junfeng ent 18 2025 Committee and Director Wang Incumb October Male 53 Director 0 0 0 0 0 Chuan ent 28 2022 Director and Femal Incumb February Liu Yu 53 Finance 0 0 0 0 0 e ent 28 2024 Director Incumb July 23 Meng Fei Male 49 Director 0 0 0 0 0 ent 2023 Decembe Wu Independent Incumb Male 62 r 25 0 0 0 0 0 Guangquan director ent 2023 Decembe Yang Independent Incumb Male 57 r 25 0 0 0 0 0 Gaoyu director ent 2023 Independent Incumb January Wang Kai Male 41 0 0 0 0 0 director ent 16 2020 Secretary of Commission for Discipline Incumb January Ma Yi Male 58 Inspection 0 0 0 0 0 ent 16 2020 Chairman of the Board of Supervisors Yuan Incumb January Male 44 Supervisor 0 0 0 0 0 Shuwen ent 16 2020 Deputy Femal Incumb January Lin Xia 49 General 0 0 0 0 0 e ent 24 2025 Manager Wang Male 35 Deputy Incumb January 0 0 0 0 0 312024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Zihan General ent 24 2025 Manager Secretary of Femal Incumb January Jiang Peng 54 the Board of 0 0 0 0 0 e ent 16 2015 Directors Septembe Employee Incumb Jiang Yifan Male 39 r 27 0 0 0 0 0 supervisor ent 2024 Director and Februa Resign January He Fei Male 47 Finance ry 7 0 0 0 0 0 ed 16 2020 Director 2024 Deputy Secretary of the Party Novem Zhu Resign July 19 Male 60 Committee ber 29 93000 0 0 0 93000 0 Meizhu ed 2017 Director and 2024 General Manager Deputy Secretary of Decembe Januar Ning Resign Male 49 the Party r 14 y 22 0 0 0 0 0 0 Maozai ed Committee 2017 2025 and Director Sun Resign February July 2 Male 43 Director 0 0 0 0 0 0 Minghui ed 10 2021 2024 Deputy May Liu Resign January Male 60 General 31 3000 0 0 0 3000 0 Honglei ed 19 2017 Manager 2024 June Zhan Femal Employee Resign February 5528000000 Lumei e supervisor ed 10 2021 2024 Total -- -- -- -- -- -- 96000 0 0 0 96000 -- Whether there were any resignations of directors and supervisors or dismissals of senior officers during the reporting period □Yes □No 1. The original director and Finance Director of the Company He Fei left office on February 7 2024. On February 7 2024 the 27th meeting of the 8th Board of Directors was held which agreed to appoint Liu Yu as the Finance Director and the person in charge of finance of the Company and agreed to nominate Ms. Liu Yu as the candidate for non-independent director of the 8th Board of Directors.For details please refer to the Announcement on Adjusting the Finance Director and Nominating Director Candidates (2024-04) published by the Company on Cninfo (http://www.cninfo.com.cn); On February 28 2024 the Company held the first extraordinary general meeting in 2024 and elected Liu Yu as the non-independent director of the company. For details please refer to the Announcement on the Resolution of the First Extraordinary General Meeting in 2024 (2024-06) published by the Company on Cninfo (http://www.cninfo.com.cn). 2. Liu Honglei the original deputy general manager of the Company retired on May 13 2024. For details please refer to the Announcement on the Retirement of the Company's Deputy General Manager (No. 2024-27) published by the Company on Cninfo (http://www.cninfo.com.cn). 3. Zhan Lumei the original employee representative supervisor of the Company retired on June 28 2024. For details please refer to the Announcement on the Retirement of the Employee Representative Supervisor (2024-29) published by the Company on Cninfo (http://www.cninfo.com.cn); The Company held a staff meeting on September 13 2024 and elected Jiang Yifan as the employee representative supervisor of the eighth Board of Supervisors of the Company. For details please refer to the Announcement on Adding the Employee Representative Supervisor of the Eighth Board of Supervisors (2024-40) published by the Company on Cninfo (http://www.cninfo.com.cn). 4. Sun Minghui the former director of the Company resigned on July 2 2024. On July 5 2024 the Company held the 31st meeting of the 8th Board of Directors and agreed to nominate Meng Fei as the non-independent director candidate of the 8th Board of Directors of the Company. For details please refer to the Announcement on Adjusting Directors and Nomination of Director Candidates (2024-32) published by the Company on Cninfo (http://www.cninfo.com.cn); On July 23 2024 the Company held the second extraordinary general meeting in 2024 and elected Meng Fei as the non-independent director of the Company. For details please refer to the Announcement on the Resolution of the Second Extraordinary General Meeting in 2024 (No. 2024-36) published by the Company on Cninfo (http://www.cninfo.com.cn). 322024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. 5. Zhu Meizhu the former Deputy Secretary of the Party Committee director and general manager of the Company retired on November 29 2024. For details please refer to the Announcement on the Retirement and Resignation of the Company's Director and General Manager (No. 2024-45) published by the Company on Cninfo (http://www.cninfo.com.cn). 6. Wang Chuan the director and former deputy general manager of the Company resigned as the deputy general manager of the company on January 21 2025 and Ning Maozai the former Deputy Secretary of the Party Committee and director of the Company resigned on January 22 2024. On January 24 2025 the 36th meeting of the 8th Board of Directors was held and it was agreed to appoint Ma Jie as the deputy general manager of the Company and Lin Xia and Wang Zihan as the deputy general manager of the Company. It was also agreed to nominate Ma Jie and Wei Junfeng as candidates for non-independent directors of the 8th Board of Directors of the Company. For details please refer to the Announcement on Adjusting Directors and Senior Officers (2025-02) published by the Company on Cninfo (http://www.cninfo.com.cn); On February 18 2025 the Company held the first extraordinary general meeting in 2025 and elected Ma Jie and Wei Junfeng as the non-independent directors of the Company. For details please refer to the Announcement on the Resolution of the First Extraordinary General Meeting in 2025 (2025-06) published by the Company on Cninfo (http://www.cninfo.com.cn).As of the disclosure date of this report except for the above changes there were no changes in other directors supervisors and senior officers of the Company.Changes in directors supervisors and senior officers of the Company □Applicable □Not applicable Name Position Type Date Reasons He Fei Director and Finance Director Resigned February 7 2024 Job transfer Liu Honglei Deputy General Manager Resigned May 13 2024 Retired Employee representative Zhan Lumei Resigned June 28 2024 Retired supervisor Sun Minghui Director Resigned July 2 2024 Job transfer Deputy Secretary of the Party Zhu Meizhu Committee Director and Resigned November 29 2024 Retired General Manager Deputy Secretary of the Party Ning Maozai Resigned January 22 2025 Job transfer Committee and Director Wang Chuan Deputy General Manager Resigned January 21 2025 Job transfer 2. Office holding Professional background main work experience and current main responsibilities of the current directors supervisors and senior officers of the Company Yin Kefei male born in July 1974 master's degree engineer member of the Communist Party of China. Successively served as the Deputy General Manager of Ganzhou Shenran Natural Gas Co. Ltd. of Shenzhen Gas Group Co. Ltd.; member of Party Leadership Group and Deputy Director of Dongguan SASAC Guangdong Province; Deputy Secretary-general of Dongguan Municipal Government of Guangdong Province; Secretary and Director of the Party Leadership Group of Beijing Liaison Office of Dongguan Municipal Government of Guangdong Province; Deputy Secretary of the Party Committee Director and General Manager of Dongguan Financial Holdings Group Co. Ltd.; Chairman of the Components and IC International Trade Center Co. Ltd; Director of Shenzhen Environmental Protection Technology Group Co. Ltd. He is currently the Deputy General Manager of Shenzhen Investment Holdings Co. Ltd. the Director of Research Institute of Tsinghua University in Shenzhen and the Secretary of the Party Committee and Chairman of the Company.Ma Jie male born in November 1977 master's degree and a member of the Communist Party of China. He successively served as a section member of Luohu Branch of Shenzhen Public Security Bureau and Personnel Bureau of Yantian District of Shenzhen; Director and Deputy Secretary of the General Office of Shenzhen Luohu District Committee of the Communist Youth League; Deputy Director and Researcher of Shenzhen Luohu District Environment Protection and Water Affairs Bureau; Director of Discipline Inspection and Supervision Office and Deputy Secretary of Commission for Discipline Inspection of Shenzhen SDG Group Co. Ltd.; Secretary of Commission for Discipline Inspection and Chairman of the Board of Supervisors of Shenzhen Urban Construction and Development (Group) Co. Ltd. He currently serves as the Deputy Secretary of the Party Committee Director and General Manager of the Company.Wei Junfeng male born in November 1979 a master's degree and a member of the Communist Party of China. He successively served as the secretary of the board of directors and the project manager of the general department of Shenzhen International Tendering Co.Ltd. the director and senior supervisor of the board office (during which he was also the risk control director and administrative director of Shenzhen Investment Holdings Donghai Investment Co. Ltd.) and the senior supervisor and deputy director of the Strategy Research Department (the Board Office) of Shenzhen Investment Holdings Co. Ltd.. He is currently the Deputy Secretary of the Party Committee and Director of the Company.Wang Chuan male born in March 1972 master's degree economist engineer and member of the Communist Party of China. He successively served as the Deputy Director Director and Assistant Director of the Cooperative Development Department of Shenzhen 332024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. National High-tech Industry Innovation Center the Director General Manager and Chairman of Shenzhen Innovation Starting Point Technology Co. Ltd. and the Deputy General Manager of Shenzhen Tong Chan Group Co. Ltd. He is currently the director of the Industrial Management Department of Shenzhen Investment Holdings Co. Ltd. and a director of the Company.Liu Yu female born in November 1971 bachelor degree senior accountant Chinese certified public accountant and member of the Communist Party of China. She successively served as the Finance Director of Shenzhen WOMAN Magazine the Deputy General Manager of Shenzhen WOMAN Magazine and the Director and Finance Director of Shenzhen Wuzhou Guest House Group Co. Ltd.She is currently a director and Finance Director of the company.Meng Fei male born in November 1975 bachelor degree senior accountant. He has worked in Shenzhen Rainbow Mall Co. Ltd. and Shenzhen Press Group and successively served as a senior supervisor of the Finance Department of Shenzhen Investment Holdings Co.Ltd. He is currently the deputy director of the Finance Department (Settlement Center) of Shenzhen Investment Holdings Co. Ltd. the supervisor of Shenzhen High-tech Zone Investment and Development Group Co. Ltd. supervisor of Shenzhen Investment Holdings Donghai Investment Co. Ltd. and the director of the Company.Wu Guangquan male born in May 1962 master's degree from Tongji University and a member of the Communist Party of China. He once served as the assistant manager deputy manager and manager of the Accounting and Finance Department deputy chief accountant deputy general manager general manager and chairman of China National Aero-Technology Shenzhen Co. Ltd.; Chairman of Jiangxi Jiangnan Trust Investment Co. Ltd.; Secretary of the Party Committee Chairman and General Manager of AVIC International Holding Corporation; special officer of Aviation Industry Corporation of China Ltd.; Secretary of the Party Committee and Chairman of China Aviation Industry General Aircraft Co. Ltd.; He has also served as the chairman and legal representative of FIYTA Precision Technology Co. Ltd. the chairman and legal representative of Tianma Microelectronics Co. Ltd. the chairman and legal representative of Rainbow Digital Commercial Co. Ltd. the chairman and legal representative of AVIC Real Estate Holding Co. Ltd. (now renamed as China Merchants Property Operation & Service Co. Ltd.) the chairman of Shennan Circuits Co. Ltd. the executive director of China South City Holdings Limited and the chairman of the Board of Directors of Continental Aerospace Technologies Holding Limited. He is currently the chairman of the Federation of Shenzhen Industries the chairman of the presidium and the director of the Global Industry Research Center of the China Federation of Industrial Economics the chairman of Shenzhen Jinling Era Technology Co. Ltd. the chairman of Shenzhen Fanjing Investment Co. Ltd. the chairman of Shenzhen Fanjing Intelligent Enterprise Management Consulting Co. Ltd. the independent director of CALB Group Co. Ltd. the independent director of Shenzhen Leaguer Co. Ltd. and the independent director of the Company.Yang Gaoyu male born in February 1968 a graduate student of Business Administration at New York Institute of Technology a Chinese Certified Public Accountant a Chinese Certified Tax Agent a forensic accounting expert and a member of China Zhi Gong Party. He used to be the accounting officer of A-Fontane Fabrication Industrial (Shenzhen) Co. Ltd. and the audit officer audit manager partner and chief partner of Shenzhen Changcheng Accountant Office Co.Ltd. He is currently the director of the Shenzhen branch of Zhongzheng Tiantong Certified Public Accountants (Special General Partnership) the executive director and general manager of Zhongtian Dexiang Taxation Firm (Shenzhen) Co. Ltd. the executive director and general manager of Shenzhen Baofuqin Enterprise Management Consulting Co. Ltd. and is also a member of the Seventh Committee of the CPPCC of Shenzhen a member of the Legislative Consultation Committee of the CPPCC of Shenzhen the vice president of the Shenzhen New Social Stratum Association a member of the Seventh Council of the China Certified Tax Agents Association the executive member of the council and vice president of the Shenzhen Tax Agents Association the vice president of the Shenzhen Futian District Accounting Society the executive president of the Legal Taxation and Finance Association of Shenzhen Jiangxi Chamber of Commerce an expert member of Guangdong Province's third-party supervision and assessment mechanism for compliance of enterprises involved in cases a visiting professor of the School of Accountancy of Jiangxi University of Finance and Economics an invited professor of the College of Modern Economics & Management of Jiangxi University of Finance and Economics a part-time master's supervisor of the Shenzhen Research Institute of Jiangxi University of Finance and Economics an entrepreneurship tutor of the Innovation and Entrepreneurship Center of the Shenzhen Research Institute of Jiangxi University of Finance and Economics an off-campus tutor of the School of Economics of Shenzhen University for MPAcc an independent director of Shenzhen New Trend International Logis-Tech Co. Ltd. an independent director of Shenzhen Chotest Technology Inc. and an independent director of the Company.Wang Kai male born in September 1983 Ph.D. of Huazhong University of Science and Technology member of the Communist Party of China professor of the Department of Electronic and Electrical Engineering of Southern University of Science and Technology National Excellent Youth and Outstanding Youth of Guangdong Province. He serves as a member of the Technical Committee of the Beijing Branch of the Society for Information Display (SID) a member of the Optical Display Professional Committee of the Chinese Society for Optical Engineering and the deputy director of the Key Laboratory of Quantum Dot Advanced Display and Lighting of Guangdong Provincial General Colleges and Universities. He is also the technical consultant of Shenzhen Planck Innovation Technology Co. Ltd. and an independent director of the Company.(II) Supervisors Ma Yi male born in August 1966 bachelor degree member of the Communist Party of China with the title of assistant economist. He has successively served as a cadre of the Automobile Manufacturing Plant of Hainan Motor Transportation Corporation Business Director and General Manager Assistant of Guangzhou Branch of Shenzhen Shenkyu International Logistics Co. Ltd. Operation Director of COSCO Logistics Guangzhou Attend Logistics Co. Ltd. General Manager of Guangzhou Branch of Shenzhen Shenkyu International Logistic Co. Ltd. Director and Assistant Director of the Planning and Development Department of Shenzhen Highway Passenger and Freight Transport Service Center Stationmaster of Futian Station Director General Manager and Deputy Secretary of the 342024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Party Committee of Shenzhen Highway Passenger and Freight Transport Service Center Co. Ltd. He is currently the Secretary of Commission for Discipline Inspection of the Company and the Chairman of the Board of Supervisors.Yuan Shuwen male born in May 1980 master's degree senior accountant and member of the Communist Party of China. He has served as the stationmaster of Shigu Operation and Management Station of Hengshan County Rural Management Administration the financial supervisor of Shenzhen Fengcheng Iron Wire Products Co. Ltd. the project manager of BDO China Shu Lun Pan Certified Public Accountants LLP Shenzhen Branch the general ledger accountant of the Finance Department of Shenzhen Zhenye (Group) Co.Ltd. and is currently the deputy director of the Assessment and Distribution Department of Shenzhen Investment Holdings Co. Ltd.and the supervisor of the Company.Jiang Yifan male born in July 1985 postgraduate degree a doctor of laws. He successively served as senior market analyst and project manager of Grok Market Consulting Co. Ltd. director and legal advisor of the Development Department of Guangzhou Huijian Technology Co. Ltd. and asset preservation manager ofthe asset preservation department ofGuangzhou Branch of Jiangxi Bank. He is currently the deputy director of the risk control and compliance department and the employee supervisor of the Company.(III) Senior officers Lin Xia female born in October 1975 bachelor's degree member of the Communist Party of China. He has served as the business supervisor of the Legal Supervision and Audit Department of Shenzhen Shenhua Group Co. Ltd. the legal supervisor of the Board Office the deputy director and director of the Office and director of the General Office (Process and Information Center) of Shenzhen Properties & Resources Development (Group) Ltd. the deputy secretary of the branch committee (full-time rank) and the chairman of the labor union of Shenzhen Huangcheng Real Estate Co. Ltd.. and the deputy general manager of Shenzhen Municipal People's Congress Cadre Training Center Co. Ltd. He is currently the deputy general manager of the Company.Wang Zihan male born in April 1989 bachelor's degree member of the Communist Party of China. He has successively served as the Deputy Director of the Marketing Department of the Commercial Operation Branch of Shenzhen SEG Group Co. Ltd. the General Manager of SEG Creative Space of Shenzhen SEG Entrepreneurship Hub Co. Ltd. and the Deputy General Manager and General Manager of the Operation Management Department of Shenzhen SEG Group Co. Ltd. He is currently the deputy general manager of the Company.Jiang Peng female born in October 1970 bachelor's degree member of the Communist Party of China. She has successively served as an office staff member and deputy section chief of the General Office of Shandong Group Corp of Fisheries Enterprises the section chief and deputy director of the Board of Directors Office and the representative of securities affairs of Shandong Zhonglu Oceanic Fisheries Co. Ltd. the representative of securities affairs of Huafu Top Dyed Melange Yarn Co. Ltd. the representative of securities affairs of the Company and the director of the Secretary of the Board of Directors Office. She is currently the Secretary of the Board of Directors of the Company and also serves as a director of Shenzhen SAPO Photoelectric Co. Ltd.*.Positions held in shareholders □Applicable □Not applicable Whether to receive Name of the Name of Positions held in Beginning date of Ending date of remuneration appointed shareholder shareholders term term allowance from the personnel shareholder unit Shenzhen Deputy General Yin Kefei Investment January 11 2021 Yes Manager Holdings Co. Ltd.Director of Shenzhen Industry Wang Chuan Investment May 23 2018 No Management Holdings Co. Ltd.Department Deputy Director of Shenzhen Financial Meng Fei Investment Department September 18 2017 Yes Holdings Co. Ltd. (Settlement Center) Deputy Director of Shenzhen Assessment and Yuan Shuwen Investment September 18 2017 Yes Distribution Holdings Co. Ltd.Department Description of the positions held in None shareholders *.Position in other entities □Applicable □Not applicable 352024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Name of Whether to receive the Positions held in Beginning date of Ending date of remuneration Name of other entities appointed other entities term term allowances in personnel other entities Research Institute of Yin Kefei Tsinghua University in Council member March 17 2023 No Shenzhen Shenzhen International Yin Kefei Vice President July 24 2023 No Chamber of Commerce ULTRARICH Yin Kefei INTERNATIONAL Director September 4 2023 No LIMITED Shenzhen International Candidates for the Yin Kefei Investment & Promotion January 20 2022 No 2nd President Association Hebei Shenbao Ma Jie Investment Development Supervisor April 20 2021 No Co. Ltd.Wang Shenzhen Shenfubao Director June 21 2018 No Chuan (Group) Co. Ltd.ULTRARICH Wang INTERNATIONAL Director June 27 2018 No Chuan LIMITED Wang Shenzhen Tong Chan December 17 Director No Chuan Group Co. Ltd. 2020 Shenzhen High-tech Zone Investment and November 25 Meng Fei Supervisor No Development Group Co. 2022 Ltd.Shenzhen Investment Meng Fei Holdings Donghai Supervisor October 17 2017 No Investment Co. Ltd.Shenzhen Special Economic Zone Real Meng Fei Director May 16 2024 No Estate & Properties (Group) Co. Ltd.Hong Kong Investment Holdings Co. Ltd. under Meng Fei Director July 18 2024 No Shenzhen Investment Holdings Shenzhen Water Yuan Planning&Design Supervisor February 20 2023 No Shuwen Institute Co. Ltd.Executive Director Wu Meishan Venture Capital September 28 and General No Guangquan Co. Ltd. 2021 Manager Wu Shenzhen Jinling Era Chairman and November 11 No Guangquan Technology Co. Ltd. General Manager 2022 Executive Director Wu Shenzhen Fanjing December 24 and General No Guangquan Investment Co. Ltd. 2019 Manager Shenzhen Fanjing Executive Director Wu Intelligent Enterprise and General July 9 2021 No Guangquan Management Consulting Manager Co. Ltd.Shanghai Yutian Kongka Wu December 20 Aviation Technology Co. Director No Guangquan 2022 Ltd.Wu CALB Group Co. Ltd. Independent December 25 Yes 362024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Guangquan director 2023 Wu Shenzhen Leaguer Co. Independent December 25 Yes Guangquan Ltd. director 2021 Zhongzheng Tiantong Certified Public Yang Accountants (Special Director October 1 2013 Yes Gaoyu General Partnership) Shenzhen Branch Shenzhen Ulan Binhai Yang Industrial Investment Co. Director February 5 2016 No Gaoyu Ltd.Shanghai Dasheng Yang Independent Non- Agricultural Financial August 23 2016 Yes Gaoyu Executive Director Technology Co. Ltd.Shenzhen Jiangcairen Yang Education Management Director November 8 2018 No Gaoyu Co. Ltd.Shenzhen Ganfan Dazi Yang Catering Management General manager May 31 2018 No Gaoyu Co. Ltd.Zhongtian Dexiang Executive Director Yang Taxation Firm and General July 17 2019 Yes Gaoyu (Shenzhen) Co. Ltd. Manager Yang Shenzhen Sannuo Independent July 24 2020 Yes Gaoyu Acousticlink Co. Ltd. director Shenzhen Baofuqin Executive Director Yang December 20 Enterprise Management and General No Gaoyu 2021 Consulting Co. Ltd. Manager Yang Shenzhen Chotest Independent October 17 2022 Yes Gaoyu Technology Inc. director Shenzhen New Trend Yang Independent International Logis-Tech April 10 2023 Yes Gaoyu director Co. Ltd.Yang Shenzhen Hangsheng Director June 25 2023 No Gaoyu Electronics Co. Ltd.Southern University of Long-term Wang Kai January 1 2024 Yes Science and Technology professor Shenzhen Planck Technical Wang Kai Innovation Technology August 1 2024 Yes Consultant Co. Ltd.General Manager of Wang Shenzhen SEG Hi-Tech General manager January 31 2024 No Zihan Industrial Co. Ltd.Explanation of serving None in other entities Penalties imposed by securities regulators on current directors supervisors and senior officers as well as those left the post in the past three years □Applicable □Not applicable 3. Remuneration of directors supervisors and senior officers Decision-making procedures determination basis and actual payment of remuneration for directors supervisors and senior officers During the reporting period the remuneration of directors and senior officers who received remuneration from the Company was determined in accordance with the Company's Director Remuneration Management System and the Measures for Annual Performance Assessment and Remuneration Management of Senior Officers of STHC. the remuneration of independent directors shall be determined according to the resolution of the general meeting; the remuneration of supervisors who receive remuneration from the Company shall be determined according to their positions in the Company. 372024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Remuneration of directors supervisors and senior officers during the reporting period Unit: RMB10000 Total pre-tax Whether get paid Employment compensation Name Gender Age Position from related parties status received from of the Company the Company Secretary of the Party Yin Kefei Male 50 Committee Chairman and Incumbent 0 Yes Director Deputy Secretary of the Party Ma Jie Male 47 Committee Director and Incumbent 0 No General Manager Deputy Secretary of the Party Wei Junfeng Male 45 Incumbent 0 No Committee and Director Wang Chuan Male 53 Director Incumbent 57.81 No Liu Yu Female 53 Director and Finance Director Incumbent 60.72 No Meng Fei Male 49 Director Incumbent 0 Yes Wu Guangquan Male 62 Independent director Incumbent 12 No Yang Gaoyu Male 57 Independent director Incumbent 12 No Wang Kai Male 41 Independent director Incumbent 12 No Secretary of Commission for Discipline Inspection Ma Yi Male 58 Incumbent 103.92 No Chairman of the Board of Supervisors Yuan Shuwen Male 44 Supervisor Incumbent 0 Yes Lin Xia Female 49 Deputy General Manager Incumbent 0 No Wang Zihan Male 35 Deputy General Manager Incumbent 0 No Secretary of the Board of Jiang Peng Female 54 Incumbent 95.29 No Directors Jiang Yifan Male 39 Employee supervisor Incumbent 47.42 No Former director and general Zhu Meizhu Male 60 Resigned 90.73 No manager Ning Maozai Male 49 Former director Resigned 95.29 No Former Director and Finance He Fei Male 47 Resigned 36 No Director Sun Minghui Male 43 Former director Resigned 0 Yes Former Deputy General Liu Honglei Male 60 Resigned 40.27 No Manager Zhan Lumei Female 55 Original employee supervisor Resigned 29.85 No Total -- -- -- -- 693.30 -- Note: The compensation of directors supervisors and senior executives who receive salaries in the company includes basic salary and partial performance-based pay as well as partial performance-based pay paid in the previous year after the completion of the current year's assessment; Ma Jie Wei Junfeng Lin Xia and Wang Zihan have been employed by the company since January 2025 and have not received any salary in 2024.VI. Directors' performance of duties during the reporting period 1. Board of Directors during the reporting period Session Date of meeting Date of disclosure Resolutions made at the meeting For details please refer to the 27th Meeting of the 8th Board of Announcement No. 2024-03 published by February 7 2024 February 8 2024 Directors the Company on Cninfo (http://www.cninfo.com.cn). 28th Meeting of the 8th Board of For details please refer to the March 26 2024 March 27 2025 Directors Announcement No. 2024-09 published by 382024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. the Company on Cninfo (http://www.cninfo.com.cn).For details please refer to the 29th Meeting of the 8th Board of Announcement No. 2024-18 published by April 28 2024 April 30 2024 Directors the Company on Cninfo (http://www.cninfo.com.cn).For details please refer to the 30th Meeting of the 8th Board of Announcement No. 2024-22 published by May 16 2024 May 17 2024 Directors the Company on Cninfo (http://www.cninfo.com.cn).For details please refer to the 31st Meeting of the 8th Board of Announcement No. 2024-30 published by July 5 2024 July 6 2024 Directors the Company on Cninfo (http://www.cninfo.com.cn).Only reviewing one item in the semi 32nd Meeting of the 8th Board of annual report without objection or August 21 2024 Directors abstention is exempt from disclosing the resolution announcement.For details please refer to the 33rd Meeting of the 8th Board of Announcement No. 2024-39 published by September 27 2024 September 28 2024 Directors the Company on Cninfo (http://www.cninfo.com.cn).Only reviewing the third quarter report 34th Meeting of the 8th Board of without objection or abstention is exempt October 29 2024 Directors from disclosing the resolution announcement.For details please refer to the 35th Meeting of the 8th Board of Announcement No. 2024-46 published by December 6 2024 December 7 2024 Directors the Company on Cninfo (http://www.cninfo.com.cn). 2. Attendance of directors at the board meeting and the general meeting Attendance of directors at the board meeting and general meeting Whether to Number of Number of fail to attend the board Number of Number of Number of the board the meeting Number of meetings to the board the board absences Name of meetings of the Board general be attended meetings meetings from the director attended by in person for meetings during this attended on attended by board communicati two attended reporting site proxy meetings on consecutive period times Yin Kefei 9 6 3 0 0 No 4 Ma Jie 0 0 0 0 0 No 0 Wei Junfeng 0 0 0 0 0 No 0 Wang Chuan 9 6 3 0 0 No 0 Liu Yu 8 5 3 0 0 No 4 Meng Fei 4 3 1 0 0 No 0 Wu 9 0 9 0 0 No 3 Guangquan Yang Gaoyu 9 1 8 0 0 No 3 Wang Kai 9 1 8 0 0 No 4 Zhu Meizhu 8 5 3 0 0 No 3 Ning Maozai 9 6 3 0 0 No 4 Sun Minghui 4 2 2 0 0 No 0 Description of the failure to attend the board meetings in person for two consecutive times None 392024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. 3. Objections raised by directors to relevant matters of the Company Whether the directors have raised any objections to relevant matters of the Company □Yes□No During the reporting period the directors did not raise any objection to the relevant matters of the Company. 4. Other descriptions of directors' performance of duties Whether the relevant suggestions of the directors to the Company have been adopted □Yes □No Director's statement on the adoption or non-adoption of the Company's relevant proposals During the reporting period all directors of the Company diligently and responsibly carried out their work in strict accordance with the relevant provisions of the China Securities Regulatory Commission and Shenzhen Stock Exchange as well as the Company's Articles of Association Rules of Procedures of the Board of Directors and other systems. They paid close attention to the Company's standardized operation and management put forward relevant opinions on the Company's major governance and operation decisions according to the Company's actual situation and formed a consensus after full communication and discussion and they resolutely supervised and promoted the implementation of the resolutions of the Board of Directors to ensure that the decisions are scientific timely and efficient and may safeguard the legitimate rights and interests of the Company and all shareholders.VII. Information on special committees under the Board during the reporting period Name Number Other Details of of Membersh of Content of the Important opinions and perform Date of meeting objections committ ip meeting meeting suggestions put forward ance of (if any) ee s held duties Deliberated on and It is agreed to nominate Liu Nomina nominated the non- Yu as the non-independent Wu tion independent director candidate and it is Guangqua Commit February 4 directors of the 8th agreed that the general n Yang 1 None None tee of 2024 Board of Directors manager shall nominate the Gaoyu the and appointed the Finance Director and the Wang Kai Board Finance Director of nomination shall be submitted the Company. to the Board for deliberation.Deliberated on Nomina matters relating to Wu It is agreed to nominate Feng tion the nomination of Guangqua Meng non-independent Commit candidates for non- n Yang 1 July 2 2024 director and submitted it to None None tee of independent Gaoyu the Board of Directors for the directors of the 8th Wang Kai deliberation.Board Board of Directors of the Company.It is believed that the formulation of the performance assessment indicators of the senior Deliberated on officers of the Company for Remune Yang matters related to 2024 complies with the Code ration Gaoyu the performance of Corporate Governance for Apprais September 23 Wang 1 assessment Listed Companies the None None al 2024 Kai Liu indicators of the Articles of Association of the Commit Yu Company's senior Company and the Working tee officers for 2024. Regulations of the Remuneration Assessment Committee of the Board of Directors and other relevant provisions.Remune Wu 1 December 2 Deliberated on It is believed that the None None 402024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. ration Guangqua 2024 matters related to formulation of the 2023 Apprais n Wang the formulation of annual business performance al Kai Liu the senior officers' assessment and remuneration Commit Yu 2023 annual management plan for senior tee business officers of the company performance complies with the Code of assessment and Corporate Governance for remuneration Listed Companies the management plan. Articles of Association of the Company and the Working Regulations of the Remuneration Assessment Committee of the Board of Directors and other relevant provisions.The Audit Committee fully affirmed the internal audit The Audit work of the Audit Department Department in 2023. The Audit reported to the Committee evaluated the Audit Committee on effectiveness of the Wu the summary of the Company's internal control in Guangqua Audit 2023 internal audit the third quarter of 2024 and n Yang January 12 Commit 1 work and the 2024 believed that the Company None None Gaoyu 2024 tee audit plan and maintained effective internal Ning communicated on control over financial report Maozai matters related to and non-financial report in all the entry of the material aspects in accordance annual report with the requirements of the auditor. enterprise's internal control norm system and relevant regulations.The Audit The Audit Committee Department recognized the reported the implementation of the internal summary of the audit work in the first quarter internal audit work Wu and requested the Audit in the first quarter Guangqua Department to continue to Audit and the work plan n Yang carry out the audit work in Commit 1 April 26 2024 for the second None None Gaoyu accordance with the tee quarter to the Audit Ning requirements of the annual Committee and the Maozai internal audit work plan for Audit Committee the second quarter of 2024; put forward and deliberated on and requirements for the adopted the First Quarterly internal audit Report of 2024.related work.The Audit Committee believes that Liu Yu is Wu Deliberated on the qualified to be the Finance Guangqua Audit Proposal on Director of the Company and n Yang February 4 Commit 1 Appointing the agrees that the Finance None None Gaoyu 2024 tee Finance Director of Director shall be nominated Ning the Company. by the General Manager and Maozai it shall be submitted to the Board for deliberation.Wu The Audit The Audit Committee Audit Guangqua February 28 Committee proposed that all relevant Commit 1 None None n Yang 2024 communicated with departments should actively tee Gaoyu the annual report cooperate with the 412024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Ning auditor on the accountants to provide Maozai progress of the audit relevant information; the of the Company's accounting firm should 2023 annual report complete the annual audit and the preliminary work in strict accordance with findings during the the annual audit plan in terms audit and put of quality quantity and forward agreed time. If any important requirements and problem is found it shall suggestions for the communicate with the Audit follow-up work of Committee in time.the annual audit.The Audit The Audit Committee Department recognized the reported the implementation of the semi- summary of the annual internal audit work semi-annual internal Wu and requested the Audit audit work and the Guangqua Department to continue to Audit work plan for the n Yang carry out the audit work in Commit 1 August 21 2024 third quarter to the None None Gaoyu accordance with the tee Audit Committee Ning requirements of the annual and the Audit Maozai internal audit work plan for Committee put the third quarter of 2024; and forward deliberated on and adopted requirements for the the Semi-annual Report of internal audit 2024. related work.Deloitte's accountant reported to the Audit Committee on the annual review work in 2023; Yang Wu Gaoyu made a The Audit Committee Guangqua Audit report on the adopted the proposal of this n Yang Commit 1 March 25 2024 performance of the meeting and agreed to submit None None Gaoyu tee Audit Committee in it to the Board of Directors Ning 2023; the Audit for deliberation. Maozai Committee deliberated on eight proposals including the 2023 annual report of the Company.The Audit The Audit Committee Department recognized the reported the implementation of the internal summary of the audit work in the third quarter internal audit work Wu and requested the Audit in the third quarter Guangqua Department to continue to Audit and the work plan n Yang October 28 carry out the audit work in Commit 1 for the fourth None None Gaoyu 2024 accordance with the tee quarter to the Audit Ning requirements of the annual Committee and the Maozai internal audit work plan for Audit Committee the fourth quarter of 2024; put forward and deliberated on and requirements for the adopted the Third Quarterly internal audit Report of 2024.related work.Audit Wu 1 December 5 Deliberated on the It is agreed to carry out None None 422024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Commit Guangqua 2024 Proposal on the hedging business to manage tee n Yang Implementation of the foreign exchange risk Gaoyu Foreign Exchange exposure.Ning Hedging Business Maozai by Subsidiaries submitted by the Finance Department and the attached Feasibility Analysis Report on the Implementation of Foreign Exchange Hedging and the Risk Control Plan for the Implementation of Foreign Exchange Hedging Business.VIII. Work of the Board of Supervisors Whether the Company has risks found by the Board of Supervisors during the supervision activities in the reporting period □Yes□No The Board of Supervisors has no objection to the supervision matters during the reporting period.IX. Employees of the Company 1. Number professional composition and education level of employees Number of employees of the parent company at the end of the 55 reporting period Number of in-service employees of major subsidiaries at the 1281 end of the reporting period Total number of in-service employees at the end of the 1389 reporting period Total number of employees receiving salaries in the current 1389 period Number of retired employees whose expenses shall be borne by 0 the parent company and major subsidiaries Professional composition Professional composition category Number of employees of each category Production personnel 988 Sales personnel 14 Technical personnel 174 Financial personnel 30 Administrative staff 183 Total 1389 Education level Education level category Quantity Master's degree or above 42 Undergraduate 225 Junior college 163 432024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Below junior college 959 Total 1389 2. Remuneration policy In 2024 the Company carried out employee remuneration management in strict accordance with relevant national laws and regulations and the Company's remuneration management system to ensure fair and reasonable employee remuneration give corresponding rewards and incentives to employees' contributions promote the common development of employees and the Company and reflect more humanistic care of the Company. 3. Training plan In combination with the Company's development strategy continue to improve the Company's talent training system and strengthen the exchange and learning of personnel of STHC. First in combination with the work of the department and the actual situation of employees provide appropriate courses for employees according to the existing network academy resources including general management courses and professional courses. During the reporting period further improve the professional level and comprehensive quality of employees through the allocation of internal and external training courses; second continue to create an atmosphere of "reading again after returning from a hundred battles" and encourage employees to love reading and read good books; third in combination with the Company's business development needs and the actual work of each department organize key employees to participate in professional training arranged by superior units and professional institutions to further improve the comprehensive ability professional skills and professional quality of employees. 4. Outsourcing of labor services □Applicable □Not applicable X. The Company's profit distribution and conversion of capital reserves into share capital in the current year Formulation implementation or adjustment of the profit distribution policy during the reporting period especially the cash dividend policy □Applicable □Not applicable On May 29 2024 the Company held the 2023 annual general meeting to deliberate on and adopt the 2023 annual profit distribution plan.The Company's 2023 annual profit distribution plan is: based on the distributable profits of the consolidated statements and based on the total equity of 506521849 shares of the Company as of December 31 2023 (including 457021849 A shares and 49500000 B shares) the Company would distribute cash dividends of RMB 0.65 (including tax) to all shareholders for every 10 shares with a total cash dividend of RMB 32923920.19 (including tax) that should be paid and the cash dividend of RMB 32923916.72 (including tax) that were actually paid and the remaining undistributed profits would be carried forward to the next year; no bonus shares would be issued and no capital reserve would be converted into share capital.If there is a change in the total equity of the Company before the implementation of the distribution plan the distribution will be made according to the total equity on the equity registration date when the distribution plan is implemented in the future based on the fixed ratio and the specific amount will be subject to the actual distribution.Special instructions for cash dividend policy Whether it complies with the Articles of Association or the resolutions of the general meeting of Yes shareholders: Whether the dividend standards and proportions are explicit and clear: Yes Whether relevant decision-making procedures and mechanisms are complete: Yes Whether the Independent Directors have fulfilled their duties and played their due roles: Yes If the Company does not make cash dividends it shall disclose the specific reasons and the next measures Not applicable to be taken to enhance the returns level of investors: Whether minority shareholders have the opportunity to fully express their opinions and demands and Yes whether their legitimate rights and interests are fully protected: Whether the conditions and procedures are compliant and transparent if the cash dividend policy is Not applicable adjusted or changed: 442024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. The Company is profitable during the reporting period and the profit available for distribution by the parent company is positive but no cash dividend distribution plan is proposed □ Applicable □Not applicable Profit distribution and conversion of capital reserves into share capital during the reporting period □Applicable □ Not applicable Bonus shares for every ten shares(Shares) 0 Cash dividend for every ten shares (Yuan)(Tax-included) 0.71 A total number of shares as the distribution basis(shares) 506521849 Cash dividend amount (yuan including tax 35963051.28 Other means (such as repurchase of shares) cash dividend amount (yuan) 0.00 Total cash dividend (yuan including tax) 35963051.28 Distributable profit (yuan) 272608113.66 Proportion of cash dividend in the distributable profit 100% Cash dividend distribution policy When the company's development stage is in the growth period and there are major capital expenditure arrangements when the profit distribution is carried out the proportion of cash dividends in this profit distribution should be at least 20%. Detailed explanation of the profit distribution or capital reserve transfer plan Based on the distributable profits in the consolidated statement with the total share capital of 506521849 shares as of December 31 2024 as the base a cash dividend of RMB 0.71 (including tax) was distributed to every 10 shares of all shareholders with a total cash dividend of RMB 35963051.28 (including tax).No bonus shares will be issued and no capital reserve will be converted into share capital.If there is a change in the total share capital of the company before the implementation of the distribution plan the total distribution amount shall be adjusted based on the total share capital on the equity registration date when the distribution plan is implemented in the future and the above distribution proportion shall be kept unchanged. The specific amount shall be subject to the actual distribution.XI. Implementation of the Company's equity incentive plan employee stock ownership plan or other employee incentive measures □Applicable □Not applicable During the reporting period the Company had no equity incentive plan employee stock ownership plan or other employee incentive measures and their implementation.XII. Construction and implementation of internal control system during the reporting period 1. Construction and implementation of internal control During the reporting period the Company has updated and improved the internal control system in a timely manner in accordance with the provisions of the Basic Standard for Enterprise Internal Control and its supporting guidelines and established a set of internal control system that is scientifically designed concisely applicable and effectively operated. The Audit Committee the Risk Control and Compliance Department and the Audit Department jointly formed the Company's risk internal control management organization system to supervise and evaluate the Company's internal control management. Through the operation analysis and evaluation of the internal control system the Company has effectively prevented risks in operation and management and promoted the realization of internal control objectives.According to the identification of major deficiencies in the Company's internal control over financial report there are no major deficiencies in the internal control over financial report on the base date of the Evaluation Report on Internal Control. The Company has maintained effective internal control over financial reports in all material respects in accordance with the requirements of the standardized system of enterprise internal control and relevant regulations.According to the identification of major deficiencies in the Company's internal control over financial report the Company has not identified any major deficiencies in the internal control over financial report on the base date of the Evaluation Report on Internal Control. 452024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. 2. Details of major deficiencies in internal control found during the reporting period □Yes □No XIII. The Company's management and control over its subsidiaries during the reporting period Problems Consolidation Consolidation Progress of Follow-up Company name encountered in Solutions taken plan progress solution solution plan consolidation Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable XIV. Evaluation Report on Internal Control or Audit Report on Internal Control 1. Internal control evaluation report Full-text disclosure date of the Evaluation Report on Internal March 28 2025 Control Full-text disclosure index of the The Company's 2024 Internal Control Self-Evaluation Report on Cninfo Evaluation Report on Internal (http://www.cninfo.com.cn).Control Ratio of total assets of units included in the evaluation scope to total assets in the consolidated 100.00% financial statements of the Company Ratio of operating revenue of units included in the evaluation scope to the operating revenue of 100.00% consolidated financial statements of the Company Defect identification criteria Type Financial report Non-financial report Under any of the following circumstances it shall be deemed that the Company has major deficiencies in internal control Deficiencies related to financial reports are unrelated to financial reports: (1) the divided into minor deficiencies significant operating activities of the Company deficiencies and major deficiencies according seriously violate national laws and to their severity. Major deficiencies refer to a regulations; (2) unscientific decision- combination of one or more control making procedures for "decision-making deficiencies which may cause the enterprise on major issues appointment and removal to deviate seriously from the control of important cadres arrangement of objectives. Significant deficiencies refer to a important projects and use of large sums Qualitative criteria combination of one or more control of money" resulting in major decision- deficiencies the severity and economic making errors and causing major property consequences of which are lower than those losses to the Company; (3) a large number of major deficiencies but which may still of key positions or technical talents are cause the enterprise to deviate from the lost; (4) failure of control system control objectives. Minor deficiencies refer to involving important business areas of the other internal control deficiencies that do not Company; (5) it has a serious negative constitute major deficiencies or significant impact on the Company's business and deficiencies.the Company cannot eliminate such impact; (6) the internal control evaluation results are major deficiencies and have not 462024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. been effectively rectified. Significant deficiencies: refer to a combination of one or more control deficiencies the severity and economic consequences of which are lower than those of major deficiencies but which may still cause the enterprise to deviate from the control objectives. Minor deficiencies: refer to other internal control deficiencies that do not constitute major deficiencies or significant deficiencies.The misstated amount of the financial statements falls within the following range: major deficiencies: misstated amount ≥ 1.5% of the total revenue; misstated amount ≥ 10% of total profit; misstated amount ≥ 5% of net assets. Significant deficiencies: 0.5% of the total revenue ≤ misstated amount < 1.5% of the total revenue; 5% of the total profit ≤ Quantitative criteria Not applicable misstated amount < 10% of the total profit; 3% of net assets ≤ misstated amount < 5% of net assets. Minor deficiencies: 0% of the total revenue < misstated amount < 0.5% of the total revenue; 2% of the total profit < misstated amount < 5% of the total profit; 0% of net assets < misstated amount < 3% of net assets.Number of major deficiencies in 0 financial reports Number of major deficiencies in 0 non-financial report Number of significant deficiencies 0 in financial report Number of significant deficiencies 0 in non-financial report 2. Audit Report on Internal Control □Applicable □Not applicable Review opinion in the Audit Report on Internal Control Shenzhen Textile has maintained in all material respects effective internal control over financial reports in accordance with the Basic Standard for Enterprise Internal Control and relevant regulations as of December 31 2024.Disclosure of the Audit Report on Internal Control Disclosed Full-text disclosure date of the Audit Report on Internal March 28 2025 Control Full-text disclosure index of the Audit Report on Internal See Cninfo (http://www.cninfo.com.cn) for details Control Opinion type of the Audit Report on Internal Control Standard and unqualified opinion Whether there are major deficiencies in non-financial reports No Whether the accounting firm issues an Audit Report on Internal Control with non-standard opinions □Yes □No Whether the Audit Report on Internal Control issued by the accounting firm is consistent with the opinion of the self-evaluation report of the Board of Directors □Yes □No 472024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. XV. Status of rectification of self-examination issues of special actions on governance of listed companies During the reporting period no relevant governance issues of the Company have been found as listed in the Self-inspection Checklist for Special Governance Activities of Listed Companies. 482024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Section V Environment and Social Responsibilities I. Major environmental protection issues Whether the listed company and its subsidiaries are among the key pollutant discharge entities announced by the environmental protection department □Yes □No Environmental protection related policies and industry standards I. SAPO Photoelectric: (I) Name of executive standards for air pollutant emissions 1. Emission Standard for Boiler Air Pollutant DB44/765-2019; 2. Emission limits of air pollutants DB44/ 27-2001; 3. Implement the limits for electronic components in the electronic industry in Tianjin Volatile Organic Compound Emission Control Standard for Industrial Enterprises (DB12/524-2020); 4. Emission Standard for Odor Pollutants GB 14554-93 Control Standard for Unorganized Emission of Volatile Organic Compounds GB 37822-2019.(II) Name of executive standards for discharge of water pollutants Guangdong Province Water Pollutant Discharge Limit Standard DB44/26-2001.II. MCENTURY 1. Regulations on environment protection of Guangdong Province; 2. Measures for Management of Ecological Environment Standards. Environmental protection administrative licensing I. SAPO Photoelectric Application time of the existing pollutant discharge permit is: December 13 2022 and validity period is: from December 13 2022 to December 12 2027.II. MCENTURY The application period of the existing pollutant discharge permit is from August 10 2020 to August 9 2023 and the validity period after application for renewal is from August 10 2023 to August 9 2028.Industrial emission standards and details of pollutant emissions involved in production and operating activities Type of Name of Name of main main Discharg Exceedi Discharg the pollutant pollutant Number Distribut e Approve ng Discharg e Total Compan s and s and of ion of standard d total discharg e concentr discharg y or particula particula discharg discharg s of discharg e method ation/int e subsidiar r r e outlets e outlets pollutant e standard ensity ies pollutant pollutant s applied s s s Shenzhe Waste Non- High Discharg <50mg/ 120mg/ 5 21.9t/a 49.98t/a None n SAPO gas methane altitude e outlets m3 m3 492024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Photoele hydrocar emission are set ctric bons s on the Co. Ltd. east side of the roof of building s 1 and 3 Open Shenzhe channel n SAPO Southeas Wastewa discharg <20mg/ 25.0536/ Photoele COD 1 t side of 40mg/L 3.9347/a None ter e after L a ctric the plant treatmen Co. Ltd.t Permitte d discharg e value: COD pH Discharg ammoni value: 6- e Limits a 9; of Water nitrogen anilines: Pollutant pH 1.0 s value Atmosp mg/L; DB44/2 suspende here: suspende 6-2001; d solids disorgan d solids: Discharg five-day ized; 50 e biochem wastewa mg/L; Standard ical ter: 1. total of Water oxygen Intermitt nitrogen Pollutant demand ent (as N) s for total discharg 15 Danshui phospho CODcr: e the mg/L; River rus (as 0.349 CODcr: flow is ammoni and P) t/a; 1.62 t/a; unstable Longitud a Shima color ammoni ammoni and e: nitrogen: River anilines a a irregular 114°15′3 8 mg/L; Basin MCENT Wastewa chlorine nitrogen: nitrogen: during 1 1.36″ sulfide: DB44/2 None URY ter dioxide 0.0102 0.216 discharg Latitude: 0.5 050- sulfide t/a; total t/a; total e but it 22°43′38 mg/L; 2017; total nitrogen nitrogen is not a .14″ chemical Discharg nitrogen (as N) (as N) shock oxygen e (as N) 0.1305 0.405 t/a discharg demand: Standard ammoni t/a e; 2. 60 of Water a intermitt mg/L; Pollutio (ammoni ent chlorine n for a gas) discharg dioxide: Textile non- e stable 0.5 Dyeing methane flow mg/L; and total during chroma: Finishin hydrocar discharg 50; five- g bons e day Industry hydroge biochem GB4287 n ical - sulfide oxygen 2012GB odor demand: 4287- concentr 202012 ation mg/L; total phospho rus (as 502024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. P) 0.5 mg/L.Treatment of pollutants I. SAPO Photoelectric SAPO Photoelectric adopts RTO waste gas thermal storage incineration treatment process for the organic waste gas produced by each production line of which RTO+ catalyst treatment process is adopted for production line 7. The exhaust gas treatment equipment operates stably with good exhaust gas treatment effect and the VOCs removal rate of organic exhaust gas reaches more than 99.9% which can fully meet the requirements of exhaust gas emission; at the same time the equipment adopts imported heat storage materials with a heat storage effect of 90% and low energy consumption for equipment operation; after RTO treatment the exhaust gas generated in the production process can meet the emission standard after treatment and the VOCs concentration at the discharge port is all controlled at <40 mg/m3.SAPO Photoelectric adopts the wastewater treatment process of Fenton + sedimentation + UASB anaerobic + aerobic + MBR membrane for its phase I wastewater treatment facilities with strong impact load resistance of the process stable system operation low energy consumption low maintenance and repair cost a high degree of automation and good effluent effect of wastewater treatment. The wastewater treatment process of Fenton + sedimentation + UASB anaerobic + aerobic + MBR membrane + mc membrane treatment + evaporation system is adopted for its phase II wastewater treatment facilities and all the wastewater is reused to the production line after treatment. All the wastewater of SAPO Photoelectric can meet the environmental requirements of standard discharge after being treated by the treatment facilities and the COD concentration of the total discharge outlet is <20 mg/L.II. MCENTURY MCENTURY has built a set of dedicated wastewater treatment facilities and continuously optimized and improved the facilities and processes during the actual operation process. The wastewater is professionally treated through multiple processes with better operation effect and all pollutant indicators meet relevant standards and laws and regulations. In addition MCENTURY built the reclaimed water recycling system in 2021 which can effectively save water consumption and reduce wastewater discharge after it is officially put into operation.Environmental self-monitoring plan I. SAPO Photoelectric The monitoring shall be carried out according to the monitoring requirements issued by the monitoring station and the operation requirements of each system of SAPO Photoelectric. The specific monitoring plan is as follows: organic waste gas 4 times/year (once a quarter); wastewater discharge 12 times/year (once a month); boiler waste gas 2 times/year (once every six months) of which nitrogen oxide 12 times/year (once a month); canteen fume 1 time/year; noise at the plant boundary 2 times/year (once every six months); drinking water 1 time/year; waste gas at the plant boundary 1 time/year.II. MCENTURY According to the environmental management requirements of the pollutant discharge permit the specific monitoring plan is as follows: wastewater pH flow COD and ammonia nitrogen automatic detection; chromaticity suspended solids total nitrogen and 5-day biochemical oxygen demand 1 time/day; total phosphorus 1 time/week; sulfide and aniline 1 time/month; chlorine dioxide 1 time/quarter; ammonia gas non-methane hydrocarbons sulfide and odor concentration at the plant boundary 1 time/half a year.Emergency plan for unexpected environmental events I. SAPO Photoelectric According to the actual situation of the Company complete the preparation of the emergency plan for environmental emergencies and apply for the filing of the environmental emergency plan through relevant departments.II. MCENTURY According to the actual situation of the Company complete the preparation of the emergency plan for environmental emergencies and apply for the filing of the environmental emergency plan through relevant departments.Investment in environmental governance and protection and payment of environmental protection tax I. SAPO Photoelectric Investment in environmental governance and protection in 2024: RMB 9.257 million; Payment of environmental protection tax in 2024: RMB 8217.78.II. MCENTURY The investment in environmental governance and protection in 2024 was about RMB10000.Measures taken to reduce its carbon emissions during the reporting period and their effects □Applicable □Not applicable I. SAPO Photoelectric 1. Through refined management and technological innovation SAPO Photoelectric save in energy consumption cost for 2024 when the output increased; through various initiatives such as independent maintenance and transformation hazardous waste reduction RTO maintenance solid waste sales and iodine recycling SAPO Photoelectric cumulatively saved in cost which effectively reduced the company's operating costs and provided strong support for the Company's sustainable development. 2. According to the production line shutdown and startup plan SAPO Photoelectric formulated the air-conditioning energy-saving adjustment plan for the corresponding shutdown carried out the air-conditioning energy-saving adjustment after the production line was connected and recorded the adjustment time every day and calculated the energy-saving benefits. The total electricity cost saved for 2024 was RMB 341000. 512024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. 3. According to the provisions of the Environmental Protection Law enterprises and institutions are required to conduct environmental credit evaluation once a year and conduct dynamic evaluation on a quarterly basis. SAPO Photoelectric has actively implemented the government's requirements improved the environmental protection system database filling (environmental punishment system emergency management system pollutant discharge permit management platform pollution source online monitoring platform solid waste supervision platform etc.) provided various green factory promotion materials for the ecological environment bureau and at the same time published the enterprise environmental credit commitment letter in the Special Zone Daily publicly. In May 2024 SAPO Photoelectric was rated as an Environmental Protection Integrity Enterprise by Shenzhen Municipal Bureau of Ecology and Environment and enjoyed the preferential treatment of charging at 90% of sewage treatment fee since July with a cumulative saving of RMB 81800 in sewage treatment fee from July to December 2024.II. MCENTURY During the reporting period MCENTURY has strictly abided by laws and regulations strengthened the management of wastewater treatment and ensured the effective operation of wastewater treatment facilities and there was no violation of laws and regulations throughout the year.Administrative punishment due to environmental problems during the reporting period Impact on Name of the Corrective Reason for production and Company or Violations Punishment result measures of the punishment operation of listed subsidiaries Company companies None None None None None None Other environmental information that should be disclosed I. SAPO Photoelectric 1. Annual Report on Legal Disclosure of Corporate Environmental Information: https://www-app.gdeei.cn/stfw/index 2. Quarterly/Annual Implementation Report of Pollutant Discharge Permit: http://permit.mee.gov.cn/ II. MCENTURY None Other information related to environmental protection None II. Social responsibilities (I) Protection of shareholders' equity During the reporting period the Company has operated in compliance with laws and regulations and further standardized its operation by continuously improving its governance structure in strict accordance with the requirements of laws and regulations such as the Company Law the Securities Law and the Code of Corporate Governance for Listed Companies. The Company has adhered to taking the deliberative system of the general meeting of shareholders the Board of Directors the Board of Supervisors and the independent directors as the core further improved the corporate governance structure and various management systems continuously improved the internal control system in the process of the Company's operation and management adopted effective preventive measures against operational risks and effectively safeguarded and protected the shareholders' equity thus laying a solid foundation for the Company's healthy and sustainable development. The independent directors have paid close attention to the operation of the Company put forward many valuable professional suggestions for the daily operation and key issues of the Company and played an important role in improving the supervision mechanism and safeguarding the legitimate rights and interests of the Company and all shareholders. The Company has strictly performed its information disclosure obligations in accordance with the law disclosed information that has a significant impact on investment decisions in a true accurate complete timely and fair manner adhered to concise and easy-to- understand disclosure contents fully reveals risks and facilitates access by all shareholders and further sorted out and improved the relevant systems to enhance the quality of information disclosure in accordance with regulatory requirements.During the reporting period the Company has further improved information disclosure and information transparency performed its information disclosure obligations in strict accordance with regulatory requirements communicated and exchanged information with investors through multiple channels answered questions raised by investors in a timely manner improved information transparency cooperated with regulatory authorities safeguarded the rights and interests of the majority of the investors especially small and medium- sized investors and achieved positive interaction and harmonious development between investors and listed companies.(II) Protection of employees' legitimate rights and interests In 2024 according to the requirements of modern enterprise management the Company strengthened the scientific standardized and professional management of human resources management through initiatives such as system construction and cultural construction effectively improved the level of human resources management avoided the risks of labor and employment created a good corporate culture atmosphere further mobilized the enthusiasm of employees and enhanced their sense of acquisition and sense of belonging.Firstly the human resources management system was further revised and improved according to the Company's development needs.During the year the Company newly revised the human resources management systems such as the Management Measures for Staff Rank Promotion of Shenzhen Textile the Management Measures for Staff Exchange and Exercise of Shenzhen Textile and the Management System for Employee Performance Assessment of Shenzhen Textile and optimized and improved the human resources 522024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. work such as talent rank promotion exchange and exercise and performance assessment management. Secondly the Company signed labor contracts with new employees and conducted standardized management of employees in accordance with the Labor Law and relevant management regulations of the Company. Thirdly the Company established a scientific appraisal and distribution system for senior officers department managers and employees and set up a relatively systematic and standardized performance appraisal and evaluation system which comprehensively objectively and fairly assesses and evaluates the performance of employees in performing their duties and completing tasks and uses this as the basis for determining the remuneration rewards and punishments and appointments of the employees. Fourthly the Company strengthened the construction of talent team thoroughly implemented the strategy of "strengthening enterprises with talents" continuously carried out two-way communication and training activities for cadres and talents of the Group and its affiliated enterprises better cared for and helped employees grow and become successful improved the comprehensive business ability and duty performance ability of employees and stimulated the vitality of the cadre team. At the same time the Company selected and recruited talents through marketization created a good environment for talent development and continuously stimulated innovation vitality and power.(III) Environmental protection The Company has always regarded building a modernized "green enterprise" as an important and long-term responsibility to be undertaken insisted on creating the whole process of building a green cycle of the industrial chain realized a truly green circular economy improved the quality of the surrounding environment of the Company and escorted the Company's production. During the reporting period the off-site noise industrial wastewater and exhaust emissions during the production process of the Company have been monitored by the environmental protection department and met the standard requirements of relevant laws and regulations and no major environmental protection incidents have occurred. The Company has vigorously advocated green office carried out various forms of environment protection publicity and education activities improved employees' awareness of energy conservation and emission reduction realized the coordinated development of production and operation and environment protection and earnestly fulfilled its social responsibility. During the reporting period the Company has actively responded to the national development goal of "carbon peak" and "carbon neutrality" continuously improved environmental protection facilities optimized waste gas and wastewater treatment processes strictly controlled the Company's waste gas and wastewater discharge ensured the efficient and stable operation of waste gas and wastewater treatment facilities to effectively reduce the Company's carbon emissions thus contributing to the realization of the national goal of "carbon peak" and "carbon neutrality".(IV) Protection of consumer rights and interests The Company has always adhered to the core values of "integrity-based and responsibility first". Being responsible for customers is the source of enterprise value. It is our unremitting pursuit to strive to provide customers with professional personalized and comprehensive products and services. Focusing on customer needs continuously innovating customer service and continuously improving product quality are the driving force for the Company to achieve good performance and sustainable development and also an important guarantee for winning long-term trust of customers. The Company has taken the initiative to pay attention to customer needs responded quickly to customer feedback sincerely thought about the interests of the customers and promoted the establishment of long-term partnerships.III. Consolidation and expansion of the achievements of poverty alleviation and rural revitalization In 2024 the Company actively fulfilled its corporate social responsibility actively participated in consumption assistance work and completed consumption assistance procurement of RMB 547600. 532024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Section VI Important Matters I. Fulfillment of commitments 1. Commitments made by the Company's actual owner shareholders related parties acquirers the Company and other related parties that have been fulfilled within the reporting period and those that have not been fulfilled as of the end of the reporting period □Applicable □Not applicable Party making Performan Reason Type Content Date Term commit ce ment Commitments made at the time of listing and circulation of restricted shares in the share reform: 1. if it plans to sell its shares held through Shenzhe the securities trading system in the future and the n reduction in the number of shares reaches 5% Commitm Commitm Investm within six months from the first reduction it will Continuou In normal ents on ents on August 4 ent disclose the sales prompt announcement through sly performan share share 2006 Holding the Company within two trading days before the effective ce reform reduction s Co. first reduction; 2. strictly abide by the relevant Ltd. provisions of the Guidance Opinions of Listed Companies on Lifting the Transfer of Restricted Stocks and the relevant business rules of the Shenzhen Stock Exchange.Commitments made at the time of private offering in 2009: Shenzhen Investment Holdings and its wholly-owned subsidiaries subsidiaries held or other companies with actual right of control will not engage in any business that are the same or similar to those currently or in the future engaged by Shenzhen Textile or conduct any other business or activities that may directly or indirectly compete with Shenzhen Textile; if Shenzhen Investment Holdings and its wholly- Commitm Shenzhe Commitm owned subsidiaries subsidiaries held or other ents made n ents on companies with actual right of control over at the Investm Continuou In normal avoiding Shenzhen Investment Holdings engage in October 9 time of ent sly performan horizontal horizontal competitions with Shenzhen Textile or 2009 IPO or Holding effective ce competitio conflict with the interests of the issuer in the refinancin s Co.ns future in terms of operating activities Shenzhen g Ltd.Investment Holdings will procure the sale of the equity interests assets or business of such companies to Shenzhen Textile or a third party; when Shenzhen Investment Holdings and its wholly-owned subsidiaries subsidiaries held or other companies with actual right of control and Shenzhen Textile need to expand their business during which there may be horizontal competitions Shenzhen Textile has the right of first refusal.Commitm Shenzhe Commitm Commitments made at the time of private Continuou In normalJuly 14 ents made n ents on offering in 2012: 1. Shenzhen Investment sly performan2012 at the Investm avoiding Holdings as the controlling shareholder of effective ce 542024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. time of ent horizontal Shenzhen Textile currently has no production IPO or Holding competitio and operating activities that constitute horizontal refinancin s Co. ns competitions with the existing business of g Ltd. Shenzhen Textile and its subsidiaries held; 2.Shenzhen Investment Holdings and its subsidiaries held or other companies with actual right of control will not in the future directly or indirectly or on behalf of any person company or unit engage in the same or similar business as Shenzhen Textile and its subsidiaries held in any region in the form of holding equity participation joint venture cooperation partnership contracting leasing etc. and undertake not to use the position as controlling shareholder to damage the legitimate rights and interests of Shenzhen Textile and other shareholders or to seek additional benefits by using the position as controlling shareholder; 3. if Shenzhen Investment Holdings and its subsidiaries held or other companies with actual right of control engage in horizontal competitions with Shenzhen Textile in the future in terms of operating activities Shenzhen Investment Holdings will urge the relevant companies to avoid horizontal competitions by transferring equity assets or business etc.; 4. the above commitments shall remain valid and irrevocable during the period when Shenzhen Investment Holdings serves as the controlling shareholder of Shenzhen Textile or indirectly controls Shenzhen Textile.Whether the commitment is fulfilled on time Yes If the commitments are not fulfilled within the time limit the specific reasons for the unfinished Not applicable performance and the next work plan shall be specified 2. If there is a profit forecast for the Company's assets or projects and the reporting period is still in the profit forecast period the Company shall explain that the assets or projects have met the original profit forecast and the reasons □Applicable □Not applicable II. Non-operational occupation of funds by the controlling shareholders and other related parties of the listed company □Applicable □Not applicable During the reporting period there were no non-operational funds occupied by the controlling shareholders and other related parties for the listed company.III. Illegal external guarantees □Applicable □Not applicable The Company had no illegal external guarantee during the reporting period. 552024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. IV. Explanation of the Board of Directors on the latest "modified report" □Applicable □Not applicable V. Explanation of the Board of Directors the Board of Supervisors independent directors (if any) on the "modified report" of the accounting firm during the reporting period □Applicable □Not applicable VI. Explanation of the accounting policies changes in accounting estimates or corrections of significant accounting errors compared to the financial report of the previous year □Applicable □Not applicable During the reporting period the Company had no accounting policies changes in accounting estimates or corrections of significant accounting errors.VII. Explanation of changes in the scope of consolidated statements compared to the financial report of the previous year □Applicable □Not applicable There was no change in the scope of the consolidated statements of the Company during the reporting period.VIII. Appointment and dismissal of the accounting firm Currently appointed accounting firm Deloitte Touche Tohmatsu Certified Public Accountants Name of domestic accounting firm (LLP) Remuneration of domestic accounting firm (RMB10000) 110 Number of consecutive years of audit services provided by 3 domestic accounting firm Name of certified public accountants of the domestic accounting Huang Tianyi Chen Junheng firm Number of consecutive years of audit services provided by 2 certified public accountants of domestic accounting firm Name of overseas accounting firm (if any) None Number of consecutive years of audit services provided by None overseas accounting firm (if any) Name of certified public accountants of overseas accounting firm None (if any) Number of consecutive years of audit services provided by None certified public accountants of overseas accounting firm (if any) Whether to change the accounting firm in the current period □Yes□No Engagement of internal control audit accounting firm financial adviser or sponsor □Applicable □Not applicable The total audit fee for 2024 is RMB 1.1 million (including tax) of which the financial statements audit fee is RMB 850000 (including tax) and the internal control audit fee is RMB 250000 (including tax). 562024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. IX. Delisting after the disclosure of the annual report □Applicable □Not applicable X. Matters related to bankruptcy and reorganization □Applicable □Not applicable During the reporting period the Company had no bankruptcy restructuring related matters.XI. Significant litigation and arbitration □Applicable □Not applicable Whether Discl Amount Results and Execution of Date estimated Proceedings osur Basic information of involved influence of litigation of liabilities of litigation e litigation (arbitration) (RMB100 litigation (arbitration) disclo are (arbitration) inde 00) (arbitration) trial judgment sure formed x As of the end During the reporting of the period the Company reporting and its subsidiaries As at the end of period among were involved in a total the reporting the The concluded of 15 other litigation period the aforementione cases basically and arbitration cases concluded cases d 15 cases 3 supported the that did not meet the were in the cases were Company's claims criteria for disclosure of 901.65 No process of / concluded and had no material litigation execution or while 7 cases material adverse mainly contract completed with were impact on the disputes and labor no material withdrawn by Company.disputes of which 6 adverse impact on the plaintiffs were brought as the Company.and 5 cases plaintiffs and 9 as were not defendants.concluded.XII. Punishment and rectification □Applicable □Not applicable There was no punishment or rectification during the reporting period.XIII. Integrity status of the Company and its controlling shareholders and actual owner □Applicable □Not applicable The Company its controlling shareholders and actual owners are in good standing in terms of their integrity and have not failed to perform the effective judgments of the court or failed to pay the larger amount due etc.XIV. Major related party transactions 1. Related party transactions related to daily operations □Applicable □Not applicable During the reporting period the Company had no related party transactions related to daily operations. 572024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. 2. Related party transactions arising from the acquisition and sale of assets or equity □Applicable □Not applicable During the reporting period the Company had no related party transactions arising from the acquisition or sale of assets or equity. 3. Related party transactions arising from joint external investment □Applicable □Not applicable During the reporting period the Company had no related party transactions arising from joint external investment. 4. Related claims and debts □Applicable □Not applicable During the reporting period the Company had no related debt transactions. 5. Information on transactions with finance companies with related relationship □Applicable □Not applicable There was no deposit loan credit or other financial business between the Company and the finance companies with related relationship and their related parties. 6. Transactions between the Company's holding finance companies and its related parties □Applicable □Not applicable There was no deposit loan credit or other financial business between the Company's holding finance companies and its related parties. 7. Other major related party transactions □Applicable □Not applicable The Company had no other major related party transactions during the reporting period.XV. Major contracts and their performance 1. Custody contracting and lease matters (1) Custody □Applicable □Not applicable During the reporting period the Company had nothing under custody. (2) Contracting □Applicable □Not applicable During the reporting period the Company had no contracting. (3) Leases □Applicable □Not applicable During the reporting period the Company had no leases. 582024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. 2. Significant guarantees □Applicable □Not applicable Unit: RMB10000 External guarantees of the Company and its subsidiaries (excluding the guarantees to subsidiaries) Disclosu re date Whether of Actual the Name of Type of Counter Whether to guarante Guarante Actual guarante Collatera Guarante performa guaranto guarante guarante guarantee for e limit e limit date e l (if any) e period nce is r e e (if any) a related party related amount complete announc d ements Guarantees to subsidiaries by the Company Disclosu re date Whether of Actual the Name of Type of Counter Whether to guarante Guarante Actual guarante Collatera Guarante performa guaranto guarante guarante guarantee for e limit e limit date e l (if any) e period nce is r e e (if any) a related party related amount complete announc d ements From the effective date of the guarante e Shenzhe Joint and agreeme n SAPO Septemb several March 12564.0 nt to the Photoele 48000 er 8 liability No No 18 2020 5 expiratio ctric 2020 guarante n date of Co. Ltd. e the actual loan performa nce period Total actual amount Total guarantee limit of guarantee to be approved to incurred to subsidiaries during 0 -23927.4 subsidiaries during the reporting period the reporting period (B1) (B2) Total approved Total actual balance guarantee limit to of guarantees to subsidiaries at the 48000 subsidiaries at the 12564.05 end of the reporting end of the reporting period (B3) period (B4) Guarantees by subsidiaries to subsidiaries Disclosu Whether re date Actual theName of Type of Counter Whether to of Guarante Actual guarante Collatera Guarante performaguaranto guarante guarante guarantee for guarante e limit date e l (if any) e period nce isr e e (if any) a related party e limit amount complete related d 592024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. announc ements Total guarantees of the Company (i.e. the total of the top three items) Total actual amount Total guarantee limit of guarantee to be approved 0 incurred during the -23927.4 during the reporting reporting period period (A1+B1+C1) (A2+B2+C2) Total approved Total actual balance guarantee limit at the of guarantees at the 4800012564.05 end of the reporting end of the reporting period (A3+B3+C3) period (A4+B4+C4) Total actual guarantees (i.e. A4+B4+C4) as a 4.26% percentage of the Company's net assets Including: Balance of guarantees provided for shareholders actual owner and their related 0 parties (D) Balance of debt guarantees provided directly or indirectly for the guaranteed object whose 0 asset-liability ratio exceeds 70% (E) Amount of total guarantees exceeding 50% 0 of net assets (F) Total amount of the above three guarantees 0 (D+E+F) Explanation of the situation in which the guarantee liability occurs or there is evidence that it may bear joint and several repayment None liability during the reporting period in respect of unexpired guarantee contracts (if any) Explanation of provision of guarantee to external parties in violation of the prescribed None procedures (if any) Explanation of the specific situation of the guarantee by the adoption of composite method 3. Entrustment of others for cash asset management (1) Entrusted wealth management □Applicable □Not applicable Overview of entrusted wealth management during the reporting period Unit: RMB10000 Sources of funds Delinquent uncollected Amount of Delinquent for entrusted Outstanding amount of financial Specific type entrusted wealth uncollected wealth balance assets with provision for management amount management impairment Bank wealth management Self-owned funds 95000 50215.56 0 0 products Others Self-owned funds 64900 22926.43 0 0 Total 159900 73141.99 0 0 602024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Details of high-risk entrusted wealth management with significant single amount low safety and poor liquidity □Applicable □Not applicable Unit: RMB10000 Actu Over Wheth Actua al view Dete er Refe l reco Amo of Type rmin there Name renc profit very unt Whet matt of atio Exp will be of e or of of her to er truste Sour Inve n ecte any trustee annu loss profi prov go and e Prod ce Expi stme met d entrust instituti Am Start alize amou t or ision throu inde institu uct of ry nt of hod earn ed on (or ount date d nt loss for gh x of tion type fund date fund of ings wealth name rate durin durin impa legal relat (or s s rem (if manag of of g the g the irme proce ed truste uner any) ement trustee) retur report repor nt (if dures enqu e) atio plan in n ing ting any) iries n the period perio (if future d any) Lum Shanghai p Pudong Self- sum Febru Augu Not Develop Finan 1500 owne Other paym 3.05 228.7 Undu Bank ary 8 st 8 0 0 Yes applicab ment cing 0 d s ent % 5 e 2024 2024 le Bank funds upon Co. Ltd. matur ity Lum p Rede Struc Self- sum Bank of Marc June mptio Not tural 2000 owne Other paym 0.20 China Bank h 7 19 11.29 11.29 n on 0 Yes applicab depos 0 d s ent % Limited 2024 2024 matur le its funds upon ity matur ity Lum Shanghai p Rede Pudong Self- sum Marc June mptio Not Develop Finan 1000 owne Other paym 2.90 Bank h 12 19 79.47 74.97 n on 0 Yes applicab ment cing 0 d s ent % 2024 2024 matur le Bank funds upon ity Co. Ltd. matur ity Lum p Self- Nove sum Bank of April Not Finan 2500 owne mber Other paym 2.80 335.6 Undu Jiangsu Bank 28 0 0 Yes applicab cing 0 d 5 s ent % 2 e Co. Ltd. 2025 le funds 2024 upon matur ity Lum p Self- Nove sum Bank of May Not Finan 2500 owne mber Other paym 2.80 350.9 Undu Jiangsu Bank 8 0 0 Yes applicab cing 0 d 7 s ent % 6 e Co. Ltd. 2025 le funds 2024 upon matur ity Southern Fund Mone 5000 Self- Febru Marc Mone Rede 1.88 10.05 10.05 Rede 0 Yes Not 612024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Asset tary owne ary h 28 y mptio % mptio applicab Manage fund d 23 2024 mark n on n on le ment funds 2024 et T matur Co. Ltd. instru day ity ment arriva s l on T+1 Rede Mone mptio Penghua y Self- Febru Dece n on Fund Mone mark Not owne ary mber T 2.07 Undu Manage Fund tary 6000 et 0 0 0 Yes applicab d 23 31 day % e ment fund instru le funds 2024 2025 arriva Co. Ltd. ment l on s T+1 Rede Mone Hotland mptio y Innovati Self- Dece n on Mone April mark Not on Asset owne mber T 3.69 Undu Fund tary 5000 3 et 0 0 0 Yes applicab Manage d 31 day % e fund 2024 instru le ment funds 2025 arriva ment Co. Ltd. l on s T+1 Rede Mone mptio Penghua y Self- Dece n on Fund Mone April mark Not owne mber T 2.07 Undu Manage Fund tary 9000 30 et 0 0 0 Yes applicab d 31 day % e ment fund 2024 instru le funds 2025 arriva Co. Ltd. ment l on s T+1 Rede Mone mptio Southern y Self- Dece n on Asset Mone May mark Not owne mber T 2.01 Undu Manage Fund tary 9900 8 et 0 0 0 Yes applicab d 31 day % e ment fund 2024 instru le funds 2025 arriva Co. Ltd. ment l on s T+1 Rede Mone mptio Southern y Self- Dece n on Asset Mone June mark Not 1000 owne mber T 1.97 Undu Manage Fund tary 28 et 0 0 0 Yes applicab 0 d 31 day % e ment fund 2024 instru le funds 2025 arriva Co. Ltd. ment l on s T+1 Rede Mone mptio Penghua y Self- Dece n on Fund Mone June mark Not 1000 owne mber T 2.07 Undu Manage Fund tary 28 et 0 0 0 Yes applicab 0 d 31 day % e ment fund 2024 instru le funds 2025 arriva Co. Ltd. ment l on s T+1 Hotland Mone Rede Self- Dece Innovati Mone June y mptio Not 1000 owne mber 3.69 Undu on Asset Fund tary 28 mark n on 0 0 0 Yes applicab 0 d 31 % e Manage fund 2024 et T le funds 2025 ment instru day 622024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Co. Ltd. ment arriva s l on T+1 15991379 Total -- -- -- -- -- -- 688.34 -- 0 -- -- -- 00.42 Entrusted wealth management that may fail to recover the principal or other circumstances that may lead to impairment □Applicable □Not applicable (2) Entrusted loans □Applicable □Not applicable There were no entrusted loans of the Company during the reporting period. 4. Other major contracts □Applicable □Not applicable There were no other major contracts of the Company during the reporting period.XVI. Notes to other major matters □Applicable □Not applicable (1) Termination of the restructuring In 2023 through the integration of high-quality resources in the polarizer industry the company optimized the industrial chain layout and actively promoted the work relating to the acquisition of 100% equity in Hengmei Optoelectronics Co. Ltd. by way of issuance of shares and payment of cash (hereinafter referred to as "the Restructuring" or "the Transaction"). During the period due to the changes in shareholders and shareholding ratio of the target company Hengmei Optoelectronics during the restructuring period it is necessary to adjust the counterparty of the restructuring and the transaction plan according to the relevant rules and requirements of the registration system. On November 17 2023 the Company reconvened the Board of Directors to review and approve the revised draft of the transaction plan and adjusted the pricing base date issue price counterparty etc. of the transaction plan. Since the disclosure of this transaction plan the Company and relevant parties have actively promoted the various tasks involved in the Transaction including additional audit evaluation and supplementary due diligence of the target company and communicated negotiated and prudently demonstrated with the counterparty on the transaction plan. According to the relevant regulations the Company shall convene the Board of Directors to review the draft of the restructuring report and issue a notice to convene the general meeting of shareholders before May 17 2024 and clarify whether to continue or terminate the Restructuring. Since the planning and first announcement of the Transaction the Company has actively organized all parties involved in the Transaction to promote the restructuring in strict accordance with the requirements of relevant laws regulations and normative documents. As of May 16 2024 due to the complexity of the restructuring plan and the involvement of many counterparties the transaction has not yet completed the approval procedures of all parties involved and the validity period of the financial data of the target company has expired. The Company is unable to issue a notice of convening the general meeting of shareholders within six months after the announcement of the first board resolution on the issuance of shares for the purchase of assets that is before May 17 2024. From the perspective of safeguarding the interests of all shareholders and the listed company the Company has decided to terminate the Restructuring after prudent argumentation by the Company and friendly negotiation with all parties to the transaction.According to the agreements relating to the Transaction signed by the Company and the counterparties the agreements relating to the Transaction shall only take effect after the transaction plan is reviewed and approved by the Board of Directors and the general meeting of shareholders reviewed and approved by the Shenzhen Stock Exchange and registered and agreed to by China Securities Regulatory Commission. In view of the fact that the above relevant preconditions have not been met the termination of the Restructuring is a prudent decision made by the Company after full communication prudent analysis and friendly negotiation with relevant parties and the Company and the parties to the transaction do not need to bear any liability for breach of contract or other liabilities. The Company's current production and operation are normal. The termination of the Restructuring is not expected to have any material adverse impact on the Company's existing daily operation and financial position and there is no harm to the interests of the Company and shareholders especially minority shareholders. The Company will continue to pay attention to and actively explore investment opportunities in polarizer and related fields to promote the long-term development of the Company and enhance its value. For details please refer to the Announcement on Termination of Issuance of Shares and Payment of Cash for Purchase of Assets and Raising of Matching Funds and Related Party Transactions (No. 2024-24) of the Company on Cninfo (http://www.cninfo.com.cn). 632024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. (2) Disposal of Assets by Shenzhen Xieli Joint Venture Company Our company has invested with Hong Kong Xieli Maintenance Company (hereinafter referred to as "Hong Kong Xieli") to establish a Sino foreign joint venture Shenzhen Xieli Automobile Enterprise Co. Ltd. (hereinafter referred to as "Shenzhen Xieli"). In March 2020 Shenzhen Xieli was deregistered by the Shenzhen Municipal Administration for Market Regulation. In July 2020 our company filed an administrative action with the Yantian District People's Court in Shenzhen Guangdong Province to revoke the approval of the Shenzhen Market Supervision Administration for the cancellation of Shenzhen Xieli.In December 2022 the People's Court of Yantian District Shenzhen Guangdong Province reviewed the first instance judgment and revoked the administrative action approving the cancellation of Shenzhen Xieli's registration. In January 2023 the third party in the original trial Hong Kong Xieli appealed to the Shenzhen Intermediate People's Court in Guangdong Province. Later due to Hong Kong Xieli's failure to pay the case acceptance fee in advance the Shenzhen Intermediate People's Court issued an administrative ruling ruling that the appeal should be withdrawn by Hong Kong Xieli. The retrial judgment of the first instance has taken effect on March 22 2023.At present Shenzhen Xieli has resumed its business registration status but its future direction still needs to be negotiated among all shareholders.XVII. Major matters of the Company's subsidiaries □Applicable □Not applicable 642024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Section VII Changes in Shares and Shareholders I. Changes in shares 1. Changes in shares Unit: shares Before the change Increase or decrease in this change (+ -) After the change Convers B ion of New on provide Sub- Number Ratio shares us Others Number Ratio nt fund total issued iss into ue shares I. Shares with restrictive 720000.01%0002100021000930000.02% conditions for sales 1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00% 2. Shares held by the state- 00.00%0000000.00% owned legal persons 3. Other domestic holdings 72000 0.01% 0 0 0 21000 21000 93000 0.02% Including: shares held by 00.00%0000000.00% domestic legal persons Shares held by domestic 720000.01%0002100021000930000.02% natural persons 4. Foreign shareholding 0 0.00% 0 0 0 0 0 0 0.00% Including: shares held by 00.00%0000000.00% overseas legal persons Shares held by overseas 00.00%0000000.00% natural persons II. Shares without restrictive 50644984999.99%000-21000-2100050642884999.98% conditions for sales 1. RMB ordinary shares 457021849 90.23% 0 0 0 -21000 -21000 457000849 90.22% 2. Foreign shares listed 494280009.76%00000494280009.76% domestically 3. Foreign shares listed 00.00%0000000.00% overseas 4. Others 0 0.00% 0 0 0 0 0 0 0.00% 100.00100.00 III. Total number of shares 506521849 0 0 0 0 0 506521849 %% Reasons for changes in shares □Applicable □Not applicable 1. Liu Honglei the former Deputy General Manager of the Company retired on May 31 2024 and the 750 tradable shares of the Company held by him without restrictions on sales were converted into tradable shares with restrictions on sales. On November 30 2024 the restricted sales were lifted and converted into tradable shares without restrictions on sales. 2. Zhu Meizhu the former Director and General Manager of the Company retired on November 29 2024 and the 23250 tradable shares of the Company held by him without restrictions on sales were converted into tradable shares with restrictions on sales. On May 31 2025 the restricted sales were lifted and converted into tradable shares without restrictions on sales. Approval of changes in shares 652024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. □Applicable □Not applicable Transfer of changes in shares □Applicable □Not applicable Effect of changes in shares on financial indicators such as basic earnings per share and diluted earnings per share in the latest year and the latest period and net assets per share attributable to the Company's ordinary shareholders □Applicable □Not applicable Other contents deemed necessary by the Company or required by the securities regulators to be disclosed □Applicable □Not applicable 2. Changes in restricted shares □Applicable □Not applicable II. Issuance and listing of securities 1. Issuance of securities (excluding preferred shares) during the reporting period □Applicable □Not applicable 2. Changes in the total number of shares and shareholder structure of the Company and changes in the structure of assets and liabilities of the Company □Applicable □Not applicable 3. Existing internal employee shares □Applicable □Not applicable III. Shareholders and actual owner 1. Number of the Company's shareholders and shareholding ratios Unit: shares Total Total number of number of preferred ordinary shareholder Total number of shareholder s with preferred shareholders Total number of s at the end restoration whose voting right have ordinary of the of voting been restored at the end shareholders at the 33622 previous 32264 0 0 rights at of the previous month end of the reporting month the end of before the disclosure period. before the the date of the annual report disclosure reporting (if any) (see Note 8) date of the period (if annual any) (see report Note 8) Shareholdings of shareholders holding more than 5% or the top 10 shareholders (excluding shares lent through refinancing) Number of Number of Number of Pledge marking or Name of Nature of Shareholdi Changesshares held at shares shares held freezing shareholder shareholder ng ratio during thethe end of the held under without reporting reporting restricted restrictions Share Number 662024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. period period conditions on sales status Shenzhen Not State-owned Investment 46.21% 234069436 0 0 234069436 applicabl 0 legal person Holdings Co. Ltd. e Shenzhen Shenchao Not Technology State-owned 3.18% 16129032 0 0 16129032 applicabl 0 Investment Co. legal person e Ltd.Domestic Not Sun Huiming natural 1.60% 8088853 1689200 0 8088853 applicabl 0 person e Domestic Su Weipeng natural 0.71% 3580000 0 0 3580000 Pledged 3000000 person Domestic Not Chen Xiaobao natural 0.66% 3328620 326236 0 3328620 applicabl 0 person e Domestic Not Li Zengmao natural 0.61% 3077997 246600 0 3077997 applicabl 0 person e Hong Kong Not Securities Clearing Overseas 0.50% 2507982 664379 0 2507982 applicabl 0 Company Ltd. legal person e (HKSCC) Shanghai Submartingale Domestic Asset Management Not non-state- Co. Ltd. - 0.43% 2154800 2154800 0 2154800 applicabl 0 owned legal Submartingale e person Value No. 1 Private Fund Domestic Not Sun Wenbo natural 0.39% 2000200 854500 0 2000200 applicabl 0 person e Shanghai Submartingale Asset Management Domestic Not Co. Ltd. - non-state- 0.39% 1991700 1991700 0 1991700 applicabl 0 Submartingale owned legal e Pingchangxin person Yuanwang Private Fund Strategic investors or general legal person becoming the top 10 None shareholders due to placement of new shares (if any) (see Note 3) Among the top 10 ordinary shareholders Shenzhen Investment Holdings Co. Ltd. and Shenzhen Shenchao Technology Investment Co. Ltd. do not constitute a relationship of persons acting in Notes to shareholders' related concert. In addition the Company does not know whether there is a related relationship between the relationship or persons acting in top 10 ordinary shareholders and between the top 10 ordinary shareholders and the top 10 concert shareholders nor does it know whether they are persons acting in concert as stipulated in the Administrative Measures for the Acquisition of Listed Companies.Explanation of the above shareholders' involvement in None entrusting/being entrusted voting rights and waiver of voting rights Special explanation for the existence of repurchase accounts among the None top 10 shareholders (if any) (see 672024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Note 10) Shareholdings of the top 10 shareholders without restrictions on sales (excluding shares lent through refinancing and shares locked by senior management) Number of shares held without Type of shares Name of shareholder restrictions on sales at the end of the reporting period Type of shares Number RMB ordinary Shenzhen Investment Holdings Co. Ltd. 234069436 234069436 shares RMB ordinary Shenzhen Shenchao Technology Investment Co. Ltd. 16129032 16129032 shares Domestically listed Sun Huiming 8088853 8088853 foreign shares RMB ordinary Su Weipeng 3580000 3580000 shares RMB ordinary Chen Xiaobao 3328620 3328620 shares RMB ordinary Li Zengmao 3077997 3077997 shares RMB ordinary Hong Kong Securities Clearing Company Ltd. (HKSCC) 2507982 2507982 shares Shanghai Submartingale Asset Management Co. Ltd. - RMB ordinary 21548002154800 Submartingale Value No. 1 Private Fund shares RMB ordinary Sun Wenbo 2000200 2000200 shares Shanghai Submartingale Asset Management Co. Ltd. - RMB ordinary 19917001991700 Submartingale Pingchangxin Yuanwang Private Fund shares Explanation of related relationship Among the top 10 ordinary shareholders Shenzhen Investment Holdings Co. Ltd. and Shenzhen or concerted actions among the top Shenchao Technology Investment Co. Ltd. do not constitute a relationship of persons acting in 10 shareholders with unrestricted concert. In addition the Company does not know whether there is a related relationship between the tradable shares and between the top top 10 ordinary shareholders and between the top 10 ordinary shareholders and the top 10 10 shareholders with unrestricted shareholders nor does it know whether they are persons acting in concert as stipulated in the tradable shares and the top 10 Administrative Measures for the Acquisition of Listed Companies.shareholders Explanation of the top 10 ordinary shareholders' participation in margin None financing and securities lending business (if any) (see Note 4) Participation of shareholders holding more than 5% of the shares the top 10 shareholders and the top 10 shareholders of unrestricted tradable shares in refinancing business and lending shares □Applicable □Not applicable Changes of the top 10 shareholders and the top 10 shareholders of unrestricted tradable shares compared with the previous period due to refinancing lending/repayment □Applicable □Not applicable Whether the Company's top 10 ordinary shareholders and the top 10 ordinary shareholders without restrictive condition for sales conduct any agreed repurchase transactions during the reporting period □Yes□No The Company's top 10 ordinary shareholders and top 10 ordinary shareholders without restrictive condition for sales did not conduct any agreed repurchase transaction during the reporting period. 2. Controlling shareholders of the Company Nature of controlling shareholders: local state-owned holding Type of controlling shareholders: legal person Name of controlling Legal Date of Organization Main business 682024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. shareholder representative/pe establishment code rson in charge General business items are: investment and merger and acquisition of financial and quasi-financial equity such as banking securities insurance funds and guarantee; engage in real estate development and operation business within the scope of legally obtaining land use right; carry out investment and services in the field of strategic emerging Shenzhen Investment October 13 industries; invest operate and manage the state- He Jianfeng 76756642-1 Holdings Co. Ltd. 2004 owned equity of wholly-owned holding and participating enterprises through restructuring and integration capital operation asset disposal etc; other business authorized by the Municipal State- owned Assets Supervision and Administration Commission (if the above business scope needs to be approved according to national regulations it can be operated only after approval is obtained).SZPRD A (000011) holds 301.41 million shares with a shareholding ratio of 50.57%; Shenzhen Special Economic Zone Real Estate & Properties (000029) holds 564.3538 million shares with a shareholding ratio of 55.78%; Shenzhen Universe (Group) (000023) holds 8.21 million shares with a shareholding ratio of 5.91%; Ping An Insurance (601318) holds 962.72 million shares with a shareholding ratio of 5.29%; Guosen Securities (002736) holds 3223.11 million shares with a shareholding ratio of 33.53%; Guotai Junan Securities (601211) holds 609.43 million A-shares and 103.37 million H-shares with a shareholding ratio of 8.00%; Telling Telecommunication Holding (000829) holds 195.03 million shares with a shareholding ratio of 19.03%; Shenzhen International (00152) holds 1059.08 million shares with a shareholding ratio of Equities of other 43.96%; Leaguer (002243) holds 606.66 million shares with a shareholding ratio of 50.11%; Infinova domestic and overseas (002528) holds 315.83 million shares with a shareholding ratio of 26.35%; Eternal Asia (002183) holds listed companies 601.67 million shares with a shareholding ratio of 23.17%; Shenzhen Water Planning and Design Institute controlled and invested (301038) holds 64.35 million shares with a shareholding ratio of 37.50%; Shenzhen Energy (000027) holds by the controlling 6.77 million shares with a shareholding ratio of 0.14%; Bank of Communications (601328) holds 9.52 shareholder during the million shares with a shareholding ratio of 0.01%; CECEP Techand Ecology&Environment (300197) holds reporting period 113.98 million share with a shareholding ratio of 3.66%; China Vanke (02202) holds 77.27 million shares with a shareholding ratio of 0.66%; Shenzhen SEG (000058) holds 696.16mn shares with a shareholding ratio of 56.54%; Shenzhen SDG Information (000070) holds 325.72 million shares with a shareholding ratio of 36.18%; Shenzhen Tellus Holding (000025) holds 211.59 million shares with a shareholding ratio of 49.09%; Shenzhen SDG Service (300917) holds 80.74mn shares with a shareholding ratio of 47.78%; Microgate Technology (300319) holds 72 million shares with a shareholding ratio of 8.28%; China Merchants Shekou Industrial Zone Holdings (001979) holds 456.12 million shares with a shareholding ratio of 5.03%.Changes in controlling shareholders during the reporting period □Applicable □Not applicable There was no change in the controlling shareholder of the Company during the reporting period. 3. The Company's actual owner and its persons acting in concert Nature of actual owner: local state-owned assets management agency Type of actual owner: legal person Legal Name of actual owner representative/person Date of establishment Organization code Main business in charge State-owned Assets Perform the duties of the Supervision and contributor on behalf of the Administration state and supervise and Yang Jun July 30 2004 K3172806-7 Commission of manage state-owned assets Shenzhen Municipal authorized for supervision in People's Government accordance with the law. 692024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Equity of other domestic and overseas listed companies Directly holds 40.10% equity in Shenzhen Gas (601139); directly hold 21.93% equity in Shenzhen Zhenye controlled by the actual (000006); directly holds 43.91% equity in Shenzhen Energy (000027).owner during the reporting period Changes in actual owner during the reporting period □Applicable□Not applicable There was no change in the actual owner of the Company during the reporting period.Chart for the property and controlling relationships between the Company and the actual owner State-owned Assets Supervision and Administration Commission of Shenzhen Municipal People's Government Shenzhen Investment Holdings Co. Ltd. Shenzhen Major Industry Investment Group Co. Ltd.Shenzhen Shenchao Technology Investment Co. Ltd.Shenzhen Textile (Holdings) Co. Ltd.The actual owner controls the Company by way of trust or other asset management methods □Applicable □Not applicable 4. The cumulative number of shares pledged by the controlling shareholder or the largest shareholder of the Company and their persons acting in concert accounted for 80% of the number of shares held by them □Applicable □Not applicable 5. Other institutional shareholders holding more than 10% of the shares □Applicable □Not applicable 6. Restricted share reduction of controlling shareholder actual owner reorganization parties and other committed entities □Applicable □Not applicable IV. Specific implementation of share repurchase during the reporting period Implementation progress of share repurchase □Applicable □Not applicable Implementation progress of reducing repurchase shares by means of centralized bidding transaction □Applicable □Not applicable 702024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Section VIII Preferred shares □Applicable □Not applicable During the reporting period the Company had no preferred shares.Section IX Bonds □Applicable □Not applicable 712024 Annual Report of Shenzhen Textile (Holdings) Co. Ltd. Section X Financial Reports Type of audit opinion Standard and unqualified opinion Signing date of the audit report March 26 2025 Name of audit institution Deloitte Touche Tohmatsu Certified Public Accountants (LLP) Audit report No. DSB (S) Z (25) No. P03605 Name of certified public accountant Huang Tianyi Chen Junheng See the attached financial statements and notes for details.Chairman: Yin Kefei Date of approval by the Board of Directors for filing: March 26 2025 72Shenzhen Textile (Holdings) Co. Ltd. Financial Statements and Audit Report For Year Ended December 31 2024Shenzhen Textile (Holdings) Co. Ltd.Financial Statements and Audit Report For Year Ended December 31 2024 Content Page Audit Report 1-4 Consolidated and parent company's balance sheet 5-7 Consolidated and parent company's income statement 8-9 Consolidated and parent company's statement of cash flows 10-11 Consolidated and parent company's statement of changes in shareholders' equity 12-15 Notes to the financial statements 16-102Shenzhen Textile (Holdings) Co. Ltd.Audit Report DSB (S) Z (25) No. P03605 (Page 1 of 4) All shareholders of Shenzhen Textile (Holdings) Co. Ltd.I. Audit opinions We have audited the financial statements of Shenzhen Textile (Holdings) Co. Ltd. (hereinafter referred to as the "Shenzhen Textile") including the consolidated and parent company's balance sheet as at December 31 2024 the consolidated and parent company's income statement consolidated and parent company's statement of cash flows consolidated and parent company's statement of changes in shareholders' equity and related notes to the financial statements for the year then ended.In our opinion the attached financial statements are prepared in all material respects in accordance with the Accounting Standards for Business Enterprises and fairly present the consolidated and the parent company's financial position of Shenzhen Textile as at December 31 2024 and the consolidated and the parent company's operating results and cash flows for the year then ended.II. Basis for the audit opinion We have conducted our audit in accordance with the Chinese Auditing Standards for Certified Public Accountants.Our responsibilities under these standards are further described in the "Certified Public Accountant's Responsibilities for the Audit of Financial Statements" section of the audit report. In accordance with the Code of Ethics for Chinese Certified Public Accountants we are independent of Shenzhen Textile and have fulfilled other ethical responsibilities.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.III. Key audit matters Key audit matters are those matters that in our professional judgment are of most significance in our audit of the financial statements of the current year. These matters are addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters.We have identified the following matters as key audit matters to be communicated in the audit report. 1. Recognition of revenue from sales of polarizers As described in the Note (V). 41 to the financial statements in 2024 the operating revenue of Shenzhen Textile as presented in the consolidated financial statements was RMB 3335283008.68 of which the revenue from sales of polarizers was RMB 3161332478.08 accounting for 94.78% of the total revenue. The revenue from sales of polarizers of Shenzhen Textile is recognized when the customer obtains control of the relevant goods. Due to the importance of revenue from sales of polarizers to the consolidated financial statements as a whole and the fact that the revenue is one of the key performance indicators of Shenzhen Textile there is an inherent risk that management may manipulate the revenue recognition in order to achieve specific goals or expectations. Therefore we have identified the recognition of revenue from sales of polarizers as a key audit matter in the audit of the consolidated financial statements.- 1 -Shenzhen Textile (Holdings) Co. Ltd.Audit Report - Continued DSB (S) Z (25) No. P03605 (Page 2 of 4) III. Key audit matters - continued 1. Recognition of revenue from sales of polarizers - continued In response to the above key audit matters the audit procedures we performed mainly include: Test and evaluate the effectiveness of the operation of internal control related to the sales business of polarizer; Check the sales contracts signed with major customers identify the terms and conditions of the contracts related to the transfer of right of control of the goods and evaluate whether the accounting policies for recognition of revenue from sales of polarizers meet the requirements of the Accounting Standards for Business Enterprises; Execute analytical procedures for the revenue from sales of polarizers by production line product type and customer respectively and analyze the rationality of the change in revenue from sales of polarizers in combination with market selling price and other factors; Extract samples to perform detail tests on the revenue from sales of polarizers check the supporting documents such as invoices delivery orders and receipts related to the recognition of revenue from sales of polarizers and conduct letter of confirmation on the sales amount of major customers to verify the authenticity of revenue from sales of polarizers; Select samples for sales transactions before and after the balance sheet date check supporting documents such as delivery orders receipts and invoices and evaluate whether the revenue from sales of polarizers is recorded in the appropriate accounting period. 2. Impairment of polarizer inventories As described in Note (V). 8 to the Financial Statements as of December 31 2024 the book balance of inventories of Shenzhen Textile as presented in the consolidated financial statements was RMB 911706239.87 of which the book balance of polarizer inventories was RMB 905482857.11 accounting for 99.32% of the total inventories and the corresponding provision for inventory depreciation of polarizer was RMB 115967084.94. According to the accounting policies of Shenzhen Textile the inventories are measured at the lower of cost or net realizable value at the end of the year. When the net realizable value of the inventories is lower than the cost the provision for inventory depreciation shall be made according to the difference. Since the provision for inventory depreciation involves significant estimates of the management we have identified the impairment of polarizer inventories as a key audit matter in the audit of the consolidated financial statements.In response to the above key audit matters the audit procedures we performed mainly include: Test and evaluate the effectiveness of internal control related to the impairment of polarizer inventories; Evaluate the appropriateness of accounting policies related to the impairment of polarizer inventories; Implement the on-site monitoring procedures of polarizer inventories check the inventory quantity of polarizer inventories and observe the status of polarizer inventories on the basis of sampling; Select samples compare the data used in determining the net realizable value of the polarizer inventories with the actual cost of completion of products in progress and the actual selling prices incurred recently and evaluate the reasonableness of the net realizable value of polarizer inventories.- 2 -Audit Report - Continued DSB (S) Z (25) No. P03605 (Page 3 of 4) IV. Other information The management of Shenzhen Textile is responsible for other information. Other information includes information covered in the 2024 Annual Report of Shenzhen Textile but excludes the financial statements and our audit report.Our audit opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.In connection with our audit of financial statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with financial statements or our knowledge obtained during the audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatement of the other information we are required to report that fact. We have nothing to report in this regard.IV. Responsibilities of the management and those charged with governance for financial statements The management of Shenzhen Textile is responsible for preparing the financial statements in accordance with the requirements of Accounting Standards for Business Enterprises to achieve a fair presentation and for designing implementing and maintaining internal control that is necessary to ensure that the financial statements are free from material misstatements whether due to frauds or errors.In preparing the financial statements the management is responsible for assessing the going-concern ability of Shenzhen Textile disclosing matters related to going concern (if applicable) and applying the going concern basis unless the management plans to liquidate Shenzhen Textile terminate its operations or has no other realistic alternative.Those charged with governance are responsible for overseeing the financial reporting process of Shenzhen Textile.VI. Responsibilities of certified public accountants for the audit of financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an audit report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the audit standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.We have exercised professional judgment and maintained professional skepticism in performing our audit under the auditing standards. At the same time we also implement the following work: (1) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.- 3 -Audit Report - Continued DSB (S) Z (25) No. P03605 (Page 4 of 4) VI. Responsibilities of certified public accountants for the audit of financial statements - continued (2) Understand the internal control related to the audit so as to design appropriate audit procedures. (3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management. (4) Draw conclusions on the appropriateness of the management's use of the going concern basis. At the same time based on the audit evidence obtained a conclusion is drawn as to whether there is a material uncertainty in events or circumstances that may give rise to significant doubt about the going-concern ability of Shenzhen Textile. If we conclude that a material uncertainty exists we are required to in our audit report draw attention of the users of statements to the related disclosures in the financial statements; if such disclosures are inadequate we should modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit report. However future events or circumstances may cause Shenzhen Textile to cease to continue as a going concern. (5) Evaluate the overall presentation (including disclosures) structure and content of the financial statements and whether the financial statements fairly reflect the relevant transactions and matters. (6) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within Shenzhen Textile to express an opinion on the financial statements. We are responsible for the direction supervision and performance of the group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding the planned scope and timing of the audit significant audit findings and other matters including any significant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and the related safeguards (if applicable).From the matters communicated with those charged with governance we have determined which matters are of most significance to the audit of the financial statements in the current year and thus constitute the key audit matters. We describe these matters in the audit report unless laws and regulations prohibit public disclosure of these matters or in extremely rare circumstances if it is reasonably expected that the negative consequences of communicating a matter outweigh the benefits to the public interest in the audit report we determine not to do so.Deloitte Touche Tohmatsu Certified Public Accountants LLP Certified Public Accountant of China (Engagement partner) Shanghai China Certified Public Accountant of China March 26 2025 - 4 -Shenzhen Textile (Holdings) Co. Ltd.Consolidated Balance Sheet December 31 2024 Consolidated Balance Sheet RMB Balance as at the Balance as at the Notes end of the current end of the previous year year Current assets: Monetary funds (V). 1 340961443.82 472274448.00 Financial assets held for trading (V). 2 731419904.42 821946114.68 Notes receivable (V). 3 47305221.88 50963943.01 Accounts receivable (V). 4 863731936.89 820134833.95 Receivables financing (V). 5 6804603.68 22839459.13 Advances to suppliers (V). 6 8176724.70 19499886.80 Other receivables (V). 7 3596543.96 3220285.42 Including: interest receivable - - Dividends receivable - - Inventories (V). 8 789756700.88 736392172.27 Other current assets (V). 9 21461736.14 60773457.39 Total current assets 2813214816.37 3008044600.65 Non-current assets: Long-term equity investments (V). 10 114828026.04 127682020.70 Other equity instrument investments (V). 11 165402900.00 145988900.00 Investment properties (V). 12 115993390.19 125603207.18 Fixed assets (V). 13 1873552843.91 2066006237.73 Construction in progress (V). 14 5814012.03 31307060.74 Right-of-use assets (V). 15 15338117.86 11999466.57 Intangible assets (V). 16 35207791.95 39564422.80 Goodwill (V). 17 - - Long-term deferred expenses (V). 18 6084115.87 3503660.94 Deferred tax assets (V). 19 58920511.20 60605365.42 Other non-current assets (V). 20 27793871.91 29517420.71 Total non-current assets 2418935580.96 2641777762.79 Total assets 5232150397.33 5649822363.44 - 5 -Shenzhen Textile (Holdings) Co. Ltd.Consolidated Balance Sheet - Continued December 31 2024 Consolidated Balance Sheet - Continued RMB Balance as at the Balance as at the Notes end of the current end of the previous year year Current liabilities: Short-term borrowings (V). 22 - 8000000.00 Derivative financial liabilities (V). 23 1278559.35 - Notes payable (V). 24 31095540.29 31049291.49 Accounts payable (V). 25 304812580.55 408548136.24 Advances from customers (V). 26 1051491.96 1450096.30 Contract liabilities (V). 27 490562.97 1436943.34 Employee compensation payable (V). 28 56685289.92 56437162.09 Taxes payable (V). 29 6853730.84 4340895.14 Other payables (V). 30 160296989.98 184528344.55 Including: interest payable - - Dividends payable - - Non-current liabilities maturing within one year (V). 31 63347555.03 108102752.99 Other current liabilities (V). 32 54072022.27 80082477.22 Total current liabilities 679984323.16 883976099.36 Non-current liabilities: Long-term borrowings (V). 33 162388870.00 505578314.56 Lease liabilities (V). 34 9496564.12 6687317.22 Deferred income (V). 35 96349196.26 97485986.89 Deferred tax liabilities (V). 19 48610809.66 44177287.45 Total non-current liabilities 316845440.04 653928906.12 Total liabilities 996829763.20 1537905005.48 Shareholders' equity: Equity (V). 36 506521849.00 506521849.00 Capital reserve (V). 37 1961599824.63 1961599824.63 Other comprehensive income (V). 38 106877807.32 93607380.81 Surplus reserves (V). 39 104262315.64 104262315.64 Undistributed profits (V). 40 272608113.66 216160896.14 Total equity attributable to shareholders of the parent company 2951869910.25 2882152266.22 Minority interests 1283450723.88 1229765091.74 Total shareholders' equity 4235320634.13 4111917357.96 Total liabilities and shareholders' equity 5232150397.33 5649822363.44 The notes are an integral part of the financial statements _________________________________________________________________ Principal Chief Finance Officer Chief Accountant - 6 -Shenzhen Textile (Holdings) Co. Ltd.Balance Sheet of the Parent Company December 31 2024 Balance Sheet of the Parent Company RMB Balance as at the Balance as at the Notes end of the current end of the previous year year Current assets: Monetary funds 13630974.26 9125800.27 Financial assets held for trading 731419904.42 741243309.42 Accounts receivable (XVI). 1 13028987.63 12671623.65 Advances to suppliers 99904.79 - Other receivables (XVI). 2 1534395.80 14013552.95 Including: interest receivable - - Dividends receivable - - Inventories 39835.05 32814.05 Total current assets 759754001.95 777087100.34 Non-current assets: Long-term equity investments (XVI). 3 2040690006.71 2087532810.79 Other equity instrument investments 152221200.00 131185500.00 Investment properties 94773462.23 102430682.27 Fixed assets 2099585.67 2522229.44 Intangible assets 83350.98 191875.56 Long-term deferred expenses 4448190.05 - Other non-current assets 25860862.33 27823005.45 Total non-current assets 2320176657.97 2351686103.51 Total assets 3079930659.92 3128773203.85 Current liabilities: Accounts payable 411743.57 411743.57 Advances from customers 540673.07 540673.07 Employee compensation payable 17955509.70 15810919.71 Taxes payable 5619509.34 3115369.56 Other payables 87029351.12 106722393.87 Including: interest payable - - Dividends payable - - Total current liabilities 111556786.80 126601099.78 Non-current liabilities: Deferred income 100000.00 200000.00 Deferred tax liabilities 34086313.51 40855186.12 Total non-current liabilities 34186313.51 41055186.12 Total liabilities 145743100.31 167656285.90 Shareholders' equity: Equity 506521849.00 506521849.00 Capital reserve 1577392975.96 1577392975.96 Other comprehensive income 98116532.32 83629830.81 Surplus reserves 104262315.64 104262315.64 Undistributed profits 647893886.69 689309946.54 Total shareholders' equity 2934187559.61 2961116917.95 Total liabilities and shareholders' equity 3079930659.92 3128773203.85 The notes are an integral part of the financial statements - 7 -Shenzhen Textile (Holdings) Co. Ltd.Consolidated Income Statement For Year Ended December 31 2024 Consolidated Income Statement RMB Notes Amount for the current Amount for the previousyear year I. Operating revenue (V). 41 3335283008.68 3079678375.45 Less: operating costs (V). 41 2795859934.82 2561631844.53 Taxes and surcharges (V). 42 10235505.65 9293623.13 Selling and distribution expenses (V). 43 42260603.47 34195670.61 G&A expenses (V). 44 134347821.58 134371410.53 R&D expenses (V). 45 103811822.91 104653040.92 Financial expenses (V). 46 12121156.05 24399501.16 Including: interest expenses 17858022.73 27339804.17 Interest income 7272362.76 12947471.64 Plus: other income (V). 47 41484107.53 50740363.91 Investment (loss) income (V). 48 (165313.89) 10828635.56 Including: investment losses in associates and joint ventures (10701895.08) (6898983.89) Gains from derecognition of financial assets measured at amortized costs - - Gains from changes in fair value (V). 49 1134503.45 2151780.82 Credit loss gains (V). 50 5100446.66 4535775.14 Asset impairment loss (V). 51 (132423108.75) (126089709.42) Gains from disposal of assets - 1.72 II. Operating profit 151776799.20 153300132.30 Plus: non-operating revenue (V). 52 1805086.92 1449879.26 Less: non-operating expenses (V). 53 698017.71 8205801.51 III. Total profit 152883868.41 146544210.05 Less: income tax expenses (V). 54 9827102.03 19407731.47 IV. Net profit 143056766.38 127136478.58 (I) Classified by operating sustainability: 1. Net profit from continuing operations 143056766.38 127136478.58 2. Net profit from discontinued operations - - (II) Classified by ownership: 1. Net profit attributable to shareholders of the parent company 89371134.24 79268250.45 2. Minority interests 53685632.14 47868228.13 V. Net of tax of other comprehensive income (V). 38 13270426.51 (15870135.10) Net of tax of other comprehensive income attributable to shareholders of the parent company 13270426.51 (15989228.50) (I) Other comprehensive income that cannot be reclassified into profit or loss 14560500.00 (16267037.45) 1. Changes in re-measurement of defined benefit plans - - 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method - - 3. Changes in fair value of other equity instrument investments 14560500.00 (16267037.45) 4. Changes in fair value of the enterprise's own credit risk - - (II) Other comprehensive income that will be reclassified into profit or loss (1290073.49) 277808.95 1. Other comprehensive income that can be transferred to profit or loss under the equity method - - 2. Changes in fair value of other debt investments - 178640.10 3. Amount of financial assets reclassified and included in other comprehensive income - - 4. Provision for credit impairment of other debt investments - - 5. Reserves of cash flow hedges (effective portion of cash flow hedging profit or loss) - - 6. Differences arising from translation of foreign-currency financial statements (1290073.49) 99168.85 7. Others - - Net of tax of other comprehensive income attributable to minority shareholders - 119093.40 VI. Total comprehensive income 156327192.89 111266343.48 Total comprehensive income attributable to shareholders of the parent company 102641560.75 63279021.95 Total comprehensive income attributable to minority shareholders 53685632.14 47987321.53 VII. Earnings per share Basic earnings per share (RMB/share) 0.18 0.16 Dilute earnings per share (RMB/share) 0.18 0.16 The notes are an integral part of the financial statements - 8 -Shenzhen Textile (Holdings) Co. Ltd.Income Statement of the Parent Company For Year Ended December 31 2024 Income Statement of the Parent Company RMB Notes Amount for the current Amount for the previousyear year I. Operating revenue (XVI). 4 77167496.95 77822508.75 Less: operating costs (XVI). 4 10205157.84 9822306.53 Taxes and surcharges 3069369.36 3193559.74 Selling and distribution expenses 476938.50 233086.71 G&A expenses 46124842.97 46901768.72 Financial expenses (1179537.25) (3418990.44) Including: interest expenses 422950.59 356264.79 Interest income 1698292.14 3838789.68 Plus: other income 164150.75 153012.52 Investment income (XVI). 5 12077902.81 19300515.95 Including: investment losses in associates and joint ventures (10701895.08) (6898983.89) Gains from derecognition of financial assets measured at amortized costs - - Gains from changes in fair value 2413062.80 2151780.82 Credit impairment (loss) gains (26291403.84) 708847.28 Asset impairment loss (20243658.34) - Gains from disposal of assets - - II. Operating (loss) profit (13409220.29) 43404934.06 Plus: non-operating revenue 1124656.60 6431.44 Less: non-operating expenses 93185.54 59123.40 III. Total profit (loss) (12377749.23) 43352242.10 Less: income tax expenses (3885606.10) 9825698.88 IV. Net (loss) profit (8492143.13) 33526543.22 (I) Net (loss) profit from continuing operations (8492143.13) 33526543.22 (II) Net profit from discontinued operations - - V. Net of tax of other comprehensive income 14486701.51 (15225837.94) (I) Other comprehensive income that cannot be reclassified into profit or loss 15776775.00 (15325006.79) 1. Changes in re-measurement of defined benefit plans - - 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method - - 3. Changes in fair value of other equity instrument investments 15776775.00 (15325006.79) 4. Changes in fair value of the enterprise's own credit risk - - 5. Others - - (II) Other comprehensive income that will be reclassified into profit or loss (1290073.49) 99168.85 1. Other comprehensive income that can be transferred to profit or loss under the equity method - - 2. Changes in fair value of other debt investments - - 3. Amount of financial assets reclassified and included in other comprehensive income - - 4. Provision for credit impairment of other debt investments - - 5. Reserves of cash flow hedges (effective portion of cash flow hedging profit or loss) - - 6. Differences arising from translation of foreign-currency financial statements (1290073.49) 99168.85 7. Others - - VI. Total comprehensive (loss) income 5994558.38 18300705.28 The notes are an integral part of the financial statements - 9 -Shenzhen Textile (Holdings) Co. Ltd.Consolidated Statement of Cash Flows For Year Ended December 31 2024 Consolidated Statement of Cash Flows RMB Notes Amount for the current Amount for theyear previous year I. Cash flows from operating activities: Cash received from sale of goods and rendering of services 3390788584.83 2985794229.99 Refunds of taxes and surcharges received 21049133.80 5073509.20 Other cash received related to operating activities (V). 55(1) 87008969.95 87277323.90 Sub-total of cash inflows from operating activities 3498846688.58 3078145063.09 Cash paid for purchase of goods and receipt of services 2842864632.73 2466252261.73 Cash paid to and on behalf of employees 238890310.33 255045680.87 Cash paid for taxes and surcharges 32071014.09 54636406.53 Other cash paid related to operating activities (V). 55(1) 153756206.34 117443974.16 Sub-total of cash outflows from operating activities 3267582163.49 2893378323.29 Net cash flows from operating activities (V). 56(1) 231264525.09 184766739.80 II. Cash flows from investing activities: Cash received from recovery of investment 1349489.37 - Cash received from investment income 11747113.36 13769440.75 Net cash received from disposal of fixed assets intangible assets and other long-term assets (18.74) 11634.84 Net cash received from disposal of subsidiaries and other business units - - Other cash received related to investing activities (V). 55(2) 1697000000.00 1454000000.00 Sub-total of cash inflows from investing activities 1710096583.99 1467781075.59 Cash paid for the purchase of fixed assets intangible assets and other long-term assets 29441167.62 64069967.97 Cash paid for investments - - Net cash paid to acquire subsidiaries and other business units - - Other cash paid related to investing activities (V). 55(2) 1605454000.00 1840500000.00 Sub-total of cash outflows from investing activities 1634895167.62 1904569967.97 Net cash flows from the investing activities 75201416.37 (436788892.38) III. Cash flows from financing activities: Cash received from absorption of investments - - Including: cash received by subsidiaries from absorption of investments of minority shareholders - - Cash received from acquisition of borrowings - 8000000.00 Other cash received related to financing activities - - Sub-total of cash inflows from financing activities - 8000000.00 Cash paid for debt repayments 406216304.56 103387387.94 Cash paid for distribution of dividends and profits or payment of interests 50633653.38 57324944.21 Including: dividends and profits paid to minority shareholders by subsidiaries - - Other cash paid related to financing activities (V). 55(3) 9508462.57 8776024.71 Sub-total of cash outflows from financing activities 466358420.51 169488356.86 Net cash flows from financing activities (466358420.51) (161488356.86) IV. Effect of fluctuation in exchange rate on cash and cash equivalents 556861.07 456132.31 V. Net increase (decrease) in cash and cash equivalents (V). 56(1) (159335617.98) (413054377.13) Plus: balance of cash and cash equivalents at the beginning of the year (V). 56(2) 461420457.33 874474834.46 VI. Balance of cash and cash equivalents at the end of the year (V). 56(2) 302084839.35 461420457.33 The notes are an integral part of the financial statements - 10 -Shenzhen Textile (Holdings) Co. Ltd.Statement of Cash Flows of the Parent Company For Year Ended December 31 2024 Statement of Cash Flows of the Parent Company RMB Notes Amount for the Amount for thecurrent year previous year I. Cash flows from operating activities: Cash received from sale of goods and rendering of services 80553754.68 79719541.58 Refunds of taxes and surcharges received - - Other cash received related to operating activities 7902075.25 20183240.81 Sub-total of cash inflows from operating activities 88455829.93 99902782.39 Cash paid for purchase of goods and receipt of services 2842492.81 3005590.09 Cash paid to and on behalf of employees 35045305.67 38735139.38 Cash paid for taxes and surcharges 13926380.37 19540659.95 Other cash paid related to operating activities 15727708.36 18940923.33 Sub-total of cash outflows from operating activities 67541887.21 80222312.75 Net cash flows from operating activities 20913942.72 19680469.64 II. Cash flows from investing activities: Cash received from recovery of investment 1554056.96 - Cash received from investment income 7790814.29 12954592.48 Net cash received from disposal of fixed assets intangible assets and other long-term assets - - Net cash received from disposal of subsidiaries and other business units - - Other cash received related to investing activities 1373585151.73 1250200000.00 Sub-total of cash inflows from investing activities 1382930022.98 1263154592.48 Cash paid for the purchase of fixed assets intangible assets and other long-term assets 2993281.20 2784786.15 Cash paid for investments - - Net cash paid to acquire subsidiaries and other business units - - Other cash paid related to investing activities 1363000000.00 1550500000.00 Sub-total of cash outflows from investing activities 1365993281.20 1553284786.15 Net cash flows from the investing activities 16936741.78 (290130193.67) III. Cash flows from financing activities: Cash received from absorption of investments - - Cash received from acquisition of borrowings - - Other cash received related to financing activities - - Sub-total of cash inflows from financing activities - - Cash paid for debt repayments - - Cash paid for distribution of dividends and profits or payment of interests 33346867.31 30747575.73 Other cash paid related to financing activities - - Sub-total of cash outflows from financing activities 33346867.31 30747575.73 Net cash flows from financing activities (33346867.31) (30747575.73) IV. Effect of fluctuation in exchange rate on cash and cash equivalents 1356.80 571.84 V. Net increase (decrease) in cash and cash equivalents 4505173.99 (301196727.92) Plus: balance of cash and cash equivalents at the beginning of the year 9125800.27 310322528.19 VI. Balance of cash and cash equivalents at the end of the year 13630974.26 9125800.27 The notes are an integral part of the financial statements - 11 -Shenzhen Textile (Holdings) Co. Ltd.Consolidated Statement of Changes in Shareholders' Equity For Year Ended December 31 2024 Consolidated Statement of Changes in Shareholders' Equity RMB Amount for the current year Item Equity attributable to shareholders of the parent companyOther comprehensive Total shareholders'Equity Capital reserve income Surplus reserves Undistributed profits Minority interests equity I. Balance as at the end of the previous year 506521849.00 1961599824.63 93607380.81 104262315.64 216160896.14 1229765091.74 4111917357.96 Plus: changes in accounting policies - - - - - - - Correction of prior period errors - - - - - - - Business combination under common control - - - - - - - Others - - - - - - - II. Balance at the beginning of the current year 506521849.00 1961599824.63 93607380.81 104262315.64 216160896.14 1229765091.74 4111917357.96 III. Increase/decrease in the current year - - 13270426.51 - 56447217.52 53685632.14 123403276.17 (I) Total comprehensive income - - 13270426.51 - 89371134.24 53685632.14 156327192.89 (II) Capital contributed or reduced by shareholders - - - - - - - 1. Ordinary shares invested by shareholders - - - - - - - 2. Amount of share-based payments included in shareholders' equity - - - - - - - 3. Others - - - - - - - (III) Profit distribution - - - - (32923916.72) - (32923916.72) 1. Withdrawal of surplus reserves - - - - - - - 2. Profits distributed to shareholders - - - - (32923916.72) - (32923916.72) 3. Others - - - - - - - (IV) Internal transfer of shareholders' equity - - - - - - - 1. Conversion of capital reserve into share capital - - - - - - - 2. Conversion of surplus reserve into share capital - - - - - - - 3. Surplus reserves offsetting losses - - - - - - - 4. Transfer of other comprehensive income into retained earnings - - - - - - - 5. Others - - - - - - - (V) Special reserves - - - - - - - 1. Withdrawal in the current year - - - - - - - 2. Use in the current year - - - - - - - (VI) Others - - - - - - - IV. Balance as at the end of the current year 506521849.00 1961599824.63 106877807.32 104262315.64 272608113.66 1283450723.88 4235320634.13Shenzhen Textile (Holdings) Co. Ltd.Consolidated Statement of Changes in Shareholders' Equity - Continued For Year Ended December 31 2024 Consolidated Statement of Changes in Shareholders' Equity - Continued RMB Amount for the previous year Item Equity attributable to shareholders of the parent companyOther comprehensive Total shareholders'Equity Capital reserve income Surplus reserves Undistributed profits Minority interests equity I. Balance as at the end of the previous year 506521849.00 1961599824.63 109596609.31 100909661.32 170636610.95 1181777770.21 4031042325.42 Plus: changes in accounting policies - - - - - - - Correction of prior period errors - - - - - - - Business combination under common control - - - - - - - Others - - - - - - - II. Balance at the beginning of the current year 506521849.00 1961599824.63 109596609.31 100909661.32 170636610.95 1181777770.21 4031042325.42 III. Increase/decrease in the current year - - (15989228.50) 3352654.32 45524285.19 47987321.53 80875032.54 (I) Total comprehensive income - - (15989228.50) - 79268250.45 47987321.53 111266343.48 (II) Capital contributed or reduced by shareholders - - - - - - - 1. Ordinary shares invested by shareholders - - - - - - - 2. Amount of share-based payments included in shareholders' equity - - - - - - - 3. Others - - - - - - - (III) Profit distribution - - - 3352654.32 (33743965.26) - (30391310.94) 1. Withdrawal of surplus reserves - - - 3352654.32 (3352654.32) - - 2. Profits distributed to shareholders - - - - (30391310.94) - (30391310.94) 3. Others - - - - - - - (IV) Internal transfer of shareholders' equity - - - - - - - 1. Conversion of capital reserve into share capital - - - - - - - 2. Conversion of surplus reserve into share capital - - - - - - - 3. Surplus reserves offsetting losses - - - - - - - 4. Transfer of other comprehensive income into retained earnings - - - - - - - 5. Others - - - - - - - (V) Special reserves - - - - - - - 1. Withdrawal in the current year - - - - - - - 2. Use in the current year - - - - - - - (VI) Others - - - - - - - IV. Balance as at the end of the current year 506521849.00 1961599824.63 93607380.81 104262315.64 216160896.14 1229765091.74 4111917357.96 The notes are an integral part of the financial statements - 13 -Shenzhen Textile (Holdings) Co. Ltd.Statement of Changes in Shareholders' Equity of the Parent Company For Year Ended December 31 2024 Statement of Changes in Shareholders' Equity of the Parent Company RMB Amount for the current year Item Equity Capital reserve Other comprehensiveincome Surplus reserves Undistributed profits Total shareholders' equity I. Balance as at the end of the previous year 506521849.00 1577392975.96 83629830.81 104262315.64 689309946.54 2961116917.95 Plus: changes in accounting policies - - - - - - Correction of prior period errors - - - - - - Others - - - - - - II. Balance at the beginning of the current year 506521849.00 1577392975.96 83629830.81 104262315.64 689309946.54 2961116917.95 III. Increase/decrease in the current year - - 14486701.51 - (41416059.85) (26929358.34) (I) Total comprehensive income - - 14486701.51 - (8492143.13) 5994558.38 (II) Capital contributed or reduced by shareholders - - - - - - 1. Ordinary shares invested by shareholders - - - - - - 2. Amount of share-based payments included in shareholders' equity - - - - - - 3. Others - - - - - - (III) Profit distribution - - - - (32923916.72) (32923916.72) 1. Withdrawal of surplus reserves - - - - - - 2. Profits distributed to shareholders - - - - (32923916.72) (32923916.72) 3. Others - - - - - - (IV) Internal transfer of shareholders' equity - - - - - - 1. Conversion of capital reserve into share capital - - - - - - 2. Conversion of surplus reserve into share capital - - - - - - 3. Surplus reserves offsetting losses - - - - - - 4. Transfer of other comprehensive income into retained earnings - - - - - - 5. Others - - - - - - (V) Special reserves - - - - - - 1. Withdrawal in the current year - - - - - - 2. Use in the current year - - - - - - (VI) Others - - - - - - IV. Balance as at the end of the current year 506521849.00 1577392975.96 98116532.32 104262315.64 647893886.69 2934187559.61 - 14 -Shenzhen Textile (Holdings) Co. Ltd.Statement of Changes in Shareholders' Equity of the Parent Company - Continued For Year Ended December 31 2024 Statement of Changes in Shareholders' Equity of the Parent Company - Continued RMB Amount for the previous year Item Equity Capital reserve Other comprehensiveincome Surplus reserves Undistributed profits Total shareholders' equity I. Balance as at the end of the previous year 506521849.00 1577392975.96 98855668.75 100909661.32 689527368.58 2973207523.61 Plus: changes in accounting policies - - - - - - Correction of prior period errors - - - - - - Others - - - - - - II. Balance at the beginning of the current year 506521849.00 1577392975.96 98855668.75 100909661.32 689527368.58 2973207523.61 III. Increase/decrease in the current year - - (15225837.94) 3352654.32 (217422.04) (12090605.66) (I) Total comprehensive income - - (15225837.94) - 33526543.22 18300705.28 (II) Capital contributed or reduced by shareholders - - - - - - 1. Ordinary shares invested by shareholders - - - - - - 2. Amount of share-based payments included in shareholders' equity - - - - - - 3. Others - - - - - - (III) Profit distribution - - - 3352654.32 (33743965.26) (30391310.94) 1. Withdrawal of surplus reserves - - - 3352654.32 (3352654.32) - 2. Profits distributed to shareholders - - - - (30391310.94) (30391310.94) 3. Others - - - - - - (IV) Internal transfer of shareholders' equity - - - - - - 1. Conversion of capital reserve into share capital - - - - - - 2. Conversion of surplus reserve into share capital - - - - - - 3. Surplus reserves offsetting losses - - - - - - 4. Transfer of other comprehensive income into retained earnings - - - - - - 5. Others - - - - - - (V) Special reserves - - - - - - 1. Withdrawal in the current year - - - - - - 2. Use in the current year - - - - - - (VI) Others - - - - - - IV. Balance as at the end of the current year 506521849.00 1577392975.96 83629830.81 104262315.64 689309946.54 2961116917.95 The notes are an integral part of the financial statements - 15 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 （I） Basic information of the Company 1. Company profile Shenzhen Textile (Holdings) Co. Ltd. (hereinafter referred to as "the Company") is a joint stock limited company registered in Guangdong Province. The Company was listed on Shenzhen Stock Exchange in August 1994. The Company has publicly issued RMB ordinary shares (A shares) and domestically listed foreign shares (B shares) to the domestic and foreign public respectively and listed for trading.Headquartered in Shenzhen Guangdong Province the Company and its subsidiaries (hereinafter referred to as "the Group") are principally engaged in the research and development production and marketing of polarizers for liquid crystal displays as well as property management and textile and apparel businesses which are mainly located in the prosperous commercial area of Shenzhen. 2. Approval date of financial statements The consolidated and parent company's financial statements of the Company were approved by the Board of Directors on March 26 2025.（II） Basis for preparation of the financial statements 1. Basis for preparation The Group implements the Accounting Standards for Business Enterprises and related provisions issued by the Ministry of Finance. In addition the Group also discloses relevant financial information in accordance with the Rules for the Compilation and Reporting of Information Disclosure by Companies Issuing Securities to the Public No. 15 - General Provisions on Financial Reports (Revised in 2023). 2. Going concern The Group has evaluated its going-concern ability for 12 months from December 31 2024 and has not found any matters or circumstances that cast significant doubt on the going-concern ability. Therefore the financial statements have been prepared on the going concern basis. 3. Accounting basis and valuation principle The accounting of the Group is based on the accrual basis. Except for certain financial instruments measured at fair value the financial statements are measured at historical cost. In the event of any asset impairment a provision for impairment will be made in accordance with relevant provisions.Under the historical cost measurement assets are measured at the amount of cash or cash equivalents paid or the fair value of the consideration paid at the time of acquisition. Liabilities are measured at the amount of money or assets actually received for assuming current obligations or the contract amount of assuming current obligations or the amount of cash or cash equivalents expected to be paid to repay liabilities in daily activities.Fair value is the price received from the sale of an asset or paid for the transfer of a liability by a market participant in an orderly transaction occurring on the measurement date. Regardless of whether the fair value is observable or estimated by using valuation techniques the fair value measured and disclosed in these financial statements is determined on this basis.- 16 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (II) Basis for preparation of financial statements - continued 3. Accounting basis and valuation principle - continued For financial assets where the transaction price is taken as the fair value at initial recognition and valuation techniques involving unobservable input value are used in the subsequent measurement of fair value the valuation techniques are corrected during the valuation process to make the initial recognition result determined by the valuation techniques equal to the transaction price.The fair value measurement is divided into three levels based on the observability of the input value of the fair value and the importance of such input value to the fair value measurement as a whole: Level 1 input value is the unadjusted quoted price in active markets for identical assets or liabilities that are available on the measurement date.Level 2 input value is the directly or indirectly observable input value of the relevant assets or liabilities except for the level 1 input value.Level 3 input value is the unobservable input value of the relevant assets or liabilities.（III） Significant accounting policies and accounting estimates 1. Statement in compliance with the Accounting Standards for Business Enterprises The financial statements prepared by the Company meet the requirements of the Accounting Standards for Business Enterprises and truly and completely reflect the Company's consolidated and parent company's financial position as at December 31 2024 and the consolidated and parent company's operating results changes in consolidated and parent company's shareholders' equity and consolidated and parent company's cash flows for the year then ended. 2. Accounting period The Company adopts the Gregorian calendar year for its accounting year that is from January 1 to December 31 of each year. 3. Operating cycle Operating cycle refers to the period from the purchase of assets for processing to the realization of cash or cash equivalents by the enterprise. The operating cycle of the Company is 12 months. 4. Recording currency RMB is the currency in the main economic environment in which the Company and its domestic subsidiaries operate.The Company and its domestic subsidiaries adopt RMB as the recording currency. The Company's overseas subsidiaries determine RMB as their recording currency based on the currency in the main economic environment in which they operate. The currency used by the Company in preparing these financial statements is RMB.- 17 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 5. Importance criteria determination method and selection basis Item Importance criteria Significant accounts receivable with the provision for bad debts The individual book balance accounts for more than 0.5% made on an individual basis of the total assets The individual recovery or reversal amount accounts for Recovery or reversal amount of provision for bad debts of more than 10% of the total amount of provision for bad significant accounts receivable debts recovery or reversal of the corresponding accounts receivable and the amount exceeds RMB 10 million Advances to suppliers with aging over 1 year and of significant Individual amount accounts for more than 0.5% of total amount assets Important accounts payable advances from customers Individual amount accounts for more than 0.5% of total contract liabilities and other payables with aging over 1 year assets Other cash received related to significant investing activities The amount exceeds RMB 50 million Other cash paid related to significant investing activities The amount exceeds RMB 50 million The total assets total revenue or total profit of the non- Major non-wholly-owned subsidiaries wholly-owned subsidiary account for more than 10% of theamount of the corresponding items in the consolidated financial statements of the Group The book value of the long-term equity investments of the Significant joint ventures or associates enterprise at the end of the year accounts for more than 5%of the net assets of the consolidated financial statements of the Group 6. Accounting treatment method of business combination under common control and not under common control Business combinations are categorized into those under common control and those not under common control. 6.1 Business combinations under common control If before and after the business combination all parties involved are ultimately controlled by the same party or the same group of parties and such control is not temporary the combination is considered under common control.The assets and liabilities obtained in the business combination are measured at their book value as recorded in the consolidated financial statements of the ultimate controller on the combination date. Any difference between the book value of the net assets acquired by the combining party and the book value of the consideration paid is adjusted against the share premium in capital reserve. If the equity premium is insufficient the difference is adjusted against retained earnings.All direct expenses incurred for the purpose of the business combination are recognized in current profit or loss as they occur. 6.2 Business combinations not under common control and goodwill When the entities involved in the combination are not under the ultimate control of the same party or the same group of parties before and after the combination it is considered a business combination not under common control.The combination cost refers to the fair value of the assets paid the liabilities incurred or assumed and the equity instruments issued by the acquirer to obtain the right of control of the acquiree. Any intermediary fees for business combination including but not limited to audit legal and valuation consulting services and other related G&A expenses incurred by the acquirer are charged to current profit or loss as they arise.Any identifiable assets liabilities and contingent liabilities of the acquiree that meet the recognition criteria and are obtained by the acquirer in the combination are measured at fair value on the acquisition date.- 18 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 6. Accounting treatments for business combination under common control and not under common control - continued 6.2 Business combination not under common control and goodwill - continued If the combination cost exceeds the acquiree's fair value share of net identifiable assets obtained this difference is recognized as goodwill and initially measured at cost. If the combination cost is less than the acquiree's fair value share of net identifiable assets obtained the acquirer shall first reassess the fair values of all identifiable assets liabilities and contingent liabilities of the acquiree as well as the measurement of the combination cost. After reassessment if the combination cost is still less than acquiree's fair value share of net identifiable assets obtained the difference is included in current profit or loss.Goodwill arising from a business combination is presented separately in the consolidated financial statements and is measured at cost less any accumulated provision for impairment. 7. Criteria for determining control and methods of preparing consolidated financial statements 7.1 Criteria for determining control Control means that an investor has power over the investee derives variable returns by participating in the investee's relevant activities and can use that power to affect the amount of returns. Whenever changes in relevant facts and circumstances alter any element of this definition of control the Group will reassess the situation. 7.2 Methods of preparing consolidated financial statements The consolidation scope in the consolidated financial statements is determined on the basis of control.A subsidiary is consolidated from the date the Group obtains the right of control over it until the date such right is lost.For subsidiaries that the Group disposes of operating results and cash flows prior to the disposal date (the date when the loss of control occurs) are appropriately included in the consolidated income statement and consolidated cash flow statement.For subsidiaries acquired in a business combination not under common control their operating results and cash flows from the acquisition date (the date when the right of control is obtained) are appropriately included in the consolidated income statement and consolidated cash flow statement.For subsidiaries acquired in a business combination under common control regardless of the point in time during the reporting period at which the combination takes place the subsidiary is deemed to have been under the Group's consolidation scope from the date it came under the ultimate controller. Its operating results and cash flows from the earliest beginning date of the reporting period are appropriately included in the consolidated income statement and consolidated cash flow statement.The primary accounting policies and reporting periods adopted by the subsidiaries are determined in accordance with the uniform accounting policies and reporting periods set by the Company.- 19 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 7. Judgment criteria for control measures and preparation of the consolidated financial statements - continued 7.2 Methods of preparing consolidated financial statements - continued Any effects on the consolidated financial statements from intercompany transactions between the Company and its subsidiaries or among the subsidiaries themselves are eliminated upon consolidation.Any portion of the subsidiary's owners' equity not attributable to the parent company is recognized as non-controlling interests and presented under "Minority Interests" in the shareholders' equity section of the consolidated balance sheet.The share of the subsidiary's current net profit or loss attributable to these minority interests is presented in the consolidated income statement under the net profit item as "minority interest income".If the losses borne by minority shareholders exceed the share of owners' equity they hold at the beginning of the subsidiary's period the excess continues to be deducted from the minority interests.Transactions involving the purchase of a subsidiary's minority interests or the partial disposal of a subsidiary's equity investments without losing the right of control are accounted for as equity transactions. The book value of the parent company's owners' equity and the minority interests are adjusted to reflect the changes in their respective ownership in the subsidiary. Any difference between the adjustment to minority interests and the fair value of the consideration paid or received is adjusted against the capital reserve. If the capital reserve is insufficient the difference is adjusted against retained earnings. 8. Joint venture arrangements Joint venture arrangements are classified as either joint operations or joint ventures based on the rights and obligations of the parties—determined by factors such as the arrangement's structure legal form and contractual terms. A joint operation is a joint arrangement in which the parties have rights to the related assets and obligations for the related liabilities. A joint operation refers to those joint venture arrangements under which the joint venture is entitled to relevant assets and be responsible for relevant liabilities. A joint venture is a joint venture arrangement in which the parties are entitled only to the arrangement's net assets.The Group accounts for investments in joint ventures using the equity method. For further details refer to Note (III) Section 17.3.2 "Long-term equity investments accounted for under the equity method." 9. Recognition of cash and cash equivalents Cash refers to cash on hand and deposits readily available for payment. Cash equivalents refer to short-term (generally maturing within three months from the purchase date) highly liquid investments held by the Group that are easily convertible into known amounts of cash and subject to an insignificant risk of value changes. 10. Translation of foreign currency transactions and financial statements denominated in foreign currency 10.1 Foreign currency transactions Foreign currency transactions are initially recognized using an exchange rate approximating the spot exchange rate on the transaction date determined by a reasonable systematic method.- 20 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 10. Foreign currency transactions and translation of foreign currency statements - continued 10.1 Foreign currency transactions - continued At each balance sheet date foreign currency monetary items are translated into RMB at the spot rate on that date. Any exchange differences arising from changes in the spot exchange rate (compared to the rate at initial recognition or the previous balance sheet date) are recognized in current profit or loss except for: (1) exchange differences on foreign- currency-specific borrowings that qualify for capitalization which are capitalized as part of the cost of the related asset during the capitalization period; (2) exchange differences on hedging instruments used to hedge foreign exchange risk which are accounted for under hedge accounting; (3) foreign exchange differences arising from changes in the book balance of monetary items classified as measured at fair value through other comprehensive income except for amortized costs are recognized in current profit or loss.When preparing consolidated financial statements involving foreign operations if a foreign currency monetary item essentially constitutes a net investment in a foreign operation any exchange differences arising from fluctuation in exchange rate are included under "Exchange differences on translation of foreign currency statements" in other comprehensive income. Upon disposal of the foreign operation these differences are recognized in profit or loss for the disposal period.Foreign currency non-monetary items measured at historical cost continue to be measured using the spot exchange rate in recording currency on the transaction date. For foreign currency non-monetary items measured at fair value the spot exchange rate on the date the fair value is determined is used for translation. Any difference between the translated amount in recording currency and the original currency is treated as a fair value change (including fluctuation in exchange rate) and is recognized in current profit or loss or other comprehensive income as appropriate. 10.2 Translation of foreign-currency financial statements To prepare consolidated financial statements foreign-currency financial statements of overseas operations are translated into RMB as follows: all assets and liabilities in the balance sheet are translated at the spot exchange rate on the balance sheet date; shareholders' equity items are translated at the spot exchange rate on the date of occurrence; all items in the income statement and items reflecting profit distribution are translated using an exchange rate approximating the spot exchange rate on the transaction date; any difference between the sum of translated assets and the sum of translated liabilities plus equity items is recognized as other comprehensive income and included in shareholders' equity.Foreign currency cash flows and the cash flows of overseas subsidiaries are translated using an exchange rate approximating the spot exchange rate on the date of the cash flow. The impact of fluctuation in exchange rate on cash and cash equivalents is presented separately in the statement of cash flows under "Effect of exchange rate changes on cash and cash equivalents." The figures for the prior year-end and the actual amounts for the previous year are presented according to the amounts translated in the previous year's financial statements.When the Group disposes of its entire owners' equity in a foreign operation or otherwise loses the right of control over a foreign operation—whether by partially disposing of equity investments or for any other reason—all differences on translation of foreign currency statements related to that foreign operation and presented under shareholders' equity (attributable to the parent company) in the balance sheet are transferred in full to profit or loss for the disposal period.- 21 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 10. Foreign currency transactions and translation of foreign currency statements - continued 10.2 Translation of foreign-currency financial statements - continued When disposing of part of an equity investments or in other circumstances that reduce the Group's ownership interest in an overseas operation without losing the right of control over that operation any differences on translation of foreign currency statements related to the disposed portion are attributed to minority interests and are not transferred to profit or loss for the current period. When disposing of a portion of equity in an overseas operation that is classified as an associate or a joint venture the differences on translation of foreign currency statements related to that operation are transferred to profit or loss in the disposal period in proportion to the percentage of equity disposed. 11. Financial instruments The Group recognizes a financial asset or financial liability when it becomes a party to the contractual provisions of a financial instrument.For purchases or sales of financial assets in the ordinary course of business the Group recognizes the assets to be received and the liabilities to be assumed on the trade date or derecognizes the assets sold on the trade date.Financial assets and financial liabilities are measured at fair value upon initial recognition (see Note (II) "Basis of accounting and valuation principles" for details on determining fair value). For financial assets and liabilities measured at fair value through profit or loss transaction costs are recognized directly in profit or loss for the current period; for other categories of financial assets and liabilities the relevant transaction costs are included in the initial recognition amount. When the Group initially recognizes accounts receivable that do not include a significant financing component or when the financing component of a contract not exceeding one year is disregarded under Accounting Standards for Business Enterprises No. 14 - Revenue (“Revenue Standard”) such receivables are initially measured at the transaction price as defined in the Revenue Standard.The effective interest method is the method used to calculate the amortized cost of a financial asset or liability and to allocate the interest income or interest expenses over the relevant accounting periods.The effective interest rate is the rate that discounts the estimated future cash flows over the expected life of a financial asset or liability to the financial asset's book balance or the financial liability's amortized cost. In determining the effective interest rate the Group estimates expected cash flows based on all contractual terms of the financial asset or liability (e.g. early repayment extension call options or other similar options) but does not factor in expected credit losses.The amortized cost of a financial asset or liability is the initial recognized amount minus any repaid principal plus or minus the accumulated amortization of the difference between the initial recognized amount and the amount at maturity using the effective interest method and then minus the accumulated provision for losses (applicable only to financial assets).- 22 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 11. Financial instruments - continued 11.1 Classification recognition and measurement of financial assets After initial recognition the Group subsequently measures different categories of financial assets at amortized cost at fair value through other comprehensive income or at fair value through profit or loss.If the contractual terms of a financial asset stipulate that on specified dates cash flows comprise solely payments of principal and interest on the outstanding principal and the Group's business model for managing this financial asset is to collect the contractual cash flows the Group classifies this financial asset as measured at amortized cost. Such financial assets mainly include monetary funds notes receivable accounts receivable and other receivables.If the contractual terms of a financial asset stipulate that on specified dates cash flows comprise solely payments of principal and interest on the outstanding principal and the Group's business model for managing the financial asset is both to collect contractual cash flows and to sell the financial asset then the Group classifies this asset as measured at fair value through other comprehensive income. Such financial assets with a maturity of more than one year from the date of acquisition are presented as "Other debt investments" while those maturing within one year (inclusive) from the balance sheet date are presented under "Non-current assets due within one year." Accounts receivable and notes receivable classified upon acquisition as measured at fair value through other comprehensive income are presented under "Receivables financing" and any other items acquired with a maturity of one year (inclusive) or less are presented under "Other current assets." At initial recognition on an individual financial asset basis the Group may irrevocably designate a non-trading equity instrument investment other than any contingent consideration recognized in a business combination not under common control as measured at fair value through other comprehensive income. Such financial assets are presented as "Other equity instrument investments." If a financial asset meets any of the following conditions it indicates that the Group holds this asset for trading purposes: The main purpose of acquiring the financial asset is to sell it in the near term.Upon initial recognition the financial asset is part of an identifiable portfolio of financial instruments that is collectively managed and there is objective evidence of a recent pattern of short-term profit-taking.The financial asset is a derivative except for derivatives that meet the definition of a financial guarantee contract or are designated as effective hedging instruments.Financial assets measured at fair value through profit or loss include those classified as such and those designated as such: Any financial asset that does not meet the classification criteria for measurement at amortized cost or at fair value through other comprehensive income is classified as measured at fair value through profit or loss.At initial recognition to eliminate or significantly reduce accounting mismatches the Group may irrevocably designate a financial asset as measured at fair value through profit or loss.- 23 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 11. Financial instruments - continued 11.1 Classification recognition and measurement of financial assets - continued Financial assets measured at fair value through profit or loss are presented under "Financial assets held for trading." Those due in more than one year from the balance sheet date (or with no fixed maturity) and expected to be held for more than one year are presented under "Other non-current financial assets." 11.1.1 Financial assets measured by amortized cost Financial assets measured at amortized cost are subsequently measured at amortized cost using the effective interest method and any gain or loss arising from impairment or derecognition is recognized in profit or loss.The Group recognizes interest income on financial assets measured at amortized cost using the effective interest method.For purchased or originated financial assets that are already credit-impaired the Group determines interest income from the date of initial recognition based on the asset's amortized cost and a credit-adjusted effective interest rate. For all other financial assets the Group calculates interest income by multiplying the book balance of the asset by the effective interest rate. 11.1.2 Financial assets measured at fair value through other comprehensive income For a financial asset classified as measured at fair value through other comprehensive income any impairment loss or gain and interest income calculated using the effective interest method are recognized in profit or loss while all other fair value changes are recognized in other comprehensive income. The amount recognized in profit or loss each period is the same as if the asset had been measured at amortized cost throughout its life. When such a financial asset is derecognized the cumulative gains or losses previously recognized in other comprehensive income are transferred from other comprehensive income to profit or loss.For a non-trading equity instrument investment designated as measured at fair value through other comprehensive income fair value changes are recognized in other comprehensive income. When the financial asset is derecognized the cumulative gains or losses previously recognized in other comprehensive income are transferred out of other comprehensive income and into retained earnings. During the period the Group holds this non-trading equity instrument investment if the right to receive dividends is established the related economic benefits are likely to flow to the Group and the amount of dividends can be measured reliably then the Group recognizes dividend income in profit or loss. 11.1.3 Financial assets measured at fair value through the current profit or loss Financial assets measured at fair value through profit or loss are subsequently measured at fair value; gains or losses arising from fair value changes as well as any dividend and interest income related to these assets are recognized in profit or loss.- 24 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 11. Financial instruments - continued 11.2 Impairment of financial instruments The Group recognizes impairment allowances and provision for losses based on expected credit losses for financial assets measured at amortized cost financial assets classified as fair value through other comprehensive income and lease receivables.For all notes receivable and accounts receivable arising from transactions governed by the Revenue Standard as well as operating lease receivables arising from transactions governed by Accounting Standards for Business Enterprises No. 21 - Leases the Group measures the provision for loss at an amount equal to the lifetime expected credit losses.For other financial instruments except for those purchased or originated with credit loss the Group evaluates changes in credit risk since initial recognition at each balance sheet date. If the credit risk of such a financial instrument has significantly increased since initial recognition the Group measures the provision for loss at an amount equal to the lifetime expected credit losses; if it has not significantly increased the Group measures the provision for loss at an amount equal to the 12-month expected credit losses. Except for financial assets classified as fair value through other comprehensive income any increase or reversal of the provision for credit losses is recognized as an impairment loss or gain in the current period's profit or loss. For financial assets classified as fair value through other comprehensive income the Group recognizes the provision for credit losses in other comprehensive income and records the impairment loss or gain in profit or loss without reducing the asset's book value in the balance sheet.If in a prior period the Group measured the provision for loss at an amount equal to the lifetime expected credit losses (due to a significant increase in credit risk since initial recognition) but at the current balance sheet date that significant increase in credit risk no longer applies then the Group measures the provision for loss at an amount equal to the 12- month expected credit losses. The amount of any resulting reversal is recognized as an impairment gain in profit or loss. 11.2.1 Significant increase in credit risk The Group uses reasonable and supportable forward-looking information to compare the risk of default on a financial instrument at the balance sheet date with the risk of default at initial recognition in order to determine whether the credit risk has significantly increased since initial recognition.- 25 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 11. Financial instruments - continued 11.2 Impairment financial instruments - continued 11.2.1 Significant increase in credit risk - continued When the Group assesses whether credit risk has increased significantly it considers the following factors: (1) Whether internal price indicators resulting from changes in credit risk have undergone a significant change. (2) Whether if an existing financial instrument is effectively originated or issued as a new financial instrument on the balance sheet date there is a significant change in the interest rate or other terms of that instrument (e.g. more stringent contractual terms increased collateral or guarantees or a higher yield). (3) Whether external market indicators of credit risk for the same financial instrument or similar instruments with the same expected term have changed significantly. Such indicators include credit spreads credit default swap (CDS) prices for the borrower the length of time and extent to which a financial asset's fair value is below its amortized cost and other market information related to the borrower (e.g. changes in the prices of the borrower's debt or equity instruments). (4) Whether the external credit rating of the financial instrument has actually changed or is expected to change significantly. (5) Whether there has been a downgrade in the debtor's internal credit rating either actual or anticipated. (6) Whether there has been an adverse change in the debtor's business financial or economic conditions that is expected to significantly affect the debtor's ability to meet its debt obligations. (7) Whether the debtor's operating performance whether actual or expected has changed significantly. (8) Whether the credit risk of other financial instruments issued by the same debtor has increased significantly. (9) Whether there has been a significantly adverse change in the regulatory economic or technological environment in which the debtor operates. (10) Whether the value of collateral securing the debt or the quality of a third-party guarantee or credit enhancement has changed significantly. Such changes are expected to reduce the debtor's economic incentive to repay under the contractual schedule or affect the probability of default. (11) Whether there has been a significant change in factors that would reduce the borrower's economic incentive to repay in accordance with the contractual terms. (12) Whether the loan contract is expected to be modified including the potential release or amendment of contractual obligations due to anticipated breaches of contract granting interest-free periods raising interest rates requiring additional collateral or guarantees or otherwise modifying the contractual framework of the financial instrument. (13) Whether there is a significant change in the debtor's expected performance or repayment behavior. (14) Whether the Group's credit management approach for the financial instrument has changed. Regardless of the outcome of the above assessment if payments under the financial instrument's contract are more than (or equal to) 30 days past due it indicates that the financial instrument's credit risk has increased significantly.On the balance sheet date if the Group concludes that a financial instrument has only low credit risk it presumes the credit risk has not increased significantly since initial recognition. A financial instrument is considered to have low credit risk if its risk of default is low the borrower has a strong capacity to meet its contractual cash flow obligations in the short term and even over a longer period adverse changes in economic and operating conditions would not necessarily reduce the borrower's ability to meet those obligations.- 26 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 11. Financial instruments - continued 11.2 Impairment financial instruments - continued 11.2.2 Financial assets with credit loss When one or more events occur that the Group expects to adversely affect the future cash flows of a financial asset that asset is considered credit-impaired. Evidence for a credit-impaired financial asset includes the following observable information: (1) The debtor breaches a contract such as default or delinquency in interest or principal payments. (2) The debtor breaches the contract such as default or delay in repayment of interest or principal. (3) The creditor grants concessions to the debtor in consideration of the debtor's financial difficulties that would not otherwise be offered under normal circumstances. (4) The debtor is highly likely to go bankrupt or undertake other financial restructuring. (5) The issuer's or debtor's financial difficulties lead to the disappearance of an active market for the financial asset. (6) A financial asset is purchased or originated at a substantial discount reflecting the fact that a credit loss has occurred.Based on the Group's internal credit risk management if internal recommendations or externally obtained information indicates that the debtor of a financial instrument cannot fully repay all creditors including the Group (regardless of any guarantee obtained by the Group) the Group considers this a default event.Regardless of the above assessment if payments under the financial instrument's contract are more than (or equal to) 90 days past due the Group presumes the instrument is in default. 11.2.3 Determination of expected credit losses For financial assets and lease receivables the expected credit loss is the present value of the difference between the contractual cash flows the Group is entitled to receive and the cash flows the Group actually expects to receive.When measuring the expected credit losses on financial instruments the Group's method reflects: an unbiased probability-weighted average determined by evaluating a range of possible outcomes; the time value of money; and reasonable and supportable information about past events current conditions and forecasts of future economic conditions available without undue cost or effort at the balance sheet date. 11.2.4 Write-off of financial assets If the Group no longer reasonably expects to recover all or part of the contractual cash flows of a financial asset the Group writes off the book balance of the financial asset directly. This write-off constitutes derecognition of the relevant financial asset.- 27 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 11. Financial instruments - continued 11.3 Transfer of financial assets A financial asset is derecognized if one of the following conditions is met: (1) the contractual right to receive cash flows from the financial asset expires; (2) the financial asset has been transferred and substantially all the risks and rewards of ownership of the asset have been transferred to the transferee; or (3) the financial asset has been transferred and although the Group has neither transferred nor retained substantially all the risks and rewards of ownership it has not retained control over the asset.If the Group has neither transferred nor retained substantially all the risks and rewards of ownership of the financial asset but retains control of it the Group continues to recognize the transferred financial asset to the extent of its continuing involvement and recognizes a corresponding liability. The Group measures that liability as follows: Where the transferred financial asset is measured at amortized cost the book value of the related liability equals the book value of the asset in which the Group continues to be involved minus the amortized cost of any rights retained by the Group (if the Group retained such rights due to the transfer) and plus the amortized cost of any obligations assumed by the Group (if the Group assumed such obligations due to the transfer). Such liabilities are not designated as financial liabilities measured at fair value through profit or loss.Where the transferred financial asset is measured at fair value the book value of the related liability equals the book value of the asset in which the Group continues to be involved minus the fair value of any rights retained by the Group (if the Group retained such rights due to the transfer) and plus the fair value of any obligations assumed by the Group (if the Group assumed such obligations due to the transfer). The fair values of such rights and obligations are measured on a stand-alone basis.When the full transfer of a financial asset qualifies for derecognition the difference between the book value of the transferred financial asset on the derecognition date and the sum of the consideration received and the corresponding portion of the cumulative fair value changes previously recognized in other comprehensive income is recognized in profit or loss. If the transferred asset by the Group is a non-trading equity instrument investment designated as measured at fair value through other comprehensive income any cumulative gains or losses previously recognized in other comprehensive income are transferred out of other comprehensive income and into retained earnings.When a partial transfer of a financial asset qualifies for derecognition the book value of the original asset before transfer is allocated between the portion being derecognized and the portion that continues to be recognized based on the relative fair values of each portion on the transfer date. The difference between (a) the consideration received for the derecognized portion plus the corresponding portion of the cumulative fair value changes previously recognized in other comprehensive income and (b) the book value of the derecognized portion on the derecognition date is recognized in profit or loss. If the transferred asset by the Group is a non-trading equity instrument investment designated as measured at fair value through other comprehensive income any cumulative gains or losses previously recognized in other comprehensive income are transferred out of other comprehensive income and into retained earnings.If a full transfer of a financial asset does not satisfy the derecognition criteria the Group continues to recognize the entire transferred financial asset and recognizes the consideration received as a liability.- 28 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 11. Financial instruments - continued 11.4 Classification of financial liabilities and equity instruments Based on the contractual terms and the economic substance of the issued financial instrument rather than merely its legal form and in conjunction with the definitions of financial liabilities and equity instruments the Group classifies the financial instrument (or its components) as either a financial liability or an equity instrument at initial recognition. 11.4.1 Classification recognition and measurement of financial liabilities Upon initial recognition financial liabilities are classified as financial liabilities measured at fair value through profit or loss or other financial liabilities. 11.4.1.1 Financial liabilities measured at fair value through profit or loss Financial liabilities measured at fair value through profit or loss include financial liabilities held for trading (including derivatives classified as financial liabilities) and those designated as measured at fair value through profit or loss. Except for derivative financial liabilities which are presented separately financial liabilities measured at fair value through profit or loss are presented as financial liabilities held for trading.If a financial liability meets any of the following conditions it indicates that the Group has assumed this liability for trading purposes: The primary purpose of assuming the financial liability is to repurchase it in the near term.Upon initial recognition the financial liability is part of an identifiable portfolio of financial instruments that is collectively managed and there is objective evidence of a recent pattern of short-term profit-taking.The financial liability is a derivative except for derivatives that meet the definition of a financial guarantee contract or are designated as effective hedging instruments.At initial recognition if any of the following conditions are met the Group may designate a financial liability as measured at fair value through profit or loss: (1) the designation can eliminate or significantly reduce accounting mismatches; (2) under the Group's formally documented risk management or investment strategy portfolios of financial liabilities or combined portfolios of financial assets and liabilities are managed and evaluated on a fair value basis and this is reported internally to key officers; or (3) it is part of an eligible hybrid contract containing an embedded derivative.Financial liabilities held for trading are subsequently measured at fair value with any gains or losses arising from fair value changes along with dividends or interest expenses related to these liabilities recognized in profit or loss.- 29 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 11. Financial instruments - continued 11.4 Classification of financial liabilities and equity instruments - continued 11.4.1 Classification recognition and measurement of financial liabilities - continued 11.4.1.1 Financial liabilities measured by fair value through the current profit or loss - continued For a financial liability designated as measured at fair value through profit or loss the portion of the fair value change attributable to the Group's own credit risk is recognized in other comprehensive income while other changes in fair value are recognized in profit or loss. When the financial liability is derecognized the accumulated fair value change attributable to changes in the Group's own credit risk that was previously recorded in other comprehensive income is transferred to retained earnings. Any dividends or interest expenses related to such financial liabilities are recognized in profit or loss. If treating the effect of changes in the liability's own credit risk in this manner creates or enlarges an accounting mismatch in profit or loss the Group recognizes all gains or losses on the liability (including those related to changes in its own credit risk) in profit or loss. 11.4.1.2 Other financial liabilities Except for financial liabilities arising from the transfer of financial assets that do not meet derecognition criteria or where the Group continues to be involved in transferred financial assets other financial liabilities are classified as financial liabilities measured at amortized cost. They are subsequently measured at amortized cost and any gains or losses from derecognition or amortization are recognized in profit or loss.If the Group modifies or renegotiates a contract with a counterparty and it does not result in the derecognition of a financial liability subsequently measured at amortized cost but leads to changes in the contractual cash flows the Group recalculates the book value of the financial liability and recognizes any related gain or loss in profit or loss. For recalculated book value the Group shall determine it by discounting the renegotiated or modified contractual cash flows at the original effective interest rate of the financial liability. For any costs or fees incurred as a result of modifying or renegotiating the contract the Group shall adjust the book value of the modified financial liability and amortize them over the remaining term thereof. 11.4.2 Derecognition of financial liabilities If the present obligation of a financial liability is fully or partially discharged the liability (or the discharged portion) is derecognized. If the Group (as borrower) signs an agreement with a lender to replace the original financial liability with a new one and the terms of the new liability differ substantially from those of the original liability the Group derecognizes the original liability and recognizes the new one.When a financial liability is fully or partially derecognized the difference between the book value of the derecognized portion and the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) is recognized in profit or loss for the current period.- 30 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 11. Financial instruments - continued 11.4 Classification of financial liabilities and equity instruments - continued 11.4.3 Equity instruments An equity instrument is a contract that evidences a residual interest in the Group's assets after deducting all liabilities.The Group treats the issuance (including refinancing) repurchase sale or cancellation of its equity instruments as changes in equity. The Group does not recognize fair value changes in equity instruments. Transaction costs directly attributable to equity transactions are deducted from equity.The Group's distributions made to holders of equity instruments are treated as profit distribution and any issued stock dividends do not affect the total shareholders' equity. 11.5 Derivatives Derivatives including forward foreign exchange contracts are initially measured at fair value on the contract date and subsequently measured at fair value. 11.6 Offsetting financial assets and financial liabilities When the Group has a legal right to offset recognized financial assets and liabilities and that right is currently enforceable and the Group intends to settle on a net basis or to realize the asset and settle the liability simultaneously the financial assets and liabilities are presented on the balance sheet at the net amount. Otherwise financial assets and financial liabilities are presented separately in the balance sheet without offset. 12. Notes receivable 12.1 Method for determining expected credit losses on notes receivable and the related accounting treatments For notes receivable with significantly increased credit risk such as those past due and not accepted or where there is clear evidence that the acceptor is likely unable to fulfill its acceptance obligation the Group evaluates credit losses on an individual basis. Other notes receivable are evaluated based on their credit risk characteristics as a group.Any increase or reversal of the provision for expected credit losses on notes receivable is recognized as a credit loss or gain in profit or loss. 12.2 Combination categories and basis for determining provision for credit losses according to credit risk characteristic combination Apart from those notes receivable whose credit losses are determined on an individual basis the Group classifies the remaining notes receivable into different groups based on shared credit risk characteristics: Combination category Determination basis Combination 1 Bank acceptance bills Combination 2 Commercial acceptance bills - 31 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 13. Accounts receivable 13.1 Method for determining expected credit losses on accounts receivable and the related accounting treatments The Group uses an impairment matrix at the group level to determine expected credit losses for accounts receivable. Any increase or reversal of the provision for expected credit losses of accounts receivable is recognized as a credit loss or gain in profit or loss. 13.2 Combination categories and basis for determining provision for credit losses according to credit risk characteristic combination.The Group classifies accounts receivable into Combination 1 and Combination 2 based on the credit risk characteristics of counterparties under different business segments. Combination 1 refers to accounts receivable arising from the polarizer business revenue where provisions for credit losses are made based on overdue aging relative to the credit term. Combination 2 refers to accounts receivable arising from property leasing and other business revenue where provisions for credit losses are made based on natural aging. 13.3 Method for calculating aging when determining credit risk characteristic combination The Group uses both the natural aging of accounts receivable and the overdue aging relative to the credit term as credit risk characteristics applying an impairment matrix to determine expected credit losses. Natural aging is calculated starting from the date of initial recognition of the accounts receivable while overdue aging begins once the natural aging exceeds the credit term granted to the customer. If the terms and conditions of an accounts receivable are modified but do not lead to derecognition the aging continues to accumulate. 13.4 Criteria for individual assessment of provision for credit losses The Group individually determines credit losses for accounts receivable where there is evidence of a significant increase in credit risk. 14. Receivables financing 14.1 Method for determining expected credit losses on receivables financing and the related accounting treatments The Group determines credit losses for receivables financing on an individual-asset basis. The Group recognizes the provision for credit losses for receivables financing in other comprehensive income and records any credit loss or gain in profit or loss without reducing the book value presented in the balance sheet. 14.2 Criteria for individual assessment of provision for credit losses Based on the credit status of the accepting bank for bank acceptance bills the Group individually assesses and determines credit losses for receivables financing.- 32 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 15. Other receivables 15.1 Method for determining expected credit losses on other receivables and the related accounting treatments The Group determines credit losses for other receivables on a group basis. Any increase or reversal of the provision for expected credit losses on other receivables is recognized as a credit loss or gain in profit or loss. 15.2 Combination categories and basis for determining provision for credit losses according to credit risk characteristic combination The Group divides other receivables into different combinations based on common credit risk characteristics. Common credit risk characteristics used by the Group include initial recognition date remaining contract term and length of overdue period. 15.3 Method for calculating aging when determining credit risk characteristic combination The aging is calculated from the date of initial recognition. If the terms and conditions of other receivables are modified but do not lead to derecognition the aging continues to accumulate. 16. Inventories 16.1 Types of inventories methods of costing for issuance inventory system and methods for amortizing low-value consumables and packaging materials 16.1.1 Types of inventories The Group's inventories mainly include raw materials work in progress finished products and materials processed on consignment. Inventories are initially measured at cost which includes purchase costs processing costs and other expenditures incurred to bring the inventories to their current location and condition. 16.1.2 Method of costing for issued inventories When inventories are issued the actual cost is determined using the weighted average method. 16.1.3 Inventory system The Group uses a perpetual inventory system. 16.1.4 Amortization methods for low-value consumables and packaging materials Low-value consumables and packaging materials are amortized using the straight-line method or are written off in full at once.- 33 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 16. Inventories - continued 16.2 Criteria for recognizing and methods for making provision for inventory depreciation On the balance sheet date inventories are measured at the lower of cost and net realizable value. If net realizable value is lower than cost a provision for inventory depreciation is made.Net realizable value is the estimated selling price of inventories in the ordinary course of business less the estimated costs to complete the estimated selling and distribution expenses and related taxes. When determining the net realizable value of inventories the Group uses conclusive evidence while considering the purpose of holding the inventories and the impact of events after the balance sheet date.After the provisions for the inventory depreciation are made the factors causing any write-down of inventory value have disappeared leading to the net realizable values of inventories higher than its book value the amount of write-down shall be resumed and be reversed from the original provision for inventory devaluation with the reversal being included in current profit or loss.Generally provisions for inventory depreciation are made on an item-by-item basis. 17. Long-term equity investments 17.1 Criteria for determining common control and significant influence Control means that an investor has power over the investee derives variable returns by participating in the investee's relevant activities and can use that power to affect the amount of returns. Common control refers to shared control over an arrangement under relevant agreements where decisions about the arrangement's relevant activities require the unanimous consent of the parties sharing the right of control. Significant influence refers to the power to participate in decisions on an investee's financial and operating policies but not to control or commonly control the formation of those policies. When determining whether the investor can exercise control or significant influence over the investee the potential voting rights arising from convertible corporate bonds or exercisable warrants currently held by the investor or other parties are taken into account. 17.2 Determination of initial investment cost For a long-term equity investment acquired in a business combination under common control the initial investment cost is determined on the combination date based on the share of the book value of the acquiree's owners' equity in the ultimate controller's consolidated financial statements. Any difference between the initial investment cost of the long- term equity investment and the book value of the cash paid non-cash assets transferred or liabilities assumed is adjusted against capital reserve. If the capital reserve is insufficient the difference is adjusted against retained earnings. Where equity securities are issued as consideration for the combination on the combination date the initial investment cost of the long-term equity investment is determined based on the share of the book value of the acquiree's owners' equity in the ultimate controller's consolidated financial statements. The total par value of the issued shares is recognized as share capital and any difference between the initial investment cost and the total par value of the shares issued is adjusted against capital reserve. If the capital reserve is insufficient the difference is adjusted against retained earnings.- 34 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 17. Long-term equity investments - continued 17.2 Determination of initial investment cost - continued For a long-term equity investment acquired in a business combination not under common control on the acquisition date the initial investment cost is determined based on the combination cost.Audit legal valuation consulting and other related G&A expenses incurred by the acquirer or purchaser for the business combination are recognized in profit or loss when they occur.Long-term equity investments obtained through methods other than a business combination are initially measured at cost.Where an investor gains significant influence or common control but not control over an investee through additional investment the cost of the long-term equity investment is the sum of the fair value of the previously held equity investment (as determined in accordance with Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments) and the new investment cost. 17.3 Subsequent measurement and recognition method of profit or loss 17.3.1 Long-term equity investments accounted for under the cost method In the parent company's financial statements long-term equity investments in subsidiaries are measured using the cost method. A subsidiary is an investee over which the Group can exercise control.Under the cost method long-term equity investments are measured at their initial investment cost. Any additional investment or capital recovery adjusts the cost of the long-term equity investment. Current investment income is recognized based on the amount of cash dividends or profits declared and distributed by the investee. 17.3.2 Long-term equity investments measured using the equity method The Group applies the equity method to its investments in associates and joint ventures. An associate is an investee over which the Group has significant influence and a joint venture is a joint venture arrangement under which the Group has rights to the net assets of the arrangement.Under the equity method if the initial investment cost of the long-term equity investment exceeds the share of the fair value of the investee's identifiable net assets at the time of investment the initial investment cost is not adjusted. If the initial investment cost is less than the share of the fair value of the investee's identifiable net assets at the time of investment the difference is recognized in current profit or loss and the cost of the long-term equity investment is adjusted accordingly.- 35 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 17. Long-term equity investments - continued 17.3 Subsequent measurement and recognition method of profit or loss - continued 17.3.2 Long-term equity investments measured using the equity method - continued When the equity method is adopted for accounting the Group based on its attributable share of the net profit or loss and other comprehensive income realized by the investee respectively recognize the investment income and other comprehensive income and simultaneously adjust the book value of the long-term equity investment. COOEC shall calculate the shares according to profits or cash dividends declared by the investee and correspondingly reduce the book value of long-term equity investments; As to any change in owners' equity of the investee other than net profit or loss other comprehensive income and profit distribution the Group shall adjust the book value of the long-term equity investment and include such change in capital reserves. When recoginzing the attributable share of net profit or loss of the investee the Group shall based on the fair value of identifiable net asset of the investee when it obtains the investmentrecognize the net profits of the investee after adjustment. If accounting policies and accounting periods adopted by the investee are inconsistent with those of the Company the financial statements of the investee shall be adjusted according to the accounting policies and accounting periods of the Company and investment income and other comprehensive income etc. shall be recognized on such basis. For transactions between the Group and associates and joint ventures if the invested or sold assets do not constitute business the unrealized profit or loss from internal transactions will be offset at the part attributable to the Group and the investment profit or loss will be recognized on that basis However the unrealized losses from internal transactions between the Group and any investee shall not be offset if they belong to the losses from the impairment of the transferred assets.When recognizing the net losses occurred in the investee that shall be shared the reduction value of book value of long- term equity investments and other long-term equities that constitute net investments in the investee will be the limit until it becomes zero. In addition if the Group has the obligation to assume extra-amount losses for the investee the estimated liabilities are recognized according to the estimated obligations and included in the current investment losses.Where the investee realizes net profits in the subsequent period the Group shall restore the income shared after making up for unrecognized losses undertaken by such income. 17.4 Disposal of long-term equity investments When a long-term equity investment is disposed of the difference between its book value and the actual proceeds is recognized in current profit or loss. If a long-term equity investment has been accounted for using the equity method and the remaining equity after disposal is still accounted for using the equity method any other comprehensive income previously recognized under the equity method is treated on the same basis as if the investee had directly disposed of the related assets or liabilities and is transferred proportionately. Any other changes in owners' equity of the investee other than net profit or loss other comprehensive income and profit distribution which were previously recognized are transferred proportionately to the current profit or loss. If a long-term equity investment is accounted for using the cost method and the remaining equity after disposal continues to be accounted for using the cost method any other comprehensive income recognized before the Group gained control under either the equity method or the accounting standards for recognizing and measuring financial instruments is treated on the same basis as if the investee had directly disposed of the related assets or liabilities and is transferred proportionately. Other changes in owners' equity other than net profit or loss other comprehensive income and profit distribution in net asset of the investee accounted for and recognized by using the equity method shall be carried forward to the current profit or loss.- 36 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 17. Long-term equity investments - continued 17.4 Disposal of long-term equity investments - continued Where the Group loses the control over the investee due to the disposal of part of the equity investments when it prepares separate financial statements the remaining equity after disposal that can commonly control or have significant influence on the investee will be measured under the equity method and the remaining equity shall be deemed to have been adjusted under the equity method on acquisition. If the remaining equity after disposal can not exercise common control or significant influence on the investee such equity will be changed to be accounted for according to recognition and measurement standards of financial instruments and the difference between fair value and book value on the date of loss of the control shall be included in the current profit or loss. For other comprehensive income recognized by using the equity method or financial instruments recognition and measurement standards before the Group obtains the control over the investee accounting treatment shall be made on the same basis as that for direct disposal of relevant assets or liabilities by the investee when the Group loses the control over the investee. Other changes in owners' equity other than net profit or loss other comprehensive income and profit distribution in net asset of the investee recognized by using the equity methodshall be carried forward to the current profit or loss when the control over the investee is lost. Where the remaining equities after disposal are accounted for under the equity method the other comprehensive income and other owners' equity shall be carried forward in proportion. If the remaining equity after disposal is changed to be accounted for according to the recognition and measurement standards of the financial instruments the other comprehensive income and other owner's equity shall be fully carried forward.In case the common control or significant influence over the investee is lost for disposing part of equity investments the remaining equity will be changed to be accounted for according to the recognition and measurement principles of financial instruments. The difference between the fair value and the book value on the date of the loss of common control or significant influence shall be included in the current profit or loss. Any other comprehensive income previously recognized under the equity method for the original equity investment is accounted for on the same basis as if the investee had directly disposed of related assets or liabilities once the equity method ceases to apply. All other changes in owners' equity recognized due to factors other than net profit or loss other comprehensive income and profit distribution of the investee are transferred in full to current investment income when the equity method is no longer applied.Where the Group disposes of equity investments in subsidiaries through multiple transactions and by stages until loss of control if the above transactions belong to a package of transactions accounting treatment shall be made on the transactions as a transaction to dispose equity investments of subsidiaries and lose the control. The difference between each disposal cost and the book value of long-term equity investments corresponding to disposed equities before the loss of control shall be firstly recognized as other comprehensive income and then transferred into the current profit or loss at the loss of control. 18. Investment properties Investment property refers to property held to earn rentals or for capital appreciation or both and includes leased land use rights and leased buildings.Investment property is initially measured at cost. Subsequent expenses related to the investment property if the economic benefits related to the asset are likely to flow in and the cost can be measured reliably shall be included in the cost of the investment property. Other subsequent expenses shall be included in the current profit or loss when incurred.- 37 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 18. Investment properties - continued The Group uses the cost model for subsequent measurement of investment property and provides for depreciation on a straight-line basis over its service life. The depreciation method useful life estimated residual value and annual depreciation rates for each category of investment property are as follows: Type Depreciation method Depreciation life Residual value rate Annual depreciation(years) (%) rate (%) Houses and buildings Straight-line method 10-40 0.00-4.00 2.40-10.00 When an investment property is being disposed of or permanently withdraws from use without any economic benefits expected from the disposal the investment property shall be derecognized.The difference between the disposal proceeds of an investment property (through sale transfer retirement or damage) and its book value net of related taxes and fees is recognized in current profit or loss. 19. Fixed assets 19.1 Recognition conditions Fixed assets refer to tangible assets held for the purpose of producing goods providing services renting or operating management with a service life exceeding one fiscal year. Fixed assets will only be recognized when the economic benefits associated with such assets are likely to flow into the Group and the cost can be measured reliably. A fixed asset is initially measured at cost.For the subsequent expenses related to the fixed assets if the economic benefits related to the fixed assets are likely to flow in and the cost can be measured reliably they shall be included in the cost of the fixed assets and the book value of the replaced part shall be derecognized Other subsequent expenses shall be included into the current profit or loss when incurred. 19.2 Depreciation method From the month following the date a fixed asset is in working condition for intended use the Group depreciates the asset on a straight-line basis over its service life. The depreciation method service year estimated residual value and annual depreciation rates for each category of fixed assets are as follows: Type Depreciation method Depreciation life Residual value rate Annual depreciation(years) (%) rate (%) Buildings and constructions Straight-line method 10-40 0.00-4.00 2.40-10.00 Machinery equipment Straight-line method 10-14 4.00 6.86-9.60 Transportation equipment Straight-line method 8 4.00 12.00 Electronic equipment and others Straight-line method 5 4.00 19.20 Estimated net residual value refers to the amount obtained by the Group from the disposal of the fixed assets at present after deducting the estimated disposal expenses assuming that the estimated service life of the fixed asset has expired and the fixed asset is in the expected state at the end of its service life.- 38 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 19. Fixed assets - continued 19.3 Other explanations When the fixed assets are disposed of or it is expected that no economic benefits can be generated through use or disposal the fixed assets shall be derecognized. The difference of the revenue from disposal of fixed assets such as sales transfer retirement or damage deducting their book value and related taxes shall be included into the current profit or loss.The Group will review service life estimated net residual value and depreciation methods of the fixed assets at the end of each year. Changes if any shall be handled as changes in accounting estimates. 20. Construction in progress The construction in progress is measured at actual cost which includes various project expenditures incurred during the construction period capitalized borrowing costs before the project reaches working condition for intended use and other related costs. No depreciation is made for construction in progress.The construction in progress shall be carried forward to the fixed assets after it reaches the working condition for intended use. The criteria and timing for the conversion of various types of construction in progress into fixed assets are as follows: Type Criteria for conversion to fixed assets Time point of conversioninto fixed assets The machinery equipment shall be carried forward to the fixed assets when it has been accepted and the following conditions are Installation ofmet: machinery (1) The machinery equipment and its supporting facilities have beenReach working condition for equipment installed; intended use(2) After commissioning the machinery equipment can maintain normal and stable operation or produce qualified products for a period of time. 21. Borrowing costs The capitalization of the borrowing costs that can be directly attributable to the acquisition construction or production of assets that meet the capitalization conditions will start when the asset expenditure has incurred the borrowing costs have incurred and the acquisition construction or production activities necessary for the asset to reach the intended usable or salable state have begun; The capitalization shall be ceased when the acquired and constructed or produced assets eligible for capitalization have reached their working condition for intended use or sales condition. The remaining borrowing costs are recognized as expenses on occurrence.- 39 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 22. Intangible assets 22.1 Service life and its basis for determination estimate amortization method or review procedure Intangible assets include land use right software and patent rights etc.The intangible assets shall be initially measured at the costs. For intangible assets with limited service life the original value shall be evenly amortized by straight-line method within the expected service life from the time when they are available for use. The intangible assets with uncertain service life shall not be amortized. The amortization method service life and residual value rate of various intangible assets are as follows: Type Amortizationmethod Service life (year) and basis of determination Residual value rate (%) Land use rights Straight-line 50 (Determine the service life based on the statutory servicemethod life) - Software Straight-line 5 (Determine the service life based on the period expected tomethod bring economic benefits) - Patent right Straight-line 15 (Determine the service life based on the period expectedmethod to bring economic benefits) - At the end of the period the service life and amortization method of intangible assets with limited service life shall be reviewed and adjusted if necessary. 22.2 The collection scope and related accounting treatments for research expenditures The expenditures in research phase will be included in current profit or loss on occurrence.Expenditures in the development stage will be recognized as intangible assets only when the following conditions are simultaneously satisfied and included in current profit or loss if the following conditions are not satisfied: (1) It is technically feasible to complete the intangible assets so that it can be used or sold; (2) It has the intention to complete the intangible assets and use or sell them; (3) The manner in which an intangible asset generates economic benefits includes the ability to prove that there is a market for the products produced through the use of this intangible asset or a market for the intangible asset itself. In the case that the intangible asset will be used internally its usefulness shall be proven. (4) With the support of sufficient technology financial resources and other resources it is able to complete the development of the intangible assets and it is able to use or sell the intangible assets; (5) The expenditures attributable to the intangible assets in the development stage can be measured reliably. Where the research expenditures and the development expenditures are indistinguishable the COOEC shall include research expenditures and development expenditures incurred in current profit or loss. The cost of the intangible assets formed by internal development activities only includes the total expenditure incurred from the time when the capitalization conditions are met to the time when the intangible assets reach the intended use. The expenses recognized in profit or loss before meeting the capitalization conditions during the development for the same intangible asset will not be adjusted.The collection scope of R&D expenditures includes the wages salaries and welfare expenses of the personnel directly engaged in R&D activities and the direct R&D activities The depreciation cost of materials fuel and power expenses instruments and equipment for R&D activities etc.- 40 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 23. Impairment of long-term assets On each balance sheet date the Group checks whether there is any indication that long-term equity investments investment properties measured by the cost model fixed assets construction in progress right-of-use assets and intangible assets with a definite service life may have impairment. If there are indications of impairment of such assets the recoverable amount shall be estimated. Intangible assets with indefinite service life and intangible assets that have not yet reached a usable state are subject to impairment testing every year regardless of whether there are indications of impairment.The recoverable amount of the estimated asset is based on a single asset. If it is difficult to estimate the recoverable amount of a single asset the recoverable amount of the asset group shall be determined on the basis of the asset group to which the asset belongs. The recoverable amount is the higher of the net amount obtained by deducting the disposal expenses from the fair value of an asset or an asset group and the present value of its expected future cash flows.If the recoverable amount of the asset is lower than its book value the provision for asset impairment shall be made at the difference and included in the current profit or loss.The goodwill shall be tested for impairment at least at the end of each year. The impairment test of goodwill shall be carried out in combination with the asset group or combination of asset groups related to it. That is from the acquisition date the book value of goodwill shall be allocated using a reasonable method to the asset group or portfolio of asset groups that benefit from the synergies of the business combination. If the recoverable amount of the asset group or group of asset groups including the allocated goodwill is lower than its book value the corresponding impairment losses shall be recognized. Amount of impairment losses shall be firstly used to deduct the book value of goodwill allocated to the asset group or portfolio of asset groups and then deduct book value of other assets according to the proportion of the book values of other assets (except for goodwill) in the asset group or portfolio of asset groups.The above losses from assets impairment will not be reversed in subsequent accounting periods once recognized. 24. Long-term deferred expenses Long-term deferred expenses refer to the expenses which have been already incurred but will be borne in the current period and in the future with an amortization period of over 1 year. Long-term deferred expenses are amortized evenly over the expected benefit period. 25. Contract liabilities Contract liabilities refer to the obligation of the Group to transfer goods or services to customers for consideration received or receivable from customers. Contract assets and contract liabilities under the same contract are presented by their net amounts. 26. Employee compensation 26.1 Accounting treatments for short-term compensation During the accounting period when employees provide services for the Group the Group recognizes the short-term compensation actually incurred as liabilities and includes it in the current profit or loss or related asset costs. The employee welfare expenses incurred by the Group shall be included in the current profit or loss or related asset costs according to the actual amount incurred. If the employee benefits are non-monetary benefits they shall be measured at fair value.- 41 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 26. Employee employee compensation - continued 26.1 Accounting treatments for short-term compensation - continued For the medical insurance premiums work-related injury insurance premiums maternity insurance premiums and other social insurance premiums and housing provident funds paid by the Group for employees as well as the labor union funds and employee education expenses withdrawn by the Group in accordance with the provisions the corresponding employee compensation amount shall be calculated and determined according to the prescribed accrual basis and accrual ratio during the accounting period when employees provide services for the Group and the corresponding liabilities shall be recognized and included in the current profit or loss or related asset costs. 26.2 Accounting treatments for post-employment benefits Post-employment benefits are all defined contribution plans.During the accounting period when employees provide services for the Group the Group recognizes the amount payable calculated according to the defined contribution plans as a liability and includes it in the current profit or loss or related asset costs. 26.3 Accounting treatments for dismissal benefits When the Group provides dismissal benefits to employees the employee compensation liability arising from the dismissal benefits shall be recognized at the earlier of the following dates and included in the current profit or loss: when the Group cannot unilaterally withdraw the dismissal benefits provided due to the termination of labor relationship plan or the layoff proposal; When the Group recognizes the costs or expenses related to the restructuring involving the payment of dismissal benefits. 27. Estimated liabilities When the obligation related to the contingency such as product quality guarantee is a current obligation of the Group and the performance of such obligation is likely to result in the outflow of economic benefits and the amount of such obligation can be measured reliably it is recognized as estimated liabilities.On the balance sheet date by considering the risks uncertainty and time value of money and other factors related to contingency the estimated liabilities will be measured according to the best estimate of the required expenditures for performace of relevant present obligation. If the time value of money is significant the best estimate shall be determined by the amount discounted by the estimated future cash flows. 28. Revenue 28.1 Accounting policies adopted for revenue recognition and measurement disclosed by business type When the Group has fulfilled its performance obligations under the contract that is when the customer obtains right of control of the relevant goods or services the revenue is recognized based on the transaction prices allocated to the specific performance obligation. Performance obligations refer to the contractual commitments in which the Group transfers clearly distinguishable goods or services to the customers.- 42 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 28. Revenue - continued 28.1 Disclosure of accounting policies for revenue recognition and measurement by business type - continued The Group evaluates the contract on the contract commencement date identifies each individual performance obligation contained in the contract and determines whether each individual performance obligation is performed within a certain period of time or at a certain point in time. If one of the following conditions is met it is a performance obligation performed within a certain period of time and the Group recognizes revenue within a certain period of time according to the performance progress: (1) the customer obtains and consumes the economic benefits brought by the Group at the same time as the Group performs the contract; (2) The customer is able to control the goods under construction in the course of the Group's performance; (3) The goods produced during the performance of the Group have irreplaceable uses and the Group has the right to receive payment for the performance accumulated to date throughout the contract period.Otherwise the Group recognizes the revenue at the point when the customer obtains the right of control of the relevant goods or services.For goods sold to customers the Group recognizes revenue when the right of control of the goods is transferred that is when the goods are delivered to the designated place of the other party and signed by the other party. For property service the Group recognizes revenue in the course of providing property service.Transaction prices refer to the amount of consideration that the Group is expected to be entitled to receive as a result of the transfer of goods or services to customers but does not include the amount received on behalf of third parties and the amount expected to be returned to customers by the Group. When determining the transaction prices the Group considers the impact of variable consideration significant financing components in the contract non-cash consideration consideration payable to customers and other factors.If the contract contains two or more performance obligations the Group shall on the commencement date of the contract allocate the transaction prices to each individual performance obligation according to the relative ratio of the individual selling price of the goods or services promised by each individual performance obligation. However if there is conclusive evidence that the contractual discount or variable consideration is only related to one or more (but not all) performance obligations in the contract the Group shall allocate the contractual discount or variable consideration to the relevant one or more performance obligations. Individual selling price refers to the price at which the Group sells goods or services to customers separately. If the individual selling price cannot be directly observed the Group will comprehensively consider all the information that can be reasonably obtained and estimate the individual selling price by maximizing the use of observable input value.For sales with sales return clauses the Group recognizes revenue at the amount of consideration expected to be entitled to receive due to the transfer of goods to the customer (i.e. excluding the amount expected to be returned due to sales return) when the customer obtains the relevant control over goods and recognizes liabilities at the amount expected to be returned due to sales return; At the same time the balance of the book value of the expected goods to be returned at the time of transfer after deducting the expected cost of recovering the goods (including the impairment of the value of the returned goods) is recognized as an asset. The net amount after deducting the cost of the above asset will be transferred as cost based on the book value of the transferred goods.For sales with quality assurance clauses if the quality assurance provides a separate service in addition to assuring the customer that the goods or services sold meet the established standards the quality assurance constitutes a single performance obligation. Otherwise the Group shall conduct accounting treatment for the quality assurance liability in accordance with the Accounting Standards for Business Enterprises No. 13 - Contingencies.The Group determines whether it is the principal or the agent when engaging in transactions based on whether it has the right of control over the goods or services before transferring them to the customer. If the Group can control the goods or services before transferring them to the customer the Group is the main responsible person and recognizes the revenue according to the total consideration received or receivable; Otherwise the Group is an agent and recognizes revenue based on the expected commissions or service fee it is entitled to receive. This amount is determined by subtracting the price payable to other related parties from the total consideration received or receivable.- 43 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 28. Revenue - continued 28.1 Disclosure of accounting policies for revenue recognition and measurement by business type - continued If the Group receives payment in advance from customers for sales of goods or services the payment is first recognized as a liability and then transferred to revenue when the relevant performance obligations are fulfilled. When the Group's advances from customers do not need to be returned and the customer may waive all or part of its contractual rights the Group expects to be entitled to the amount related to the contractual rights waived by the customer and recognizes the above amount as revenue in ratio according to the mode of the customer's exercise of contractual rights; Otherwise the Group will only transfer the relevant balance of the above-mentioned liabilities to revenue when it is highly unlikely that the customer will request the fulfillment of the remaining performance obligations. 29. Government grants Government grants refer to the monetary assets and non-monetary assets obtained by the Group from the government for free. Government grants are recognized when they can meet the conditions attached to government grants and can be received.The government grants considered as monetary assets are measured at the amount received or receivable. 29.1 Judgment basis and accounting treatments for government grants related to assets The subsidies fro production line and equipment in the Group's government grants can form long-term assets so such government grants are asset-related government grants.Government grants related to assets are recognized as deferred income and included in the current profit or loss by stages according to the straight-line method within the service life of the relevant assets. 29.2 Judgment basis and accounting treatments for government grants related to income The industry development support funds and enterprise development support funds in the Group's government grants cannot form long-term assets so such government grants are income-related government grants.Income-related government grants used to compensate for relevant costs and losses in subsequent periods are recognized as deferred income and included in the current profit or loss in the period when the relevant costs or expenses are recognized; If it is used to compensate the relevant costs and losses incurred it shall be directly included in the current profit or loss.Government grants related to the daily activities of the Group are included in other income according to the essence of economic business. Government grants unrelated to the daily activities of the Group are included in the non-operating revenue.When the recognized government grants need to be returned if there is relevant deferred income balance the book balance of relevant deferred income shall be offset and the excess shall be included in the current profit or loss; If there is no relevant deferred income it shall be directly included in the current profit or loss.- 44 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 30. Lease Leases refers to a contract in which the lessor transfers the right of use of the asset to the lessee for consideration within a certain period of time.At the commencement date of the contract the Group assesses whether the contract is a lease contract or contains a lease.Unless the terms and conditions of the contract change the Group does not reassess whether the contract is a lease contract or contains a lease. 30.1 The Group as a lessee 30.1.1 Spin-off of the lease When a contract contains one or more lease and non-lease parts the Group will split the individual lease and non-lease parts and allocate the contract consideration according to the relative ratio of the sum of the individual price of each lease part and the individual price of the non-lease part. 30.1.2 Right-of-use assets Except for short-term leases the Group recognizes the right-of-use assets of the lease on the lease commencement date.The lease commencement date refers to the starting date when the lessor provides the leased assets for use by the Group.Right-of-use assets are initially measured at cost. The cost includes: The initial measurement amount of the lease liabilities; The lease payments made on or before the lease commencement date or the relevant amount after deducting the lease incentive already enjoyed if any; Initial direct costs incurred by the Group; The costs to be incurred to the Group for demolishing and removing leased assets restoring the site where the leased assets are located or restoring the leased assets to the state agreed in the lease terms.The Group depreciates right right-of-use assets with reference to the depreciation provisions of Accounting Standards for Business Enterprises No. 4 - Fixed Assets. If the Group can reasonably determine that the ownership of leased assets will be obtained at the expiration of the lease term the right-of-use assets shall be depreciated within the remaining service life of the leased assets. If it is not reasonably certain that ownership of leased assets will be obtained at the expiration of the lease term the depreciation shall be accrued during the shorter of the lease term and remaining service life leased assets.The Group determines whether the right-of-use assets are impairment in accordance with the Accounting Standards for Business Enterprises No. 8 - Asset Impairment and performs accounting treatment on the identified impairment losses. 30.1.3 Lease liabilities Except for short-term leases the Group makes initial measurement of the lease liabilities on the lease commencement date according to the present value of the lease payments that have not been paid on that date. When calculating the present value of lease payments the Group uses the interest rate implicit in lease as the discount rate and if the interest rate implicit in lease cannot be determined the incremental borrowing rate is used as the discount rate.- 45 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 30. Leases - continued 30.1 The Group as a lessee - continued 30.1.3 Lease liabilities - continued Lease payments refer to the payments made by the Group to the lessor in connection with the right to use the leased assets during the lease term including: Fixed payment (including substantial fixed payment) and the relevant amount after deducting the lease incentive if any; Variable lease payments depending on index or ratio; The Group reasonably determines the exercise price of purchase option to be exercised; Lease term reflects the amount that needs to be paid if the Group exercises the option to termination of leases termination of leases; The amount expected to be paid based on the residual value of guarantee provided by the Group.After the lease commencement date the Group calculates the interest expenses of the lease liabilities for each period of the lease term at a fixed cyclical interest rate and includes it in the current profit or loss or related asset costs.After the lease commencement date if any of the following circumstances occurs the Group shall remeasure the lease liabilities and adjust the corresponding right-of-use assets. If the book value of the right-of-use assets has been reduced to zero but the lease liabilities still needs to be further reduced the Group shall include the difference in the current profit or loss: If lease term changes or the valuation result of purchase option changes the Group remeasures lease liabilities based on the present value of the changed lease payments and the revised discount rate; If there is a change in the estimated amount payable of the residual value of guarantee or the index or ratio used to determine lease payments the Group remeasures lease liabilities based on the changed lease payments and the present value calculated using the original discount rate. 30.1.4 As the basis for judgment and accounting treatments for the simplified treatment of short-term leases by the lessee The Group chooses not to recognize right-of-use assets and lease liabilities for short-term leases of some plants and some leased warehouses. Short-term lease refers to a lease that lasts for no more than 12 months and includes no purchase options at the lease commencement date. The Group includes the lease payments of short-term leases in the current profit or loss or related asset costs according to the straight-line method in each period of the lease term. 30.1.5 Lease modification If the lease is modified and the following conditions are met at the same time the Group will account for the lease modification as a separate lease: * The lease modification expands the scope of the lease by adding one or more right of use of the leased assets; * The increased consideration is equivalent to the individual price of the expanded part adjusted according to the contract.- 46 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 30. Leases - continued 30.1 The Group as a lessee - continued 30.1.5 Lease modification - continued If the lease modification is not accounted for as a separate lease on the effective date of the lease modification the Group re-apportions the consideration of the modified contract re-determines the lease term and re-measures the lease liabilities at the present value calculated according to the modified lease payments and the revised discount rate.If the lease modification results in a reduction in the scope of the lease or the lease term the Group shall reduce the book value of the right-of-use assets accordingly and include the relevant gains or losses of partial or complete termination of leases into the current profit or loss. If the lease liabilities are remeasured due to other lease modification the Group shall adjust the book value of the right-of-use assets accordingly. 30.2 The Group as a lessor 30.2.1 Spin-off of the lease If the contract contains both the lease and non-lease parts the Group shall allocate the contract consideration according to the provisions of the revenue standards on the allocation of transaction prices and the basis of allocation shall be the separate price of the lease part and the non-lease part. 30.2.2 Classification criteria and accounting treatments as a lessor Leases that substantially transfer substantially all of the risks and rewards associated with the ownership of leased assets are financing leases Leases other than financing lease are operating leases. 30.2.2.1 The Group records operating leases as a lessor During each period of the lease term the Group recognizes the lease receipts of operating leases as rental income by using the straight-line method. The initial direct costs incurred by the Group in connection with operating leases are capitalized when incurred amortized on the same basis as rental income recognition during the lease term and included in the current profit or loss in installments.The variable lease receipts related to operating leases acquired by the Group and not included in the lease receipts are included in the current profit or loss when actually incurred. 30.2.3 Lease modification If the operating lease is changed the Group will account for it as a new lease from the effective date of the change and the advance or receivable lease receipts related to the lease before the change will be regarded as the receipt amount of the new lease.- 47 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 31. Deferred tax assets and deferred tax liabilities Income tax expenses include current income tax and deferred income tax. 31.1 Current income tax On the balance sheet date the current income tax liabilities (or assets) formed in the current and prior periods are measured at the expected income tax payable (or refundable) calculated in accordance with the tax law. 31.2 Deferred tax assets and deferred tax liabilities For the difference between the book value of certain assets and liabilities and their tax bases and the temporary differences arising from the difference between the book value and tax base of items that are not recognized as assets and liabilities but whose tax bases can be determined in accordance with the tax law the balance sheet liability method is adopted to recognize deferred tax assets and deferred tax liabilities.In general the relevant deferred income taxes are recognized for all temporary differences. However for deductible temporary differences the Group recognizes the relevant deferred tax assets to the extent of the taxable income that is likely to be obtained to offset the deductible temporary differences. In addition deferred tax assets or liabilities are not recognized for temporary differences associated with the initial recognition of goodwill and with the initial recognition of assets or liabilities arising from transactions that are neither business combinations nor affect accounting profit or taxable income (or deductible losses) and do not result in equal taxable temporary differences and deductible temporary differences.For deductible loss and tax credits that can be carried forward to subsequent years the corresponding deferred tax assets arising therefrom are recognized to the extent that future taxable income will be probable to be available against deductible losses and tax credits.The Group recognizes deferred tax liabilities arising from taxable temporary differences associated with subsidiaries associates and investments in joint ventures unless the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not be reversed in the foreseeable future. For deductible temporary differences related to subsidiaries associates and investments in joint ventures the Group recognizes deferred tax assets only if it is probable that the temporary differences will reverse in the foreseeable future and it is probable that taxable income will be available to offset the deductible temporary differences in the future.On the balance sheet date deferred tax assets and deferred tax liabilities should be measured at the applicable tax rate during the period of expected recovery of the relevant assets or liquidation of the relevant assets according to the provisions of tax laws.Except for the current income tax and deferred income taxes related to transactions and events directly included in other comprehensive income or shareholders' equity which are included in other comprehensive income or shareholders' equity and the book value of deferred income taxes arising from business combination to adjust goodwill the remaining current income tax and deferred income tax expenses or income are included in the current profit or loss.On the balance sheet date the book value of the deferred tax assets shall be reviewed. If it is likely that sufficient taxable income will not be available in the future to offset the benefits of the deferred tax assets the book value of the deferred tax assets shall be written down. When it is likely to earn sufficient taxable income the written down amount is reversed.- 48 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (III) Significant accounting policies and accounting estimates - continued 31. Deferred tax assets/deferred tax liabilities - continued 31.3 Offset of income tax When the Group has a legal right to settle on a net basis and intends to settle with net amount or acquire assets and pay off liabilities simultaneously the Group reports the net amount of current income tax assets and current tax liabilities after offsetting.When the Group has the legal right to settle current income tax assets and current income tax liabilities on a net basis and the deferred tax assets and deferred tax liabilities are related to the income tax levied by the same tax collection authority on the same taxpayer or on different taxpayers but in each important future period of reversal of deferred tax assets and liabilities the involved taxpayer intends to settle current income tax assets and liabilities on a net basis or to obtain assets and settle liabilities at the same time the deferred tax assets and deferred tax liabilities of the Group are presented at the net amount after offset. 32. Changes in significant accounting policies and accounting estimates 32.1 Adjustments for changes in significant accounting policies On October 25 2023 the Ministry of Finance issued the Accounting Standards for Business Enterprises - Interpretation No. 17 (hereinafter referred to as "Interpretation No. 17"). Interpretation No. 17 standardizes the classification of current liabilities and non-current liabilities and the accounting treatment of sale and leaseback transactions and will come into effect on January 1 2024.On December 6 2024 the Ministry of Finance issued the Accounting Standards for Business Enterprises - Interpretation No. 18" (hereinafter referred to as "Interpretation No. 18"). It regulates the subsequent measurement of investment properties held as underlying items under the floating charge method and the accounting treatment of warranty-type quality assurance that is not a single performance obligation. It will come into force from December 6 2024 allowing enterprises to implement it ahead of the annual release.After assessment the Group believes that the adoption of the above provisions has no material impact on the Group's financial statements. 32.2 Changes in accounting estimates The Group has no significant changes in accounting estimates during the year.- 49 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024（IV） Taxation 1. Main tax types and tax rates Tax type Tax basis Tax rate The output tax for domestic sales is Balance of output tax minus deductible input tax; calculated at 13% 9% 6% and 5% of the Value-added tax Tax exemption offset and refund measures are sales amount according to relevant tax applicable to the sales of export products regulations and the export product tax rebate rate is 13% Urban maintenance and construction tax Turnover tax payable 7% Education surcharge Turnover tax payable 3% Local education surtax Turnover tax payable 2% Corporate income tax Taxable income 25%、20%、15%、8.25% THE RESIDUAL VALUE AFTER Property taxes DEDUCTING 30% FROM THE ORIGINAL 1.2% VALUE OF THE PROPERTYAT ONCE Notes to the taxpayers with different corporate income tax rates: Name of taxpayer Income tax rate The Company 25% Shenzhen Shenfang Property Management Co. Ltd. 20% (Note 1) Shenzhen MCENTURY Garment Co. Ltd. 20% (Note 1) Shenzhen Lisi Industrial Development Co. Ltd. 20% (Note 1) Shenzhen Shenfang Sungang Property Management Co. Ltd. 20% (Note 1) Shenzhen Huaqiang Hotel Co. Ltd. 20% (Note 1) SATO (Hong Kong) Limited 8.25% (Note 2) Shenzhen SAPO Photoelectric Co. Ltd. (hereinafter referred to as "SAPO Photoelectric") 15% (Note 3) Note 1: See Note (IV) and 2(2) for details.Note 2: according to the Inland Revenue Ordinance of Hong Kong SATO (Hong Kong) Limited is subject to a two-tier profits tax system. The first HKD 2 million of taxable profits shall taxed at a rate of 8.25% and the profits generated thereafter shall be taxed at a rate of 16.5%.Note 3: See Note (IV) and 2(1) for details. 2. Tax incentives (1) SAPO Photoelectric a subsidiary of the Company was jointly recognized as a high-tech enterprise in 2022 by Shenzhen Science and Technology Innovation Commission Finance Bureau of Shenzhen Municipality and Shenzhen Tax Service State Taxation Administration. The certification is valid for 3 years and the certificate number is GR202244204504. Since SAPO Photoelectric was recognized as a high-tech enterprise it is eligible for the tax incentives for high-tech enterprises for three years. After filing with the competent tax bureau SAPO Photoelectric has paid corporate income tax at a tax rate of 15%.- 50 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (IV) Taxes - continued 2. Tax incentives - continued (2) The Company's subsidiaries Shenzhen MCENTURY Garment Co. Ltd. Shenzhen Huaqiang Hotel Co. Ltd. Shenzhen Lisi Industrial Development Co. Ltd. Shenzhen Shenfang Sungang Property Management Co. Ltd. and Shenzhen Shenfang Property Management Co. Ltd. are qualified small low-profit enterprises. According to the Announcement of the Ministry of Finance and the State Taxation Administration of Taxation on Further Implementing Preferential Policies for Corporate Income Tax of Small and Micro Enterprises (No. 13 2022) and the Announcement of the Ministry of Finance and the State Taxation Administration on Preferential Policies for Corporate Income Tax of Small and Micro Enterprises and Individual Industrial and Commercial Households (No. 6 2023) the part of the annual taxable income not exceeding RMB 3 million will be included in the taxable income after deducting 25% and corporate income tax will be paid at a tax rate of 20%. (3) According to the relevant provisions of the Notice of the Ministry of Finance the General Administration of Customs and the State Taxation Administration on the Import Tax Policies for Supporting the Development of the New Display Device Industry (CGS [2021] No. 19) SAPO Photoelectric a subsidiary of the Company meets the relevant conditions and will enjoy the policy of exemption from import duties on relevant products from January 1 2021 to December 31 2030. (4) According to the Announcement on the Policy of Additional Value-Added Tax Deduction for Advanced Manufacturing Enterprises (CZBSWZJGG [2023] No.43) issued by the Ministry of Finance and the State Taxation Administration in September 2023 from January 1 2023 to December 31 2027 advanced manufacturing enterprises are allowed to deduct the value-added tax payable by 5% of the deductible input tax for the current period. SAPO Photoelectric a subsidiary of the Company meets the relevant conditions and enjoyed the policy of additional deduction of value-added tax (VAT) in 2024.（V） Notes to financial statements items 1. Monetary funds RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Cash on hand: 4751.69 1710.40 RMB 4691.50 1651.50 HKD 60.19 58.90 Bank deposits (Note 1): 302111853.17 462967619.54 RMB 245621517.8 396264667.05 USD 40462152.89 62535102.56 JPY 15265963.38 3440280.17 HKD 762219.10 727569.76 Other monetary funds (Note 2): 38844838.96 9305118.06 RMB 10920461.06 9305118.06 JPY 27924377.90 - Total 340961443.82 472274448.00 Including: total amount deposited abroad - - - 51 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 1. Monetary funds - continued Note 1: bank deposits include interest income from current deposits and 7-day notice deposits amounting to RMB 31765.51 (2023: RMB 1548872.61). Note 2: as of December 31 2024 the Group's other monetary funds included RMB 3401500.00 (2023: RMB 3400000.00) of restricted funds due to account freezes and RMB 35443338.96 (2023: RMB 5905118.06) of guarantee deposits for bills and letters of credit. 2. Financial assets held for trading RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Financial assets measured at fair value through current profit or loss 731419904.42 821946114.68 Including: money funds and structured deposits 731419904.42 821946114.68 3. Notes receivable (1) Classification of notes receivable RMB Category Balance as at the end of Balance as at the end ofthe current year the previous year Bank acceptance bills 47305221.88 50963943.01 (2) As at December 31 2024 the Group has no pledged notes receivable. (3) As of December 31 2024 notes receivable endorsed or discounted by the Group and not yet due on the balance sheet date at the end of the period RMB Item Amount derecognized at the Amount not derecognized atend of the period the end of the period Bank acceptance bill - 30291952.76 (4) Disclosure by provision method for bad debts RMB Balance as at the end of the current year Balance as at the end of the previous year Book balance Provision for bad debts Book balance Provision for baddebts Category Provisi Ratio Book value Provisi Book value Amount (%) Amount on ratio Amount Ratio (%) Amount on ratio (%)(%) Provision for bad debts accrued on an - - - - - - - - - - individual basis Provision for bad debts made by 47305221.88 100.0 47305221.80 - - 8 50963943.01 100.00 - - 50963943.01portfolio Including: bank 100.0 47305221.8 acceptance bills 47305221.88 0 - - 8 50963943.01 100.00 - - 50963943.01 Total 47305221.88 100.0 - 47305221.80 8 50963943.01 100.00 - 50963943.01 (5) In 2024 the Group has no actual write-off of notes receivable. - 52 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 4. Accounts receivable (1) Disclosure by aging RMB Aging Book balance at the end of Book balance at the end ofthe year the previous year Within 1 year 888265598.53 848526236.04 1-2 years 368365.12 1640043.18 2 to 3 years - 618907.34 Over 3 years 13565696.79 12911211.29 Total 902199660.44 863696397.85 (2) Disclosure by provision method for bad debts RMB Balance as at the end of the current year Category Book balance Provision for bad debts Amount Ratio (%) Amount Provision ratio (%) Book value Provision for bad debts accrued on an individual basis 35622829.91 3.95 17870018.37 50.16 17752811.54 Provision for bad debts made by portfolio 866576830.53 96.05 20597705.18 845979125.35 Including: portfolio 1 854782067.66 94.74 20338340.21 2.38 834443727.45 Combination 2 11794762.87 1.31 259364.97 2.20 11535397.90 Total 902199660.44 100.00 38467723.55 863731936.89 RMB Balance as at the end of the previous year Category Book balance Provision for bad debts Amount Ratio (%) Amount Provision ratio (%) Book value Provision for bad debts accrued on an individual basis 71687951.26 8.30 27464002.48 38.31 44223948.78 Provision for bad debts made by portfolio 792008446.59 91.70 16097561.42 775910885.17 Including: portfolio 1 779372185.30 90.24 15882600.54 2.04 763489584.76 Combination 2 12636261.29 1.46 214960.88 1.70 12421300.41 Total 863696397.85 100.00 43561563.90 820134833.95 As of December 31 2024 the Company has no significant accounts receivable with individual provision for bad debts.As of December 31 2024 the credit risk and provision for bad debts of accounts receivable of Portfolio 1 are as follows: RMB Balance as at the end of the current year Type Expected average Book balance Provision for badloss rate (%) debts Book value Within the credit period 2.11 796842757.97 16786953.04 780055804.93 1-30 days overdue 3.10 53503516.30 1656637.60 51846878.70 31-60 days overdue 26.63 3418979.10 910571.37 2508407.73 61-90 days overdue 96.70 989164.17 956528.08 32636.09 More than 90 days overdue (with impairment) 100.00 27650.12 27650.12 - Total 854782067.66 20338340.21 834443727.45 - 53 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 4. Accounts receivable - continued (2) Disclosure by provision method for bad debts - continued As of December 31 2024 the credit risk and provision for bad debts of accounts receivable of Portfolio 2 are as follows: RMB Balance as at the end of the current year Aging Expected average Book balance Provision for badloss rate (%) debts Book value Within 1 year 1.44 11460139.05 165377.59 11294761.46 1-2 years 10.00 267373.82 26737.38 240636.44 Over 3 years 100.00 67250.00 67250.00 - Total 11794762.87 259364.97 11535397.90 As of December 31 2024 provision for bad debts is made based on the simplified expected credit losses model RMB Whole duration Whole duration Provision for bad debts Expected credit losses Expected credit losses Total (No credit loss) (With credit loss) Balance at the beginning of the year 27153548.62 16408015.28 43561563.90 Balance at the beginning of the year - Transfer to credit loss incurred - - - - Reversal of credit loss not incurred - - - Withdrawal in the current year 8871275.71 102828.16 8974103.87 Reversal in the current year (11196138.79) (2871805.43) (14067944.22) Charge-off in the current year - - - Write-off in the current year - - - Other changes - - - Balance as at the end of the current year 24828685.54 13639038.01 38467723.55 (3) Provision for bad debts RMB Balance at the Changes in the current year Balance as at Type beginning of Provision Recovery or Resale or write- Other changes the end of thethe year reversal off current year Provision for bad debts 43561563.90 8974103.87 (14067944.22) - - 38467723.55 There was no significant amount of provision for bad debts recovered or reversed this year. (4) There are no accounts receivable with actual write-off this year. - 54 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 4. Accounts receivable - continued (5) Top 5 accounts receivable in terms of the ending balances by debtors RMB Proportion in accounts Book balance at the end of receivable Provision for bad debtsEntity name the year Ratio of balance at the end Balance as at the end of the of the year (%) current year Customer 1 216148577.64 23.96 4753114.82 Customer 2 102082718.13 11.31 2184024.62 Customer 3 90645486.60 10.05 1855541.78 Customer 4 84618742.39 9.38 1841371.17 Customer 5 65531083.75 7.26 1350058.99 Total 559026608.51 61.96 11984111.38 5. Receivables financing (1) Presentation of receivables financing by category RMB Item Balance as at the end of the Balance as at the end of thecurrent year previous year Bank acceptance bills 6804603.68 22839459.13 The Group believes that the bank acceptance bills it holds are issued by banks with high credit ratings and carry no significant credit risk; therefore no provision for bad debts has been made. (2) As at December 31 2024 the Group has no pledged receivables financing. (3) As of December 31 2024 receivables financing endorsed or discounted by the Group and not yet due on the balance sheet date at the end of the period RMB Item Amount derecognized at the Amount not derecognized atend of the period the end of the period Bank acceptance bills 34926518.99 - (4) In 2024 the Group has no receivables financing with actual write-off. - 55 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 6. Advances to suppliers (1) Disclosure of advances to suppliers by aging RMB Aging Balance as at the end of the current year Balance as at the end of the previous year Amount Ratio (%) Amount Ratio (%) Within 1 year 7233035.70 88.46 16927119.84 86.81 1-2 years 873375.47 10.68 969677.39 4.97 2 to 3 years 8227.73 0.10 1603089.57 8.22 Over 3 years 62085.80 0.76 - - Total 8176724.70 100.00 19499886.80 100.00 As of December 31 2024 the Group has no advances to suppliers with an aging of more than 1 year and an important amount. (2) Top 5 advances to suppliers in terms of the ending balances by prepayment objects The total amount of the top five prepayments categorized by prepayment objects as of the end of the year was RMB 5657262.47 accounting for 69.19% of the ending balance of advances to suppliers. 7. Other receivables (1) Disclosure by aging RMB Aging Balance as at the end of Balance as at the end ofthe current year the previous year Within 1 year 2878553.22 1860613.92 1-2 years 227729.90 548779.55 2 to 3 years 37922.15 690301.34 Over 3 years 18436540.75 18115521.40 Total 21580746.02 21215216.21 Less: provision for bad debts 17984202.06 17994930.79 Book value 3596543.96 3220285.42 (2) Disclosure by nature of payment RMB Nature of payment Book balance at the Book balance at the end of the year end of the previousyear Current accounts 15422685.97 15350589.97 Guarantee and deposits 2523551.88 2000722.80 Export tax rebate 709028.48 710026.13 Petty cash and employee borrowings 296058.95 577183.94 Others 2629420.74 2576693.37 Total 21580746.02 21215216.21 - 56 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 7. Other receivables - continued (3) Provision for bad debts As of December 31 2024 provision for bad debts is made based on general model of expected credit losses RMB Phase I Phase II Phase III The entire expected The entire expected Provision for bad debts Expected credit credit loss over the credit loss over thelosses over the next life of the life of the Total 12 months instruments instruments (No credit loss) (With credit loss) Balance at the beginning of the year 73918.97 268296.26 17652715.56 17994930.79 Balance at the beginning of the year 73918.97 268296.26 17652715.56 17994930.79 -Transfer to phase II (12183.55) 12183.55 - - -Transfer to phase III - (187095.88) 187095.88 - -Reversal to phase II - - - - -Reversal to phase I - - - - Withdrawal in the current year 85256.08 - - 85256.08 Reversal in the current year - (54177.15) (37685.24) (91862.39) Charge-off in the current year - - - - Write-off in the current year - - (4122.42) (4122.42) Other changes - - - - Balance as at the end of the current year 146991.50 39206.78 17798003.78 17984202.06 As of December 31 2024 provision for bad debts shall be made according to the credit risk characteristic combination RMB Balance as at the end of the current year Phase Expectedaverage loss rate Book balance Provision for (%) bad debts Book value Provision for bad debts based on credit risk characteristic combination 83.33 21580746.02 17984202.06 3596543.96 Provision for other receivables As of December 31 2024 the credit risk and provision for bad debts of other receivables are as follows: RMB Balance as at the end of the current year Aging Expected average Book balance Provision for badloss rate (%) debts Book value Within 1 year 5.11 2878553.22 146991.50 2731561.72 1-2 years 7.69 227729.90 17521.25 210208.65 2 to 3 years 57.18 37922.15 21685.53 16236.62 Over 3 years 96.54 18436540.75 17798003.78 638536.97 Total 21580746.02 17984202.06 3596543.96 - 57 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 7. Other receivables - continued (4) Provision for bad debts RMB Balance at the Changes in the current year Balance as at Type beginning of Provision Recovery or Resale or write- the end of thethe year reversal off Other changes current year Provision for bad debts 17994930.79 85256.08 (91862.39) (4122.42) - 17984202.06 There is no provision for bad debts recovery or reversal of significant amount in the current year. (5) There are no other receivables with actual write-off this year. (6) Top five entities in terms of ending balance of other receivables by debtors RMB Provision for bad Balance as at the debts Other receivables end of the current Ratio in ending Nature of amount Aging Balance as at the year balance of other end of the current receivables (%) year Top five of the ending balance of the current 16287801.03 75.47 1年以内、3年以year 应收单位往来等 15242801.03上 Total other receivables 8. Inventories (1) Classification of inventories RMB Balance as at the end of the current year Balance as at the end of the previous year Item Provision for Provision forBook balance inventory Book value Book balance inventory Book value depreciation depreciation Raw materials 453134126.81 14875137.34 438258989.47 403031948.06 7506047.48 395525900.58 Products in progress 335115507.53 66220022.55 268895484.98 309068674.96 64610590.25 244458084.71 Finished products 121746047.85 40357658.59 81388389.26 137596740.37 43501540.31 94095200.06 Entrusted processing 1710557.68 496720.51 1213837.17 2406793.65 93806.73 2312986.92 materials Total 911706239.87 121949538.99 789756700.88 852104157.04 115711984.77 736392172.27 Note: as of December 31 2024 the book balance of the polarizer inventories was RMB 905482857.11 (December 31 2023: RMB 838447375.39) with a corresponding provision for inventory depreciation of RMB 115967084.94 (December 31 2023: RMB 107290039.96). (2) Provision for inventory depreciation RMB Balance at the Increase in the current year Decrease in the current year Balance as at the Item beginning of the Provision Others Reversal or Others end of the currentyear write-off year Raw materials 7506047.48 10509078.42 - 3139988.56 - 14875137.34 Products in progress 64610590.25 28883121.41 - 27273689.11 - 66220022.55 Finished products 43501540.31 83743853.45 - 86887735.17 - 40357658.59 Entrusted processing 93806.73 402913.78 - - - 496720.51 materials Total 115711984.77 123538967.06 - 117301412.84 - 121949538.99 - 58 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 8. Inventories - continued (2) Provision for inventory depreciation - continued Specific basis for determining the net realizable value of inventories and the reasons for reversal or write-off of the provision for inventory depreciation during the current year: Reasons for reversing or Item Specific basis for determining net realizable value writing off provision forinventory depreciation this year The net realizable value is determined by the Raw materials goods in process and estimated selling price of the relevant finished consigned processing materials products minus the estimated cost to be incurred until Received or sold in the completion estimated selling and distribution current year expenses and relevant taxes.The net realizable value is determined by the Finished products estimated selling price of the inventories minus the It is sold or market value estimated selling and distribution expenses and is recovered in the current related taxes. year (3) As of December 31 2024 there is no amount in the balance of inventories used for guarantee and no amount of capitalization of borrowing costs. 9. Other current assets RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Value-added tax to be deducted and input tax to be certified 2100314.86 27399897.46 Prepaid income tax 47034.59 47034.59 Cost of return receivable 19314386.69 33326525.34 Total 21461736.14 60773457.39 10. Long-term equity investments RMB Changes in the current year Provision Other for comp Provisi impairme Balance at the Addit rehen Other Cash Investees beginning of the ional Reduced Investment sive chang dividends or on Balance as at the nt year invest investment profit or loss inco es in profits Provisi Others end of the Balance recognized declared to be on for current year as at thement under the equity me equit paid impair end of the method adjust y ment currentment year I. Joint ventures Shenzhen Guanhua Printing and Dyeing Co. Ltd. 122370494.08 - - (10814606.80) - - - - - 111555887.28 - Sub-total 122370494.08 - - (10814606.80) - - - - - 111555887.28 - II. Associates Shenzhen Changlianfa Printing and Dyeing Co. Ltd. 3358117.09 - - 260171.67 - - (346150.00) - - 3272138.76 - Yehui International Co. Ltd. 1953409.53 - (1805949.58) (147459.95) - - - - - - - Sub-total 5311526.62 - (1805949.58) 112711.72 - - (346150.00) - - 3272138.76 - Total 127682020.70 - (1805949.58) (10701895.08) - - (346150.00) - - 114828026.04 - - 59 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 11. Other equity instrument investments (1) Details of other equity instrument investments RMB Changes in the current year Balance at the Gains accruedto other Loss accrued to Balance as at the Dividend Accumulative Reasons designated as Item beginning of Additional Reduced income Accumulative gains comprehensive other Others end of the current recognized in accrued to other losses accrued to being measured at fair the year investment investment other value through otherincome in the comprehensive year comprehensive current year income in the the current income comprehensive comprehensive income current year period income Hualian Development Co. Ltd. 110457700.00 - - 19426300.00 - - 129884000.00 208000.00 127284000.00 - The Group plans to holdit for a long time Shenzhen Dailisi Underwear Co. Ltd. 17741900.00 - - 1901000.00 - - 19642900.00 1037735.85 17083043.74 - The Group plans to holdit for a long time Shenzhen Nanfang Textile Co.Ltd. 14803400.00 - - - (1621700.00) - 13181700.00 865050.16 11681700.00 - The Group plans to holdit for a long time Shenzhen Xinfang Knitting Factory Co.Ltd. 2985900.00 - - - (291600.00) - 2694300.00 200000.00 2170300.00 - The Group plans to hold it for a long time Jintian Industry (Group) Co. Ltd. - - - - - - - - - (14831681.50) The Group plans to holdit for a long time Total 145988900.00 - - 21327300.00 (1913300.00) - 165402900.00 2310786.01 158219043.74 (14831681.50) (2) Description of derecognition in the current year There is no derecognition of other equity instrument investments this year.- 60 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 12. Investment properties (1) Investment properties measured at the cost mode RMB Item Houses and buildings I. Total original book value 1. Balance at the beginning of the year 350367442.40 2. Increase in the current year - (1) Outsourcing - (2) Transfer of fixed assets - 3. Decrease in the current year - (1) Disposal - (2) Other transfer-out - 4. Balance at the end of the year 350367442.40 II. Accumulated depreciation and accumulated amortization 1. Balance at the beginning of the year 224764235.22 2. Increase in the current year 9609816.99 (1) Provision or amortization 9609816.99 (2) Transfer of fixed assets - 3. Decrease in the current year - (1) Disposal - (2) Other transfer-out - 4. Balance at the end of the year 234374052.21 III. Provision for impairment 1. Balance at the beginning of the year - 2. Increase in the current year - (1) Provision - 3. Decrease in the current year - (1) Disposal - 4. Balance at the end of the year - IV. Book value 1. Book value at the end of the year 115993390.19 2. Book value at the beginning of the year 125603207.18 (2) Investment properties without certificate of title RMB Reasons for failure to Item Book value obtain the certificate of title Houses and buildings 11556252.96 Warrants not obtainedfor historical reasons - 61 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 13. Fixed assets (1) Fixed assets RMB Item Buildings and Machinery Transportation Electronicconstructions equipment equipment equipment and Total others I. Total original book value 1. Balance at the beginning of the year 727679833.94 2711433903.98 17090895.87 44539622.55 3500744256.34 2. Increase in the current year 9634489.50 35489764.62 471769.90 1139257.60 46735281.62 (1) Purchase - 5444196.63 471769.90 1139257.60 7055224.13 (2) Transfer from construction in progress - 30045567.99 - - 30045567.99 (3) Other changes 9634489.50 - - - 9634489.50 3. Decrease in the current year - 4168000.00 266184.80 717804.27 5151989.07 (1) Disposal or scrapping - - 266184.80 717804.27 983989.07 (2) Other changes - 4168000.00 - - 4168000.00 4. Balance at the end of the year 737314323.44 2742755668.60 17296480.97 44961075.88 3542327548.89 II. Accumulated depreciation 1. Balance at the beginning of the year 189420295.28 1179132635.63 7869614.58 33092767.56 1409515313.05 2. Increase in the current year 23097751.05 198886428.20 2046425.49 4076907.22 228107511.96 (1) Provision 23097751.05 198886428.20 2046425.49 4076907.22 228107511.96 (2) Other changes - - - - - 3. Decrease in the current year - - 249694.76 677349.26 927044.02 (1) Disposal or scrapping - - 249694.76 677349.26 927044.02 (2) Other changes - - - - - 4. Balance at the end of the year 212518046.33 1378019063.83 9666345.31 36492325.52 1636695780.99 III. Provision for impairment 1. Balance at the beginning of the year 9820261.26 15149037.18 6126.41 247280.71 25222705.56 2. Increase in the current year 99508.16 6572870.85 1102.16 189993.37 6863474.54 (1) Provision 99508.16 6572870.85 1102.16 189993.37 6863474.54 3. Decrease in the current year - - - 7256.11 7256.11 (1) Disposal or scrapping - - - 7256.11 7256.11 4. Balance at the end of the year 9919769.42 21721908.03 7228.57 430017.97 32078923.99 IV. Book value 1. Book value at the end of the year 514876507.69 1343014696.74 7622907.09 8038732.39 1873552843.91 2. Book value at the beginning of the year 528439277.40 1517152231.17 9215154.88 11199574.28 2066006237.73 (2) Fixed assets without certificate of title RMB Item Book value Reasons for failure to obtain thecertificate of title Houses and buildings 10815790.07 Warrants not handled forhistorical reasons (3) Fixed assets of mortgage and guarantee As at December 31 2024 the Group's fixed assets mortgaged for bank borrowings are detailed in Note (V) 21 "Assets with Restricted Ownership or Right of Use".- 62 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 14. Construction in progress 14.1 Summary of construction in progress RMB Item Balance as at the end Balance as at the endof the current year of the previous year Construction in progress 5814012.03 31307060.74 14.2 Construction in progress RMB Balance as at the end of the current year Balance as at the end of the previous year Item Book balance Provision for Net book value Book balance Provision forimpairment impairment Net book value Installation of machinery equipment 5814012.03 - 5814012.03 31307060.74 - 31307060.74 15. Right-of-use assets RMB Item Buildings and Machinery equipment Totalconstructions I. Total original book value: 1. Balance at the beginning of the year 33450802.23 - 33450802.23 2. Increase in the current year 11214565.00 1799631.64 13014196.64 (1) Addition 11214565.00 1799631.64 13014196.64 3. Decrease in the current year 8181940.76 - 8181940.76 (1) Termination of leases 8181940.76 - 8181940.76 4. Balance at the end of the year 36483426.47 1799631.64 38283058.11 II. Accumulated depreciation 1. Balance at the beginning of the year 21451335.66 - 21451335.66 2. Increase in the current year 8105002.79 1546340.96 9651343.75 (1) Provision 8105002.79 1546340.96 9651343.75 3. Decrease in the current year 8157739.16 - 8157739.16 (1) Termination of leases 8157739.16 - 8157739.16 4. Balance at the end of the year 21398599.29 1546340.96 22944940.25 III. Provision for impairment 1. Balance at the beginning of the year - - - 2. Increase in the current year - - - (1) Provision - - - 3. Decrease in the current year - - - 4. Balance at the end of the year - - - IV. Book value 1. Book value at the end of the year 15084827.18 253290.68 15338117.86 2. Book value at the beginning of the year 11999466.57 - 11999466.57 - 63 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 16. Intangible assets (1) Details of intangible assets RMB Item Land use rights Software Patent right Total I. Total original book value 1. Balance at the beginning of the year 48258239.00 22600069.86 11825200.00 82683508.86 2. Increase in the current year - 219057.84 - 219057.84 (1) Purchase - 219057.84 - 219057.84 3. Decrease in the current year - - - - 4. Balance at the end of the year 48258239.00 22819127.70 11825200.00 82902566.70 II. Accumulated accumulation 1. Balance at the beginning of the year 16165713.67 15128172.39 11825200.00 43119086.06 2. Increase in the current year 891565.32 3684123.37 - 4575688.69 (1) Provision 891565.32 3684123.37 - 4575688.69 3. Decrease in the current year - - - - 4. Balance at the end of the year 17057278.99 18812295.76 11825200.00 47694774.75 III. Provision for impairment 1. Balance at the beginning of the year - - - - 2. Increase in the current year - - - - 3. Decrease in the current year - - - - 4. Balance at the end of the year - - - - IV. Book value 1. Book value at the end of the year 31200960.01 4006831.94 - 35207791.95 2. Book value at the beginning of the year 32092525.33 7471897.47 - 39564422.80 As at December 31 2024 for the intangible assets pledged by the Group due to bank borrowings please refer to Note (V) 21 "Assets with restricted ownership or right of use" for details. 17. Goodwill (1) Original book value of goodwill RMB Balance at the Name of the investees or matters beginning of the Increase in Decrease in Balance as at the forming goodwill year current year current year end of the current year SAPO Photoelectric 9614758.55 - - 9614758.55 Shenzhen MCENTURY Garment Co. Ltd. 2167341.21 - - 2167341.21 Total 11782099.76 - - 11782099.76 - 64 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 17. Goodwill - continued (2) Provision for impairment of goodwill RMB Balance at the Balance as at the Name of the investees or matters beginning of the Increase in Decrease in end of the forming goodwill year current year current year current year SAPO Photoelectric 9614758.55 - - 9614758.55 Shenzhen MCENTURY Garment Co. Ltd. 2167341.21 - - 2167341.21 Total 11782099.76 - - 11782099.76 18. Long-term deferred expenses RMB Balance at the Increase in the Amortization Balance as atItem beginning of current year amount for the Other decreases the end of thethe year current year current year Decoration and facility renovation 3503660.94 5515370.67 2934915.74 - 6084115.87 costs 19. Deferred tax assets and deferred tax liabilities (1) Deferred tax assets without offset RMB Balance as at the end of the current Balance as at the end of the year previous year Item Deductible temporary Deferred tax Deductible temporary Deferred tax differences Assets differences Assets Provision for credit losses 55500808.39 9874641.13 59994128.15 10538054.68 Provision for asset impairment 146194722.68 21929208.40 132512745.52 19876911.83 Unrealized profits of internal transactions 2056848.93 308527.34 2145963.47 321894.52 Employee compensation payable 4173800.00 1043450.00 4173800.00 1043450.00 Deferred income 95821558.58 14373233.79 96647256.82 14497088.52 Deductible losses 96771113.52 14515667.03 127769387.40 19165408.11 Fair value changes of investments in other equity instruments 14831681.50 3707920.38 14831681.50 3707920.38 Lease liabilities 16381050.71 2457157.61 12177572.68 1826635.90 Changes in fair value of derivative financial liabilities 1278559.35 191783.90 - - Estimated liabilities 9451090.40 1417663.56 - - Total 442461234.06 69819253.14 450252535.54 70977363.94 Based on the Group's profit forecast for the future periods the Group believes that it is highly probable to obtain sufficient taxable income to utilize the above-mentioned deductible temporary differences and deductible losses in the future periods so the relevant deferred tax assets are recognized.- 65 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 19. Deferred tax assets and deferred tax liabilities - continued (2) Deferred tax liabilities without offset RMB Balance as at the end of the current Balance as at the end of the previous year year Item Taxable Taxable temporary Deferred tax Deferred tax differences Liabilities temporary differences Liabilities Difference between initial recognition cost and tax base of 62083693.36 15520923.34 62083693.36 15520923.34 long-term equity investments Fair value changes of investments in other equity instruments 158219043.74 39554760.94 138805043.74 34701260.94 Rent receivable 8532598.56 2133149.64 10108726.81 2527181.70 Right-of-use assets 15338117.86 2300717.68 11999466.57 1799919.99 Total 244173453.52 59509551.60 222996930.48 54549285.97 (3) Deferred tax assets or liabilities listed net amount after write-offs RMB Deduction amount Deduction amount of deferred tax Balance of of deferred tax Balance of Item assets and deferred tax assets assets and deferred tax assets liabilities at the or liabilities after liabilities at the or liabilities after end of the current offset at the end end of the offset at the end of year of the current year previous year the previous year Deferred taxassets (10898741.94) 58920511.20 (10371998.52) 60605365.42 Deferred tax liabilities (10898741.94) 48610809.66 (10371998.52) 44177287.45 (4) Unrecognized deferred tax assets RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Deductible temporary differences 15750990.01 14740965.97 Deductible losses 365594502.67 442263671.30 Total 381345492.68 457004637.27 (5) Deductible losses from unrecognized deferred tax assets will be expired in the following years RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Year 2024 - 69053143.67 2025-- 202683168900.3753989578.07 202710067397.5010067397.50 202813479346.6639988583.76 2029132565644.36129732249.98 203075352814.2475352814.24 2031-- 2032-- 203350960399.5464079904.08 2034-- Total 365594502.67 442263671.30 - 66 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 20. Other non-current assets RMB Balance as at the end of the current year Balance as at the end of the previous year Item Book balance Provision forimpairment Book value Book balance Provision for impairment Book value Advances for projects and equipment 2033785.64 - 2033785.64 3757334.44 - 3757334.44 Investment funds to be liquidated 25760086.27 - 25760086.27 25760086.27 - 25760086.27 Total 27793871.91 - 27793871.91 29517420.71 - 29517420.71 - 67 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 21. Assets with restrictions on the ownership or use right At the end of current year At the end of the previous year Item Book balance Book value Restricted type Restricted condition Book balance Book value Restrictedtype Restricted condition Monetary funds 38844838.96 38844838.96 Restricted Account freezing andright of use guarantee 9305118.06 9305118.06 Restricted Account freezing and right of use guarantee Notes receivable 30291952.76 30291952.76 Restricted Bill endorsement hasright of use not been derecognized 42665954.11 42665954.11 Restricted Bill endorsement has right of use not been derecognized Fixed assets 581895750.64 448156480.33 Restrictedright of use Mortgage 572261261.14 454185881.22 Restricted right of use Mortgage Intangible assets 44770083.00 31200960.01 Restricted Restrictedright of use Mortgage 44770083.00 32092525.33 right of use Mortgage Total 695802625.36 548494232.06 669002416.31 538249478.72 - 68 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 22. Short-term borrowings RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Credit borrowings - 8000000.00 23. Derivative financial liabilities RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Foreign exchange forward contract 1278559.35 - 24. Notes payable RMB Bill type Balance as at the end of Balance as at the end ofthe current year the previous year Bank acceptance bills 31095540.29 31049291.49 The Group had no notes payable due but unpaid at the end of the year. 25. Accounts payable RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Payment for goods 282510771.35 386767637.00 Service fee 15645017.04 13817610.72 Payment for outsourcing processing 3489364.64 4584423.60 Royalties 2006578.00 2207166.50 Others 1160849.52 1171298.42 Total 304812580.55 408548136.24 As at December 31 2024 the Group had no significant accounts payable with aging of over 1 year or overdue. 26. Advances from customers RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Rent and others 1051491.96 1450096.30 As at December 31 2024 the Group had no significant advances from customers with aging of over 1 year. 27. Contract liabilities RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Payment for goods 490562.97 1436943.34 As at December 31 2024 the Group had no significant contract liabilities with aging of more than 1 year.- 69 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 28. Employee compensation payable (1) Presentation of employee compensation payable RMB Balance at the Item beginning of the Increase in Decrease in Balance as at the current year current year end of the currentyear year Short-term compensation 53853081.65 213903704.48 214130906.81 53625879.32 Post-employment benefits - defined contribution plans - 18732853.22 18032853.22 700000.00 Dismissal welfare 2584080.44 6172694.98 6397364.82 2359410.60 Total 56437162.09 238809252.68 238561124.85 56685289.92 (2) Presentation of short-term compensation RMB Balance at the Item beginning of the Increase in Decrease in Balance as at the year current year current year end of the current year Salaries bonuses allowances and subsidies 50484811.72 190224348.48 189308677.27 51400482.93 Employee welfare expenses - 6936747.83 6936747.83 - Social insurance premiums - 4740283.18 4740283.18 - Including: medical insurance premiums - 3516302.65 3516302.65 - Maternity insurance premiums - 572355.25 572355.25 - Work-related injury insurance premiums - 651625.28 651625.28 - Housing provident fund - 8872644.55 8872644.55 - Union funds and employee education funds 3368269.93 3129680.44 4272553.98 2225396.39 Total 53853081.65 213903704.48 214130906.81 53625879.32 (3) Presentation of defined contribution plans RMB Balance at the Item beginning of the Increase in Decrease in Balance as at the year current year current year end of the current year Basic endowment insurance premiums - 15756686.06 15056686.06 700000.00 Supplementary endowment insurance premiums - 2765981.24 2765981.24 - Unemployment insurance premium - 210185.92 210185.92 - Total - 18732853.22 18032853.22 700000.00 The Group participates in the endowment insurance and unemployment insurance plans established by government agencies in accordance with the regulations. According to the plans the Group makes contributions to such plans in accordance with the prescribed standards. Except for the above monthly contributions the Group has no further payment obligations. The corresponding expenses are included in the current profit or loss or the cost of related assets when incurred.The Group shall pay RMB 15756686.06 and RMB 210185.92 to the endowment insurance and unemployment insurance plans respectively for the current year (2023: RMB 14207148.80 and RMB 296839.87). As at December 31 2024 the Group still had RMB 700000.00 of payable contributions due but not paid to the endowment insurance plan during the reporting period and the relevant payable contributions are expected to be paid after the reporting period.- 70 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 29. Taxes payable RMB Taxation Balance as at the end of Balance as at the end ofthe current year the previous year Corporate income tax 4720967.29 2080849.81 Individual income tax 751443.34 1080628.82 Value-added tax 592143.28 582961.29 Other taxes 789176.93 596455.22 Total 6853730.84 4340895.14 30. Other payables (1) Other payables by nature of payment RMB Item Balance as at the end of the Balance as at the end of thecurrent year previous year Engineering equipment payment 56213373.95 67176881.34 Current accounts 53333604.97 56444481.12 Guarantee and deposits 37775687.75 48208919.61 Others 12974323.31 12698062.48 Total 160296989.98 184528344.55 (2) As at December 31 2024 the Group had no significant other payables with aging of more than 1 year or overdue. 31. Non-current liabilities maturing within one year RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Long-term borrowings maturing within one year (Note (V) 33) 47011978.04 102612497.53 Lease liabilities maturing within one year (Note (V) 34)6884486.595490255.46 Estimated liabilities due within one year 9451090.40 - Total 63347555.03 108102752.99 32. Other current liabilities RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Endorsed but undue acceptance bills 30291952.76 42665954.11 Payables for returned goods 23747757.33 37244449.90 Output tax to be carried forward in the value-added tax 32312.18 172073.21 Total 54072022.27 80082477.22 - 71 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 33. Long-term borrowings RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Interest rate range Guaranteed borrowings (Note) 209400848.04 608190812.09 3.36%-3.41% Total 209400848.04 608190812.09 Less: long-term borrowings maturing within one year 47011978.04 102612497.53 Long-term borrowings due after one year 162388870.00 505578314.56 Note: SAPO Photoelectric a subsidiary of the Company obtained the loan by mortgaging the real estate such as the plant it held and the Company and Hengmei Optoelectronics Co. Ltd. provided 60% and 40% joint and several liability guarantee for the loan respectively. 34. Lease liabilities RMB Item Balance as at the end of Balance as at the end ofthe current year the previous year Lease liabilities 16381050.71 12177572.68 Total 16381050.71 12177572.68 Less: Lease liability maturing within one year 6884486.59 5490255.46 Lease liabilities due after one year 9496564.12 6687317.22 The Group's lease liabilities are presented as follows according to the maturity of undiscounted remaining contractual obligations: RMB Within 1 month 1- 3 months 3 - 12 months 1 - 5 years Over 5 years Total Balance as at the end of the current 1105714.51 2425877.50 3879671.64 7808943.06 3098158.97 18318365.68 year Balance as at the end of the 513149.55 2012582.22 3284024.84 5822333.46 1672592.08 13304682.15 previous year 35. Deferred income RMB Balance at the Increase in Decrease in Balance as at theItem beginning of the current year current year end of the current Formation causesyear year Government 97485986.89 15265000.00 16401790.63 96349196.26 Governmentgrants grants received 36. Equity RMB Changes in the current year Balance at the Conversion of Balance as at the Item beginning of the New shares Bonus issue provident Others Sub-total end of theyear issued fund into current year shares Total shares 506521849.00 - - - - - 506521849.00 - 72 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 37. Capital reserve RMB Balance at the Item beginning of the Increase in current Decrease in current Balance as at the year year end of the currentyear year Equity premium 1826482608.54 - - 1826482608.54 Other capital reserves 135117216.09 - - 135117216.09 Total 1961599824.63 - - 1961599824.63 38. Other comprehensive income RMB Amount for the current year Less: retained Less: the income amount included included in in other Attribut other compreh able toBalance at the Amount before Item beginning of income tax this comprehensi ensive Attributable to minorit Balance as at theincome Less: income y end of the current the year year ve income inprior period in prior tax expenses parent company periods after tax shareho year and lders transferred and after to current transferr tax profit or loss ed tocurrent profit or loss I. Other comprehensive income that 106877807.32 cannot be reclassified into profit or loss 92317307.32 19414000.00 - - 4853500.00 14560500.00 - 1. Changes in fair value of other equity instrument investments 92317307.32 19414000.00 - - 4853500.00 14560500.00 - 106877807.32 II. Other comprehensive income to be reclassified into profit or loss later 1290073.49 - 1290073.49 - - (1290073.49) - - 1. Changes in the fair value of other debt investments - - - - - - - - 2. Translation differences of foreign currency financial statements 1290073.49 - 1290073.49 - - (1290073.49) - - Total of other comprehensive income 93607380.81 19414000.00 1290073.49 - 4853500.00 13270426.51 - 106877807.32 39. Surplus reserves RMB Balance at the Item beginning of the Increase in current Decrease in current Balance as at the year year end of the currentyear year Statutory surplus reserve 104262315.64 - - 104262315.64 40. Undistributed profits RMB Item Current year Previous year Undistributed profits at the beginning of the year before adjustment 216160896.14 170636610.95 Total adjusted undistributed profits at the beginning of the year - - Adjusted undistributed profit at the beginning of the year 216160896.14 170636610.95 Plus: net profit attributable to shareholders of the parent company in the current year 89371134.24 79268250.45 Less: Withdrawal of statutory surplus reserves - 3352654.32 Distribution of dividends of ordinary shares (Note) 32923916.72 30391310.94 Undistributed profits at the end of the year 272608113.66 216160896.14 Note: according to the resolution of the General Meeting on May 29 2024 the Company distributed cash dividends of RMB 0.65 (including tax) for every 10 shares based on the share capital of 506521849 shares as at December 31 2023 with a total cash dividends of RMB 32923916.72 (tax inclusive).- 73 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 41. Operating revenue and operating costs (1) Operating revenue and operating costs RMB Item Amount for the current year Amount for the previous yearRevenue Cost Revenue Cost Primary business 3275150434.05 2748312498.75 3031175008.58 2524464550.09 Other business 60132574.63 47547436.07 48503366.87 37167294.44 Total 3335283008.68 2795859934.82 3079678375.45 2561631844.53 (2) Primary business by product RMB Amount for the current year Amount for the previous year Product type Income from Cost of primary Income from Cost of primary primary business business primary business business Polarizer sales business 3161332478.08 2720719735.99 2885625542.77 2463137348.05 Property leasing and others 113817955.97 27592762.76 145549465.81 61327202.04 Total 3275150434.05 2748312498.75 3031175008.58 2524464550.09 (3) Primary business by region RMB Amount for the current year Amount for the previous year Main business area Income from Cost of primary Income from Cost of primary primary business business primary business business Domestic 3113083695.45 2621542725.57 2914588072.35 2427944202.03 Overseas 162066738.60 126769773.18 116586936.23 96520348.06 Total 3275150434.05 2748312498.75 3031175008.58 2524464550.09 (4) Description of performance obligations The Group's sales of goods are mainly the production and sales of polarizers and textiles-related goods. For goods sold to customers the Group recognizes revenue when the right of control of the goods is transferred that is when the goods are delivered to the designated place of the other party and signed by the other party. The Group recognizes a receivable when the goods are delivered to the customer because the delivery of the goods to the customer represents an unconditional right to receive the contractual consideration and the maturity of the payment depends only on the passage of time. When the customer makes a prepayment for goods the Group recognizes the transaction amount received as a contract liability and recognizes the revenue when the goods are delivered to the customer.The Group provides property services to customers and such services represent performance obligations performed over a period of time. For property service the Group recognizes revenue in the course of providing property service. (5) Description of allocation to remaining performance obligations As of December 31 2024 the amount of contract liabilities corresponding to the performance obligations that the Group has already signed contracts for but has not yet fulfilled or has not fully fulfilled is RMB 490562.97 which will be recognized as revenue when the customer obtains the control over goods.- 74 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 42. Taxes and surcharges RMB Item Amount for the Amount for thecurrent year previous year Property taxes 7240576.84 6184638.83 Urban maintenance and construction tax 397643.06 555230.22 Education surcharge 287055.45 400403.17 Other taxes 2310230.30 2153350.91 Total 10235505.65 9293623.13 43. Selling and distribution expenses RMB Item Amount for the Amount for thecurrent year previous year Employee compensation 15245568.88 17089203.74 Sales service fee 19491891.54 10639607.95 Business entertainment expenses 1117751.47 972733.63 Others 6405391.58 5494125.29 Total 42260603.47 34195670.61 44. G&A expenses RMB Item Amount for the Amount for thecurrent year previous year Employee compensation 90301081.26 90991755.13 Depreciation cost 10962929.91 11118057.18 Professional service fees 10520874.85 8841449.74 Amortization of intangible assets 4575688.69 4891672.68 Property leasing and utilities 2441383.42 4086627.39 Business entertainment expenses 1193877.91 1439231.97 Others 14351985.54 13002616.44 Total 134347821.58 134371410.53 45. R&D expenses RMB Item Amount for the Amount for thecurrent year previous year Employee compensation 15844594.49 14827264.16 Material consumption 83483679.76 85216243.35 Depreciation cost 3275385.23 3389328.35 Others 1208163.43 1220205.06 Total 103811822.91 104653040.92 The Group has no development expenses of R&D projects that meet the capitalization requirements.- 75 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 46. Financial expenses RMB Item Amount for the current Amount for the previousyear year Interest expenses (Note) 17858022.73 27339804.17 Less: interest income 7272362.76 12947471.64 Exchange differences (3772940.12) 4332702.63 Service fee and others 5308436.20 5674466.00 Total 12121156.05 24399501.16 Note: The interest expenses of the lease liabilities in 2024 is RMB 721945.56. 47. Other income RMB Classification by nature Amount for the current Amount for the previousyear year Transfer-in of deferred income 16401790.63 22107734.21 Support funds for industry development (Note 1) 7988744.44 11049910.96 Support funds for enterprise development (Note 2) 989098.49 553455.00 Tax incentives 16014588.22 16881612.68 Others 89885.75 147651.06 Total 41484107.53 50740363.91 Note 1: The support funds for industry development mainly include the 2024 Special Science and Technology Innovation Funds (the first batch) funded by the Science and Technology Innovation Bureau of Pingshan District Shenzhen City the Foreign Trade Quality Growth Support Plan of the Bureau of Commerce and the Industry Standard Formulation Project Subsidies of the Shenzhen Administration for Market Regulation.Note 2: The support funds for enterprise development mainly include the Steady Growth Funds of Industry and Information Technology Bureau of Shenzhen Municipality and the One-time Subsidy for Job Expansion of Guangdong Provincial Social Insurance Fund Administration. 48. Investment (loss) income RMB Item Amount for the current Amount for the previousyear year Losses on long-term equity investments accounted for under equity method (10701895.08) (6898983.89) Investment income from disposal of long-term equity investments 833613.28 - Investment income obtained during holding the financial assets held for trading 13846181.90 15519035.33 Investment income (loss) from derecognition of derivative financial liabilities (6454000.00) - Dividend income from investments in other equity instrument during the holding period 2310786.01 2208584.12 Total (165313.89) 10828635.56 - 76 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 49. Gains from changes in fair value RMB Sources of gains from changes in fair value Amount for the Amount for thecurrent year previous year Financial assets held for trading 2413062.80 2151780.82 Derivative financial liabilities (1278559.35) - Total 1134503.45 2151780.82 50. Credit loss gains RMB Item Amount for the Amount for thecurrent year previous year Gains on impairment of accounts receivable (Note (V) 4 (2)) 5093840.35 4133136.51 Gains on impairment of other receivables (Note (V) 7 (3)) 6606.31 402638.63 Total 5100446.66 4535775.14 51. Asset impairment loss RMB Item Amount for the Amount for thecurrent year previous year Inventory depreciation loss (123538967.06) (126089709.42) Fixed asset impairment loss (6863474.54) - Other asset impairment loss (2020667.15) - Total (132423108.75) (126089709.42) 52. Non-operating revenue RMB Item Amount for the Amount for the Amount included incurrent year previous year the current non- recurring profit or loss Gains from unclaimed payables 1439654.31 768398.45 1439654.31 Liquidated damages 275672.99 252000.00 275672.99 Insurance compensation 24911.31 193275.48 24911.31 Gains from the damage and scrapping of non-current assets 341.42 - 341.42 Others 64506.89 236205.33 64506.89 Total 1805086.92 1449879.26 1805086.92 - 77 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 53. Non-operating expenses RMB Amount for the Amount for the Amount included inItem current year previous year the current non-recurring profit or loss Losses on scrapping of non-current assets 51361.87 115541.99 51361.87 Amercement outlay 44000.00 42319.72 44000.00 Compensation expenses 468146.00 7926787.08 468146.00 Other losses 134509.84 121152.72 134509.84 Total 698017.71 8205801.51 698017.71 54. Income tax expenses (1) List of income tax expenses RMB Item Amount for the current Amount for theyear previous year Income tax expenses for the current period 8562225.60 8563917.13 Deferred tax expenses 1264876.43 10843814.34 Total 9827102.03 19407731.47 (2) Adjustment process of accounting profits and income tax expenses RMB Item Amount for the Amount for thecurrent year previous year Total profits 152883868.41 146544210.05 Income tax expenses calculated at statutory tax rate 38220967.10 36636052.51 Influence of different tax rates applicable to subsidiaries (15431945.83) (14393929.80) Influence of adjustments to the income tax for the prior years (27243.77) 27700.05 Influence of non-taxable income (3079800.79) (1126262.45) Influence of nondeductible costs expenses and losses 5591965.60 2266174.69 Utilization of unrecognized deductible losses and deductible temporary differences from prior periods and their tax effects (7061678.51) (25587.79) Tax effects of unrecognized deductible losses and deductible temporary differences 4078341.28 10154045.89 Changes in deferred tax assets/liabilities at the beginning of the period due to tax rate adjustments - (21128.84) Additional deduction for R&D expenses (12458381.02) (13995916.51) Others (5122.03) (113416.28) Income tax expenses 9827102.03 19407731.47 - 78 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 55. Notes to items in statement of cash flows (1) Cash related to operating activities Other cash received related to operating activities RMB Item Amount for the Amount for thecurrent year previous year Letter of credit guarantee and deposit 30652489.87 37450879.69 Interest income 9057486.70 18578870.77 Government grants 24242842.93 16029942.02 Current accounts and others 23056150.45 15217631.42 Total 87008969.95 87277323.90 Other cash paid related to operating activities RMB Item Amount for the Amount for thecurrent year previous year Letter of credit guarantee and deposit 57908823.39 34639361.27 Out-of-pocket expenses 68667614.18 71894532.84 Current accounts and others 27179768.77 10910080.05 Total 153756206.34 117443974.16 (2) Cash related to investing activities Other cash received related to significant investing activities RMB Item Amount for the Amount for thecurrent year previous year Structural deposits 950000000.00 950000000.00 Monetary fund 747000000.00 245000000.00 Certificates of deposit and others - 259000000.00 Total 1697000000.00 1454000000.00 Other cash paid related to significant investing activities RMB Item Amount for the Amount for thecurrent year previous year Structural deposits 950000000.00 1400000000.00 Monetary fund 649000000.00 290500000.00 Foreign exchange forward contract 6454000.00 - Certificates of deposit and others - 150000000.00 Total 1605454000.00 1840500000.00 - 79 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 55. Notes to items in statement of cash flows - continued (2) Cash related to investing activities - continued Other cash received related to investing activities RMB Item Amount for the Amount for thecurrent year previous year Wealth management investment and structured deposits 1697000000.00 1454000000.00 Other cash paid related to investing activities RMB Item Amount for the Amount for thecurrent year previous year Wealth management investment and structured deposits 1605454000.00 1840500000.00 (3) Cash related to financing activities Other cash paid related to financing activities RMB Item Amount for the Amount for thecurrent year previous year Lease payments 9508462.57 8776024.71 Changes in various liabilities arising from financing activities RMB Balance at the Increase in current year Decrease in current year Balance as at the Item beginning of the Cash changes Non-cash Cash changes Non-cash end of theyear changes changes current year Short-term borrowings 8000000.00 - - 8000000.00 - - Long-term borrowings (Note) 608190812.09 - 18176583.78 416966547.83 - 209400848.04 Lease liabilities (Note) 12177572.68 - 13711940.60 9508462.57 - 16381050.71 Total 628368384.77 - 31888524.38 434475010.40 - 225781898.75 Note: long-term borrowings and lease liabilities include those maturing within one year. (4) The Group does not present cash flows on a net basis. (5) The Group has no significant activities that do not involve current cash receipts and payments but affect the financial position of the enterprise or may affect the cash flows of the enterprise in the future.- 80 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 56. Supplementary information to statement of cash flows (1) Supplementary information to the statement of cash flows RMB Supplementary information Amount for the Amount for thecurrent year previous year 1. Adjustment of net profit to cash flows from operating activities: Net profit 143056766.38 127136478.58 Plus: provision for assets impairment 132423108.75 126089709.42 Provision for credit losses (reversal) (5100446.66) (4535775.14) Depreciation of fixed assets and investment properties 237717328.95 235884938.02 Amortization of right-of-use assets 9651343.75 8257857.90 Amortization of intangible assets 4575688.69 4891672.68 Amortization of long-term deferred expenses 2934915.74 2160430.42 Losses (gains) from disposal of fixed assets intangible assets and other long-term assets - (1.72) Losses (gains) on retirement of non-current assets 51020.45 113290.32 Losses from changes in fair value (income) (1134503.45) (2151780.82) Financial expenses (income) 17301161.66 26883671.86 Investment loss (income) 165313.89 (10828635.56) Decrease (increase) in deferred tax assets 1684854.22 9218448.87 Increase (decrease) in deferred tax liabilities (419977.79) 1625365.47 Decrease (increase) in inventories (176903495.67) (304034232.92) Decrease (increase) in operating receivables 29434877.96 (126515773.08) Increase (decrease) in operating payables (164173431.78) 90571075.50 Net cash flows from operating activities 231264525.09 184766739.80 2. Net changes in cash and cash equivalents: Ending balance of cash and cash equivalents 302084839.35 461420457.33 Less: beginning balance of cash and cash equivalents 461420457.33 874474834.46 Net increase (decrease) in cash and cash equivalents (159335617.98) (413054377.13) (2) Composition of cash and cash equivalents RMB Item Balance as at the end Balance as at the endof the current year of the previous year I. Cash 302084839.35 461420457.33 Including: cash on hand 4751.69 1710.40 Unrestricted bank deposits 302080087.66 461418746.93 Other unrestricted monetary funds - - II. Cash equivalents - - III. Balance of cash and cash equivalents at the end of the year 302084839.35 461420457.33 (3) As of the end of the year the Group had no cash and cash equivalents with restricted use that were still presented as such.- 81 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 56. Supplementary information to the statement of cash flows - continued (4) Monetary funds other than cash and cash equivalents RMB Item Balance as at the end Balance as at the endof the current year of the previous year Reason Bill and L/C guarantee 35443338.96 5905118.06 Not available forpayment at any time Demand interest and 7-day notice deposit interest 31765.51 1548872.61 Not available for payment at any time Others 3401500.00 3400000.00 Account freezing Total 38876604.47 10853990.67 57. Monetary items in foreign currency (1) Foreign currency monetary items RMB Foreign currency Item balance at the end of Exchange rate of Conversion at the end conversion of the current yearthe current year RMB balance Monetary funds 84414773.46 Including: USD 5628812.10 7.1884 40462152.89 JPY 934188594.29 0.0462 43190341.28 HKD 823195.78 0.9260 762279.29 Accounts receivable 38996397.54 Including: USD 5389057.25 7.1884 38738699.13 HKD 278280.00 0.9260 257698.41 Other receivables 506973.56 Including: USD 70526.62 7.1884 506973.56 Accounts payable 165329381.79 Including: USD 2549681.14 7.1884 18328127.89 JPY 3179297798.00 0.0462 146988475.10 HKD 13800.00 0.9260 12778.80 Other payables 6609813.60 Including: USD 879786.00 7.1884 6324253.68 JPY 5555131.00 0.0462 256830.37 HKD 31025.43 0.9260 28729.55 58. Lease (1)As a lessee The Group leases a number of assets including houses and buildings for lease terms of 1 to 10 years. The above right- of-use assets cannot be used for purposes such as borrowing mortgages guarantees etc.The Group had no variable lease payments that were not included in the measurement of lease liabilities.- 82 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (V) Notes to financial statements - continued 58. Leases - continued (1) As a lessee - continued The short-term lease expenses subject to simplified accounting treatment and recognized in the current profit or loss in this year amounted to RMB 950508.89 (previous year: RMB 558957.38).The total cash outflows related to leases in the current year amounted to RMB 10458971.46 (previous year: RMB 9334982.09). (2) As a lessor Operating lease as lessor RMB Including: revenue related Item Lease income to variable lease paymentsnot included in lease receipts Buildings and constructions 96066371.44 - The operating leases of the Group as the lessor are related to houses and buildings with lease terms ranging from 1 to 15 years.The revenue related to operating leases in the current year amounted to RMB 96066371.44 (previous year: RMB 97558143.88) of which the revenue related to variable lease payments not included in the lease receipts amounted to RMB 0 (previous year: RMB 0).RMB Undiscounted lease receipts Item Amount at the end of Amount at the end of the current year previous year The first year after the balance sheet date 66825466.35 74399477.80 The second year after the balance sheet date 49946457.62 54475653.29 The third year after the balance sheet date 31103495.38 44564404.34 The fourth year after the balance sheet date 8785825.58 29708115.33 The fifth year after the balance sheet date 6625510.75 9346233.32 Subsequent years 5106929.55 7327310.40 Total undiscounted lease receipts 168393685.23 219821194.48 - 83 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024（VI） R&D expenditures (1) Presented by nature of expenses RMB Item Amount for the current Amount for the previousyear year Employee compensation 15844594.49 14827264.16 Material consumption 83483679.76 85216243.35 Depreciation cost 3275385.23 3389328.35 Others 1208163.43 1220205.06 Total 103811822.91 104653040.92 Including: expensed R&D expenditures 103811822.91 104653040.92 Capitalized R&D expenditures - - (2) The Group has no development expenses of R&D projects that meet the capitalization requirements. (3) The Group has no significant outsourced projects under research.（VII） Changes in the scope of consolidation The consolidation scope of the Group has not changed.（VIII）Equity in other entities 1. Interest in subsidiary (1) Structure of the enterprise group Shareholding ratio of Method Name of subsidiaries Main premise Registered capital Registration Business nature the Company (%) of(RMB) place Direct Indirect acquisition Shenzhen Lisi Industrial Development Co. Ltd. Shenzhen RMB 2360000.00 Shenzhen Property leasing 100.00 - Establish ment Shenzhen Huaqiang Hotel Co. Ltd. Shenzhen RMB 10005300.00 Shenzhen Property leasing 100.00 - Establish ment Shenzhen Shenfang Property Management Co. Ltd. Shenzhen RMB 1600400.00 Shenzhen Property management 100.00 - Establish ment Shenzhen MCENTURY Shenzhen RMB 13000000.00 Shenzhen Production and sales of 100.00 - EstablishGarment Co. Ltd. textiles ment Shenzhen Shenfang Sungang Property Management Co. Shenzhen RMB 1000000.00 Shenzhen Property management 100.00 - Establish Ltd. ment SAPO Photoelectric Shenzhen RMB 583333333.00 Shenzhen Production and sales of Acquisitipolarizers 60.00 - on SATO (Hong Kong) Limited Hong Kong HKD 10000.00 Hong Kong Polarizer sales - 100.00 Establishment - 84 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (VIII) Interests in other entities - continued 1. Interests in subsidiary - continued (2) Significant non-wholly-owned subsidiaries RMB Profit or loss Dividends declared to Name of Shareholding ratio by attributable to be distributed to Balance of minority subsidiaries minority shareholders minority shareholders minority shareholders interests at the end of in the current year in the current year the current year SAPO Photoelectric 40.00% 53685632.14 - 1283450723.88 (3) Key financial information of significant non-wholly-owned subsidiaries RMB SAPO Photoelectric Balance as at the end Balance as at the end Item of the current year/ of the previous year/ Amount for the Amount for the current year previous year Current assets 2039673042.84 2224998868.32 Non-current assets 1998903130.31 2215651449.74 Total assets 4038576173.15 4440650318.06 Current liabilities 567603106.30 762685435.65 Non-current liabilities 267706992.70 608912888.60 Total liabilities 835310099.00 1371598324.25 Operating revenue 3230006072.51 2944147907.27 Net profit 134214080.34 119670570.33 Total comprehensive income 134214080.34 119968303.83 Cash flows from operating activities 205666636.23 168163478.05 2. Equity in joint ventures or associates Summarized financial information of insignificant joint ventures and associates RMB Balance as at the end Balance as at the end Item of the current year/ of the previous year/Amount for the Amount for the current year previous year Joint ventures: Total of investment book value 111555887.28 122370494.08 Total amounts of the following items calculated at shareholding ratio - Net profit (loss) (10814606.80) (7135777.68) -Other comprehensive income - - -Total comprehensive income (10814606.80) (7135777.68) Associates: Total of investment book value 3272138.76 5311526.62 Total amounts of the following items calculated at shareholding ratio -Net profit 112711.72 236793.79 -Other comprehensive income - 99168.85 -Total comprehensive income 112711.72 335962.64 - 85 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024（IX） Government grants (1) As at December 31 2024 the Group had no government grants recognized at the amount receivable. (2) Liability items involving government grants RMB Amount at the Amount included in Amount included Liabilities beginning of the New grants in the non-operating in other income Other changes in Amount at the end of Related to assets/ year current year revenue in the in the current the current year current year Related to income current year year Deferred income 97485986.89 15265000.00 16401790.63 - 96349196.26 Related to assets Total 97485986.89 15265000.00 - 16401790.63 - 96349196.26 (3) Government grants included in the current profit or loss RMB Grants Amount for the current Amount for theyear previous year Other income 25379633.56 33711100.17 （X） Risks associated with financial instruments The group's main financial instruments include monetary funds financial assets held for trading notes receivable accounts receivable receivables financing other receivables other equity instrument investments short-term borrowings derivative financial liabilities notes payable accounts payable other payables other current liabilities and long-term borrowings etc. At the end of the year the financial instruments held by the group are as follows and the details are described in note (v). Risks associated with these financial instruments and the risk management policies adopted by the group to mitigate these risks are described below. The group's management manages and monitors these exposures to ensure that the risks are controlled within certain limits.- 86 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (X) Risks related to financial instruments - continued RMB Item Amount at the end of Amount at the end of thecurrent year previous year Financial assets Measured at fair value through current profit or loss Financial assets held for trading 731419904.42 821946114.68 Measured at fair value through other comprehensive income Receivables financing 6804603.68 22839459.13 Other equity instrument investments 165402900.00 145988900.00 Measured at amortized costs Monetary funds 340961443.82 472274448.00 Notes receivable 47305221.88 50963943.01 Accounts receivable 863731936.89 820134833.95 Other receivables 3596543.96 3219287.77 Financial liabilities Measured at fair value through current profit or loss Derivative financial liabilities 1278559.35 - Measured at amortized costs Short-term borrowings - 8000000.00 Notes payable 31095540.29 31049291.49 Accounts payable 304812580.55 408548136.24 Other payables 160296989.98 184528344.55 Other current liabilities 30291952.76 42665954.11 Long-term borrowings 209400848.04 608190812.09 The group uses sensitivity analysis techniques to analyze the possible impact of reasonable and possible changes in risk variables on the current profit or loss and shareholders' equity. As any risk variable seldom changes in isolation and the correlation between the variables will have a significant effect on the final affected amount of the change of a risk variable the following contents are carried out under the assumption that the change of each variable is independently: 1. Risk management objectives policies and procedures and changes in the current year The group's objective in risk management is to achieve an appropriate balance between risk and return minimize the negative impact of risk on the group's operating performance and maximize the interests of shareholders and other equity investors. Based on this risk management objective the basic strategy of the group's risk management is to identify and analyze various risks faced by the group establish an appropriate risk tolerance bottom line and conduct risk management and timely and reliably supervise various risks to control risks within a limited scope.- 87 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (X) Risks related to financial instruments - continued 1. RISK MANAGEMENT OBJECTIVES POLICIES AND PROCEDURES AND CHANGES IN THE CURRENT YEAR - CONTINUED 1.1 MARKET RISK 1.1.1 FOREIGN EXCHANGE RISK Foreign exchange risk refers to the risk of losses arising from the exchange rate fluctuation. The Group's exposure to foreign exchange risk is mainly related to the USD the JPY and the HKD. Except for some of the Group's import purchases and export sales in Chinese mainland which were mainly settled in USD JPY and HKD the Group's other major business activities were settled in RMB.As of December 31 2024 except for the foreign currency monetary items in Note (V) 57 the assets and liabilities of the Group were all in RMB. The foreign currency balances of assets and liabilities (converted into RMB) listed in the table below may expose the Group to foreign exchange risks that could impact its operating performance.RMB Balance as at the end of the current Item year Assets Liabilities USD 79707825.58 24652381.57 JPY 43190341.28 147245305.47 HKD 1019977.70 41508.35 The Group closely monitors the impact of exchange rate changes on the Group's foreign exchange risk and will take measures to avoid foreign exchange risk according to the actual situation.Sensitivity analysis of foreign exchange risk With other variables unchanged the pre-tax impact of reasonable changes in exchange rates on the current profit or loss and shareholders' equity is as follows: RMB CURRENT YEAR PREVIOUS YEAR ITEM FLUCTUATION INEXCHANGE RATE IMPACT ON IMPACT ON IMPACT ON IMPACT ONPROFIT SHAREHOLDERS PROFIT SHAREHOLDERS ' EQUITY ' EQUITY ALL FOREIGN REVALUATION CURREN AGAINST RMB BY (2401052.54) (2401052.54) (11522564.42) (11522564.42) CIES 5% ALL FOREIGN DEPRECIATION CURREN AGAINST RMB BY 2401052.54 2401052.54 11522564.42 11522564.42 CIES 5% 1.1.2. Interest rate risk - risk of changes in cash flows The Group's risk of changes in cash flows of financial instruments due to changes in interest rates is mainly related to bank borrowings with floating rates. The Group continues to closely monitor the impact of interest rate changes on the Group's interest rate risk. The Group's policy is to maintain the floating rate of these borrowings and there are currently no interest rate swap arrangements.- 88 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (X) Risks related to financial instruments - continued 1. RISK MANAGEMENT OBJECTIVES POLICIES AND PROCEDURES AND CHANGES IN THE CURRENT YEAR - CONTINUED 1.1 MARKET RISK - CONTINUED 1.1.2. Interest rate risk - risk of changes in cash flows - continued SENSITIVITY ANALYSIS OF INTEREST RATE RISK: WITH OTHER VARIABLES UNCHANGED THE PRE-TAX IMPACT OF REASONABLE CHANGES IN INTEREST RATES ON THE CURRENT PROFIT OR LOSS AND SHAREHOLDERS' EQUITY IS AS FOLLOWS: RMB CURRENT YEAR PREVIOUS YEAR FLUCTUATION ITEM IN EXCHANGE IMPACT ON IMPACT ON IMPACT ON IMPACT ON RATE PROFIT SHAREHOLDER PROFIT SHAREHOLDER S' EQUITY S' EQUITY FLOATING RATE UP 1% (2092051.50) (2092051.50) (6154214.55) (6154214.55) BORROWINGS FLOATING RATE DOWN 1% 2092051.50 2092051.50 6154214.55 6154214.55 BORROWINGS 1.2. Credit risk As of December 31 2024 the maximum credit risk exposure that may cause financial losses to the Group mainly comes from the losses of the Group's financial assets due to the failure of the other party to the contract to perform its obligations including: monetary funds financial assets held for trading notes receivable accounts receivable receivables financing and other receivables. On the balance sheet date the book value of the Group's financial assets represents its maximum credit risk exposure.In order to reduce the credit risk the Group arranges special personnel to determine the credit line conduct credit approval and implement other monitoring procedures to ensure that necessary measures are taken to recover overdue debts. In addition the Group reviews the recovery of financial assets on each balance sheet date to ensure that adequate provision for credit losses has been made for the relevant financial assets. Therefore the management of the Group believes that the credit risk assumed by the Group has been greatly reduced.The Group's monetary funds are deposited in banks with high credit ratings so the monetary funds only have low credit risk.As of December 31 2024 the balance of accounts receivable from the top five customers of the Group was RMB 559026608.51 accounting for 61.96% of the balance of accounts receivable of the Group. In addition the Group has no other significant credit risk exposure concentrated in a single financial asset or a portfolio of financial assets with similar characteristics. 1.3. Liquidity risk When managing liquidity risk the Group maintains cash and cash equivalents that the management believes are sufficient and monitors them to meet the Group's operational needs and reduce the impact of fluctuations in cash flows.The Group's management monitors the use of bank borrowings and ensures compliance with loan agreements.- 89 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (X) Risks related to financial instruments - continued 1. RISK MANAGEMENT OBJECTIVES POLICIES AND PROCEDURES AND CHANGES IN THE CURRENT YEAR - CONTINUED 1.3. Liquidity risk - continued AS AT DECEMBER 31 2024 THE UNUSED COMPREHENSIVE BANK CREDIT LINE OF THE GROUP WAS RMB 1380340000 THE GROUP'S FINANCIAL LIABILITIES HELD ARE PRESENTED AS FOLLOWS BASED ON THE MATURITY OF UNDISCOUNTED REMAINING CONTRACTUAL OBLIGATIONS: RMB Item Within 1 year 1 - 5 years Over 5 years Total Notes payable 31095540.29 - - 31095540.29 Accounts payable 304812580.55 - - 304812580.55 Other payables 160296989.98 - - 160296989.98 Other current liabilities 30291952.76 - - 30291952.76 Long-term borrowings 52192649.82 169663448.78 - 221856098.60 Lease liabilities 7411263.65 7808943.06 3098158.97 18318365.68 Derivative financial liabilities 1278559.35 - - 1278559.35 2. Transfer of financial assets 2.1 Classification of transfer methods RMB Transfer Nature of transferred Amount of method financial assets transferred financial Derecognition Judgment basis for derecognition assets After the accounts receivable is factored the factor Factoring Accounts receivable 59923300.74 Derecognized has no right to recover from the Group and almostall the risks and rewards of the ownership of the accounts receivable have been transferred The credit risk level of the acceptance bank of the Transfer by Outstanding bank bank acceptance bill transferred by endorsement is endorsemen acceptance bills classified 34926518.99 Derecognized relatively high and almost all the risks and t as receivables financing rewards of the ownership of the corresponding receivables financing have been transferred The credit risk level of the acceptance bank of the Transfer by Outstanding bank bank acceptance bill transferred by endorsement is endorsemen acceptance bills classified 30291952.76 Not derecognized not high and almost all the risks and rewards of t as notes receivable the ownership of the relevant notes receivable are retained Total 125141772.49 2.2 Financial assets derecognized due to transfer RMB Item Transfer method Amount of Gains or losses of financial assets derecognized related tofinancial assets derecognition Receivables financing Transfer byendorsement 34926518.99 - Accounts receivable Factoring 59923300.74 - Total 94849819.73 - - 90 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (X) Risks related to financial instruments - continued 2. Transfer of financial assets - continued 2.3 Transfer of financial assets with continued involvement RMB Amount of assets Amount of Item Asset transfer arising from liabilities arisingmethod continued from continued involvement involvement Notes receivable Transfer byendorsement 30291952.76 30291952.76 Total 30291952.76 30291952.76（XI） Disclosure of fair value 1. Fair value of assets and liabilities measured at fair value at the end of the year RMB Fair value at the end of current year Item Measured at the Measured at the Measured at the fair value of the fair value of the fair value of the Total 1st level 2nd level 3rd level Continuous fair value measurement (I) Financial assets held for trading - 731419904.42 - 731419904.42 (II) Receivables financing - - 6804603.68 6804603.68 (III) Other equity instrument investments - - 165402900.00 165402900.00 Total assets constantly measured at fair value - 731419904.42 172207503.68 903627408.10 (IV) Derivative financial liabilities - 1278559.35 - 1278559.35 Total liabilities constantly measured at fair value - 1278559.35 - 1278559.35 2. Qualitative and quantitative valuation techniques and important parameters of sustainable and non- sustainable items measured on the basis of fair value of level 2 RMB Item Fair value at theend of current Valuation techniques Input value year Financial assets held for trading 731419904.42 Discounted cash flow method Expected rate of return The contracted delivery exchange rate Derivative financial 1278559.35 Discounted cash flow under forward foreign exchange contractsliabilities method and the market forward exchange rate as of the balance sheet date 3. Qualitative and quantitative valuation techniques and important parameters of sustainable and non- sustainable items measured on the basis of fair value of level 3 RMB Item Fair value at the endof current year Valuation techniques Input value Receivables financing 6804603.68 Discounted cash flow method Discount rate Comparable Public Company Method P/B ratio of similar listedOther equity instrument investments 165402900.00 companies Comparable earnings method Market price Statement adjustment method Book value - 91 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (XI) Disclosure of fair value Disclosure of fair value - continued 4. Condition of fair value of financial assets and financial liabilities not measured at fair value Financial assets and liabilities not measured at fair value mainly include: monetary funds notes receivable accounts receivable other receivables notes payable accounts payable other payables other current liabilities and long-term borrowings etc.The Group's management believes that the book value of financial assets and financial liabilities measured at amortized costs in the financial statements is close to the fair value of such assets and liabilities.（XII） Related parties and related party transactions 1. Parent company Registered Proportion of voting Name Registration place Business nature capital Parent company'sshareholding ratio in rights of the parent(RMB '0000) the Company (%) company in theCompany (%) Floor 18 Investment Equity Shenzhen Investment Holdings Building Shennan investments Co. Ltd. Road Futian District real estate 3318600.00 46.21 46.21 Shenzhen development etc.Parent company of the Company: the parent company of the Company is a wholly state-owned company approved and authorized by the Shenzhen Municipal Government which exercises the functions of the investor in accordance with the law for the state-owned enterprises within the authorized scope.During the reporting period the registered capital of the parent company changed as follows: RMB '0000 Balance at the beginning Increase in current year Decrease in current year Balance as at the end ofof the year the current year 3235900.0082700.00-3318600.00 2. Subsidiaries See Note (VIII) 1 for details of the subsidiary. 3. Joint ventures and associates of the Company See Note (V) 10 for details of the Company's joint ventures and associates.- 92 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (XII) Related parties and related party transactions - continued 4. Other related parties of the Company Name of related party Relationship with the Company Shenzhen Xinfang Knitting Factory Co. Ltd. The Company's participated company whose chairman is appointed by theGroup Shenzhen Dailisi Underwear Co. Ltd. The Company's participated company whose chairman is appointed by theGroup Hengmei Optoelectronics Co. Ltd. Minority shareholder of the Company's subsidiary SAPO Photoelectric; one ofthe directors of the company is a supervisor of SAPO Photoelectric Shenzhen Shentou Property Development Co. Ltd. Subsidiary of the parent company of the Company Shenzhen InvestmentHoldings Co. Ltd.Shenzhen Seg Longyan Energy Technology Co. Ltd. Subsidiary of the parent company of the Company Shenzhen InvestmentHoldings Co. Ltd.Guoren P&C Insurance Co. Ltd. Shenzhen Branch Subsidiary of the parent company of the Company Shenzhen InvestmentHoldings Co. Ltd.Shenzhen Talent Service Center (Shenzhen Talent Market) Subsidiary of the parent company of the Company Shenzhen InvestmentHoldings Co. Ltd.Shenzhen Property Management Co. Ltd. Subsidiary of the parent company of the Company Shenzhen InvestmentHoldings Co. Ltd.Shenzhen Cultural Enterprise Development Co. Ltd. Subsidiary of the parent company of the Company Shenzhen Investment (Headquarters) Holdings Co. Ltd.Shenzhen Investment Holdings Development Co. Ltd. Subsidiary of the parent company of the Company Shenzhen InvestmentHoldings Co. Ltd.Shenzhen Investment Holdings Digital Technology Co. Subsidiary of the parent company of the Company Shenzhen Investment Ltd. Holdings Co. Ltd.Shenzhen Talent Recruitment International Co. Ltd. Subsidiary of the parent company of the Company Shenzhen Investment (Headquarters) Holdings Co. Ltd.Shenzhen Leaguer Education Co. Ltd. (Headquarters) Subsidiary of the parent company of the Company Shenzhen InvestmentHoldings Co. Ltd.Shenzhen Legal Training Center Co. Ltd. Subsidiary of the parent company of the Company Shenzhen Investment Holdings Co. Ltd.Shenzhen Investment Holdings Sports Event Development Subsidiary of the parent company of the Company Shenzhen Investment Co. Ltd. Holdings Co. Ltd.Shenzhen Investment Building Hotel Co. Ltd. Subsidiary of the parent company of the Company Shenzhen Investment Holdings Co. Ltd.Shenzhen Investment Building Property Management Co. Subsidiary of the parent company of the Company Shenzhen Investment Ltd. Holdings Co. Ltd. 5. Related party transactions (1) Procurement of goods/receipt of labor services Related party Related party transactions Amount for the Amount for thecurrent year previous year Shenzhen Seg Longyan Energy Technology Co. Ltd. Purchase of electricity 1146803.41 1075289.19 Guoren P&C Insurance Co. Ltd. Shenzhen Branch Insurance premiums 285104.25 - Shenzhen Cultural Enterprise Development Co. Ltd.(Headquarters) Exhibition fees 136298.00 - Shenzhen Talent Service Center (Shenzhen Talent Market) Outsourcing service fee 125596.14 - Shenzhen Investment Holdings Sports Event Development Co. Ltd. Marketing expenses 80000.00 - Shenzhen Investment Holdings Digital Technology Co. Ltd. Information construction 78655.84 - Shenzhen Investment Holdings Development Co. Ltd. Rental 65786.40 - Shenzhen Property Management Co. Ltd. Property management fee 47258.75 - Shenzhen Legal Training Center Co. Ltd. Training expenses 34597.00 - Shenzhen Leaguer Education Co. Ltd. (Headquarters) Training expenses 20449.02 - Shenzhen Guanhua Printing and Dyeing Co. Ltd. Interest expenses 9025.99 16237.39 Shenzhen Talent Recruitment International Co. Ltd.(Headquarters) Training expenses 7000.00 - Hengmei Optoelectronics Co. Ltd. Optical film materials andprocessing 2874.60 4540435.30 Total 2039449.40 5631961.88 - 93 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (XII) Related parties and related party transactions - continued 5. Related party transactions - continued (2) Sale of goods RMB Related party Related party Amount for the Amount for thetransactions current year previous year Hengmei Optoelectronics Co. Ltd. Polarizer - 4744631.12 Shenzhen Investment Building Hotel Co. Ltd. Textiles - 163729.20 Shenzhen Shentou Property Development Co. Ltd. Textiles - 65634.51 Shenzhen Investment Building Property Management Co. Ltd. Textiles - 35522.12 Shenzhen Investment Holdings Co.Ltd. Textiles - 15371.68 Total - 5024888.63 (3) Loans from and to related parties RMB Related party Amountborrowed Start date Maturity date Notes Borrowed from Shenzhen Guanhua Printing and Dyeing 3806454.17 2019.07.30 2025.07.31 Annual interestCo. Ltd. rate 0.15% (4) Remuneration of key officers RMB Item Amount for the current year Amount for the previous year Remuneration of key officers 6932991.00 8557258.00 6. Accounts receivable accounts payable to related parties and other unsettled items (1) Receivables RMB Balance as at the end of the Balance as at the end of the Project Related party current year previous year Book balance Provision for Book balance Provision forbad debts bad debts Accounts Shenzhen Shentou Property receivable Development Co. Ltd. 6027.00 602.70 6027.00 602.70 Other receivables Shenzhen Dailisi UnderwearCo. Ltd. 1100000.00 55000.00 1100000.00 58850.00 Other receivables Shenzhen Investment HoldingsDevelopment Co. Ltd. 73096.00 3910.64 - - Other receivables Shenzhen Guanhua Printing andDyeing Co. Ltd. - - 41325.00 - Total 1173096.00 58910.64 1141325.00 58850.00 - 94 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (XII) Related parties and related party transactions - continued 6. Accounts receivable accounts payable to related parties and other unsettled items - continued (2) Payables RMB Project Related party Balance as at the end of Balance as at the end ofthe current year the previous year Other payables Shenzhen Guanhua Printing and DyeingCo. Ltd. 3816981.88 3811272.20 Shenzhen Changlianfa Printing and Dyeing Co. Ltd. 2281299.95 2023699.95 Shenzhen Xinfang Knitting Factory Co.Ltd. 244789.85 244789.85 Shenzhen Investment Holdings Co. Ltd. - 485189.00 Shenzhen Investment Holdings Sports Event Development Co. Ltd. 80000.00 - Shenzhen Investment Holdings Digital Technology Co. Ltd. 37735.84 - Shenzhen Investment Holdings Development Co. Ltd. 29238.40 - Shenzhen Property Management Co. Ltd. 7934.52 - Yehui International Co. Ltd. - 1124656.60 Total 6497980.44 7689607.60（XIII）Commitments and contingencies 1. Important commitments (1) Capital commitments RMB Item Amount at the end of Amount at the end ofcurrent year previous year Contracted but not recognized in the financial statements - Commitment to purchase and construct long-term assets 53374.76 2413823.52 2. Contingencies As of December 31 2024 the Group had no contingencies such as pending litigations and external guarantees to be discolsed.- 95 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024（XIV）Events after the balance sheet date 1. Profit distribution after the balance sheet date On March 26 2025 the profit distribution proposal for the year 2024 was approved by the Board of the Company. It is proposed that the Company distribute cash dividends of RMB 0.71 per share (tax inclusive) to all shareholders based on the total share capital of 506521849 shares as of December 31 2024 resulting in total cash dividends of RMB 35963051.28 (tax inclusive). The profit distribution plan is subject to the consideration and approval of the Company's General Meeting.RMB Item Amount Profit or dividend to be distributed 35963051.28 Profit or dividend declared to be granted upon deliberation and approval -（XV） Other significant matters 1. Segment information (1) Determination basis and accounting policies for reporting segments According to the internal organizational structure management requirements and internal reporting system of the Group the Group's operating business is divided into two operating segments. The management of the Group regularly evaluates the operating results of these segments to decide on the allocation of resources to them and evaluate their performance. On the basis of operating segments the Group has identified the following two reporting segments polarizer business property leasing business and other business.Information on segment reporting is disclosed according to the accounting policies and measurement standards adopted by each segment when reporting to the management and these measurement bases are consistent with the accounting and measurement bases when preparing the financial statements. (2) Financial information of reporting segments RMB Current year or end Polarizer Property leasing andof current year others Offset Total Operating revenue: Revenue from external 3219211416.65 116071592.03 - 3335283008.68 transactions Revenue from transactions - 4239345.09 (4239345.09) - between segments Total operating revenue of 3219211416.65 120310937.12 (4239345.09) 3335283008.68 segments Operating expenses (Note) 3007500292.36 95037109.98 (3900557.86) 3098636844.48 Operating profit 136015568.69 (20628307.04) 36389537.55 151776799.20 Net profit 134120025.66 (15831104.78) 24767845.50 143056766.38 Total assets of segments 4031861994.76 3149618569.49 (1949330166.92) 5232150397.33 Total liabilities of segments 835237595.88 191159171.74 (29567004.42) 996829763.20 Note: this item includes operating costs taxes and surcharges G&A expenses R&D expenses selling and distribution expenses and financial expenses.- 96 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (XV) Other significant events - continued 2. Other significant events affecting the decision-making of investors (1) Real estate not yet disposed of by Shenzhen Xieli Automobile Enterprise Co. Ltd. (hereinafter referred to as "Shenzhen Xieli") Our company has invested with Hong Kong Xieli Maintenance Company (hereinafter referred to as "Hong Kong Xieli") to establish a Sino foreign joint venture Shenzhen Xieli Automobile Enterprise Co. Ltd. (hereinafter referred to as "Shenzhen Xieli"). In March 2020 Shenzhen Xieli was deregistered by the Shenzhen Municipal Administration for Market Regulation. In July 2020 our company filed an administrative action with the Yantian District People's Court in Shenzhen Guangdong Province to revoke the approval of the Shenzhen Market Supervision Administration for the cancellation of Shenzhen Xieli.In December 2022 the People's Court of Yantian District Shenzhen Guangdong Province reviewed the first instance judgment and revoked the administrative action approving the cancellation of Shenzhen Xieli's registration. In January 2023 the third party in the original trial Hong Kong Xieli appealed to the Shenzhen Intermediate People's Court in Guangdong Province. Later due to Hong Kong Xieli's failure to pay the case acceptance fee in advance the Shenzhen Intermediate People's Court issued an administrative ruling ruling that the appeal should be withdrawn by Hong Kong Xieli. The retrial judgment of the first instance has taken effect on March 22 2023. At present Shenzhen Xieli has resumed its business registration status but its future direction still needs to be negotiated among all shareholders.（XVI）Notes to the main items of the parent company's financial statements 1. Accounts receivable (1) Disclosure by aging RMB Aging Book balance at the end Book balance at theof the year beginning of the year Within 1 year 10649986.34 10190859.62 1-2 years - - 2 to 3 years - 2485076.00 3 - 4 years 2485076.00 - Total 13135062.34 12675935.62 (2) Disclosure by provision method for bad debts RMB Balance as at the end of the current year Category Book balance Provision for bad debts Amount Ratio (%) Amount Provision ratio Book value(%) Provision for bad debts - - - accrued on an individual - - basis Provision for bad debts made by portfolio 13135062.34 100.00 106074.71 0.81 13028987.63 Total 13135062.34 100.00 106074.71 13028987.63 - 97 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (XVI) Notes to the main items of the parent company's financial statements - continued 1. Accounts receivable - continued (2) Disclosure by provision method for bad debts - continued RMB Balance as at the end of the previous year Category Book balance Provision for bad debts Amount Ratio (%) Amount Provision ratio Book value(%) Provision for bad debts accrued on an individual - - - - - basis Provision for bad debts made by portfolio 12675935.62 100.00 4311.97 0.03 12671623.65 Total 12675935.62 100.00 4311.97 12671623.65 As of December 31 2024 accounts receivable with provision for bad debts accrued on a portfolio basis: RMB Balance as at the end of the current year Aging Expected average Provision for bad loss rate (%) Book balance debts Book value Within 1 year 1.00 10649986.34 106074.71 10543911.63 3 - 4 years - 2485076.00 - 2485076.00 Total 13135062.34 106074.71 13028987.63 As of December 31 2024 provision for bad debts is made based on the simplified expected credit losses model RMB Whole duration Whole duration Provision for bad debts Expected credit losses Expected credit losses Total (No credit loss) (With credit loss) Balance at the beginning of the year 4311.97 - 4311.97 Balance at the beginning of the year - - - - Transfer to credit loss incurred - - - - Reversal of credit loss not incurred - - - Withdrawal in the current year 101762.74 - 101762.74 Reversal in the current year - - - Charge-off in the current year - - - Write-off in the current year - - - Other changes - - - Balance as at the end of the current year 106074.71 - 106074.71 (3) Provision for bad debts RMB Balance at the Changes in the current year Balance as at the Type beginning of the Provision Recovery or Resale or write- Other changes end of the currentyear reversal off year Provision for bad debts 4311.97 101762.74 - - - 106074.71 There was no significant amount of provision for bad debts recovered or reversed this year.- 98 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (XVI) Notes to the main items of the parent company's financial statements - continued 1. Accounts receivable - continued (4) There are no accounts receivable with actual write-off this year. (5) Top five entities in terms of the ending balance of accounts receivable by debtor RMB Provision for bad At the end of debts Entity name current year Ratio in total Book balance accounts Balance as at the receivable (%) end of the currentyear Total amount of the top five accounts receivables as of December 31 2024. 13003135.50 99.00 100734.39 2. Other receivables (1) Disclosure by aging RMB Aging Balance as at the end Balance as at the endof the current year of the previous year Within 1 year 15129726.66 1683810.52 1-2 years 273000.00 2213073.28 2 to 3 years 2204641.09 10100800.01 Over 3 years 25380195.11 15279395.10 Total 42987562.86 29277078.91 Less: provision for bad debts 41453167.06 15263525.96 Book value 1534395.80 14013552.95 (2) Disclosure by nature of payment RMB Book balance at the Nature of payment Book balance at theend of the year end of the previousyear Transactions with related parties within the consolidation scope 26189641.10 12553241.09 Transactions with external units 15422435.97 15349339.97 Guarantee and deposits 10000.00 10000.00 Others 1365485.79 1364497.85 Total 42987562.86 29277078.91 (3) Provision for bad debts As of December 31 2024 provision for bad debts shall be made according to the credit risk characteristic combination RMB Balance as at the end of the current year Phase Expected average loss Book balance Provision for badrate (%) debts Book value Provision for bad debts based on credit risk characteristic combination 96.43 42987562.86 41453167.06 1534395.80 Provision for other receivables - 99 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (XVI) Notes to the main items of the parent company's financial statements - continued 2. Other receivables - continued (3) Provision for bad debts - continued As of December 31 2024 the credit risk and provision for bad debts of other receivables are as follows: RMB Balance as at the end of the current year Aging Expected average loss rate (%) Book balance Provision for bad debts Book value Within 1 year 90.62 15129726.66 13711066.34 1418660.32 1-2 years 100.00 273000.00 273000.00 - 2 to 3 years 100.00 2204641.09 2204641.09 - Over 3 years 99.54 25380195.11 25264459.63 115735.48 Total 42987562.86 41453167.06 1534395.80 (4) Changes in provision for bad debts RMB Balance at the Changes in the current year Balance as at the Type beginning of the Provision Recovery or Resale or Other changes end of theyear reversal write-off current year Provision for bad debts 15263525.96 26189641.10 - - - 41453167.06 (5) There were no other receivables actually written off this year. (6) Top five entities in terms of ending balance of other receivables by debtors RMB Other Provision for receivables bad debts Entity name Nature of payment Balance as at Aging Ratio in the total the end of the ending balance of Balance as at the end of the current year other receivables inthe current year (%) current year Total amount of the top five Receivables fromexternal entities Within 1 year 1 - 2other receivables as of and internal 41496981.06 years 2 - 3 years over 96.53 40514681.06December 31 2024. receivables 3 years 3. Long-term equity investments RMB Balance as at the end of the current year Balance as at the end of the previous year Item Book balance Provision forimpairment Book value Book balance Provision for impairment Book value Investment in subsidiaries 1962688268.31 36826287.64 1925861980.67 1976433419.39 16582629.30 1959850790.09 Investments in joint ventures 111555887.28 - 111555887.28 122370494.08 - 122370494.08 Investments in associates 3272138.76 - 3272138.76 5311526.62 - 5311526.62 Total 2077516294.35 36826287.64 2040690006.71 2104115440.09 16582629.30 2087532810.79 - 100 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements Year ended December 31 2024 (XVI) Notes to the main items of the parent company's financial statements - continued 3. Long-term equity investments - continued (1) Investment in subsidiaries RMB Investees Balance at the beginning Increase in Decrease in Provision for Provision for impairment of the year current year current year impairment in the Balance as at the end of Balance as at the end of the current year the current year current year SAPO Photoelectric 1910247781.94 - - - 1910247781.94 14415288.09 Shenzhen Lisi Industrial Development Co.Ltd. 8073388.25 - - - 8073388.25 - Shenzhen MCENTURY Garment Co. Ltd. 18499458.34 1744200.00 - 20243658.34 - 22410999.55 Shenzhen Huaqiang Hotel Co. Ltd. 15489351.08 - 15489351.08 - - - Shenzhen Shenfang Property Management Co. Ltd. 1713186.55 - - - 1713186.55 - Shenzhen Shenfang Sungang Property Management Co. Ltd. 5827623.93 - - - 5827623.93 - Total 1959850790.09 1744200.00 15489351.08 20243658.34 1925861980.67 36826287.64 (2) Investment in associates and joint ventures RMB Changes in the current year Provision for Balance at the Investment profit Other Cash dividends Provision Balance as at impairment Investees beginning of Additional Reduced or loss recognized comprehensi Otherve changes in or profits Provision Othe the end of the Balance as atthe year investment investment under the equity method income equity declared to be for rs current year the end of the adjustment paid impairment current year Joint ventures Shenzhen Guanhua Printing and Dyeing Co. Ltd. 122370494.08 - - (10814606.80) - - - - - 111555887.28 - Sub-total 122370494.08 - - (10814606.80) - - - - - 111555887.28 - Associates Shenzhen Changlianfa Printing and Dyeing Co. 3358117.09 - - 260171.67 - - 346150.00 - - 3272138.76 - Ltd.Yehui International Co.Ltd. 1953409.53 - 1805949.58 (147459.95) - - - - - - - Sub-total 5311526.62 - 1805949.58 112711.72 - - 346150.00 - - 3272138.76 - Total 127682020.70 - 1805949.58 (10701895.08) - - 346150.00 - - 114828026.04 - - 101 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements For the year ended December 31 2023 (XVI) Notes to the main items of the parent company's financial statements - continued 4. Operating revenue and operating costs (1) Operating revenue and operating costs RMB Item Amount for the current year Amount for the previous yearRevenue Cost Revenue Cost Primary business 77167496.95 10205157.84 77822508.75 9822306.53 (2) Income from primary business and cost of primary business by product RMB Amount for the current year Amount for the previous year Products Income from Cost of primary Income from Cost of primary primary business business primary business business Property leasing 77167496.95 10205157.84 77822508.75 9822306.53 (3) Income from primary business and cost of primary business by region RMB Amount for the current year Amount for the previous year Region Income from Cost of primary Income from Cost of primary primary business business primary business business Domestic 77167496.95 10205157.84 77822508.75 9822306.53 5. Investment income RMB Item Amount for the Amount for thecurrent year previous year Long-term equity investment income calculated under the equity method (10701895.08) (6898983.89) Income from long-term equity investments under cost method 4700000.00 9989533.92 Investment income from disposal of long-term equity investments 5838587.94 - Investment income obtained during holding the financial assets held for trading 10795474.10 14816230.07 Dividend income from investments in other equity instrument during the holding period 1445735.85 1393735.85 Total 12077902.81 19300515.95 - 102 -Shenzhen Textile (Holdings) Co. Ltd.Supplementary information Year ended December 31 2024 1. Breakdown of current non-recurring profit or loss According to the Interpretive Announcement No. 1 on Information Disclosure of Companies Issuing Securities to the Public - Non-recurring Profit or Loss (Revision 2023) (hereinafter referred to as "Interpretive Announcement No. 1") issued by the China Securities Regulatory Commission the Group's non-recurring profit or loss for 2024 are as follows: RMB Item Amount for thecurrent year Profit or loss from disposal of non-current assets including the writing-off part for which the asset impairment provision is made 833613.28 Government grants included in the current profit or loss (except for those that are closely related to the Company's normal business operations comply with national policies and regulations are enjoyed according to determined standards and have a sustained impact on 10454530.12 the Company's profit or loss) Profit or loss from changes in fair value of financial assets and liabilities held by non- financial enterprises and profit or loss from the disposal of financial assets and financial (5319496.55) liabilities except for effective hedging operations related to the Company's normal business operations Reversal of provision for impairment of accounts receivable subject to separate impairment test 13927792.63 Non-operating revenue and expenses other than the above-mentioned items 1107069.21 Total non-recurring profit or loss 21003508.69 Less: income tax effect of non-recurring profit or loss 2998978.10 Net amount of non-recurring profit or loss 18004530.59 Less: net effect of non-recurring profit or loss attributable to minority shareholders (after tax) 5661882.11 Non-recurring profit or loss attributable to the Company's ordinary shareholders 12342648.48 2. Return on net assets and earnings per share This return on net assets and earnings per share table is prepared by Shenzhen Textile (Holdings) Co. Ltd. in accordance with the Rules for the Compilation and Reporting of Information Disclosure by Companies Issuing Securities in Public (No. 9) - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010) issued by the China Securities Regulatory Commission.RMB Earnings per share Profit in the reporting period Weighted averagerate of return on net Basic earnings per Diluted earnings per assets share share Net profit attributable to ordinary shareholders of the COOEC 3.06 0.18 0.18 Net profit attributable to ordinary shareholders of the Company after 2.64 0.15 0.15 deducting non-recurring profit or loss Shenzhen Textile (Holdings) Co. Ltd.Board of Directors March 28 2025