FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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FIYTA HOLDINGS LTD.
2018 Semi-annual Report
August, 2018
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Section 1 Important Notice, Table of Contents and Definition
The Board of Directors, the Supervisory Committee, directors, supervisors and senior executives hereby individually and
collectively accept responsibility for the correctness, accuracy and completeness of the contents of this report and confirm
that there are neither material omissions nor errors which would render any statement misleading.
Huang Yongfeng, the Company leader, Chen Zhuo, chief financial officer, and Tian Hui, the manager of the accounting
department (treasurer) hereby confirm the authenticity and completeness of the financial report enclosed in this Annual
Report.
With the exception of the following directors, all the other directors personally attended the board meeting where this
semi-annual report was reviewed.
Names of the directors failed to Offices taken by the directors Cause of the absence Name of the mandatary
personally attend the Board absent from the Meeting
Meeting
Fu Debin Director For the sake of work Wang Bo
Chen Libin Director For the sake of work Huang Yongfeng
Wang Yan Independent director For the sake of work Zhang Shunwen
Any perspective description, such as future plan, development strategy, etc. involved in the Semi-annual Report shall not
constitute the Company’s substantial commitment to the investors and the investors should please pay attention to their
investment risks.
The Company intends neither to distribute any cash dividend or bonus shares nor to convert any reserve into share
capital.
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Table of Contents
Section 1 Important Notice, Table of Contents and Definition
Section 2 Company Profile and Financial Highlights
Section 3 Business Summary
Section 4 Discussion and Analysis of the Management
Section 5 Significant Events
Section 6 Change of Shares and Particulars about Shareholders
Section 7 About the Preferred Shares
Section 8 Directors, Supervisors, Senior Executives and Employees
Section 9 Company Bond
Section 10 Financial Report
Section 11 Documents Available for Inspection
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Definitions
Terms to be defined Refers to Definition
This Company, the Company or FIYTA Refers to FIYTA HOLDINGS LTD.
AVIC Refers to Aviation Industry Corporation of China, Ltd.
AVIC International Refers to AVIC International Holding Corporation
AVIC International Shenzhen Refers to AVIC International Shenzhen Co., Ltd.
AVIC IHL Refers to AVIC International Holding Limited
Harmony Refers to Shenzhen Harmony World Watches Center Co., Ltd.
The Sales Co. Refers to FIYTA Sales Co., Ltd.
the Manufacture Co. Refers to Shenzhen FIYTA Sophisticated Timepieces Manufacture Co., Ltd.
the Technology Co. Refers to Shenzhen FIYTA Technology Development Co., Ltd.
the Hong Kong Co. Refers to FIYTA (Hong Kong) Limited
SHIYUEHUI Refers to Shiyuehui Boutique (Shenzhen) Co., Ltd.
Rainbow Ltd. Refers to Rainbow Department Store Co., Ltd.
AVIC SUNDA Refers to AVIC SUNDA Co., Ltd.
AVIC Property Refers to AVIC Property Management Co., Ltd.
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Section 2 Company Profile and Financial Highlights
I. Company Profile
Short form of the stock: FIYTA A, FIYTA B Stock Codes: 000026 and 200026
Stock Exchange Listed with Shenzhen Stock Exchange Listed
Company Name in Chinese 飞亚达（集团）股份有限公司
Abbreviation of Registered Company
飞亚达公司
Name in Chinese
Company name in foreign language (if
FIYTA HOLDINGS LTD.
any)
Abbreviation of the Company name in
FIYTA
foreign language (if any)
Legal Representative Huang Yongfeng
II. Liaison Persons and Communication Information
Secretary of the Board Securities Affairs Representative
Names Lu Wanjun Zhang Yong
20th Floor, FIYTA Technology Building, Gaoxin S. Road 20th Floor, FIYTA Technology Building, Gaoxin S. Road
Liaison Address
One, Nanshan District, Shenzhen One, Nanshan District, Shenzhen
Tel 0755 and -86013669 0755 and -86013669
Fax 0755 and -83348369 0755 and -83348369
Email investor@fiyta.com.cn investor@fiyta.com.cn
III. Other Information
1. Way of Communication
There is no change in the registered address, office address and post code, company website, email during the
reporting period. For the detail, refer to 2017 Annual Report.
2. Information Disclosure and Place where the Regular Reports are Prepared
Newspapers designated for disclosing the information, Internet web site designated by China Securities Regulatory
Commission for publishing the Semi-annual Report, place of the Company’s Semi-annual Report prepared for inquiry, for
the detail, refer to 2017 Annual Report.
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IV. Summary of Accounting/Financial Data
Does the Company need to make retroactive adjustment or restatement of the accounting data of the previous years
No
Year-on-year increase/decrease in
Reporting period Same period of the previous year
the reporting period
Revenue in CNY 1,695,891,432.72 1,599,541,144.35 6.02%
Net profit attributable to the Company’s shareholders, in
112,367,921.44 86,708,824.76 29.59%
CNY
Net profit attributable to the Company’s shareholders less
99,759,371.16 85,938,456.94 16.08%
the non-recurring items, in CNY
Net cash flows arising from operating activities, in CNY 224,672,274.09 276,715,660.53 -18.81%
Basic earnings per share (CNY/share) 0.2561 0.1976 29.61%
Diluted earnings per share (CNY/share) 0.2561 0.1976 29.61%
Return on equity, weighted average 4.45% 3.65% 0.80%
Increase/decrease at the end of the
End of the reporting period End of the previous year year over the end of the previous
year
Total assets, in CNY 3,629,325,363.14 3,579,789,692.90 1.38%
Net profit attributable to the Company’s shareholders, in
2,578,942,362.89 2,467,967,361.20 4.50%
CNY
V. Difference in the Accounting Data based respectively on the Chinese Accounting Standards (CAS) and
International Accounting Standards (IAS)
1. Differences in the net profit disclosed in the financial report & the net assets attributable to the Company’s
shareholders respectively according to the IAS and the CAS.
Inapplicable
2. Differences in the net profit disclosed in the financial report & the net assets attributable to the Company’s
shareholders according to both the IAS and the CAS
Inapplicable
VI. Non-recurring gain/loss items and the amount involved
In CNY
Items Amount Notes
Gain/loss from disposal of non-current assets, including the part offset from the -54,407.16 Gain/loss from disposal of partial obsolete
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provision for impairment of assets. office fixed assets during the reporting
period
For detail, refer to the supplementary
Government subsidy credited to the current gain and loss (except the government
description of the government subsidy
subsidies closely related with the Company’s business and enjoyable according to the 6,497,018.80
counted to the current profit and loss, Note
unified standard quota or fixed amount specified by the central government).
VII.70.
Operating income and expenses other than
Operating income and expenses other than the aforesaid items 7,533,121.86
the aforesaid items
Other various non-operating revenue and expenditure with the aforesaid items Other various non-operating revenue and
-102,663.02
exclusive expenditure
Less: Amount affected by the income tax 1,264,520.20
Total 12,608,550.28 --
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering their Securities to the Public – Non-recurring Gains and Losses and its non-recurring
gain/loss items as illustrated in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
their Securities to the Public – Non-recurring Gains and Losses which have been defined as recurring gains and losses, it
is necessary to explain the reason.
Inapplicable
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Section 3 Business Summary
I. Principal Businesses in the Reporting Period
Does the Company need to comply with the requirements on information disclosure for special industries?
No
(1) Principal Business and Operation Model
FIYTA has been concentrating itself in watch industry under the strategy with the brand strategy as the guidance, with
"products + channel” as the business model, is enthusiastically carrying forward integration of key value chains and
construction of core ability, continuously promoting the integrative brand development strategy. So far, the Company has
integrated watch R & D, design, manufacture, sales and services, has formed two general core businesses of “watch
brand management + retail of famous brand watches”, has constructed the proprietary product brand cluster represented
by “FIYTA” Brand and watch retail channel brand represented by Harmony with mutual promotion and coordinated
development of the Company’s product brand business and channel retail services.
(2) Development Status of Watch Industry and the Company's Position in the Industry
At present, China has entered an important development stage of consumption demand in continuous growth and
consumption structure upgrading in an accelerated way; the people’s dreaming of good life and demand shall be
increasingly enhanced. China’s famous brand watch market started reviving in the second half year of 2016. After around
two years’ growth and stabilization, the growth of the market is expectable under the new background. The growth of
economy and rise of the household consumption level shall continuously provide steady power for the growth of the
industry. In the first half year of 2018, the quality consumption and personalized consumption has been persistently
overheating, consumers are willing to pay higher prices to buy better quality products and services and medium and high
end brands have kept stable growth rate. Despite some factors such as the Sino-US trade friction, capital market
fluctuation, etc. may possibly impact the market at a certain level and periodically in the short run, they shall not change
the judgment of the market trend towards a good prospect; in addition, differentiation has taken place in growth of the
domestic watches vs Swiss watch brands (especially high-end Switch watch brands), it shall accelerate upgrading of the
domestic watch brands and development progress of the domestic watch manufacturers.
Since its establishment, the Company has concentrated itself on the watch industry persistently. After 31 years’ tempering
struggling, the Company has now become a flagship enterprise in China’s watch industry. The Company’s brand “FIYTA”
has become a leading brand among the domestic watches; and the channel brand “HARMONY” has become a world
watch retail and service channel leader in China. The Company shall seize the opportunity of consumption upgrading and
personalized consumption growth, further quicken the steps its own brand upgrading and core ability construction, actively
explore and foster and develop new businesses, continuously consolidate the Company’s leading position in the industry
and create greater value for the customers, shareholders and the society.
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II. Significant Changes in the Prime Assets
1. Significant Changes in the Prime Assets
Prime assets Note to the significant change
Decrease of the carrying value of fixed assets as at the end of the reporting period by CNY -59,786,456.47 was mainly
due to increase of the lease area of Shenyang 1928 Building and was carried to the investment oriented real estate for
Fixed assets
accounting; the book original value of the assets involved amounted to CNY 58,656,614.70 and the net value
amounting to CNY 49,139,814.06.
2. Prime Assets Abroad
Inapplicable
III. Analysis on Core Competitiveness
Does the Company need to comply with the requirements on information disclosure for special industries?
No
Through many years’ development, the Company has focused on the brand building and channel operation, has already
successfully constructed its core competitiveness, including the abilities of product innovation, brand building, supply
chain management, channel operation, quality services, strategic human resource management, etc. Based on these
abilities, the Company has become an enterprise with national technology center, national industry design center, a
national technological innovation demonstration enterprise and national hi-tech enterprise; has risen to one of the global
three powers of spaceflight watch R&D and manufacture enterprise. During the reporting period, the Company has based
itself on providing customers with better products and services, further elevated its core competitiveness, and has
achieved continuous breakthrough in partial fields. In the first half year, “FIYTA” Brand released the products with entirely
new style such as SOLO at Basel Fairground and received positive comments from market.
In respect of R & D, the Company further increased the R & D investment and achievement transformation. In the first half
year, the Company applied for 3 patents of invention, 2 utility model patents, and 19 design patents; was granted 2
patented inventions, 6 utility model patents and 15 design patents. Meanwhile, the Company continued to devote itself to
construction of the industrial standards, took lead in and participated in amendment of the standards and completed 10
national, industrial standards and 1 technical regulation of Shenzhen Municipality.
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Section 4 Discussion and Analysis of the Management
I. General
During the first half year of 2018, facing the changes of the market environment, the Company insisted on the brand
strategy and innovation driving, in compliance with the annual work theme of “brand upgrading, quality and efficiency
improvement and innovation and development”, focused on the efficiency and benefit, carried forward various tasks.
While grasping the opportunity of steady growth of the market of famous brand watches and lifting of the market shares of
the domestic watches, speeded up boosting upgrading of its proprietary brand, propelled transformation of the growth way
by unit price and gross profit rate and inventory turnover ratio, etc. and realized operation efficiency and further
improvement of the asset efficiency.In the reporting period, the Company realized operating revenue amounting to CNY
1,695.89 million with year-on-year growth of 6.02% and realized total profit amounting to CNY 145.83 million with a
year-on-year growth of 29.54%.
Steadily carrying forward brand upgrading and differentiated brand cluster building. During the reporting period,
the Company kept up with the market trend and boosted construction of brand cluster differentiation according to the
established strategy, various brand segments were further specified, the 3-dimension brand system with distinct features
were basically shaped up, the “FIYTA” Brand positioning and development idea were further clarified, the brand building
ability was further upgraded. With the help of Basel Fairground, brand spokesman, cooperation with CCTV5+Game
Advertisement and the first-tier city flagship store project, etc. and multiple channels promoted the influence of “FIYTA”
Brand; and as a result, the market share was steadily elevated. Such brands as “JONAS & VERUS”, “BEIJING”, “JEEP”
etc. have received ideal performance in aspects of brand influence, sales revenue, etc. The breakthrough orientation in
product quality, high-end watch manufacture ability, supply chain competitiveness, etc. has been further specified. Such
products as KING’S SWORD triggered intense echo at the Basel World. Various tasks centering on improvement of the
product competitiveness have been spread comprehensively and are being carried forward in an orderly way and have
consolidated the foundation for the Company’s subsequent development.
The channel layout continuously optimized and channel operation ability improved with acceleration. During the
reporting period, the Company actively carried forward offline channel structure optimization and improvement of
operation ability. HARMONY World Watch seized the opportunity of the revival and growth of high-end brands, conducted
in-depth study on the customers’ consumption trend, persistently carried out the per-unit-yield raising work. As a result, its
customer size and unit price got improved significantly and its sales income grew steadily; to comply with the new
consumption demand, HARMONY actively established close cooperative relationship with domestic excellent cooperation
resources, continuously optimized and improved the structure of existing shops, developed layout of the medium and high
end brands in the newly opened shops. Meanwhile, HARMONY enhanced the online business layout, improved the online
operation ability and has become the designated operator of CARL F. BUCHERER in the official flagship store of JD.com.
During the reporting period, the Company efocused on the per-unit-yield improvement for its own brand channel,
enhanced the channel operation ability, increased resource distribution in the key regions and market, carried forward
channel structure optimization and adjustment in an orderly way; continued to speed up development of the online
channels with building online operation ability as the key and achieved a good growth in sales income.
Enthusiastically carrying forward application of new technologies and new business layout. During the reporting
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period, the Company closely followed up the movement of the market demand and technology development trend, based
itself on the long term strategy, positively propelled development of new businesses, such as intelligent retail exploration
and practice, smart watch, etc. During the reporting period, “FIYTA” Brand and its partners jointly launched the first pointer
type aerobic capacity smart watch in the industry; JEEP Brand also newly launched a smart watch. This produced has
attracted attention and enjoyed favor from the consumers as soon as it came into being.
Various work for quality and efficiency improvement being initially paid off. During the reporting period, the
Company kept carrying forward the process optimization and efficiency improvement; systematically solved the key and
difficult problems existing in the business operation and management by using management tools, such as 6 Sigma ; the
Company kept carrying forward the adjustment for optimization of the organization structure and coordinative and high
efficiency operation of various links, including “research, design, production and sales”, boosted in depth the special tasks
of optimization of the product development cycle, the control of inventories and accounts receivable, etc. Through the
whole staff’s joint efforts, the Company achieved initial success in performances of the relevant tasks: the Company
reduced the total inventories by CNY162.32 million on year-on-year basis, and by CNY 85.16 million over the beginning of
the reporting period; achieved steady improvement in total assets turnover and inventory carry rate on year-on-year basis,
realized net cash flow generated from business activities amounting to CNY 224.67 million, which have powerfully
supported the growth of the performances in the reporting period.
II. Analysis on Principal Businesses
Refer to “I. General” of “Discussion and Analysis of Business Conditions”
Movements of the Key Financial Items are summarized as follows:
In CNY
Reporting period Same period of the previous year Year-on-year increase/decrease Cause of the movement
Revenue 1,695,891,432.72 1,599,541,144.35 6.02% Inapplicable
Operating cost 976,325,736.35 941,479,684.84 3.70% Inapplicable
Sales costs 422,113,041.69 394,286,321.79 7.06% Inapplicable
Administrative expenses 125,528,317.71 98,170,386.95 27.87% Inapplicable
It was mainly due to year-on-year
Financial expenses 18,147,791.49 26,200,633.06 -30.74% decrease of bank loan size during
the reporting period.
Income tax expense 33,463,799.72 25,965,385.00 28.88% Inapplicable
R&D input 21,285,926.02 21,944,615.09 -3.00% Inapplicable
Net cash flows arising from
224,672,274.09 276,715,660.53 -18.81% Inapplicable
operating activities, in CNY
Net cash flow arising from
-52,512,866.91 -56,423,051.76 6.93% Inapplicable
investment activities
It was mainly due to year-on-year
Net cash flow arising from
-78,421,466.76 -264,211,350.78 70.32% decrease of bank loan size during
financing activities
the reporting period. while the
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dividend distribution for year 2016
completed in the same period of
the previous year.
Mainly due to year-on-year
increase of the net cash flow in
Net increase of cash and cash
93,856,380.26 -43,578,751.94 315.37% connectino with financing
equivalents
activities during the reporting
period.
Significant change in profit composition or profit sources during the reporting period.
Inapplicable
Composition of the principal business
In CNY
Year-on-year Year-on-year Year-on-year
increase/decrease of increase/decrease of increase/decrease of
Revenue Operating cost Gross profit rate operating revenue over operating cost over the gross profit rate over
the same period of same period of the same period of
previous year previous year previous year
Sectors
Watches 1,626,297,488.93 961,750,068.78 40.86% 5.79% 3.25% 1.45%
Leases 57,539,426.21 11,490,008.03 80.03% 12.20% 33.31% -3.16%
Others 12,054,517.58 3,085,659.54 74.40% 9.71% 116.39% -12.62%
Products
Famous brand watches 1,133,532,373.71 808,009,338.65 28.72% 7.79% 3.63% 2.86%
FIYTA watches 492,765,115.22 153,740,730.14 68.80% 1.47% 1.31% 0.05%
Leases 57,539,426.21 11,490,008.03 80.03% 12.20% 33.31% -3.16%
Others 12,054,517.58 3,085,659.54 74.40% 9.71% 116.39% -12.62%
Regions
Northeast China 167,808,988.90 107,206,732.64 36.11% 4.85% 4.10% 0.46%
Northeast China 158,237,523.05 95,232,032.22 39.82% -9.29% -9.55% 0.17%
Northwest China 296,818,912.14 187,468,984.48 36.84% 12.33% 12.31% 0.01%
Southwest China 153,677,143.03 98,615,718.57 35.83% -0.19% -0.23% 0.02%
East China 219,099,443.56 128,259,650.78 41.46% -0.83% -1.16% 0.20%
South China 700,249,422.03 359,542,617.67 48.66% 11.88% 6.47% 2.60%
III. Analysis on Non-Principal Businesses
Inapplicable
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IV. Assets and Liabilities
1. Significant Changes in Assets Composition
In CNY
End of the reporting period End of the same period of the previous year Proportion
Proportion in total Proportion in total increased/decre Note to significant changes
Amount Amount
assets assets ased
Monetary fund 281,009,271.58 7.74% 385,224,003.87 10.02% -2.28% Inapplicable
Accounts receivable 378,420,568.27 10.43% 315,123,497.85 8.20% 2.23% Inapplicable
Inventories 1,735,371,328.09 47.82% 1,897,695,603.73 49.36% -1.54% Inapplicable
Investment real estate 348,258,775.18 9.60% 284,928,954.22 7.41% 2.19% Inapplicable
Long-term equity
43,972,531.47 1.21% 43,612,496.76 1.13% 0.08% Inapplicable
investment
Fixed assets 463,913,136.18 12.78% 557,286,443.92 14.49% -1.71% Inapplicable
Construction-in-proce
12,515,382.25 0.34% 1,404,130.16 0.04% 0.30% Inapplicable
ss
Short term borrowings 479,917,100.00 13.22% 919,078,240.00 23.90% -10.68% Inapplicable
Long term borrowings 62,153,235.50 1.71% 97,939,904.54 2.55% -0.84% Inapplicable
2. Assets and liabilities measured based on fair value
Inapplicable
3. Restriction on rights in the assets ended the reporting period
A property owned by Switzerland based Montres Chouriet SA with net value of CNY 14,803,859.87 was used as a
collateral for the overseas long term loan amounting to CNY 4,791,307.50.
V. Investment
1. General
Amount of investment in the same period of the previous
Amount of investment during the reporting period (CNY) Amount of variation
year (CNY)
1,568,081.72 1,404,130.16 11.68%
2. Significant equity investment acquired in the reporting period
Inapplicable
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3. Significant non-equity investment in process in the reporting period
In CNY
Cause of
Accumulativ Earnings
the failure
e amount accumulati
Industry Amount in arriving
actually vely
Is it an involved by invested Predicte at the Date of Disclosure
Way of invested by Capital Project realized by
Description investment in the during the d planned disclosure index (if
investment the end of source progress the end of
fixed assets? investment reporting earning progress (if any) any)
the the
project period and
reporting reporting
predicted
period period
earnings
Construction project
http://www
of FIYTA watch Manufactur 1,568,081.7 12,515,382. Self-raised Inapplicabl March 10,
Self-built Yes 100.00% 0.00 0.00 .cninfo.co
R&D and e 2 25 capital e 2017
m.cn/
manufacture center
1,568,081.7 12,515,382.
Total -- -- -- -- -- 0.00 0.00 -- -- --
2 25
Note: The 13th session of the Eighth Board of Directors reviewed and approved the proposal for increase of the
investment in the construction project of FIYTA Watch R&D and Manufacture Center by CNY 34.0509 million. For the
detail, refer to Announcement of the Resolution of the 13th Session of the Eighth Board of Directors 2017-003. Ended the
reporting period, the accumulative amount of investment in the project was CNY12.5153 million.
4. Financial assets investment
(1) Portfolio investment
Inapplicable
(2) Investment in derivatives
Inapplicable
VI. Sales of Significant Assets and Equity
1. Sales of Significant Assets
Inapplicable
2. Sales of Significant Equity
Inapplicable
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VII. Analysis on Principal Subsidiaries and Mutual Shareholding Companies
Particulars about the principal subsidiaries and mutual shareholding companies which may affect the Company’s net profit
by over 10%.
In CNY
Company Names Company type Principal business Registered capital Total assets Net assets Revenue Operating profit Net profit
Purchase & sale and
repairing service of
watches and
components. Import
& export (based on
SHEN MAO JIN
ZHUN ZI NO. [2001]
No. 2204; sales of
general
Shenzhen Harmony merchandise,
World Watches Subsidiaries jewelry, diamond 600,000,000.00 1,440,193,056.51 779,097,297.14 1,058,209,281.29 85,709,797.97 65,724,745.75
Center Co., Ltd. ornaments,
leatherwares, pens,
ties, tie clips,
electronic products,
communication
equipment; domestic
trading; property
management;
advertising
business.
Design, R & D and
sales of watches,
timing instruments,
and spare and
FIYTA Sales Co., accessory parts;
Subsidiaries 450,000,000.00 780,609,948.35 394,632,068.95 515,721,061.06 -23,367,059.41 -17,620,701.45
Ltd. sales of jewelry
and ornaments;
import & export of
watches and
repairing services.
R & D, design and
sales of various
watches and driving
units, watchcases,
watchbands, and
other spare and
accessory parts;
sales of
sophisticated
timepieces and their
pare and accessory
parts; wholesale of
K gold ornaments
and watches,
superhard materials
(hard alloy,
sophisticated
ceramics) spare and
accessory parts; and
development
of technology for the
Shenzhen FIYTA aforesaid products
Sophisticated and
Timepieces Subsidiaries supporting business; 10,000,000.00 308,517,739.97 218,419,211.64 238,249,943.95 83,665,663.87 71,518,996.35
Manufacture Co., import & export.
Ltd. Production of
various watches and
driving units,
watchcases,
watchbands and
other spare and
accessory parts;
production of
sophisticated
timepieces and their
sophisticated spare
and accessory parts;
processing of K gold
ornamental watches,
superhard material
(hard alloy,
sophisticated
ceramics) spare and
accessory parts; and
repairing of the
aforesaid products.
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R&D, production
sales of watches
(excluding the
products in the
catalogue of
measuring
instruments under
control according to
the law); production
& machining and
Shenzhen FIYTA
sales of
Technology
Subsidiaries sophisticated parts 10,000,000.00 76,406,074.21 63,186,141.49 46,073,281.42 3,827,312.28 3,884,219.65
Development Co.,
and technology
Ltd.
development;
investment and
initiation of industrial
entities (application
shall be submitted
for a specific
project); domestic
commerce,
materials supply and
sales.
Trading of watches
FIYTA (Hong Kong)
Subsidiaries and accessories and 137,737,520.00 236,496,156.12 167,266,294.17 57,729,653.35 -2,704,172.57 -5,633,718.48
Limited
investment
General business
activities:
Design, R & D, sales
of timing instruments
and spare and
accessory parts;
brand planning,
design, R&D, sales
and wholesale of
general
merchandise,
jewelry, ornaments
and gifts (with the
Shiyuehui Boutique restricted items
Subsidiaries 5,000,000.00 20,944,271.37 -5,293,140.12 6,079,828.02 -2,177,427.21 -1,753,275.62
(Shenzhen) Co., Ltd. exclusive); brand
planning; advertising
business; import &
export.
Permitted business
activities: production
of timing instruments
and spare and
accessory parts;
production of
general
merchandise,
jewelry, ornaments,
gifts.
Wholesale, retail
and repairing
services of watches
and components;
sales of electronic
products,
communication
equipment and
materials,
instruments and
meters, office
equipment, general
merchandise,
Liaoning Hengdarui jewelry, handicrafts,
Commerce & Trade Subsidiaries toys, metal 51,000,000.00 146,815,457.40 39,776,386.79 4,958,865.07 836,818.33 627,604.99
Co., Ltd. materials;
conference services;
property
management;
property lease. (For
the projects subject
to approval
according to the law,
the business
activities shall not be
carried out before
approval by the
competent
authority.)
Wholesale and retail
of watches and
Harbin Harmony accessories, general
World Watch Subsidiaries merchandise, 500,000.00 50,233,677.52 3,085,542.96 21,618,950.37 -350,128.91 -480,437.64
Distribution Co., Ltd. jewelry,
leatherwares,
stationery articles,
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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costume; watch
repairing; design,
manufacture,
agency, distribution
of domestic
advertising
business.
Wholesale, import
&export of watches
and accessories,
jewelry, ornaments
(excluding loose
diamond and gold,
palladium material)
and the relevant
supporting
businesses (For the
Emile Chouriet commodities not
Subsidiaries 41,355,200.00 108,940,423.85 75,763,067.52 44,509,243.81 -4,952,004.03 -3,741,042.18
(Shenzhen) Limited subject to
administration of
state-run trade,
quota or license, it is
necessary to make
application
according to the
relevant regulations
of the government);
after-sale repairing
services of watches.
Production (outward
processing) and
sales of watches,
watch driving units,
watch parts,
Shanghai Watch Mutual shareholding sophisticated
15,350,000.00 109,224,801.99 100,892,448.99 46,323,386.37 -182,784.65 372,053.52
Industry Co., Ltd. company instruments and
accessories;
goods import &
export and
technology import &
export.
Subsidiaries acquired and disposed in the reporting period
Inapplicable
Note to the principal mutual shareholding companies
Inapplicable
VIII. Structurized Entities Controlled by the Company
Inapplicable
IX. Prediction of the Performances from January to September, 2018
Inapplicable
X. Risks Possibly to be Confronted with and Measures to be Taken
1. Benefited by the growth of the residents’ disposable income, the consumption market is optimistic in its medium and
long term development. However, affected by such factors as the Sino-US trade friction, capital market fluctuation,
exchange rate fluctuation, etc., the domestic residents’ consumer confidence has been impacted somewhat. The
Company needs to keep carrying out the market and customer research work, sturdily carrying forward improvement of
the operation efficiency, doing a good job in brand construction, tamping the foundation of management. Meanwhile, keep
carrying forward multi-brand strategy and seizing the opportunity of market segment growth.
2. Although the smart watch field is still in the stage of product optimization and improvement, but it has formed a certain
consumption foundation, and brought about a certain impact upon the traditional watch industry. The Company always
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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pays close attention to smart watch field, enthusiastically practices, and has been involved in the smart watch market by
means of FIYTA Brand and JEEP Brand. The Company shall still keep paying attention to the development trend of this
field and persistently carries forward ability building and product layout.
3. The change of consumers’ consumption habit, persistent rapid development of the online channel and shopping
center have caused a certain bypass to the customer flow of traditional general merchandise channel. In the aspect of
online channel, the Company made layout quite early and now is carrying forward improvement of operation ability. In the
first half year, the Company has achieved good growth in online business; in respect of offline channels, the Company
actively conducted channel structure adjustment, and building the ability of site selection, product selection and terminal
operation. As a result, the number of shopping mall channels has been increasing continuously.
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Section 5 Significant Events
I. General Meeting and Extraordinary General Meetings
1. General Meetings
Proportion of attendance of
Sessions Meeting type Meeting date Date of disclosure Disclosure index
the investors
2017 Annual General
Annual general meeting 39.07% June 21, 2018 June 21, 2018 www.cninfo.com.cn
Meeting
2018 1st Extraordinary Extraordinary General
7.37% January 16, 2018 January 17, 2018 www.cninfo.com.cn
General Meeting Meeting
2. Extraordinary general meeting requested for holding by the preferred shareholders with the voting power
recovered.
Inapplicable
II. Preplan for Profit Distribution and Conversion of Capital Reserve into Share Capital in the Reporting Period
Inapplicable
III. Commitments finished in implementation by the Company's actual controller, shareholders, related parties,
acquirer, the Company, etc. in the reporting period and commitments unfinished in implementation at the end of
the reporting period
Commitment Implementation
Commitments Promiser Commitment type Description Commitment time
deadline status
Commitment for Equity Separation Reform
Commitments in the acquisition report or the
written report on change of equity
Commitment made at the time of asset
reorganization
Commitment made at IPO or re-financing
Equity incentive commitment
Huang Yongfeng, The said directors
Commitment for
Chen Libin, Lu and senior , December 16, Completed in
Other commitments to the minority shareholders sales restriction on 6 months
Bingqiang, Lu executives 2017 implementation
shares
Wanjun, Liu increased holding
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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Xiaoming, Pan Bo, of the Company's
Li Ming, Chen shares and
Zhuo committed that
within six months
of the increase
they shall not
reduce the holding
size initiatively,
shall not be
engaged in any
inside trading,
trading the shares
during sensitive
period or short
swing trading.
Has the commitment been timely implemented Yes
If the commitment has not been implemented at
the end of the reporting period, it is necessary to
Inapplicable
explain the specific reason of failure in
implementation and the future work plan.
IV. Engagement/Disengagement of CPAs
Has the financial report to the Semi-Annual Report been audited
No
V. Explanation of the Board of Directors and the Supervisory Committee on the Qualified Auditors' Report for the
reporting period issued by the CPAs
Inapplicable
VI. Explanation of the Board of Directors on the Qualified Auditors' Report for the previous year issued by the
CPAs
Inapplicable
VII. Matters concerning Bankruptcy Reorganization
Inapplicable
VIII. Lawsuits
Inapplicable
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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IX. Penalty and Rectification
Inapplicable
X. Integrity of the Company, its Controlling Shareholder and Actual Controller
Inapplicable
XI. Implementation of the Company’s Equity Incentive Plan, Employee Stock Ownership Plan or other Employee
Incentive Measures
Inapplicable
XII. Significant Related Transactions
1. Related Transactions Related with Day-to-Day Operations
Amount of Way of
Principle of Proportion in Transaction Has the Market price
Type of Description Price of the related settlement
Related pricing of the the amount quota as approved of the similar Date of Disclosure
Relationship related of Related related transaction for the
Parties related of the similar approved (in quota been transaction disclosure index
transaction Transactions transactions (in CNY related
transactions transactions CNY10,000) exceeded? accessible
10,000) transaction
. Property
AVIC Common March 10, www.cninf
Administrativ management Market price Inapplicable 296.62 100.00% 1,000 No Bank transfer Inapplicable
Property controller 2018 o.com.cn
e expenses fee
Common Shopping March 10, www.cninf
Rainbow Ltd. Sales costs Market price Inapplicable 255.46 9.66% 800 No Bank transfer Inapplicable
controller mall fees 2018 o.com.cn
Principal
AVIC Common Engineering March 10, www.cninf
business Market price Inapplicable 46.84 88.43% 500 No Bank transfer Inapplicable
Building Co. controller fees 2018 o.com.cn
costs
Shenzhen
AVIC Group .
Common March 10, www.cninf
Enterprise Administrativ Talent fund Market price Inapplicable 14.45 100.00% 50 No Bank transfer Inapplicable
controller 2018 o.com.cn
Training e expenses
Center
Revenue
Common from Sales of March 10, www.cninf
Rainbow Ltd. Market price Inapplicable 3,506.04 2.07% 11,000 No Bank transfer Inapplicable
controller principal goods 2018 o.com.cn
business
Shennan Revenue
Common Sales of March 10, www.cninf
Circuit Co., from Market price Inapplicable 330.03 15.31% 1,500 No Bank transfer Inapplicable
controller goods 2018 o.com.cn
Ltd. principal
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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business
Revenue
Ganzhou 9 Common from Sales of March 10, www.cninf
Market price Inapplicable 70.14 0.04% 500 No Bank transfer Inapplicable
Square controller principal goods 2018 o.com.cn
business
Shenzhen
Grand Revenue
Skylight Common from Sales of March 10, www.cninf
Market price Inapplicable 0.6 0.00% - No Bank transfer Inapplicable
Hotel controller principal goods 2018 o.com.cn
Management business
Co., Ltd.
Revenue
AVIC Common from Property March 10, www.cninf
Market price Inapplicable 378.67 6.58% 2,000 No Bank transfer Inapplicable
Property controller principal lease 2018 o.com.cn
business
Revenue
AVIC Common from Property March 10, www.cninf
Market price Inapplicable 89.89 1.56% - No Bank transfer Inapplicable
SUNDA controller principal lease 2018 o.com.cn
business
Revenue
AVIC City
Common from Property March 10, www.cninf
Property Co., Market price Inapplicable 18.8 0.33% - No Bank transfer Inapplicable
controller principal lease 2018 o.com.cn
Ltd.
business
Revenue
AVIC City Common from Property March 10, www.cninf
Market price Inapplicable 0.24 0.00% - No Bank transfer Inapplicable
Development controller principal lease 2018 o.com.cn
business
Revenue
Guanlan Common from Property March 10, www.cninf
Market price Inapplicable 5.39 0.09% - No Bank transfer Inapplicable
Real Estate controller principal lease 2018 o.com.cn
business
Revenue
Tianyue Common from Property March 10, www.cninf
Market price Inapplicable 174.6 3.03% - No Bank transfer Inapplicable
Hotel controller principal lease 2018 o.com.cn
business
Revenue
Common from Property March 10, www.cninf
Rainbow Ltd. Market price Inapplicable 22.93 0.40% - No Bank transfer Inapplicable
controller principal lease 2018 o.com.cn
business
9 Square Common Revenue Property March 10, www.cninf
Market price Inapplicable 57.96 1.01% - No Bank transfer Inapplicable
Assets controller from lease 2018 o.com.cn
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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principal
business
Revenue
AVIC City Common from Property March 10, www.cninf
Market price Inapplicable 23.26 0.40% - No Bank transfer Inapplicable
Investment controller principal lease 2018 o.com.cn
business
Revenue
AVIC
Common from Property March 10, www.cninf
Huacheng Market price Inapplicable 14.37 0.25% - No Bank transfer Inapplicable
controller principal lease 2018 o.com.cn
Property
business
Revenue
AVIC Real Common from Property March 10, www.cninf
Market price Inapplicable 3.34 0.06% - No Bank transfer Inapplicable
Estate controller principal lease 2018 o.com.cn
business
Revenue
AVIC Common from Property March 10, www.cninf
Market price Inapplicable 60.86 1.06% 200 No Bank transfer Inapplicable
Securities controller principal lease 2018 o.com.cn
business
Ganzhou 9 Common Lease March 10, www.cninf
Sales costs Market price Inapplicable 54.46 1.34% 300 No Bank transfer Inapplicable
Square controller expenses 2018 o.com.cn
Jiujiang AVIC Common Lease March 10, www.cninf
Sales costs Market price Inapplicable 20.15 0.50% - No Bank transfer Inapplicable
Real Estate controller expenses 2018 o.com.cn
AVIC City
Common Lease March 10, www.cninf
Property Sales costs Market price Inapplicable 11.08 0.27% - No Bank transfer Inapplicable
controller expenses 2018 o.com.cn
(Kunshan)
Aviation
Industry Common Purchase of March 10, www.cninf
Sales costs Market price Inapplicable 0 0.00% 800 No Bank transfer Inapplicable
Corporation controller goods 2018 o.com.cn
of China
Total -- -- 5,456.18 -- 18,650 -- -- -- -- --
Details of the rejection of the goods already sold in big
Inapplicable
amount
The 24th session of the Eighth Board of Directors and 2017 Annual General Meeting reviewed and approved the Proposal on Prediction of
In case the total amount of the regular related transaction
Routine Related Transactions in 2018. It was predicted that the total amount of the related transactions between the Company and the related
incurred in the reporting period has been predicted based
parties in 2018 would not exceed CNY 186.50 million; the total amount of the related transactions actually incurred in the reporting year was
on categories, state the actual implementation of the in
CNY 54.5618 million which did not exceed the total predicted amount, where the amount actually incurred in each individual related
the reporting period (if any)
transactions did not exceed the predicted amount.
Cause of the big difference between the transaction price
Inapplicable
and the market reference price. (if applicable)
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2. Related transactions concerning acquisition and sales of assets or equity
Inapplicable
3. Related transactions concerning joint investment in foreign countries
Inapplicable
4. Current Associated Rights of Credit and Liabilities
Inapplicable
5. Other Significant Related Transactions
Inapplicable
XIII. The Company's Funds Occupied by its Controlling Shareholder or/and Related Parties for Non-operating
Purpose
Inapplicable
XIV. Important Contracts and Implementation
1. Custody, Contacting and Leases
(1) Custody
Inapplicable
(2) Contracting
Inapplicable
(3) Leases
Inapplicable
2. Significant Guarantees
(1) Guarantees
In CNY 10,000
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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Outward guarantees Offered by the Company and its Subsidiaries (excluding guarantee to the subsidiaries)
Date of the
Date of occurrence Guarantee to
announcement Actual amount of Implementati
Names of Gurantees Guarantee line (date of agreement Type of guarantee Guarantee period related
on the guarantee on status
execution) party?
guarantee line
Inapplicable
Guarantee to the subsidiaries
Date of the
Date of occurrence Guarantee to
announcement Actual amount of Implementati
Names of Gurantees Guarantee line (date of agreement Type of guarantee Guarantee period related
on the guarantee on status
execution) party?
guarantee line
FIYTA (Hong Kong) March 10, Guarantee with
8,306 April 26, 2018 2,492 1 year No No
Limited 2018 joint responsibility
Shenzhen Harmony
March 10, Guarantee with
World Watches Center 7,500 December 30, 2017 7,500 1 year No No
2017 joint responsibility
Co., Ltd.
Total amount of guarantee to the
Total guarantee quota to the subsidiaries
8,306 subsidiaries actually incurred in the 2,492
approved in the reporting period (B1)
reporting period (B2)
Total guarantee quota to the subsidiaries Total balance of actual guarantee to the
approved at the end of the reporting period 15,806 subsidiaries at the end of the reporting 9,992
(B3) period (B4)
Guarantee among the subsidiaries
Date of the
Date of occurrence Guarantee to
announcement Actual amount of Implementati
Names of Gurantees Guarantee line (date of agreement Type of guarantee Guarantee period related
on the guarantee on status
execution) party?
guarantee line
Total amount of guarantees (i.e. Total of the previous three major items)
Total guarantee quota to the subsidiaries Total amount of outward guarantee
approved in the reporting period 8,306 actually incurred in the report period 2,492
(A1+B1+C1) (A2+B2+B3)
Total amount of guarantees already
Total ending balance of guarantees at
approved at the end of the report period 15,806 9,992
the end of the report period (A4+B4+C4)
(A3+B3+C3)
Proportion of the actual guarantees in the Company’s net assets (namely A4+B4 +
3.87%
C4)
Including:
Amount of guarantees offered to the shareholders, actual controller and its related
0
parties (D)
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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Amount of guarantee for liabilities directly or indirectly offered to the guarantees
0
with the asset-liability ratio exceeding 70% (E)
Guarantee with total amount exceeding 50% of the net assets (F) 0
Total amount of the aforesaid three guarantees (D+E+F) 0
Note to the undue guarantee which may bring about joint responsibility for
Inapplicable
discharging (if any)
Note to the outward guarantee against the established procedures (if any) Inapplicable
(2) Outward guarantee against regulations
Inapplicable
3. Other Important Contracts
Inapplicable
XV. Social Responsibilities
1. Significant Issues concerning Environmental Protection
Does the Company or any of its subsidiaries belong to a key pollutant discharging unit as announced to the public by the
environmental protection authority?
Yes
Description of
Pollutant
Name of the the major Number of Distribution of
Way of Discharging Discharge Total discharge Total discharge Over-dischargin
Company or its pollutants or discharging the discharging
discharging concentration Standards in volume volume verified g
Subsidiary specific outlets outlets
Force
pollutant
At the port of
Shanghai Watch Nickel and Nickel﹤0.01,
Intermittent and effluent Nickel:0.1;
Industry Co., chromium 1 Chromium﹤ 2640 tons/year 3960 tons/year None
interruption treatment chromium:0.3
Ltd. effluent 0.01
equipment
Construction and operation of the pollution prevention and control facilities
Shanghai Watch Co., Ltd. reconstructed the clean production facility in 2016 and added 2 sets of equipment in 2018 for
the purpose of ensuring discharging of nickel and chromium effluent to comply with the Emission Standard of Pollutants
for Electroplating. So far, the facility has been running normally and has never over-discharged the pollutants; and has
now networked the platform of the local environmental protection authority.
Environmental impact assessment on construction projects and other environmental protection administrative licensing
In 2018 Yangpu District Environmental Protection Bureau of Shanghai organized and held the Clean Production Auditing
and Assessment Seminar of Shanghai Watch Co., Ltd. where the company's clean production work was assessed,
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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audited and approved.
Shanghai Watch Co., Ltd.has passed the pollution discharge verification organized by Yangpu District Environmental
Protection Bureau of Shanghai with the Notice of Pollution Discharging Verification No.: YANG HUAN JIAN HUAN JIAN
FEI HE ZI [2007] No. 05363;
In accordance with the provisions of Shanghai Environmental Protection Bureau, the Company is going to apply for the
pollutant discharging licence before the end of 2019. At present, the company is making the relevant preparation work for
application for the pollutant discharging licence.
Contingency Plan for Emergent Environmental Incidents
Shanghai Watch Co., Ltd. prepared the Emergency Response Plan against Emergent Environmental Incidents and
regularly organizes training and exercise every year. The aforesaid plan has been approved and filed for record by
Yangpu District Environmental Protection Bureau of Shanghai and has been published on the Environmental Information
Disclosure Platform of Enterprises and Institutions of Shanghai.
Environment Self-Monitoring Program
Yangpu District Environmental Protection Bureau of Shanghai conducts supervision once every quarter. The company
entrusts Shanghai Light Industry Environment Protection and Pressure Vessel Monitoring General Station, a competent
independent agent, to conduct the monitoring every year. The company is itself equipped with monitoring instruments and
conducts self-monitoring at least 4 times every month.
Other environment information necessary to be disclosed
The company has disclosed the concerned information on the Environmental Information Disclosure Platform of
Enterprises and Institutions of Shanghai according to the requirements of the local environmental protection authorities.
Website: http://xxgk.eic.sh.cn
Other information in connection with the environmental protection
None
2. Implementation of the social responsibility of precise poverty relief
During the reporting period of half a year, the Company had neither precise poverty relief work nor follow-up precise
poverty relief plan to be carried out.
XVI. Notes to Other Significant Events
Inapplicable
XVII. Significant Events of the Company's Subsidiaries
Inapplicable
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Section 6 Change of Shares and Particulars about Shareholders
I. Change of Shares
1. Change of Shares
In shares
Before the change Increase / Decrease (+/ -) After the change
Shares
Quantity Proportion New issuing Bonus shares converted Others Sub-total Quantity Proportion
from reserve
I. Restricted shares 490,773 0.11% -110,260 -110,260 380,513 0.09%
1. Shares held by the state 0 0.00% 0 0 0 0.00%
2. State corporate shares 0 0.00% 0 0 0 0.00%
3. Other domestic shares 490,773 0.11% -110,260 -110,260 380,513 0.09%
Including: Domestic corporate
0 0.00% 0 0 0 0.00%
shares
Shares held by domestic
490,773 0.11% -110,260 -110,260 380,513 0.09%
natural persons
4、Foreign invested shares 0 0.00% 0 0 0 0.00%
Including: Foreign corporate shares 0 0.00% 0 0 0 0.00%
Shares held by foreign
0 0.00% 0 0 0 0.00%
natural persons
II. Unrestricted shares 438,254,108 99.89% 110,260 110,260 438,364,368 99.91%
1. CNY ordinary shares 356,606,108 81.28% 110,260 110,260 356,716,368 81.30%
2. Foreign invested shares listed in
81,648,000 18.61% 0 0 81,648,000 18.61%
Mainland China
3、Foreign invested shares listed
0 0.00% 0 0 0 0.00%
abroad
4. Others 0 0.00% 0 0 0 0.00%
III. Total shares 438,744,881 100.00% 0 0 438,744,881 100.00%
Cause of the change of shares
On December 15, 2017, part of the Company’s directors and senior executives increased the holding of the Company’s
shares in a way of centralized auction trading through the securities trading system of Shenzhen Stock Exchange totaling
441,040 shares, taking 0.10% of the Company’s total shares. During the reporting period, the Company released the
restriction for sale on 110,260 shares.
Approval of Change of the Shares
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Inapplicable
Transfer of the Shares Changed
Inapplicable
Influence of the change of the shares upon such financial indicators as the basic EPS and diluted EPS, net asset value
per share attributable to the common stockholders in the past year and the latest period
Inapplicable
Other information the Company considers necessary or required by the securities regulatory authority to be disclosed.
Inapplicable
2. Change of the Restricted Shares
In shares
Number of restricted Number of restricted Number of restricted Number of restricted
Names of the Date of relieving the
shares at the beginning shares relieved in the shares increased in the shares at the end of Cause of restriction
Shareholders restriction
of the reporting period reporting period reporting period the reporting period
Restricted shares held
Huang Yongfeng 80,000 20,000 0 60,000 by the senior June 16, 2018
executives
Restricted shares held
Chen Libin 80,000 20,000 0 60,000 by the senior June 16, 2018
executives
Restricted shares held
Lu Bingqiang 79,733 7,500 0 72,233 by the senior June 16, 2018
executives
Restricted shares held
Lu Wanjun 50,000 12,500 0 37,500 by the senior June 16, 2018
executives
Restricted shares held
Liu Xiaoming 50,000 12,500 0 37,500 by the senior June 16, 2018
executives
Restricted shares held
Pan Bo 50,000 12,500 0 37,500 by the senior June 16, 2018
executives
Restricted shares held
Li Ming 50,040 12,510 0 37,530 by the senior June 16, 2018
executives
Restricted shares held
Chen Zhuo 51,000 12,750 0 38,250 by the senior June 16, 2018
executives
Total 490,773 110,260 0 380,513 -- --
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II. Issuing and Listing
Inapplicable
III. Number of Shareholders and Shareholding
In shares
Total preference shareholders with the
Total common shareholders at the end of
32,013 voting power recovered at the end of the 0
the reporting period
reporting period (if any) (Refer to Note 8)
Shares held by the common shareholders holding over 5% shares or the top 10 common shareholders
Number of Pledging or freezing
Increase/decre Number of the Number of the
common shares
Names of the Shareholding ase in the restricted unrestricted
Nature of the shareholder held at the end Status of the
Shareholders proportion reporting common shares common shares Quantity
of the reporting shares
period held held
period
AVIC International
State corporate 37.15% 162,977,327 0 0 162,977,327
Holding Limited
#Yang Zugui Domestic natural persons 2.23% 9,763,469 100,000 0 9,763,469
National Social Domestic
Security Fund 114 non-state-owned 2.15% 9,417,998 6,159,526 0 9,417,998
Portfolio corporate
Chongqing
International Trust Domestic
Co., Ltd. - non-state-owned 2.07% 9,088,723 -332,957 0 9,088,723
RONGXINTONG corporate
Series Unitrust No.10
Chongqing
Domestic
International Trust
non-state-owned 1.90% 8,326,000 -777,318 0 8,326,000
Co., Ltd. - YUXIN
corporate
Trust No.2
Chongqing
International Trust
Domestic natural persons 1.59% 6,996,595 0 0 6,996,595
Co., Ltd. - YUXIN No.
2 Trust
Industrial and
Commercial Bank of
Domestic
China Co., Ltd. -
non-state-owned 1.26% 5,537,337 4,200,837 0 5,537,337
FUGUO Recreation
corporate
& Sports and Health
Stock Type Securities
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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Investment Fund
Xizang Investment
State corporate 1.13% 4,976,551 0 0 4,976,551
Co., Ltd.
MANULIFE TEDA
Fund－ Minsheng
Bank－MANULIFE
Domestic
TEDA Value Growth
non-state-owned 1.12% 4,893,559 -150,000 0 4,893,559
Oriented Additional
corporate
Issue No. 351 Assets
Management
Program
Shenzhen Heli Domestic
Fengyuan Commerce non-state-owned 0.75% 3,300,000 0 0 3,300,000
& Trade Co., Ltd. corporate
Of the top 10 shareholders, Xizang Investment Co., Ltd., MANULIFE TEDA Fund - Minsheng Bank－MANULIFE TEDA
About the fact that a strategic investor or
Value Growth Oriented Additional Issue No. 351 Assets Management Program are all the shareholders that have
ordinary corporate became one of the top ten
participated in the Company's non-public issuing; the new shares subscribed by them got listed with Shenzhen Stock
common shareholders due to placement of new
Exchange on January 15, 2016 and they were not allowed to be listed for trading or assigned within 12 months commencing
shares (if any) (Refer to Note 3)
from the first of listing. The aforesaid restriction on sales has been released since January 16, 2017.
Of the top 10 shareholders, both Chongqing International Trust Co., Ltd. - Rongxintong Serial Order - No. 10 Trust and
Explanation on associated relationship or
Chongqing International Trust Co., Ltd. - YUXIN No. 2 Trust are subsidiaries of Chongqing International Trust Co., Ltd. Both
consistent action of the above shareholders
of them are holding totaling 17,414,723 shares in the Company, which takes 3.97% of the Company's total shares.
Shares held by top 10 shareholders of unrestricted shares
Share type
Names of the Shareholders Quantity of unrestricted shares held at the end of the reporting period
Share type Quantity
AVIC International Holding Limited 162,977,327 CNY ordinary shares 162,977,327
#Yang Zugui 9,763,469 CNY ordinary shares 9,763,469
National Social Security Fund 114 Portfolio 9,417,998 CNY ordinary shares 9,417,998
Chongqing International Trust Co., Ltd. -
9,088,723 CNY ordinary shares 9,088,723
RONGXINTONG Series Unitrust No.10
Chongqing International Trust Co., Ltd. - YUXIN
8,326,000 CNY ordinary shares 8,326,000
Trust No.2
Chongqing International Trust Co., Ltd. - YUXIN
6,996,595 CNY ordinary shares 6,996,595
No. 2 Trust
Industrial and Commercial Bank of China Co.,
Ltd. - FUGUO Recreation & Sports and Health 5,537,337 CNY ordinary shares 5,537,337
Stock Type Securities Investment Fund
Xizang Investment Co., Ltd. 4,976,551 CNY ordinary shares 4,976,551
MANULIFE TEDA Fund－ Minsheng Bank－ 4,893,559 CNY ordinary shares 4,893,559
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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MANULIFE TEDA Value Growth Oriented
Additional Issue No. 351 Assets Management
Program
Shenzhen Heli Fengyuan Commerce & Trade
3,300,000 CNY ordinary shares 3,300,000
Co., Ltd.
Note to the associated relationship or
consistent action among the top 10
Of the top 10 shareholders, both Chongqing International Trust Co., Ltd. - Rongxintong Serial Order - No. 10 Trust and
shareholders of non-restricted common shares
Chongqing International Trust Co., Ltd. - YUXIN No. 2 Trust are subsidiaries of Chongqing International Trust Co., Ltd. Both
and that between the top 10 shareholders of
of them are holding totaling 17,414,723 shares in the Company, which takes 3.97% of the Company's total shares.
non-restricted common shares and top 10
common shareholders.
Note to the top 10 common shareholders
involved in margin financing & securities lending Inapplicable
(if any) (Refer to Note 4)
Did the top ten common shareholders or top ten shareholders of unrestricted common shares conduct contractual
repurchase during the reporting period?
No
IV. Change of the Controlling Shareholder or Actual Controller
Inapplicable
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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Section 7 About the Preferred Shares
Inapplicable
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Section 8 Directors, Supervisors, Senior Executives and Employees
I. Change in Shares Held by Directors, Supervisors and Senior Executives
No change has taken place in the shares held by directors, supervisors and senior executives of the Company during the
reporting period. For the detail, refer to 2017 Annual Report.
II. Personnel Change in Directors, Supervisors and Senior Executives
No change has taken place in directors, supervisors and senior executives of the Company during the reporting period.
For the detail, refer to 2017 Annual Report.
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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Section 9 Company Bonds
Did there exist any company bonds publically issued and listed with any stock exchange for trading while still undue at the
time of issuing the Semi-annual report or not yet fully honored although already due at the end of the reporting period
No
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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Section 10 Financial Report
I. Auditors’ Report
The Semi-Annual Report has not been audited.
II. Financial Statements
The currency applied in the financial notes and statements is Renminbi (CNY)
1. Consolidated Balance Sheet
Prepared by FIYTA Holdings Ltd.
June 30, 2018
In CNY
Items Ending balance Ending balance
Current assets:
Monetary fund 281,009,271.58 187,152,891.32
Settlement reserve
Inter-bank lending
Financial assets which is measured based on
the fair value and whose movement is counted to the
current gain/loss
Derivative financial assets
Notes receivable 4,632,089.34 9,693,883.68
Accounts receivable 378,420,568.27 326,254,624.94
Advance payment 24,690,349.29 24,663,314.53
Receivable premium
Reinsurance accounts receivable
Reserve for reinsurance contract receivable
Interest receivable
Dividends receivable
Other receivables 47,707,666.00 34,990,539.09
Redemptory monetary capital for sale
Inventories 1,735,371,328.09 1,820,526,676.26
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Held-for-sale assets
Non-current assets due within a year
Other current assets 23,779,637.36 24,616,815.21
Total current assets 2,495,610,909.93 2,427,898,745.03
Non-current assets:
Provision of loans and advance in cash
Available-for-sale financial assets 85,000.00 85,000.00
Held-to-due investments
Long term accounts receivable
Long-term equity investment 43,972,531.47 43,879,518.09
Investment real estate 348,258,775.18 305,493,987.77
Fixed assets 463,913,136.18 523,699,592.65
Construction-in-process 12,515,382.25 10,947,300.53
Engineering supplies
Clearing of fixed assets
Productive biological asset
Oil and gas assets
Intangible assets 44,446,605.63 44,223,280.21
Development expenses
Goodwill
Long-term expenses to be apportioned 109,190,273.11 109,409,785.49
Deferred income tax asset 106,468,887.10 105,905,944.80
Other non-current assets 4,863,862.29 8,246,538.33
Total non-current assets 1,133,714,453.21 1,151,890,947.87
Total assets 3,629,325,363.14 3,579,789,692.90
Current liabilities:
Short term borrowings 479,917,100.00 525,990,510.00
Borrowings from central bank
Deposits taking and interbank placement
Loans from other banks
Financial liabilities measured based on the fair
value and whose change was charged to the current
gain and loss.
Derivative financial liabilities
Notes payable
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Accounts payable 266,982,797.21 263,256,495.65
Advance receipts 18,605,653.79 15,141,587.79
Funds from selling out and repurchasing
financial assets
Service charge and commission payable
Salaries payable to the employees 40,464,315.83 71,564,367.14
Taxes payable 56,008,726.34 55,857,236.59
Interest payable 686,654.15 1,464,729.11
Dividends payable
Other payables 84,655,036.89 57,767,536.64
Payable reinsurance
Reserve for insurance contract
Acting trading securities
Income from securities underwriting on
commission
Held-for-sale liabilities
Non-current liabilities due within a year 35,000,000.00 35,000,000.00
Other current liabilities
Total current liabilities 982,320,284.21 1,026,042,462.92
Non-current liabilities:
Long term borrowings 62,153,235.50 79,870,353.00
Bonds payable
Including: preferred shares
Perpetual bond
Long-term accounts payable
Long term accrued payroll
Special accounts payable
Predicted liabilities
Deferred income 5,904,000.00 5,904,000.00
Deferred income tax liability
Other non-current liabilities
Total non-current liabilities 68,057,235.50 85,774,353.00
Total liabilities 1,050,377,519.71 1,111,816,815.92
Owner’s equity:
Capital Stock 438,744,881.00 438,744,881.00
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Other equity instruments
Including: preferred shares
Perpetual bond
Capital Reserve 1,062,455,644.22 1,062,455,644.22
Less: shares in stock
Other comprehensive income -12,916,362.14 -11,523,442.39
Special reserve
Surplus Reserve 206,805,713.35 206,805,713.35
Reserve against general risks
Retained earnings 883,852,486.46 771,484,565.02
Total owners’ equity attributable to the parent
2,578,942,362.89 2,467,967,361.20
company
Minority shareholders’ equity 5,480.54 5,515.78
Total owner’s equity 2,578,947,843.43 2,467,972,876.98
Total liabilities and owners’ equity 3,629,325,363.14 3,579,789,692.90
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
2. Balance Sheet, Parent Company
Prepared by FIYTA Holdings Ltd.
June 30, 2018
In CNY
Items Ending balance Ending balance
Current assets:
Monetary fund 253,398,514.18 131,163,944.43
Financial assets which is measured based on
the fair value and whose movement is counted to the
current gain/loss
Derivative financial assets
Notes receivable
Accounts receivable 7,386,159.04 6,832,006.11
Advance payment
Interest receivable
Dividends receivable
Other receivables 698,286,652.54 831,952,437.86
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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Inventories
Held-for-sale assets
Non-current assets due within a year
Other current assets 10,533,391.51 9,089,170.12
Total current assets 969,604,717.27 979,037,558.52
Non-current assets:
Available-for-sale financial assets 85,000.00 85,000.00
Held-to-due investments
Long term accounts receivable
Long-term equity investment 1,375,221,122.40 1,375,128,109.02
Investment real estate 265,238,770.42 270,241,724.52
Fixed assets 334,026,583.81 340,765,873.45
Construction-in-process 12,515,382.25 10,947,300.53
Engineering supplies
Clearing of fixed assets
Productive biological asset
Oil and gas assets
Intangible assets 36,303,042.25 36,932,963.95
Development expenses
Goodwill
Long-term expenses to be apportioned 4,789,075.14 4,418,287.94
Deferred income tax asset 1,499,126.32 1,499,126.32
Other non-current assets 1,322,816.84 2,687,910.84
Total non-current assets 2,031,000,919.43 2,042,706,296.57
Total assets 3,000,605,636.70 3,021,743,855.09
Current liabilities:
Short term borrowings 455,000,000.00 470,000,000.00
Financial liabilities measured based on the fair
value and whose change was charged to the current
gain and loss.
Derivative financial liabilities
Notes payable
Accounts payable 57,686,340.48 60,520,874.66
Advance receipts 3,401,495.93 4,212,930.07
Salaries payable to the employees 4,580,915.75 9,291,422.00
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Taxes payable 2,626,857.04 1,038,481.26
Interest payable 663,902.90 929,155.39
Dividends payable
Other payables 38,509,235.57 20,666,945.05
Held-for-sale liabilities
Non-current liabilities due within a year 35,000,000.00 35,000,000.00
Other current liabilities
Total current liabilities 597,468,747.67 601,659,808.43
Non-current liabilities:
Long term borrowings 57,361,928.00 74,861,928.00
Bonds payable
Including: preferred shares
Perpetual bond
Long-term accounts payable
Long term accrued payroll
Special accounts payable
Predicted liabilities
Deferred income 5,904,000.00 5,904,000.00
Deferred income tax liability
Other non-current liabilities
Total non-current liabilities 63,265,928.00 80,765,928.00
Total liabilities 660,734,675.67 682,425,736.43
Owner’s equity:
Capital Stock 438,744,881.00 438,744,881.00
Other equity instruments
Including: preferred shares
Perpetual bond
Capital Reserve 1,068,111,185.32 1,068,111,185.32
Less: shares in stock
Other comprehensive income
Special reserve
Surplus Reserve 206,805,713.35 206,805,713.35
Retained earnings 626,209,181.36 625,656,338.99
Total owner’s equity 2,339,870,961.03 2,339,318,118.66
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Total liabilities and owners’ equity 3,000,605,636.70 3,021,743,855.09
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
3.Consolidated Profit Statement
Prepared by FIYTA Holdings Ltd.
June 30, 2018
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
I. Turnover 1,695,891,432.72 1,599,541,144.35
Including: operating income 1,695,891,432.72 1,599,541,144.35
Interest income
Earned insurance premium
Service charge and commission income
II. Total operating costs 1,556,492,673.56 1,488,102,213.22
Including: Operating costs 976,325,736.35 941,479,684.84
Interest payment
Service charge and commission payment
Surrender Value
Compensation expenses, net
Provision of reserve for insurance
contract, net
Payment of policy dividend
Reinsurance expenses
Taxes and surcharges 17,790,786.43 15,181,497.28
Sales costs 422,113,041.69 394,286,321.79
. Administrative expenses 125,528,317.71 98,170,386.95
Financial expenses 18,147,791.49 26,200,633.06
Loss from impairment of assets -3,413,000.11 12,783,689.30
Add: Income from change of fair value (loss is
stated with “-“)
Investment income (loss is stated with “-“) 93,013.38 188,871.89
Including: return on investment in associate
93,013.38 188,871.89
and joint venture
Exchange income (loss stated with “-“)
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Income from disposal of assets (loss is
-54,407.16 -13,352.95
stated with “-“)
Other income 6,497,018.80 1,478,043.00
III. Operating Profit (loss is stated with “-“) 145,934,384.18 113,092,493.07
Plus: Non-operating income 363,859.51 145,866.91
Less: Non-operating expenses 466,522.53 661,190.44
IV. Total profit (total loss is stated with “-”) 145,831,721.16 112,577,169.54
Less: Income tax expense 33,463,799.72 25,965,385.00
V. Net Profit (net loss is stated with “-“) 112,367,921.44 86,611,784.54
(I) Net Profit from sustainable operation (net loss
112,367,921.44 86,611,784.54
is stated with “-“)
(II) Net profit from termination of business
operation (net loss is stated with “-“)
Net profit attributable to the parent company’s
112,367,921.44 86,708,824.76
owner
Minority shareholders’ gain/loss -97,040.22
VI. Net of other comprehensive income after tax -1,392,954.99 7,086,490.52
Net of other comprehensive income after tax
-1,392,919.75 7,168,544.58
attributable to the parent company’s owner
(I) Other comprehensive income which cannot be
re-classified into the gain and loss
1. Movement of the net liabilities and net
assets re-measured for setting the beneficial plan
2. Share enjoyable in the other
comprehensive income in which the investee cannot be
re-classified into the gain and loss under the equity
method
(II) Other comprehensive income which cannot be
-1,392,919.75 7,168,544.58
re-classified into the gain and loss in future
1. Share enjoyable in the other
comprehensive income in which the investee cannot be
re-classified into the gain and loss under the equity
method in future
2. Gain/loss from change in the fair value
of the financial assets available for sale
3. Gain/loss from which the
held-to-maturity investment is re-classified as
available-for-sale financial assets
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4. Valid part of the gain/loss from cash
flow hedge
5. Conversion difference in foreign
-1,392,919.75 7,168,544.58
currency statements
6. Others
Net amount of other comprehensive income after tax
-35.24 -82,054.06
attributable to minority shareholders
VII. Total comprehensive income 110,974,966.45 93,698,275.06
Total comprehensive income attributable to the
110,975,001.69 93,877,369.34
parent company’s owner
Total comprehensive income attributable to
-35.24 -179,094.28
minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share 0.2561 0.1976
(II) Diluted earnings per share 0.2561 0.1976
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
4.Statement of Profit, Parent Company
Prepared by FIYTA Holdings Ltd.
June 30, 2018
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
I. Revenue 56,119,634.18 51,354,423.93
Less: Operating cost 9,578,544.70 8,618,881.55
Taxes and surcharges 2,206,362.07 1,857,724.22
Sales costs 5,024,222.36
. Administrative expenses 41,637,155.81 33,744,643.77
Financial expenses 3,554,000.36 5,846,311.05
Loss from impairment of assets
Add: Income from change of fair value (loss is
stated with “-“)
Investment income (loss is stated with “-“) 93,013.38 188,871.89
Including: return on investment in
93,013.38 188,871.89
associate and joint venture
Income from disposal of assets (loss is -13,917.68
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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stated with “-“)
Other income 1,598,000.00 754,000.00
II. Operating Profit (loss is stated with “-“) 820,666.94 -2,794,487.13
Plus: Non-operating income 9,480.00 35,879.89
Less: Non-operating expenses 446,782.07 20,000.00
III. Total profit (total loss is stated with “-“) 383,364.87 -2,778,607.24
Less: Income tax expense -169,477.50 -1,787,850.83
IV. Net Profit (net loss is stated with “-“) 552,842.37 -990,756.41
(I) Net Profit from sustainable operation (net
552,842.37 -990,756.41
loss is stated with “-“)
(II) Net profit from termination of business
operation (net loss is stated with “-“)
V. Net of other comprehensive income after tax
(I) Other comprehensive income which cannot
be re-classified into the gain and loss
1. Movement of the net liabilities and
net assets re-measured for setting the beneficial plan
2. Share enjoyable in the other
comprehensive income in which the investee cannot
be re-classified into the gain and loss under the
equity method
(II) Other comprehensive income which cannot
be re-classified into the gain and loss in future
1. Share enjoyable in the other
comprehensive income in which the investee cannot
be re-classified into the gain and loss under the
equity method in future
2. Gain/loss from change in the fair
value of the financial assets available for sale
3. Gain/loss from which the
held-to-maturity investment is re-classified as
available-for-sale financial assets
4. Valid part of the gain/loss from cash
flow hedge
5. Conversion difference in foreign
currency statements
6. Others
VI. Total comprehensive income 552,842.37 -990,756.41
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VII. Earnings per share:
(I) Basic earnings per share 0.0013 -0.0023
(II) Diluted earnings per share 0.0013 -0.0023
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
5. Consolidated Cash Flow Statement
Prepared by FIYTA Holdings Ltd.
June 30, 2018
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
I. Net cash flows arising from operating activities:
Cash received from sales of goods and supply
1,905,278,291.59 1,812,867,961.66
of labor service
Net increase of customers’ deposit and due
from banks
Net increase of borrowings from the central
bank
Net increase of borrowings from other financial
institutions
Cash received from the premium of the original
insurance contract
Net cash received from the reinsurance
business
Net increase of the reserve from policy holders
and investment
Net increase from disposal of financial assets
which is measured based on the fair value and
whose movement is counted to the current gain/loss
Cash received from interest, service charge
and commission
Net increase of loan from other banks
Net increase of fund from repurchase business
Rebated taxes received 185,691.63 84,719.44
Other operation activity related cash receipts 25,022,648.38 19,800,294.79
Subtotal of cash flow in from operating activity 1,930,486,631.60 1,832,752,975.89
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FIYTA HOLDINGS LTD. 2018 Semi-annual Report, Full Tex
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Cash paid for purchase of goods and reception
1,010,882,821.40 980,063,342.31
of labor services
Net increase of loans and advances to
customers
Net increase of due from central bank and due
from banks
Cash from payment for settlement of the
original insurance contract
Cash paid for interest, service charge and
commission
Cash for payment of policy dividend
Cash paid to and for staff 308,576,830.37 263,216,670.99
Taxes paid 169,009,260.06 130,097,049.65
Other business activity related cash payments 217,345,445.68 182,660,252.41
Subtotal of cash flow out from operating activity 1,705,814,357.51 1,556,037,315.36
Net cash flows arising from operating activities 224,672,274.09 276,715,660.53
II. Cash flows arising from investment activities:
Cash received from recovery of investment
Cash received from investment income
Net cash from disposal of fixed assets and
intangible asset and recovery of other long term 6,872.90 24,249.89
assets
Net cash received from disposal of subsidiaries
and other operating units
Other investment related cash receipts
Subtotal of cash flow in from investment activity 6,872.90 24,249.89
Cash paid for purchase/construction of fixed
52,519,739.81 56,447,301.65
assets, Intangible assets and other long term assets
Cash paid for investment
Net increase of the pledged loan
Net cash paid for acquisition of subsidiaries and
other operation units
Other investment related cash payments
Subtotal of cash flow out from investment activity 52,519,739.81 56,447,301.65
Net cash flow arising from investment activities -52,512,866.91 -56,423,051.76
III. Cash flows arising from fund raising activities:
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Cash received from absorbing investment
Incl.: Cash received from the subsidiaries’
absorption of minority shareholders’ investment
Cash received from loans 384,997,200.00 173,846,200.00
Cash received from bond issuing
Other fund-raising related cash receipts
Subtotal of cash flow in from fund raising activity 384,997,200.00 173,846,200.00
Cash paid for debt repayment 448,409,609.38 371,965,603.86
Cash paid for dividend/profit distribution or
15,009,057.38 66,091,946.92
repayment of interest
Including: Dividend and profit paid by the
subsidiaries to minority shareholders
Cash paid for other financing activities
Sub-total cash flow paid for financing activities 463,418,666.76 438,057,550.78
Net cash flow arising from financing activities -78,421,466.76 -264,211,350.78
IV. Change of exchange rate influencing the cash
118,439.84 339,990.07
and cash equivalent
V. Net increase of cash and cash equivalents 93,856,380.26 -43,578,751.94
Plus: Opening balance of cash and cash
184,947,891.32 427,227,755.81
equivalents
VI. Ending balance of cash and cash equivalents 278,804,271.58 383,649,003.87
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
6.Cash Flow Statement, Parent Company
Prepared by FIYTA Holdings Ltd.
June 30, 2018
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
I. Net cash flows arising from operating activities
Cash received from sales of goods and supply
56,758,456.16 50,374,752.27
of labor service
Rebated taxes received
Other operation activity related cash receipts 1,204,947,705.78 264,986,637.47
Subtotal of cash flow in from operating activity 1,261,706,161.94 315,361,389.74
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Cash paid for purchase of goods and reception
of labor services
Cash paid to and for staff 33,422,054.30 31,949,428.47
Taxes paid 4,702,936.63 4,894,598.25
Other business activity related cash payments 1,045,289,650.60 13,685,482.18
Subtotal of cash flow out from operating activity 1,083,414,641.53 50,529,508.90
Net cash flows arising from operating activities 178,291,520.41 264,831,880.84
II. Cash flows arising from investment activities:
Cash received from recovery of investment
Cash received from investment income
Net cash from disposal of fixed assets and
intangible asset and recovery of other long term
assets
Net cash received from disposal of subsidiaries
and other operating units
Other investment related cash receipts
Subtotal of cash flow in from investment activity
Cash paid for purchase/construction of fixed
9,442,405.28 26,633,834.50
assets, Intangible assets and other long term assets
Cash paid for investment
Net cash paid for acquisition of subsidiaries and
other operation units
Other investment related cash payments
Subtotal of cash flow out from investment activity 9,442,405.28 26,633,834.50
Net cash flow arising from investment activities -9,442,405.28 -26,633,834.50
III. Cash flows arising from fund raising activities:
Cash received from absorbing investment
Cash received from loans 360,000,000.00 165,000,000.00
Cash received from bond issuing
Other fund-raising related cash receipts
Subtotal of cash flow in from fund raising activity 360,000,000.00 165,000,000.00
Cash paid for debt repayment 392,500,000.00 354,000,000.00
Cash paid for dividend/profit distribution or
14,108,861.83 62,917,164.79
repayment of interest
Cash paid for other financing activities
Sub-total cash flow paid for financing activities 406,608,861.83 416,917,164.79
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Net cash flow arising from financing activities -46,608,861.83 -251,917,164.79
IV. Change of exchange rate influencing the cash
-5,683.55 -26,249.80
and cash equivalent
V. Net increase of cash and cash equivalents 122,234,569.75 -13,745,368.25
Plus: Opening balance of cash and cash
128,958,944.43 269,372,926.47
equivalents
VI. Ending balance of cash and cash equivalents 251,193,514.18 255,627,558.22
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
7.Consolidated Statement of Changes in Owner’s Equity
Prepared by FIYTA Holdings Ltd.
June 30, 2018
Amount in the reporting period
In CNY
Reporting period
Owners’ equity attributable to the parent company
Other equity instruments Other Reserve Minority Total
Items
Less:
Capital Capital comprehe Special Surplus against Retained shareholde owner’s
Preferre Perpetu shares in
Stock Reserve nsive reserve Reserve general earnings rs’ equity equity
Others
d shares al bond stock
income risks
I. Ending balance of the 438,744, 1,062,455, -11,523,44 206,805,7 771,484,5 2,467,972,
5,515.78
previous year 881.00 644.22 2.39 13.35 65.02 876.98
Plus: Change in
0.00
accounting policy
Correction of
0.00
previous errors
Consolidation
of enterprises under the 0.00
same control
Others 0.00
II. Opening balance of 438,744, 1,062,455, -11,523,44 206,805,7 771,484,5 2,467,972,
5,515.78
the reporting year 881.00 644.22 2.39 13.35 65.02 876.98
III. Decrease/increase of
-1,392,919 112,367,92 110,974,9
the report year (decrease -35.24
.75 1.44 66.45
is stated with “-“)
(I) Total comprehensive -1,392,919 112,367,92 -35.24 110,974,9
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income .75 1.44 66.45
(II) Owners’ input and
0.00
decrease of capital
1.Common shares
contributed by the 0.00
shareholder
2. Capital contributed by
other equity instruments 0.00
holders
3. Amount of payment for
shares credited to 0.00
owners’ equity
4. Others 0.00
(III) Profit Distribution 0.00
1. Provision of surplus
0.00
reserve
2. Provision of generic
0.00
risk reserve
3. Distribution to the
0.00
owners (or shareholders)
4. Others 0.00
(IV) Internal carry-over of
0.00
owners’ equity
1. Conversion of capital
reserve into capital (or 0.00
capital stock)
2. Conversion of surplus
reserve into capital (or 0.00
capital stock)
3. Loss made up with
0.00
surplus reserve
4. Others 0.00
(V) Special reserve 0.00
1. Provision in the
0.00
reporting period
2.. Applied in the
0.00
reporting period
(VI) Others 0.00
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IV. Ending balance of the 438,744, 1,062,455, -12,916,36 206,805,7 883,852,4 2,578,947,
5,480.54
reporting period 881.00 644.22 2.14 13.35 86.46 843.43
Amount of the previous year
In CNY
Previous period
Owners’ equity attributable to the parent company
Other equity instruments Other Reserve Minority Total
Items
Less:
Capital Capital comprehe Special Surplus against Retained sharehold owner’s
Preferre Perpetu shares in
Stock Others Reserve nsive reserve Reserve general earnings ers’ equity equity
d shares al bond stock
income risks
I. Ending balance of the 438,744, 1,062,455, -11,778,49 193,961,7 687,986,80 3,577,654. 2,374,948,
previous year 881.00 644.22 8.24 00.45 7.74 56 189.73
Plus: Change in
accounting policy
Correction of
previous errors
Consolidation
of enterprises under the
same control
Others
II. Opening balance of 438,744, 1,062,455, -11,778,49 193,961,7 687,986,80 3,577,654. 2,374,948,
the reporting year 881.00 644.22 8.24 00.45 7.74 56 189.73
III. Decrease/increase of
the report year 255,055.8 12,844,01 83,497,757 -3,572,138 93,024,68
(decrease is stated with 5 2.90 .28 .78 7.25
“-“)
(I) Total comprehensive 255,055.8 140,216,25 2,116,368. 142,587,6
income 5 8.28 91 83.04
(II) Owners’ input and -5,688,507 -5,688,507
decrease of capital .69 .69
1.Common shares
contributed by the
shareholder
2. Capital contributed by
other equity instruments
holders
3. Amount of payment for
shares credited to
owners’ equity
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-5,688,507 -5,688,507
4. Others
.69 .69
12,844,01 -56,718,50 -43,874,48
(III) Profit Distribution
2.90 1.00 8.10
1. Provision of surplus 12,844,01 -12,844,01
reserve 2.90 2.90
2. Provision of generic
risk reserve
3. Distribution to the -43,874,48 -43,874,48
owners (or shareholders) 8.10 8.10
4. Others
(IV) Internal carry-over of
owners’ equity
1. Conversion of capital
reserve into capital (or
capital stock)
2. Conversion of surplus
reserve into capital (or
capital stock)
3. Loss made up with
surplus reserve
4. Others
(V) Special reserve
1. Provision in the
reporting period
2. Applied in the
reporting period
(VI) Others
IV. Ending balance of the 438,744, 1,062,455, -11,523,44 206,805,7 771,484,56 2,467,972,
5,515.78
reporting period 881.00 644.22 2.39 13.35 5.02 876.98
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
8. Statement of Changes in Owner’s Equity, Parent Company
Prepared by FIYTA Holdings Ltd.
June 30, 2018
Amount in the reporting period
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In CNY
Reporting period
Other equity instruments Other
Items Capital Capital Less: shares Special Surplus Retained Total owner’s
Preferred Perpetual comprehensi
Stock Others Reserve in stock reserve Reserve earnings equity
shares bond ve income
I. Ending balance of the 438,744,88 1,068,111,18 206,805,713. 625,656,33 2,339,318,11
previous year 1.00 5.32 35 8.99 8.66
Plus: Change in
accounting policy
Correction of previous
errors
Others
II. Opening balance of 438,744,88 1,068,111,18 206,805,713. 625,656,33 2,339,318,11
the reporting year 1.00 5.32 35 8.99 8.66
III. Decrease/increase of
the report year (decrease 552,842.37 552,842.37
is stated with “-“)
(I) Total comprehensive
552,842.37 552,842.37
income
(II) Owners’ input and
decrease of capital
1.Common shares
contributed by the
shareholder
2. Capital contributed by
other equity instruments
holders
3. Amount of payment for
shares credited to
owners’ equity
4. Others
(III) Profit Distribution
1. Provision of surplus
reserve
2. Distribution to the
owners (or shareholders)
3. Others
(IV) Internal carry-over of
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owners’ equity
1. Conversion of capital
reserve into capital (or
capital stock)
2. Conversion of surplus
reserve into capital (or
capital stock)
3. Loss made up with
surplus reserve
4. Others
(V) Special reserve
1. Provision in the
reporting period
2. Applied in the
reporting period
(VI) Others
IV. Ending balance of the 438,744,88 1,068,111,18 206,805,713. 626,209,18 2,339,870,96
reporting period 1.00 5.32 35 1.36 1.03
Amount of the previous year
In CNY
Previous period
Other equity instruments Other
Items Capital Capital Less: shares Special Surplus Retained Total owner’s
Preferred Perpetual comprehensi
Stock Others Reserve in stock reserve Reserve earnings equity
shares bond ve income
I. Ending balance of the 438,744,88 1,068,111,18 193,961,700. 553,934,71 2,254,752,47
previous year 1.00 5.32 45 0.97 7.74
Plus: Change in
accounting policy
Correction of
previous errors
Others
II. Opening balance of 438,744,88 1,068,111,18 193,961,700. 553,934,71 2,254,752,47
the reporting year 1.00 5.32 45 0.97 7.74
III. Decrease/increase of
12,844,012.9 71,721,628 84,565,640.9
the report year (decrease
0 .02 2
is stated with “-“)
(I) Total comprehensive 128,440,12 128,440,129.
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income 9.02 02
(II) Owners’ input and
decrease of capital
1. Common shares
contributed by the
shareholder
2. Capital contributed by
other equity instruments
holders
3. Amount of payment for
shares credited to
owners’ equity
4. Others
12,844,012.9 -56,718,50 -43,874,488.
(III) Profit Distribution
0 1.00 10
1. Provision of surplus 12,844,012.9 -12,844,01
reserve 0 2.90
2. Distribution to the -43,874,48 -43,874,488.
owners (or shareholders) 8.10 10
3. Others
(IV) Internal carry-over of
owners’ equity
1. Conversion of capital
reserve into capital (or
capital stock)
2. Conversion of surplus
reserve into capital (or
capital stock)
3. Loss made up with
surplus reserve
4. Others
(V) Special reserve
1. Provision in the
reporting period
2. Applied in the
reporting period
(VI) Others
IV. Ending balance of the 438,744,88 1,068,111,18 206,805,713. 625,656,33 2,339,318,11
reporting period 1.00 5.32 35 8.99 8.66
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Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of the
Accounting Department: Tian Hui
III. Company Profile
Fiyta Holdings Ltd. (hereinafter referred to as the Company) was reorganized, incorporated and renamed from Shenzhen
Fiyta Timer Industry Company on December 25 1992 with approval by the General Office of Shenzhen Municipal People’s
Government with Document SHEN FU BAN FU [1992] No. 1259 and with China National Aero-Technology Import &
Export Corporation Shenzhen Industry & Trade Center (which was renamed as AVIC International Shenzhen Company
Limited as the sponsor. The Company's head office is located at the 20th Floor, FIYTA Technology Building, Gaoxin S.
Road One, Nanshan District, Shenzhen, Guangdong Province.
On March 10, 1993, the Company, with approval by the People’s Bank of China Shenzhen Special Economic Zone
Branch [SHEN REN YIN FU ZI (1993) No. 070], issued publically domestic CNY based common shares (A-shares) and
CNY based special shares (B-shares). In accordance with the Approval Document of Shenzhen Municipal Securities
Regulatory Office SHEN ZHENG BAN FU [1993] No. 20 and the Approval Document of Shenzhen Stock Exchange SHEN
ZHENG SHI ZI (1993) No. 16, the Company’s A-shares and B-shares were all listed with Shenzhen Stock Exchange for
trading commencing from June 3, 1993.
On January 30, 1997, with approval by Shenzhen Municipal Administration for Industry and Commerce, the Company was
renamed as Shenzhen Fiyta Holdings Ltd.
On July 4, 1997, according to the equity assignment agreement between China National Aero-Technology Corporation
Shenzhen (CATIC Shenzhen Corporation) and CATIC Shenzhen Holdings Limited ( with original name of Shenzhen
CATIC Group Co., Ltd. (hereinafter referred to as CATIC Shenzhen), CATIC Shenzhen Corporation assigned 72.36 million
corporate shares (taking 52.24% of the Company’s total shares) to CATIC Shenzhen. From then on, the Company’s
controlling shareholder turned to be CATIC Shenzhen from CATIC Shenzhen Corporation.
On October 26, 2007, the Company implemented the equity separation reform, according to which the shareholder of the
Company’s non-negotiable shares would pay shares to the whole shareholders of negotiable shares registered on the
equity record day as designated in the equity separation reform plan at the rate of 3.1 shares for every 10 shares held by
them while the Company’s total 249,317,999 shares remained unchanged. So far, after the equity separation reform, the
proportion of the Company’s shares held by CATIC Shenzhen reduced from 52.24% to 44.69%.
On February 29, 2008, due to expansion of the Company’s business scope and with approval by Shenzhen Municipal
Administration for Industry and Commerce, the Company’s enterprise corporate business licence number was changed
from 4403011001583 into 440301103196089.
In 2010, approved by China Securities Regulatory Commission (CSRC) with the Official Reply on Approval of Non-public
Issuing of Shenzhen Fiyta Holdings Ltd., ZHENG JIAN XU KE [2010] No. 1703 and the Official Reply on the Issue of
Non-Public Issuing of Shenzhen Fiyta Holdings Ltd. by State-owned Assets Supervision and Administration Commission
of the State Council [2010] No. 430, the Company was approved to non-publically issue no more than 50 million common
shares (A-shares). After completion of non-public issuing on December 9, 2010, the Company’s registered capital
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increased to CNY 280,548,479.00 and AVIC Shenzhen holds 41.49% of the Company’s equity based capital.
On March 03, 2011, with approval by Shenzhen Municipal Administration for Industry and Commerce, the Company was
renamed as Fiyta Holdings Ltd. On April 8, 2011, the Company took the total share capital of 280,548,479 shares as at
December 31, 2010 as the base, converted its capital reserve into share capital at the rate of 4 shares for every 10 shares.
After the conversion, the Company’s total share capital became 392,767,870 shares.
On November 11, 2015, approved by China Securities Regulatory Commission (CSRC) with the Official Reply on
Approval of Non-public Issuing of Fiyta Holdings Ltd., ZHENG JIAN XU KE [2015] No. 2588 and the Official Reply on the
Issue of Non-Public Issuing of Fiyta Holdings Ltd. by State-owned Assets Supervision and Administration Commission of
the State Council [2015] No. 415, the Company was approved to non-publically issue no more than 46,911,649 common
shares (A-shares). After completion of non-public issuing on December 22, 2015, the Company’s registered capital
increased to CNY 438,744,881.00 and CATIC Shenzhen holds 37.15% of the Company’s equity based capital.
Ended June 30, 2018, the Company accumulatively issued altogether 438,744,881 shares. For the detail, refer to Note VII.
53 “Share Capital”.
The principal business activities of the Company and its subsidiaries (collectively the Group) are: production and sales of
various pointer type quartz watches and units, spares and parts, various timing apparatus, processing and wholesale of K
gold watches and ornament watches (for production site, separate application should be submitted); domestic trade,
materials supply and sales (excluding the commodities for exclusive operation, exclusive control and monopoly); property
management and lease. Self-run import and export, design and construction; import and export business (implemented
according to Document SHEN MAO GUAN DENG ZHENG ZI NO. 2007-072). The Company's legal representative is
Huang Yongfeng.
The Company has established the Shareholders’ General Meeting, the Board of Directors, the Supervisory Committee,
the Audit Committee, the Strategy Committee and the Nomination, Remuneration and Assessment Committee as the
governance organs, etc. The Company has also established a number of functional departments, including
comprehensive management department, human resource department, financial department, property department,
innovation & design department, strategy and information department, office of the Board of Directors, audit department,
R & D department, etc.
The financial statements was approved and issued through the resolution of the Board of Directors dated August 21,
2018.
There were 9 subsidiaries consolidated during the reporting period. For the detail, refer to Note IX. "Equity in Other
Entities". The consolidation scope of the reporting year is the same as that of the previous year. For the detail, refer to
Note VIII "Change of the Consolidation Scope".
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IV. Basis for preparation of the financial statements
1. Preparation Basis
The financial statements are prepared with the going-concern assumption as the base and the transactions and matters
actually occurred in accordance with the Accounting Standards for Business Enterprises - Basic Standards promulgated
by the Ministry of Finance (issued by Order 33 of the Ministry of Finance and revised according to Order 76 of the Ministry
of Finance), 42 specific accounting standards promulgated and revised on February 15, 2006 and afterwards, and their
application guidelines, interpretations and other relevant requirements (collectively, "Accounting Standards for
Enterprises"). Besides, the Company discloses the relevant financial information in accordance with Compilation Rules for
Information Disclosure by Companies Offering Securities to the Public No.15-General Provisions on Financial Reports
(2014 Revision)
In accordance with the Enterprise Accounting Standards, the Company follows the accrual basis of accounting. With the
exception of some financial instruments, these financial statements are measured based on the historic cost basis. If
impaired, the assets shall provide for impairment in accordance with the relevant regulations.
2. Operation on Going Concern Basis
The financial statements of the Company have been prepared on going concern basis.
V. Important accounting policies and accounting estimates
Presentation on specific accounting policies and accounting estimates:
The Company and its subsidiaries have made a few of specific accounting policies and accounting estimates about
cognition of revenue, depreciation of fixed assets, amortization of intangible assets, R & D expenditures and other
transactions and matters in accordance with the actual operation and management characteristics and based on relevant
provisions of accounting standards for business enterprises. For the detail, refer to various descriptions stated in Note
V.28 "Revenue", Note V.16 "Fixed assets", Note V.21(1) "Intangible Assets", Note V.21(2) “R & D expenditure" for details.
1. Statement on complying with the accounting standards for business enterprise
The financial statements prepared by the Company in accordance with the requirements of accounting standards for
business enterprises truly and fully reflect the financial status of the Company on June 30, 2018 and the business result
and cash flow and relevant information for January to June 2018. In addition, the Company's financial statements are in
conformity with the disclosure requirements of Compilation Rules for Information Disclosure by Companies Offering
Securities to the Public No. 15 - General Provisions for Financing Reporting as amended in 2014 by China Securities
Regulatory Commission on relevant financial statements and their notes in all important aspects.
2. Fiscal period
The fiscal period of the Company includes the fiscal year and interim period. The interim period refers to the reporting
period less than a whole fiscal year. The fiscal year of the Company is the Gregorian year, i.e. from January first to
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December 31st.
3. Business Cycle
The normal business cycle refers to the period of the Company from purchasing the assets for processing to realization of
cash or cash equivalent. The Company takes 12 months as a business cycle and uses it as the liquidity division
standard for assets and liabilities.
4. Recording Currency
Renminbi is the currency for the major economic environment where the Company and its domestic subsidiaries are
managed, and the Company and its domestic subsidiaries take Renminbi as the standard currency for accounting.
Except Switzerland based Montres Chouriet SA Company (hereinafter referred to as the "Swiss Company"), an overseas
subsidiary of FIYTA Hong Kong Co., Ltd. (hereinafter referred to as "FIYTA HK"), has determined Swiss franc as its
recording currency for accounting in accordance with the currencies available in its major economic environment where it
is operated. The other overseas subsidiaries, including FIYTA HK, have determined Hong Kong currency as their
recording currency for accounting in accordance with the currencies available in their major economic environment where
they are operated. Hong Kong currency will be converted into Renminbi while in preparing financial statements.
The Company uses Renminbi while preparing these financial statements.
5. The accounting treatment on merger of enterprises under the same control and not under the same control
Merger of enterprises refers to the transaction or matter that two or more independent enterprises are merged into a
reporting entity. The merger of enterprises includes merger under the same control and the merger not under the same
control.
(1) Merger of enterprises under the same control
The enterprise participating in merger is under the final control of the same party or parties and such control is not
temporary, this is the merger of enterprises under the same control. In the merger of enterprises under the same control,
the party that obtains the control right to the other enterprises participating in merger on the date of merger is the merging
party and the other enterprises participating in the merger are the merged party. The date of merger refers to the date
when the merging party has actually obtained the control right to the merged party.
The assets and liabilities acquired by the merging party are measured at the book value on the merged party on the date
of merger. If the book value of net assets acquired by the merging party is different with the book value paid for merger
consideration (or sum of book value of issued shares), the capital reserve (premium on stock capital) shall be adjusted; if
the capital reserve (premium on stock capital) is not sufficient to be written down, the retained earnings shall be adjusted.
Various direct expenses incurred by the merging party for merger of enterprises are included in the current profits and
losses at the time of occurrence.
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(2) Merger of enterprises not under the same control
The enterprises to be merged, if not under the final control by the same party or parties before or after merger, refer to the
merger of enterprises not under the same control. For the merger of enterprises not under the same control, the party
acquiring the control right to the other enterprises involved with the merger on the date of purchase is the purchasing party
and the other enterprises involved with the merger are the purchased party. The date of purchase refers to the date
when the purchasing party actually acquires the control right to the purchased party.
For the merger of enterprises not under the same control, the merger costs contain the assets paid by the purchasing
party on the date of purchase for acquiring the control right to the purchased party, the liabilities incurred or undertaken
and the fair value of the issued equity securities are the commission incurred for merger of enterprises and involved with
audit, legal service, evaluation, consultation and etc., as well as other overhead expenses, are included in the current
profits and losses at the time of occurrence. The transaction costs of equity securities or debt securities issued as merger
consideration by the purchasing party are included in the initial confirmation amount of equity securities or debt securities.
The contingent consideration involved is included into the merger costs at the fair value on its purchase date. If it is
necessary to adjust the contingent consideration because any new or further evidence for the existing situation on the
purchase date appears within 12 months after the purchase date, the merged goodwill shall be modified accordingly. The
merger costs incurred and the net identifiable assets acquired in the merger by the purchasing party are measured at the
fair value on the purchase date. The difference that the merger costs are larger than the fair value of the net identifiable
assets of the purchased party on the purchase date as acquired in the merger is confirmed as the goodwill. If the merger
costs are less than the fair value of the net identifiable assets of the purchased party as acquired in the merger, the fair
value of various identifiable assets, liabilities and contingent liabilities of the purchased party and measurement of merger
costs are first checked, and if the merger costs are less than the fair value of net identifiable assets of the purchased party
acquired in the merger, the difference is included in the current profits and losses.
If the deductible temporary difference of the purchased party acquired by the purchasing party is not confirmed for it does
not conform to the confirmation conditions of deferred tax assets on the date of purchase, but new or further information
obtained within 12 months after the date of purchase shows the existence of relevant situation on the date of purchase
and it is expected that the economic interest arising from deductible temporary difference of the purchased party on the
date of purchase could be realized, the relevant deferred tax assets are confirmed and the goodwill is reduced
synchronously. If the goodwill is not sufficient to be written down, the difference is confirmed as the current profits and
losses; except the above situation, if the deferred tax assets involved with merger of enterprises are confirmed, it is
included in the current profits and losses.
For the merger of enterprises not under the same control as realized in steps through several transactions, whether the
several transactions are "package deals" is judged in accordance with the Notice of the Ministry of Finance on Issuing the
Explanation No. 5 of Accounting Standards for Business Enterprises (Cai Kuai [2012]19) and the judgment standard on
"package deals" in article 51 of Accounting Standards for Business Enterprises No. 33 - Consolidated Financial
Statements (see the Note V.6(2)). If they are package deals, they are treated with reference to the description of various
paragraphs in front of this part and the Note V.14 "Long-term Equity Investment"; if they are not package deals, individual
financial statements and consolidated financial statements are separately made relevant accounting treatment:
In individual financial statements, the sum of the book value of the equity investment of the purchased party as held before
the date of purchase and the newly increased investment costs on the date of purchase is used as the initial investment
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costs of the investment; if the equity of the purchased party as held before the date of purchase is involved with other
comprehensive income, while this investment is being disposed, other comprehensive incomes related to it are made
accounting treatment on the same basis as the purchased party directly disposing relevant assets or liabilities (namely,
except the purchased party measures again the corresponding share in the change caused by the net liabilities or net
assets of the set benefit plan according to the equity method, the others are included in the current profits and losses).
In the consolidated financial statements, the equity of the purchased party as held before the date of purchase is
measured again at the fair value on the date of purchase of such equity, and the difference between the fair value and its
book value is included in the current profits and losses; if the equity of the purchased party as held before the date of
purchase is involved with other comprehensive incomes, other comprehensive incomes related to it shall be made
accounting treatment on the same basis as the purchased party directly disposing relevant assets or liabilities (namely,
except the purchased party measures again the corresponding share in the change caused by the net liabilities or net
assets of the set benefit plan according to the equity method, the others are included in the current profits and losses).
6. Method of preparing consolidated financial statements
(1) Principle of determining the scope of consolidated financial statements
The consolidation scope of the consolidated financial statements is determined on the basis of control. Control refers to,
the Company owns the power to the purchased party, enjoys variable return by participating in the relevant activities of the
purchased party and is able to impact the amount of return by using the power to the purchased party. The scope of
consolidation includes the Company and all of its subsidiaries. A subsidiary refers to the entity under control of the
Company.
Once the change of relevant facts and situations causes the change of relevant factors involved with the above definition
of control, the Company will make new evaluation.
(2) Method of preparing consolidated financial statements
As of the date when the actual control right to the net assets, production and management decision of subsidiary is
acquired, the Company starts to put it into the scope of consolidation; ceases to contain it in the scope of consolidation
from the date of losing the actual control right. For any subsidiary disposed, its operation result and cash flow before
disposal date have been properly contained in the consolidated profit statement and consolidated cash flow; any
subsidiary disposed in the current period is not modified the beginning number of the balance sheet. For any subsidiary
increasing due to merger of enterprises not under the same control, its operation result and cash flow after the date of
purchase have been properly contained in the consolidated profit statement and consolidated cash flow, and the
beginning number and comparison number of the consolidated financial statements are not modified. For any subsidiary
increasing due to merger of enterprises under the same control, its operation result and cash flow from the beginning of
the current consolidation period to the date of consolidation have been properly contained in the consolidated profit
statement and consolidated cash flow, and the comparison numbers of the consolidated financial statement are
synchronously modified.
While preparing the consolidated financial statements, if the accounting policies or accounting period adopted by any
subsidiary and the Company are not consistent, necessary modification shall be made to the subsidiary's financial
statements based on the Company's accounting policies and accounting period. For any subsidiary acquired from merger
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of enterprises not under the same control, its financial statements are modified on the basis of the fair value of net
identifiable assets on the date of purchase.
All major current account balances, transactions and unrealized profit in the Company are set off in preparation of
consolidated financial statements.
In the stockholder's equity and current net profit or loss of a subsidiary, the parts not owned by the Company are solely
listed under the stockholder's equity and net profit in the consolidated financial statements separately as minority equity
and minority interest. If the loss of subsidiary shared by minority shareholders exceeds the share enjoyed by minority
shareholders in the shareholders' equity of the subsidiary in the beginning, it still writes down the minority equity. When
the loss in a subsidiary shared by minority shareholders exceeded the share in the shareholders’ equity enjoyable by the
minority shareholders at the beginning of the reporting period, the minority shareholders’ equity should be written down.
When the control right to the original subsidiary is lost due to disposal of partial equity investment or other reasons, the
residual equity is measured again at its fair value on the date of losing the control right. The sum of the consideration
acquired from disposal of equity and the fair value of residual equity is minus the share of net assets of the original
subsidiary as continually calculated from the date of purchase at the original shareholding ratio, such difference is
included in the investment income in the current period of losing the control right. Other comprehensive incomes related to
equity investment of the original subsidiary shall be made accounting treatment on the same basis as the purchased party
directly disposing relevant assets or liabilities when the control right is lost (namely, except the original subsidiary
measures again the change caused by the net liabilities or net assets of the set benefit plan according to the equity
method, the others are included in the current profits and losses). Thereafter, such part of the residual equity is made
subsequent measurement in accordance with the Accounting Standards for Business Enterprises No. 2 - Long-term
Equity Investment or Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial
Instruments and other relevant provisions. See the Note V.14 "Long-term Equity Investment" or the Note V.10 "Financial
Instruments".
If the Company disposes the investment on the subsidiary's equity in steps through several transactions and until loses
the control right, whether the various transactions disposing the investment on the subsidiary's equity until losing the
control right are package deals shall be distinguished. If the terms, conditions and economic impact of various
transactions disposing the investment on the subsidiary's equity conform to one or more of the following circumstances, it
is usually indicated that several transactions shall be made accounting treatment as package deal:① these transactions
are concluded synchronously or in consideration of mutual impact; ② these transactions can wholly reach a complete
commercial result; ③ Occurrence of a transaction lies on occurrence of at least another transaction; ④ A transaction
may be uneconomic separately, but it is economical if the transaction is considered with other ones. If they are not
package deals, each transaction thereof is made accounting treatment in accordance with the principle applicable for
"partially disposing long-term equity investment on subsidiary in the case of not losing control right" (see (2) ④, Note V.14
for details) and "losing control right to the original subsidiary due to disposal of partial equity investment or other reasons"
(see the above paragraph) as appropriate. If the various transactions disposing the investment on the subsidiary's equity
until losing control right are package deals, various transactions are made accounting treatment as a transaction of
disposing the subsidiary and losing control right; however, before losing control right, the difference between every
disposal amount and the share of the subsidiary's net assets enjoyed corresponding to disposal of investment is
recognized as other comprehensive income in the consolidated financial statements, and is included in the current profit
and loss corresponding to loss of control right.
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7. Classification of joint venture arrangements and accounting treatment method of joint management
Joint venture arrangement refers to an arrangement that two or more participants jointly control. In accordance with the
rights enjoyed and obligations undertaken in the joint venture arrangement, the Company classifies joint venture
arrangements into joint management and joint venture. Joint management refers to the joint venture arrangement that the
Company enjoys the relevant assets of the arrangement and undertakes the relevant liabilities of the arrangement. Joint
venture refers to the joint venture arrangement that the Company only enjoys rights to the net assets of the arrangement.
The Company's investment on joint venture is measured with equity method and is treated in accordance with the
accounting policies as stated in the Note V.14 (2) ② "Long-term equity investment measured with equity method".
As a joint venture in the joint management, the Company confirms the assets solely held, liabilities solely undertaken and
the assets jointly held and liabilities jointly undertaken as confirmed according to the Company's share; confirms the
income arising from sale of the joint management's output share enjoyed by the Company; confirms the income arising
from sale of output if confirming joint management according to the Company's share; confirms the expenses solely
incurred by the Company, and the expenses incurred if confirming joint management according to the Company's share.
When the Company as a joint venture delivers or sells assets to the joint management (the assets do not constitute
business, same as below), or the joint management purchases assets, before such assets are sold to a third party, the
Company only confirms the parts in the profit and loss arising from such transaction and belonging to other participants of
the joint management. If occurrence of such assets is in conformity with the impairment loss as stated in the Accounting
Standards for Business Enterprises No. 8 - Impairment of Assets, in the event that the Company delivers or sells assets to
the joint management, the Company fully confirms the loss; in the event that the Company purchases assets from the joint
management, the Company confirms the loss according to its share undertaken.
8. Standard for confirming cash and cash equivalent
The cash and cash equivalent of the Company include the cash on hand, the deposit that can be used for payment at any
time, and the investment held by the Company, which has short term (generally becomes mature within three months from
the date of purchase), good liquidity and is easy to be converted into known amount of cash and with low risk in change of
value.
9. Foreign currency transactions and translation of foreign currency statements
(1) Translation methods for foreign currency transactions
The foreign currency transactions occurred in the Company, at the time of initial recognition, shall be translated into the
amount of bookkeeping base currency at the spot exchange rate (generally refer to the medium price of the foreign
exchange quotation as declared by the People's Bank of China) on the date of transaction, but any foreign currency
exchanging business or any transaction related to exchange of foreign currency occurred by the Company shall be
translated into the amount of bookkeeping base currency at the actual exchange rate.
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(2) Translation methods for monetary items in foreign currency and nonmonetary items in foreign currency
The monetary items in foreign currency shall be translated according to the spot exchange rate on the date of balance
sheet, and the balance of exchange incurred accordingly is included in the current profits and losses except the balance of
exchange arising from the special borrowing in foreign currency related to purchase and building of the assets meeting
capitalization conditions is treated on the principle of capitalization of borrowing cost, and for the monetary items in foreign
currency available for sale, the balance of exchange arising from change of other book balances exclusive of amortized
cost is included in other comprehensive incomes.
If preparation of consolidated financial statements is involved with overseas operation and any monetary item in foreign
currency substantially constitutes net investment to overseas operation, the balance of exchange arising from change of
exchange rate is included in other comprehensive incomes; when overseas operation is disposed, it is transferred into the
current profits and losses from disposal.
The non-monetary items in foreign currency measured with historical cost are still measured with the amount in
bookkeeping base currency which is translated at the spot exchange rate on the transaction occurring date. The
non-monetary items in foreign currency measured at fair value are translated at the exchange rate on the date of
recognizing fair value, and the difference between the amount in bookkeeping base currency and the previous amount in
bookkeeping base currency after translated is treated as change of fair value (including change of exchange rate) and
included in the current profits and losses or recognized as other comprehensive incomes.
(3) Translation methods for financial statements in foreign currency
If preparation of consolidated financial statements is involved with overseas operation and any monetary item in foreign
currency substantially constitutes net investment to overseas operation, the balance of exchange arising from change of
exchange rate is deemed as "translation balance of statements in foreign currency" and recognized as other
comprehensive incomes; when overseas operation is disposed, it is included in the current profits and losses from
disposal.
The financial statements in foreign currency for overseas operation are translated into the statements in Renminbi
according to the following method: the items of assets and liabilities in the balance sheet are translated at the spot
exchange rate on the date of balance sheet; in the items of stockholder's equity, except the item of "undistributed profit",
other items are translated at the spot exchange rate at the time of occurrence. The items of incomes and expenses in the
profit statement are translated at the current average exchange rate on the transaction occurring date. The undistributed
profit at the beginning of the year is the undistributed profit at the ending of the previous year after translated; the
undistributed profit at the ending of the year is listed according to the calculation of translated profit distributed on various
items; after translated, the difference between the sum of assets items and liabilities items and the sum of stockholder's
equity items is the translated difference of statements in foreign currency and is recognized as other comprehensive
incomes. If overseas operation is disposed and the control right is lost, the translated difference of foreign currency
statements as listed under the item of stockholder's equity in balance sheet and related to overseas operation is
transferred fully or at the ratio of disposing the overseas operation into the current profits and losses from disposal.
The cash flow in foreign currency and cash flow of overseas subsidiaries are translated at the current average exchange
rate on the cash flow occurring date. The amount of cash impacted by change of exchange rate is used as the
modification item and solely listed in the cash flow statement.
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The number in the beginning of the year and the actual number in the previous year are listed according to the amount
after the financial statements for the previous year are translated.
While disposing all owners' equity of the Company in overseas operation or losing the control right to overseas operation
due to disposal of partial equity investment or other reasons, the foreign current statements attributive to the owners'
equity of the parent company, as listed under the item of stockholder's equity in balance sheet and related to overseas
operation, are translated into difference and fully transferred into the current profits and losses from disposal.
When the ratio of holding overseas operation equity caused by disposal of partial equity investment or other reasons
reduces but the control right to overseas operation is not lost, the translated difference of foreign currency statements
related to the overseas operation disposing part is attributive to minority equity and not transferred into the current profits
and losses. When the disposal of overseas operation is involved with the partial equity of a joint venture or a cooperative
enterprise, the translated difference of foreign currency statements related to the overseas operation is transferred at the
ratio of disposing the overseas operation into the current profits and losses from disposal.
10. Financial instruments
A financial asset or financial liability is recognized when the Company becomes a party of financial instrument contract.
Financial assets and financial liabilities are measured at fair value at the initial recognition time. For the financial assets
and financial liabilities that are measured at fair value and which changes are included into the current profits and losses,
the relevant transaction expenses are directly included in the profits and losses; for other financial assets and financial
liabilities, the relevant transaction expenses are included in the amount of initial recognition.
(1) Methods for determining fair value of financial assets and financial liabilities
Fair value refers to the price that a market participant can receive from selling an asset or is payable for transferring a
liability in the orderly transactions occurring in the date of measurement. If there is an active market for financial
instruments, the Company uses the quotation in the active market to determine its fair value. The quotation in the active
market refers to the price that is readily available from exchanges, brokers, industry associations and pricing service
institutes on regular basis, and represents the price of market transaction actually occurring in the fair transactions. If
there is not an active market for financial instruments, the company takes valuation technologies to determine its fair value.
Valuation technologies include with reference to the price used in the recent transactions that the parties who are familiar
with situation and willingly transact make in the market, with reference to the current fair value of other financial
instruments that are substantially same, discounted cash flow and option pricing model.
(2) Classification, confirmation and measurement of financial assets
The financial assets purchased or sold in any conventional manner are made accounting confirmation and termination of
confirmation on the date of transaction. At the time of initial confirmation, financial assets are classified into the financial
assets that are measured at fair value and which change is included in the current profits and losses, held-to-maturity
investment, loan, receivable and the financial assets available for sale.
① The financial assets that are measured at fair value and which change is included in the current profits and losses,
Including trading financial assets and the financial assets designated as measurement at fair value and which change is
included in the current profits and losses
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The financial assets held for trading refer to the financial assets that meet one of the following conditions: A. the purpose
of acquiring the financial assets is mainly for recent sale; B. are a part of the portfolio of identifiable financial instruments
under concentrated management, and objective evidences showing that the Company recently administrates the portfolio
with short-term profit making mode; C. are a derivative instrument, except the derivative instruments designated and
being effective hedging instruments, the derivative instruments belonging to financial guarantee contract, the derivative
instruments connecting with an equity instrument investment that is without quotation in an active market and which fair
value cannot be reliably measured, and must be settled by delivering the equity instrument.
Any financial asset meeting one of the following conditions can be designated at the time of initial recognition as the
financial asset that is measured at fair value and which change is included in the current profits and losses: A. This
designation can eliminate or significantly reduce inconsistence of relevant gains or losses in the aspect of confirmation or
measurement as caused due to different measurement basis of the financial asset; B. The formal written document of the
risk management or investment strategy of the Company has clearly stated that the portfolio of financial assets or the
portfolio of financial assets and financial liabilities containing the financial asset is manage and evaluated on the basis of
fair value, and reported to the key management.
The financial assets that are measured at fair value and which change is included into the current profits and losses are
made subsequent measurement at fair value, and the gains or losses formed due to change of fair value and the
dividends and interests related to such financial assets are included in the current profits and losses.
② Held-to-maturity investment
Refers to non-derivative financial assets with fixed date of maturity, fixed or identifiable recovery amount, and which the
Company has the clear intention and ability to hold until its maturity.
Held-to-maturity investment is subject to effective interest method and is subsequently measured according to the
amortized cost. The gains or losses generating in case of terminated confirmation, occurrence of devaluation or
amortization are included in the current profits and losses.
Effective interest method refers to such method that their amortized costs and interest incomes or expenditures in various
periods are calculated at the effective interest rate of financial assets or financial liabilities (including a set of financial
assets or financial liabilities). Effective interest rate refers to such interest rate with which the future cash flow of any
financial asset or financial liability in the expected period of existence or applicable shorter period is discounted to the
current book value of such financial asset or financial liability.
While calculating the effective interest rate, the Company will forecast the future cash flow on the basis of considering all
contract articles of financial assets or financial liabilities (no consideration of the credit loss in the future), and will also
consider various charges, transaction expenses, discount or premium paid or collected among all parties of financial
assets or financial liabilities contract and belonging to a part of effective interest rate.
③ Loans and receivables
Refer to non-derivative financial assets without quotation, fixed or identifiable recovery amount in an active market. The
financial assets classified as loans and receivables by the Company include notes receivable, accounts receivable,
interest receivable, dividends receivable and other receivables.
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Loans and receivables are subject to effective interest method and are subsequently measured according to the
amortized cost. The gains or losses generating in case of terminated confirmation, occurrence of devaluation or
amortization are included in the current profits and losses.
④ Financial assets available for sale
Including the non-derivative financial assets that are designated available for sale at the time of initial recognition, and the
financial assets except the financial assets measured at fair value and which changes are included in the current profits
and losses, loans and receivables, held-to-maturity investments.
The ending costs of debt instruments investment available for sale are determined according to the amortized cost,
namely, initially recognized amount deducted with the paid principal, plus or minus the accumulative amount of
amortization arising from amortizing the difference between the initially recognized amount and the amount on the date of
maturity with effective interest rate, and deducted with the loss of devaluation occurred. The ending costs of equity
instruments available for sale are their initially acquired costs.
The financial assets available for sale are subsequently measured at fair value, and the gains or losses from change of
fair value are recognized as other comprehensive incomes except that the balance of exchange related to the amortized
costs in the loss of devaluation and monetary financial assets in foreign currency are included in the current profits and
losses, and they are transferred and included into the current profits and losses when the financial assets are terminated
recognition. However, any equity instrument investment with quotation in an active market and which fair value cannot be
reliably measured, and the derivative financial assets connecting with such equity instrument and must be settled by
delivering the equity instrument are subsequently measured at costs.
The interest of any financial asset accrued in the holding period and dividend in cash as distributed upon declaration of the
invested organization are included in the income from investments.
(3) Devaluation of financial assets
Except the financial assets that are measured at fair value and which changes are included into the current profits and
losses, the Company checks the book values of other financial assets on the date of each balance sheet. If any objective
evidence shows that devaluation of financial assets occurs, provision for impairment is set aside.
The Company separately makes devaluation testing for any single financial asset in large amount; any single financial
asset without large amount is separately made devaluation testing or made devaluation testing in the portfolio of financial
assets with the similar credit risk characteristics. Any financial assets not found devaluation in a single testing (including
the single financial assets with or without large amount) are made devaluation testing in the portfolio of financial assets
with the similar credit risk characteristics. Any financial assets recognized impairment loss in a single item are made
devaluation testing not in the portfolio of financial assets with the similar credit risk characteristics.
① Devaluation of held-to-maturity investments, loans and receivables
The book value of any financial asset measured at costs or amortized costs is written down to the present value of the
future cash flow forecasted, and the write-down amount is recognized as impairment loss and included in the current
profits and losses. After any financial asset is recognized its impairment loss, if any objective evidence shows that such
financial asset has recovered its value, and it is objectively related to the matter occurring after the loss is recognized, the
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previously recognized impairment loss is reversed, and the book value of financial asset after the impairment loss is
reversed does not exceed the amortized cost of the financial asset on the date of reversal when it is assumed that
provision for impairment is not set aside.
② Devaluation of financial assets available for sale
If it is judged according to comprehensive relevant factors that the fall of fair value of equity instrument investment
available for sale is serious or non temporary, it shows that the equity instrument investment available for sale devalues.
When any financial asset available for sale devalues, the accumulative losses arising from fall of fair value as previously
recorded in other comprehensive income are transferred out and included in the current profits and losses.
After any financial asset is recognized its impairment loss, if any objective evidence shows that such financial asset has
recovered its value, and it is objectively related to the matter occurring after the loss is recognized, the previously
recognized impairment loss is reversed, the impairment loss of equity instrument investment available for sale is reversed
and recognized as other comprehensive incomes, and the impairment loss of equity instrument investment available for
sale is reversed and included in the current profits and losses.
The impairment loss of the equity instrument investment without quotation in an active market and which fair value cannot
be reliably measured, or the derivative financial assets connecting with the equity instrument and must be settled by
delivering the equity instrument is not reversed.
(4) Recognition basis and measurement method for transfer of financial assets
Any financial asset meeting one of the following conditions is terminated recognition: ① The rights under the contract of
collecting the cash flow of the financial asset are terminated; ② the financial asset has been transferred and substantially
all of risks and remunerations on the ownership of the financial asset are transferred to the transferee; ③ the financial
asset has been transferred, the enterprise has neither transferred nor kept substantially all of risks and remunerations on
the ownership of the financial asset, but it gives up control to the financial asset.
If the enterprise has neither transferred nor kept substantially all of risks and remunerations on the ownership of the
financial asset, and does not gives up control to the financial asset, relevant financial assets are recognized based on the
extent continually involved with the transferred financial asset, and relevant liabilities are recognized accordingly. The
extent continually involved with the transferred financial asset refers to the level of risk that the enterprise suffers from
value change of the financial asset.
If the whole transfer of any financial asset meets the termination recognizing conditions, the book value of the transferred
financial asset and the consideration received from the transfer is minus the accumulative amount of fair value change
previously included in other comprehensive incomes, and the balance is included in the recent profits and losses.
If the partial transfer of any financial asset meets the termination recognizing conditions, the book value of the transferred
financial asset is shared between the termination recognizing part and non- termination recognizing part at their relative
fair values. The consideration received from transfer and the accumulative amount of fair value change shared in the
termination recognizing part and previously included in other comprehensive incomes, minus the shared aforesaid book
value, are the balance, which is included in the current profits and losses.
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If the Company sells the financial asset in mode of recourse or transfers the financial asset it holds by endorsement, it
shall determine whether substantially all of risks and remunerations on the ownership of the financial asset have been
transferred. If substantially all of risks and remunerations on the ownership of the financial asset have been transferred to
the transferee, the financial asset's recognition is terminated; if substantially all of risks and remunerations on the
ownership of the financial asset are kept, the financial asset's recognition is not terminated; if neither transfer is made nor
substantially all of risks and remunerations on the ownership of the financial asset are kept, it shall continually judge
whether control to the asset is maintained, and accounting treatment is made in accordance with the principles as stated
in above paragraphs.
(5) Classification and measurement of financial liabilities
In the initial recognition, financial liabilities are classified as the financial liabilities that are measured at fair value and
which change is included in the current profits and losses, and other financial liabilities. The initially recognized financial
liabilities are measured at fair value. For financial liabilities that are measured at fair value and which change is included in
the current profits and losses, the relevant transaction expenses are directly included in the current profits and losses; for
other financial liabilities, relevant transaction expenses are included in the initially recognized amount.
① Financial liabilities measured at fair value and which change is included in the current profits and losses
The financial liabilities held for trading and the financial liabilities designated at the time of initial recognition as
measurement at fair value and which change is included in the current profits and losses have the conditions consistent
with the financial assets held for trading and the financial assets designated at the time of initial recognition as
measurement at fair value and which change is included in the current profits and losses.
The financial liabilities measured at fair value and which change is included in the current profits and losses are
subsequently measured at fair value, and the gains or losses arising from change of fair value and the dividends and
interests related to such financial liabilities are included in the current profits and losses.
② Other financial liabilities
The derivative financial liabilities connecting with the equity instrument without quotation in an active market and which fair
value cannot be reliably measured, and must be settled by delivering the equity instrument are subsequently measured at
costs. Other financial liabilities are subject to effective interest method and are subsequently measured according to the
amortized cost. The gains or losses generating in case of terminated confirmation, occurrence of devaluation or
amortization are included in the current profits and losses.
③ Financial guarantee contract
A financial guarantee contract that is not specified as financial liabilities at fair value through profit or loss is initially
recognized at fair value minus direct transaction fees, and the subsequent measurement is based on the higher of the
amount recognized in accordance with Accounting Standards for Business Enterprises No.13 – Contingencies and the
initially recognized amount deducting the cumulative amortization in accordance with Accounting Standards for Business
Enterprises No.14 – Income.
(6) Derecognition of financial liabilities
The current liabilities of financial liabilities have been wholly or partially cancelled, recognition on the financial liabilities or
a part thereof can be terminated. The Company (the debtor) and the creditor enter an agreement to substitute the existing
financial liabilities in the manner of undertaking new financial liabilities, and the contract's articles of new financial liabilities
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and the existing financial liabilities are materially different, recognition on the existing liabilities is terminated and new
liabilities are recognized synchronously.
If recognition on financial liabilities is wholly or partially terminated, the difference between the book value of the part
terminated to recognize and the consideration paid (including non-cash assets transferred out or new financial liabilities
undertaken) is included in the current profits and losses.
(7) Derivative instruments and embedded derivatives
A derivative instrument is initially measured at fair value on the date of signing relevant contract and is subsequently
measured at fair value.. Except the derivative instruments designated as hedging instrument and with highly effective
hedging, the gains or losses arising from which change of fair value are recognized to be included in the period of profits
and losses based on the nature of hedging relationship and in accordance with the accounting requirements of hedging,
the change of fair value of other derivative instruments is included in the current profits and losses
For the mixed instruments containing embedded derivative instruments, if they are not designated as financial assets or
financial liabilities measured at fair value and which change is included in the current profits and losses, the embedded
derivatives and the master contract have no close relationship in the economic characteristics and risk, and have the
same conditions as the embedded derivatives, the separately existing instrument meets the definition of derivative
instrument, then the embedded derivatives are separated from mixed instruments and are treated as sole derivative
financial instruments. If it cannot carry out separate measurement to the embedded derivatives at the time of acquisition
or subsequent date of balance sheet, the mixed instruments are wholly designated as financial assets or financial
liabilities measured at fair value and which change is included in the current profits and losses.
(8) Setoff of financial assets and financial liabilities
When the Company has the legal rights of setting off the recognized financial assets and financial liabilities and can
currently these legal rights now, and if the Company has the plan to settle with net amount or synchronously realize these
financial assets and discharge these financial liabilities, the financial assets and financial liabilities are listed in the balance
sheet with the amount after mutual set-off. Except that, financial assets and financial liabilities are listed respectively in the
balance sheet and are not set off mutually.
(9) Equity instruments
Equity instrument refers to the contract that can certify possession of the residual equity of the Company in the assets
after deducted all liabilities. If the Company issues (including refinancing), repurchase, sell or cancel any equity instrument,
this is treated as change of equity. The Company does not recognize change of fair value of equity instruments. The
transaction expenses related to equity transactions are deducted from equity.
The Company makes various distributions (exclusive of stock's dividends) to the equity instrument holders from
stockholders' equity. The Company does not recognize fair value changing amount of equity instruments. The Company
does not recognize change of fair value of equity instruments.
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11. Receivables
(1) Individually significant receivable and provision for bad and doubtful debts individually
The carrying amount of accounts receivables of over CNY 800,000.00 (with CNY
Criteria of individually significant receivables 800,000.00 inclusive )and other receivables of over CNY500,000.00 (with CNY
500,000.00 inclusive) are recognized as individually significant receivable.
The Company separately made devaluation testing for any single accounts receivable
in large amount, individually tested financial assets which have not experienced
impairment, or made devaluation testing in the portfolio of financial assets with the
Measurement of individually recognized bad and doubtful debts provision of
similar credit risk characteristics. The accounts receivable whose impairment loss has
individually significant receivables:
been recognized through individual item testing shall no longer be included in the
portfolio of financial assets with the similar credit risk characteristics for devaluation
testing.
(2) Receivables with provision for bad and doubtful debts based on the credit risk characteristics collectively
Portfolio Description Method of provision for bad and doubtful debts
Group of ageing Ageing analysis method
Specific fund portfolio Other Method
In grouping, reserve for bad debt is provided by ageing analysis method
Ageing Percentage of provision for accounts receivable Percentage of provision for other receivables
Within 1 year (including 1 year) 5.00% 5.00%
1-2 years 10.00% 10.00%
2-3 years 30.00% 30.00%
Over 3 years 50.00% 50.00%
In grouping, the account receivable for which reserve for bad debt is provided based on balance percentage:
Inapplicable
In grouping, the accounts receivable for which the bad debt reserve is provided based on the other method:
Portfolio Description Percentage of provision for accounts receivable Percentage of provision for other receivables
Specific fund portfolio 0.00% 0.00%
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(3) Accounts receivable with insignificant individual amount but individually recognized bad and doubtful debts
provision
Including the accounts receivable involving dispute or lawsuit/arbitration with the
counterparty and the accounts receivable in which there exists evident indication
Reason of individual provision for bad and doubtful debts
showing that a debtor may possibly be unable to implement the obligation of
repayment.
Provision for bad and doubtful debts is based on the difference of the present value of
Method for provision for bad and doubtful debts
future cash flow lower than the book value.
12. Inventories
Does the Company need to comply with the requirements on information disclosure for special industries?
No
(1) Classification of Inventories
Inventories include raw materials, products-in-process, commodity stocks, etc.
(2) Pricing of Inventories Acquired and Delivered
Inventories are priced based on the actual costs at the time of acquisition. Costs of inventories include purchase cost,
processing cost and other costs. Raw materials, products-in-process and merchandise inventory are priced respectively
according to the weighted average (with brand world watch stocks exclusive), specific identification (for famous brand
watch stocks) at the time of delivery.
(3) Basis for determination of the net realizable value of inventories and the method for provision for price falling of
inventories
The net realizable value of the inventories refers to the amount of the estimated sales prices of inventories less the
estimated costs up to the completion, the estimated sales costs and relevant taxes. In determining the realizable net value
of inventories, with the acquired concrete evidence as the base, the purpose of holding the inventories and the influence
from the events after the balance sheet day are taken into consideration at the same time.
On the balance sheet day, inventories are measured based on the lower of the cost and the realizable net value. When the
realizable net value is lower than the cost, reserve for price falling of inventories is provided. Including:
① For the inventories directly for sale, including the finished products and the materials for sale, in process of normal
production and operation, the realizable net value is the amount of the estimated sales price of the inventories less the
estimated sales costs and the relevant taxes;
② For the material inventories necessary to be processed, the realizable net value is the amount of the estimated sales
price of the finished products produced in process of normal production and operation less the costs predicted to incur at
the time of finishing the work, the estimated sales expenses and the relevant taxes.
The Company provides reserve for price falling of the inventories classified based on the models of self-made FIYTA
watch inventories.
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For the famous brand watches in distribution, reserve for price falling of inventories is provided based on the individual
items.
For the raw materials for FIYTA watches, based on the terminal sales status of FIYTA finished watches, reserve for price
falling of inventories is provided with interchangeability of spares and parts and specialized classification of applications of
materials taken into consideration.
After reserve for price falling of inventories is provided, if the factors influencing the price falling of the inventories have
disappeared, which causes the realizable net value of the inventories to be higher than their book value, the reserve for
price falling of the inventories provided previously is reversed, the amount reserved is recorded in the current gain and
loss.
(4) The inventory system for the inventories is the perpetual inventory system
(5) Amortization of low value consumables and packing materials
Low value consumables and packing materials are amortized in lump sum at the time of reception.
13. Classified as assets held for sale
The Company shall classify a non-current asset or disposal group as held for sale if its carrying amount will be recovered
principally through a sale transaction (including a non-monetary asset exchange of commercial substance, the same
below) rather than through continuous use. Non-current assets or disposal group classified as held for sale shall meet the
following criteria: disposable immediately under current conditions based on similar transactions for disposals of such
assets or practices for the disposal group; a decision has been made on a plan for disposal and an undertaking to
purchase has been obtained, and the disposal is expected to be completed within a year. Where, the disposal group
refers to a group of assets which are disposed altogether by sale or other way as a whole in a transaction as well as a
liability transferred in the transaction with direct connection with these assets. For an asset group or asset group portfolio
attributable to the disposal group where the goodwill has been apportioned at the time of entity consolidation according to
the Standards for Enterprise Accounting No. 8 - Impairment of Assets, the disposal group should be included in the
goodwill apportioned to the disposal group.
When the Company makes initial measurement or makes re-measurement of the disposal group which has been
classified as held for sale non-current assets and where book value is higher than the net value of fair value less disposal
expenses, the difference between book value and the net value of fair value less disposal expenses is recognized as
asset impairment loss in profit and loss in the current period, and at the same time, provision is made for impairment of
held as available-for-sale asset. For the disposal group, the loss from impairment of the assets as recognized first offsets
the carrying value of the goodwill in the disposal group and then offsets the carrying value of various non-current assets in
the disposal group in compliance with the measurement provisions as specified in the Standard for Enterprise Accounting
No. 42 - Held for Sale Assets, Disposal Group and Termination of Operation (hereinafter referred to as the “Standard for
Holding for Sale). Where there is increase in net value of fair value less disposal expenses for non-current assets held as
available-for-sale on subsequent balance sheet days, the previously charged difference should be recovered and
reversed in asset impairment loss recognized applicable to the provision of the measurement standard for held-for-sale
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after classification as held as available-for-sale investment; the reversal amount is recognized in profit and loss in the
reporting period. The book value is increased based on the proportion of the book value of various non-current assets
according to the provision of the measurement standard for held-for-sale in the disposal group with the goodwill exclusive:
the book value of goodwill already offset as well as the impairment loss of the assets recognized before classification of
the non-current assets applicable to the provision of the measurement standard as held-for-sale is not reversible.
No depreciation or amortization is provided for a non-current asset in the non-current assets or disposal groups held for
sale. Interest and other expenses attributable to the liabilities of a disposal group held for sale shall continue to be
recognized.
When a non-current asset or disposal group no longer satisfies the conditions for classification of the held-for-sale, the
Company no longer classifies it as held-for-sale category or removes the non-current asset from the held-for-sale disposal
group, and measures it based on the lower of the two: (1) for the book value before classification as the held-for-sale, the
amount after the adjustment for depreciation, amortization or impairment which should be recognized under the condition
in which it is assumed not to be classified as held-for-sale; (2) recoverable amount.
14. Long-term equity investments
The long-term equity investment as stated in this part refers to the long term equity investment with control over, joint
control over or significant influence upon the investees. The long term equity investment without control over, joint control
over or significant influence upon the investees in the Company are taken as available-for-sale financial assets or the
financial assets which are measured based on the fair value and their changes are counted to the current profit and loss.
For the detail of the accounting policy, refer to Note V. 10 "Financial Instruments".
Joint control refers to the joint control over some arrangement made by the Company according to the relevant agreement
and the relevant activities for the arrangement must be jointly decided by all the parties sharing the control power.
Significant influence refers to the Company's power of participation in making an investee's financial and operation
policies but the Company cannot control or jointly control with other parties to make these policies.
(1) Determination of Investment Costs
For the long term equity investment acquired through consolidation of enterprises under the common control, the share of
the book value of the consolidatee's owner's equity as at the date of consolidation in the eventual controller's financial
statements is taken as the initial investment cost of the long term equity investment. The balance among the initial
investment cost of the long term equity investment and the cash as paid, non-cash asset as assigned and the book value
of the liabilities as assumed is used for adjustment of the capital reserve; in case the capital reserve is not enough for
writing-down, the retained earnings is adjusted. In case the equity securities as issued for consolidation consideration, the
share of the book value of the consolidatee's owner's equity as at the date of consolidation in the eventual controller's
consolidated financial statements is taken as the initial investment cost of the long term equity investment, the total book
value of the issued shares is taken as the share capital, the balance between the initial investment cost of the long term
equity investment and the total face value of the issued shares is used for adjustment of the capital reserve; in case the
capital reserve is not enough for writing-down, the retained earnings is adjusted. The equity in the consolidatee under the
common control which is acquired in steps through a number of transactions and the consolidation of the enterprise under
control is eventually formed shall be treated depending on whether it belongs to "one package deal": if it belongs to "one
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package deal", all the transactions shall be taken as a transaction for acquiring the control power for accounting treatment.
If it does not belong to "one package deal", the share of the book value of the consolidatee's owner's equity in the eventual
controller's consolidated financial statements is taken as the initial investment cost of the long term equity investment; the
balance among the initial investment cost of the long term equity investment and the book value of the long term equity
investment before arrival of the consolidation plus the book value of the newly paid consideration of the shares acquired
further on the consolidation date shall be used to adjust the capital reserve; in case the capital reserve is not enough for
writing-down, the retained earnings is adjusted. For the equity investment held before the date of consolidatoin or the
other comprehensive income as recognized from the available-for-sale financial assets, no accounting treatment shall be
taken for time being.
For the long term equity investment acquired through consolidation of enterprises not under the common control, the
consolidation cost as at the acquisition date is taken as the initial investment cost of the long term equity investment. The
consolidation cost is the sum of the assets paid to the buyer, the liabilities incurred or assumed, and the fair value of the
equity securities as issued. The equity which is acquired in steps through a number of transactions and eventually forms
consolidation of enterprises not under the common control shall be treated depending on whether it belongs to "one
package deal": if it belongs to "one package deal", all the transactions shall be taken as a transaction for acquiring the
control power for accounting treatment. If it does not belong to "one package deal", the sum of the book value of the equity
investment in the purchasee originally held plus the newly increased investment cost shall be taken as the initial
investment cost of the long term equity investment calculated according to the cost method. In case the equity originally
held is calculated based on the equity method, the relevant other comprehensive income shall not undergo accounting
treatment for time being. If the equity investment originally held is an available-for-sale financial asset, the balance
between its fair value and the book value and the accumulative movement of the fair value originally counted to other
comprehensive income are transferred to the current profit and loss.
Intermediary fees in connection with audit, law service, appraisal and consulting, etc. incurred to the consolidator or
purchaser and other relevant administrative fees shall be counted to the current profit and income at the time of
incurrence.
The equity investment other than the long term equity investment formed from the enterprise consolidation which is
initially measured based on the cost, such costs are recognized in such ways as the fair value of the equity securities
issued by the Company, the value as specified in the investment contract or agreement, the fair value or the original book
value of the assets exchanged out in the non-monetary asset exchange transactions, or the own fair value of the long term
equity investment, etc. depending on the ways of acquirement of the long term equity investment. The expenses, taxes
and other necessary expenditures directly in connection with the acquirement of the long term equity investment are
counted to the investment costs. For the long term equity investment resulted from the additional investment which may
bring out significant influence upon or joint control over the investee but shall not constitute control, the cost of the long
term equity investment is the sum of the fair value of the equity investment originally held as determined according to the
Accounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instruments plus the cost of the
newly increased investment.
(2)Subsequent measurement and recognition of gains and losses
The long term equity investment with the investee enjoying joint control (with the constitution of joint operators exclusive)
or significant influence is calculated by means of equity method; and also for the long term equity investment in which the
Company's financial statements can implement control over the investee by calculation based on the cost method.
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① Long term equity investment calculated based on the cost method
In calculation by cost method, the long term equity investment is valuated according to the initial investment cost, and for
additional or recovery of investment, the cost of the long term equity investment is adjusted. Except that the actual
payment or consideration paid at the time of acquiring the investment contains the cash dividend or profit already
announced but not yet distributed, the return on the investment in the reporting period is recognized based on the cash
dividend or profit already announced for distribution by the investee.
② Long term equity investment calculated based on the equity method
When the calculation based on the equity method is used, if the initial investment cost of the long term equity investment
is greater than the share of the fair value of net identifiable assets enjoyable in the investee, the initial investment cost of
the long term equity investment shall not be adjusted; when the initial investment cost is less than the share of the fair
value of net identifiable assets enjoyable in the investee, the balance is counted to the current profit and loss and at the
same time the cost of the long term equity investment is adjusted.
When the equity method is used for calculation, the net gains and losses realized by the investee and the share of the
other comprehensive income enjoyable or sharable shall be respectively used to recognize the return on investment and
other comprehensive income and at the same time the book value of the long term equity investment is adjusted;
according to the profit announced for distribution by the investee or the part of the cash dividend enjoyable upon
calculation, the book value of the long term equity investment is reduced correspondingly. For other change in the net
profit and loss, other comprehensive income and owner's equity other than the profit distribution, the book value of the
long term equity investment is adjusted and counted to the capital reserve. In determining the net profit and loss in the
investee enjoyable, with the fair value of various identifiable assets, etc. in the investee when the investment is acquired
as the base, the net profit of the investee is recognized after adjustment. When the accounting policy and fiscal period
adopted by the investee is different from that of the Company, the investee's financial statements are adjusted according
to the accounting policy and fiscal period adopted by the Company and the return on the investment and other
comprehensive income are recognized on this basis. For the transactions between the Company and its associates or
joint ventures, in case the assets provided or sold do not constitute business, the part calculated based on the proportion
of the unrealized internal transaction gains and losses attributable to the Company shall be offset and the gains and
losses on the investment shall be recognized on this basis. However, the loss from no internal transaction between the
Company and an investee shall not be offset if the loss belongs to impairment of the assets assigned. In case the assets
invested in a joint venture or an associate constitutes business and the investor has acquired the long term equity
investment therefrom but has not achieved the control power, the fair value of the business provided shall be taken as the
initial investment cost of the newly added long term equity investment, the balance between the initial investment cost and
the book value of the business provided shall all be counted to the current gains and losses. In case assets sold by the
Company to its joint ventures or associates constitute business, the balance between the consideration acquired and the
book value of the business shall all be counted to the current gains and losses. In case the asset provided to the Company
by its joint venture or the associate constitutes business, accounting treatment shall be conducted according to the
Enterprise Accounting Standards No. 20 - Enterprise Consolidation and all the amount shall be recognized as the
transaction related gains and losses.
In determining the part of the net loss incurred to the investee to be shared by the Company, the book value of the long
term equity investment and other long term equity which has substantially constituted net investment in the investee shall
be reduced to the limit of zero. In addition, in case the Company is obliged for extra loss in an investee, the predicted
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liabilities shall be recognized according to the obligation predicted to assume and counted to the current gains and losses
in the investment. In case an investee realizes net profit in subsequent periods, the Company shall recover recognition of
the part of income enjoyable after the recognized part of the loss shared by the Company has been made up for with the
part of the benefit enjoyable.
③ Acquisition of minority equity
In preparation of the consolidated financial statements, the balance between the long term equity investment newly
increased resulted from purchase of minority equity and the share of the net asset continuously calculated commencing
from the date of purchase (or date of consolidation) enjoyable by the subsidiary shall be used to adjust the capital reserve.
In case the capital reserve is not enough for writing-down, the retained earnings shall be adjusted.
④ Disposal of long term equity investment
In a consolidated financial statement, the parent company has partially disposed the long term equity investment in its
subsidiary without losing its control power, the difference between the disposal income of the amount enjoyable in the
subsidiary’s net assets corresponding to the long term equity investment disposed is counted to the owner’s equity. In
case that the parent company has partially disposed the long term equity investment in its subsidiary has caused the
parent company to have lost the control power over the subsidiary, it should be treated according to the accounting policy
as specified in the “method for preparation of consolidated financial statements” of Note V. 6.(2).
If a long term equity investment is disposed under other situation, for the equity disposed, the difference between its book
value and the consideration actually obtained is counted to the current gains and losses.
For the long term equity investment calculated based on the equity method, the other comprehensive income part which
was originally counted to the owner’s equity undergoes accounting treatment according to the corresponding proportion
by using the same base for direct disposal of the relevant assets or liabilities used by the investee. The owner's equity
recognized due to change of the other owners' equity of the investee with the net gains and loss, other comprehensive
income and profit distribution exclusive is carried over into the current gains and losses based on the proportions.
For the long term equity investment, in case the remaining equity after disposal sitll needs to be calculated according to
the cost method, the other comprehensive income calculated by the equity method or calculated and recognized based on
the standards for recognition and measurement of financial instruments undergoes the accounting treatment by using the
same base as the investee has adopted for direct disposal of the relevant assets or liabilities and carried over to the
current gains and losses according to the proportion; movement of all other owners' equity calculated and determined by
using the equity method with the net gains and losses in the investee's net assets as determined, other comprehensive
income and profit distribution exclusive is carried over to the current gains and losses according to the proportion.
In case the Company has lost the control over an investee due to disposal of partial equity, in preparation of individual
financial statements, the remaining equity after disposal can still implement joint control over or significant influence on the
investee; the equity method is applied for calculation instead and the said remaining equity is adjusted as if the equity
method was used for calculation commencing from the time of its acquisition; in case the remaining equity after the
adjustment can no longer implement joint control over or significant influence on the investee, the accounting treatment
shall be conducted according to the provisions concerning recognition and measurement of financial instruments; the
balance between the fair value as at the day of loosing the control power and the book value is counted to the current
gains and losses. The other comprehensive income calculated by means of the equity method or calculated and
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recognized according to the standards for recognition and measurement of financial instruments undergoes accounting
treatment on the same base as the investee has lost control and the investee directly disposes the relevant assets or
liabilities. The movement of the other owner's equity in the investee's net assets calculated and recognized by means of
the equity method is carried over into the current gains and losses at the time of loosing the control over the investee with
the exception of the net gains and profit, other comprehensive income and profit distribution. Where, for the remaining
equity after disposal calculated by means of equity method, the other comprehensive income and other owner's equity are
carried over according to the proportion; in case the remaining equity after disposal is recognized and measured based on
the financial instruments, the other comprehensive income and other owner's equity are all carried over.
In case the Company has lost the joint control over or significant influence on the investee due to disposal of partial equity,
the remaining equity after disposal is calculated according to the standards for recognition and measurement of financial
instruments while the balance between the fair value and the book value as at the day when the Company lost its joint
control or significant influence is counted to the current gains and losses. The other comprehensive income from the
original equity investment calculated and recognized by means of the equity method undergoes accounting treatment by
using the same base as the investee directly disposes the relevant assets or liabilities when the calculation based on teh
equity method is terminated; the owner's equity recognized due to the movement of other owner's equity with the
investee's net gains and losses, other comprehensive income and profit distribution exclusive is all transferred into the
current return on investment when the equity method is stopped.
The Company disposes the equity investment in a subsidiary in steps through a number of transactions until it has lost the
control power. If the aforesaid transaction belongs to a one-package transaction, the transactions shall undergo
accounting treatment as a transaction in which the equity investment in a subsidiary is disposed and the control power is
lost. The balance between the first disposal consideration prior to loss of the control power the book value of the long term
equity investment corresponding to the equity disposed is recognized as other comprehensive income first and then all
transferred into the current gains and losses from loss of the control power.
15. Investment based real estate
Measurement model for investment real estate
Measured based on the cost method
Depreciation or amortization method
Investment based real estate refers to the real estate held by the Company which creates rental or added value of capital
or both, Including the land use right which has already been let out, the land use right held and to be assigned after
appreciation, building which has been leased out, etc.
Investment based real estate is initially measured according to the cost Investment based real estate is initially measured
based on the cost. The follow-expenses in connection with the investment based real estate are recorded in the
investment based real estate costs in case the relevant economic benefit may flow into the Company while the costs can
be reliably measured. Other follow-up expenses are recorded in the current gain and loss at the time of incurrence.
The Company adopts the cost model to make follow-up measurement of the investment based real estate and makes
depreciation or amortization according to the policy of coincidence with housing and building or land use right.
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About the impairment test method and method for provision of reserve for impairment of the investment based real estate.
For the detail, refer to Note V.22 "Impairment of Long Term Assets".
When the self-use real estate is transferred into the investment based real estate or the investment based real estate is
transferred into the self-use real estate, the book value prior to the transfer is taken as the entry value after the transfer.
When the application of the investment based real estate is for self-use, the investment based real estate is transferred to
fixed asset or intangible asset commencing from the date of change. When the application of the self-use real estate is
changed into earning rental or increase of capital value, commencing from the date of change, the fixed asset or
intangible asset are transferred into investment based real estate. When conversion takes place, for the investment based
real estate measured by means of the cost module instead, the book value before conversion shall be taken as the entry
value after the conversion; for the investment based real estate measured by means of fair value instead, the fair value as
at the conversion date shall be taken as the entry value after conversion.
When the investment based real estate is disposed or permanently withdrawn from use and it is predicted that it is unable
to earn economic benefit, the recognition of the investment based real estate is terminated. The income from disposal of
investment based real estate, including sale, assignment, discarding or damage, is charged to the current gain and loss
after deduction of the book value and the relevant taxes.
16. Fixed asset
(1) Recognition of fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of services, for rental to others, or for
administrative purposes and have useful lives more than one accounting year. A fixed asset shall be recognized only
when it is probable that economic benefits associated with the asset will flow into the enterprise and the cost of the asset
can be measured reliably. A fixed asset shall be initially measured at actual cost.
(2) Depreciation methods
Categories Depreciation methods Depreciation life Residual rate Yearly depreciation
Plant & buildings Average service life method 20 -35 5 2.7 -4.8
Machinery & equipment Average service life method 10 5 -10 9 -9.5
Electronic equipment Average service life method 5 5 19
Motor vehicle Average service life method 5 5 19
Other equipment Average service life method 5 5 19
(3) Basis for recognizing the fixed assets under financing lease, Pricing and Depreciation Methods
The "finance lease" shall refer to a lease that has transferred in substance all the risks and rewards related to the
ownership of an asset. The ownership of it may or may not eventually be transferred. For the fixed assets rented by
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means of financing lease, depreciation of the rented assets is provided according to the policy identical to the proprietary
assets. If it is reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term
expires, the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee
will obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated
over the shorter one of the lease term or its useful life.
17. Construction-in-process
The cost of construction-in-process is determined according to the actual expenditure incurred for the construction,
including all necessary construction expenditures incurred during the construction period, borrowing costs that shall be
capitalized before the construction reaches the condition for intended use and other relevant expenses.
Construction-in-process is transferred to fixed assets when the asset is ready for its intended use.
For provision for impairment of construction-in-process and the method for provision for impairment, refer to Note V.22
"Impairment of Long Term Assets".
18. Borrowing Costs
Borrowing costs include interest on borrowings, amortization of depreciation or premium, auxiliary expenses and balance
of exchange resulted from foreign currency loan, etc. he borrowing costs from acquisition or production of the assets or
borrowing expenses result therefrom directly attributable to compliance with the condition of capitalization starts to be
capitalized when the expense of the asset has incurred, borrowing costs have incurred and the acquisition and
construction or production activities necessary to let the asset reach the predicted applicable or sellable status; when the
assets acquired, constructed or produced in compliance with capitalization have reached the predicted applicable status
or sellable status, the capitalization stops. The other borrowing costs are recognized as expenses in the period of
incurrence.
Interest expenses of special borrowings incurred actually for the current period less interest income from borrowings at
bank or investment income from temporary investments is capitalized; capitalization amount is determined as
accumulative asset expenditure of general borrowings over weighted average asset expenditure of special borrowings
multiples capitalization rate of general borrowings. Capitalization rate is determined as calculating weighted average
interest rate of general borrowings.
In the capitalization period, exchange differences of special borrowings in foreign currency is totally capitalized; exchange
differences of general borrowings in foreign currency is recognized in profit or loss for the current period.
The assets in compliance with the capitalization conditions refer to such assets as fixed assets, investment based real
estate, inventories, etc. which need to undergo long time of acquisition or construction or production activities before they
can reach the predicted applicable or sellable status.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production of a
qualifying asset is interrupted abnormally and when the interruption is for a continuous period of more than 3 months until
the acquisition or construction or production activities of the assets restart.
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19. Biological Assets
Inapplicable
20. Oil and Gas Assets
Inapplicable
21. Intangible assets
(1) Pricing Method, Service Life and Impairment Test
An intangible asset refers to a recognizable non-monetary asset without physical form possessed by or under the control
of the Company.
Intangible assets are initially measured based on the cost.. All expenses in connection with the intangible assets are
charged to the costs of intangible assets if the relevant economic benefit can flow into the Company and the costs can be
reliably measured. All the expenses of other items except that are charged to the current gain and loss at the time of
incurrence.
The land use right acquired is usually calculated as intangible asset. For the buildings, such as factory building,
constructed independently, the expenses in connection with the land use right and the construction cost of such building
are calculated as intangible asset and fixed assets. For purchased housing and buildings, the relevant costs are
distributed between the land use right and buildings; in case it is difficult to distribution rationally, they shall all be handled
as fixed assets.
An intangible asset with limited service life is amortized in average by using the straight-line method over the predicted
service life with its original value less the predicted residual value and the accumulated amount of the reserve for
impairment already provided commencing from the time of availability for use. The intangible asset with unidentified
service life would not be amortized.
The method for amortization of intangible assets with limited service life is as follows:
Categories Useful Life (Year) Amortization Method
Land use right 50 Straight-line method
Software system 5 Straight-line method
Trademark rights 5 -10 Straight-line method
At the end of a year, the Company rechecks the service life of the intangible asset and the amortization method. The
change incurred is treated as change of accounting estimation. In addition, the service life of intangible asset with
indefinite service life is rechecked. If there is evidence showing that the duration of the economic benefit brought about by
the intangible asset for the enterprise is foreseeable, the estimated service life is amortized according to the amortization
policy of intangible assets with limited service life.
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(2) Accounting policy for internal research and development expenditure
Expenditure on an internal research and development project is classified into expenditure on the research phase and
expenditure on the development phase.
Expenditure on the research phase is recognized in profit or loss when incurred.
Expenditure on the development phase is capitalized only when the Company can satisfy all of the following conditions:
① the technical feasibility of completing the intangible asset so that it will be available for use or sale;
② its intention to complete the intangible asset is to use or sell it; how the intangible asset will generate economic
benefits;
③ Way of intangible assets producing economic interest, including those that can demonstrate the existence of a market
for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the
intangible asset;
④ The availability of adequate technical, financial and other resources to complete the development and the ability to use
or sell the intangible asset;
⑤ Its ability to measure reliably the expenditure attributable to the intangible asset during its development phase.
If it is impossible to distinguish research stage expenses and development stage expenses, the R & D expenses as
incurred shall be all charged to the current gains and losses.
The research and development projects of the Company will enter into the development stage after meeting the above
conditions and passing through the technical feasibility and economic feasibility studies and the formation of the project.
Capitalized expenditure on the development phase is presented as “development costs” in the balance sheet and shall be
transferred to intangible assets when the project is completed to its intended use state.
(3) Impairment testing method and method for provision for impairment of intangible assets
About the impairment testing method and method for provision of reserve for impairment of the investment based
intangible assets. For the detail, refer to Note V.22 "Impairment of Long Term Assets".
22. Impairment of long term assets
For non-current and non-financial assets such as fixed assets, construction-in-process, intangible assets with limited
service life, investment based real estate measured based on the cost model, the long term equity investment in
subsidiaries, joint ventures and associates, etc., the Company make judgment on whether there exists any sign of
impairment on balance sheet day. In case there exists sign of impairment, the Company estimates the recoverable
amount and makes impairment test. For goodwill and the intangible assets with the service life undetermined and the
intangible assets which have not reached applicable status, regardless whether there exists sign of impairment, the
Company makes impairment test every year.
In case impairment test result shows that the recoverable amount of asset is lower than the book value, provision for
impairment is made based on the difference and is regarded in the loss for impairment. The recoverable amount is
determined based on the higher of the net amount of the fair value of the asset less the expense of disposal and the
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present value of the predicted future cash flow of the asset. The fair value of assets is determined based on the sales
agreement price in fair transaction; in case there is no sales agreement but does exist active market of asset, the fair
value is determined according to the buyer’s offer of the asset; in case there exists neither sales agreement nor active
market of asset, the fair value of assets is estimated based on the best information obtainable. The disposal expenses
include legal expenses, relevant taxes, handling fee and direct expenses incurred before the asset reaches the sellable
status in connection with disposal of the assets. The present value the predicted future cash flow of assets: according to
the predicted future cash flow created in process of continuous application and final disposal, choose the proper discount
rate to determine the amount after discount. Provision for impairment of asset is calculated and recognized based on the
individual asset. In case it is difficult to make estimation of the recoverable amount of individual asset, the recoverable
amount of asset group is determined based on the asset group which the asset belongs to. The asset group is the
minimum grouping of assets which can independently produce cash flow in.
For the goodwill separately stated in the financial statements, at the time of impairment testing, the book value of the
goodwill is apportioned to the asset group or combination of asset groups of assets benefited from the synergistic effect of
enterprise consolidation. In case the testing result shows that the recoverable amount of an asset group or combination of
asset groups which contain apportioned goodwill is lower than their book value, the corresponding impairment loss is
recognized. The amount of the impairment loss first offsets and is apportioned to the book value of the goodwill of the
asset group or combination of asset groups, and then offset the book value of other assets according to the proportions of
other various assets in the book value with the exception of goodwill in the asset group or combination of asset groups.
The impairment loss of the aforesaid assets, once recognized, shall not be reversed as the recovered part in subsequent
periods.
23. Long term expenses to be apportioned
Long term expenses to be apportioned refer to various expenses which have already incurred but should be borne in the
reporting period and subsequent periods with the apportioning term exceeding one year. The Company's long term
expenses to be apportioned include the special counter fabrication cost, repairing fee, etc. Long term expenses to be
apportioned are amortized according to the straight-line method in the predicted beneficial period.
24. Payroll to Employees
(1) Accounting treatment of short term salaries
Short term salaries mainly include wages, bonus, allowances and subsidy, welfare expenses to employees, medical
insurance premium, birth insurance premium, work related injury insurance premium, housing fund, labor union dues and
employees' personnel education fund, non-monetary welfare, etc. The Company recognizes the short term salaries to
incur during the fiscal periods when employees offer services to the Company as liabilities and count the same to the
current gains and losses or the relevant cost of assets. Of them, non-monetary welfare is measured based on the fair
value.
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(2) Post-employment benefits
The post-employment benefits mainly include the basic endowment insurance, unemployment insurance, annuity, etc.
Post-employment benefit program includes defined contribution plan. In case the defined contribution plan is used, the
corresponding contributable amount is counted to the corresponding asset cost or the current gains and losses at the time
of incurrence.
(3) Dismission welfare
In case the employment relation between the Company and an employee is terminated before the employment contract
term is due or for the purpose of encouraging an employee to volunteerly accept the lay-off, the Company proposes to
offer compensation, and the employees' payroll liabilities resulted from the termination benefits are recognized as at the
earlier of the time when the Company cannot unilaterally withdraw the dismission welfare as specified in the plan for
termination of labor relationship or the lay-off proposal and the time when the Company recognizes the costs related with
the reorganization of payment of the termination benefits and such liabilities are counted to the current gains and losses.
However, if the termination benefits are predicted to be unable to be fully paid within 12 months after termination of the
annual reporting period, it shall be handled according to the other long term payroll to employees.
The internal retirement program for employees is handled based on the same principle as that for the aforesaid dismission
welfare. The Company plans to count the salaries paid to the internally retired employees and their social insurance
premium paid by the Company from the date when the concerned employees stops offering services to the Company to
the time of their official retirement to the current gains and losses (dismission welfare) when they comply with the
conditions for recognizing the predicted liabilities.
(4) Other long term employees' welfare
Other long term employees' welfare provided by the Company to its employees shall undergo the accounting treatment
according to the defined contribution plan as long as it complies with the defined contribution plan. With the exception of
this, it shall undergo accounting treatment according to the defined beneficial plan.
25. Predicted liabilities
Predicted liabilities are recognized when an obligation in connection with contingencies complies with the following
conditions: (1) The obligation is a present obligation of the Company; (2) It is probable that an outflow of economic
benefits will be required to settle the obligation; (3) The amount of the obligation can be measured reliably.
On the balance sheet day, with consideration of such factors as contingency related risk, uncertainty and the time value of
money, etc., the predicted liabilities are measured according to the best estimated amount necessary to be paid in
implementation of the relevant current obligation.
If the expenses for clearing of predictive liability is fully or partially compensated by a third party, and the compensated
amount can be definitely received, it is recognized separated as asset. The compensated amount shall not be greater
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than the carrying amount of the predictive liability.
26. Payment for shares
Inapplicable
27. Other financial instruments, such as preferred shares, perpetual liabilities, etc.
Inapplicable
28. Revenue
Does the Company need to comply with the requirements on information disclosure for special industries?
No
(1) General Principle
① Sale of goods
Revenue from the sale of goods is recognized only when all of the following conditions are satisfied: the Company has
transferred to the buyer the significant risks and rewards of ownership of the goods, the Company retains neither
continuing managerial involvement nor effective control over the goods sold, and related income has been achieved or
evidences of receivable have been obtained, and the associated costs can be measured reliably.
②Provision of services
Where the outcome of a transaction involving the provision of services can be estimated reliably, at the end of the period,
revenue associated with the transaction is recognized using the percentage of completion method. The stage of
completion of a transaction involving the providing of services is determined according to the proportion of the services
performed to the total services to be performed.
The outcome of a transaction involving the providing of services can be estimated reliably only when all of the following
conditions can be satisfied at the same time: ①. The amount of revenue can be measured reliably; ②. The associated
economic benefits are likely to flow into the enterprise; ③. The stage of completion of the transaction can be measured
reliably; ④. The costs incurred and to be incurred in the transaction can be measured reliably.
If the outcome of a transaction involving the providing of services can’t be estimated reliably, the revenue of providing of
services is recognized at the service cost that incurred and is estimated to obtain compensation and the service cost
incurred is recognized in profit or loss for the current period. If the service cost incurred is estimated to obtain
compensation, revenue isn’t recognized.
When a contract or agreement signed between the Company and other enterprise covers sales of goods and supply of
labor service, in case the part of sales of goods and the part of providing labor service are distinguishable and can be
measured separately, the part of sales of goods and the part of providing labor service should be treated separately; in
case the part of sales of goods and the part of providing labor service cannot be distinguished or cannot be separately
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measured despite that they are distinguishable, all the contract shall be treated as sales of goods.
③ Royalty revenue
Revenue is recognized on accrual basis according to the relevant contract or agreement.
④ Interest income
The interest income shall be calculated based on the tenure of the Company’s monetary funds used by others and the
actual interest rates used.
(2) Detailed method of revenue recognition
The watches sold by the Company includes two types, one is the self-manufactured FIYTA watch, the sales of which is
managed by branch offices and provincial-level sale sections by regions set up by Harmony, a subsidiary of the
Company's. The other is brand watches, the sales of which are controlled by HARMONY Company, a subsidiary of the
Company, and we act as agent Regarding to sales modes, a small portion of the sales of self-manufactured FIYTA
watches is sold through direct sales to customer and consignment sales while most self-manufactured FIYTA watches and
brand watches under agent are under two sales modes, namely exclusive shop and shop-in-shop. Detailed method of
revenue recognition as follows:
① Direct sales to the customers
Under direct sales to the customers mode, the Company delivers products to customers and recognizes sales income
after customers check and accept.
② Exclusive shop
Under exclusive shop mode, the Company delivers products to customers and recognizes sales income after customers
check, accept and pay.
③ Shop-in-shop
Under shop-in-shop mode, the Company delivers products to customers, sales staff issues notes to retail customers and
recognizes sales income after customers check and accept and department store collects the payment from the
customers.
④ Consignment sales
Under consignment sales mode, the Company receives the detail of the sales list from consignee and recognizes revenue
while issuing invoice to distributors.
29. Government subsidies
(1) Basis for judging asset related government grants and the accounting treatment method
Government subsidy refers to the monetary asset and non-monetary asset obtained free by the Company from the
government, excluding the capital from the government as owner's contribution. Government subsidy consists of
asset-related government subsidy and income-related government subsidy.
The government subsidy in form of monetary asset is measured based on the amount received or receivable. The
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government subsidy in form of non-monetary asset is measured based on fair value; or measured based on nominal
amount if the fair value cannot be reliably obtained. The government subsidy measured based on nominal amount is
directly counted to the current gains and losses.
Asset-related government subsidy is recognized as deferred income and is distributed and counted on averaged to the
current gains and losses over the service life of the relevant assets.
In case there exists any balance of the related deferred income when the government subsidy as already recognized
needs to be returned, the balance is used to write down the book balance of the relevant deferred income and the
exceeded part is counted to the current gains and losses; in case there exists no related deferred income, it is counted
directly to the current gains and losses.
(2) Basis for judging income related government subsidy and the accounting treatment method
The income-related government subsidy used for compensate the relevant expenses and losses in the subsequent period
is recognized as deferred income and counted to the current gains and losses in the period of recognizing the relevant
expenses.
In case there exists any balance of the related deferred income when the government subsidy as already recognized
needs to be returned, the balance is used to write down the book balance of the relevant deferred income and the
exceeded part is counted to the current gains and losses; in case there exists no related deferred income, it is counted
directly to the current gains and losses.
30. Deferred tax assets and deferred tax liabilities
(1) Income tax in the reporting period
At the balance sheet day, the current income tax liabilities (or asset) formed in the reporting period and previous periods
are measured based on the income tax amount predicted payable (or returnable) as calculated according to the tax law.
The taxable income amount based on which the current income tax expense is calculated is worked out after the
corresponding adjustment of the pretax accounting profit during the reporting period according to the relevant provisions
of the tax law.
(2) Deferred income tax asset and deferred income tax liability
The balance between the book value of some assets and liability items and their tax base and the provisional difference
arising from the balance between the book value of the items which have not been taken as asset and liability but may be
determined as tax base according to the tax law are recognized as deferred income tax asset and deferred income tax
liability by means of the debt method based on balance sheet.
The taxable provisional difference which is connected with the initial recognition of goodwill and the initial recognition of
the asset or liability arising from the transaction which is neither enterprise consolidation nor influences the accounting
profit and taxable income amount (or may be used to offset loss) at the time of incurrence are not recognized as relevant
deferred income tax liability. In addition, as to the taxable provisional difference in connection with investment in the
subsidiaries, associates and joint ventures, if the Company can control the time of reversal of the provisional difference
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while such provisional difference may be possibly unable to be reversed in the foreseeable future and the relevant
deferred income tax liability shall not be recognized either. With the exception of the aforesaid situation, the Company
recognizes the deferred income tax liability arising from other taxable provisional difference.
The offsetable provisional difference which is connected with the initial recognition of the asset or liability (or may be used
to offset loss) arising from the transaction which is neither enterprise consolidation nor influences the accounting profit and
taxable income amount is not recognized as the relevant deferred income tax asset. In addition the offsetable provisional
difference in connection with investment in the subsidiaries, associates and joint ventures, in case such provisional
difference may be possibly unable to be reversed in the foreseeable future, or it is not highly possible to obtain taxable
income amount which can be used to offset the offsetable provincial difference in future, shall not be recognized as the
relevant deferred income tax asset. With the exception of the aforesaid situation, the Company recognizes the deferred
income tax asset arising from the other offsetable provisional difference only with the taxable income amount which may
possibly be obtainable for offsetting the offsetable provisional difference.
For the offsetable loss and tax payment write-down which may be carried over to the future years, only the future taxable
income amount which may be obtainable and used to offset the offsetable loss and write down the tax payment may be
recognized as the corresponding deferred income tax asset.
At the balance sheet day, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to
apply to the period when the asset is realized or the liability is settled according to the tax law.
At the balance sheet day, the Company reviews the carrying amount of a deferred tax asset. If it is probable that sufficient
taxable profits will not be available in future to allow the benefit of the deferred tax asset to be utilized, the carrying amount
of the deferred tax asset is reduced. Any such reduction in amount is reversed when it becomes probable that sufficient
taxable profits will be available.
(3) Income tax expense
Income tax expense includes the current income tax and deferred income tax.
Except that the current income tax and deferred income tax in connection with other comprehensive income or the
transactions and matters which are directly stated in the shareholders' equity are counted to the other comprehensive
income or shareholder's equity and the deferred income tax arising from enterprise consolidation is used to adjusted the
book value of goodwill, all the other current income tax and deferred income tax expenses or income are counted to the
current gains and losses.
(4) Income Tax Offsetting
In case the Company has legal right to make netting and is desirous to make netting or obtain assets and settle liabilities
at the same time, the Company may present the net amount after offsetting the current income tax liabilities with the
current income tax assets.
In case the Company has legal right to settle the current income tax asset and current income tax liability in net while the
deferred income tax asset and the deferred income tax liability are related to the income tax which is collected by the
same tax collection and administration authority from the same tax payer or related to the different tax payer, but during
the period in future when each significant deferred income tax asset and liability are reversed, the Company present the
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deferred income tax asset and deferred income tax liability in net after offsetting when it involves the tax payer's desire to
settle the current income tax asset and liability or obtaining asset and satisfying liability in net.
31. Lease
(1) Accounting process for operating lease
The "finance lease" shall refer to a lease that has transferred in substance all the risks and rewards related to the
ownership of an asset. The ownership of it may or may not eventually be transferred. Other lease except the financing
lease is operational lease
① The Company records the operational lease business as the tenant
Rental payment of operational lease is recorded in the relevant asset cost or current gain and loss based on the straight
line method over various fiscal periods within the lease term. The initial direct expense is recorded in the current gain and
loss. Contingent rental is recorded in the current gain and loss when it actually incurs.
② The Company records the operational lease business as the lessor
The rental income of the operational lease is recorded in the current gain and loss according to the straight line method in
different periods within the lease term. The initial direct expense with bigger amount is capitalized at the time of incurrence
and is recorded in the current gain and loss periodically according to the same base in recognizing the rental income
during the lease term; other initial direct expense with smaller amount is recorded in the current gain and loss at the time
of incurrence. Contingent rental is recorded in the current gain and loss when it actually incurs.
(2) Accounting treatment method for finance lease
① As lessor
At the beginning date of lease period, the Company will recognize the lower of the fair value of the lease asset at the
beginning of the lease and the present value of the minimum amount of rent payment as the entry value of rent asset;
takes the minimum rent payment as the entry value of long term account payable and its balance as the unrecognized
financial charges. In addition, when the lease negotiation takes place in the same process of conclusion of lease contract,
the initial direct expenses attributable to lease item are also counted to the value of rent asset. The balance of the
minimum rent payment amount less the unrecognized financial charges is respectively stated on the long term liabilities
and the long term liabilities due within a year.
Unrecognized financial charges are recognized in the current financing expenses by using the actual interest rate method
within the lease term. Contingent rental is recorded in the current gain and loss when it actually incurs.
② As lessee
As at the beginning date of lease period, the Company takes the sum of the minimum amount of the rent collected at the
beginning of the lease and the initial direct expense as the entry value of the finance lease receivable and at the same
time records the unsecured residual value; the recognizes the balance of the sum of the minimum rent collection amount,
initial direct expenses and unsecured residual value and the sum of its present value as the unrealized financing income.
The balance between the receivable rent from finance lease less the unrealized revenue of financing is respectively
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presented in the long term claim and the long term claim due within a year.
The unrecognized financial charges are calculated by means of the actual interest rate method within the lease term and
recognized as the current financial expenses. Contingent rental is recorded in the current gain and loss when it actually
incurs.
32. Other important accounting policy and accounting estimate
Operation termination
Operation termination refers to the components which can satisfy one of the following conditions, can be separately
distinguished and have been disposed or classified as the category of held-for-sale by the Company: ① this component
represents an independent major business or an independent major operation region; ② this component is a part of a
related plan for an independent principal business or an independent principal operation region; ③ this component is a
subsidiary acquired exclusively for resale.
About the accounting treatment method for operation termination, refer to the relevant description of Note V.13
“Held-for-sale assets and disposal group”
33. Changes in significant accounting policies and accounting estimates
(1) Change in significant accounting policies
Inapplicable
(2) Change in significant accounting estimates
Inapplicable
34. Miscelleneous
Inapplicable
VI. Taxation
1. Types of major taxes and tax rates
Type of taxes Tax basis Tax rates
VAT is calculated and paid based on the balance of the
output VAT as worked out based on 16% of the taxable
VAT 16%
revenues less the input VAT allowed to be offset in the
very period.
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For the high-grade watch at the price higher than CNY
Consumption tax 10,000 (with CNY 10,000 inclusive) imported or 20%
produced, the consumption tax is calculated and payable.
The urban maintenance and construction tax is based on
Urban maintenance and construction tax 7%
7% of the turnover tax actually paid
Corporate income tax Taxable income amount 15%-30%
1.2% of 70% of the cost of the property or 12% of the
Real estate tax 1.2% and 12%
rental income
In case there exist taxpayers subject to different corporate income tax rates, disclose the information.
Taxpayers Income tax rates
The Company (Notes①②) 25.00%
Shenzhen Harmony World Watches Center Co., Ltd. (HARMONY) (Notes①) 25.00%
Shenzhen FIYTA Sophisticated Timepieces Manufacture Co., Ltd. (the Manufacture
15.00%
Co.) (Notes②③)
FIYTA Hong Kong (Note ④) 16.50%
Shenzhen FIYTA Technology Development Co., Ltd. (the Technology Co.) (Notes②
15.00%
③)
Shiyuehui Boutique (Shenzhen) Co., Ltd. (Shiyuehui ) (Notes⑤) 25.00%
Harbin Harmony World Watch Distribution Co., Ltd. (Harbin Company) (Notes⑤) 25.00%
Emile Chouriet (Shenzhen) Limited (Emile Choureit Shenzhen Company) (Notes⑤) 25.00%
FIYTA Sales Co., Ltd. (the Sales Co.) (Notes①⑤) 25.00%
Liaoning Hengdarui Commerce & Trade Co., Ltd. (Hengdarui) (Notes⑤) 25.00%
Montres Chouriet SA (the Swiss Co.) (Notes⑥) 30.00%
2. Tax Preferences
(1) Enterprise Income Tax
Note ①: According to the regulations stated in GuoShuiFa (2008) No. 28, “Interim Administration Method for Levy of
Corporate Income Tax to Enterprise that Operates Cross-regionally”, the head office of the Company and its branch
offices, the head office of HARMONY Company and its branch offices adopt tax submission method of “unified calculation,
managing by classes, pre-paid in its registered place, settlement in total, and adjustment by finance authorities” starting
from 1 January 2008. 50% is shared and prepaid by branches and 50% is prepaid by the headquarters.
Note ②: According to the Notice of Improving R & D Expense Pre-tax Weighted Deduction Policy (CAI SHUI (2015) No.
119 promulgated by the Science and Technology Department of State Administration of Taxation, the R & D expenses
arising from development of new technology, new products and new process in the Company, the Manufacture Company
and the Technology Company may enjoy 50% weighted deduction as the R & D expenses based on the specified
deduction according to fact as long as they have not formed intangible assets and counted to the current gains and loss;
Note ③: The company enjoys the “income tax rate exclusion of high-tech enterprises key supported by the state”.
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Note ④: These companies are registered in Hong Kong and the income tax rate of Hong Kong applicable is 16.50% this
year.
Note ⑤: According to the People's Republic of China Enterprise Income Tax Law, the income tax rate is 25% for
residential enterprises since 1 January 2008.
Note ⑥: The tax rate of 30% is applicable for Swiss Company as it registered in Switzerland.
(2) Property tax
According to Article 2 of the Circular on Transmission of the Provisions on the Policy in Connection with the Property Tax
and Urban Land Use Tax Promulgated by the State Administration of Taxation (SHEN DI SHUI FA [2003] No. 676: for the
new properties newly constructed or purchased by taxpayers, the property tax may be exempted for three years
commencing from the next month after completion of the construction or purchase. Our FIYTA Watch Building located at
Guangming New Zone of Shenzhen enjoys exemption from the property tax for three years commencing from the next
month of completion of the construction in September 2016.
3. Miscelleneous
Inapplicable
VII. Notes to items of consolidated financial statements
1. Monetary capital
In CNY
Items Ending balance Ending balance
Cash in stock 233,265.12 414,210.14
Bank deposit 278,565,485.60 184,528,160.32
Other Monetary Funds 2,210,520.86 2,210,520.86
Total 281,009,271.58 187,152,891.32
2. Financial assets measured based on fair value and its movements counted to the current gain or loss
Inapplicable
3. Derivative financial assets
Inapplicable
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4. Notes receivable
(1) Presentation of classification of notes receivable
In CNY
Items Ending balance Ending balance
Bank acceptance 3,164,514.86 2,398,579.72
Trade acceptance 1,467,574.48 7,295,303.96
Total 4,632,089.34 9,693,883.68
(2) Notes receivable already pledged by the Company at the end of the reporting period
Inapplicable
(3) Endorsed or discounted notes receivable at the end of the reporting period, but not yet due on the balance
sheet day
Inapplicable
(4) Notes transferred to receivables due to issuer’s default at the end of the reporting period
Inapplicable
5. Accounts receivable
(1) Accounts receivables disclosed by types
In CNY
Ending balance Ending balance
Book balance Bad debt reserve Book balance Bad debt reserve
Categories
Provision Book value Provision Book value
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Accounts receivable with
significant single amount 1,702,371.9 1,702,371.9 6,985,493.
0.44% 13.57% 0.00 2.04% 6,985,493.80 44.40% 0.00
and provision of bad debt 4 4 80
reserve on individual basis
Receivables for which
provision for bad debts have 389,169,407 10,748,839. 378,420,568. 334,903,9
99.54% 85.66% 97.93% 8,649,343.91 54.98% 326,254,624.94
been recognized based on .57 30 27 68.85
the portfolio
Accounts receivable with
97,147.84 0.02% 97,147.84 0.77% 0.00 97,147.84 0.03% 97,147.84 0.62% 0.00
insignificant single amount
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and provision of bad debt
reserve on individual basis
390,968,927 12,548,359. 378,420,568. 341,986,6 15,731,985.5
Total 100.00% 100.00% 100.00% 100.00% 326,254,624.94
.35 08 27 10.49 5
Accounts receivable with significant single amount and provision of bad debt reserve on individual basis at the end of the
reporting period :
In CNY
Accounts receivable (based on Ending balance
units) Accounts receivable Bad debt reserve Provision proportion Provision reason
Xi'an Centuryginwa Qujiang
1,702,371.94 1,702,371.94 100.00% Chances of recovering is remote
Shopping Center Co., Ltd.
Total 1,702,371.94 1,702,371.94 -- --
In the combination, the accounts receivable for which the bad debt reserve is provided based on the age analysis:
In CNY
Ending balance
Ageing
Accounts receivable Bad debt reserve Provision proportion
Itemized within 1 year
Sub-total within 1 year 200,590,710.06 10,022,012.71 5.00%
1 to 2 years 1,386,065.23 138,606.52 10.00%
2 to 3 years 726,441.81 217,932.54 30.00%
Over 3 years 740,575.05 370,287.53 50.00%
Total 203,443,792.15 10,748,839.30 5.28%
Note to the basis for determining the combination:
In the combination, the account receivable for which reserve for bad debt is provided based on balance percentage:
Inapplicable
In the combination, the accounts receivable for which the bad debt reserve is provided based on the other method:
Ending balance
Portfolio Description
Accounts receivable Bad debt reserve Provision proportion (%)
Specific fund portfolio 185,725,615.42 - -
Note: Based on historical experience, the Company’s receivables due from petty cash paid to employees, receivables due
from subsidiaries of the Company and accounts receivable for the sales between the last settlement date of the same
department store and the balance sheet day are with high recoverability and low possibility of incurring bad debt, as a
result, no bad debt provisions are provided for such receivables.
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(2) Bad debt reserve provided, recovered or reversed in the reporting period
During the reporting period, the Company provided reserve for bad debt amounting to CNY 2,101,421.27; the reserve for
bad debt recovered or reversed during the reporting period amounted to CNY 5,283,121.86.
Where the significant amount of the reserve for bad debt recovered or reversed:
In CNY
Company name Amount recovered or reversed Way of recovery
Xi'an Centuryginwa Shopping Co., Ltd. 5,283,121.86 Bank transfer
Total 5,283,121.86 --
(3) Accounts receivable actually written off in current period
Inapplicable
(4) Accounts receivable due from the top five debtors are as follows:
Total accounts receivable due from the top five debtors of the Company in the current period is CNY32,639,305.03,
accounting for 8.35% of the total accounts receivable as at the end of the current period and the total provision for bad and
doubtful debts made as at the end of the current period is CNY1,631,965.25.
(5) Accounts receivable terminated for recognition due to transfer of financial assets
Inapplicable
(6) Amount of assets, liabilities formed by transfer of accounts receivable and continuing to be involved
Inapplicable
6. Advance payments
(1) Advance payments are presented based on ages
In CNY
Ending balance Ending balance
Ageing
Amount Proportion Amount Proportion
Within 1 year 17,227,525.25 69.77% 20,284,829.30 82.25%
1 to 2 years 6,528,167.69 26.44% 2,034,407.41 8.25%
2 to 3 years 932,656.35 3.78% 2,344,077.82 9.50%
Over 3 years 2,000.00 0.01% 0.00 0.00%
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Total 24,690,349.29 -- 24,663,314.53 --
(2) Advance payment to the top five payees of the ending balance collected based on the payees of the advance
payment
The total amount of advance payment to the top five payees of the ending balance collected based on the payees of the
advance payment was CNY 15,260,482.94, taking 61.81% of the toal ending balance of the advance payment.
Other notes:
Inapplicable
7. Interest receivable
(1) Classification
Inapplicable
(2) Significant overdue interest
Inapplicable
8. Dividends receivable
(1) Dividends receivable
Inapplicable
(2)Significant dividends receivable with age exceeding 1 year
Inapplicable
9. Other receivables
(1) Disclosure of classification of other receivables
In CNY
Ending balance Ending balance
Book balance Bad debt reserve Book balance Bad debt reserve
Categories
Provision Book value Provision Book value
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Other receivables with
6,784,706.5 6,784,706.5 6,847,372.
significant single amount 11.73% 66.80% 0.00 15.23% 6,847,372.68 68.70% 0.00
5 5 68
and provision of bad debt
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reserve on individual basis
Other receivables for which
bad debt reserve has been 51,060,207. 3,352,541.6 47,707,666.0 38,090,25
88.24% 33.00% 84.73% 3,099,718.79 31.10% 34,990,539.09
provided based on the 68 8 0 7.88
portfolio
Other receivables with
insignificant single amount
20,000.00 0.03% 20,000.00 0.20% 0.00 20,000.00 0.04% 20,000.00 0.20% 0.00
and provision of bad debt
reserve on individual basis
57,864,914. 10,157,248. 47,707,666.0 44,957,63
Total 100.00% 100.00% 100.00% 9,967,091.47 100.00% 34,990,539.09
23 23 0 0.56
Other receivables with significant single amount and provision of bad debt reserve on individual basis at the end of the
reporting period:
In CNY
Ending balance
Other receivables (based on unit)
Other receivables Bad debt reserve Provision proportion Provision reason
Deposit of China Resources
800,000.00 800,000.00 100.00% Unrecoverable
(Chongqing) Industrial Co., Ltd.
Beat Blattman Marketing 3,843,487.75 3,843,487.75 100.00% Unrecoverable
Liberty Time Center GmbH 2,141,218.80 2,141,218.80 100.00% Unrecoverable
Total 6,784,706.55 6,784,706.55 -- --
In the combination, other receivables for which the bad debt reserve is provided based on the age analysis:
In CNY
Ending balance
Ageing
Other receivables Bad debt reserve Provision proportion
Itemized within 1 year
Sub-total within 1 year 32,815,493.64 1,442,731.93 4.40%
1 to 2 years 7,530,672.67 753,067.27 10.00%
2 to 3 years 3,446,284.94 1,033,885.48 30.00%
Over 3 years 245,714.00 122,857.00 50.00%
Total 44,038,165.25 3,352,541.68 7.61%
Note to the basis for determining the combination:
In the combination, other account receivable for which reserve for bad debt is provided based on balance percentage:
Inapplicable
In the combination, other receivable for which the bad debt reserve is provided based on other method:
Ending balance
Portfolio Description
Other receivables Bad debt reserve Provision proportion (%)
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Specific fund portfolio 7,022,042.43 - -
(2) Bad debt provision accrual, received or reversed in the reporting period
During the reporting period, the Company provided reserve for bad debt amounting to CNY 190,156.76; the reserve for
bad debt recovered or reversed during the reporting period amounted to CNY 0.00.
(3) Accounts receivable actually written off in current period
Inapplicable
(4) Classification of other receivables based on nature of payment
In CNY
Nature of Payment Ending book balance Opening book balance
Cash deposit and deposit in security 32,937,359.59 30,200,936.65
Commodity promotion fee 3,701,674.02 3,387,360.70
Reserve 7,022,042.43 4,399,822.68
Payment for goods 5,984,706.55 6,047,372.68
Others 8,219,131.64 922,137.85
Total 57,864,914.23 44,957,630.56
(5) Other receivables owed by the top five debtors based on the ending balance
In CNY
Proportion in total ending Ending balance of the
Company name Nature of Payment Ending balance Ageing
balance of other receivables provision for bad debts
Beat Blattman Marketing Payment for goods 3,843,487.75 Over 3 years 6.64% 3,843,487.75
China Resources
Deposit in security 2,960,734.00 Within 1 year 5.12% 148,036.70
(Shenzhen) Co., Ltd
Liberty Time Center GmbH Payment for goods 2,141,218.80 Over 3 years 3.70% 2,141,218.80
CHINA RESOURCES SUN
HUNG KAI PROPERTIES Deposit in security 1,497,003.00 Within 1 year 2.59% 74,850.15
(HANGZHOU) LIMITED
Shenzhen Yitian Holiday
Deposit in security 1,171,173.00 Within 1 year 2.02% 58,558.65
Plaza Co,. Ltd.
Total -- 11,613,616.55 -- 20.07% 6,266,152.05
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(6) Accounts receivable involving government subsidy
Inapplicable
(7) Other receivables with recognition terminated due to transfer of financial assets
Inapplicable
(8) Amount of assets and liabilities formed through transfer of other receivables and continuing to be involved
Inapplicable
10. Inventories
(1) Classification of inventories
In CNY
Ending balance Ending balance
Items Provision for price Provision for price
Book balance Book value Book balance Book value
falling falling
Raw materials 181,142,722.04 26,475,316.23 154,667,405.81 192,872,336.46 26,899,506.29 165,972,830.17
Products in process 9,992,097.03 0.00 9,992,097.03 16,744,428.79 0.00 16,744,428.79
Commodities in stock 1,632,393,233.64 61,681,408.39 1,570,711,825.25 1,708,413,402.70 70,603,985.40 1,637,809,417.30
Total 1,823,528,052.71 88,156,724.62 1,735,371,328.09 1,918,030,167.95 97,503,491.69 1,820,526,676.26
Does the Company need to comply with the requirements on disclosure according to the Guidance of Shenzhen Stock
Exchange on Disclosure of Information of the Industry Engaged in No. 4 - Listed Companies Engaged in Seed Industry,
Cultivation
No
(2) Reserve for Price Falling of Inventories
In CNY
Increase in the reporting period Decrease in the reporting period
Items Ending balance Reversal or Ending balance
Provision Others Others
Offset
Raw materials 26,899,506.29 2,050,627.60 0.00 2,474,817.66 0.00 26,475,316.23
Products in process 0.00 0.00 0.00 0.00 0.00 0.00
Commodities in stock 70,603,985.40 0.00 0.00 8,922,577.01 0.00 61,681,408.39
Total 97,503,491.69 2,050,627.60 0.00 11,397,394.67 0.00 88,156,724.62
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(3) Note to the amount of capitalized borrowing costs involved in the ending balance of inventories
Inapplicable
(4) Assets already completed but not yet settled formed in the construction contract at the end of the reporting
period
Inapplicable
11. Classified as held-for-sale assets
Inapplicable
12. Non-current assets due within a year
Inapplicable
13. Other current assets
In CNY
Items Ending balance Ending balance
Rent 4,036,993.89 5,229,782.50
Input VAT to be offset 14,235,658.91 18,745,349.24
Income tax paid in advance 803,709.68 314,917.39
Others 4,703,274.88 326,766.08
Total 23,779,637.36 24,616,815.21
14. Available-for-sale financial assets
(1) About available-for-sale financial assets
In CNY
Ending balance Ending balance
Items
Book balance Impairment reserve Book value Book balance Impairment reserve Book value
Available-for-sale equity instrument 385,000.00 300,000.00 85,000.00 385,000.00 300,000.00 85,000.00
Measured based on cost 385,000.00 300,000.00 85,000.00 385,000.00 300,000.00 85,000.00
Total 385,000.00 300,000.00 85,000.00 385,000.00 300,000.00 85,000.00
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(2) Available-for-sale financial assets measured based on fair value at the end of the reporting period
Inapplicable
(3) Available-for-sale financial assets measured based on costs at the end of the reporting period
In CNY
Book balance Impairment reserve Holding Cash dividend
Beginning of Increase in the Decrease in End of the Beginning of Increase in the Decrease in End of the proportion of in the
Investees
the reporting reporting the reporting reporting the reporting reporting the reporting reporting the shares in reporting
period period period period period period period period the investees period
Shenzhen
AVIC Culture
300,000.00 0.00 0.00 300,000.00 300,000.00 0.00 0.00 300,000.00 15.00% 0.00
Communicatio
n Co., Ltd.
Xi'an
Tangcheng 85,000.00 0.00 0.00 85,000.00 0.00 0.00 0.00 0.00 0.10% 0.00
Co., Ltd.
Total 385,000.00 0.00 0.00 385,000.00 300,000.00 0.00 0.00 300,000.00 -- 0.00
(4) Change in impairment of available-for-sale financial assets
In CNY
Classification of available-for-sale Available-for-sale equity Available-for-sale liability
Total
financial assets instrument instrument
Balance with provision for
impairment recognized at the 300,000.00 0.00 300,000.00
beginning of the reporting period
Balance with provision for
impairment recognized at the end 300,000.00 0.00 300,000.00
of the reporting period
(5) Note to serious falling or non-provisional falling of the fair value of available-for-sale equity instruments
without provision for impairment provided
Inapplicable
15. Held-to-maturity investments
(1) About held-to-maturity investments
Inapplicable
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(2) Significant held-to-maturity investments at the end of the reporting period
Inapplicable
(3) Reclassification of the held-to-maturity investments in the reporting period
Inapplicable
16. Long term accounts receivable
(1) About long term accounts receivable
Inapplicable
(2) Long term accounts receivable recognized due to termination of the transfer of financial assets
Inapplicable
(3) Transfer of long term accounts receivable while continuing to be involved in the amount of the formed assets
and liabilities
Inapplicable
17. Long-term equity investments
In CNY
Increase/ Decrease (+ / -) in the reporting period
Income from Announced Ending
equity Other for balance of
Ending Ending
Investees Additional Decrease of investment comprehensi Other equity distributing Provision for the provision
balance Others balance
investment investment recognized ve income movement cash impairment for
under equity adjustment dividend or impairment
method profit
I. Joint Venture
II. Associates
Shanghai
Watch
Industry Co., 43,879,518.0 43,972,531.4
0.00 0.00 93,013.38 0.00 0.00 0.00 0.00 0.00 0.00
Ltd. 9 7
(Shanghai
Watch)
43,879,518.0 43,972,531.4
Sub-total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
9 7
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43,879,518.0 43,972,531.4
Total 0.00 0.00 93,013.38 0.00 0.00 0.00 0.00 0.00 0.00
9 7
Other notes
18. Investment based real estate
(1) Investment property measured based on the cost method
In CNY
Plant and buildings Land use right Construction-in-process Total
I. Original book value
1. Opening balance 449,153,501.16 0.00 0.00 449,153,501.16
2. Increase in the reporting
58,656,614.70 0.00 0.00 58,656,614.70
period
(1) Purchased
(2) Inventories\fixed
assets/construction- in – process 58,656,614.70 0.00 0.00 58,656,614.70
transferred in
(3) Increase of enterprise
consolidation
3. Amount decreased in the
reporting period
(1) Disposal
(2) Other transfer out
4. Ending balance 507,810,115.86 0.00 0.00 507,810,115.86
II. Accumulative depreciation and
accumulative amortization
1. Opening balance 143,659,513.39 0.00 0.00 143,659,513.39
2. Increase in the reporting
15,891,827.29 0.00 0.00 15,891,827.29
period
(1) Provision or amortization 6,375,026.65 0.00 0.00 6,375,026.65
(2)Transferred in to the fixed
9,516,800.64 0.00 0.00 9,516,800.64
asset
3. Amount decreased in the
reporting period
(1) Disposal
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(2) Other transfer out
4. Ending balance 159,551,340.68 0.00 0.00 159,551,340.68
III. Provision for impairment
1. Opening balance
2. Increase in the reporting
period
(1) Provision
3. Amount decreased in the
reporting period
(1) Disposal
(2) Other transfer out
4. Ending balance
IV. Book value
1.Book value at the end of
348,258,775.18 0.00 0.00 348,258,775.18
the reporting period
2.Book value at the
305,493,987.77 0.00 0.00 305,493,987.77
beginning of the reporting period
(2) Investment property measured based on fair value
Inapplicable
(3) Investment property without certificate of property right
Inapplicable
19. Fixed asset
(1) About fixed assets
In CNY
Machinery &
Items Plant & buildings Motor vehicle Electronic equipment Others Total
equipment
I. Original book
value
1. Opening 548,203,064.99 76,359,195.91 15,572,717.72 43,168,802.82 56,767,439.55 740,071,220.99
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balance
2. Increase in the
0.00 1,821,880.34 0.00 1,463,669.77 1,471,405.39 4,756,955.50
reporting period
(1) Purchase 0.00 1,821,880.34 0.00 1,463,669.77 1,471,405.39 4,756,955.50
(2)
Construction-in-proc
ess transferred in
(3) Increase of
enterprise
consolidation
3. Amount
decreased in the 59,093,947.97 157,887.39 0.00 671,612.42 304,807.47 60,228,225.25
reporting period
(1) Disposal or
437,333.27 157,887.39 0.00 671,612.42 304,807.47 1,571,640.55
scrapping
(2) Transferred
into investment 58,656,614.70 0.00 0.00 0.00 0.00 58,656,614.70
purpose real estate
4. Ending balance 489,109,117.02 78,023,188.86 15,572,717.72 43,960,860.17 57,934,037.47 684,599,921.24
II. Accumulative
depreciation
1. Opening
94,955,404.27 36,106,695.76 12,805,115.03 25,960,630.90 46,543,782.38 216,371,628.34
balance
2. Increase in the
7,080,045.25 3,131,927.12 508,303.00 2,471,305.70 1,514,155.42 14,705,736.49
reporting period
(1) Provision 7,080,045.25 3,131,927.12 508,303.00 2,471,305.70 1,514,155.42 14,705,736.49
3. Amount
decreased in the 9,516,800.64 32,522.96 0.00 593,038.40 248,217.77 10,390,579.77
reporting period
(1) Disposal or
0.00 32,522.96 0.00 593,038.40 248,217.77 873,779.13
scrapping
(2) Transferred
into investment 9,516,800.64 0.00 0.00 0.00 0.00 9,516,800.64
purpose real estate
4. Ending balance 92,518,648.88 39,206,099.92 13,313,418.03 27,838,898.20 47,809,720.03 220,686,785.06
III. Provision for
impairment
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1. Opening
balance
2. Increase in the
reporting period
(1) Provision
3. Amount
decreased in the
reporting period
(1) Disposal or
scrapping
4. Ending balance
IV. Book value
1.Book value at
the end of the 396,590,468.14 38,817,088.94 2,259,299.69 16,121,961.97 10,124,317.44 463,913,136.18
reporting period
2.Book value at
the beginning of the 453,247,660.72 40,252,500.15 2,767,602.69 17,208,171.92 10,223,657.17 523,699,592.65
reporting period
(2) About temporarily idle fixed assets
Inapplicable
(3) Fixed assets rented through finance lease
Inapplicable
(4) Fixed assets leased through operating lease
Inapplicable
(5) Fixed assets that do not have certificate for property right
Inapplicable
20. Construction-in-process
(1)About construction in progress
In CNY
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Ending balance Opening balance
Items
Book balance Impairment reserve Book value Book balance Impairment reserve Book value
FIYTA Watch Building
design, construction
12,515,382.25 0.00 12,515,382.25 10,947,300.53 0.00 10,947,300.53
and supporting
construction project
Total 12,515,382.25 0.00 12,515,382.25 10,947,300.53 0.00 10,947,300.53
(2) Movements of important construction-in-progress projects in the reporting period
In CNY
Including:
Proportion
Transferred Accumulativ amount of
Other of the Interest
Increase in into the e amount the
decreases accumulativ capitalizatio
Opening the fixed assets Ending Project involved in capitalized Capital
Description Budget in the e n rate in the
balance reporting in the balance progress interest interest in source
reporting engineering reporting
period current capitalizatio the
year input in the period
period n reporting
budget
period
FIYTA
Watch
Building
design,
34,050,900. 10,947,300. 1,568,081.7 12,515,382. Self-raised
construction 0.00 0.00 36.75% 36.75% 0.00 0.00 0.00%
00 53 2 25 capital
and
supporting
construction
project
34,050,900. 10,947,300. 1,568,081.7 12,515,382.
Total 0.00 0.00 -- -- 0.00 0.00 0.00% --
00 53 2 25
(3) Provision for impairment of construction in progress in the current period
Inapplicable
21. Engineering materials
Inapplicable
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22. Disposal of fixed assets
Inapplicable
23. Productive biological asset
(1) Productive biological asset by using the cost measurement model
Inapplicable
(2) Productive biological asset by using the fair value measurement model
Inapplicable
24. Oil and Gas Assets
Inapplicable
25. Intangible assets
(1) About the intangible assets
In CNY
Items Land use right Patent Right Non-patent technology Software system Trademark rights Total
I. Original book value
1. Opening
34,854,239.40 0.00 0.00 19,904,736.57 9,547,313.86 64,306,289.83
balance
2. Increase in the
79,583.00 0.00 0.00 2,077,738.43 496,358.86 2,653,680.29
reporting period
(1) Purchase 79,583.00 0.00 0.00 2,077,738.43 496,358.86 2,653,680.29
(2) Internal R &
D
(3) Increase of
enterprise consolidation
3. Amount
decreased in the
reporting period
(1) Disposal
4. Ending balance 34,933,822.40 0.00 0.00 21,982,475.00 10,043,672.72 66,959,970.12
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II. Accumulative
amortization
1. Opening
9,887,164.24 0.00 0.00 6,951,113.14 3,244,732.24 20,083,009.62
balance
2. Increase in the
366,015.82 0.00 0.00 1,893,226.08 171,112.97 2,430,354.87
reporting period
(1) Provision 366,015.82 0.00 0.00 1,893,226.08 171,112.97 2,430,354.87
3. Amount
decreased in the
reporting period
(1) Disposal
4. Ending balance 10,253,180.06 0.00 0.00 8,844,339.22 3,415,845.21 22,513,364.49
III. Provision for
impairment
1. Opening
balance
2. Increase in the
reporting period
(1) Provision
3. Amount
decreased in the
reporting period
(1) Disposal
4. Ending balance
IV. Book value
1.Book value at
the end of the reporting 24,680,642.34 0.00 0.00 13,138,135.78 6,627,827.51 44,446,605.63
period
2.Book value at
the beginning of the 24,967,075.16 0.00 0.00 12,953,623.43 6,302,581.62 44,223,280.21
reporting period
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(2) About the land use right without certificate of title
Inapplicable
26. Development expenditure
Inapplicable
27. Goodwill
Inapplicable
28. Long term expenses to be apportioned
In CNY
Increase in the reporting Amount amortized in the
Items Opening balance Other decrease Ending balance
period reporting period
Charge of fabrication of
49,334,415.56 14,981,157.22 24,086,669.23 0.00 40,228,903.55
special counters
Refurbishment expenses 58,392,053.11 18,954,360.44 14,628,775.92 0.00 62,717,637.63
Market promotion 0.00 6,792,452.86 1,698,113.22 0.00 5,094,339.64
Others 1,683,316.82 0.00 533,924.53 0.00 1,149,392.29
Total 109,409,785.49 40,727,970.52 40,947,482.90 0.00 109,190,273.11
29. Deferred tax assets and deferred tax liabilities
(1) Deferred income tax asset without offsetting
In CNY
Ending balance Opening balance
Items
Offsetable provisional difference Deferred income tax asset Offsetable provisional difference Deferred income tax asset
Asset impairment reserve 81,697,110.54 19,865,559.30 93,805,178.33 22,891,430.26
Unrealized profit from the
298,377,314.29 73,967,818.56 309,982,920.90 76,608,130.54
intracompany transactions
Offsetable loss 50,682,837.77 11,159,509.24 27,342,976.03 4,930,384.00
Deferred income 5,904,000.00 1,476,000.00 5,904,000.00 1,476,000.00
Total 436,661,262.60 106,468,887.10 437,035,075.26 105,905,944.80
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(2) Deferred income tax liabilities without offsetting
Inapplicable
(3) Deferred income tax asset or liabilities stated with net amount after offsetting
In CNY
Amount mutually offset between Amount mutually offset between
Ending balance of the deferred Opening balance of the deferred
the deferred income tax assets the deferred income tax assets
Items income tax asset or liabilities after income tax asset or liabilities after
and liabilities at the end of the and liabilities at the beginning of
offsetting offsetting
reporting period the reporting period
Deferred income tax asset 0.00 106,468,887.10 0.00 105,905,944.80
(4) Statement of deferred income tax asset not recognized
In CNY
Items Ending balance Opening balance
Offsetable provisional difference 29,465,221.39 29,691,944.68
Offsetable loss 52,654,047.72 41,326,518.50
Total 82,119,269.11 71,018,463.18
(5) Unrecognized deferred income tax asset available for offsetting loss is going to expire in the following years
Inapplicable
30. Other non-current assets
In CNY
Items Ending balance Opening balance
Advance payment for equipment 4,863,862.29 8,246,538.33
Total 4,863,862.29 8,246,538.33
31. Short term loans
(1) Classification of short-term loans
In CNY
Items Ending balance Opening balance
Secured loan 129,917,100.00 120,990,510.00
Credit loan 350,000,000.00 405,000,000.00
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Total 479,917,100.00 525,990,510.00
(2)Short-term loans overdue but still remaining outstanding
Inapplicable
32. Financial liabilities measured based on fair value and the movements counted to the current gain or loss
Inapplicable
33. Derivative financial liabilities
Inapplicable
34. Notes payable
Inapplicable
35. Accounts payable
(1) Statement of accounts payable
In CNY
Items Ending balance Opening balance
Payment for goods 201,502,338.96 197,139,603.70
Payment for materials 7,881,729.77 5,596,017.29
Engineering payment 57,598,728.48 60,520,874.66
Total 266,982,797.21 263,256,495.65
(2) Significant accounts payable with age exceeding 1 year
Inapplicable
36. Advances from customers
(1) Statement of advances from customers
In CNY
Items Ending balance Opening balance
Advances on sales 15,204,157.86 10,928,657.72
Rent received in advance 3,401,495.93 4,212,930.07
Total 18,605,653.79 15,141,587.79
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(2) Significant advances from customers with age exceeding 1 year
Inapplicable
(3) Unfinished projects formed in the construction contracts but already settled at the end of the reporting period
Inapplicable
37. Employee remuneration payable
(1) Statement of employee remuneration payable
In CNY
Items Opening balance Increase in the reporting period Decrease in the reporting period Ending balance
I. Short term remuneration 67,145,581.32 258,370,201.89 288,791,753.83 36,724,029.38
II. Post-employment benefit
program - defined contribution 4,418,785.82 20,093,945.06 20,772,444.43 3,740,286.45
plan.
III. Dismission welfare 0.00 0.00 0.00 0.00
IV. Other welfare due within a
0.00 0.00 0.00 0.00
year
Total 71,564,367.14 278,464,146.95 309,564,198.26 40,464,315.83
(2) Presentation of short term remuneration
In CNY
Items Opening balance Increase in the reporting period Decrease in the reporting period Ending balance
1. Salaries, bonus, allowances
66,712,129.20 230,556,433.10 261,048,814.75 36,219,747.55
and subsidies
2. Staff’s welfare 0.00 5,507,544.99 5,507,544.99 0.00
3. Social security premium 0.00 9,054,362.60 9,054,362.60 0.00
Including: medical
0.00 8,049,893.76 8,049,893.76 0.00
insurance premium
Work injury
0.00 410,886.39 410,886.39 0.00
insurance
Maternity Insurance 0.00 593,582.45 593,582.45 0.00
4. Public reserve for housing 0.00 8,249,237.92 8,249,237.92 0.00
5. Trade union fund and staff
433,452.12 4,356,888.05 4,286,058.34 504,281.83
education fund
Compensation provided for 0.00 645,735.23 645,735.23 0.00
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severing of employment relation
Total 67,145,581.32 258,370,201.89 288,791,753.83 36,724,029.38
(3) Presentation of the defined contribution plan
In CNY
Items Opening balance Increase in the reporting period Decrease in the reporting period Ending balance
1. Basic endowment insurance
1,044.89 18,891,415.99 18,850,590.58 41,870.30
premium
2. Unemployment insurance
0.00 529,422.59 529,422.59 0.00
premium
3. Contribution to the enterprise
4,417,740.93 673,106.48 1,392,431.26 3,698,416.15
annuity scheme
Total 4,418,785.82 20,093,945.06 20,772,444.43 3,740,286.45
Other notes:
38. Taxes payable
In CNY
Items Ending balance Opening balance
VAT 27,512,259.94 28,234,436.08
Consumption tax 13,792.59 0.00
Corporate income tax 23,107,706.42 24,051,749.74
Individual income tax 2,254,316.88 779,154.31
Urban maintenance and construction tax 906,564.08 948,001.89
Real estate tax 1,370,319.41 640,117.90
Education Surcharge 647,696.32 677,393.80
Stamp duty 118,885.78 401,599.97
Dyke protection surcharge 1,195.61 2,178.98
Others 75,989.31 122,603.92
Total 56,008,726.34 55,857,236.59
Other notes:
39. Interest payable
In CNY
Items Ending balance Opening balance
Long term loan interest with interest payment in 116,286.23 152,151.14
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installment and principal repayment upon maturity
Interest payable for short term loan 570,367.92 1,312,577.97
Total 686,654.15 1,464,729.11
40. Dividend payable
Inapplicable
41. Other payables
(1) Other payments stated based on nature of fund
In CNY
Items Ending balance Opening balance
Collateral and Deposit 20,236,777.86 23,026,920.95
Fund for shop-front activities 45,720,112.79 15,096,271.16
Personal account payable 1,683,098.43 4,911,856.36
Refurbishment 2,873,345.15 3,175,612.64
Down payment 591,807.71 1,132,084.26
Others 13,549,894.95 10,424,791.27
Total 84,655,036.89 57,767,536.64
(2) Other payables in significant amount and with aging over 1 year
In CNY
Items Ending balance Cause of failure in repayment or carry-over
Shenzhen Tencent Computer System Co., Ltd . 4,693,429.16 Property rental deposit; still in the lease term
Oracle Research & Development Center(Shenzhen) Co., Ltd 804,000.00 Property rental deposit; still in the lease term
Rainforest Restaurant Nanshan District, Shenzhen 791,320.00 Property rental deposit; still in the lease term
SHENZHEN COMEN MEDICAL INSTRUMENTS CO., LTD. 734,775.68 Property rental deposit; still in the lease term
China Merchants Bank Co., Ltd. Shenzhen Branch 637,932.40 Property rental deposit; still in the lease term
Total 7,661,457.24 --
Other notes
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42. Liabilities classified as held-for-sale liabilities
Inapplicable
43. Non-current liabilities due within a year
In CNY
Items Ending balance Opening balance
Long-term liabilities due within a year 35,000,000.00 35,000,000.00
Total 35,000,000.00 35,000,000.00
Other notes:
44. Other current liabilities
Inapplicable
45. Long-term Loan
(1) Classification of Long-term Borrowings
In CNY
Items Ending balance Opening balance
Mortgage loan 4,791,307.50 5,008,425.00
Secured loan 92,361,928.00 109,861,928.00
Less: Long-term borrowings due within 1 year -35,000,000.00 -35,000,000.00
Total 62,153,235.50 79,870,353.00
Notes to classification of long term borrowings:
Note：① The Company has no overdue and outstanding long term borrowing.
② For classification of the categories of collaterals of secured borrowings and the amount, refer to Note VII.78.
③ For guaranteed borrowings and the guarantees offered by the related parties, refer to Note XII.5(4).
④ The interest rate of long term borrowings is 4.5325%.
46. Bonds Payable
(1) Bonds payable
Inapplicable
(2) Increase/Decrease of bonds payable (excluding other financial instruments classified as financial liabilities,
such as preferred shares, perpetual bonds, etc.)
Inapplicable
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(3) Note to the conditions and time of share conversion of convertible company bonds
Inapplicable
(4) Note to other financial instruments classified as financial liabilities
Inapplicable
47. Long term accounts payable
(1) Long term accounts payable stated based on the nature
Inapplicable
48. Long term payroll payable
(1) Statement of long term payroll payable
Inapplicable
(2) Change of defined benefit plans
Inapplicable
49. Special accounts payable
Inapplicable
50. Predicted liabilities
Inapplicable
51. Deferred income
In CNY
Increase in the Decrease in the
Items Opening balance Ending balance Cause of formation
reporting period reporting period
Government subsidies 5,904,000.00 0.00 0.00 5,904,000.00
Total 5,904,000.00 0.00 0.00 5,904,000.00 --
Items involving government subsidies:
In CNY
Liabilities Opening balance Amount of newly Amount counted Amount counted Amount offsetting Other changes Ending balance Related with
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added subsidy in to the to the other costs and assets/related
the reporting non-operating income in the expenses in the with income
period income in the reporting period reporting period
reporting period
Special purpose
fund of Shenzhen
Related with
industrial design 2,000,000.00 0.00 0.00 0.00 0.00 0.00 2,000,000.00
assets
development
(Note (1))
Funding project
for construction of
enterprise Related with
2,000,000.00 0.00 0.00 0.00 0.00 0.00 2,000,000.00
technology center assets
designated by the
state (Note (2))
Key technology R
& D project of
DF101 Airplane Related with
480,000.00 0.00 0.00 0.00 0.00 0.00 480,000.00
Benchmark income
Timing System
(Note (3))
Special purpose
fund for the
Self-dependent
Related with
2017 Innovation 124,000.00 0.00 0.00 0.00 0.00 0.00 124,000.00
income
Industry
Development in
Nanshan District
Special purpose
fund for 2017
Industry and Related with
1,300,000.00 0.00 0.00 0.00 0.00 0.00 1,300,000.00
Informationization income
at Provincial Level
(Note (4))
Total 5,904,000.00 0.00 0.00 0.00 0.00 0.00 5,904,000.00 --
Other notes:
Note ①: It is the special fund for development of industrial design in Shenzhen obtained according to the Operation
Instructions on Certification and Financial Support Program for Industrial Design Centers in Shenzhen (Trial
Implementation) SHEN JING MAO IT Zi [2013] No. 227 jointly promulgated by Economy, Trade and Information
Commission of Shenzhen Municipality and Finance Commission of Shenzhen Municipality;
Note ②: It is the fund from the financial support for construction of enterprise technology centers in Shenzhen obtained
according to the Circular of Development and Reform Commission of Shenzhen Municipality on Issuing the First Batch of
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Supporting Program of Financial Support Fund for Construction of Enterprise Technology Centers in Shenzhen in 2015
(SHEN JING MAO XINXI YU [2015] No. 129 on October 28, 2015.
Note ③: It is the special fund for cooperation among organizations under the province and ministries, manufacturers and
research institutions obtained according to the Public Notice on the Projects Enjoying Support with the Special Fund for
Overall Strategic Cooperation of Provincial Institutions from the Special Fund for Cooperation among Organizations under
the Province and Ministries, Manufacturers and Research Institutions in Year 2013 (YUE KE GONG SHI [2014] No. 13)
promulgated by Department of Science and Technology of Guangdong Province on December 9, 2015.
Note ④: The special purpose fund obtained according to the Circular of the Economic and Information Commission of
Guangdong Province on Doing a Good Job in Submission to the Special Project Library of Production and Services at
Provincial Level in 2017 (YUE JING XIN SHENG CHAN HAN (2016) No. 53) jointly promulgated by the Economic &
Information Commission of Guangdong Province and the Finance Department of Guangdong Province.
52. Other non-current liabilities
Inapplicable
53. Capital stock
In CNY
Increase / Decrease (+/ -)
Opening balance Shares converted Ending balance
New issuing Bonus shares Others Sub-total
from reserve
Total Shares 438,744,881.00 0.00 0.00 0.00 0.00 0.00 438,744,881.00
54. Other equity instruments
(1) Basic information on the outstanding other financial instruments, including preferred shares, perpetual bonds,
etc. at the end of the reporting period
Inapplicable
(2)Movement of the outstanding other financial instruments, including preferred shares, perpetual bonds, etc. at
the end of the reporting period
Inapplicable
55. Capital reserve
In CNY
Items Opening balance Increase in the reporting period Decrease in the reporting period Ending balance
Capital premium (capital stock 1,047,963,195.57 0.00 0.00 1,047,963,195.57
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premium)
Other capital reserve 14,492,448.65 0.00 0.00 14,492,448.65
Total 1,062,455,644.22 0.00 0.00 1,062,455,644.22
56. Treasury shares
Inapplicable
57. Other comprehensive income
In CNY
Amount incurred in the reporting period
Less: Gain or loss
Amount counted to the other
Attributable to Attributable to
incurred before comprehensive Ending
Items Opening balance Less: Income the parent minority
income tax in income and balance
tax expense company after shareholders
the reporting transferred into gain
tax after tax
period or loss in the
current period
Other comprehensive income which cannot be -12,916,362.
-11,523,442.39 -1,392,954.99 0.00 0.00 -1,392,919.75 -35.24
re-classified into the gain and loss in future 14
Conversion difference in foreign currency -12,916,362.
-11,523,442.39 -1,392,954.99 0.00 0.00 -1,392,919.75 -35.24
statements 14
-12,916,362.
Total other comprehensive income -11,523,442.39 -1,392,954.99 0.00 0.00 -1,392,919.75 -35.24
14
Other notes include the valid part of gain and loss of a cash-flow hedge converted into initial amount of arbitraged items
for adjustment:
Inapplicable
58. Special reserve
Inapplicable
59. Surplus Reserve
In CNY
Items Opening balance Increase in the reporting period Decrease in the reporting period Ending balance
Surplus reserve 144,820,819.35 0.00 0.00 144,820,819.35
Discretionary surplus reserve 61,984,894.00 0.00 0.00 61,984,894.00
Total 206,805,713.35 0.00 0.00 206,805,713.35
Note to surplus reserve, including the note to its increase/decrease and the cause(s) of its movement in the reporting
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period:
Inapplicable
60. Retained earnings
In CNY
Items Reporting period Previous period
Before adjustment: Retained earnings at the end of the previous
771,484,565.02 687,986,807.74
period
After adjustment: Retained earnings at the beginning of the
771,484,565.02 687,986,807.74
reporting period
Plus: Net profit attributable to the parent company’s owner in the
112,367,921.44 140,216,258.28
report period
Less: Provision of statutory surplus public reserve 0.00 12,844,012.90
Dividends of common shares payable 0.00 43,874,488.10
Retained earnings at the end of the reporting period 883,852,486.46 771,484,565.02
Statement of adjustment of retained earnings at the beginning of the reporting period:
1). The amount involved in the retroactive adjustment according to the Enterprise Accounting Standards and the relevant
new provisions influencing the retained earnings at the beginning of the reporting period was CNY 0.00.
2). The amount involved in change of the accounting policy influencing the retained earnings at the beginning of the
reporting period was CNY 0.00.
3). The amount involved in correction of the significant accounting errors influencing the retained earnings at the
beginning of the reporting period was CNY 0.00.
4). The amount involved in change of the consolidation scope caused by the common control influencing the retained
earnings at the beginning of the reporting period was CNY 0.00.
5). The total amount involved in other adjustments influencing the retained earnings at the beginning of the reporting
period was CNY 0.00.
61. Operation Income and Costs
In CNY
Amount incurred in the reporting period Amount incurred in the previous period
Items
Income Costs Income Costs
Principal business 1,683,836,915.14 973,240,076.81 1,588,553,573.96 940,053,728.29
Other businesses 12,054,517.58 3,085,659.54 10,987,570.39 1,425,956.55
Total 1,695,891,432.72 976,325,736.35 1,599,541,144.35 941,479,684.84
62. Business Taxes and Surcharges
In CNY
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Items Amount incurred in the reporting period Amount incurred in the previous period
Consumption tax 35,185.87 3,685.47
Urban maintenance and construction tax 8,003,388.87 6,767,130.24
Education Surcharge 5,707,461.48 4,841,191.32
Resource tax 0.00 0.00
Real estate tax 1,987,807.87 1,792,451.23
Land use tax 189,899.66 133,605.02
Tax on using vehicle and boat 375.00 1,860.00
Stamp duty 990,689.30 890,202.85
Others 875,978.38 751,371.15
Total 17,790,786.43 15,181,497.28
63. Sales expenses
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Salaries & bonus 139,546,287.86 137,774,121.37
Market promotion 74,916,847.31 52,659,388.21
Rent 37,604,819.68 33,600,054.64
Amortization of the long-term expenses to be apportioned 34,992,451.67 46,807,569.89
Shopping mall fees 26,432,225.66 30,701,374.17
Social security premium 20,980,632.82 19,188,573.59
Advertisement fee 14,113,335.56 13,600,866.95
Packing expenses 8,692,707.95 6,046,492.43
Exhibition fee 8,567,276.57 14,393,962.02
Freight 5,646,078.77 5,646,078.77
Other expenses 50,620,377.84 33,867,839.75
Total 422,113,041.69 394,286,321.79
64. Administrative expenses
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Salaries & bonus 63,138,017.67 44,368,426.25
R & D expenses 21,285,926.02 21,944,615.09
Depreciation expense 7,397,612.68 6,605,338.51
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Social security premium 5,047,581.22 4,088,475.24
Business travel expenses 3,182,680.24 2,678,668.34
Rent 3,014,559.67 647,956.03
Labor union dues 2,603,067.32 1,249,443.18
Amortization of the long-term expenses to be apportioned 2,539,439.18 1,767,821.69
Amortization of intangible assets 2,223,019.77 1,277,694.42
Public reserve for housing 2,048,849.77 2,252,733.41
Other expenses 13,047,564.17 11,289,214.79
Total 125,528,317.71 98,170,386.95
65. Financial expenses
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Interest payment 14,273,043.13 23,246,930.51
Less: capitalized interest 0.00 0.00
Less: Interest income 0.00 1,489,867.45
Exchange gain & loss 33,652.69 265,259.52
Financial service charge 4,920,682.75 4,178,310.48
Total 18,147,791.49 26,200,633.06
66. Loss from impairment of assets
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
I. Loss from impairment of assets -5,178,800.41 6,473,689.30
II. Loss from price falling of inventories 1,765,800.30 6,310,000.00
Total -3,413,000.11 12,783,689.30
67. Income from change of the fair value
Inapplicable
68. Return on investment
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Income from long term equity investment based on equity 93,013.38 188,871.89
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method
Total 93,013.38 188,871.89
Other notes:
69. Income from disposal of assets
In CNY
Source of income from disposal of assets Amount incurred in the reporting period Amount incurred in the previous period
Profit from disposal of assets 3,490.00 3,570.55
Loss from disposal of assets -57,897.16 -16,923.50
70. Other income
In CNY
Source of arising of other income Amount incurred in the reporting period Amount incurred in the previous period
2017 Shenzhen Patent Award (Note 1) 2,000.00 0.00
Special Fund of Shenzhen Standard in 2017(Note 2) 496,000.00 0.00
Financial support for integrating IT application with
industrialization from the Economic Promotion Bureau of 100,000.00 0.00
Nanshan District (Note 3)
19th China Patent Award(Note 4) 500,000.00 0.00
Special fund for industry transformation and upgrading in
500,000.00 0.00
2018(Note 5)
Job stabilization subsidy delivered on behalf by
10,000.00 0.00
Administration of Social Security Funds
2016 R & D financial support from the Technology
866,000.00 0.00
Innovation Commission (Note 6)
R & D financial support from Guangming New Zone 360,000.00 0.00
Financial support as exhibition subsidy in Guangming
50,000.00 0.00
New Zone
Special financial support for economic development in
208,000.00 0.00
Guangdong New Zone
Allowance for BaselWorld 2017 496,013.80 0.00
Financial support for excellence creation rating in
200,000.00 0.00
Nanshan District (Note 7)
The national E-commerce demonstration enterprise
award from the State Commission of Economy and 1,000,000.00 0.00
Information Technology (Note 8)
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Subsidy of export credit insurance 33,005.00 0.00
Domestic patent fee award for improving the enterprise's
2,000.00 0.00
competitiveness (Note 9)
Enterprise R & D financial support of year 2016(Note 10) 1,024,000.00 0.00
Subsidy for the domestic economic and trade exhibition
of the special fund for the new zone economic 50,000.00 0.00
development in 2017
Special fund for supporting intellectual property for the
economic development of the first half year of 2018 (Note 600,000.00 0.00
11)
Prize of the 18th China Patent Award 0.00 100,000.00
Special Fund for Shenzhen Standards 2016 0.00 651,000.00
Fund for financing patent application 0.00 3,000.00
Support with Special Fund of Shenzhen Standard in
0.00 499,350.00
2016
Science & Technology Innovation Commission of
0.00 7,800.00
Shenzhen Municipality - Innovation
Allowance for BaselWorld 0.00 100,000.00
Subsidy for Improving Internationalized Operation Ability
0.00 57,073.00
2016
Special Financial Support for Self-Innovation Industry
0.00 60,000.00
Development of Nanshan District 2016
Other Notes:
Note 1: It refers to the patent award received according to the Circular of Market and Quality Supervision Commission of
Shenzhen Municipality on Publishing the Name List of the Winners of Patent Awards of Shenzhen 2017 (SHEN SHI
[2016]No.8);
Note 2: It refers to the patent award received according to Notice of Market and Quality Supervision Commission of
Shenzhen Municipality on the Plan for Financial Support to Standard Related Projects for Building Shenzhen Standards in
2017 and the Circular on Issuing the Supporting Plan with Special Fund for Development of Self-dependent Innovation
Industries in Nanshan District 2017 – Fund for the Sub-item of Economic Development (the Fourth Batch) (SHEN NAN
JING [2017] No. 6);
Note 3: It refers to the special fund received according to the Circular on Issuing the Supporting Plan with Special Fund for
Development of Self-dependent Innovation Industries in Nanshan District 2017 – Fund for the Sub-item of Economic
Development (the Fourth Batch) (SHEN NAN JING [2017] No. 6).
Note 4: It refers to the patent award received according to the Circular of Market and Quality Supervision Commission of
Shenzhen Municipality on Handling the Reward of the 5th Guangdong Patent Award and the Supporting Award of
Guangdong Provincial Intellectual Property of the 19 th China Patent Award;
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Note 5: It refers to the special fund received according to the Circular of Economic, Trade and Information Commission of
Shenzhen Municipality on Carrying out Declaration Work of the Special Fund for Industrial Transformation and Upgrading
for Community Joint Stock Partnership Companies Reform and Improvement of the City 2018 ([2017] No. 243);
Note 6: It refers to the government financial support fund according to the Circular of Shenzhen Science & Technology
Innovation Commission on the Second Batch of Enterprises to be Financially Supported in the Enterprise R & D Financial
Support Plan 2017 (SHEN FA [2016] No. 7);
Note 7: It refers to the special fund received according to the Circular on Issuing the Supporting Plan with Special Fund for
Development of Self-dependent Innovation Industries in Nanshan District 2017 – Fund for the Sub-item of Economic
Development (the Fourth Batch) (SHEN NAN JING [2017] No. 6);
Note 8: It refers to the special fund of the government received according to the Circular of the Economic, Trade and
Information Commission of Shenzhen Municipality on Disclosing the Special Fund Projects for E-commerce Development
in Shenzhen 2018 (SHEN JING MAO XIN XI SHENG CHAN ZI [2018] No. 100);
Note 9: It refers to the patent award received according to the Circular of Market and Quality Supervision Commission of
Shenzhen Municipality on Publishing the Name List of the Winners of Patent Awards of Shenzhen 2017 (SHEN SHI
[2016]No.8);
Note 10: It refers to the government financial support fund according to the Circular of Shenzhen Science & Technology
Innovation Commission on the Second Batch of Enterprises to be Financially Supported in the Enterprise R & D Financial
Support Plan 2017 (SHEN FA [2016] No. 7);
Note 11: It refers to the special fund received according to the Circular on the Projects to be Financially Supported for the
Strategic Projects of Intellectual Property, Quality Certification, Brand and Standardization with the Special Fund for
Economic Development of Guangming New Zone in the First Half Year of 2018.
71. Non-operating expenses
In CNY
Amount counted to the current
Items Amount incurred in the reporting period Amount incurred in the previous period
non-operating gain and loss
Disposal of account payable impossible to
52,506.24 3,741.50 52,506.24
be paid
Others 311,353.27 142,125.41 311,353.27
Total 363,859.51 145,866.91 363,859.51
72. Non-operating expenditure
In CNY
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Amount counted to the current
Items Amount incurred in the reporting period Amount incurred in the previous period
non-operating gain and loss
Outward donation 380,000.00 3,000.00 380,000.00
Others 86,522.53 658,190.44 86,522.53
Total 466,522.53 661,190.44 466,522.53
73. Income tax expense
(1) Statement of income tax expense
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Income tax expense in the reporting period 34,026,742.02 24,613,171.31
Deferred income tax expense -562,942.30 1,352,213.69
Total 33,463,799.72 25,965,385.00
(2) Process of adjustment of accounting profit and income tax expense
In CNY
Items Amount incurred in the reporting period
Total profit 145,831,721.16
Income tax expense calculated based on the statutory/ applicable tax rate 36,457,930.29
Influence of different tax rates applicable to subsidiaries -5,958,497.90
Influence of adjustment of the income tax in the previous period 117,154.89
Influence of the non-taxable income -23,253.35
Influence of the non-offsetable costs, expenses and loss 479,273.82
Influence from the offsetable provisional difference or offsetable loss of the
3,398,258.77
unrecognized deferred income tax asset at the end of the reporting period
Influence from the addition of the R & D expenses upon deduction of tax payment (to
-1,007,066.81
be stated with “-“)
Income tax expense 33,463,799.72
74. Other comprehensive income
For the detail, refer to Note X.57.
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75. Cash Flow Statement Items
(1) Other operation activities related cash receipts
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Commodity promotion fee 6,072,093.46 8,162,746.84
Government subsidies 6,497,018.80 2,778,043.00
Deposit in security 4,350,761.76 1,420,812.66
Interest income 1,079,587.08 1,489,867.45
Reserve 1,406,129.93 1,707,688.82
Others 5,617,057.35 4,241,136.02
Total 25,022,648.38 19,800,294.79
(2) Other cash paid in connection with operation activities
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Market promotion 66,401,628.85 45,369,388.21
Rent 39,732,881.18 34,532,393.41
Shopping mall fees 26,461,676.31 30,701,374.17
Advertisement fee 11,176,335.56 12,310,866.95
Packing expenses 8,883,462.57 6,046,492.43
Business travel expenses 8,333,226.89 7,772,400.58
Water and electricity fees 7,029,160.13 4,636,608.93
R & D expenses 6,759,781.73 7,253,934.93
Office expenses 6,534,273.39 5,004,516.54
Freight 6,018,407.34 5,112,140.83
Exhibition fee 5,974,002.19 10,307,276.23
Property management fee 4,228,170.40 2,405,767.74
Business entertainment 2,830,040.57 3,093,901.20
Service fee to intermediary agencies 2,156,715.09 1,929,387.83
Others 14,825,683.48 6,183,802.43
Total 217,345,445.68 182,660,252.41
Note to other cash paid in connection with operation activities:
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(3) Other investment activities related cash receipts
Inapplicable
(4) Other investment activities related cash payments
Inapplicable
(5) Other fund-raising activities related cash receipts
Inapplicable
(6) Other fund-raising activities related cash payments
Inapplicable
76. Supplementary information of the cash flow statement
(1) Supplementary information of the cash flow statement
In CNY
Supplementary information Amount in the reporting period Amount in the previous period
1. Net cash flows arising from adjustment of net profit into
-- --
operating activities:
Net profit 112,367,921.44 86,611,784.54
Plus: Asset impairment reserve -14,525,567.48 12,783,689.30
Depreciation of fixed assets, depletion of oil and gas asset,
21,080,763.14 21,936,993.35
depreciation of productive biological asset
Amortization of intangible assets 2,430,354.87 1,594,234.34
Amortization of the long-term expenses to be apportioned 40,947,482.90 54,065,432.58
Loss (income is stated in “-”) from disposal of fixed assets,
54,407.16 13,352.95
intangible assets and other long term assets
Financial expenses (income is stated with “-”) 14,273,043.13 23,246,930.51
Investment loss (income is stated with “-”) -93,013.38 -188,871.89
Decrease of the deferred income tax asset (increase is
-562,942.30 1,352,213.69
stated with “_”)
Decrease of inventories (Increase is stated with “-”) 94,502,115.24 93,091,588.65
Decrease of operative items receivable (Increase is stated
-56,854,840.95 -12,212,990.56
with “-”)
Increase of operative items payable (Decrease is stated 11,052,550.32 -5,578,696.93
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with “-”)
Net cash flows arising from operating activities 224,672,274.09 276,715,660.53
2. Significant investment and fund-raising activities with no
-- --
cash income and expenses involved:
3. Net change in cash and cash equivalents: -- --
Plus: Ending balance of cash equivalent 278,804,271.58 383,649,003.87
Less: Opening balance of cash equivalent 184,947,891.32 427,227,755.81
Net increase of cash and cash equivalents 93,856,380.26 -43,578,751.94
(2) Net cash paid for acquisition of subsidiary in the reporting period
Inapplicable
(3) Net cash received from disposal of subsidiary in the reporting period
Inapplicable
(4) Composition of cash and cash equivalents
In CNY
Items Ending balance Opening balance
Including: Cash in stock 233,265.12 414,210.14
Bank deposit available for payment at any time 278,565,485.60 184,528,160.32
Other monetary fund used for payment at any time 5,520.86 5,520.86
II. Cash equivalents 278,804,271.58 184,947,891.32
III. Ending balance of cash and cash equivalents 278,804,271.58 184,947,891.32
Including: cash and cash equivalents restricted for use from
2,205,000.00 2,205,000.00
the parent company or other subsidiaries of the Group
77. Notes to items of statement of change in owner’s equity
Inapplicable
78. Assets restricted in ownership or use right
In CNY
Items Book value at the end of the reporting period Cause of being restricted
Monetary capital 2,205,000.00 Deposit for L/G
Total 2,205,000.00 --
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79. Foreign currency monetary items
(1) Foreign currency monetary items
In CNY
Items Ending balance of foreign currency Conversion rate Ending balance of Renminbi converted
Monetary capital
Including: USD 358,309.02 6.61660 2,370,787.46
Euro 145,749.33 7.65150 1,115,201.00
HKD 5,537,161.79 0.84310 4,668,381.11
CHF 229,106.11 6.63500 1,520,119.04
Accounts receivable
Including: USD 657,648.25 6.61660 4,351,395.41
Euro 32,872.11 7.65150 251,520.95
HKD 13,326,820.48 0.84310 11,235,842.35
CHF 164,418.90 6.63500 1,090,919.40
Advance payments
Including: HKD 7,216,704.66 0.84310 6,084,403.70
CHF 888,530.91 6.63500 5,895,402.59
Other receivables
Including: HKD 288,356.00 0.84310 243,112.94
CHF 905,580.00 6.63500 6,008,523.30
Accounts payable
Including: HKD 11,482,520.80 0.84310 9,680,913.29
CHF 30,046.97 6.63500 199,361.65
Advances from customers
HKD 218,093.00 0.84310 183,874.21
Other payables
Including: HKD 25,926.92 0.84310 21,858.99
CHF 68,759.90 6.63500 456,221.94
Short term loans
HKD 30,000,000.00 0.84310 25,293,000.00
Long-term Loan
CHF 725,000.00 6.63500 4,810,375.00
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(2) Note to overseas operating entities, including important overseas operating entities, which should be
disclosed about its principal business place, function currency for bookkeeping and basis for the choice. In case
of any change in function currency, the cause should be disclosed.
For the principal business place, function currency for bookkeeping for key overseas business entities, refer to Note V.4.
80. Hedging
Inapplicable
81. Miscelleneous
Inapplicable
VIII. Change in consolidation scope
1. Consolidation of enterprises not under the same control
(1) Consolidation of enterprises not under common control during the reporting period
Inapplicable
(2) Consolidation cost and goodwill
Inapplicable
(3) Purchasee's distinguishable assets and liabilities as at the date of purchase
Inapplicable
(4) Profit or loss of the equity held before the date of purchase arising from re-measurement based on the fair
value
Does there exist any transaction in which the enterprise consolidation is realized step by step through several transactions
and the control power is obtained within the reporting period.
No
(5) Note to the consolidation consideration or the fair value of the distinguishable assets and liabilities of the
purchasee which cannot be reasonably identified as at the date of purchase or at the end of the very period of
consolidation
Inapplicable
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(6) Other notes
2. Consolidation of enterprises under the same control
(1) Consolidation of enterprises not under common control during the reporting period
Inapplicable
(2) Consolidation cost
Inapplicable
(3) Book value of the consolidatee's assets and liabilities as at the date of consolidation
Inapplicable
3. Counter purchase
Inapplicable
4. Disposal of subsidiaries
Does there exist any such situation that a single disposal may cause the control power over the investment in a subsidiary
lost?
No
Does there exist any such situation that disposal in steps through a number of transactions may cause the control power
over the investment in a subsidiary lost during the reporting period?
No
5. Change of consolidation scope due to other reason
Inapplicable
6. Miscelleneous
Inapplicable
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IX. Equity in other entities
1. Equity in a subsidiary
(1) Composition of an enterprise group
Shareholding proportion
Subsidiaries Main business location Place of registration Nature of business Way of acquisition
Direct Indirect
Establishment or
Harmony Shenzhen Shenzhen Commerce 100.00%
investment
Establishment or
the Manufacture Co. Shenzhen Shenzhen Manufacture 90.00% 10.00%
investment
Establishment or
FIYTA Hong Kong Hong Kong Hong Kong Commerce 100.00%
investment
Establishment or
Harbin Co. Harbin Harbin Commerce 100.00%
investment
Establishment or
Technology Co. Shenzhen Shenzhen Manufacture 100.00%
investment
Establishment or
SHIYUEHUI Shenzhen Shenzhen Commerce 100.00%
investment
Emile Choureit Establishment or
Shenzhen Shenzhen Commerce 100.00%
(Shenzhen) investment
Establishment or
FIYTA Sales Co., Ltd. Shenzhen Shenzhen Commerce 100.00%
investment
Consolidation of
Hengdarui Shenyang Shenyang Commerce 100.00% enterprises under the
same control
Consolidation of
Swiss Company Switzerland Switzerland Commerce 100.00% enterprises not under
the same control
Note to the proportion of shareholding in a subsidiary different from the proportion of voting power:
Basis of holding less than a half of the voting power but still controlling the investee and holding more than a half of the
voting power but not controlling the investee:
Inapplicable
Basis of an important structurized entity being brought to the consolidation scope and being controlled:
Inapplicable
Basis of distinguishing an agent from consignor:
Inapplicable
Other notes:
Inapplicable
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(2) Important non-wholly-owned subsidiaries
Inapplicable
(3) Key financial information of important non-wholly-owned subsidiaries
Inapplicable
(4) Significant restriction on use of enterprise group’s assets and paying off the enterprise group’s liabilities
Inapplicable
(5) Financial support or other support provided to the structured entities incorporated in the scope of
consolidated financial statements
Inapplicable
2. Transaction with a subsidiary with the share of the owner’s equity changed but still under control
(1)Note to change in the share of the owner's equity in subsidiaries
Inapplicable
(2) Affect of the transaction on the minority equity and owner's equity attributable to the parent company
Inapplicable
3. Equity in joint venture arrangement or associates
(1) Important joint ventures or associates
Shareholding proportion Accounting treatment
Name of joint venture or method for investment
Main business location Place of registration Nature of business
associate Direct Indirect in joint ventures or
associates
Shanghai Watch Shanghai Shanghai Manufacture 25.00% Equity method
Note to the proportion of the shareholding in a joint venture or an associate different from voting power therein:
Inapplicable
Basis of holding below 20% voting power but having significant influence or holding more than 20% voting power but not
having significant influence
Inapplicable
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(2) Key financial information of important joint ventures
Inapplicable
(3) Key financial information of important associates
In CNY
Ending balance/amount incurred in the reporting period Opening balance/amount incurred in the reporting period
Current assets 92,802,011.32 88,035,307.16
Non-current assets 16,422,790.67 17,515,363.90
Total assets 109,224,801.99 105,550,671.06
Current liabilities 8,332,353.00 5,527,973.92
Non-current liabilities 0.00 0.00
Total liabilities 8,332,353.00 5,527,973.92
Minority shareholders’ equity 0.00 0.00
Equity attributable to the parent company’s shareholders 100,892,448.99 100,022,697.16
Share of net assets calculated according to the
25,223,112.25 25,005,674.29
shareholding proportion
Book value of the equity investment in associates 43,972,531.47 43,879,518.09
Revenue 46,323,386.37 43,499,754.20
Net profit 372,053.52 755,487.55
Other comprehensive income 0.00 0.00
Total comprehensive income 372,053.52 755,487.55
Dividends from associates received in the current year 0.00 0.00
(4) Financial information summary of unimportant joint ventures and associates
Inapplicable
(5) Note to significant restriction on the competence of a joint venture or an associate in transferring funds to the
Company
Inapplicable
(6) Excessive loss incurred to a joint venture or an associate
Inapplicable
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(7) Unrecognized commitment in connection with investment in a joint venture
Inapplicable
(8) Contingent liabilities in connection with investment in joint ventures or associates
Inapplicable
4. Important joint operation
Inapplicable
5. Equity in the structurized entities not incorporated in the consolidated financial statements
Inapplicable
6. Miscelleneous
Inapplicable
X. Financial instruments and risk management
The Company’s major financial instruments consist of monetary funds, accounts receivable, notes receivable, other
receivables, other current assets, available-for-sale financial assets, accounts payable, interest payable, dividend payable,
other payables, short term loan, non-current liabilities due within a year, long term loan, bonds payable. The detailed
information about various financial instruments has been disclosed in the corresponding items in Note VII. The risks
involved in these financial instruments and the Company’s risk control policies aiming at reducing these risks are stated as
follows. The Company’s management conducts management and monitoring of these risk exposures so as to ensure
risks to be controlled within a specific limitation.
Sensitivity analysis is adopted by the Company to analyze possible impact on the current profit and loss or shareholders’
equity by the reasonable and possible changes of risk variables. Since any risk variables seldom happen individually,
relativity between variables will cause significant influences on the ultimate impacted amount of the change in a risk
variable, so the following statement is based on supposition that each variable happens independently.
(I) Risk management goals and policies
The goal of risk management is to keep proper balance between risk and profit, to reduce negative influence of financial
risk to financial performance of the Company, lower the negative influence of the risks upon the Company's business
performance to the minimum and maximize the interest of the shareholders and its other equity investors. Based on this
goal, the basic strategy of risk management for the Company is to ascertain and analyze all the risks that the Group
confronts, establish appropriate bottom line for risk-taking, and manage the risks accordingly, in the meantime supervise
all the risks in a timely and reliable manner, controlling the risks within the limited scope.
1. Market Risks
(1) Foreign exchange risk
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Foreign exchange risk refers to the risk arising from the loss on exchange rate changes. The Company is mainly exposed
to foreign exchange risk that relates to Hong Kong dollars, Swiss Franc. Except a number of the Company's subsidiaries
that conduct procurement and sales in Hong Kong Dollars and Swiss Franc, the principal business activities of the
Company’s principal business activities are settled in Renminbi. As at 30 June 2018, except the balance of the aforesaid
assets or liabilities which are stated in Hong Kong dollar, Swiss Franc, US dollar, etc., the balance of the financial assets
and financial liabilities of the Company are all in Renminbi. Foreign exchange risks arising from the balance of assets and
liabilities of such foreign currencies may have an impact on the operating results of the Company.
In CNY
Items 6/30/2018 Amount at the beginning of the year
Monetary capital 9,674,488.61 9,103,319.22
Accounts receivable 16,929,678.11 11,193,694.31
Advance payment for goods 11,979,806.29 12,872,520.90
Other receivables 6,251,636.24 6,290,491.67
Accounts payable 9,880,274.94 1,330,403.14
Advance from customers 183,874.21 185,101.44
Other payables 478,080.93 794,190.64
Short term loans 25,293,000.00 50,990,510.00
Long-term Loan 4,810,375.00 5,008,425.00
Sensitivity analysis on foreign exchange risks:
Assumption for sensitivity analysis on foreign exchange risks: both the net investment hedge of the overseas business
and cash flow hedge are highly effective. On the basis of the aforesaid assumption, while the other variables remain
unchanged, the pre-tax influence of the reasonable change of the exchange rate possibly incurred upon the current
income and loss and shareholders’ equity is as follows:
In CNY
Current year Previous year
Change of the exchange
Items Influence upon the Influence upon the Influence upon the Influence upon the
rate
profit shareholders’ equity profit shareholders’ equity
Appreciation of Renminbi
483,724.43 483,724.43 1,408,960.66 1,408,960.66
by 5%
Monetary capital
Depreciation of Renminbi
-483,724.43 -483,724.43 -1,408,960.66 -1,408,960.66
by 5%
Appreciation of Renminbi
846,483.91 846,483.91 526,006.88 526,006.88
Accounts by 5%
receivable Depreciation of Renminbi
-846,483.91 -846,483.91 -526,006.88 -526,006.88
by 5%
Appreciation of Renminbi
598,990.31 598,990.31 0.00 0.00
Advance payment by 5%
for goods Depreciation of Renminbi
-598,990.31 -598,990.31 0.00 0.00
by 5%
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Appreciation of Renminbi
312,581.81 312,581.81 267,418.42 267,418.42
by 5%
Other receivables
Depreciation of Renminbi
-312,581.81 -312,581.81 -267,418.42 -267,418.42
by 5%
Appreciation of Renminbi
494,013.75 494,013.75 169,110.89 169,110.89
by 5%
Accounts payable
Depreciation of Renminbi
-494,013.75 -494,013.75 -169,110.89 -169,110.89
by 5%
Appreciation of Renminbi
9,193.71 9,193.71 0.00 0.00
Advance from by 5%
customers Depreciation of Renminbi
-9,193.71 -9,193.71 0.00 0.00
by 5%
Appreciation of Renminbi
23,904.05 23,904.05 331,358.00 331,358.00
by 5%
Other payables
Depreciation of Renminbi
-23,904.05 -23,904.05 -331,358.00 -331,358.00
by 5%
Appreciation of Renminbi
1,264,650.00 1,264,650.00 7,247,132.00 7,247,132.00
by 5%
Short term loans
Depreciation of Renminbi
-1,264,650.00 -1,264,650.00 -7,247,132.00 -7,247,132.00
by 5%
Appreciation of Renminbi
240,518.75 240,518.75 280,757.79 280,757.79
by 5%
Long-term Loan
Depreciation of Renminbi
-240,518.75 -240,518.75 -280,757.79 -280,757.79
by 5%
(2) Interest rate risk - risk from change of the cash flow
The Company’s risk of movement in the cash flow of financial instrument arising from change of the interest rate arising
from change of the interest rate is mainly related with the bank loan of the fluctuating interest rate (for the detail, refer to
Note VI.31 and VI. 45). The Company's policy is to maintain the fluctuating interest rate of these loans.
Sensitivity analysis on interest rate risks:
Sensitivity analysis on interest rate risks is based on the following assumption:
Influence of the change of market interest rate upon the interest income or expenses of the financial instruments with
variable interest rates;
For the financial instrument with fixed interest rate measured based on the fair value, the change of the interest rate
only impact its interest income or expenses;
For the derivative financial instrument designated as arbitrage tool, the change of the market interest rate impacts its
fair value and all the interest rate intercropping date is predicted to be highly valid;
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The market interest rate as at the balance sheet day uses the discounted cash flow technique to calculate the change
of the fair value of the financial instrument and other financial assets and liabilities.
On the basis of the aforesaid assumption, while the other variables remain unchanged, the pre-tax influence of the
reasonable change of the interest rate possibly incurred upon the current income and loss and shareholders’ equity is as
follows:
In case the loan interest rate calculated based on the floating interest rate rises or falls by 50 base points as at 31st
December 2017 while the other factors keep unchanged, the Company's net profit and shareholders’ equity shall
decrease or increase by CNY 883,800 (as at 31st December 2017: CNY 326,300).
(3) Other price risks
The investment classified as the available-for-sale financial asset held by the Company is measured at the cost value as
at the balance sheet day. Therefore, there exists no price risk necessary to be disclosed in the Company.
2. Credit risk
As at 30th June 2018 , the maximum credit risk exposure possibly arising from the financial loss to the Company was
mainly from the loss arising from failure of the other party to the contract in implementing the obligations which caused
loss from generation of the Company's financial assets, which specifically included the carrying amount of the financial
asses recognized in the consolidated balance sheet. The Company provided no other guarantee which may render the
Company bear the credit risk.
For the purpose of lowering the credit risk, the Company may possibly access to the guarantee, credit record and other
elements from the third party based on the debtor's financial status, independent rating and other elements, such as
assessment of the debtor’s credit qualification, such as the current market situation and specifying the corresponding debt
limit and credit term. The Company conducts regular supervision over the debtors’ credit records and may take the
measures of written reminders, shortening the credit period or canceling the credit period, etc. against the debtors with
poor credit record so as to ensure the Company’s overall credit risk to be within the controllable scope. In addition, the
Company examines the recovery of the accounts receivable on each balance sheet day so as to ensure to provide
sufficient bad debt reserve for the accounts impossible to be recovered. Therefore, in the opinion of the Company's
management, the credit risk borne by the Company has been greatly reduced.
In the Company's accounts receivable, the accounts receivable owed by the top five customers took 8.35% of the
Company's total accounts receivable (end of 2017: 6.30%); in the Company's other receivables, the total other
receivables owed by the top five customers took 20.07% of the Company's total other receivables (end of 2017:
24.14%).
3. Liquidity risk
In management of the liquidity risk, the Company kept the cash and cash equivalent as sufficient as the management
considered necessary and conducted supervision over the same so as to satisfy the Company's business requirements
and reduced the impact from the fluctuation of cash flow. The Company's management conducted monitoring over the
application of the bank loans and ensured its compliance with the loan agreements.
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The Company took the capital arising from its business, bank loans and other borrowings as the major capital source. As
at 30th June 2018, the amount of the bank loan not yet used by the Company was CNY 2,764.48 million (31st December
2017: CNY 2,723.97 million).
The expiry of the remaining contract obligations for the financial liabilities held by the Company not discounted is analyzed
as follows:
In CNY10,000
Items Within 1 year 1 to 2 years 2-3 years Over 3 years Total
Financial assets:
Monetary capital 28,100.93 - - - 28,100.93
Notes receivable 463.21 - - - 463.21
Accounts receivable 38,916.94 - - - 38,916.94
Other receivables 5,106.02 - - - 5,106.02
Total financial assets 72,587.10 - - - 72,587.10
Financial liabilities:
Short term loans 47,991.71 - - - 47,991.71
Accounts payable 26,698.28 - - - 26,698.28
Interest payable 68.67 - - - 68.67
Other payables 8,465.50 - - - 8,465.50
Non-current liabilities due within a year 3,500.00 - - - 3,500.00
Long-term Loan - 3,500.00 1,750.00 965.32 6,215.32
Financial guarantee 20,491.71 - - - 20,491.71
Total financial liabilities and contingent
107,215.87 3,500.00 1,750.00 965.32 113,431.19
liabilities
XI. Disclosure of Fair Value
1. Fair value at the end of the reporting period of the assets and liabilities measured based on the fair value
Inapplicable
2. Basis for determining the market price of the items measured based on the continuous and non-continuous
first level fair value
Inapplicable
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3. Items measured based on the continuous or uncontinuous 2nd level fair value, valuatoin technique as used,
nature of important parameters and quantitative information
Inapplicable
4. Items measured based on the continuous or uncontinuous 3rd level fair value, valuatoin technique as used,
nature of important parameters and quantitative information
Inapplicable
5. Items measured based on the continuous 3rd level fair value, sensitivity analysis on adjusted information and
unobservable parameters between the book value at beginning and end of the period
Inapplicable
6. In case items measured based on fair value are converted between different levels incurred in the current
period, state the cause of conversion and determine conversion time point
Inapplicable
7. Change of valuation technique incurred in the current period and cause of such change
Inapplicable
8. Fair value of financial assets and financial liabilities not measured at fair value
Inapplicable
9. Others
Inapplicable
XII. Related parties and transactions
1. Details of the parent company of the Company
Shareholding ratio of the Ratio of vote right of the
Name of the parent
Place of registration Nature of business Registered capital parent company in the parent company in the
company
Company Company
Investment in industries,
AVIC International Holding
Shenzhen domestic trade, material 1,166,161,996 37.15% 37.15%
Limited
supply and distribution
Note to the parent company:
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AVIC International Shenzhen Co., Ltd. 33.93% of the shares in AVIC International Holdings Limited. AVIC International
Shenzhen is a wholly owned subsidiary of AVIC International Holdings Limited (AVIC IHL), and China Aviation Industry
Corporation (AVIC) directly holds 62.52% of the equity of AVIC IHL. Therefore, the eventual controller of the Company is
AVIC.
2. Subsidiaries of the Company
Refer to Note IX. 1 for details of subsidiaries of the Company.
3. Joint venture and association of the Company
Refer to NOTE IX.3 for details of the Company's major joint ventures or associates.
4. Other related parties of the Company
Names of other related parties Relationship between other related parties and the Company
AVIC Property Management Co., Ltd. (AVIC Property) Controlled by the same party
Shenzhen AVIC Building Technology Co., Ltd. (AVIC Building Co.) Controlled by the same party
Rainbow Department Store Co., Ltd. (RAINBOW) Controlled by the same party
Shennan Circuit Co., Ltd. (Shennan Circuit) Controlled by the same party
AVIC SUNDA Co., Ltd. (AVIC SUNDA) Controlled by the same party
AVIC Securities Co., Ltd. (AVIC Securities) Controlled by the same party
Xi’an Skytel Hotel Co., Ltd. (Skytel Hotel) Controlled by the same party
Shenzhen AVIC Nanguang Elevator Co., Ltd. (AVIC Nanguang ) Controlled by the same party
Shenzhen AVIC City Property Development Co., Ltd.(AVIC City Property) Controlled by the same party
Shenzhen AVIC Development Co., Ltd. (AVIC City Development) Controlled by the same party
Shenzhen AVIC Guanlan Real Estate Development Co., Ltd. (AVIC Guanlan Real Estate) Controlled by the same party
Shenzhen AVIC Changtai Investment Development Co., Ltd. (AVIC Changtai) Controlled by the same party
Shenzhen AVIC 9 Square Assets Management Co., Ltd. (9 Square Asset) Controlled by the same party
Ganzhou AVIC Real Estate Development Co., Ltd. (Ganzhou AVIC Real Estate) Controlled by the same party
Shenzhen AVIC City Investment Co., Ltd.(AVIC City Investment) Controlled by the same party
Shenzhen AVIC Group Enterprise Training Center Controlled by the same party
Ganzhou AVIC 9 Square Commerce Co., Ltd. (Ganzhou 9 Square) Controlled by the same party
Jiujiang AVIC City Real Estate Development Co., Ltd. (Jiujiang AVIC Real Estate) Controlled by the same party
AVIC City Property (Kunshan) Co., Ltd. (AVIC City Property (Kunshan) ) Controlled by the same party
Shenzhen AVIC Curtain Wall Engineering Co., Ltd. (AVIC Curtain Wall Engineering ) Controlled by the same party
AVIC Finance Co., Ltd. (AVIC Finance ) Controlled by the same party
Shenzhen AVIC Security Service Co., Ltd. (AVIC Security Service) Controlled by the same party
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Shenzhen AVIC Property Asset Management Co., Ltd. (AVIC Property Asset Management) Controlled by the same party
Jiujiang 9 Square Commerce Management Co., Ltd. (9 Square Commerce Management) Controlled by the same party
Shenzhen AVIC Huacheng Property Development Co., Ltd.(AVIC Huacheng Property) Controlled by the same party
AVIC Property Management Co., Ltd. CBD Branch (AVIC Property CBD) Controlled by the same party
AVIC Property Management Co., Ltd. Real Estate Project Branch (AVIC Property Real Estate
Controlled by the same party
Project)
Shenzhen AVIC Grand Skylight Hotel Management Co., Ltd. (Grand Skylight Hotel) Controlled by the same party
Shenzhen AVIC Real Estate Development Co., Ltd. (AVIC Real Estate) Controlled by the same party
Huang Yongfeng A senior executive
Wang Mingchuan A senior executive
Fu Debin A senior executive
Xiao Zhanglin A senior executive
Wang Bo A senior executive
Chen Libin A senior executive
Zhang Hongguang A senior executive
Zhang Shunwen A senior executive
Wang Yan A senior executive
Wang Baoying A senior executive
Sheng Qing A senior executive
Wang Jingqi A senior executive
Lu Bingqiang A senior executive
Lu Wanjun A senior executive
Liu Xiaoming A senior executive
Pan Bo A senior executive
Li Ming A senior executive
Chen Zhuo A senior executive
5. Related transactions
(1) Related transactions of purchase and sale of commodities and supply and acceptance of labor services
Statement of purchase of commodities and acceptance of labor services
In CNY
Description of Related Amount incurred in the Transaction quota as Has it exceeded the Amount incurred in the
Related parties
Transactions reporting period approved transaction quota previous period
AVIC Property Reception of services 2,966,178.17 5,000,000.00 No 3,912,604.61
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Shopping mall
Rainbow Ltd. 2,554,556.27 3,000,000.00 No 2,529,676.00
fees/purchase of goods
AVIC Building Co. Engineering fees 468,415.30 5,000,000.00 No 0.00
Shenzhen AVIC Group
Training fee 144,548.39 500,000.00 No 0.00
Enterprise Training Center
Statement of sales of goods/supply of labor services
In CNY
Related parties Description of Related Transactions Amount incurred in the reporting period Amount incurred in the previous period
Rainbow Ltd. Products and labor services 35,060,373.29 37,311,632.36
Shennan Circuit Co., Ltd. Products and labor services 3,300,322.92 1,074,050.91
Shenzhen Grand Skylight Hotel
Products and labor services 5,982.90 2,564.10
Management Co., Ltd.
Ganzhou 9 Square Products and labor services 701,423.33 0.00
Note to the related transactions of purchase and sale of commodities and supply and acceptance of labor services
(2) Related entrusted management/contracted and mandatory management/contracting
Inapplicable
(3) Related lease
The Company as lessor:
In CNY
Rental income recognized in the current Rental income recognized in the
Names of lessees Categories of leasehold properties
period previous period
AVIC SUNDA Housing 898,931.71 679,371.90
AVIC Property Housing 3,786,677.96 3,213,521.33
AVIC Securities Housing 608,571.42 584,228.58
AVIC City Property Co., Ltd. Housing 187,965.57 218,555.04
AVIC City Development Housing 2,428.57 8,878.07
Guanlan Real Estate Housing 53,919.42 40,199.53
Tianyue Hotel Housing 1,746,031.74 2,095,238.09
Rainbow Ltd. Housing 229,327.58 262,440.80
9 Square Assets Housing 579,564.39 192,879.08
AVIC City Investment Housing 232,636.75 547,184.70
AVIC Huacheng Property Housing 143,684.84 165,498.96
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AVIC Real Estate Development Housing 33,406.82
The Company as lessee:
In CNY
Rental fee recognized in the current Rental fee recognized in the previous
Names of lessees Categories of leasehold properties
period period
Ganzhou 9 Square Housing 544,600.15 0.00
Jiujiang AVIC Real Estate Housing 201,501.48 0.00
AVIC City Property (Kunshan) Housing 110,753.27 101,827.56
AVIC Changtai Housing 0.00 176,273.10
(4) Related guarantee
The Company as a guarantor
In CNY
Guarantees Amount guaranteed Effective date Expiring date Is the guarantee finished
FIYTA (Hong Kong) Limited 24,917,100.00 April 26, 2018 April 26, 2019 No
Shenzhen Harmony World
75,000,000.00 December 30, 2017 December 29, 2018 No
Watches Center Co., Ltd.
The Company as a guarantee
In CNY
Guarantors Amount guaranteed Effective date Expiring date Is the guarantee finished
Shenzhen Harmony World
50,000,000.00 September 12, 2017 September 11, 2018 No
Watches Center Co., Ltd.
Shenzhen Harmony World
50,000,000.00 June 12, 2018 February 28, 2019 No
Watches Center Co., Ltd.
Shenzhen Harmony World
5,000,000.00 July 03, 2017 July 03, 2018 No
Watches Center Co., Ltd.
AVIC International Holding
17,861,928.00 January 26, 2015 June 24, 2019 No
Limited
AVIC International Holding
10,000,000.00 October 28, 2015 June 24, 2019 No
Limited
AVIC International Holding
6,000,000.00 May 27, 2015 June 24, 2019 No
Limited
AVIC International Holding
7,000,000.00 December 01, 2015 June 24, 2019 No
Limited
AVIC International Holding
10,000,000.00 January 18, 2016 December 24, 2019 No
Limited
AVIC International Holding 15,000,000.00 January 26, 2016 June 24, 2020 No
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Limited
AVIC International Holding
2,000,000.00 April 20, 2016 June 24, 2020 No
Limited
AVIC International Holding
7,500,000.00 May 05, 2016 June 24, 2020 No
Limited
AVIC International Holding
17,000,000.00 May 19, 2016 June 24, 2020 No
Limited
(5) Borrowings and lendings among related parties
Inapplicable
(6) Assets assignment and liabilities reorganization of related parties
Inapplicable
(7)Remuneration to senior executives
Inapplicable
(8) Other related transactions
Inapplicable
6. Accounts receivable from and payable to related parties
(1) Receivables
In CNY
Ending balance Opening balance
Description Related parties
Book balance Bad debt reserve Book balance Bad debt reserve
Accounts receivable: AVIC City Property Co., Ltd. 39,204.91 1,960.25 0.00 0.00
AVIC Huacheng Property 30,803.86 1,540.19 0.00 0.00
AVIC 9 Square Assets 260,240.52 13,012.03 0.00 0.00
AVIC Property 272,406.30 13,620.32 0.00 0.00
Rainbow Ltd. 7,196,437.23 359,821.86 1,782,356.36 89,117.82
Shennan Circuit Co., Ltd. 1,331,624.48 66,581.22 786,443.94 39,322.20
Ganzhou 9 Square 160.00 8.00 115,742.00 5,787.10
Notes receivable: Shennan Circuit Co., Ltd. 2,514,502.57 0.00 2,398,579.72 0.00
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Other receivables: Rainbow Ltd. 843,580.00 42,179.00 832,774.30 41,638.72
AVIC International Holding
11,101.80 555.09 0.00 0.00
Limited
Ganzhou 9 Square 122,665.60 6,133.28 122,665.60 6,133.28
AVIC City Property
35,000.00 1,750.00 35,000.00 1,750.00
(Kunshan)
Grand Skylight Hotel 32,000.00 1,600.00 32,000.00 1,600.00
AVIC Training Center 155,451.61 7,772.58 150,000.00 7,500.00
Jiujiang 9 Square
Commerce Management 50,400.00 2,520.00 0.00 0.00
Co., Ltd.
AVIC Property 0.00 0.00 100.00 5.00
Jiujiang AVIC Real Estate 0.00 0.00 50,000.00 2,500.00
AVIC Building Co. 0.00 0.00 126,598.73 6,329.94
(2) Payables
In CNY
Description Related parties Ending book balance Opening book balance
Advance Receipts: Guanlan Real Estate 10,971.43 8,315.43
AVIC SUNDA 0.00 148,915.46
9 Square Assets 0.00 33,331.01
AVIC Securities 0.00 101,428.57
Interest payable AVIC Finance 172,187.50 0.00
Other payables: AVIC Property 472,032.00 472,032.00
AVIC SUNDA 442,407.92 442,407.92
AVIC City Investment 309,732.00 309,732.00
9 Square Assets 179,860.00 66,666.60
AVIC Building Co. 112,710.23 89,289.47
AVIC City Property Co., Ltd. 99,052.32 99,052.32
AVIC Huacheng Property 73,819.68 73,819.68
Rainbow Ltd. 60,000.00 60,000.00
AVIC Real Estate 51,014.88 0.00
AVIC Guanlan Real Estate 25,401.60 0.00
AVIC Public Security Service Co. 10,533.44 0.00
Ganzhou 9 Square 3,725.69 0.00
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9 Square Commerce Management Co.,
2,532.20 0.00
Ltd.
AVIC Changtai 4,064.81 4,064.81
AVIC Securities 0.00 213,000.00
AVIC City Development 0.00 5,100.00
7. Related parties’ commitments
8. Miscelleneous
XIII. Stock payment
1. General
Inapplicable
2. Stock payment for equity settlement
Inapplicable
3. Stock payment for cash settlement
Inapplicable
4. Correction and termination of stock payment
Inapplicable
5. Miscelleneous
Inapplicable
XIV. Commitments and contingencies
1. Important commitments
Important commitments existing as at the balance sheet day
(1) Operating lease commitment
Implementation of irrevocable operating lease contract signed by the Company ended the balance sheet day is as follows:
In CNY
Items Ending balance Opening balance
Minimum rent payment for irrevocable operational lease:
1st year after the balance sheet day 42,593,133.47 29,799,099.00
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2nd year after the balance sheet day 20,439,242.80 14,570,632.00
3rd year after the balance sheet day 9,207,698.49 7,533,388.00
Subsequent years 5,253,776.23 1,121,206.00
2. Contingencies
(1) Significant contingencies existing as at the balance sheet day
(2) Important contingencies unnecessary to be disclosed but necessary to be explained
There existed no such contingencies necessary to be disclosed in the Company.
3. Others
Inapplicable
XV. Events after balance sheet day
1. Significant non-adjustment events
Inapplicable
2. Profit distribution
Inapplicable
3. Sales return
Inapplicable
4. Note to other matters after the balance sheet date
Inapplicable
XVI. Other significant events
1. Correction of the accounting errors in the previous period
(1) Retroactive restatement
Inapplicable
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(2) Prospective application
Inapplicable
2. Liabilities restructuring
Inapplicable
3. Replacement of assets
(1) Non-monetary assets exchange
Inapplicable
(2) Other assets exchange
Inapplicable
4. Pension plan
Inapplicable
5. Discontinuing operation
Inapplicable
6. Segment information
(1) Basis for determining the reporting segments and accounting policy
Inapplicable
(2) Financial information of the reporting segments
Inapplicable
(3) In case there is no reporting segment or the total assets and liabilities of the reporting segments cannot be
disclosed, explain the reason
Inapplicable
(4) Other notes
Inapplicable
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7. Other significant transactions and matters that may affect investors' decision making
Inapplicable
8. Others
Inapplicable
XVII. Notes to the parent company’s financial statements
1. Accounts receivable
(1) Accounts receivables disclosed by types
In CNY
Ending balance Opening balance
Book balance Bad debt reserve Book balance Bad debt reserve Book value
Categories
Provision Book value Provision
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Receivables for which
provision for bad debts have 6,871,446.3
7,425,599.28 100% 39,440.24 100% 7,386,159.04 100% 39,440.24 100% 6,832,006.11
been recognized based on 5
the portfolio
6,871,446.3
Total 7,425,599.28 100% 39,440.24 100% 7,386,159.04 100% 39,440.24 100% 6,832,006.11
5
Accounts receivable with significant single amount and provision of bad debt reserve on individual basis at the end of the
reporting period :
Inapplicable
In the combination, the accounts receivable for which the bad debt reserve is provided based on the age analysis:
In CNY
Ending balance
Ageing
Accounts receivable Bad debt reserve Provision proportion
Itemized within 1 year
Sub-total within 1 year 871,586.71 39,440.24 4.53%
Total 871,586.71 39,440.24 4.53%
Note to the basis for determining the combination:
No reserve for bad debt of the accounts receivable was provided during the reporting period while it is going to be
provided at the end of the year.
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In the combination, the account receivable for which reserve for bad debt is provided based on balance percentage:
Inapplicable
In the combination, the accounts receivable for which the bad debt reserve is provided based on the other method:
In CNY
Portfolio Description Book balance Bad debt reserve Provision proportion
Specific fund portfolio 6,554,012.57 - -
Based on historical experience, the Company did not provide any reserve for bad debt for the Group’s receivables due
from its subsidiaries which should be brought into the consolidation scope (the specific fund grouping amounting to CNY
6,554,012.57 is attributable to the rent receivable from the subsidiaries), as such receivables are highly recoverable and it
is little possible to become bad debt .
(2) Bad debt provision accrual, received or reversed in the reporting period
Inapplicable
(3) Accounts receivable actually written off in current period
Inapplicable
(4) Accounts receivable due from the top five debtors are as follows:
In CNY
Bad debt reserve at Are they
Serial Nature of Proportion
Names of the debtors Amount Ageing the end of the related
No. Payment taken
reporting period parties
1 FIYTA Sales Co., Ltd. Rent 6,116,757.60 Within 1 year 82.37% - Yes
Shenzhen FIYTA Sophisticated Timepieces
2 Rent 326,627.97 Within 1 year 4.40% - Yes
Manufacture Co., Ltd.
3 AVIC Property Management Co., Ltd. Rent 272,406.30 Within 1 year 3.67% 13,620.32 Yes
Shenzhen AVIC 9 Square Assets
4 Rent 260,240.52 Within 1 year 3.50% 13,012.03 Yes
Management Co., Ltd.
Shenzhen Goodfamily Sports Equipment
5 Rent 178,101.30 Within 1 year 2.40% 8,900.52 No
Chain Store Co., Ltd.
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(5) Accounts receivable terminated for recognition due to transfer of financial assets
Inapplicable
(6) Amount of assets, liabilities formed by transfer of accounts receivable and continuing to be involved
Inapplicable
2. Other receivables
(1) Disclosure of classification of other receivables
In CNY
Ending balance Opening balance
Book balance Bad debt reserve Book balance Bad debt reserve
Categories
Provision Book value Provision Book value
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Other receivables for which
bad debt reserve has been 698,339,717 698,286,652. 832,005,5
100% 53,065.03 100% 100% 53,065.03 100% 831,952,437.86
provided based on the .57 54 02.89
portfolio
698,339,717 698,286,652. 832,005,5
Total 100% 53,065.03 100% 100% 53,065.03 100% 831,952,437.86
.57 54 02.89
Other receivables with significant single amount and provision of bad debt reserve on individual basis at the end of the
reporting period:
Inapplicable
In the combination, other receivables for which the bad debt reserve is provided based on the age analysis:
In CNY
Ending balance
Ageing
Other receivables Bad debt reserve Provision proportion
Itemized within 1 year
Sub-total within 1 year 369,198.43 17,840.03 4.83%
1 to 2 years 152,000.00 15,200.00 10%
Over 3 years 40,050.00 20,025.00 50%
Total 561,248.43 53,065.03 9.45%
Note to the basis for determining the combination:
No reserve for bad debt of other receivables was provided during the reporting period while it is going to be provided at the
end of the year.
In the combination, other account receivable for which reserve for bad debt is provided based on balance percentage:
Inapplicable
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In the combination, other receivable for which the bad debt reserve is provided based on other method:
Based on historical experience, as the reserve receivable from the employees, accounts receivable due from the
subsidiaries which should be brought into the consolidation scope, accounts receivable with the nature of advance
payment and the accounts receivable as the part of the premiums of endowment insurance, medical insurance,
unemployment insurance, work-related injury insurance and maternity insurance and housing fund payable by employees
are of high recoverability and low possibility of incurring bad debt, the Group provided no reserve for bad debt for them.
In CNY
Portfolio Description Book balance Bad debt reserve Provision proportion
Specific fund portfolio 697,778,469.14 - -
(2) Bad debt provision accrual, received or reversed in the reporting period
Inapplicable
(3) Accounts receivable actually written off in current period
Inapplicable
(4) Classification of other receivables based on nature of payment
In CNY
Nature of Payment Ending book balance Opening book balance
Dealings among related parties within the consolidation
696,575,834.05 831,217,702.17
scope
Reserve 1,202,635.09 0.00
Cash deposit and deposit in security 258,104.00 352,131.00
Others 303,144.43 435,669.72
Total 698,339,717.57 832,005,502.89
(5) Other receivables owed by the top five debtors based on the ending balance
In CNY
Proportion in total ending Ending balance of the
Company name Nature of Payment Ending balance Ageing
balance of other receivables provision for bad debts
Shenzhen Harmony World
Current accounts 442,318,003.30 Within 1 year 63.34% 0.00
Watches Center Co., Ltd.
Liaoning Hengdarui
Current accounts 104,260,500.00 Within 1 year 14.93% 0.00
Commerce & Trade Co., Ltd.
FIYTA Sales Co., Ltd. Current accounts 100,129,598.82 Within 1 year 14.34% 0.00
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Emile Chouriet (Shenzhen)
Current accounts 25,500,839.73 Within 1 year 3.65% 0.00
Limited
Shiyuehui Boutique
Current accounts 24,366,892.20 Within 1 year 3.49% 0.00
(Shenzhen) Co., Ltd.
Total -- 696,575,834.05 -- 99.75% 0.00
(6) Accounts receivable involving government subsidy
Inapplicable
(7) Other receivables with recognition terminated due to transfer of financial assets
Inapplicable
(8) Amount of assets and liabilities formed through transfer of other receivables and continuing to be involved
Inapplicable
3. Long-term equity investments
In CNY
Ending balance Opening balance
Items
Book balance Impairment reserve Book value Book balance Impairment reserve Book value
Investment in
1,331,248,590.93 0.00 1,331,248,590.93 1,331,248,590.93 0.00 1,331,248,590.93
subsidiaries
Investment in
associates and joint 43,972,531.47 0.00 43,972,531.47 43,879,518.09 0.00 43,879,518.09
ventures
Total 1,375,221,122.40 0.00 1,375,221,122.40 1,375,128,109.02 0.00 1,375,128,109.02
(1) Investment in subsidiaries
In CNY
Provision for
Increase in the Decrease in the Ending balance of the
Investees Opening balance Ending balance impairment in the
reporting period reporting period provision for impairment
reporting period
Shenzhen Harmony
World Watches Center 601,307,200.00 0.00 0.00 601,307,200.00 0.00 0.00
Co., Ltd.
FIYTA Sales Co., Ltd. 450,000,000.00 0.00 0.00 450,000,000.00 0.00 0.00
Shenzhen FIYTA 9,000,000.00 0.00 0.00 9,000,000.00 0.00 0.00
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Sophisticated
Timepieces Manufacture
Co., Ltd.
Shenzhen FIYTA
Technology Development 10,000,000.00 0.00 0.00 10,000,000.00 0.00 0.00
Co., Ltd.
FIYTA (Hong Kong)
137,737,520.00 0.00 0.00 137,737,520.00 0.00 0.00
Limited
Shiyuehui Boutique
5,000,000.00 0.00 0.00 5,000,000.00 0.00 0.00
(Shenzhen) Co., Ltd.
Harbin Harmony World
2,184,484.39 0.00 0.00 2,184,484.39 0.00 0.00
Watch Co., Ltd.
Liaoning Hengdarui
Commerce & Trade Co., 36,867,843.96 0.00 0.00 36,867,843.96 0.00 0.00
Ltd.
Emile Chouriet
79,151,542.58 0.00 0.00 79,151,542.58 0.00 0.00
(Shenzhen) Limited
Total 1,331,248,590.93 0.00 0.00 1,331,248,590.93 0.00 0.00
(2) Investment in associates and joint ventures
In CNY
Increase/ Decrease (+ / -) in the reporting period
Income from Announced Ending
equity Other for balance of
Opening Ending
Investees Additional Decrease of investment comprehensi Other equity distributing Provision for the provision
balance Others balance
investment investment recognized ve income movement cash impairment for
under equity adjustment dividend or impairment
method profit
I. Joint Venture
II. Associates
Shanghai
Watch 43,879,518.0 43,972,531.4
0.00 0.00 93,013.38 0.00 0.00 0.00 0.00 0.00 0.00
Industry Co., 9 7
Ltd.
43,879,518.0 43,972,531.4
Sub-total 0.00 0.00 93,013.38 0.00 0.00 0.00 0.00 0.00 0.00
9 7
43,879,518.0 43,972,531.4
Total 0.00 0.00 93,013.38 0.00 0.00 0.00 0.00 0.00 0.00
9 7
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(3) Other notes
4. Operation Income and Costs
In CNY
Amount incurred in the reporting period Amount incurred in the previous period
Items
Income Costs Income Costs
Principal business 56,119,634.18 9,578,544.70 51,281,774.36 8,618,881.55
Other businesses 0.00 0.00 72,649.57 0.00
Total 56,119,634.18 9,578,544.70 51,354,423.93 8,618,881.55
Other notes:
5. Return on investment
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Income from long term equity investment based on equity
93,013.38 188,871.89
method
Total 93,013.38 188,871.89
6. Miscelleneous
XVIII. Supplementary information
1. Statement of non-recurring gains and losses in the reporting period
In CNY
Items Amount Notes
Gain/loss from disposal of partial obsolete office fixed
Gain/Loss from disposal of non-current assets -54,407.16
assets during the reporting period
Government subsidy credited to the current gain and loss
(except the government subsidies closely related with the For detail, refer to the supplementary description of the
Company’s business and enjoyable according to the unified 6,497,018.80 government subsidy counted to the current profit and
standard quota or fixed amount specified by the central loss, Note VII.70.
government).
Operating income and expenses other than the aforesaid Operating income and expenses other than the aforesaid
7,533,121.86
items items.
Other various non-operating revenue and expenditure with
-102,663.02 Other non-operating income and expenses
the aforesaid items exclusive
Less: Amount affected by the income tax 1,264,520.20
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Total 12,608,550.28 --
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering their Securities to the Public – Non-recurring Gains and Losses and its non-recurring
gain/loss items as illustrated in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
their Securities to the Public – Non-recurring Gains and Losses which have been defined as recurring gains and losses, it
is necessary to explain the reason.
Inapplicable
2. ROE and EPS
Earnings per share
Profit in the reporting period Return on equity, weighted average Basic earning per share Diluted earning per share
(CNY/share) (CNY/share)
Net profit attributable to the Company’s
4.45% 0.2561 0.2561
shareholders of ordinary shares
Net profit attributable to the Company’s
shareholders of ordinary shares less 3.95% 0.2274 0.2274
non-recurring gains and loss
3. Discrepancy in accounting data between IAS and CAS
(1) Discrepancy in net profit and net assets as disclosed in the financial report respectively according to IAS and
CAS
Inapplicable
(2) Discrepancy in net profit and net assets as disclosed in the financial report respectively according to the
accounting standards outside Mainland China and CAS
Inapplicable
(3) Note to the discrepancy in accounting data under the accounting standards outside Mainland China. In case
the discrepancy in data which have been audited by an overseas auditing agent has been adjusted, please
specify the name of the overseas auditing agent.
4. Miscelleneous
Inapplicable
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Section11 Documents Available for Inspection
I. Financial Statements signed by and under the seal of the legal representative, the treasurer and the
person in charge of the accounting department of the Company;
II. All the manuscripts of the Company’s documents and announcements disclosed in the newspapers
(Securities Times and Hong Kong Commercial Daily) designated by China Securities Regulatory
Commission.
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