I. Company Overview
Shandong Nanshan Zhishang Technology Co., Ltd. (hereinafter referred to as the "Company") was established on April 29, 2007. The unified social credit code of the Company is 9137068166139756X1, and the legal representative is Zhao Liang. The registered location and headquarters are in Nanshan Industrial Park, Dongjiang Town, Longkou City, Yantai, Shandong Province. The registered capital is RMB 506,134,427.00. The parent company is Nanshan Group Co., Ltd. The Company primarily engages in the research, design, production, and sales of fine woolen fabrics and formal workwear, as well as textile fibers. The Company operates in the textile and apparel industry. The financial statements were approved for issuance by the Company's board of directors on April 15, 2026.
II. Basis for Financial Statement Preparation
(1) Preparation Basis
The Company's financial statements are prepared on a going concern basis, reflecting actual transactions and events in accordance with the "Accounting Standards for Enterprises" issued by the Ministry of Finance and the disclosure regulations of the China Securities Regulatory Commission's "Rules for Information Disclosure by Companies Issuing Securities No. 15 - General Provisions for Financial Reports" (2023 revision), based on the significant accounting policies and estimates described below. The Company's accounting is based on the accrual basis. Except for certain financial instruments, these financial statements are measured at historical cost. If assets are impaired, the corresponding impairment provisions are made in accordance with relevant regulations.
(2) Going Concern
During the reporting period and at the end of the reporting period, the Company has stable production and operations, a reasonable asset-liability structure, and the ability to continue as a going concern, with no significant adverse risks affecting its ongoing operations.
III. Significant Accounting Policies and Estimates
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Compliance with Accounting Standards The financial statements prepared by the Company comply with the requirements of the "Accounting Standards for Enterprises," accurately and completely reflecting the Company's financial position as of December 31, 2025, operating results for the year 2025, and related cash flow information.
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Accounting Period The Company's accounting year is the calendar year, from January 1 to December 31.
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Operating Cycle The Company uses a 12-month period as an operating cycle and uses this as the standard for classifying the liquidity of assets and liabilities.
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Functional Currency The Company and its domestic subsidiaries use RMB as the functional currency. The functional currency of the Company's overseas subsidiaries is determined based on the primary economic environment in which they operate, and financial statements are translated into RMB.
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Materiality Standards The determination methods and selection criteria for materiality standards are as follows:
| Item | Materiality Standard |
|---|---|
| Significant individual receivables for bad debt provisions | Amount exceeds 5% of total bad debt provisions for receivables and is greater than 1 million |
| Significant construction in progress | Amount exceeds 0.5% of total net assets and is greater than 10 million |
| Significant payables over 1 year | Amount exceeds 5% of total payables and is greater than 3 million |
| Significant contract liabilities over 1 year | Amount exceeds 5% of total contract liabilities and is greater than 1 million |
| Significant other payables over 1 year | Amount exceeds 5% of total other payables and is greater than 1 million |
| Significant subsidiaries | Subsidiary's revenue, total assets, or total profit exceeds 5% of the corresponding items in the consolidated financial statements |
- Accounting Treatment for Business Combinations Business combinations refer to transactions or events that merge two or more separate enterprises into a single reporting entity. Business combinations are classified into those under common control and those not under common control.