FIYTA Precision Technology Co., Ltd.
2020 Semi-annual Report
Financial Report
I. Auditors’ Report
Has the semi-annual report been audited
No
II. Financial Statements
The currency applied in the financial notes and statements is Renminbi (CNY)
1. Consolidated Balance Sheet
Prepared by FIYTA Precision Technology Co., Ltd.
June 30, 2020
In CNY
Items June 30, 2020 December 31, 2019
Current assets:
Monetary fund 346,481,641.68 316,668,565.09
Settlement reserve
Inter-bank lending
Transactional financial assets
Derivative financial assets
Notes receivable 21,231,543.36 10,596,431.31
Accounts receivable 428,154,219.98 397,471,106.98
Financing with accounts receivable
Advance payment 18,403,768.63 10,847,962.28
Receivable premium
Reinsurance accounts receivable
Reserve for reinsurance contract receivable
Other receivables 106,768,399.40 47,239,844.58
Including: Interest receivable
Dividends receivable
Redemptory monetary capital for sale
Inventories 1,798,215,040.24 1,808,820,089.92
Contract assets
Held-for-sale assets
Non-current assets due within a year
Other current assets 44,538,051.17 68,858,096.74
Total current assets 2,763,792,664.46 2,660,502,096.90
Non-current assets:
Loan issuing and advance in cash
Equity investment
Other equity investment
Long term accounts receivable
Long-term equity investment 48,584,749.77 46,423,837.85
Investment in other equity instruments 85,000.00 85,000.00
Other non-current financial assets
Investment-oriented real estate 399,881,983.38 407,503,307.24
Fixed assets 354,294,685.37 363,997,098.94
Construction-in-process
Productive biological asset
Oil and gas assets
Use right assets
Intangible assets 37,857,017.44 38,711,821.26
Development expenses
Goodwill
Long-term expenses to be apportioned 126,571,325.96 152,587,491.33
Deferred income tax asset 96,067,247.70 83,739,383.37
Other non-current assets 10,492,964.34 7,373,248.48
Total non-current assets 1,073,834,973.96 1,100,421,188.47
Total assets 3,837,627,638.42 3,760,923,285.37
Current liabilities:
Short term borrowings 673,562,359.55 567,908,833.21
Borrowings from central bank
Loans from other banks
Transactional financial liabilities
Derivative financial liabilities
Notes payable 1,400,000.00
Accounts payable 191,041,428.35 279,772,787.37
Advance Receipts 7,251,488.79 23,433,463.57
Contract liabilities 21,475,843.30
Income from sale of the repurchased financial
assets
Deposits taking and interbank placement
Acting trading securities
Income from securities underwriting on
commission
Payroll payable to the employees 62,233,409.51 82,602,845.67
Taxes payable 53,088,654.29 24,064,803.00
Other payables 190,515,397.99 119,616,721.63
Including: interest payable
Dividends payable 53,887,144.07 848,233.27
Service charge and commission payable
Payable reinsurance
Held-for-sale liabilities
Non-current liabilities due within a year 373,530.00 360,140.00
Other current liabilities
Total current liabilities 1,200,942,111.78 1,097,759,594.45
Non-current liabilities:
Reserve for insurance contract
Long-term borrowings 4,295,595.00 4,321,680.00
Bonds payable
Including: preferred shares
Perpetual bond
Lease liabilities
Long-term accounts payable
Long term payroll payable to the employees
Estimated liabilities
Deferred income 3,046,090.60 3,046,090.60
Deferred income tax liability 1,192,721.71 1,256,242.49
Other non-current liabilities
Total non-current liabilities 8,534,407.31 8,624,013.09
Total liabilities 1,209,476,519.09 1,106,383,607.54
Owner’s equity:
Capital stock 428,171,881.00 442,968,881.00
Other equity instruments
Including: preferred shares
Perpetual bond
Capital Reserve 1,019,385,022.79 1,081,230,215.32
Less: shares in stock 17,447,988.68 71,267,118.78
Other comprehensive income 3,389,668.49 -940,209.09
Special reserve
Surplus Reserve 235,701,180.14 235,701,180.14
Provision for general risks
Retained earnings 958,945,348.50 966,840,818.40
Total owners’ equity attributable to the parent
2,628,145,112.24 2,654,533,766.99
company
Minority shareholders’ equity 6,007.09 5,910.84
Total owner’s equity 2,628,151,119.33 2,654,539,677.83
Total liabilities and owners’ equity 3,837,627,638.42 3,760,923,285.37
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge
of the Accounting Department: Tian Hui
2. Balance Sheet, Parent Company
In CNY
Items June 30, 2020 December 31, 2019
Current assets:
Monetary fund 296,412,869.24 270,673,346.02
Transactional financial assets
Derivative financial assets
Notes receivable
Accounts receivable 4,468,617.83 2,848,025.39
Financing with accounts receivable
Advance payment
Other receivables 697,541,260.60 783,647,732.22
Including: Interest receivable
Dividends receivable
Inventories
Contract assets
Held-for-sale assets
Non-current assets due within a year
Other current assets 14,411,160.44 12,380,243.67
Total current assets 1,012,833,908.11 1,069,549,347.30
Non-current assets:
Equity investment
Other equity investment
Long term accounts receivable
Long-term equity investment 1,385,319,621.50 1,380,895,239.27
Investment in other equity instruments 85,000.00 85,000.00
Other non-current financial assets
Investment-oriented real estate 323,720,394.86 329,970,083.18
Fixed assets 232,525,547.05 238,594,698.50
Construction-in-process
Productive biological asset
Oil and gas assets
Use right assets
Intangible assets 28,849,765.24 30,925,974.54
Development expenses
Goodwill
Long-term expenses to be apportioned 11,407,352.44 12,106,759.98
Deferred income tax asset 1,376,549.26 1,125,840.75
Other non-current assets 4,798,820.13 4,707,236.86
Total non-current assets 1,988,083,050.48 1,998,410,833.08
Total assets 3,000,916,958.59 3,067,960,180.38
Current liabilities:
Short term borrowings 540,581,988.89 540,650,622.50
Transactional financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 1,484,563.53 12,952,934.93
Advance Receipts 7,251,488.79 3,434,407.04
Contract liabilities
Payroll payable to the employees 16,173,553.17 19,019,554.57
Taxes payable 2,695,509.97 1,713,130.68
Other payables 132,347,479.64 82,631,590.46
Including: interest payable
Dividends payable 53,887,144.07 848,233.27
Held-for-sale liabilities
Non-current liabilities due within a year
Other current liabilities
Total current liabilities 700,534,583.99 660,402,240.18
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: preferred shares
Perpetual bond
Lease liabilities
Long-term accounts payable
Long term payroll payable to the employees
Estimated liabilities
Deferred income 3,046,090.60 3,046,090.60
Deferred income tax liability
Other non-current liabilities
Total non-current liabilities 3,046,090.60 3,046,090.60
Total liabilities 703,580,674.59 663,448,330.78
Owner’s equity:
Capital stock 428,171,881.00 442,968,881.00
Other equity instruments
Including: preferred shares
Perpetual bond
Capital Reserve 1,025,040,563.89 1,086,885,756.42
Less: shares in stock 17,447,988.68 71,267,118.78
Other comprehensive income
Special reserve
Surplus Reserve 235,701,180.14 235,701,180.14
Retained earnings 625,870,647.65 710,223,150.82
Total owner’s equity 2,297,336,284.00 2,404,511,849.60
Total liabilities and owners’ equity 3,000,916,958.59 3,067,960,180.38
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of the Accounting
Department: Tian Hui
3. Consolidated Profit Statement
In CNY
Items The first half year of 2020 The first half year of 2019
I. Turnover 1,581,834,715.03 1,785,036,020.23
Including: operating income 1,581,834,715.03 1,785,036,020.23
Interest income
Earned insurance premium
Service charge and commission income
II. Total operating costs 1,501,108,535.92 1,634,493,191.74
Including: Operating costs 977,435,676.87 1,051,504,075.22
Interest payment
Service charge and commission payment
Surrender Value
Compensation expenses, net
Appropriation of deposit for duty, net
Payment of policy dividend
Reinsurance expenses
Taxes and surcharges 7,270,983.69 15,094,875.33
Sales costs 380,928,312.51 415,776,028.95
Administrative expenses 98,240,348.73 116,352,835.42
R & D expenditures 20,704,270.76 19,526,410.93
Financial expenses 16,528,943.36 16,238,965.89
Where: Interest cost 13,485,670.67 12,023,843.93
Interest income -2,482,721.82 -908,850.92
Plus: Other income 10,154,015.67 13,045,742.36
Investment income (loss is stated with “-”) 2,160,911.92 1,531,310.06
Including: return on investment in associate
2,160,911.92 1,531,310.06
and joint venture
Income from the derecognition of the
financial assets measured at amortised cost
Exchange income (loss stated with “-“)
Net exposure hedge income (loss stated
with “-“)
Income from change of fair value (loss is
stated with “-”)
Loss from impairment of credit (loss is
-2,467,361.35 -3,081,768.89
stated with “-”)
Loss from impairment of assets (loss is
2,514,740.86
stated with “-”)
Income from disposal of assets (loss is
-200,140.17 -212,010.13
stated with “-“)
III. Operating Profit (loss is stated with “-“) 90,373,605.18 164,340,842.75
Plus: Non-operating income 1,391,859.42 294,311.70
Less: non-operating expenditures 118,646.41 524,505.98
IV. Total profit (total loss is stated with “-”) 91,646,818.19 164,110,648.47
Less: Income tax expense 13,907,911.89 40,615,187.57
V. Net Profit (net loss is stated with “-“) 77,738,906.30 123,495,460.90
(I) Classification based on operation sustainability
1. Net Profit from sustainable operation (net loss
77,738,906.30 123,495,460.90
is stated with “-”)
2. Net Profit from termination of operation (net
loss is stated with “-”)
(II) Classification by ownership
1. Net profit attributable to the parent company’s
77,738,906.30 123,495,460.90
owner
2. Minority shareholders’ gain/loss
VI. Net of other comprehensive income after tax 4,329,973.83 1,749,420.87
Net of other comprehensive income after tax
4,329,877.58 1,749,407.20
attributable to the parent company’s owner
(I) Other comprehensive income which cannot be
re-classified into gain and loss
1. Movement of the net liabilities and net
assets re-measured for setting the beneficial plan
2. Other comprehensive income which
cannot be converted into gain and loss based on the
equity method
3. Movement of the fair value of the
investment in other equity instruments
4. Movement of the fair value of the
Company’s own credit risk
5. Others
(II) Other comprehensive income which shall be
4,329,877.58 1,749,407.20
re-classified into gain and loss
1. Other comprehensive income which
can be converted into gain and loss based on the
equity method
2. Movement of the fair value of the
investment in other debt instruments
3. Amount of the reclassified financial
assets counted to the other comprehensive income
4. Provision for impairment of the credit
of the other debt investment
5. Reserve for cash flow hedge
6. Conversion difference in foreign
4,329,877.58 1,749,407.20
currency statements
7. Others
Net amount of other comprehensive income after tax
96.25 13.67
attributable to minority shareholders
VII. Total comprehensive income 82,068,880.13 125,244,881.77
Total comprehensive income attributable to the
82,068,783.88 125,244,868.10
parent company’s owner
Total comprehensive income attributable to
96.25 13.67
minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share 0.1775 0.2788
(II) Diluted earnings per share 0.1775 0.2788
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge
of the Accounting Department: Tian Hui
4. Profit Statement, Parent Company
In CNY
Items The first half year of 2020 The first half year of 2019
I. Operating revenue 57,313,218.41 64,124,939.95
Less: Operating cost 17,626,390.24 11,807,925.90
Taxes and surcharges 1,616,108.15 2,257,018.92
Sales costs 597,618.02 582,036.03
Administrative expenses 31,406,670.97 39,783,149.16
R & D expenditures 7,989,092.54 9,146,589.64
Financial expenses 3,458,375.39 3,247,689.32
Where: Interest cost 5,364,370.20 4,007,526.54
Interest income -2,363,907.44 -776,046.44
Plus: Other income 4,334,756.32 7,743,695.89
Investment income (loss is stated with “-”) 2,160,911.92 1,531,310.06
Including: return on investment in
2,160,911.92 1,531,310.06
associate and joint venture
Gain from the derecognition of the
financial assets measured at amortised cost (loss
is stated with “-”)
Net exposure hedge income (loss stated
with “-“)
Income from change of fair value (loss is
stated with “-”)
Loss from impairment of credit (loss is -100,902.52 -64,803.91
stated with “-”)
Loss from impairment of assets (loss is
stated with “-”)
Income from disposal of assets (loss is
-15,641.58 -2,074.20
stated with “-“)
II. Operating Profit (loss is stated with “-“) 998,087.24 6,508,658.82
Plus: Non-operating income 33,077.28 18,000.00
Less: non-operating expenditures 200,000.00
III. Total profit (total loss is stated with “-“) 1,031,164.52 6,326,658.82
Less: Income tax expense -250,708.51 1,174,172.39
IV. Net Profit (net loss is stated with “-“) 1,281,873.03 5,152,486.43
(I) Net Profit from sustainable operation (net
1,281,873.03 5,152,486.43
loss is stated with “-”)
(II) Net Profit from termination of operation (net
loss is stated with “-”)
V. Net of other comprehensive income after tax
(I) Other comprehensive income which cannot
be re-classified into gain and loss
1. Movement of the net liabilities and
net assets re-measured for setting the beneficial plan
2. Other comprehensive income which
cannot be converted into gain and loss based on the
equity method
3. Movement of the fair value of the
investment in other equity instruments
4. Movement of the fair value of the
Company’s own credit risk
5. Others
(II) Other comprehensive income which shall be
re-classified into gain and loss
1. Other comprehensive income which
can be converted into gain and loss based on the
equity method
2. Movement of the fair value of the
investment in other debt instruments
3. Amount of the reclassified financial
assets counted to the other comprehensive income
4. Provision for impairment of the credit
of the other debt investment
5. Reserve for cash flow hedge
6. Conversion difference in foreign
currency statements
7. Others
VI. Total comprehensive income 1,281,873.03 5,152,486.43
VII. Earnings per share:
(I) Basic earnings per share 0.0030 0.0116
(II) Diluted earnings per share 0.0030 0.0116
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of the Accounting
Department: Tian Hui
5. Consolidated Cash Flow Statement
In CNY
Items The first half year of 2020 The first half year of 2019
I. Cash flows arising from operating activities:
Cash received from sales of goods and supply
1,704,132,389.05 1,913,555,960.34
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
Cash received from interest, service charge
and commission
Net increase of loan from other banks
Net increase of fund from repurchase business
Net cash received from securities trading on
commission
Rebated taxes received 1,408,520.48 3,160,067.59
Other operation activity related cash receipts 31,287,429.73 40,976,127.91
Subtotal of cash flow in from operating activity 1,736,828,339.26 1,957,692,155.84
Cash paid for purchase of goods and reception
1,124,364,970.39 1,116,738,134.87
of labor services
Net increase of loans and advances to
customers
Net increase of due from central bank and due
from other banks
Cash from payment for settlement of the
original insurance contract
Net increase of the lending capital
Cash paid for interest, service charge and
commission
Cash for payment of policy dividend
Cash paid to and for staff 280,396,366.01 314,068,308.62
Taxes paid 62,495,543.38 130,569,918.63
Other business activity related cash payments 165,926,224.21 237,301,143.35
Subtotal of cash flow out from operating activity 1,633,183,103.99 1,798,677,505.47
Net cash flows arising from operating activities 103,645,235.27 159,014,650.37
II. Net cash flows arising from investment activities
Cash received from recovery of investment
Cash received from investment income
Net cash from disposal of fixed assets,
intangible assets and recovery of other long term 19,552.47 84,258.51
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 19,552.47 84,258.51
Cash paid for purchase/construction of fixed
53,912,380.03 89,298,306.14
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 53,912,380.03 89,298,306.14
Net cash flows arising from investment activities -53,892,827.56 -89,214,047.63
III. Cash flow arising from financing activities:
Cash received from absorbing investment 0.00 18,585,600.00
Incl.: Cash received from the subsidiaries’
absorption of minority shareholders’ investment
Cash received from loans 572,430,000.00 330,176,520.00
Other fund-raising related cash receipts
Subtotal of cash flow in from fund raising activity 572,430,000.00 348,762,120.00
Cash paid for debt repayment 467,250,228.75 327,486,253.30
Cash paid for dividend/profit distribution or
98,229,142.76 12,018,884.30
repayment of interest
Including: Dividend and profit paid by the
subsidiaries to minority shareholders
Cash paid for other financing activities 26,825,873.78 17,565,400.00
Sub-total cash flow paid for financing activities 592,305,245.29 357,070,537.60
Net cash flow arising from financing activities: -19,875,245.29 -8,308,417.60
IV. Influence of the change of exchange rate on the
-64,085.83 201,307.31
cash and cash equivalents
V. Net increase of cash and cash equivalents 29,813,076.59 61,693,492.45
Plus: Opening balance of cash and cash
315,093,565.09 162,623,059.97
equivalents
VI. Ending balance of cash and cash equivalents 344,906,641.68 224,316,552.42
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of the Accounting
Department: Tian Hui
6. Cash Flow Statement, Parent Company
In CNY
Items The first half year of 2020 The first half year of 2019
I. Net cash flows arising from operating activities:
Cash received from sales of goods and supply
84,447,213.29 66,872,263.13
of labor service
Rebated taxes received
Other operation activity related cash receipts 1,761,219,003.00 1,733,050,857.61
Subtotal of cash flow in from operating activity 1,845,666,216.29 1,799,923,120.74
Cash paid for purchase of goods and reception
of labor services
Cash paid to and for staff 28,476,180.31 42,848,757.99
Taxes paid 5,608,474.08 5,460,385.81
Other business activity related cash payments 1,646,751,070.92 1,676,610,396.74
Subtotal of cash flow out from operating activity 1,680,835,725.31 1,724,919,540.54
Net cash flows arising from operating activities 164,830,490.98 75,003,580.20
II. Net cash flows arising from investment activities
Cash received from recovery of investment
Cash received from investment income
Net cash from disposal of fixed assets,
intangible assets and recovery of other long term 550.00 23,000.00
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 550.00 23,000.00
Cash paid for purchase/construction of fixed
15,073,283.59 31,845,425.44
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 15,073,283.59 31,845,425.44
Net cash flow arising from investment activities -15,072,733.59 -31,822,425.44
III. Cash flow arising from financing activities:
Cash received from absorbing investment 18,585,600.00
Cash received from loans 450,000,000.00 310,000,000.00
Other fund-raising related cash receipts
Subtotal of cash flow in from fund raising activity 450,000,000.00 328,585,600.00
Cash paid for debt repayment 450,000,000.00 295,000,000.00
Cash paid for dividend/profit distribution or
97,351,309.71 11,510,341.40
repayment of interest
Cash paid for other financing activities 26,693,235.96 17,565,400.00
Sub-total cash flow paid for financing activities 574,044,545.67 324,075,741.40
Net cash flow arising from financing activities: -124,044,545.67 4,509,858.60
IV. Influence of the change of exchange rate on the
26,311.50 1,378.48
cash and cash equivalents
V. Net increase of cash and cash equivalents 25,739,523.22 47,692,391.84
Plus: Opening balance of cash and cash
269,098,346.02 134,970,466.27
equivalents
VI. Ending balance of cash and cash equivalents 294,837,869.24 182,662,858.11
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
Amount in the reporting period
In CNY
The first half year of 2020
Owners’ equity attributable to the parent company
Other equity instruments Other Minority Total
Items Less: Provision
Capital Capital comprehe Special Surplus Retained shareholde owner’s
Preferre Perpetu shares in for general Others Sub-total
stock Others Reserve nsive reserve Reserve earnings rs’ equity equity
d shares al bond stock risks
income
I. Ending balance of the 442,968, 1,081,230, 71,267,118 -940,209.0 235,701,1 966,840,8 2,654,533, 2,654,539,
5,910.84
previous year 881.00 215.32 .78 9 80.14 18.40 766.99 677.83
Plus: Change in
accounting policy
Correction of
previous errors
Consolidation
of enterprises under the
same control
Others
II. Opening balance of 442,968, 1,081,230, 71,267,118 -940,209.0 235,701,1 966,840,8 2,654,533, 2,654,539,
5,910.84
the reporting year 881.00 215.32 .78 9 80.14 18.40 766.99 677.83
III. Decrease/increase of
the report year -14,797, -61,845,19 -53,819,13 4,329,877. -7,895,469 -26,388,65 -26,388,55
96.25
(decrease is stated with 000.00 2.53 0.10 58 .90 4.75 8.50
“-“)
(I) Total comprehensive 4,329,877. 77,738,90 82,068,78 82,068,88
96.25
income 58 6.30 3.88 0.13
(II) Owners’ input and -14,797, -61,845,19 -53,819,13 -22,823,06 -22,823,06
decrease of capital 000.00 2.53 0.10 2.43 2.43
1. Common shares -14,797, -64,385,94 -53,819,13 -25,363,81 -25,363,81
contributed by the owner 000.00 8.25 0.10 8.15 8.15
2. Capital contributed by
other equity instruments
holders
3. Amount of payment for
2,784,096. 2,784,096. 2,784,096.
shares counted to
62 62 62
owners’ equity
-243,340.9 -243,340.9 -243,340.9
4. Others
0 0 0
-85,634,37 -85,634,37 -85,634,37
(III) Profit Distribution
6.20 6.20 6.20
1. Provision of surplus
reserve
2. Provision for general
risks
3. Distributions to the -85,634,37 -85,634,37 -85,634,37
owners (or shareholders) 6.20 6.20 6.20
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 for with
surplus reserve
4. Setting of the amount
involved in the
movement of the
beneficial plan carried
over to the retained
earnings
5. Other comprehensive
income carried-over to
the retained earnings
6. Others
(V) Special reserve
1. Provision in the
reporting period
2. Applied in the
reporting period
(VI) Others
IV. Ending balance of the 428,171, 1,019,385, 17,447,98 3,389,668. 235,701,1 958,945,3 2,628,145, 2,628,151,
6,007.09
reporting period 881.00 022.79 8.68 49 80.14 48.50 112.24 119.31
Amount in the previous period
In CNY
The first half year of 2019
Owners’ equity attributable to the parent company
Other equity instruments Other Minority Total
Items Less: Provision
Capital Preferre Capital comprehe Special Surplus Retained shareholder owner’s
Perpetu shares in for general Others Sub-total
stock d Others Reserve nsive reserve Reserve earnings s’ equity equity
al bond stock risks
shares income
I. Ending balance of the 438,744, 1,062,455, -5,442,139 223,015,7 851,360,6 2,570,134, 2,570,140,5
5,781.64
previous year 881.00 644.22 .78 93.80 03.66 782.90 64.54
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, -5,442,139 223,015,7 851,360,6 2,570,134, 2,570,140,5
5,781.64
the reporting year 881.00 644.22 .78 93.80 03.66 782.90 64.54
III. Decrease/increase of
the report year 4,224,00 16,596,19 32,902,19 1,749,407. 123,495,4 113,162,8 113,162,880
13.66
(decrease is stated with 0.00 7.31 8.89 21 60.89 66.52 .18
“-“)
(I) Total comprehensive 1,749,407. 123,495,4 125,244,8 125,244,881
13.66
income 21 60.89 68.10 .76
(II) Owners’ input and 4,224,00 16,596,19 32,902,19 -12,082,00 -12,082,001
decrease of capital 0.00 7.31 8.89 1.58 .58
1. Common shares 4,224,00 16,596,19 18,585,60 2,234,597. 2,234,597.3
contributed by the 0.00 7.31 0.00 31 1
owner
2. Capital contributed by
other equity instruments
holders
3. Amount of payment
for shares counted to
owners’ equity
14,316,59 -14,316,59 -14,316,598
4. Others
8.89 8.89 .89
(III) Profit Distribution
1. Provision of surplus
reserve
2. Provision for general
risks
3. Distributions to the
owners (or
shareholders)
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 for
with surplus reserve
4. Setting of the amount
involved in the
movement of the
beneficial plan carried
over to the retained
earnings
5. Other comprehensive
income carried-over to
the retained earnings
6. Others
(V) Special reserve
1. Provision in the
reporting period
2. Applied in the
reporting period
(VI) Others
IV. Ending balance of 442,968, 1,079,051, 32,902,19 -3,692,732 223,015,7 974,856,0 2,683,297, 2,683,303,4
5,795.30
the reporting period 881.00 841.53 8.89 .57 93.80 64.55 649.42 44.72
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
Amount in the reporting period
In CNY
The first half year of 2020
Other equity instruments Other
Items Capital Capital Less: shares Special Surplus Retained Total owners’
Preferred Perpetual comprehensiv Others
stock Others Reserve in stock reserve Reserve earnings equity
shares bond e income
I. Ending balance of the 442,968,88 1,086,885,75 71,267,118.7 235,701,180. 710,223,15 2,404,511,849.6
previous year 1.00 6.42 8 14 0.82 0
Plus: Change in
accounting policy
Correction of
previous errors
Others
II. Opening balance of the 442,968,88 1,086,885,75 71,267,118.7 235,701,180. 710,223,15 2,404,511,849.6
reporting year 1.00 6.42 8 14 0.82 0
III. Decrease/increase of
-14,797,000 -61,845,192.5 -53,819,130.1 -84,352,50
the report year (decrease -107,175,565.60
.00 3 0 3.17
is stated with “-“)
(I) Total comprehensive 1,281,873.
1,281,873.03
income 03
(II) Owners’ input and -14,797,000 -61,845,192.5 -53,819,130.1
-22,823,062.43
decrease of capital .00 3 0
1. Common shares -14,797,000 -64,385,948.2 -53,819,130.1
-25,363,818.15
contributed by the owner .00 5 0
2. Capital contributed by
other equity instruments
holders
3. Amount of payment for
shares counted to owners’ 2,784,096.62 2,784,096.62
equity
4. Others -243,340.90 -243,340.90
-85,634,37
(III) Profit Distribution -85,634,376.20
6.20
1. Provision of surplus
reserve
2. Distributions to the -85,634,37
-85,634,376.20
owners (or shareholders) 6.20
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 for with
surplus reserve
4. Setting of the amount
involved in the movement
of the beneficial plan
carried over to the
retained earnings
5. Other comprehensive
income carried-over to the
retained earnings
6. Others
(V) Special reserve
1. Provision in the
reporting period
2. Applied in the reporting
period
(VI) Others
IV. Ending balance of the 428,171,88 1,025,040,56 17,447,988.6 235,701,180. 625,870,64 2,297,336,284.0
reporting period 1.00 3.89 8 14 7.65 0
Amount in the previous period
In CNY
The first half year of 2019
Other equity instruments Other
Items Capital Capital Less: shares Special Surplus Retained Total owners’
Preferred Perpetual comprehensi Others
stock Others Reserve in stock reserve Reserve earnings equity
shares bond ve income
I. Ending balance of the 438,744,88 1,068,111,18 223,015,793
683,798,086.83 2,413,669,946.95
previous year 1.00 5.32 .80
Plus: Change in
accounting policy
Correction of
previous errors
Others
II. Opening balance of 438,744,88 1,068,111,18 223,015,793
683,798,086.83 2,413,669,946.95
the reporting year 1.00 5.32 .80
III. Decrease/increase of
the report year 4,224,000. 16,596,197.3 32,902,198.8
5,152,486.43 -6,929,515.15
(decrease is stated with 00 1 9
“-“)
(I) Total comprehensive
5,152,486.43 5,152,486.43
income
(II) Owners’ input and 4,224,000. 16,596,197.3 32,902,198.8
-12,082,001.58
decrease of capital 00 1 9
1. Common shares 4,224,000. 16,596,197.3 18,585,600.0
2,234,597.31
contributed by the owner 00 1 0
2. Capital contributed by
other equity instruments
holders
3. Amount of payment
for shares counted to
owners’ equity
14,316,598.8
4. Others -14,316,598.89
9
(III) Profit Distribution
1. Provision of surplus
reserve
2. Distributions to the
owners (or
shareholders)
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 for with
surplus reserve
4. Setting of the amount
involved in the
movement of the
beneficial plan carried
over to the retained
earnings
5. Other comprehensive
income carried-over to
the retained earnings
6. Others
(V) Special reserve
1. Provision in the
reporting period
2. Applied in the
reporting period
(VI) Others
IV. Ending balance of 442,968,88 1,084,707,38 32,902,198.8 223,015,793
688,950,573.26 2,406,740,431.80
the reporting period 1.00 2.63 9 .80
Legal representative: Huang Yongfeng Chief Financial Officer: Chen Zhuo Person in charge of the Accounting
Department: Tian Hui
III. Company Profile
FIYTA Precision Technology Co., 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 increased to
CNY 280,548,479.00 and CATIC Shenzhen holds 41.49% of the Company’s equity based capital.
On March 3, 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.
On December 20, 2018, approved by State-owned Assets Supervision and Administration Commission of
the State Council with the “Official Reply on FIYTA Holdings Ltd. to Implement the Restricted stock
Incentive Program”, GUO ZI KAO FEN [2018] No. 936, the Company awarded A-share restricted stock by
less than 4.277 million shares. After completion of implementation of the A-share Restricted stock
Incentive Program (Phase I) by January 30, 2019, the Company’s registered capital increased to CNY
442,968,881 and AVIC IHL holds 36.79% of the Company’s equity based capital.
According to the “Proposal on the Intentional Change of the Company Name and the Short Term of
A-share Securities reviewed and approved at 2019 3rd Extraordinary General Meeting of the Company
and approved by the Administration for Industry and Commerce of Shenzhen Municipality, commencing
from January 9, 2020, the Company changed its name from FIYTA Holdings Limited to FIYTA Precision
Technology Co., Ltd."
On April 30, 2020, the Company wrote off 14,730,000 B-shares repurchased by the Company, and on
June 9, 2020, the number of A-share restricted stock to the original three retired incentive objects which
were written-off after being repurchased was 67,000 in total. After the write-off, the total capital stock of
the Company decreased from 428,238,881 shares to 428,171,881 shares. The equity capital of the
Company held by AVIC IHL increased to 38.06%.
Ended June 30, 2020, the Company accumulatively issued altogether 428,171,881 shares. For the detail,
refer to Note VII. 53 “Share Capital”.
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 the comprehensive management department,
the Party construction work department, department of discipline inspection, audit and law, the financial
department, the human resource department, the strategy operation department, the data & information
department, the innovation & design department, the R & D department, the property operation
department, etc.
The principal business activities of the Company and its subsidiaries are: production and sales of various
pointer type mechanical watches, quartz watches and their driving units, spares and parts, various
timing apparatus, processing and wholesale of K gold watches and ornament watches; domestic trade,
materials supply and sales (excluding the commodities for exclusive operation, exclusive control and
monopoly); property management and lease; design service; self-run import & export business
(implemented according to the Document SHEN MAO GUAN DENG ZHENG ZI No. 2007-072). The
Company's legal representative is Huang Yongfeng.
The financial statements was approved and issued through the resolution of the Board of Directors dated
July 28, 2020.
There were 11 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".
IV. Basis for preparation of the financial statements
1. Preparation Basis
These financial statements are prepared in accordance with the Accounting Standards for Enterprises
promulgated by the Ministry of Finance and its application guidelines, interpretations and other relevant
provisions (collectively referred to as the "Accounting Standards for Enterprises"). In addition, the Group
disclosed the relevant financial information according to the Preparation Rules for Information Disclosure
by Companies Offering Securities to the Public No. 15 - General Provisions on Financial Reports (2014
Revision) promulgated by China Securities Regulatory Commission.
2. Operation on Going Concern Basis
The financial statements of the Company have been prepared on going concern basis.
The Group follows the accrual basis for bookkeeping. 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.
V. Important accounting policies and accounting estimates
Presentation on specific accounting policies and accounting estimates:
The Group determines the depreciation of fixed assets, amortization of intangible assets and income
recognition policies according to its own production and operation characteristics. For the specific
accounting policies, refer to Notes V.24, V.30 and V. 39.
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 enterprises truly and fully reflect the financial status of the Company as at June 30, 2020,
and the relevant information, such as the operation result and cash flow for January to June, 2020.
2. Fiscal period
The accounting period adopted by the Company is from January 1 to December 31 of the Gregorian
calendar.
3. Business Cycle
The Company's operating cycle is 12 months.
4. Recording Currency
The Company and its domestic subsidiaries use Renminbi (CNY) as the function currency for book
keeping. Except Switzerland based Montres Chouriet SA (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, Station-68 Limited (hereinafter referred to as “Station-68”), another subsidiary of
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 its financial statements. The
currency the Grouptakes in preparation of these financial statements is Renminbi.
5. The accounting treatment on combination of enterprises under the joint control and not under the joint control
(1) Combination of enterprises under the joint control
For the combination of an enterprise under the joint control, the assets and liabilities of the merged party
obtained by the merging party in process of consolidation are measured according to the book value of
the merged party in the consolidated financial statements of the eventual controlling party on the date of
merger, except for adjustment due to different accounting policies. The difference between the book value
of the net assets which the merging party obtains and the book value of the consideration which it pays
(or the total par value of the shares issued) shall adjust the capital reserve (capital stock premium). If the
capital reserve (capital stock premium) is not sufficient to be offset, the retained earnings shall be
adjusted.
Combination of enterprises under the joint control realized in steps through repeated transactions
In some financial statements, the share of the book value of the shareholders’ equity in the merged party
enjoyable in the eventual controller's consolidated financial statements as at the consolidation day is
taken as the initial investment cost of the long term equity investment; the difference between the initial
investment cost of the long term equity investment and the sum of the book value of the long term equity
investment before the consolidation plus the book value of the consideration newly paid for further
acquiring the shares on the consolidation day is used to adjust the capital reserve (capital stock premium);
if the capital reserve is not sufficient to be offset, the retained earnings should be adjusted.
In the consolidated financial statements, the assets and liabilities of the merged party that the merging
party obtains in a business combination shall be measured on the basis of their book value in the
consolidated financial statements of the eventual controller on the date of combination except the
adjustment carried out due to different accounting policies; difference between the sum of the book value
of the investment held before the consolidation plus the book value of the consideration newly paid on the
consolidation day is used to adjust the capital reserve (capital stock premium); if the capital reserve is not
sufficient to be offset, the retained earnings should be adjusted. For the long term equity investment held
before the merging party has acquired the control power over the merged party, the concerned profit and
loss are recognized commencing from the latter of the day when the original equity is acquired and the
day when the merging party and the merged party are under the eventual joint control to the date of
combination; the movement of other comprehensive income and other owner’s equity respectively write
down the retained earning or current profit and loss at the beginning of the period during the comparative
statements.
(2) Combination of enterprises not under the joint control
For the combination of enterprises not under the joint control, the combination cost is the fair value of the
assets, liabilities incurred or assumed and equity securities issued on the date of the acquisition for the
purpose of acquiring the control over the acquired party. On the date of acquisition, the assets, liabilities
and contingent liabilities of the acquired party are recognized based on the fair value.
The difference between the combination cost and the fair value share of the identifiable net assets of the
acquired party obtained in the merger is recognized as goodwill, and subsequent measurement is made
according to the accumulated impairment provision deducted from the cost; the difference between the
combination cost and the fair value share of the identifiable net assets of the acquired party obtained in
the combination is recorded in the current profit and loss after review.
Combination of enterprises not under the joint control realized in steps through repeated transactions
In individual financial statements, the sum of the book value of the equity investment held by the acquired
party before the acquisition date and the new investment cost on the purchase date shall be taken as the
initial investment cost of the investment. For the equity investment held before the date of acquisition,
other comprehensive income recognized by means of the equity method does not undergo accounting
treatment by using the this part of other comprehensive income on the date of acquisition; in disposal of
the investment, the accounting treatment is carried out on the same basis used by the invested entity in
direct disposal of the relevant assets or liabilities; the owner's equity recognized as a result of changes in
owner's equity other than the net profit and loss of the investee, other comprehensive income and profit
distribution are transferred to the current profit and loss during the disposal of the investment. If the equity
investment held before the acquisition date is measured at fair value, the accumulated fair value change
originally included in other comprehensive income is transferred to the current profit and loss when it is
calculated according to the cost method.
In the consolidated financial statement, the combined cost is the sum of the consideration paid on the
acquisition date and the fair value of the equity held by the acquired party prior to the acquisition date.
The equity held by the acquired party before the acquisition date is re-measured according to the fair
value of the equity on the acquisition date, and the difference between the fair value and the book value is
recorded in the current income; the equity held by the acquired party before the acquisition date involves
other comprehensive income, and changes in other owners' equity converted into current income on the
acquisition date, except for other comprehensive income generated by changes in net liabilities or net
assets of the investee due to re-measurement of the defined income plan.
(3) Disposal of the relevant transaction expenses in business combination
Intermediary fees in connection with audit, law service, appraisal and consulting, etc. incurred to the
business combination and other relevant administrative fees are counted to the current profit and loss at
the time of incurrence. The transaction costs of equity securities or debt securities issued as merger
consideration are included in the initial confirmation amount of equity securities or debt securities.
6. Method of preparing consolidated financial statements
(1) Consolidation scope
The consolidation scope of the consolidated financial statements is determined on the basis of control.
Control refers to that the Company has he power over the investee, enjoys variable return by participating
in the relevant activities of the investee and is able to impact the amount of return by using the power to
the investee. A subsidiary refers to the entity under control of the Company (including the dividable part,
structured entity, etc. in the enterprise and the investee, etc.)
(2) Method of preparing consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and its
subsidiaries, and prepared by the Company according to other relevant information. In preparing the
consolidated financial statements, the accounting policies and accounting period of the Company and its
subsidiaries are required to maintain consistent, and the significant inter-company transactions and
balances are written off.
The newly increased subsidiary as well as business as a result of a business combination under joint
control during the reporting period, it is deemed that the subsidiaries and business are incorporated into
the consolidation scope of the Company from the controlling date by the ultimate controlling party, and the
operating results and cash flows from the date are included in the consolidated income statement and
cash flow statement.
The newly increased subsidiary as well as business as a result of a business combination not under joint
control, the subsidiaries and business from the acquisition date and the income, expenses and profit as at
the end of reporting period are included in the consolidated income statement, and the cash flow is
included in the consolidated statement of cash flows.
The part in the shareholders’ equity of the subsidiaries that did not belong to the Company shall be
separately presented as minority interest under the shareholders’ equity in the consolidated balance
sheet. The share attributable to minority interests of the subsidiaries in current profit and loss, shall be
presented as “minority interests” under the net profit in the consolidated income statement. When the loss
of the subsidiaries shared by minority shareholders exceeded the shares enjoyed by the minority
shareholders in the owners’ equity of the subsidiaries in the beginning period, the balance shall offset the
minority interests.
(3) Acquisition of the minority shareholders’ equity of the subsidiaries
Where the Company acquires a minority interest from a subsidiary’s minority shareholders or disposes of
a portion of an interest in a subsidiary without a change in control, the transaction is treated as equity
transaction, and the book value of shareholder’s equity attributed to the Bank and to the minority interest
is adjusted to reflect the change in the Bank’s interest in the subsidiaries. The difference between the
proportion interests of the subsidiary’s net assets being acquired or disposed and the amount of the
consideration paid or received is adjusted to the capital reserve in the consolidated balance sheet, with
any excess adjusted to retained earnings.
(4) Losing control over the subsidiary
When the Company loses control over subsidiary because of disposing part of equity investment or other
reasons, the remaining part of the equity investment is re-measured at fair value at the date when losing
control over the subsidiary. A gain or loss is recognized in profit or loss for the current period and is
calculated by the aggregate of the consideration received in disposal and the fair value of remaining part
of the equity investment deducting the share of carrying value of net assets in proportion to previous
shareholding percentage in former subsidiary since acquisition date and the goodwill.
Other comprehensive income related to the former subsidiary is transferred to profit or loss for the current
period when the control is lost, except for the comprehensive income arising from the movement of net
liabilities or assets in the former subsidiary’s re-measurement of defined benefit plan.
7. Classification of Joint Venture Arrangements and Accounting Treatment of Joint Operations
The joint venture arrangement refers to an arrangement between two or more parties control jointly. The
joint venture of the Group was divided in co-operation and joint venture.
(1) Joint Operation
Joint operation refers to the joint venture arrangement in which the Group enjoys the assets related to the
arrangement and assumes the liabilities related to the arrangement.
The Group recognizes the following items related to the interests of the joint operation, and the
accounting treatment is in accordance with the related accounting standards for enterprises:
A. Confirmed the assets held individually and the common assets held in accordance with the shares;
B. Confirmed the liabilities assumed separately and liabilities shared commonly in accordance with the
shares;
C. Confirmed income from the sale of joint operation shares;
D. Confirmed income from the joint operation in accordance with the shares;
E. Recognized expense occurred separately and confirmed the costs of joint operation in accordance with
the shares.
(2) Joint Venture
Joint venture refers to the joint venture arrangements that the Group only has the rights of arranged net
assets.
The accounting treatment of the joint venture investment in the Group was in accordance with long-term
equity investment on equity method.
8. Standard for confirming cash and cash equivalent
Cash refers to the cash in stock of the Company and the deposit in hand available for payment at any
time. The Company takes short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value as cash equivalents.
9. Foreign currency transactions and translation of foreign currency statements
(1) Foreign Currency Translation
For the foreign currency businesses incurred in the Group, the amount in a foreign currency shall be
translated into amount in the functional currency at the spot exchange rate of the transaction date.
On the date of balance sheet, foreign currency monetary items should be translated into functional
currency using the spot exchange rate at the balance sheet date. Exchange differences arising from the
spot exchange rates at the balance sheet date being different from those at which the monetary items
were translated on initial recognition during the period or those of previous balance sheet dates should be
recognized in current period profit and loss. Non-monetary items that are measured at historical cost are
still using the spot exchange rate at the transaction date. Non-monetary items that are measured at fair
value adopts the spot exchange rates at the date when the fair value was determined, and the exchange
differences thus arising should be recognized in the profit or loss for the period.
(2) Translation of Foreign Currency Financial Statement
On the balance sheet date, when the foreign currency financial statements of overseas subsidiaries are
translated, the spot exchange rate on the balance sheet date shall be used for the translation of the
assets and liabilities items, and the spot exchange rate on the date of incurrence shall be used for the
translation of the shareholders' equity items except the "retained earnings".
The items of incomes and expenses in the profit statement are translated at the current average
exchange rate on the transaction occurring date.
All the items in the cash flow statement are translated based on the spot rate of the day of incurrence of
the cash flow. The amount of influence of exchange rate changes on cash is taken as the adjustment item,
and the item of "influence of exchange rate changes on cash and cash equivalents" is separately listed in
the cash flow statement.
The difference resulting from the translation of the financial statements is reflected under the "Other
comprehensive income" under the item of stockholders' equity in the balance sheet.
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.
10. Financial instruments
Financial instruments refer to any contract that gives rise to a financial asset of the Bank and a financial
liability or equity instrument of other entities.
(1) Recognition and derecognition of financial instruments
A financial asset or financial liability is recognized when the Group becomes a party to a financial
instrument contract.
A financial asset is derecognized when one of the following criteria is met:
① the contractual rights to the cash flows from the financial asset expire;
② The Company transfers the financial asset and the transfer qualifies under the criteria for the
derecognition of financial assets prescribed by transfer of financial assets as stated below.
The Company should derecognize a financial liability or part of a financial liability when the present
obligation associated with the financial liability ceases or partly ceases. The Group (debtor) enters into an
agreement with a creditor so as to substitute the existing financial liabilities by way of any new financial
liability, and if the contractual stipulations regarding the new financial liability is substantially different from
that regarding the existing financial liability, it shall terminate the recognition of the existing financial
liability, and shall at the same time recognize the new financial liability.
The financial assets purchased or sold in any conventional manner are made accounting confirmation
and termination of confirmation on the date of transaction.
(2) Classification and measurement of financial assets
In the initial recognition, the Group classifies financial assets into the following three categories according
to the business model of financial assets management and the contractual cash flow characteristics of
financial assets: financial assets measured at amortized cost, financial assets measured at fair value and
whose movements are included in other comprehensive income, and financial assets measured at fair
value and whose movements are included in current profit and loss.
Financial assets measured based on the amortized cost
The Group shall also meet the following conditions and is not designated as a financial asset measured at
fair value and its movements recorded in the current profit and loss, classified as a financial asset
measured at the amortized cost:
The business model of the Group to manage the financial assets is to collect the contract cash flow as the
target;
According to the contractual terms of the financial asset，the cash flow created on the specific date is
exclusively for payment of the principal and the interest based on the outstanding amount of the principal.
After the initial recognition, the effective interest rate method is adopted to measure the financial assets
by amortized cost. Profit or loss of financial assets measured at the amortized cost but not belonging to
part of any hedge relationship is recorded in the current profit and loss upon termination of recognition,
amortization or recognition of the impairment in accordance with the effective interest rate method.
Financial assets measured at fair value with the movement recorded in the other comprehensive income.
The Group classifies the financial assets that as well meet the following conditions and not designated as
fair value-measured financial assets and whose movement is recorded in the current profit and loss as
the financial assets that are measured at fair value and whose movement is recorded in other
comprehensive income:
The Group’s business model for managing the financial asset is aimed at both collecting contractual cash
flow and selling the financial asset according to the contractual terms of the financial asset，the cash flow
created on the specific date is exclusively for payment of the principal and the interest based on the
outstanding amount of the principal.
After the initial recognition, subsequent measurement of such financial assets is carried out at fair value.
Interest, loss from impairment loss or profit calculated by the effective interest rate method and exchange
profit and loss are recorded in the current profit and loss, while other profit and loss are recorded in other
comprehensive income. When the recognition is terminated, the accumulated profit or loss included in
other comprehensive income before is transferred out from other comprehensive income and included in
the current profit and loss.
Financial assets measured at fair value with the movement recorded in the current profit and loss
Except for the above-mentioned financial assets measured at amortized cost and at fair value with
movement included in other comprehensive income, the Group classifies all other financial assets as
financial assets at fair value with movement included in current profits and losses. At the time of initial
recognition, in order to eliminate or significantly reduce accounting mismatches, the Group irrevocably
designates some financial assets that should be measured at amortized cost or at fair value and whose
movement is included in other comprehensive income as being measured at fair value and its movement
included in the financial assets of the current profit and loss.
After initial recognition, such financial assets are subsequently measured at fair value, and the resulting
profit or loss (including interest and dividend income) are included in the current profit and loss, unless the
financial assets are part of the hedging relationship.
However, for non-trading equity instrument investments, the Group irrevocably designates them as
financial assets measured at fair value and whose movement is included in other comprehensive income
at the time of initial recognition. The designation is made on the basis of a single investment, and the
related investment meets the definition of an equity instrument from the issuer's perspective.
After the initial recognition, subsequent measurement of such financial assets is carried out at fair value.
Dividend income meeting the conditions is included in profit and loss, and other profit or loss and the
movement of the fair value are included in other comprehensive income. When the recognition is
terminated, the accumulated profit or loss included in other comprehensive income before is transferred
out from other comprehensive income and included in the retained earnings.
The business model of managing financial assets refers to how the Group manages financial assets to
generate cash flow. The business model determines whether the source of the cash flow of the financial
assets managed by the Group is to collect contractual cash flows, sell financial assets or a combination of
both. The Group determines the business model for managing financial assets based on objective facts
and the specific business objectives of managing financial assets determined by key management
personnel.
The Group evaluates the contractual cash flow characteristics of financial assets to determine whether
the contractual cash flow generated by the relevant financial assets on a specific date is only the payment
of principal and interest based on the outstanding principal amount. Where the principal refers to the fair
value of financial assets at the time of initial recognition; interest includes consideration for the time value
of money, credit risks related to the outstanding principal amount in a specific period, and other basic
borrowing risks, costs and profits. In addition, the Group evaluates contract terms that may lead to
changes in the time distribution or amount of contractual cash flows of financial assets to determine
whether they meet the above-mentioned contractual cash flow characteristics.
Only when the Group changes the business model of managing financial assets, all affected financial
assets will be reclassified on the first day of the first reporting period after the business model is changed;
otherwise the financial assets shall not be reclassified after initial recognition.
Financial assets are measured at fair value at the tune of initial recognition. For the financial assets
measured at fair value with the movement counted to the current profit and loss, the relevant transaction
expenses are directly included in the current profit and loss; the relevant transaction expenses for other
categories of financial assets are counted to the amount of the initial recognition. For accounts receivable
arising from the sale of products or the provision of labor services that do not contain or consider
significant financing components, the amount of consideration that the Group is expected to be entitled to
receive is the initial confirmation amount.
(3) Classification and measurement of financial liabilities
In the initial recognition, financial liabilities are classified as the financial liabilities measured at the
amortized cost and that measured at fair value with the movement counted to the current profit and loss.
For the financial assets which have not been classified as those measured at fair value with the
movement counted to the current profit and loss, the relevant transaction expenses are directly counted to
the amount of the initial recognition.
Financial liabilities measured at fair value with the movement recorded in the current profit and loss
Financial liabilities measured at their fair value with the movement counted to the current profit and loss
include transactional financial liabilities and the financial liabilities measured at fair value with the
movement counted to the current profit and loss directly designated at the initial recognition. For such
financial liabilities with the follow-up measurement carried out at fair value, the profit or loss formed due to
the movement of the fair value and dividends and interest expenses related to these financial liabilities
included in the current profit and loss.
Financial liabilities measured based on 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.
Distinction between financial liabilities and equity instruments
Financial liabilities refer to liabilities that meet one of the following conditions:
① Contractual obligations to deliver cash or other financial assets to other parties.
②Under a potentially unfavorable condition, the contractual obligation to exchange financial assets or
financial liabilities with other parties.
③ A non-derivative contract that must use or may use the Company’s own equity instruments for
settlement in the future, and the Company shall deliver a variable amount of its own equity instrument
according to the contract.
④ A derivative instrument contract that must use or may use the Company’s own equity instruments for
settlement in the future, except for derivative instrument contract that exchanges a fixed amount of cash
or other financial assets for a fixed amount of its own equity instruments.
Equity instrument refers to the contract that can certify possession of the residual equity of the Company
in the assets after deducting all liabilities.
If the Group cannot unconditionally avoid the delivery of cash or other financial assets to perform a
contractual obligation, the contractual obligation meets the definition of a financial liability.
If a financial instrument must use or may use the Group’s own equity instruments for settlement, it is
necessary to consider whether the Group’s own equity instruments are used as a substitute for cash or
other financial assets to settle the instrument, or to enable the holder of the instrument to enjoy the
residual equity in the issuer's assets after deducting all the liabilities. If it is the former, the instrument is a
financial liability of the Group; if it is the latter, the instrument is an equity instrument of the Group.
(4) Fair value of financial instruments
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.
The Group measures related assets or liabilities at fair value, assuming that the orderly transaction of
selling assets or transferring liabilities takes place in the main market of related assets or liabilities; if there
is no main market, the Group assumes that the transaction is most beneficial to the market of the related
assets or liabilities. The main market (or the most favorable market) is the trading market that the Group
can enter on the measurement date. The Group adopts the assumptions used by market participants to
maximize their economic benefit when pricing the asset or liability.
For financial assets or financial liabilities in an active market, the Group uses quoted prices in the active
market to determine their fair value. If there exists no active market for a financial instrument, the Group
uses valuation techniques to determine its fair value.
When non-financial assets are measured at fair value, the ability of market participants to use the asset
for the best use to generate economic benefits, or the ability to sell the asset to other market participants
who can be used for the best use to generate economic benefits is taken into consideration.
The Group adopts valuation techniques that are applicable under the current circumstances and have
sufficient available data and other information to support, take priority to use the relevant observable input
values; use unobservable input values only if the observable input values are not available or not
practicable.
For assets and liabilities that are measured or disclosed at fair value in financial statements, the fair value
level to which they belong is determined based on the lowest level of input value that is important for fair
value measurement as a whole: the input value of the first level is the unadjusted quotation of the same
asset or liability in the active market that can be obtained on the measurement date; the second-level
input value is the directly or indirectly observable input value of related assets or liabilities other than the
first-level input value; the input value of the third level is the unobservable input value of the related assets
or liabilities.
On each balance sheet date, the Group re-evaluates the assets and liabilities recognized in the financial
statements that are continuously measured at fair value to determine whether there is a conversion
between the fair value measurement levels.
(5) Impairment of financial assets
Based on expected credit losses, the Group performs impairment accounting treatments on the following
items and recognizes the provision for loss:
Financial assets measured based on the amortized cost;
Creditor's rights investment measured at fair value with the movement counted in the other
comprehensive income;
Measurement of the predicted credit loss
Expected credit loss refers to the weighted average of the credit loss of financial instruments weighted
based on the risk of default. Credit loss refers to the difference between all contractual cash flows
receivable under the contract and all cash flows expected to be received by the Group discounted at the
original effective interest rate, that is, the present value of all cash shortages.
The Group measures the expected credit losses of financial instruments at different stages. If the credit
risk has not increased significantly since the initial recognition, the financial instrument is at the first stage,
and the Group measures the provision for the loss according to the expected credit loss within the next 12
months; if the credit risk has increased significantly since the initial confirmation but impairment of the
credit has not yet occurred, the financial instrument is at the second stage, the Group measures the
provision for the loss according to the expected credit loss of the financial instrument for the entire
duration; if impairment of the credit has taken place after the initial recognition, the financial instrument is
at the third stage, and the Group measures the provision for the loss according to the expected credit loss
of the financial instrument for the entire duration.
For financial instruments with lower credit risk on the balance sheet date, the Group assumes that its
credit risk has not increased significantly since the initial recognition, and measures the provision for the
loss according to the expected credit loss within the future 12 months.
The expected credit loss for the entire duration refers to the expected credit loss caused by all possible
default events that may occur during the entire expected lifetime of a financial instrument. Expected credit
loss in the next 12 months refers to the expected credit loss caused by the event of a financial instrument
default that may occur within 12 months after the balance sheet date (if the expected duration of the
financial instrument is less than 12 months, then the expected duration). It is part of the expected credit
loss in the entire duration.
When measuring expected credit losses, the longest period that the Group needs to consider is the
longest contract period for which the Group faces credit risk (including the consideration of the option of
renewal).
For the financial instrument at the first stage or the second stage or with lower credit risk, the Group
calculates the interest income according to the book balance without deduction of the provision for
impairment and the effective interest rate. For the financial instrument at the third stage, the Group
calculates the interest income according to the book balance less the amortized cost after provision for
the impairment and effective interest rate
Regarding notes and accounts receivable, regardless of whether there is a significant financing
component, the Group always measures its provision for loss at an amount equivalent to expected credit
losses during the entire duration.
The Group divides the portfolio of notes receivable and accounts receivable based on credit risk
characteristics, and calculates the expected credit losses on the basis of the portfolio. The basis for
determining the portfolio is as follows:
A. Notes receivable
Notes receivable portfolio 1: Bank acceptance
Notes receivable portfolio 2: Trade acceptance
B. Accounts receivable
Accounts receivable portfolio 1: Receivables from related parties within the scope of consolidation
Accounts receivable portfolio 2: Accounts receivable from other customers
For notes receivable and accounts receivable divided into portfolios, the Group refers to historical credit
loss experience with combination of the current conditions and forecasts of future economic conditions,
and compiles a comparison table of accounts receivable aging and the entire duration of expected credit
loss rate, and calculate the expected credit loss.
Other receivables
The Group divides the portfolio of other receivables based on credit risk characteristics, and calculates
the expected credit losses on the basis of the portfolio. The basis for determining the portfolio is as
follows:
Other receivables portfolio 1: Deposit and margin receivable
Other receivables portfolio 2: Reserve receivable from employees
Other receivables portfolio 3: Advance for another to the social insurance premium receivable
Accounts receivable portfolio 4: Receivables from related parties within the scope of consolidation
Other receivables portfolio 5: Other receivables
For other receivables classified into portfolios, the Group calculates expected credit losses based on the
default risk exposure and the expected credit loss rate within the next 12 months or the entire duration.
Creditor’s rights investment and other creditor’s right investment
For creditor’s right investments and other creditor’s right investments, the Group calculates the expected
credit loss with reference to the nature of the investment according to various types of counterparties and
risk exposures, through the default risk exposure and the expected credit loss rate within the next 12
months or the entire duration loss.
Assessment of a significant increase in credit risk
The Group compares the default risk of financial instruments on the balance sheet date and the risk of
default on the initial recognition day to determine the relative change in the default risk of the financial
instrument during the expected life of the financial instrument to assess whether the credit risk of the
financial instrument has increased significantly since the initial recognition.
When determining whether the credit risk has increased significantly since the initial recognition, the
Group considers reasonable and evidence-based information that can be obtained without unnecessary
additional costs or efforts, including forward-looking information. The information the Group concerns
includes:
A debtor has failed to pay the principal and interest on the due date of the contract;
A serious deterioration in the external or internal credit rating (if any) of the financial instrument that has
occurred or is expected;
A serious deterioration in the debtor’s operating results that has occurred or is expected;
The existing or anticipated changes in technology, market, economic or legal environment will have a
significant adverse impact on the debtor's ability to repay the Group.
According to the nature of financial instruments, the Group assesses whether the credit risk has
increased significantly on the basis of individual financial instruments or a combination of financial
instruments. When evaluating financial instruments based on a portfolio of financial instruments, the
Group may classify financial instruments based on common credit risk characteristics, such as overdue
information and credit risk ratings.
Financial assets which have experienced credit impairment
On the balance sheet date, the Group assesses whether financial assets measured at amortized cost and
debt investments measured at fair value with the movement included in other comprehensive income
have experienced credit impairment. When one or more events that have an adverse effect on the
expected future cash flow of a financial asset occur, the financial asset becomes a financial asset with
credit impairment. Evidence of credit impairment of financial assets includes the following observable
information:
The issuer or debtor has experienced serious financial difficulty;
The debtor has violated the contract, such as the payment of the interest or the principal in default or
overdue, etc.;
Due to economic or contractual considerations related to the debtor’s financial difficulty, the Group gives
the debtor concession that the debtor may not make under any other circumstances;
The debtor is likely to go into liquidation or carry out other financial restructuring;
The issuer or debtor’s financial difficulty caused the disappearance of the active market for the financial
asset.
Presentation of the provision for the predicted credit loss
In order to reflect the changes in the credit risk of financial instruments since the initial recognition, the
Group re-measures expected credit losses on each balance sheet date, and the resulting increase in loss
provision or the amount of reversal shall be counted as impairment loss or profit in the current profit and
loss. For financial assets measured at amortized cost, the reserve for loss is deducted from the book
value of the financial asset listed in the balance sheet; for creditor’s right investments which is measured
at fair value and whose movement is included in other comprehensive income, the Group recognizes the
provision for the loss in other comprehensive income, and the book value of the financial asset is not
offset.
Writing-off
If the Group no longer reasonably expects that the contractual cash flow of a financial asset can be
recovered in full or in part, it will directly write down the book value of the financial asset. Termination of
recognition of the relevant financial assets formed from such writing-down This situation usually occurs
when the Group determines that the debtor has no assets or sources of income that can generate
sufficient cash flow to repay the amount to be written down. However, in accordance with the Group's
procedures for recovering due payments, the financial assets that have been written down may still be
affected by execution activities.
If the written-down financial assets are later recovered, they shall be included in the current profit and loss
as the reversal of the impairment loss.
(6) Transfer of financial assets
Transfer of financial assets refers to when the Group(the transferor) transfers or delivers a financial asset
to a party (the transferee) other than the issuer of the financial asset.
The Group derecognizes a financial asset when it transfers substantially all the risks and rewards of
ownership of the asset to the transferee, and the Group does not derecognize a financial asset when it
retains substantially all the risks and rewards of ownership of the asset.
If the Group has neither transferred nor kept substantially all of risks and remunerations on the ownership
of the financial asset, treatment is made respectively based on the following conditions: in case control
over the financial asset has been given up, recognition of that financial asset as well and the assets and
liabilities generated are terminated; in case control over the financial asset has not been given up,
relevant financial assets are recognized based on the extent continually involved with the transferred
financial asset, and relevant liabilities are recognized accordingly.
(7) Setoff of financial assets and financial liabilities
When the Group has the legal rights of setting off the recognized financial assets and financial liabilities
and can currently these legal rights now, and if the Group 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.
(8) Financial instruments that bear the risk of exchange rate fluctuation
Exchange rate risk refers to the risk of fluctuations in the fair value of financial instruments or future cash
flows due to movement in foreign exchange rates. Exchange rate risk may be derived from financial
instruments denominated in foreign currencies other than the functional currency. The Company's
overseas subsidiaries are mainly settled in Hong Kong dollars and Swiss francs. The Company's
monetary assets and liabilities denominated in foreign currencies are all affected by the risk of foreign
currency exchange rate fluctuations.
11. Notes receivable
For the detail, refer to Note V. Important Accounting Policies and Accounting Estimates and 10. Financial
Instruments.
12. Accounts receivable
For the detail, refer to Note V. Important Accounting Policies and Accounting Estimates and 10. Financial
Instruments.
13. Financing with accounts receivable
Inapplicable
14. Other receivables
Determination and accounting treatment of the predicted credit loss of other receivables
For the detail, refer to Note V. Important Accounting Policies and Accounting Estimates and 10. Financial
Instruments.
15. Inventories
(1) Classification of Inventories
The Group’s inventories are classified into raw materials,products-in-process and commodity in stock,etc.
(2) Valuation of Inventories Delivered
The Group's inventories are priced according to the actual cost. Raw materials, commodity in stock, etc.
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 determining net realizable value of inventories and method for providing reserve for price
falling of inventories
The net realizable value of the inventories refers to the amount of the estimated sales price of the
inventory less the estimated sales costs to incur at the time of completion, estimated sales expenses and
relevant taxes. In determining the net realizable value of inventory, with the obtained valid evidence as the
base, the purpose of holding the inventory and the influence from the events after the balance sheet date
is taken into consideration at the same time..
On the balance sheet date, if the cost of inventories is higher than its net realizable value, provision for
falling prices of inventories is made. The Group makes provision for inventory depreciation for
self-produced FIYTA watch inventory according to model classification, and makes provision for inventory
depreciation for brand watches sold in accordance with individual inventory items. On the balance sheet
date, if the factors affecting the previous write-down of the inventory value have disappeared, the
provision for price falling of inventory shall be reversed within the amount originally provided.
(4) Inventory system
The Company adopts the perpetual inventory system in inventory accounting.
(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.
16. Contract assets
1. Method and criteria for confirmation of contract assets
The Company presents contract assets or contract liabilities in the balance sheet based on the
relationship between performance obligations and customer payments. The Company is entitled to
receive consideration for the transfer of goods or services to customers (while such right depends on
other factors other than the passage of time) listed as contract assets. Contract assets and liabilities
under the same contract are presented in net. The Company's right to unconditionally (only depending on
the passage of time) collect consideration from the customers are separately stated as accounts
receivable.
2. Recognition and accounting treatment of the predicted credit loss of contract assets
For details on the recognition and accounting treatment method of the predicted credit losses of contract
assets, please refer to the accounting treatment of accounts receivable under the new financial
instrument standards in Note V. 10 Testing Methods of Financial Asset Impairment and Accounting
Treatment Method.
17. Contract cost
The contract costs include the incremental cost incurred in obtaining the contract and the cost for
performance of the contract.
The incremental cost incurred in obtaining the contract refers to the cost which will not incur as long as the
Group does not obtain the contract (such as sales commission, etc.) If the cost is expected to be
recoverable, the Group recognizes it as a contract acquisition cost as an asset. The Group's expenses
incurred in obtaining the contract other than the incremental cost expected to be recovered are included
in the current profit and loss when incurred.
If the cost incurred in implementing the contract does not fall within the scope of other accounting
standards and regulations such as inventory and meets the following conditions at the same time, the
Group shall recognize it as an asset as the contract performance cost:
① The cost is directly related to a current or expected contract, including direct labor, direct materials,
manufacturing expenses (or similar expenses), clearly borne by the customer, and other costs incurred
solely due to the contract;
② This cost increases the Group's resources for future performance obligations;
③ This cost is expected to be recoverable.
Assets recognized for contract acquisition costs and assets recognized for contract performance costs
(hereinafter referred to as "assets related to contract costs") are amortized on the same basis as the
revenue recognition of goods or services related to the asset and included in the current profit and loss. (If
the amortization period does not exceed one year, it shall be included in the current profit and loss when it
incurs.)
When the book value of the asset related to the contract cost is higher than the difference between the
following two items, the Group makes provision for impairment of the excess part and recognizes it as an
asset impairment loss:
①The residual consideration that the Group expects to obtain due to the transfer of the goods or services
related to the asset;
② The costs that shall incur for transferring the related goods or services as estimated. The contract
performance cost recognized as an asset is presented in the item of “inventories” with the amortization
period not exceeding one year or one normal business cycle at the initial recognition, while it is presented
in the item of "other non-current assets" with the amortization period not exceeding one year or one
normal operation cycle.
The contract acquisition cost recognized as an asset is presented in the item of “other current assets” with
the amortization period not exceeding one year or one normal business cycle at the initial recognition,
while it is presented in the item of "other non-current assets" with the amortization period not exceeding
one year or one normal operation cycle at the initial recognition.
18. Classified as assets held for sale
Inapplicable
19. Equity investment
Inapplicable
20. Other equity investment
Inapplicable
21. Long term accounts receivable
Inapplicable
22. Long-term equity investments
Long-term equity investments include equity investments in subsidiaries, joint ventures and associates.
Those that the Group may exert significant influence on the investees are associates of the Group.
(1) Recognition of initial investment cost
Long-term equity investment that forms a business combination: For a long-term equity investment
acquired through a business combination involving enterprises under joint control, the initial investment
cost of the long-term equity investment is the absorbing party’s share of the book value of the owners’
equity of the party being absorbed at the date of combination; for a long-term equity investment acquired
through a business combination involving enterprises not under joint control, the initial investment cost of
the long-term equity investment is the merge cost.
For a long-term equity investment acquired through other ways rather than a business combination:
long-term equity acquired by cash paid, the initial investment cost is the actual payment; long-term equity
acquired by the issuing of equity securities, the initial investment cost is the fair value of the equity
securities.
(2) Subsequent Measurement of Long-term Equity Investment
Where the Bank can exercise joint control over the investee, a long-term equity investment is accounted
for using the cost method and a long-term equity investment is accounted for using the equity method for
associated enterprises and joint ventures.
For long-term equity investments accounted for in the cost method, except for payments made actually
from the investments or cash dividends or profits contained in the consideration which have been
declared but not yet paid, the cash dividends or profits which have been declared distribution by investees
are recognized and recorded in the current profit and loss as investment gains.
For long term equity investment calculated by the equity method, if the initial cost of a long-term equity
investment is greater than the investor’s attributable share of the fair values of the net identifiable assets
of the investee enterprise at the acquisition date, no adjustment is made to the initial investment cost. If
the initial cost of a long-term equity investment is less than the investor’s attributable share of the fair
value of the net identifiable assets of the investee enterprise at the acquisition date, the difference is
charged to profit or loss for the current period, and the cost of the long-term equity investment is adjusted
accordingly.
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 (other capital reserve). In recognizing the share
of the net profit or loss of an investee enjoyable by the Company, the Company takes the fair value of the
distinguishable net assets of the investee at the time of investment as the base and recognizes it after the
net profit of the investee has been recognized after adjustment.
If due to additional investment or other reasons, it is possible to exert significant influence on the investee
or implement joint control but does not constitute control, on the conversion date, the total of the fair value
of the original equity plus the new investment cost shall be used as the initial investment cost calculated
according to the equity method. The difference between the fair value and the book value of the original
equity on the conversion date, and the accumulated fair value changes originally included in other
comprehensive income are transferred to the current profit and loss accounted for by the equity method.
If the joint control over or significant influence on the investee is lost due to the disposal of part of the
equity investment, the remaining equity after the disposal shall undergo the accounting treatment
according to the "Accounting Standards for Enterprises No. 22-Recognition and Measurement of
Financial Instruments instead on the day when joint control or significant influence is lost. The difference
between the fair value and the book value is counted in the current profit and loss. 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 the equity method is terminated; the
movement of the other owner's equity in connection with the original equity investment is transferred into
the current profit and loss.
If the control over an investee is lost due to the disposal of part of the equity investment and other reasons,
the residual equity after disposal may implement joint control or exert significant influence on the investee,
the equity method may be used for accounting instead, and the remaining equity shall be regarded as
self-acquisition, and the equity method shall be adopted for accounting adjustment; if the residual equity
after disposal can no longer jointly control or exert significant influence on the investee, the accounting
treatment shall be carried out in accordance with the relevant provisions of the Accounting Standards for
Enterprises No. 22 - Recognition and Measurement of Financial Instruments, and the difference between
the fair value and the book value on the day when the control is lost shall be recorded in the current profit
and loss.
If the Company’s shareholding proportion decreases due to the increase of capital by other investors so
that its control power has lost but can still exercise joint control over or exert significant influence on the
invested entity, the new shareholding proportion shall be used to confirm the Company’s share of the
invested entity due to capital increase and the increase in the share of net assets due to share expansion
and the difference between the original book value of the long-term equity investment corresponding to
the decline in the shareholding proportion which should be carried forward is included in the current profit
and loss; and subsequently according to the new shareholding proportion, it is deemed to be adjusted
using the equity method when the investment is obtained
The unrealized internal transaction profit and loss between the Group and associates and joint ventures
are calculated based on the shareholding proportion attributable to the Group, and the investment profit
and loss are recognized on the basis of offsetting. However, the loss from the unrealized internal
transaction between the Group and an investee shall not be offset if the loss belongs to impairment of the
assets assigned.
(3) Recognition basis of the joint control over and significant influence upon an invested entity
Joint control refers to the joint control over some arrangement made according to the relevant agreement
and the relevant activities for the arrangement must be jointly decided by all the parties sharing the control
power. In judging whether there exists joint control, firstly determine whether all the participants or a
combination of participants collectively control the arrangement, and secondly determine whether the
decision-making on the related activities of the arrangement must be unanimously agreed by the
participants collectively controlling the arrangement. If all the participants or a group of participants must
act in concert to determine the relevant activities of an arrangement, then all the participants or the group
of the participants are considered as collectively in control of the arrangement; If there exists a portfolio of
two or more participants that can collectively control an arrangement, it does not constitute joint control.
When judging whether there exists joint control, the protective right enjoyed shall not be taken into
consideration.
Significant influence refers to the investor's power of participation in making an investee's financial and
operation policies but the investor cannot control or jointly control with other parties to make such policies.
When determining whether significant influence may be exerted on the investee, it is necessary to
consider the influence from that the voting shares of the investee directly or indirectly held by the investor
and the currently executable potential voting rights held by the investor and other parties are assumed to
be convered into equity of the investee,including the influence of current convertible warrants, share
options and convertible corporate bonds issued by the investee.
When the company directly or indirectly through its subsidiaries owns more than 20% (including 20%) but
less than 50% of the voting shares of the investee, it is generally considered to have a significant
influence on the investee, unless there is clear evidence that this condition is not allowed to participate in
the production and operation decision-making of the invested entity, which means no significant influence
has formed; when the Group owns less than 20% (with 20% exclusive) of the voting shares of the
investee, it is generally not considered to have a significant influence on the investee unless there is clear
evidence that it can participate in the production and operation decision-making of the investee under
such circumstances, which means significant influence has formed.
(4) Method for testing the impairment and provision for impairment
About the investment in subsidiaries, associates and joint ventures, see Note V.31 Method of Provision for
Impairment of Assets
23. Investment based real estate
Measurement model for investment real estate
Measured based on the cost method
Depreciation or amortization method
About the depreciation method of investment based real estate and the depreciation method of fixed
assets, see Note V.24.
24. Fixed asset
(1) Recognition of fixed assets
Fixed assets are tangible assets that are held for product production, supply of services, lease or
operation and administration with useful life more than one fiscal 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. The Group's fixed assets are initially measured at the
actual cost at the time of acquisition.
(2) Depreciation methods
Categories Depreciation methods Depreciation life Residual rate Yearly depreciation rate
Plant & buildings Average service life method 20 -35 5% 4.80%-2.70%
Machinery & equipment Average service life method 10 5%-10% 9.50%-9.00%
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
Inapplicable
25. Construction-in-process
The Group determines the cost of construction-in-process 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.
About the method of provision for asset impairment of construction-in-process, refer to Note V. 31.
26. Borrowing Costs
1. Principle for recognition of the capitalization of the borrowing costs
If the borrowing costs incurred to the Group may be directly attributable to the purchase, construction or
production of assets that meet the capitalization conditions, they shall be capitalized and included in the
cost of the relevant assets; other borrowing costs are recognized as the expenses based on the amount
incurred at the time of occurrence, and counted to the current profit and loss. If the borrowing costs meet
the following conditions at the same time, they shall be capitalized:
① The asset disbursements have already incurred, which shall include the cash, transferred non-cash
assets or interest bearing debts paid for the acquisition and construction or production activities for
preparing assets eligible for capitalization;
② The borrowing costs have already incurred; and
③ The acquisition and construction or production activities which are necessary to prepare the asset for
its intended use or sale have already started.
(2) Capitalization period of borrowing costs:
When the qualified asset under acquisition and construction or production is ready for the intended use or
sale, the capitalization of the borrowing costs shall be ceased. The borrowing costs incurred after the
qualified asset under acquisition and construction or production is ready for the intended use or sale shall
be recognized as expenses at the incurred amount when they are incurred, and shall be recorded into the
current profits and losses.
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the
interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be
suspended.
(3) Calculation for the capitalization rate and capitalization amount of the borrowing costs
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.
27. Biological Assets
Inapplicable
28. Oil and Gas Assets
Inapplicable
29. Use right assets
Inapplicable
30. Intangible assets
(1) Pricing Method, Service Life and Impairment Test
The Group's intangible assets include land use rights, software systems, trademark use rights, etc.
Intangible assets are initially measured at cost and the useful life of an intangible asset is analyzed and
defined at the time of acquisition of the asset. An intangible asset with a finite useful life should be
amortized over its estimated useful life using an amortization method that can reflect the expected
consumption pattern of the economic benefits associated with the asset, commencing from the time when
the intangible asset is available for use. When the expected consumption pattern cannot be determined
reliably the asset should be amortized based on a straight-line method. An intangible asset with an
indefinite useful life should not be amortized.
The method for amortization of intangible assets with limited service life is as follows:
Categories Useful Life Amortization Method Remarks
Land use right 50 Straight-line method
Software system 5 Straight-line method
Trademark rights 5 -10 Straight-line method
At the end of each year, the Group shall review the service life and amortization method of intangible
assets with limited service life. If the former estimate is different, the previous estimate shall be adjusted
and treated as the change of the accounting estimate.
If an intangible asset is no longer expected to bring future economic benefits to the enterprise on the
balance sheet date, the book value of the intangible asset shall be transferred into the current profit and
loss.
About the method of provision for asset impairment of intangible assets, refer to Note V. 31.
(2) Accounting policy for internal research and development expenditure
The internal research and development expenditures of the Group are divided into research expenditures
and development expenditures.
Expenditures on research phase are recorded into profit or loss when it occurred.
Expenditure in development stage can be capitalized while meeting the following conditions, i.e.
completing the intangible asset so that it is technically feasible to use or sale; has the intent to complete
the intangible asset and use or sell it; the way of the intangibles to generate economic benefits, including
being able to prove that the products that produced with the use of the intangibles have market or the
intangible asset itself has market, the intangible assets will be used internally, and can prove its
usefulness; have adequate technical, financial resources and other resources support to complete the
development of the intangible assets, and have the ability to use or sell the intangible asset; the
expenditure attributable to the intangible asset development phase can be reliably measured.
Development expenditure does not meet the above conditions are recognized in the current profit and
loss.
When the Group’s research and development projects meet the above conditions, through technical
feasibility and economic feasibility studies, the development stage begins after project is approved.
Expenditures on the development phase after capitalization is listed on the balance sheet as development
expenditure and transferred to intangible assets after the project reach its intended use.
31. Impairment of long term assets
The impairment of subsidiaries, associates and joint ventures in the long-term equity investments,
foreclosed assets, investment property subsequently measured at cost model, fixed assets, construction
in progress, and intangible assets (with inventories, deferred income tax asset and financial assets
exclusive) are determined as follows:
At each balance sheet date, the Group determines whether there may be indication of impairment of the
assets, if there is any, the Group will estimate the recoverable amount of the asset, and perform test for
impairment. 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
Group makes impairment test every year.
The recoverable amount shall be determined according to the net amount of the fair value of an asset
minus the disposal expenses, and the current value of the expected future cash flow of the asset,
whichever is higher. The recoverable amount of asset is estimated on individual basis. If it is not possible
to estimate the recoverable amount of the individual asset, the Bank determines the recoverable amount
of the asset group to which the asset belongs. The recognition of an asset group shall base on whether
the main cash inflow generated by the asset group is independent of those generated by other assets or
other group assets.
When the asset or asset group’s recoverable amount is lower than its book value, the Group reduces its
book value to its recoverable amount, the reduced amount is recorded in profit or loss for the current
period and the provision for impairment of assets are recognized.
As far as the goodwill impairment test concerned, the book value of the goodwill formed by merger is
apportioned to the relevant asset group according to the reasonable method commencing from the date
of acquisition; in case it is difficult to be apportioned to the relevant asset group, it is apportioned to the
portfolio of the relevant asset groups. The relevant asset group or portfolio of asset groups are those
which get benefit from the coordinative effect of enterprise consolidation but should not be greater than
the reporting segment determined by the Group.
When the relevant asset group or portfolio of asset groups with goodwill included undergo the impairment
testing, in case there exists impairment evidence in the goodwill related asset group or portfolio of asset
groups, impairment testing should be first conducted on the asset group or portfolio of asset groups
without goodwill and the recoverable amount is calculated, and the corresponding impairment loss is
recognized. Impairment testing is then conducted on the asset group or portfolio of asset groups with
goodwill included. In comparison with the book value and recoverable amount, in case the recoverable
amount is lower than the book value, the loss of goodwill impairment is recognized.
The loss of asset impairment, once recognized, shall no longer be reversable in the future fiscal periods.
32. Long term expenses to be apportioned
Long-term expenses to be apportioned occurred by the Group are priced according to the actual cost, and
are amortized averagely according to the expected period of benefit. As for the long-term deferred
expenses that can not benefit the future accounting period, the amortized value is recognized in the
current profit and loss.
33. Contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the
relationship between performance obligations and customer payments. The obligation of the Company to
transfer goods or provide services to customers after receiving or receivable consideration from
customers are listed as contractual liabilities. Contract assets and liabilities under the same contract are
presented in net.
34. Employees’ Wages and Salaries
(1) Accounting treatment of short term salaries
During the accounting period in which the employees render services to the Group, the Group recognizes
the actual wages, bonuses, medical insurance premiums, work-related injury insurance premiums,
maternity insurance premiums and other social insurance premiums and housing provident funds paid for
the employees in accordance with the prescribed standards and proportions as liabilities which are
included in the current profit and loss or related asset costs. If the liability is not expected to be fully paid
within twelve months after the end of the annual reporting period in which employees have rendered the
related services while the financial impact is significant, the liability will be measured at the discounted
amount.
(2) Post-employment benefits
A post-employment benefit plan consists of the defined contribution plan and the defined benefit plan.
Where, the defined contribution plan refers to a post-employment benefit plan in which the Company no
longer assumes further payment obligation after paying fixed fees to an independent fund; the defined
benefit plan refers to a post-employment benefit plan other than the defined contribution plan.
Defined Contribution Plans
The defined contribution plan includes the basic pension insurance, unemployment insurance and
enterprise annuity plans.
In addition to basic pension insurance, the Group has established an enterprise annuity plan (the "annuity
plan") in accordance with the relevant policies of the national enterprise annuity system, and employees
may participate in the annuity plan voluntarily. With the exception of the above, the Group has no other
significant social security commitments to employees.
During the accounting period in which employees provide services to the Group, the amount of the
deposits calculated based on the defined contribution plan is recognized as a liability and counted in the
current profit or loss or related asset costs.
The defined benefit plan
For the defined benefit plan, an independent actuary performs actuarial valuation on the annual balance
sheet date, and uses the expected cumulative benefit unit method to determine the cost of providing
benefits. The employee compensation cost resulting from the defined benefit plan of the Group includes
the following components:
① Service costs include current service costs, past service costs, and settlement profit or loss. Where,
the current service cost refers to the increase in the present value of the defined benefit plan obligations
caused by the employees providing services in the current period; past service costs refer to the increase
or decrease in the present value of defined benefit plan obligations related to previous employee services
as a result of modification of the defined benefit plan.
② Net interest on net liabilities or net assets of the defined benefit plan, including interest income on the
plan assets, interest expense on the defined benefit plan obligations, and interest on the asset cap effect.
③ Movement of the net liabilities and net assets re-measured for setting the beneficial plan.
Unless other accounting standards require or permit the cost of employee benefits to be included in the
cost of assets, the Group will include the above Items ① and ② in the current profit and loss; Item ③
will be included in other comprehensive income and will not be converted back to profit and loss in
subsequent accounting period. The part originally included in other comprehensive income will be carried
forward to the retained earnings within the scope of equity at the end of the original defined benefit plan.
(3) Accounting treatment for termination benefits
If the Group provides termination benefits to employees, the employee compensation liabilities arising
from the termination benefits shall be recognized as soon as possible and included in the current profit
and loss: when the Group cannot unilaterally withdraw the termination benefits provided due to the
termination of the labor relationship plan or reduction proposal; when the Group confirms the costs or
expenses related to the reorganization involving the payment of termination benefits.
In the case of implementing an internal retirement plan, the economic compensation prior to the official
retirement date shall be considered as termination benefit. During the period from the time when an
employee ceases to render services to the day of normal retirement, the salary to the employee of internal
retirement and the social insurance premium to be paid shall be recorded into the current profit and loss in
a lump sum. The economic compensation after the official retirement date (such as normal old-age
pension) shall be treated as post-employment benefits.
(4) Accounting treatment for other long term employees' welfare
Other long term employees' welfare provided by the Group to its employees shall undergo the accounting
treatment according to the defined contribution plan as long as it complies with the defined contribution
plan. If it meets the defined benefit plan, it shall be treated in accordance with the above relevant
provisions of the defined benefit plan. However, in the relevant employee compensation cost, the part of
"change caused by remeasurement of net liabilities or net assets of the defined benefit plan" shall be
recorded into the current profit and loss or the cost of relevant assets.
35. Lease liabilities
Inapplicable
36. Predicted liabilities
If the obligation related to the contingencies meet the following conditions at the same time, the Group will
recognize it as estimated liability:
(1) The obligation is a current obligation of the Group;
(2) The performance of this obligation is likely to lead to the outflow of economic benefit from the Group;
(3)The amount of the obligation can be reliably measured.
The estimated liabilities shall be initially measured in accordance with the best estimate of the necessary
expenses for the performance of the current obligation, and the Bank shall take into full consideration of
the risks, uncertainty, time value of money, and other factors pertinent to the Contingencies. If the time
value of money is of great significance, the best estimate shall be determined after discounting the
relevant future outflow of cash. On the balance sheet date, the Group re-checks the book value of the
estimated debts and makes proper adjustment in order to reflect the best estimated amount at present.
If the expenses for clearing of predictive liability is fully or partially compensated by a third party, and the
compensated amount can only be received basically, it is recognized separated as asset. The
compensated amount shall not be greater than the book value of the predictive liability.
37. Share-based payment
(1) Type of share-based payment
Share-based payments are divided into equity-settled share-based payment and cash-settled
share-based payment.
(2) Method for determining the fair value of equity instruments
The Group determines the fair value of the equity instruments granted, such as options with an active
market according to the price quoted in the active market. The fair value of equity instruments such as
options without active market is determined by option pricing model. In selecting the option pricing model,
the following factors have been taken into consideration: A. price for exercising the option; B. validity of
the option; C. the current price of the underlying shares; D. the expected volatility of stock prices; E. the
expected dividends on the shares; F. the risk-free interest rate within the term of the option.
(3) Basis for determining the best estimate of the vested equity instruments
On each balance sheet date during the vesting period, the Group may make best estimate based on the
subsequent information, such as the movement of the number of employees eligible for exercising the
rights as latest obtained and the number of the vested equity instruments is corrected. On the vesting
date, the number of the final estimated vested equity instrument should be equal to the number of the
actually vested equity instruments.
(4) Relevant accounting treatment for implementation, amendment or termination of the share-based
payment plan
Share-based payment settled with equity is measured with the fair value of the employee's equity
instruments at the grant date. If the right may be exercised immediately after the grant, the fair value of
the equity instruments shall, on the date of the grant, be included in the relevant cost or expense and the
capital reserves shall be increased accordingly. As to a equity-settled share-based payment in return for
employee services, if the right cannot be exercised until the vesting period comes to an end or until the
prescribed performance conditions are met, then on each balance sheet date within the vesting period,
the services obtained in the current period shall, based on the best estimate of the number of vested
equity instruments, be included in the relevant costs or expenses and the capital reserves at the fair value
of the equities instruments on the date of the grant. The Group shall, after the vesting date, make no
adjustment to the relevant costs or expenses as well as the total amount of the owner's equities which
have been confirmed.
A cash-settled share-based payment shall be measured in accordance with the fair value of liability
calculated and confirmed based on the shares or other equity instruments undertaken by the Group. As to
a cash-settled share-based payment instruments, if the right may be exercised immediately after the
grant, the fair value of the liability undertaken by the Group shall, on the date of the grant, be included in
the relevant costs or expenses, and the liabilities shall be increased accordingly. As to a cash-settled
share-based payment, if the right may not be exercised until the vesting period comes to an end or until
the specified performance conditions are met, on each balance sheet date within the vesting period, the
services obtained in the current period shall, based on the best estimate of the information about the
exercisable right, be included in the relevant costs or expenses and the corresponding liabilities at the fair
value of the liability undertaken by the Group. The fair value of the liabilities is re-measured and the
movement is counted in the current profits and losses on each balance sheet date and settlement day
before the settlement of related liabilities.
When the Group amends the share-based payment plan, if the amendment increases the fair value of the
equity instruments granted, the increase of the services obtained is recognized accordingly based on the
increase of the fair value of the equity instruments. If the amendment increases the number of equity
instruments granted, the fair value of the increased equity instruments is correspondingly recognized as
increase in the services acquired. Increase of the fair value of the equity instrument refers to the
difference between the fair value of the equity instrument on the amendment day before and after the
amendment. If the amendment reduces the total fair value of the share-based payment or adopts any
other method unfavorable to the employees, the service obtained will continue to undergo accounting
treatment as if such amendment has never taken place unless the Group has canceled part or all of the
granted equity instruments.
If the granted equity instrument has been canceled (unless the non-market condition which does not
satisfy the right of feasibility is cancelled)during the vesting period, the Group shall treat the cancellation
of the granted equity instrument as accelerated vesting, the amount which should be recognized during
the remaining vesting period is counted to the current profit and loss immediately and at the same time
the capital reserve is recognized. If an employee or other party can choose to meet the non-vesting
conditions but fails to meet the vesting period, the Group shall treat it as a cancellation of the granted
equity instrument.
38. Other financial instruments, such as preferred shares, perpetual liabilities, etc.
Inapplicable
39. Revenue
The accounting policy used for revenue recognition and measurement
The Company recognizes revenue when it has satisfied the performance obligation under the contract,
that is, when the customer has obtained the right to control the relevant goods or services “Obtaining the
right to control the relevant goods or services” means that it is able to dominate the use of the goods or
services and derive almost all economic benefits therefrom.
If a contract contains two or more performance obligations, the Company shall allocate the transaction
price to each individual performance obligation in accordance with the relative proportion of the
stand-alone selling price of the goods or services promised by each individual performance obligation on
the date of the contract The Company measures revenue based on the transaction price allocated to
each individual performance obligation.
The transaction price refers to the amount of consideration that the company expects to be entitled to
receive due to the transfer of goods or services to customers, excluding payments collected on behalf of
third parties and payments expected to be returned to customers. The Company determines the
transaction price in accordance with the terms of the contract with combination of its past customary
practices. When determining the transaction price, the influence from variable consideration, major
financing components in the contract, non-cash consideration, consideration payable to customers and
other factors should be taken into consideration. The Company determines the transaction price that
includes variable consideration at an amount that does not exceed the amount of accumulated
recognized revenue that is unlikely to be materially reversed when the relevant uncertainty is eliminated.
If there is a significant financing component in the contract, the Company determines the transaction price
based on the amount payable in cash when the customer obtains control of the goods or services, and
uses the actual interest method to amortize the difference between the transaction price and the contract
consideration during the contract period. One of the following conditions shall be fulfilled within a certain
period of time; otherwise, it shall be fulfilled at a certain point in time:
A customer obtains and consumes the economic benefits brought by the Company's performance at the
same time as the Company's performance.
A customer may control the products under construction in the Company's performance process.
The goods produced by the Company during the performance of the contract have irreplaceable uses,
and the Company has the right to collect payment for the cumulative performance part that has been
completed so far during the entire contract period.
For performance obligations performed within a certain period of time, the Company recognizes revenue
in accordance with the performance progress during that period, except where the performance progress
cannot be reasonably determined. The Company determines the progress of a contract by using the
output method or input method with consideration of the nature of goods or services. When the
performance progress cannot be reasonably determined, and the costs incurred are expected to be
compensable, the Company recognizes the revenue according to the amount of the costs incurred until
the performance progress can be reasonably determined.
For performance obligations performed at a certain point of time, the Company recognizes revenue at the
point when a customer obtains control of the relevant goods or services. In judging whether a customer
has obtained control of goods or services, the Company considers the following signs:
The Company has the current right to receive payment for the goods or services, that is, the customer
has the current payment obligation for the goods or services.
The Company has transferred the legal ownership of the product to the customer, that is, the customer
has the legal ownership of the product.
The Company has transferred the goods to the customer in kind, that is, the customer has taken
possession of the goods in kind.
The Company has transferred the main risks and rewards of the ownership of the goods to the customer,
that is, the customer has obtained the main risks and rewards of the ownership of the goods.
The customer has accepted the goods or services, etc.
Differences in revenue recognition accounting policies caused by different business models in similar
businesses
Nil
40. Government subsidies
Government subsidies are recognized when they meet the conditions attached to the government
subsidies and can be received.
Government subsidies for monetary assets are measured according to the amount received or receivable.
If a government subsidy is a non-monetary asset, it shall be measured at its fair value. If its fair value
cannot be obtained in a reliable way, it shall be measured at its nominal amount.
The government subsidies pertinent to assets mean the government subsidies that are obtained by the
Group used for purchase or construction, or forming the long-term assets by other ways with those
pertinent to income exclusive.
If the subsidy recipient is not specified in the government documents and long-term assets can be formed,
the part of the government subsidies corresponding to the asset value is regarded as the government
subsidy pertinent to the asset, and the rest is regarded as the government subsidy pertinent to the income;
if it is difficult to distinguish, the government subsidies as a whole are regarded as the government
subsidies pertinent to the income.
Government subsidies pertinent to assets are recognized as deferred income and recorded in profit and
loss in installments in accordance with a reasonable and systematic method within the useful life of the
relevant assets. If government subsidies pertinent to income are used to compensate related cost or loss
already incurred, they are included in the current profit and loss or offsets the related costs; if they are
used to compensate related costs or losses in subsequent periods, they shall be included in the deferred
income, and included in the current profit and loss or offset the related costs during the recognition period
of the related costs or losses. The government subsidy measured at a nominal amount is directly counted
to the current profit and loss. The Group adopts the same method to deal with the same or similar
government subsidy business.
Government subsidies pertinent to daily activities are included in other income in accordance with the
nature of economic business. Government subsidies irrelevant with the daily activities are included in
non-operating revenue and expenditure.
When the government subsidy already recognized needs to be returned, if there is a relevant deferred
income balance, the book balance of the relevant deferred income shall be offset, and the excess part
shall be included in the current profit and loss; in other cases, it shall be directly included in the current
profit and loss.
41. Deferred income tax asset/deferred income tax liability
Income tax includes current income tax and deferred income tax. Income taxes should be recognized as
income tax expenses in profit or loss for current period except for deferred income tax associated with
goodwill arising from business combination, or transactions or events that are directly recognized in
owners’ equity, which should be recorded under owners’ equity.
A deferred income tax asset or liability is recognized based on the temporary differences between the
book value of an asset or a liability at the balance sheet date and its tax basis using the balance sheet
liability method.
A deferred income tax liability should be recognized for all taxable temporary differences, except to the
extent that the deferred income tax liability arises from the following transactions:
(1) The initial recognition of goodwill; or the initial recognition of an asset or liability in a transaction that
has both of the following characteristics: the transaction is not a business combination; and at the time of
the transaction, it neither affects the accounting profit nor taxable profit.
(2) A deferred income tax liability should be recognized for all taxable temporary differences arising from
the investments in subsidiaries, joint ventures and associates, except to the extent that both of the
following conditions are satisfied: A. the Group is able to control the timing of the reversal of the temporary
differences; and B. it is probable that the temporary difference will not reverse in the foreseeable future.
In respect of deductible temporary differences, the carry-forward of deductible losses and tax deductions,
the Group should recognize deferred tax assets to the extent that it is probable that future taxable profit
will be available against which the deductible temporary differences, the deductible losses and tax
deductions can be utilized, unless the deductible temporary differences arises from the following
transactions.
(1) The transaction is not business combination and at the time of the transaction, it neither affects
accounting profit nor taxable profit.
(2) Deferred tax assets should be recognized for all deductible temporary differences associated with
investments in subsidiaries, joint ventures and associates if all of the following conditions are satisfied: it
is probable that the deductible temporary difference will reverse in the foreseeable future and it is
probable that taxable profit in the future will be available against which the deductible temporary
difference can be utilized.
At the balance sheet date deferred income tax assets and liabilities should be measured at tax rates
expected to be applied to the period when the asset is recovered or the liability is settled and the
measurement of deferred income tax assets and liabilities should reflect the tax consequences that would
follow from the manner in which The Bank expects, at the balance sheet date, to recover or settle the
book value of its assets and liabilities.
At the balance sheet date the Bank should review the book value of deferred income tax assets. The book
value of a deferred income tax asset should be reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow the benefit of the deferred income tax asset to be utilized.
Any such reduction in amount is reversed when it becomes probable that sufficient taxable profits will be
available.
42. Lease
(1) Accounting process for operating lease
A. The Group as the Lessor
The rents from operating leases shall be recorded in the profits and losses of the current period by using
the straight-line method over each period of the lease term. The initial direct costs incurred shall be
recorded into the profits and losses of the current period.
B. The Group as the Tenant
Lease income from operating leases shall be recorded in the profits and losses of the current period using
the straight-line method over each period of the lease term. The initial direct costs incurred shall be
recorded into the profits and losses of the current period.
(2) Accounting treatment method for finance lease
Inapplicable
43. Other important accounting policy and accounting estimate
(1) Repurchased shares
The shares repurchased by the Company shall be managed as treasury stock before they are cancelled
or transferred, and all expenditures for the repurchase of shares shall be transferred to the cost of
treasury stock. The consideration and transaction costs paid in the repurchase reduce the owner’s equity.
In process of repurchasing, transferring or canceling the Company’s shares, no profit or loss is
recognized.
When transferring treasury shares, the difference between the actual amount received and the book value
of treasury shares is included in the capital reserve. If the capital reserve is insufficient to offset, the
surplus reserve and retainted earnings shall be offset. For the cancellation of treasury shares, the share
capital shall be reduced according to the book value of the shares and the number of shares cancelled,
and the capital reserve shall be reduced according to the difference between the book balance and the
book value of the cancelled treasury shares. If the capital reserve is insufficient, the surplus reserve and
retained earnings shall be written-down.
(2) Restricted stocks
In the equity incentive plan, the Company grants restricted stocks to the motivated objects. The motivated
objects first subscribe for the stocks. If the unlocking conditions stipulated in the equity incentive plan are
not met subsequently, the Company shall repurchase the stocks at the previously agreed price. If the
restricted stocks issued to employees have fulfilled the capital increase procedures such as registration in
accordance with relevant regulations, on the grant date, the Company shall confirm the share capital and
capital reserve (share capital premium) based on the subscription monies paid by the employees; at the
same time, the treasury stock and other payables are confirmed for the repurchase obligation.
44. Changes in significant accounting policies and accounting estimates
(1) Change in significant accounting policies
Contents and cause of the change in the accounting
Examination and approval procedures Remarks
policy
On July 5, 2017, the Ministry of Finance revised and
issued the "Accounting Standards for Enterprises No.
14-Revenue". According to the requirements of the
Ministry of Finance, companies listed both at home and
abroad or listed overseas should prepare their financial
The Company reviewed and approved the
statements according to the IFRS or the Accounting
implementation at its 16th Session of the Ninth Board of
Standards for Enterprises commencing from January 1,
Directors.
2018; other domestically listed companies implement the
same commencing from January 1, 2020; non-listed
companies implementing the Accounting Standards for
Business Enterprises shall implement the same
commencing from January 1, 2021.
The Ministry of Finance revised the "Accounting Standards for Enterprises No. 14 - Revenue" in 2017.
The revised standards stipulate that in the initial implementation of the standards, an enterprise should
adjust the amount of retained earnings and other related items in the financial statements at the beginning
of the year based on the cumulative impact, and no adjustments should be made to comparable period
information.
The Company started to implement the new standards for revenue commencing from January 1, 2020.
According to the standards, the Company only adjusts the accumulated impact of contracts that have not
been completed on the date of first implementation. The retained earnings at the beginning of 2020 and
the amount of other related items in the financial statements would not be adjusted in the 2019 financial
statements. The implementation of these standards has no impact on retained earnings at the beginning
of 2020 and the amount of other related items in the financial statements.
The main impacts of the changes in accounting policies caused by the above new standards for revenue
in the financial statements on January 1, 2020 are as follows::
Consolidated Financial Statements:
Book value as presented according to the Reclassified Book value as presented according to the new
previous standards (December 31, 2019) standards
January 1, 2020)
Advance Receipts 23,433,463.57 -19,999,056.53 3,434,407.04
Contract liabilities 19,999,056.53 19,999,056.53
Financial Statements, Parent Company
Book value as presented according to the Reclassified Book value as presented according to the new
previous standards (December 31, 2019) standards
January 1, 2020)
Advance Receipts 3,434,407.04 3,434,407.04
Contract liabilities
(2) Change in significant accounting estimates
Inapplicable
(3) Adjustment of the relevant financial statements at the current year beginning according to the new standards
for revenues and the new standards for lease initially implemented commencing from 2020
Consolidated Balance Sheet
In CNY
Items December 31, 2019 January 01, 2020 Amount involved in the adjustment
Current assets:
Monetary fund 316,668,565.09 316,668,565.09
Settlement reserve
Inter-bank lending
Transactional financial assets
Derivative financial assets
Notes receivable 10,596,431.31 10,596,431.31
Accounts receivable 397,471,106.98 397,471,106.98
Financing with accounts
receivable
Advance payment 10,847,962.28 10,847,962.28
Receivable premium
Reinsurance accounts receivable
Reserve for reinsurance contract
receivable
Other receivables 47,239,844.58 47,239,844.58
Including: Interest receivable
Dividends receivable
Redemptory monetary capital for
sale
Inventories 1,808,820,089.92 1,808,820,089.92
Contract assets
Held-for-sale assets
Non-current assets due within a
year
Other current assets 68,858,096.74 68,858,096.74
Total current assets 2,660,502,096.90 2,660,502,096.90
Non-current assets:
Loan issuing and advance in
cash
Equity investment
Other equity investment
Long term accounts receivable
Long-term equity investment 46,423,837.85 46,423,837.85
Investment in other equity
85,000.00 85,000.00
instruments
Other non-current financial assets
Investment-oriented real estate 407,503,307.24 407,503,307.24
Fixed assets 363,997,098.94 363,997,098.94
Construction-in-process
Productive biological asset
Oil and gas assets
Use right assets
Intangible assets 38,711,821.26 38,711,821.26
Development expenses
Goodwill
Long-term expenses to be
152,587,491.33 152,587,491.33
apportioned
Deferred income tax asset 83,739,383.37 83,739,383.37
Other non-current assets 7,373,248.48 7,373,248.48
Total non-current assets 1,100,421,188.47 1,100,421,188.47
Total assets 3,760,923,285.37 3,760,923,285.37
Current liabilities:
Short term borrowings 567,908,833.21 567,908,833.21
Borrowings from central bank
Loans from other banks
Transactional financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 279,772,787.37 279,772,787.37
Advance Receipts 23,433,463.57 3,434,407.04 -19,999,056.53
Contract liabilities 19,999,056.53 19,999,056.53
Income from sale of the
repurchased financial assets
Deposits taking and interbank
placement
Acting trading securities
Income from securities
underwriting on commission
Payroll payable to the employees 82,602,845.67 82,602,845.67
Taxes payable 24,064,803.00 24,064,803.00
Other payables 119,616,721.63 119,616,721.63
Including: interest payable
Dividends payable 848,233.27 848,233.27
Service charge and commission
payable
Payable reinsurance
Held-for-sale liabilities
Non-current liabilities due within a
360,140.00 360,140.00
year
Other current liabilities
Total current liabilities 1,097,759,594.45 1,097,759,594.45
Non-current liabilities:
Reserve for insurance contract
Long-term borrowings 4,321,680.00 4,321,680.00
Bonds payable
Including: preferred shares
Perpetual bond
Lease liabilities
Long-term accounts payable
Long term payroll payable to the
employees
Estimated liabilities
Deferred income 3,046,090.60 3,046,090.60
Deferred income tax liability 1,256,242.49 1,256,242.49
Other non-current liabilities
Total non-current liabilities 8,624,013.09 8,624,013.09
Total liabilities 1,106,383,607.54 1,106,383,607.54
Owner’s equity:
Capital stock 442,968,881.00 442,968,881.00
Other equity instruments
Including: preferred shares
Perpetual bond
Capital Reserve 1,081,230,215.32 1,081,230,215.32
Less: shares in stock 71,267,118.78 71,267,118.78
Other comprehensive income -940,209.09 -940,209.09
Special reserve
Surplus Reserve 235,701,180.14 235,701,180.14
Provision for general risks
Retained earnings 966,840,818.40 966,840,818.40
Total owners’ equity attributable to the
2,654,533,766.99 2,654,533,766.99
parent company
Minority shareholders’ equity 5,910.84 5,910.84
Total owner’s equity 2,654,539,677.83 2,654,539,677.83
Total liabilities and owners’ equity 3,760,923,285.37 3,760,923,285.37
Note to the Adjustment
Balance Sheet, Parent Company
In CNY
Items December 31, 2019 January 01, 2020 Amount involved in the adjustment
Current assets:
Monetary fund 270,673,346.02 270,673,346.02
Transactional financial assets
Derivative financial assets
Notes receivable
Accounts receivable 2,848,025.39 2,848,025.39
Financing with accounts
receivable
Advance payment
Other receivables 783,647,732.22 783,647,732.22
Including: Interest receivable
Dividends receivable
Inventories
Contract assets
Held-for-sale assets
Non-current assets due within a
year
Other current assets 12,380,243.67 12,380,243.67
Total current assets 1,069,549,347.30 1,069,549,347.30
Non-current assets:
Equity investment
Other equity investment
Long term accounts receivable
Long-term equity investment 1,380,895,239.27 1,380,895,239.27
Investment in other equity
85,000.00 85,000.00
instruments
Other non-current financial assets
Investment-oriented real estate 329,970,083.18 329,970,083.18
Fixed assets 238,594,698.50 238,594,698.50
Construction-in-process
Productive biological asset
Oil and gas assets
Use right assets
Intangible assets 30,925,974.54 30,925,974.54
Development expenses
Goodwill
Long-term expenses to be
12,106,759.98 12,106,759.98
apportioned
Deferred income tax asset 1,125,840.75 1,125,840.75
Other non-current assets 4,707,236.86 4,707,236.86
Total non-current assets 1,998,410,833.08 1,998,410,833.08
Total assets 3,067,960,180.38 3,067,960,180.38
Current liabilities:
Short term borrowings 540,650,622.50 540,650,622.50
Transactional financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 12,952,934.93 12,952,934.93
Advance Receipts 3,434,407.04 3,434,407.04
Contract liabilities
Payroll payable to the employees 19,019,554.57 19,019,554.57
Taxes payable 1,713,130.68 1,713,130.68
Other payables 82,631,590.46 82,631,590.46
Including: interest payable
Dividends payable 848,233.27 848,233.27
Held-for-sale liabilities
Non-current liabilities due within a
year
Other current liabilities
Total current liabilities 660,402,240.18 660,402,240.18
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: preferred shares
Perpetual bond
Lease liabilities
Long-term accounts payable
Long term payroll payable to the
employees
Estimated liabilities
Deferred income 3,046,090.60 3,046,090.60
Deferred income tax liability
Other non-current liabilities
Total non-current liabilities 3,046,090.60 3,046,090.60
Total liabilities 663,448,330.78 663,448,330.78
Owner’s equity:
Capital stock 442,968,881.00 442,968,881.00
Other equity instruments
Including: preferred shares
Perpetual bond
Capital Reserve 1,086,885,756.42 1,086,885,756.42
Less: shares in stock 71,267,118.78 71,267,118.78
Other comprehensive income
Special reserve
Surplus Reserve 235,701,180.14 235,701,180.14
Retained earnings 710,223,150.82 710,223,150.82
Total owner’s equity 2,404,511,849.60 2,404,511,849.60
Total liabilities and owners’ equity 3,067,960,180.38 3,067,960,180.38
Note to the Adjustment
Inapplicable
(4) Note to the retroactive adjustment of the previous comparative data according to the new standards for
revenue and the new standards for lease to be implemented commencing from year 2020
Inapplicable
45. Miscelleneous
Inapplicable
VI. Taxation
1. Types of major taxes and tax rates
Type of taxes Tax basis Tax rates
Value-added tax Taxable income 13%, 10%, 9%, 6% and 5%
Consumption tax Taxable income 20%
Urban maintenance and construction tax Amount of payable turnover tax 5% and 7%
Enterprise income tax Taxable income amount Refer to the Note
Real estate tax Cost of the property or rental income 1.2% and 12%
In case there exists taxpayers subject to different corporate income tax rates, disclose the information.
Taxpayers Income tax rates
The Company 25.00%
Shenzhen Harmony World Watches Center Co., Ltd. (HARMONY) 25.00%
Shenzhen FIYTA Precision Technology Co., Ltd. 15.00%
FIYTA (Hong Kong) Limited (FIYTA HK) 16.50%
Station-68 Co. 16.50%
Shenzhen FIYTA Technology Development Co., Ltd. (Technology Development Co.) 15.00%
Shiyuehui Boutique (Shenzhen) Co., Ltd. (Shiyuehui ) 25.00%
Shenzhen Harmony E-Commerce Co., Ltd. 20.00%
Emile Chouriet (Shenzhen) Limited (Emile Choureit Shenzhen Company) 25.00%
FIYTA Sales Co., Ltd. (FIYTA Sales Co.) 25.00%
Liaoning Hengdarui Commerce & Trade Co., Ltd. (Hengdarui) 25.00%
Montres Chouriet SA (the Swiss Co.) 30.00%
2. Tax Preferences
(1) 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.
(2) In accordance with Notice of the Ministry of Finance and the State Administration of Taxation on
Extending the Loss Carryover Period for High and New Technology Enterprises and Small and
Medium-Sized Technological Enterprises (CAI SHUI [2018] No. 76), beginning on January 1, 2018, the
losses of an enterprise currently qualified as a high and new technology enterprise that occurred during
the prior five years and are still not fully covered may be carried over for covering in subsequent years,
and the maximum carryover period shall be extended from 5 years to 10 years.
3. Others
Note: Property tax
According to the provisions of Article 5 of the Notice of Shenzhen Local Tax Bureau on the Issuance of the
"Questions and Answers on the Policy for the Property Tax and Vehicle & Vessel Use Tax": Production
and business units leasing its properties should pay real estate tax based on 70% of the cost of the
properties at the tax rate of 1.2%.
The Group pays the property tax for its properties located in Shenzhen at the tax rate specified in the said
Notice, and pays the property tax for its properties located in other cities according to local regulations.
VII. Notes to items of consolidated financial statements
1. Monetary capital
In CNY
Items Ending balance Opening balance
Cash in stock 215,989.73 229,258.38
Bank deposit 343,931,215.59 285,306,297.62
Other Monetary Funds 2,334,436.36 31,133,009.09
Total 346,481,641.68 316,668,565.09
Including: total amount deposited overseas 1,156,395.61 3,641,389.51
Total amount with restrictions on use due to
1,575,000.00 1,575,000.00
mortgage, pledge or freezing of account
Other notes
Of other monetary fund, CNY 1,575,000.00 (December 31, 2017: CNY 1,575,000.00) was the margin
deposits deposited by the Company for application to banks for unconditional and irrevocable letter of
guarantee.
2. Transactional financial assets
Inapplicable
3. Derivative financial assets
Inapplicable
4. Notes receivable
(1) Presentation of classification of notes receivable
In CNY
Items Ending balance Opening balance
Bank acceptance 6,593,239.62 6,187,353.98
Trade acceptance 14,638,303.74 4,409,077.33
Total 21,231,543.36 10,596,431.31
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
where
Notes receivable for which
21,448,726. 21,231,543.3 10,813,614.0 10,596,431.3
bad debt reserve has been 100.00% 217,182.73 1.01% 100.00% 217,182.73 2.01%
09 6 4 1
provided based on portfolios
where
6,593,239.6
Bank acceptance 30.74% 6,593,239.62 6,187,353.98 57.22% 6,187,353.98
2
14,855,486. 14,638,303.7
Trade acceptance 69.26% 217,182.73 1.46% 4,626,260.06 42.78% 217,182.73 4.69% 4,409,077.33
47 4
21,448,726. 21,231,543.3 10,813,614.0 10,596,431.3
Total 100.00% 217,182.73 1.01% 100.00% 217,182.73 2.01%
09 6 4 1
Individual provision for bad and doubtful debts:
Inapplicable
Total provision for bad and doubtful debts based on portfolio:
In CNY
Ending balance
Description
Book balance Bad debt reserve Provision proportion
Trade acceptance 14,855,486.47 217,182.73 1.46%
Total 14,855,486.47 217,182.73 --
Note to the basis for determining the combination:
Inapplicable
(2) Provision, recovery or reversal of reserve for bad debts during the reporting period
Provision for bad debt during the reporting period
In CNY
Amount of movement during the reporting period
Categories Opening balance Amount recovered or Ending balance
Provision Writing-off Others
reversed
Trade acceptance 217,182.73 217,182.73
Total 217,182.73 217,182.73
Where the significant amount of the reserve for bad debt recovered or reversed:
Inapplicable
(3) Notes receivable already pledged by the Company at the end of the reporting period
Inapplicable
(4) Endorsed or discounted notes receivable at the end of the reproting period, but not yet due on the balance
sheet date
Inapplicable
(5) Notes transferred to receivables due to issuer’s default at the end of the reporting period
Inapplicable
(6) Notes receivable actually written off in current period
Inapplicable
5. Accounts receivable
(1) Accounts receivables disclosed by types
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
Accounts receivable for
which bad debt reserve has 18,435,421. 17,685,254. 24,140,377.5 17,562,041.1
4.01% 95.93% 750,166.85 5.66% 72.75% 6,578,336.42
been provided based on 50 65 7 5
individual items
where
Accounts receivable from 18,435,421. 17,685,254. 24,140,377.5 17,562,041.1
4.01% 95.93% 750,166.85 5.66% 72.75% 6,578,336.42
other customers 50 65 7 5
Accounts receivable for
which bad debt reserve has 441,309,124 13,905,071. 427,404,053. 402,376,052. 11,483,281.4
95.99% 3.15% 0.94% 2.85% 390,892,770.56
been provided based on .89 76 13 00 4
portfolios
where
Portfolios 1 (Receivables
from related parties within
the scope of consolidation)
Portfolios 2 (Accounts
441,309,124 13,905,071. 427,404,053. 402,376,052. 11,483,281.4
receivable from other 95.99% 3.15% 94.34% 2.85% 390,892,770.56
.89 76 13 00 4
customers)
459,744,546 31,590,326. 428,154,219. 426,516,429. 29,045,322.5
Total 100.00% 6.87% 100.00% 6.81% 397,471,106.98
.39 41 98 57 9
Individual provision for bad and doubtful debts:
In CNY
Ending balance
Description
Book balance Bad debt reserve Provision proportion Provision reason
Accounts receivable from other
18,435,421.50 17,685,254.65 95.93% Expected to be unrecoverable
customers
Total 18,435,421.50 17,685,254.65 -- --
Individual provision for bad and doubtful debts:
Inapplicable
Total provision for bad and doubtful debts based on portfolio:
In CNY
Ending balance
Description
Book balance Bad debt reserve Provision proportion
Accounts receivable from other customers 441,309,124.89 13,905,071.76 3.15%
Total 441,309,124.89 13,905,071.76 --
Note to the basis for determining the combination:
Inapplicable
Disclosed based on aging
In CNY
Aging Ending balance
Within 1 year (with 1 year inclusive) 449,801,260.02
1 to 2 years 7,015,459.22
2 to 3 years 942,383.55
Over 3 years 1,985,443.60
3 to 4 years 1,953,085.41
4 to 5 years 32,358.19
Total 459,744,546.39
(2) Provision, recovery or reversal of reserve for bad debts during the reporting period
Provision for bad debt during the reporting period
In CNY
Amount of movement during the reporting period
Categories Opening balance Ending balance
Provision Amount recovered or Writing-off Others
reversed
Accounts receivable
29,045,322.59 2,928,414.87 383,411.05 31,590,326.41
from other customers
Total 29,045,322.59 2,928,414.87 383,411.05 31,590,326.41
Where the significant amount of the reserve for bad debt recovered or reversed:
Inapplicable
(3) Accounts receivable actually written off in current period
Inapplicable
(4) Accounts receivable owed by the top five debtors based on the ending balance
In CNY
Proportion of the ending balance of the
Description of Units Ending balance of accounts receivable Ending balance of the provision for bad debts
accounts receivable
Accounts receivable from the top
70,888,754.40 15.41% 3,544,437.72
five debtors
Total 70,888,754.40 15.41%
(5) Account receivable with recognition terminated due to transfer of financial assets
Inapplicable
(6) Amount of assets and liabilities formed through transfer of account receivable and continuing to be involved
Inapplicable
6. Financing with accounts receivable
Inapplicable
7. Advance payments
(1) Advance payments are presented based on ages
In CNY
Ending balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 15,017,714.46 81.60% 10,221,061.48 94.23%
1 to 2 years 2,759,153.37 14.99% 284,733.40 2.62%
2 to 3 years 284,733.40 1.55% 342,167.40 3.15%
Over 3 years 342,167.40 1.86%
Total 18,403,768.63 -- 10,847,962.28 --
Note to the reason why the prepayment with age exceeding 1 year and a significant amount of money has
not been settled in time:
Inapplicable
(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 10,980,253.84, taking 59.66% of the toal ending balance of the
advance payment.
Other notes:
Inapplicable
8. Other receivables
In CNY
Items Ending balance Opening balance
Other receivables 106,768,399.40 47,239,844.58
Total 106,768,399.40 47,239,844.58
(1) Interest receivable
1) Classification of interest receivable
Inapplicable
2) Significant overdue interest
Inapplicable
3) Provision for bad debts
Inapplicable
(2) Dividends receivable
1) Classification of dividends receivable
Inapplicable
2) Significant dividends receivable with age exceeding 1 year
Inapplicable
3) Provision for bad debts
Inapplicable
(3) Other receivables
1) Classification of other receivables based on nature of payment
In CNY
Nature of Payment Ending book balance Opening book balance
Reserve 5,462,300.98 2,147,617.27
Cash deposits 45,511,609.60 45,014,657.70
Commodity promotion fee 749,974.83 2,518,891.09
Advance payment for equity allocation 53,183,393.38
Others 12,376,982.56 7,903,069.93
Total 117,284,261.35 57,584,235.99
2) Provision for bad debts
In CNY
The 1st stage The 2nd stage The 3rd stage
Predicted credit loss in the whole Predicted credit loss in the whole
Bad debt reserve Predicted credit loss in the Total
duration (no credit impairment taken duration (credit impairment already
future 12 months
place) taken place)
Balance as at January 01, 2020 2,450,903.29 7,893,488.12
Balance as at January 01, 2020
—— —— —— ——
during the reporting period
Provision in the reporting period 49,663.99
Reversal in the reporting period 120,707.78
Other changes 242,514.33
Balance as at June 30, 2020 2,379,859.50 8,136,002.45
Movement of the book balance of provision for loss with significant amount in the reporting period
Inapplicable
Disclosed based on aging
In CNY
Aging Ending balance
Within 1 year (with 1 year inclusive) 93,144,499.37
1 to 2 years 6,207,121.99
2 to 3 years 4,015,241.00
Over 3 years 13,917,398.99
3 to 4 years 11,790,568.98
4 to 5 years 1,922,066.01
Over 5 years 204,764.00
Total 117,284,261.35
3) Provision, recovery or reversal of reserve for bad debts during the reporting period
Provision for bad debt during the reporting period
In CNY
Amount of movement during the reporting period
Categories Opening balance Amount recovered or Ending balance
Provision Writing-off Others
reversed
Bad debt reserve 10,344,391.41 49,663.99 120,707.78 242,514.33 10,515,861.95
Total 10,344,391.41 49,663.99 120,707.78 242,514.33 10,515,861.95
Where the significant amount of the provision for bad debt recovered or reversed:
Inapplicable
4) Accounts receivable actually written off in the reporting period
Inapplicable
5) Accounts receivable owed by the top five debtors based on the ending balance
In CNY
Proportion in total ending Ending balance of the
Description of Units Nature of Payment Ending balance Aging
balance of other receivables provision for bad debts
A Payment for goods 6,293,233.44 Over 3 years 5.37% 6,293,233.44
B Deposit in security 3,166,648.00 Within 1 year 2.70% 158,332.40
C Deposit in security 1,672,563.00 Within 1 year 1.43% 83,628.15
D Deposit in security 1,151,403.00 Within 1 year 0.98% 57,570.15
E Deposit in security 946,179.00 Within 1 year 0.81% 47,308.95
Total -- 13,230,026.44 -- 11.28% 6,640,073.09
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 account receivable and continuing to be involved
Inapplicable
9. Inventories
Does the Company need to comply with the disclosure requirements of real estate industry
No
(1) Classification of inventories
In CNY
Ending balance Opening balance
Provision for price Provision for price
falling of inventories or falling of inventories or
Items
Book balance provision for Book value Book balance provision for Book value
impairment of contract impairment of contract
performance costs performance costs
Raw materials 198,721,964.25 21,420,955.08 177,301,009.17 195,644,341.20 21,197,269.90 174,447,071.30
Products in process 6,274,467.37 6,274,467.37 11,707,382.99 11,707,382.99
Commodities in stock 1,676,669,349.53 62,029,785.83 1,614,639,563.70 1,684,674,585.69 62,008,950.06 1,622,665,635.63
Total 1,881,665,781.15 83,450,740.91 1,798,215,040.24 1,892,026,309.88 83,206,219.96 1,808,820,089.92
(2) Provision for price falling of inventories or provision for impairment of contract performance costs
In CNY
Increase in the reporting period Decrease in the reporting period
Items Opening balance Reversal or Ending balance
Provision Others Others
Offset
Raw materials 21,197,269.90 223,685.19 21,420,955.08
Commodities in stock 62,008,950.06 20,835.76 62,029,785.83
Total 83,206,219.96 244,520.95 83,450,740.91
(3) Note to the amount of capitalized borrowing costs involved in the ending balance of inventories
Inapplicable
(4) Note to the amortized amount of the contract performance costs in the reporting period
Inapplicable
10. Contract assets
Inapplicable
11. Classified as assets held for sale
Inapplicable
12. Non-current assets due within a year
Inapplicable
13. Other current assets
In CNY
Items Ending balance Opening balance
Input VAT to be offset 28,805,937.14 47,626,820.11
Income tax paid in advance 3,248,429.93 1,313,954.49
Others - short-term expenses to be apportioned 11,240,638.19 15,661,429.95
VAT paid in advance 1,243,045.91 4,255,892.19
Total 44,538,051.17 68,858,096.74
Other notes:
Inapplicable
14. Equity investment
Inapplicable
15. Other equity investment
Inapplicable
16. Long term accounts receivable
(1) About long term accounts receivable
Inapplicable
(2) Long term account receivable with recognition terminated due to transfer of financial assets
Inapplicable
(3) Amount of assets and liabilities formed through transfer of long-term accounts receivable and continuing to be
involved
Inapplicable
17. Long-term equity investments
In CNY
Opening Increase/ Decrease (+ / -) in the reporting period Ending Ending
Investees balance balance balance of
Additional Decrease of Income from Other Other equity Announced Provision for Others
(book value) (book value) the provision
investment investment equity comprehensi movement for impairment for
investment ve income distributing impairment
recognized adjustment cash
under equity dividend or
method profit
I. Joint Venture
II. Associates
Shanghai
Watch
Industry Co., 46,423,837.8 48,584,749.7
2,160,911.92
Ltd. 5 7
(Shanghai
Watch)
46,423,837.8 48,584,749.7
Sub-total 2,160,911.92
5 7
46,423,837.8 48,584,749.7
Total 2,160,911.92
5 7
Other notes
Inapplicable
18. Investment in other equity instruments
In CNY
Items Ending balance Opening balance
Xi'an Tangcheng Co., Ltd. 85,000.00 85,000.00
Total 85,000.00 85,000.00
Itemized disclosure of investment in non-trading equity instruments in the reporting period
Inapplicable
19. Other non-current financial assets
Inapplicable
20. Investment based real estate
(1) Investment property measured based on the cost method
In CNY
Items Housing and buildings Land use right Construction-in-process Total
I. Original book value
1. Opening balance 603,886,647.35 603,886,647.35
2. Increase in the reporting period
(1) Purchased
(2) Inventories\fixed
assets/construction- in – process
transferred in
(3) Increase of enterprise
consolidation
3. Amount decreased in the
reporting period
(1) Disposal
(2) Other transfer out
4. Ending balance 603,886,647.35 603,886,647.35
II. Accumulative depreciation and
accumulative amortization
1. Opening balance 196,383,340.11 196,383,340.11
2. Increase in the reporting period 7,621,323.86 7,621,323.86
(1) Provision or amortization 7,621,323.86 7,621,323.86
3. Amount decreased in the
reporting period
(1) Disposal
(2) Other transfer out
4. Ending balance 204,004,663.97 204,004,663.97
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 the
399,881,983.38 399,881,983.38
reporting period
2.Book value at the beginning of
407,503,307.24 407,503,307.24
the reporting period
(2) Investment property measured based on fair value
Inapplicable
(3) Investment property that does not have certificate for property right
Inapplicable
21. Fixed asset
In CNY
Items Ending balance Opening balance
Fixed assets 354,294,685.37 363,997,098.94
Total 354,294,685.37 363,997,098.94
(1) About fixed assets
In CNY
Items Plant & buildings Machinery & equipment Motor vehicle Electronic equipment Others Total
I. Original book value
1. Opening balance 399,884,182.37 88,576,975.77 15,357,879.37 45,484,697.66 46,262,752.19 595,566,487.36
2. Increase in the
1,673,662.24 2,374,605.84 987,842.49 602,909.94 5,639,020.51
reporting period
(1) Purchase 1,673,662.24 2,374,605.84 987,842.49 602,909.94 5,639,020.51
(2)
Construction-in-process
transferred in
(3) Increase of
enterprise consolidation
3. Amount
decreased in the 418,674.85 779,760.00 406,310.94 1,604,745.79
reporting period
(1) Disposal or
418,674.85 779,760.00 406,310.94 1,604,745.79
scrapping
4. Ending balance 401,557,844.61 90,532,906.76 15,357,879.37 45,692,780.15 46,459,351.19 599,600,762.08
II. Accumulative
depreciation
1. Opening balance 99,134,756.79 49,325,868.54 13,492,690.81 32,184,334.98 37,431,737.30 231,569,388.42
2. Increase in the
6,968,805.33 3,933,316.11 201,480.66 2,214,596.73 1,601,335.24 14,919,534.07
reporting period
(1) Provision 6,968,805.33 3,933,316.11 201,480.66 2,214,596.73 1,601,335.24 14,919,534.07
3. Amount
decreased in the 217,213.16 643,229.61 322,403.01 1,182,845.78
reporting period
(1) Disposal or
217,213.16 643,229.61 322,403.01 1,182,845.78
scrapping
4. Ending balance 106,103,562.12 53,041,971.49 13,694,171.47 33,755,702.10 38,710,669.53 245,306,076.71
III. Provision for
impairment
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 reporting 295,454,282.49 37,490,935.27 1,663,707.90 11,937,078.05 7,748,681.66 354,294,685.37
period
2.Book value at the
beginning of the 300,749,425.58 39,251,107.23 1,865,188.56 13,300,362.68 8,831,014.89 363,997,098.94
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
The reason why the property ownership certificate has
Items Book value
not been granted
Office occupancy of Harbin Office 247,083.50 There existed problem in ownership
(6) Disposal of fixed assets
Inapplicable
22. Construction-in-process
Inapplicable
(4) Engineering materials
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. Use right assets
Inapplicable
26. 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
34,933,822.40 24,114,126.36 11,930,531.38 70,978,480.14
balance
2. Increase in the
1,268,215.40 1,711,282.42 2,979,497.82
reporting period
(1) Purchase 1,268,215.40 1,711,282.42 2,979,497.82
(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 25,382,341.76 13,641,813.80 73,957,977.96
II. Accumulative
amortization
1. Opening
11,353,509.97 15,410,275.67 5,502,873.24 32,266,658.88
balance
2. Increase in the
366,776.65 2,197,060.87 1,270,464.12 3,834,301.64
reporting period
(1) Provision 366,776.65 2,197,060.87 1,270,464.12 3,834,301.64
3. Amount
decreased in the
reporting period
(1) Disposal
4. Ending balance 11,720,286.62 17,607,336.54 6,773,337.36 36,100,960.52
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 23,213,535.78 7,775,005.22 6,868,476.44 37,857,017.44
period
2.Book value at
the beginning of the 23,580,312.43 8,703,850.69 6,427,658.14 38,711,821.26
reporting period
Proportion 0% of the intangible assets formed through the Company’s internal R & D in the balance of the
intangible assets at the end of the reporting period.
(2) About the land use right that does not have certificate of title
Inapplicable
27. Development expenditure
Inapplicable
28. Goodwill
(1) Original book value of the goodwill
Inapplicable
(2) Provision for impairment of the goodwill
Inapplicable
29. 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
41,961,947.89 11,476,444.96 23,585,536.88 29,852,855.97
special counters
Refurbishment expenses 95,266,200.86 13,998,397.46 23,273,140.55 85,991,457.77
Others 15,359,342.58 0.00 4,632,330.36 10,727,012.22
Total 152,587,491.33 25,474,842.42 51,491,007.79 126,571,325.96
Other notes
Inapplicable
30. Deferred income tax asset/deferred income tax liability
(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 103,310,389.63 22,788,457.81 100,912,679.00 22,188,996.64
Unrealized profit from the
156,287,413.96 38,840,027.68 179,676,673.34 44,654,504.04
intracompany transactions
Offsetable loss 122,599,534.04 30,135,383.47 50,678,682.32 12,074,057.61
Deferred income 3,046,090.60 761,522.65 3,046,090.60 761,522.65
Share-based payment 7,606,027.81 1,823,052.62 4,440,625.91 1,062,967.67
Advertisement fee available for
8,221,847.42 1,718,803.47 14,988,443.65 2,997,334.76
carrying-forward to the next year
Total 401,071,303.46 96,067,247.70 353,743,194.82 83,739,383.37
(2) Deferred income tax liabilities without offsetting
In CNY
Ending balance Opening balance
Items
Taxable provisional difference Deferred income tax liability Taxable provisional difference Deferred income tax liability
One-time pre-tax deduction of
7,951,478.07 1,192,721.71 8,374,949.93 1,256,242.49
fixed assets
Total 7,951,478.07 1,192,721.71 8,374,949.93 1,256,242.49
(3) Deferred income tax asset or liabilities stated with net amount after offsetting
Inapplicable
(4) Statement of deferred income tax asset not recognized
In CNY
Items Ending balance Opening balance
Offsetable loss 68,005,378.21 64,205,351.75
Provision for impairment of assets 22,775,235.70 22,200,437.70
Total 90,780,613.91 86,405,789.45
(5) Unrecognized deferred income tax asset available for offsetting loss is going to expire in the following years
In CNY
Amount at the beginning of the reporting
Year Amount at the end of the reporting period Remarks
period
2020
2021
2022
2023 2,417,279.16 2,417,279.16
2024 7,798,677.32 7,798,677.32
2025 11,684,299.22 11,684,299.22
2026 18,449,678.50 18,449,678.50
2027 23,855,417.55 23,855,417.55
2028 3,800,026.46
Total 68,005,378.21 64,205,351.75 --
Other notes:
Inapplicable
31. Other non-current assets
In CNY
Ending balance Opening balance
Items Impairment Impairment
Book balance Book value Book balance Book value
reserve reserve
Advance payment for engineering works and equipment 10,492,964.34 10,492,964.34 7,373,248.48 7,373,248.48
Total 10,492,964.34 10,492,964.34 7,373,248.48 7,373,248.48
Other notes:
Inapplicable
32. Short term loans
(1) Classification of short-term loans
In CNY
Items Ending balance Opening balance
Secured loan 60,512,090.66 37,271,502.38
Credit loan 613,050,268.89 530,637,330.83
Total 673,562,359.55 567,908,833.21
Note to classification of short term borrowings:
Inapplicable
(2)Short-term loans overdue but still remaining outstanding
Inapplicable
33. Transactional financial liabilities
Inapplicable
34. Derivative financial liabilities
Inapplicable
35. Notes payable
In CNY
Categories Ending balance Opening balance
Trade acceptance 1,400,000.00 0.00
Total 1,400,000.00 0.00
Total amount of notes payable due but not paid amounting to CNY 0 at the end of the reporting period.
36. Accounts payable
(1) Statement of accounts payable
In CNY
Items Ending balance Opening balance
Payment for goods 189,556,864.82 254,887,129.91
Payment for materials 11,932,722.53
Construction cost payable 1,484,563.53 12,952,934.93
Total 191,041,428.35 279,772,787.37
(2) Significant accounts payable with age exceeding 1 year
Inapplicable
37. Advance Receipts
(1) Statement of advances from customers
In CNY
Items Ending balance Opening balance
Payment for goods
Engineering fees
Rent 7,251,488.79 3,434,407.04
Unfinished projects formed in the construction contract
but already settled
Total 7,251,488.79 3,434,407.04
(2) Significant advances from customers with age exceeding 1 year
Inapplicable
38. Contract liabilities
In CNY
Items Ending balance Opening balance
Payment for goods 21,475,843.30 19,999,056.53
Total 21,475,843.30 19,999,056.53
Amount and reason of the significant change in the book value during the reporting period
Inapplicable
39. 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 75,434,545.00 254,001,441.87 271,417,606.03 58,018,380.84
II. Post-employment benefit
program - defined contribution 7,067,511.52 6,552,660.39 9,405,143.24 4,215,028.67
plan.
III. Dismissal welfare 100,789.15 614,333.23 715,122.38
Total 82,602,845.67 261,168,435.49 281,537,871.65 62,233,409.51
(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
74,919,776.81 229,817,392.02 247,521,739.12 57,215,429.71
and subsidies
2. Staff’s welfare 5,604,972.00 5,604,972.00
3. Social security premium 6,959,476.34 6,791,592.13 167,884.21
Including: medical insurance
6,408,859.43 6,259,816.74 149,042.69
premium
Work injury
117,511.50 117,078.36 433.14
insurance
Maternity Insurance 433,105.41 414,697.03 18,408.38
4. Public reserve for housing 8,279,142.71 8,233,410.71 45,732.00
5. Trade union fund and staff
514,768.19 3,308,991.61 3,234,424.88 589,334.92
education fund
6. Short-term paid leave 31,467.19 31,467.19
Total 75,434,545.00 254,001,441.87 271,417,606.03 58,018,380.84
(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
255,571.47 5,508,582.11 5,376,258.34 387,895.24
premium
2. Unemployment insurance 137,321.18 329,926.24 -192,605.06
premium
3. Contribution to the enterprise
6,811,940.05 906,757.10 3,698,958.66 4,019,738.49
annuity scheme
Total 7,067,511.52 6,552,660.39 9,405,143.24 4,215,028.67
Other notes:
Inapplicable
40. Taxes payable
In CNY
Items Ending balance Opening balance
Value-added tax 26,548,335.81 6,929,833.12
Enterprise income tax 24,101,242.37 15,512,840.60
Individual income tax 1,487,307.93 1,227,923.78
Urban maintenance and construction tax 127,921.38 91,612.52
Education Surcharge 84,988.48 65,887.11
Others 738,858.32 236,705.87
Total 53,088,654.29 24,064,803.00
Other notes:
Inapplicable
41. Other payables
In CNY
Items Ending balance Opening balance
Dividends payable 53,887,144.07 848,233.27
Other payables 136,628,253.92 118,768,488.36
Total 190,515,397.99 119,616,721.63
(1) Interest payable
Inapplicable
(2) Dividend payable
In CNY
Items Ending balance Opening balance
Dividends of common shares 53,887,144.07 848,233.27
Total 53,887,144.07 848,233.27
Other note, including the significant dividends payable remaining outstanding for more than 1 year and
necessary to disclose the reason of unpayment:
Inapplicable
(3) Other payables
1) Other payments stated based on nature of fund
In CNY
Items Ending balance Opening balance
Cash pledge or cash deposit 68,019,256.56 45,114,205.97
Fund for shop-front activities 1,535,874.76 16,636,771.40
Personal account payable 1,280,092.78 1,321,518.82
Refurbishment 3,558,722.65 4,556,469.41
Obligation for repurchase of the restricted stocks 17,442,566.73 17,737,366.73
Others 44,791,740.44 33,402,156.03
Total 136,628,253.92 118,768,488.36
2) Other payables in significant amount and with aging over 1 year
Inapplicable
42. 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 373,530.00 360,140.00
Total 373,530.00 360,140.00
Other notes:
Inapplicable
44. Other current liabilities
Inapplicable
45. Long-term Loan
(1) Classification of Long-term Borrowings
In CNY
Items Ending balance Opening balance
Mortgage loan 4,295,595.00 4,321,680.00
Total 4,295,595.00 4,321,680.00
Note to classification of long term borrowings:
(1) The Company has no overdue and outstanding long term borrowing.
(2) The Company has no secured borrowings in the balance of the long term borrowings during the
reporting period
Other notes, including the interest rate interval:
The interest rate of long term borrowings is 3.00%.
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
(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. Lease liabilities
Inapplicable
48. Long term accounts payable
Inapplicable
(1) Long term accounts payable stated based on the nature
Inapplicable
(2) Special accounts payable
Inapplicable
49. Long term payroll payable
(1) Statement of long term payroll payable
Inapplicable
(2) Change of defined benefit plans
Inapplicable
50. Predicted liabilities
Inapplicable
51. Deferred income
In CNY
Increase in the reporting Decrease in the reporting
Items Opening balance Ending balance Cause of formation
period period
Government subsidies 3,046,090.60 3,046,090.60 Income to be recognized
Total 3,046,090.60 3,046,090.60 --
Items involving government subsidies:
In CNY
Amount counted
Amount of newly Amount counted Amount offsetting
to the Related with
added subsidy in to the other costs and
Liabilities Opening balance non-operating Other changes Ending balance assets/related
the reporting income in the expenses in the
income in the with income
period reporting period reporting period
reporting period
Special purpose
fund of Shenzhen
Related with
industrial design 729,945.01 729,945.01
assets
development
(Note (1))
Funding project
for construction of
enterprise Related with
1,218,274.51 1,218,274.51
technology center assets
designated by the
state (Note (2))
Special purpose
fund for 2017
Related with
Industry and 1,031,833.34 1,031,833.34
income
Informationization
at Provincial Level
(Note (3))
Special fund for
upgrading
Related with
standard and 66,037.74 66,037.74
income
quality of
consumer goods
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 Supporting Program of Financial Support Fund for Construction
of Enterprise Technology Centers in Shenzhen in 2015 (SHEN JING MAO XINXI YU [2015] No. 129 ;
Note (3): 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 442,968,881.00 -14,797,000.00 -14,797,000.00 428,171,881.00
Other notes:
(1) The Company held the 7th session of the Ninth Board of Directors on April 4, 2019 and the 2nd
Extraordinary General Meeting 2019 on April 23, 2019, and reviewed and approved the "Proposal for
Repurchase of the Company's Partial Domestically Listed Foreign Shares (B-shares)”, according to which
the Company was approved to repurchase the Company’s partial domestically listed foreign shares
(B-shares) by means of centralized bidding to reduce its registered capital. Ended April 29, 2020, the
Company completed the cancellation of the above shares (14,730,000 shares) repurchased with China
Securities Depository and Clearing Corporation Limited Shenzhen Branch. After cancellation of the
repurchased shares, the total capital stock of the Company decreased from 442,968,881 shares to
428,238,881 shares.
(2) On January 10, 2020 and March 18, 2020, the Company held the 15th and 16th sessions of the Ninth
Board of Directors and reviewed and approved the “Proposal for Repurchase and Cancellation of the
Partially Restricted Shares Involved in 2018 A-Share Restricted Stock Incentive Plan (Phase 1)”,
according to which the Company intended to repurchase and cancel a total of 67,000 A-share restricted
stock jointly held, already granted but with the restriction not released to three former incentive objects
who have left the Company.
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
1,062,297,140.76 0.00 65,007,645.82 997,289,494.94
premium)
Other capital reserve 18,933,074.56 3,165,401.89 2,948.60 22,095,527.85
Total 1,081,230,215.32 3,165,401.89 65,010,594.42 1,019,385,022.79
Other notes, including the note to its increase/decrease and the cause(s) of its movement in the reporting
period:
(1) The Company held the 7th session of the Ninth Board of Directors on April 4, 2019 and the 2nd
Extraordinary General Meeting 2019 on April 23, 2019, and reviewed and approved the "Proposal for
Repurchase of the Company's Partial Domestically Listed Foreign Shares (B-shares)”, according to which
the Company was approved to repurchase the Company’s partial domestically listed foreign shares
(B-shares) by means of centralized bidding to reduce its registered capital. The Company accumulatively
repurchased 14,730,000 domestically listed foreign shares (B shares) by means of centralized bidding
through special securities repurchase accounts, and the capital reserve (capital stock premium)
decreased by CNY 65,007,645.82 (converted in Hong Kong dollars, including the service fees of CNY
243,340.90).
(2) Other capital reserve increased by CNY 3,165,401.89 in the reporting period are the restricted stock
incentive expenses of A-shares in January, 2020 provided from January to June, 2020.
56. Treasury shares
In CNY
Items Opening balance Increase in the reporting period Decrease in the reporting period Ending balance
Shares in stock 71,267,118.78 25,969,974.82 79,789,104.92 17,447,988.68
Total 71,267,118.78 25,969,974.82 79,789,104.92 17,447,988.68
Other notes, including the note to its increase/decrease and the cause(s) of its movement in the reporting
period:
The increase of the shares in stock during the reporting period consisted of two parts. One part was the
cancelled retired employees’ restrictive shares in stock with total amount of CNY 294,800.00 and the
other part was the amount from the repurchase of B-shares totaling CNY 25,969,974.82 and the
repurchased B-shares in stock cancelled subsequently with total amount of CNY 79,494,304.92.
57. Other comprehensive income
In CNY
Amount incurred in the reporting period
Less: the
amount counted
Less: the amount
to the retained
counted to the profit
earnings during
and loss during the
Amount incurred the reporting Attributable to Attributable to
reporting period Ending
Items Opening balance before income period which Less: Income the parent minority
which had been balance
tax in the had been tax expense company after shareholders
counted to the other
reporting period counted to the tax after tax
comprehensive
other
income in the
comprehensive
previous period.
income in the
previous period.
II. Other comprehensive income which shall be
-940,209.09 4,329,973.83 4,329,877.58 96.25 3,389,668.49
re-classified into profit and loss
Conversion difference in foreign currency
-940,209.09 4,329,973.83 4,329,877.58 96.25 3,389,668.49
statements
Total other comprehensive income -940,209.09 4,329,973.83 4,329,877.58 96.25 3,389,668.49
Other notes include the valid part of gain and loss of a cash-flow hedge converted into initial amount of
arbitraged items for adjustment:
The net amount of the other comprehensive income after tax incurred in the reporting period was CNY
4,329,973.83. Where, the net after-tax amount of other comprehensive income attributable to
shareholders of the parent company was CNY 4,329,877.58; the net after-tax amount of other
comprehensive income attributable to the minority shareholders incurred in the reporting period was CNY
96.25.
58. Special reserve
Inapplicable
59. Surplus Reserve
In CNY
Items Opening balance Increase in the reporting period Decrease in the reporting period Ending balance
Statutory surplus reserve 173,716,286.14 0.00 0.00 173,716,286.14
Discretionary surplus reserve 61,984,894.00 0.00 0.00 61,984,894.00
Total 235,701,180.14 0.00 0.00 235,701,180.14
Note to surplus reserve, including the note to its increase/decrease and the cause(s) of its movement in
the reporting period:
Inapplicable
60. Retained earnings
In CNY
Items Reporting period Previous period
Before adjustment: Retained earnings at the end of the previous
966,840,818.40 851,360,603.66
period
After adjustment: Retained earnings at the beginning of the
966,840,818.40 851,360,603.66
reporting period
Plus: Net profit attributable to the parent company’s owner in the
77,738,906.30 215,909,014.15
report period
Less: Provision of statutory surplus public reserve 12,685,386.34
Dividends of common shares payable 85,634,376.20 87,743,413.07
Retained earnings at the end of the reporting period 958,945,348.50 966,840,818.40
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 joint 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 1,579,084,669.87 977,121,580.01 1,775,615,457.33 1,049,188,996.85
Other businesses 2,750,045.16 314,096.86 9,420,562.90 2,315,078.37
Total 1,581,834,715.03 977,435,676.87 1,785,036,020.23 1,051,504,075.22
Revenue related information:
Inapplicable
Information in connection with the performance obligation:
Inapplicable
Information related to the transaction price allocated to the remaining performance obligations:
Inapplicable
Other notes:
Inapplicable
62. Business Taxes and Surcharges
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Consumption tax 39,803.71 184,399.06
Urban maintenance and construction tax 2,489,349.64 6,395,004.36
Education Surcharge 1,762,953.17 4,548,531.69
Resource tax 0.00 0.00
Real estate tax 1,403,403.52 1,886,754.77
Land use tax 119,304.10 211,126.82
Tax on using vehicle and boat 2,880.00 1,035.00
Stamp duty 1,007,174.51 1,102,915.98
Others 446,115.04 765,107.65
Total 7,270,983.69 15,094,875.33
Other notes:
Inapplicable
63. Sales expenses
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Salaries & bonus 139,307,052.85 145,512,139.90
Employees’ welfare 2,813,685.58 3,159,080.44
Public reserve for housing 5,258,301.65 5,750,656.98
Social security premium 9,151,865.67 22,997,809.84
Shopping mall and rental fees 89,783,779.60 83,986,057.93
Advertising, exhibition and market promotion fee 61,631,796.14 72,972,500.97
Depreciation and amortization 44,191,277.25 43,315,834.35
Packing expenses 3,301,568.93 5,502,133.20
Water & power supply and property management fee 8,864,424.63 9,561,119.07
Freight 5,368,007.05 6,971,013.87
Office expenses 2,324,895.41 2,779,674.92
Business travel expenses 1,975,223.92 4,887,148.59
Others 6,956,433.83 8,380,858.89
Total 380,928,312.51 415,776,028.95
Other notes:
Inapplicable
64. Administrative expenses
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Salaries & bonus 61,814,187.62 67,718,045.37
Employees’ welfare 1,940,091.63 1,790,667.18
Social security premium 2,319,177.99 5,755,767.56
Public reserve for housing 2,231,934.56 2,077,719.29
Enterprise annuity 961,256.78 1,125,994.66
Labor union dues 2,548,950.92 2,630,194.16
Training fee 341,994.77 518,230.67
Depreciation and amortization 13,362,685.84 14,295,251.10
Business travel expenses 967,235.20 3,353,907.41
Office expenses 2,085,464.53 1,688,108.77
Service fee to intermediary agencies 1,598,683.57 1,625,961.96
Others 8,068,685.32 13,772,987.29
Total 98,240,348.73 116,352,835.42
Other notes:
Inapplicable
65. R & D expenditures
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Salaries & bonus 12,250,034.26 10,860,114.59
Employees’ welfare 198,645.82 205,127.58
Social security premium 392,814.93 924,124.54
Public reserve for housing 412,951.55 304,138.80
Cost of materials 9,453.09 63,256.68
Intellectual property fee 276,918.12 277,815.00
Payment for samples 593,599.24 868,357.42
Consulting fee 240,576.67 875,841.49
Depreciation and amortization 3,162,020.53 2,627,949.69
Technical cooperation fee 1,536,929.13 560,030.37
Others 1,630,327.42 1,959,654.77
Total 20,704,270.76 19,526,410.93
Other notes:
Inapplicable
66. Financial expenses
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Interest payment 13,485,670.67 12,023,843.93
Less: capitalized interest 0.00 0.00
Less: Interest income 2,482,721.82 908,850.92
Exchange gain & loss 713,188.07 -134,740.68
Financial service charges and miscellaneous 4,812,806.44 5,258,713.56
Total 16,528,943.36 16,238,965.89
Other notes:
Inapplicable
67. Other income
In CNY
Source of arising of other income Amount incurred in the reporting period Amount incurred in the previous period
Government subsidies 10,154,015.67 13,045,742.36
Total 10,154,015.67 13,045,742.36
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
2,160,911.92 1,531,310.06
method
Total 2,160,911.92 1,531,310.06
Other notes:
Inapplicable
69. Net exposure hedge income
Inapplicable
70. Income from change of the fair value
Inapplicable
71. Loss from impairment of credit
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Provision for bad debt of other receivables -1,851.58 -301,318.07
Loss from bad debt of accounts receivable -2,465,509.77 -2,780,450.82
Total -2,467,361.35 -3,081,768.89
Other notes:
Inapplicable
72. Loss from impairment of assets
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
II. Loss from price falling of inventories or loss from
0.00 2,514,740.86
impairment of contract performance costs
Total 0.00 2,514,740.86
Other notes:
Inapplicable
73. 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 0.00 1,720.00
Loss from disposal of assets -200,140.17 -213,730.13
Total -200,140.17 -212,010.13
74. 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
877,410.33 212,175.93 877,410.33
be paid
Carry-over of inventory overage 226,888.80 226,888.80
Others 287,560.29 82,135.77 287,560.29
Total 1,391,859.42 294,311.70 1,391,859.42
Government subsidy counted to the current profit and loss:
Inapplicable
75. Non-operating expenditure
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
Outward donation 0.00 200,000.00 0.00
Others 118,646.41 324,505.98 118,646.41
Total 118,646.41 524,505.98 118,646.41
Other notes:
Inapplicable
76. Income tax expense
(1) Statement of income tax expenses
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Income tax expense in the reporting period 26,235,776.22 22,066,289.48
Deferred income tax expense -12,327,864.33 18,548,898.09
Total 13,907,911.89 40,615,187.57
(2) Process of adjustment of accounting profit and income tax expense
In CNY
Items Amount incurred in the reporting period
Total profit 91,646,818.19
Income tax expense calculated based on the statutory/ applicable tax rate 22,911,704.55
Influence of different tax rates applicable to subsidiaries -9,197,395.81
Influence of adjustment of the income tax in the previous period -49,934.25
Influence of the non-taxable income 0.00
Influence of the non-offsetable costs, expenses and loss 891,927.62
Influence from the offsetable loss of the unrecognized deferred income tax asset at the
0.00
end of the previous period
Influence from the offsetable provisional difference or offsetable loss of the
1,140,007.94
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
-1,788,398.15
be stated with “-“)
Others 0.00
Income tax expenses 13,907,911.89
Other notes
Inapplicable
77. Other comprehensive income
For the detail, refer to Note 57.
78. 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 5,210,311.30 7,326,827.42
Government subsidies 10,154,015.67 13,045,742.36
Cash deposit 7,315,744.37 6,493,217.88
Interest income 2,482,721.82 908,850.92
Reserve 1,303,065.89 687,618.62
Others 4,821,570.68 12,513,870.71
Total 31,287,429.73 40,976,127.91
Note to other cash received in connection with operating activities:
Inapplicable
(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 30,650,504.85 55,480,743.21
Rent 56,722,191.19 54,742,365.90
Shopping mall fees 12,740,511.78 30,786,192.52
Advertisement fee 6,000,177.41 11,083,207.52
Packing expenses 3,491,359.91 5,703,500.29
Business travel expenses 2,955,291.84 8,284,981.38
Water and electricity fees 5,422,039.82 6,714,986.63
R & D expenses 3,588,855.18 4,322,224.36
Office expenses 5,169,903.19 5,207,489.18
Freight 5,917,126.15 7,747,014.23
Exhibition fee 45,727.87 6,546,230.71
Property management fee 9,544,159.17 7,982,065.97
Business entertainment 1,310,428.39 2,683,582.53
Service fee to intermediary agencies 2,671,307.29 2,043,210.38
Others 19,696,640.17 27,973,348.54
Total 165,926,224.21 237,301,143.35
Note to other cash paid in connection with operating activities:
Inapplicable
(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
In CNY
Items Amount incurred in the reporting period Amount incurred in the previous period
Repurchase of B-shares 26,825,873.78 17,565,400.00
Total 26,825,873.78 17,565,400.00
Note to other cash paid in connection with fund-raising activities:
The amount incurred in the reporting period was the payment for repurchase of B-shares.
79. 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 77,738,906.30 123,495,460.90
Plus: Provision for impairment of assets 2,467,361.35 567,028.03
Depreciation of fixed assets, depletion of oil and
21,037,291.58 21,385,076.08
gas asset, depreciation of productive biological asset
Amortization of intangible assets 3,829,094.00 3,291,008.97
Amortization of the long-term expenses to be
50,739,190.23 46,754,405.36
apportioned
Loss (income is stated in “-”) from disposal of
200,140.17 212,010.13
fixed assets, intangible assets and other long term assets
Financial expenses (income is stated with “-”) 13,485,670.67 12,023,843.93
Investment loss (income is stated with “-”) -2,160,911.92 -1,531,310.06
Decrease of the deferred income tax asset
-12,327,864.33 17,382,217.94
(increase is stated with “_”)
Increase of deferred income tax liability
-63,520.78
(decrease is stated with “-”)
Decrease of inventories (Increase is stated with
10,360,528.74 57,362,696.37
“-”)
Decrease of operative items receivable
-57,935,867.20 -112,532,040.70
(Increase is stated with “-”)
Increase of operative items payable (Decrease is
-3,724,783.54 -9,395,746.58
stated with “-”)
Net cash flows arising from operating activities 103,645,235.27 159,014,650.37
2. Significant investment and fund-raising activities with no
-- --
cash income and expenses involved:
3. Net change in cash and cash equivalents: -- --
Ending cash balance 344,906,641.68 224,316,552.42
Less: Opening balance of cash 315,093,565.09 162,623,059.97
Net increase of cash and cash equivalents 29,813,076.59 61,693,492.45
(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
I. Cash 344,906,641.68 315,093,565.09
Including: Cash in stock 344,906,641.68 315,093,565.09
Bank deposit available for payment at any time 215,989.73 229,258.38
Other monetary fund used for payment at any time 343,931,215.59 285,306,297.62
Due from central bank available for payment 759,436.36 29,558,009.09
III. Ending balance of cash and cash equivalents 344,906,641.68 315,093,565.09
Including: cash and cash equivalents restricted for use from
1,575,000.00 3,641,389.51
the parent company or other subsidiaries of the Group
Other notes:
Inapplicable
80. Notes to items of statement of change in owner’s equity
Specify the description of the item "others" and the adjusted amount of the balance at the end of last year:
Inapplicable
81. Assets restricted in ownership or use right
In CNY
Items Book value at the end of the reporting period Cause of restriction
Monetary fund 1,575,000.00 Deposit for L/G
Fixed assets 14,201,915.48 Security guarantee
Total 15,776,915.48 --
Other notes:
Inapplicable
82. 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 fund -- --
Including: USD 2,733,938.06 7.07950 19,354,914.51
Euro 30,154.43 7.96100 240,059.40
HKD 8,747,941.93 0.91344 7,990,720.07
SF 138,202.79 7.44340 1,028,698.65
Accounts receivable -- --
Including: USD 603,055.08 7.0795 4,269,328.45
Euro 30,425.59 7.9610 242,218.13
HKD 2,970,361.11 0.91344 2,713,246.66
SF 30,527.96 7.4434 227,231.82
Long-term Loan -- --
Including: USD 0.00 7.07950 0.00
Euro 0.00 7.96100 0.00
HKD 0.00 0.91344 0.00
SF 577,101.19 7.44340 4,295,595.00
Advance payment for goods
Including: USD 0.00 7.07950 0.00
Euro 0.00 7.96100 0.00
HKD 0.00 0.91344 0.00
SF 859,637.54 7.44340 6,398,626.07
JP Yen 10,477,519.30 0.06581 689,504.59
Accounts payable
Including: USD 0.00 7.07950 0.00
Euro 0.00 7.96100 0.00
HKD 1,771,811.89 0.91344 1,618,443.85
SF 29,675.49 7.44340 220,886.54
Other receivables
Including: USD 0.00 7.07950 0.00
Euro 0.00 7.96100 0.00
HKD 146,038.44 0.91344 133,397.35
SF 908,889.21 7.44340 6,765,225.95
Advance from customers
Including: USD 31,617.09 7.07950 223,833.19
Euro 0.00 7.96100
HKD 1,179,628.55 0.91344 1,077,519.90
SF 7.44340
Other payables
Including: USD 4,702.87 7.07950 33,293.97
Euro 1,090.35 7.96100 8,680.28
HKD 416,145.72 0.91344 380,124.15
SF 71,910.54 7.44340 535,258.91
Short term loans
Including: USD 0.00 7.07950 0.00
Euro 0.00 7.96100 0.00
HKD 58,302.42 0.91344 53,255.76
SF 1,405,115.26 7.44340 10,458,834.93
Non-current liabilities due within a year
Including: USD 0.00 7.07950 0.00
Euro 0.00 7.96100 0.00
HKD 0.00 0.91344 0.00
SF 50,182.71 7.44340 373,530.00
Other notes:
Inapplicable
(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.
Inapplicable
83. Hedging
Inapplicable
84. Government subsidies
(1) Basic information of government subsidies
In CNY
Amount counted to the current profit and
Categories Amount Items presented
loss
Qualification of the enterprise in
150,000.00 Other income 150,000.00
Guangming District for Baselworld 2019
Financing the enterprises for project
development in the domestic market in 88,280.00 Other income 88,280.00
2020
The 1st fund allocation of the first R&D
571,000.00 Other income 571,000.00
financial support (A) in 2019
Financial support for improving both
technical innovation and brands (B) in 800,000.00 Other income 800,000.00
2020
Funding and award in the Shenzhen
176,681.00 Other income 176,681.00
Standard Field in 2019
Export credit insurance premiums for the
34,123.00 Other income 34,123.00
second half year of 2018
Financial support for improving both
quality and brand in the technical
800,000.00 Other income 800,000.00
innovation doubling special subsidy
program (C) in 2020
Business subsidy 3,601.49 Other income 3,601.49
Subsidy to the employees of the Education
Bureau of Xiacheng District engaged in 500.00 Other income 500.00
nursing service
Business opening bonus received from the
100.00 Other income 100.00
Bureau of Commerce
Local government subsidy for COVID-19
6,577.35 Other income 6,577.35
prevention
Refunded education surcharge 273.22 Other income 273.22
Financial support for improving both
quality and brand in the technical
800,000.00 Other income 800,000.00
innovation doubling special subsidy
program (C) in 2020
Social insurance subsidy 12,100.00 Other income 12,100.00
Allowance for the Endowment and Medical
Insurance for the Disabled in the Second 3,590.52 Other income 3,590.52
Half of 2019 from Guangming District
Financial support for exhibition at
20,000.00 Other income 20,000.00
Guangdong Industrial Expo
Financial support for certifying the second
national hi-tech enterprises in 2019 from 100,000.00 Other income 100,000.00
Guangming District
Financing the enterprises for project
development in the domestic market in 71,510.00 Other income 71,510.00
2020
Special fund subsidy in the field of 60,814.00 Other income 60,814.00
Shenzhen Standards in 2019
Salary delivered to the employees still not
1,078,243.40 Other income 1,078,243.40
starting work as subsidy in Switzerland
Special financial support for 2019
Nanshan District Excellence-Creation
1,618,800.00 Other income 1,618,800.00
Rating Independent Innovation Project
(National Design Center) (D)
Special financial support for 2019
Nanshan District Innovation Carrier 776,500.00 Other income 776,500.00
Support Technology Project (E)
Special fund for 2019 Nanshan District
9,500.00 Other income 9,500.00
Patent Support Program
Special fund for 2019 Nanshan District
57,000.00 Other income 57,000.00
Standardization Work Support Plan
Award for 2019 Nanshan District
Technology Innovation (China Award for 200,000.00 Other income 200,000.00
Excellence in Design)
Financial support from 2019 Nanshan
District Enterprise R & D Investment 657,400.00 Other income 657,400.00
Support Plan (F)
Basic electricity charge for February paid
103,740.00 Other income 103,740.00
on behalf by the municipal government
Special fund subsidy in the field of
Shenzhen Standards in 2019 from the
741,665.00 Other income 741,665.00
Market Supervision & Administration
Bureau of Shenzhen Municipality (G)
Financing the enterprises for project
development in the domestic market in 1,473.34 Other income 1,473.34
2020
Subsidies to the affected enterprises in
499,019.60 Other income 499,019.60
2019 (H)
Employment stabilization subsidies 433,480.80 Other income 433,480.80
Refunded individual income tax 278,042.95 Other income 278,042.95
Total 10,154,015.67 10,154,015.67
Notes:
A. It is the government subsidy obtained according to the Notice of Shenzhen Municipal Science &
Technology Innovation Commission on the First Supporting Fund Application Materials and Appropriation
Materials for the Advance Reception of the Enterprise R & D Funding Plan in 2019.
B. It is the government subsidy obtained according to the Notice of the Bureau of Industry and Information
Technology of Shenzhen Municipality on the Disclosure of the Intentional Financial Support Scheme for
Quality Brand Double Promotion of the Special Subsidy Plan for Technology Improvement Multiplication
in 2020.
C. It is the government subsidy obtained according to the Notice of the Bureau of Industry and Information
Technology of Shenzhen Municipality on the Disclosure of the Intentional Financial Support Scheme for
Quality Brand Double Promotion of the Special Subsidy Plan for Technology Improvement Multiplication
(Batch I) in 2020.
D. It is the government subsidy obtained according to the "Measures of the Bureau of Industry and
Information Technology of Nanshan District for Management of the Special Fund for Development of the
Independent Innovation Industry in Nanshan District" and the "Rules for Implementation of the Special
Fund for Independent Innovation Industry Development in Nanshan District - the Itemized Fund for
Economic Development".
E. It is the government subsidy obtained according to the Notice of the General Office of Nanshan District
People's Government of Shenzhen Municipality on the Printing and Issuing of the "Measures for
Management of the Special Fund for Development of the Independent Innovation Industry in Nanshan
District” SHEN NAN FU BAN GUI [2019] No. 2.
F. It is the government subsidy obtained according to the Notice of the General Office of Nanshan District
People's Government of Shenzhen Municipality on the Printing and Issuing of the "Measures for
Management of the Special Fund for Development of the Independent Innovation Industry in Nanshan
District” SHEN NAN FU BAN GUI [2019] No. 2.
G. It is the government subsidy obtained according to the Notice of the Market Supervision and
Administration Bureau of Shenzhen Municipality on the Special Fund Support and Incentive Scheme for
the Standard Fields 2019 in Shenzhen.
H. It is the government subsidy obtained according to the Notice of the Small and Medium-sized
Enterprise Service Bureau of Shenzhen Municipality for Allocating the Subsidy for the Domestic Market
Development Projects to the Program of Innovative Development, Fostering and Support of Shenzhen
Local Private and Small & Medium-sized Enterprises in 2020.
(2) Refunding of the government subsidies
Inapplicable
85. Others
Inapplicable
VIII. Change in consolidation scope
1. Consolidation of enterprises not under the joint control
(1) Consolidation of enterprises not under joint 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
(6) Other notes
No change took place in the consolidation scope of the Company in 2020
2. Consolidation of enterprises under the joint control
(1) Consolidation of enterprises under joint 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
Note to the change in the consolidation scope (e.g. new subsidiaries, liquidation subsidiaries, etc.)
caused by other reasons and relevant information:
Inapplicable
6. Others
Inapplicable
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% 0.00%
investment
Precision Technology Establishment or
Shenzhen Shenzhen Manufacture 90.00% 10.00%
Co. investment
Establishment or
the Hong Kong Co. Hong Kong Hong Kong Commerce 100.00% 0.00%
investment
Establishment or
Station-68 Co. Hong Kong Hong Kong Commerce 0.00% 60.00%
investment
Shenzhen Harmony Shenzhen Shenzhen Commerce 100.00% 0.00% Establishment or
E-Commerce Co., Ltd. investment
Science & Technology Establishment or
Shenzhen Shenzhen Manufacture 100.00% 0.00%
Development Co. investment
Establishment or
SHIYUEHUI Shenzhen Shenzhen Commerce 100.00% 0.00%
investment
Emile Choureit Establishment or
Shenzhen Shenzhen Commerce 100.00% 0.00%
(Shenzhen) investment
Establishment or
FIYTA Sales Co., Ltd. Shenzhen Shenzhen Commerce 100.00% 0.00%
investment
Consolidation of
Hengdarui Shenyang Shenyang Commerce 100.00% 0.00% enterprises under the
joint control
Consolidation of
Swiss Company Switzerland Switzerland Commerce 0.00% 100.00% enterprises not under
the joint control
Other notes:
Inapplicable
(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 Commerce 25.00% Equity method
(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 119,900,356.87 117,096,911.21
Non-current assets 15,186,082.97 13,556,720.58
Total assets 135,086,439.84 130,653,631.79
Current liabilities 21,476,491.68 22,661,506.61
Non-current liabilities - 7,978,869.84
Total liabilities 21,476,491.68 30,640,376.45
Equity attributable to the parent company’s shareholders 113,609,948.16 100,013,255.34
Share of net assets calculated according to the 28,402,487.04
25,003,313.84
shareholding proportion
Book value of the equity investment in associates 48,584,749.77 46,423,837.85
Revenue 54,674,292.84 57,039,155.07
Net profit 8,643,647.69 6,125,240.23
Total comprehensive income 8,643,647.69 6,125,240.23
Other notes
Inapplicable
(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
(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. Others
Inapplicable
X. Financial instruments and risk management
The Group's main financial instruments include monetary funds, notes receivable, accounts receivable,
other receivables, other equity instrument investments, accounts payable, other payables, short-term
borrowings, non-current liabilities due within 1 year, and long-term borrowings. Details of the financial
instruments have been disclosed in the relevant notes. The risks involved in these financial instruments
and the Group’s risk control policies aiming at reducing these risks are stated as follows. The Group’s
management conducts management and monitoring of these risk exposures so as to ensure risks to be
controlled within a specific limitation.
1. Risk management goals and policies
The Group's objective in risk management is to achieve a proper balance between risk and return and to
reduce the adverse impact of financial risks on the Group's financial performance. Based on this risk
management objective, the Group has developed risk management policies to identify and analyze the
risks faced by the Group, set appropriate acceptable levels of risks and design corresponding internal
control procedures to monitor the risk level of the Group. The Group regularly reviews these risk
management policies and relevant internal control systems to respond to changes in market conditions or
the Group's business activities. The Group's internal audit department also periodically or randomly
checks whether the implementation of the internal control system conforms to the risk management
policy.
The main risks caused by the Group's financial instruments are credit risk, liquidity risk and market risk
(including exchange rate risk, interest rate risk and commodity price risk).
The Board of Directors is responsible for planning and establishing the risk management framework of the
Group, formulating the risk management policies and relevant guidelines of the Group and supervising
the implementation of risk management measures. The Group has formulated risk management policies
to identify and analyze the risks faced by the Group. These risk management policies clearly specify
specific risks and cover many aspects such as market risk, credit risk and liquidity risk management. The
Group regularly evaluates the market environment and changes in the Group's business activities to
determine whether or not to update the risk management policy and system. The risk management of the
Group is carried out by the Risk Management Committee in accordance with policy approved by the
Board of Directors. The Risk Management Committee works closely with other business units of the
Group to identify, evaluate and mitigate risks. The internal audit department of the Group conducts regular
audits of risk management controls and procedures and reports the audit results to the audit committee of
the Group.
The Group diversifies the risk of financial instruments through appropriate diversification of investments
and business portfolios and reduces the risk of being concentrated in a single industry, a specific region or
a specific counterparty by developing appropriate risk management policy.
(1) Credit risk
Credit risk refers to the risk of the Group's financial loss caused by the counterparty's failure to fulfill its
contractual obligations.
The Group manages credit risk by portfolio classification. Credit risk mainly arises from bank deposits,
notes receivable, accounts receivable, other receivables, etc.
The Group places its bank deposits mainly with financial institutions with good reputation and high credit
rating, and the Group does not expect that there exists any significant credit risk to the bank deposits.
For notes receivable, accounts receivable and other receivables, the Group has set the relevant policy to
control credit exposure. The Group evaluates the customer's credit qualification and sets the
corresponding credit period based on their financial position, credit history and other factors such as
current market conditions. The Group shall regularly monitor customers' credit records. For customers
with poor credit records, the Group shall use such methods as written payment reminders, shortening or
canceling credit periods to ensure that the overall credit risks of the Group are under control.
The Group’s debtors of accounts receivable are customers engaged in different industries and located in
different regions. The Group continues to conduct credit assessment of the financial position of accounts
receivable and, where appropriate, purchases credit guarantee insurance.
The maximum credit risk exposure the Group accesses to is the book value of each financial asset in the
balance sheet. The Group is also exposed to credit risks due to the provision of financial guarantees, as
detailed in Note XII.2.
In the Group's accounts receivable, the amount owed by the top five customers took 15.42% of the
Group's total accounts receivable (2019: 25.39%); in the Group's other receivables, the amount owed
by the top five customers took 11.28% of the Group's total other receivables (2019: 40.94%).
(2) Liquidity risks
Liquidity risk refers to the risk that the Group encounters a shortage of funds in fulfilling its obligation to
settle by delivery of cash or other financial assets.
When managing flow risks, each of the Group's affiliates is responsible for its own cash flow forecast. The
Group's financial center monitors long - and short-term fund demands at the Group level based on the
cash flow forecast results of each member enterprise. The Group manages the surplus fund within the
Group through the capital pool plan established with some large banking financial institution, and ensures
that each member enterprise has sufficient cash reserves to meet the payment obligations due for
settlement. In addition, the Group has entered into agreements for line of financing credit with its major
correspondent banks to support the Group in fulfilling its obligations related to commercial paper.
The Group raises working capital through funds generated from its operations and bank borrowings. As at
June 30,2020, the amount of the bank loans not yet used by the Group was CNY 2,316.68 million
(December 31,2019: CNY 1,970.39 million).
(3) Market risks
Market risk of financial instruments refers to the risk that the fair value or future cash flow of financial
instruments may fluctuate due to changes in market prices, including interest rate risk, exchange rate risk
and other price risk.
Interest rate risks
Interest rate risk refers to the risk that the fair value of financial instruments or future cash flow may
fluctuate due to changes in market interest rates. Interest rate risk may arise from recognized interest
bearing financial instruments and unrecognized financial instruments (such as certain loan commitments).
The interest rate risk of the Group is mainly generated from short-term bank borrowing, long-term bank
borrowing and other interest-bearing debts. Financial liabilities with floating interest rate expose the
Group to interest rate risk of cash flow while financial liabilities with fixed interest rate expose the Group to
interest rate risk of fair value. The Group determines the relative proportion of fixed and floating rate
contracts in accordance with prevailing market conditions and maintains an appropriate portfolio of fixed
and floating rate instruments through regular reviews and monitoring.
The interest-bearing financial instruments held by the Group are as follows (In CNY 10,000) :
Items Amount in the reporting year Amount in the previous year
Financial instruments with fixed interest rate
Financial liabilities
Where: short-term borrowings 67,356.24 48,710.37
Long-term Loan 466.91 468.18
Sub-total 67,823.15 49,178.55
Financial instruments with floating interest rate
Financial liabilities
Where: short-term borrowings 8,000.00
Total 67,823.15 57,178.55
For the financial instruments held on the balance sheet date that expose the Group to fair value interest
rate risk, the impact of net profit and shareholders' equity in the sensitivity analysis above is the impact
after the re-measurement of the financial instruments according to the new interest rate, assuming that
the daily interest rate of the balance sheet changes. For floating rate non-derivative instruments held at
the balance sheet date that expose the Group to cash flow interest rate risk, the impact on net profit and
shareholders' equity in the sensitivity analysis above is the impact of the above interest rate change on
the annualized estimated interest expense or income. The previous year's analysis was based on the
same assumptions and methodology.
Exchange rate risk
Exchange rate risk refers to the risk of fluctuations in the fair value of financial instruments or future cash
flows due to movement in foreign exchange rates. Exchange rate risk may be derived from financial
instruments denominated in foreign currencies other than the functional currency.
Exchange rate risk mainly refers to the Group's financial position and cash flow affected by foreign
exchange rate fluctuations. In addition to the subsidiary established in Hong Kong holding assets in Hong
Kong dollars and the sub-subsidiary established in Switzerland holding assets in Swiss Francs, the
Group's other major business activities are mainly settled in Renminbi. However, foreign exchange risks
still exist in the foreign currency assets and liabilities recognized by the Group and in future foreign
currency transactions.
As of June 30, 2020, the amount of foreign currency financial assets and foreign currency financial
liabilities held by the Group converted into Renminbi is listed as follows (In CNY 10,000) :
Items Foreign currency liabilities Foreign currency assets
Amount at the end of the Amount at the beginning of Amount at the end of the Amount at the beginning of
reporting period the reporting period reporting period the reporting period
US$ 25.71 - 2,362.42 4,601.89
HK$ 312.93 1,939.47 1,083.74 1,072.77
CHF 1,588.41 1,700.89 1,441.98 3,497.65
Euro 0.87 - 48.23 359.81
JP Yen - 68.95
Total 1,927.93 3,640.36 5,005.32 9,532.12
The Group pays close attention to the impact of exchange rate fluctuations on exchange rate risks of the
Group. The Group is not currently taking any measures to protect itself from exchange rate risk. However,
the management is responsible for monitoring currency risks and will consider hedging significant
currency risks as needed.
On June 30, 2020, for the Group’s foreign currency monetary funds, bank loans and other financial
instruments, and so on, may lead to appreciation or depreciation of the Group's shareholders' equity and
net profit by about CNY 1.2494 million (December 31, 2019: about CNY 2.9459 million) with the
assumption that that Renminbi to foreign currencies (mainly against US Dollars, HK Dollars and Swiss
Franc) may be appreciated or depreciated by 5% with other factors remain unchanged.
2. Capital management
The objective of the Group's capital management policy is to ensure that the Group is a going concern,
thus providing returns to shareholders and benefits to other stakeholders, while maintaining an optimal
capital structure to reduce the cost of capital.
In order to maintain or recapitalize, the Group may adjust the way of financing, adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares and other equity
instruments, or sell assets to reduce its debts.
The Group monitors its capital structure on the basis of the asset-liability ratio (that is, the total liabilities
are divided by the total assets). As at 30 June 2020, the Group's gearing was 31.52% (December 31,
2019: 29.420%).
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
Level 1: the quotation of the same assets or liabilities in an active market (unadjusted)
3. Items measured based on the continuous or uncontinuous 2nd level fair value, valuation technique as used,
nature of important parameters and quantitative information
Level 2: either directly (i.e., price) or indirectly (i.e., derived from price) use observable input value other
than market quotations for assets or liabilities at Level 1.
4. Items measured based on the continuous or uncontinuous 3rd level fair value, valuation technique as used,
nature of important parameters and quantitative information
Level 3: The asset or liability has used any input value not based on observable market data
(non-observable input value).
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
This year, the fair value measurement of the Group's financial assets and financial liabilities has neither
experienced any conversion between Level 1 and Level 2, nor experienced transfer-in or transfer-out
to/from Level 3.
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
The Group's financial assets and financial liabilities measured with amortized costs mainly include
monetary funds, notes receivable, accounts receivable, other receivables, short-term loans, accounts
payable, other payables, long-term loans due within a year, long-term loans, etc.
The difference between the book value and fair value of the above financial assets and financial liabilities
not measured with fair value is very little.
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 IHL Shenzhen domestic trade, material CNY 1,166.162 million 38.06% 38.06%
supply and distribution
Note to the parent company:
The proportion of the equity held by AVIC International Shenzhen Co., Ltd. in AVIC International
Holdings Limited is 33.93%. AVIC International Shenzhen is a wholly owned subsidiary of AVIC
International Holdings Limited (AVIC IHL) and China Aviation Industry Corporation (AVIC) directly holds
91.14% of the equity of AVIC IHL. Therefore, the Company’s ultimate controller is AVIC.
Other notes:
Inapplicable
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) An associate of the holding shareholder
Shenzhen AVIC Building Technology Co., Ltd. (AVIC Building Co.) An associate of the holding shareholder
China Merchants Jiyu Industry Operation & Service Co., Ltd. (China Merchants JIYU) An associate of the holding shareholder
Shenzhen AVIC Guanlan Real Estate Development Co., Ltd. (AVIC Guanlan Real
An associate of the holding shareholder
Estate)
Shenzhen AVIC 9 Square Assets Management Co., Ltd. (9 Square Asset) An associate of the holding shareholder
Shenzhen AVIC City Investment Co., Ltd.(AVIC City Investment) An associate of the holding shareholder
Ganzhou CATIC 9 Square Commerce Co., Ltd. (Ganzhou 9 Square) An associate of the holding shareholder
AVIC City Property (Kunshan) Co., Ltd. (AVIC City Property (Kunshan) ) An associate of the holding shareholder
Shenzhen AVIC Security Service Co., Ltd. (AVIC Security Service) An associate of the holding shareholder
Shenzhen AVIC Property Asset Management Co., Ltd. (AVIC Property Asset
An associate of the holding shareholder
Management)
Jiujiang 9 Square Commerce Management Co., Ltd. (9 Square Commerce
An associate of the holding shareholder
Management)
Shenzhen AVIC Real Estate Development Co., Ltd. (AVIC Real Estate) An associate of the holding shareholder
Shenzhen AVIC Nanguang Elevator Co., Ltd. An associate of the holding shareholder
Rainbow Department Store Co., Ltd. and its subsidiaries (RAINBOW) Controlled by the same party
Shennan Circuit Co., Ltd. and its subsidiaries (Shennan Circuit) Controlled by the same party
Shenzhen AVIC City Commerce development Co., Ltd. (AVIC City Development) Controlled by the same party
Shenzhen AVIC Huacheng Commerce development Co., Ltd. (AVIC Huacheng
Controlled by the same party
Commerce development)
Shenzhen AVIC City Parking Lots Management Co., Ltd. (AVIC Parking Lots
Controlled by the same party
Management)
Shenzhen CATIC Technical Testing Office Co., Ltd. (CATIC Technical Testing) Controlled by the same party
Tianma Micro-electronics Co., Ltd. (SHEN TIANMA) 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 Changtai Investment Development Co., Ltd. (AVIC Changtai) Controlled by the same party
Shenzhen CATIC Group Training Center (CATIC Training Center) Controlled by the same party
Shenzhen Grand Skylight Hotel Management Co., Ltd. (Grand Skylight Hotel
Controlled by the same party
Management)
AVIC Finance Co., Ltd. (AVIC Finance ) Controlled by the same party
Shenzhen AVIC Grand Skylight Hotel Management Co., Ltd. (Grand Skylight Hotel) Controlled by the same party
Gongqingcheng CATIC Cultural Investment Co., Ltd. (Gongqingcheng CATIC Cultural
Controlled by the same party
Investment)
AVIC International Complete Set Equipment Co., Ltd. (AVIC Complete Set Equipment) Controlled by the same party
AVIC International Aero-Development Corporation Controlled by the same party
AVIC XI’AN AERONAUTICS COMPUTING TECHNIQUE RESEARCH INSTITUTE Controlled by the same party
AVIC JINCHENG NANJING ENGINEERING INSTITUTE OF AIRCRAFT SYSTEM Controlled by the same party
AVIC Lutong Industrial Co., Ltd. Controlled by the same party
AVIC East China Optoelectronic Co., Ltd. Controlled by the same party
AVIC East China Optoelectronic (Shanghai) Co., Ltd. Controlled by the same party
China Aviation Industry Supply and Marketing Zhongnan Co., Ltd. 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
Wang Jianxin A senior executive
Zhong Hongming A senior executive
Tang Xiaofei A senior executive
Wang Baoying A senior executive
Sheng Qing A senior executive
Fang Jiasheng 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
Tang Haiyuan A senior executive
Xu Chuangyue A senior executive
Other notes
Inapplicable
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 Property management 5,255,465.36 1,800.00 No 4,665,553.46
fee
Shopping mall
Rainbow Ltd. 2,389,264.94 1,000.00 No 3,005,499.82
fees/purchase of goods
SHEN TIANMA Purchase of goods 31,309.90 800.00 No
Ganzhou 9 Square Shopping mall fees 92,549.84 200.00 No
9 Square Commerce
Shopping mall fees 43,147.68 No
Management Co., Ltd.
AVIC Building Co. Refurbishment 32,924.52 No
Shenzhen AVIC Nanguang
Repairing fee 122,830.20 No
Elevator Co., Ltd.
AVIC City Commerce
Shopping mall fees 19,346.13 No
Development
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 29,669,833.80 35,273,411.88
Ganzhou 9 Square Products and labor services 8,748.67 68,392.00
Shennan Circuit Sales of materials and supply of labor 3,086,589.15 4,656,548.21
Gongqingcheng CATIC Cultural
Sales of products 182,271.24
Investment
AVIC International Sales of products 4,424.78
AVIC International Aero-Development
Sales of products 140,884.97
Corporation
Shanghai Watch Sales of products 2,047,890.00
AVIC City Commerce Development Sales of products 94,585.88
AVIC Changtai Sales of products 0
AVIC XI’AN AERONAUTICS COMPUTING Sales of products 7,061.95
TECHNIQUE RESEARCH INSTITUTE
AVIC JINCHENG NANJING Sales of products 176,991.15
ENGINEERING INSTITUTE OF
AIRCRAFT SYSTEM
AVIC Lutong Industrial Co., Ltd. Sales of products 14,123.89
AVIC East China Optoelectronic Co., Ltd. Sales of products 212,389.38
AVIC East China Optoelectronic Sales of products 35,398.23
(Shanghai) Co., Ltd.
China Aviation Industry Supply and Sales of products 7,079.65
Marketing Zhongnan Co., Ltd.
Note to the related transactions of purchase and sale of commodities and supply and acceptance of labor
services
Inapplicable
(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 Property Housing 6,196,298.09 9,236,271.13
Tianyue Hotel Housing 2,095,238.09
CMPO Housing 926,577.86
AVIC City Investment Housing 139,986.58 133,320.56
AVIC Securities Housing 657,257.16 527,428.55
Rainbow Ltd. Housing 696,114.82 289,764.58
AVIC Huacheng Commerce Development Housing 117,566.50
9 Square Assets Housing 1,042,900.03 993,238.13
CATIC Public Security Service Co. Housing 502,635.07 706,043.41
Guanlan Real Estate Housing 69,993.29 172,145.99
AVIC City Property Housing 149,630.10
AVIC Real Estate Housing 140,569.86 133,876.07
The Company as lessee:
In CNY
Rental fee recognized in the Rental fee recognized in the
Names of lessees Categories of leasehold properties
current period previous period
Ganzhou 9 Square Housing 449,741.52 538,609.84
AVIC City Property (Kunshan) Housing 87,666.38
Jiujiang AVIC Real Estate Housing 191,570.45
9 Square Commerce Management
Housing 192,860.44
Co., Ltd.
AVIC City Commerce Development Housing 68,807.29 203,568.04
Note to related lease
Inapplicable
(4) Related guarantee
The Company as a guarantor
In CNY
Guarantees Amount guaranteed Effective date Expiring date Is the guarantee finished
Harmony 100,000,000.00 December 30, 2019 December 29, 2020 No
Harmony 40,000,000.00 April 21, 2020 April 21, 2021 No
the Hong Kong Co. 3,721,700.00 August 22, 2019 August 19, 2020 No
the Hong Kong Co. 3,721,700.00 September 23, 2019 September 19, 2020 No
the Hong Kong Co. 2,977,360.00 October 31, 2019 October 25, 2020 No
The Sales Co. 50,000,000.00 April 26, 2020 April 26, 2021 No
Precision Technology Co. 30,000,000.00 April 24, 2020 April 24, 2021 No
Science & Technology
2,430,000.00 April 29, 2020 April 29, 2021 No
Development Co.
The Company as a guarantee
Inapplicable
(5) Borrowings and lendings among related parties
In CNY
Related parties Borrowing amount Starting date Due date Note
Borrowed from
AVIC Financial Co. 50,000,000.00 March 26, 2019 March 26, 2020
AVIC Financial Co. 100,000,000.00 April 02, 2019 April 02, 2020
AVIC Financial Co. 60,000,000.00 October 25, 2019 October 25, 2020
Lending
(6) Assets assignment and liabilities reorganization of related parties
Inapplicable
(7)Remuneration to senior executives
Inapplicable
(8) Other related transactions
The balance of the Company's deposit at the end of the current year with AVIC Finance amounted to CNY
289,316,243.49, of which the interest received in the current year amounted to CNY 469,992.60.
6. Accounts receivable from and payable to related parties
(1) Receivables
In CNY
Ending balance Opening balance
Project name Related parties
Book balance Bad debt reserve Book balance Bad debt reserve
Accounts receivable:
Rainbow Ltd. 8,983,247.13 449,162.36 633,187.49 31,596.06
Shennan Circuit 1,421,361.72 71,068.09 1,704,634.58 85,061.27
Gongqingcheng CATIC
31,387.08 1,569.35
Cultural Investment
AVIC City Commerce
29,251.10 1,462.56
Development
AVIC Property 227,167.05 11,358.35
Tianyue Hotel 7,630.00 381.50
CATIC Public Security 271,533.23 13,576.66
Service Co.
Shanghai Watch 140,000.00 6,986.00
Notes receivable:
Shennan Circuit 2,094,782.89 2,263,719.32
Advance payment:
SHEN TIANMA 581,280.00 31,309.90
Other receivables:
Rainbow Ltd. 1,208,200.00 60,410.00 975,867.00 50,647.50
Ganzhou 9 Square 122,665.60 6,366.34 122,665.60 6,366.34
AVIC City Property 40,000.00 2,000.00
32,000.00 1,660.80
(Kunshan)
Gongqingcheng CATIC
5,500.00 275.00
Cultural Investment
9 Square Commerce
50,000.00 2,595.00 50,000.00 2,595.00
Management Co., Ltd.
AVIC City Commerce
59,923.00 3,110.00 59,923.00 3,110.00
Development
AVIC IHL 11,101.80 576.18 11,101.80 576.18
(2) Payables
In CNY
Project name Related parties Ending book balance Opening book balance
Accounts payable:
AVIC Building Co. 23,300.97
SHEN TIANMA 3,415.84
Advance receipts:
China Aviation Industry Supply and
29,175.00
Marketing Zhongnan Co., Ltd.
Other payables:
AVIC Property 2,001,989.48 1,237,403.65
CMPO 442,407.92 442,407.92
AVIC City Investment 309,732.00 309,732.00
AVIC Securities 213,000.00 213,000.00
AVIC Building Co. 71,153.70 54,691.44
AVIC City Commerce Development 0.00 99,052.32
AVIC Huacheng Commerce Development 0.00 73,819.68
9 Square Assets 378,483.84 378,483.84
Rainbow Ltd. 257,490.98 155,672.90
AVIC Real Estate 51,014.88 51,014.88
Guanlan Real Estate 25,401.60 25,401.60
CATIC Public Security Service Co. 226,603.44 226,603.44
Tianyue Hotel 57,718.82 28,886.00
7. Related parties’ commitments
Inapplicable
8. Others
Inapplicable
XIII. Stock payment
1. General
Inapplicable
2. Stock payment for equity settlement
In CNY
Method for determining the fair value of equity instruments as at the granting day Closing price of the Company’s shares as at the granting day
Employee service period, achievement rate of performance indicators and
Basis for determining the quantity of exercisable equity instruments
individual performance evaluation result
Cause of significant difference between the estimation of the reporting period and that of
Nil
the previous period
Accumulated amount of the equity-settled share-based payment counted to the capital
17,447,988.68
reserve
Total expenses recognized in the equity-settled share-based payment during the reporting
3,165,401.89
period
Other notes
Inapplicable
3. Stock payment for cash settlement
Inapplicable
4. Correction and termination of stock payment
Inapplicable
5. Others
Inapplicable
XIV. Commitments and contingencies
1. Important commitments
Important commitments existing as at the balance sheet date
Implementation of irrevocable operating lease contract signed by the Company ended the balance sheet
date is as follows:
Minimum rent payment for irrevocable operational lease Ending balance Opening balance
1st year after the balance sheet date 75,083,458.13 69,420,770.36
2nd year after the balance sheet date 34,286,090.53 40,749,688.35
3rd year after the balance sheet date 14,875,155.04 15,620,420.28
Subsequent years 5,240,332.87 11,333,148.34
Total 129,485,036.57 137,124,027.33
2. Contingencies
(1) Significant contingencies existing as at the balance sheet date
As of June 30, 2020, the guarantee status within the Group is as follows (in CNY 10,000) :
Guarantees Guarantors The guarantees Line of credit Used credit line Effective date Expiring date
Harmony The Company Letter of 20,000.00 10,000.00 December 30, 2019 December 29, 2020
guarantee
Harmony The Company Loan 4,000.00 4,000.00 April 21, 2020 April 21, 2021
the Hong Kong Co. The Company Loan 372.17 August 22, 2019 August 19, 2020
the Hong Kong Co. The Company Loan 3,653.76 372.17 September 23, 2019 September 19, 2020
the Hong Kong Co. The Company Loan 297.74 October 31, 2019 October 25, 2020
The Sales Co. The Company Loan 5,000.00 5,000.00 April 26, 2020 April 26, 2021
Precision Technology The Company Loan 3,000.00 3,000.00 April 24, 2020 April 24, 2021
Co.
Science & Technology The Company Loan 3,000.00 243.00 April 29, 2020 April 29, 2021
Development Co.
Total 38,653.76 23,288.88
(2) Important contingencies unnecessary to be disclosed but necessary to be explained
Inapplicable
3. Others
As of June 30, 2020, there exist no other contingencies in the Group necessary to be disclosed.
XV. Events after balance sheet date
1. Significant non-adjustment events
Inapplicable
2. Profit distribution
In CNY
Profit or dividend to be distributed 85,634,376.20
Profit or dividend announced to be distributed after review and approval 85,634,376.20
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
(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
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
Categories Book balance Bad debt reserve Book balance Bad debt reserve
Book value Book value
Amount Proportion Amount Provision Amount Proportion Amount Provision
proportion proportion
where
Accounts receivable for which
provision for bad debt is based 4,699,542.96 100.00% 230,925.13 5.00% 4,468,617.83 2,997,921.46 100.00% 149,896.07 5.00% 2,848,025.39
on portfolios
where
Accounts receivable from other
4,699,542.96 100.00% 230,925.13 5.00% 4,468,617.83 2,997,921.46 100.00% 149,896.07 5.00% 2,848,025.39
customers
Total 4,699,542.96 100.00% 230,925.13 5.00% 4,468,617.83 2,997,921.46 100.00% 149,896.07 5.00% 2,848,025.39
Individual provision for bad and doubtful debts:
Inapplicable
Provision for bad debts based on portfolio: accounts receivable from other customers
In CNY
Ending balance
Description
Book balance Bad debt reserve Provision proportion
Accounts receivable from other customers 4,699,542.96 230,925.13 5.00%
Total 4,699,542.96 230,925.13 --
Note to the basis for determining the combination:
Inapplicable
Disclosed based on aging
In CNY
Aging Ending balance
Within 1 year (with 1 year inclusive) 4,699,542.96
Total 4,699,542.96
(2) Provision, recovery or reversal of reserve for bad debts during the reporting period
Provision for bad debt during the reporting period
In CNY
Amount of movement during the reporting period
Categories Opening balance Amount recovered or Ending balance
Provision Writing-off Others
reversed
Bad debt reserve 149,896.07 230,925.13 149,896.07 0.00 0.00 230,925.13
Total 149,896.07 230,925.13 149,896.07 0.00 0.00 230,925.13
Where the significant amount of the reserve for bad debt recovered or reversed:
Inapplicable
(3) Accounts receivable actually written off in current period
Inapplicable
(4) Accounts receivable owed by the top five debtors based on the ending balance
In CNY
Proportion of the ending balance of the Ending balance of the provision for bad
Description of Units Ending balance of accounts receivable
accounts receivable debts
Receivable from the top five customers 2,421,654.32 52.00% 121,082.71
Total 2,421,654.32 52.00%
(5) Account receivable with recognition terminated due to transfer of financial assets
Inapplicable
(6) Amount of assets and liabilities formed through transfer of account receivable and continuing to be involved
Inapplicable
2. Other receivables
In CNY
Items Ending balance Opening balance
Other receivables 697,541,260.60 783,647,732.22
Total 697,541,260.60 783,647,732.22
(1) Interest receivable
1) Classification of interest receivable
Inapplicable
2) Significant overdue interest
Inapplicable
3) Provision for bad debts
Inapplicable
(2) Dividends receivable
1) Classification of dividends receivable
Inapplicable
2) Significant dividends receivable with age exceeding 1 year
Inapplicable
3) Provision for bad debts
Inapplicable
(3) Other receivables
1) Classification of other receivables based on nature of payment
In CNY
Nature of Payment Ending book balance Opening book balance
Collateral and Deposit 235,761.90 235,761.90
Inter-company current account 643,492,028.31 783,005,800.85
Advance payment for equity allocation 53,183,393.38 0.00
Others 739,511.33 495,730.33
Total 697,650,694.92 783,737,293.08
2) Provision for bad debts
In CNY
The 1st stage The 2nd stage The 3rd stage
Predicted credit loss in the whole Predicted credit loss in the whole
Bad debt reserve Predicted credit loss in the Total
duration (no credit impairment taken duration (credit impairment already
future 12 months
place) taken place)
Balance as at January 01, 2020 89,560.86
Balance as at January 01, 2020
—— —— —— ——
during the reporting period
Provision in the reporting period 19,873.46
Balance as at June 30, 2020 109,434.32
Movement of the book balance of provision for loss with significant amount in the reporting period
Inapplicable
Disclosed based on aging
In CNY
Aging Ending balance
Within 1 year (with 1 year inclusive) 697,403,235.59
1 to 2 years 10,127.53
2 to 3 years 197,281.80
Over 3 years 40,050.00
3 to 4 years 40,050.00
4 to 5 years 0.00
Over 5 years 0.00
Total 697,650,694.92
3) Provision, recovery or reversal of reserve for bad debts during the reporting period
Provision for bad debt during the reporting period
In CNY
Amount of movement during the reporting period
Categories Opening balance Amount recovered or Ending balance
Provision Writing-off Others
reversed
Bad debt reserve 89,560.86 19,873.46 0.00 0.00 0.00 109,434.32
Total 89,560.86 19,873.46 0.00 0.00 0.00 109,434.32
Where the significant amount of the provision for bad debt recovered or reversed:
Inapplicable
4) Accounts receivable actually written off in the reporting period
Inapplicable
5) Accounts receivable owed by the top five debtors based on the ending balance
In CNY
Proportion in total ending Ending balance of the
Description of Units Nature of Payment Ending balance Aging
balance of other receivables provision for bad debts
Inter-company current
Harmony 447,480,015.30 Within 1 year 64.00% 0.00
account
Inter-company current
Hengdarui 93,350,157.00 Within 1 year 13.00% 0.00
account
Inter-company current
Precision Technology Co. 63,956,637.59 Within 1 year 9.00% 0.00
account
Inter-company current
SHIYUEHUI 27,809,145.33 Within 1 year 4.00% 0.00
account
Emile Chouriet (Shenzhen) Inter-company current
10,896,073.09 Within 1 year 2.00% 0.00
Limited account
Total -- 643,492,028.31 -- 92.00% 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 account receivable 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
1,336,734,871.73 0.00 1,336,734,871.73 1,334,471,401.42 0.00 1,334,471,401.42
subsidiaries
Investment in
associates and joint 48,584,749.77 0.00 48,584,749.77 46,423,837.85 0.00 46,423,837.85
ventures
Total 1,385,319,621.50 0.00 1,385,319,621.50 1,380,895,239.27 0.00 1,380,895,239.27
(1) Investment in subsidiaries
In CNY
Increase/ Decrease (+ / -) in the reporting period Ending balance of
Opening balance Ending balance
Investees Additional Decrease of Provision for the provision for
(book value) Others (book value)
investment investment impairment impairment
Harmony 602,538,761.04 0.00 0.00 0.00 875,279.56 603,414,040.60 0.00
The Sales Co. 451,377,582.46 0.00 0.00 0.00 970,532.34 452,348,114.80 0.00
Precision Technology
9,344,923.49 0.00 0.00 0.00 255,455.31 9,600,378.80 0.00
Co.
Science & Technology
10,126,964.71 0.00 0.00 0.00 57,199.69 10,184,164.40 0.00
Development Co.
the Hong Kong Co. 137,737,520.00 0.00 0.00 0.00 0.00 137,737,520.00 0.00
SHIYUEHUI 5,000,000.00 0.00 0.00 0.00 0.00 5,000,000.00 0.00
Shenzhen Harmony
E-Commerce Co., 2,184,484.39 0.00 0.00 0.00 0.00 2,184,484.39 0.00
Ltd.
Hengdarui 36,867,843.96 0.00 0.00 0.00 0.00 36,867,843.96 0.00
Emile Chouriet
79,293,321.37 0.00 0.00 0.00 105,003.41 79,398,324.78 0.00
(Shenzhen) Limited
Total 1,334,471,401.42 0.00 0.00 0.00 2,263,470.31 1,336,734,871.73 0.00
(2) Investment in associates and joint ventures
In CNY
Increase/ Decrease (+ / -) in the reporting period
Income from
Opening equity Other Announced for Ending balance
Ending balance
Investees balance (book Additional Decrease of investment comprehensive Other equity distributing Provision for of the provision
Others (book value)
value) investment investment recognized income movement cash dividend impairment for impairment
under equity adjustment or profit
method
I. Joint Venture
II. Associates
Shanghai
Watch Industry 46,423,837.85 0.00 0.00 2,160,911.92 0.00 0.00 0.00 0.00 0.00 48,584,749.77 0.00
Co., Ltd.
2,160,911.92
Sub-total 46,423,837.85 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
48,584,749.77
2,160,911.92
Total 46,423,837.85 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
48,584,749.77
(3) Other notes
Inapplicable
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 57,329,018.41 17,626,390.24 64,124,939.95 11,807,925.90
Other businesses -15,800.00 0.00 0.00 0.00
Total 57,313,218.41 17,626,390.24 64,124,939.95 11,807,925.90
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
2,160,911.92 1,531,310.06
method
Total 2,160,911.92 1,531,310.06
6. Others
Inapplicable
XVIII. Supplementary information
1. Statement of non-recurring gains and losses in the reporting period
In CNY
Items Amount Note
1. Gain/Loss from disposal of non-current assets -200,140.17
The government subsidies included in the profits and
10,154,015.67
losses of the current period ( (excluding government grants
which are closely related to the Company’s business and
conform with the national standard amount or quantity)
Reversal of the impairment provision for
receivables and contract assets which have been tested 296,622.87
individually for impairment
Other non-operating income and expenses other than the
1,273,213.01
aforesaid items
Less: Amount affected by the income tax 2,454,282.53
Total 9,069,428.85 --
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
2.91% 0.1775 0.1775
shareholders of ordinary shares
Net profit attributable to the Company’s
shareholders of ordinary shares less 2.57% 0.1568 0.1568
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.
Inapplicable
4. Others
Inapplicable
