FIYTAHOLDINGSLTD.
2018AnnualReport
February,2019
Section1ImportantNotice,TableofContentsandDefinitionTheBoardofDirectors,theSupervisoryCommittee,directors,supervisorsandseniorexecutivesherebyindividuallyandcollectivelyacceptresponsibilityforthecorrectness,accuracyandcompletenessofthecontentsofthisreportandconfirmthatthereareneithermaterialomissionsnorerrorswhichwouldrenderanystatementmisleading.HuangYongfeng,theCompanyleader,ChenZhuo,chieffinancialofficer,andTianHui,themanageroftheaccountingdepartment(treasurer)herebyconfirmtheauthenticityandcompletenessofthefinancialreportenclosedinthisAnnualReport.AllthedirectorsattendedtheboardmeetingforreviewingtheAnnualReport.Anyperspectivedescription,suchasthefutureplan,developmentstrategy,etc.involvedintheAnnualReportshallnotconstitutetheCompany’ssubstantialcommitmenttotheinvestorsandtheinvestorsshouldpleasepayattentiontotheirinvestmentrisks.Inthisreport,theCompanyhasdescribedindetailtheexistingmacro-economicrisksaswellasoperationrisks.InvestorsareadvisedtorefertothecontentsconcerningriskfactorspossiblytobeconfrontedwithandthecountermeasuresintheCompany'sfuturedevelopmentprospectinSection4DiscussionandAnalysisoftheManagementTheprofitdistributionpreplanreviewedandapprovedbytheBoardofDirectorsissummarizedasfollows:WiththeCompany’stotalsharecapitalof438,744,881sharesasthebase,theCompanywoulddistributecashdividendattherateofCNY2.00forevery10shares(withtaxinclusive),bonusshareattherateof0shareforevery10shares(withtaxinclusive)tothewholeshareholdersandcapitalizenocapitalreservetothewholeshareholders.
TableofContentsSection1ImportantNotice,TableofContentsandDefinitionsSection2CompanyProfileandFinancialHighlightsSection3BusinessSummarySection4DiscussionandAnalysisoftheManagementSection5SignificantEventsSection6ChangesinSharesandParticularsabouttheShareholdersSection7AboutthePreferredSharesSection8Directors,Supervisors,OfficersandEmployeesSection9CorporateGovernanceSection10BondRelatedInformationSection11FinancialReportSection12ListofDocumentsAvailableforInspection
Definitions
Termstobedefined
Termstobedefined | Refersto | Definition |
ThisCompany,theCompanyorFIYTA | Refersto | FIYTAHOLDINGSLTD. |
AVIC | Refersto | AviationIndustryCorporationofChina,Ltd. |
AVICInternational | Refersto | AVICInternationalHoldingCorporation |
AVICInternationalShenzhen | Refersto | AVICInternationalShenzhenCo.,Ltd. |
AVICIHL | Refersto | AVICInternationalHoldingLimited |
TheSalesCo. | Refersto | FIYTASalesCo.,Ltd. |
Harmony | Refersto | ShenzhenHarmonyWorldWatchesCenterCo.,Ltd. |
theManufactureCo. | Refersto | ShenzhenFIYTASophisticatedTimepiecesManufactureCo.,Ltd. |
theTechnologyCo. | Refersto | ShenzhenFIYTATechnologyDevelopmentCo.,Ltd. |
theHongKongCo. | Refersto | FIYTA(HongKong)Limited |
SHIYUEHUI | Refersto | ShiyuehuiBoutique(Shenzhen)Co.,Ltd. |
Hengdarui | Refersto | LiaoningHengdaruiCommerce&TradeCo.,Ltd. |
HarbinCo. | Refersto | HarbinHarmonyWorldWatchDistributionCo.,Ltd. |
AVICSUNDA | Refersto | AVICSUNDACo.,Ltd. |
RainbowLtd. | Refersto | RainbowDepartmentStoreCo.,Ltd. |
ShennanCircuit | Refersto | ShennanCircuitCo.,Ltd. |
AVICProperty
AVICProperty | Refersto | AVICPropertyManagementCo.,Ltd. |
Section2CompanyProfileandFinancialHighlights
I.CompanyInformation
Shortformofthestock
Shortformofthestock | FIYTAA,FIYTAB | StockCodes: | 000026and200026 |
StockExchangeListedwith | ShenzhenStockExchange | ||
CompanyNameinChinese | FIYTAHOLDINGSLTD. | ||
AbbreviationoftheCompanyNameinChinese | 飞亚达公司 | ||
CompanynameinEnglish(ifany) | FIYTAHOLDINGSLTD. | ||
AbbreviationoftheCompanynameinEnglish(ifany) | FIYTA | ||
LegalRepresentative | HuangYongfeng | ||
Registeredaddress: | FIYTATechnologyBuilding,GaoxinS.RoadOne,NanshanDistrict,Shenzhen | ||
PostalCodeoftheRegisteredAddress | 518057 | ||
OfficeAddress | 20thFloor,FIYTATechnologyBuilding,GaoxinS.RoadOne,NanshanDistrict,Shenzhen | ||
PostalCodeoftheRegisteredAddress | 518057 | ||
Website: | www.fiytagroup.com | ||
E-mail: | investor@fiyta.com.cn |
II.LiaisonPersonsandCommunicationInformation
SecretaryoftheBoard | SecuritiesAffairsRepresentative | |
Name | LuWanjun | ZhangYong |
LiaisonAddress | 20thFloor,FIYTATechnologyBuilding,GaoxinS.RoadOne,NanshanDistrict,Shenzhen | 20thFloor,FIYTATechnologyBuilding,GaoxinS.RoadOne,NanshanDistrict,Shenzhen |
Tel. | 0755-86013669 | 0755-86013669 |
Fax | 0755-83348369 | 0755-83348369 |
investor@fiyta.com.cn | investor@fiyta.com.cn |
III.InformationDisclosureandPlacewheretheRegularReportsarePrepared
NameofthemediaselectedbytheCompanyfordisclosinginformation | SecuritiesTimesandHongKongCommercialDaily |
InternetWebSiteDesignatedbyChinaSecuritiesRegulatoryCommissionforPublishingtheannualreport:
InternetWebSiteDesignatedbyChinaSecuritiesRegulatoryCommissionforPublishingtheannualreport: | www.cninfo.com.cn |
PlacewheretheCompany’sAnnualReportwaspreparedandisplacedforinquiry | TheCompany'sStrategicOperationDepartment |
IV.ChangesinRegistration
OrganizationCode | 91440300192189783K |
Changesinprincipalbusinessactivitiessincelisting(ifany) | Nochange |
Changesinthecontrollingshareholderoverthepastyears(ifany) | Nochange |
V.OtherRelevantInformationTheCPAsappointedbytheCompany
NameoftheCPAs | RuihuaCertifiedPublicAccountants(SpecialGeneralPartnership) |
Officeaddress | 9thFloor,TaipingFinancialBuilding,FutianDistrict,Shenzhen |
NamesoftheCPAsastheauthorizedsignatories | WangYuqiaoandLiuXin |
ThesponsorperformingpersistentsupervisiondutiesengagedbytheCompanyinthereportingperiodInapplicableThefinancialadvisorperformingpersistentsupervisiondutiesengagedbytheCompanyinthereportingperiodInapplicableVI.SummaryofAccounting/FinancialDataDoestheCompanyneedtomakeretroactiveadjustmentorrestatementoftheaccountingdataofthepreviousyearsNo
2018 | 2017 | Increase/Decreaseofthereportingyearoverthepreviousyear | 2016 | |
RevenueinCNY | 3,400,450,599.90 | 3,345,809,703.98 | 1.63% | 2,993,864,561.43 |
NetprofitattributabletotheCompany’sshareholders,inCNY | 183,835,095.29 | 140,216,258.28 | 31.11% | 110,662,681.59 |
NetprofitattributabletotheCompany’sshareholderslessthenon-recurringitems,inCNY | 162,758,061.00 | 123,918,527.75 | 31.34% | 97,200,540.64 |
Netcashflowsarisingfromoperatingactivities,inCNY | 331,627,789.62 | 564,954,561.97 | -41.30% | 455,759,094.15 |
Basicearningpershare(CNY/share)
Basicearningpershare(CNY/share) | 0.4190 | 0.3196 | 31.10% | 0.2522 |
Dilutedearningpershare(CNY/share) | 0.4190 | 0.3196 | 31.10% | 0.2522 |
Returnonequity,weightedaverage | 7.30% | 5.79% | 1.51% | 4.74% |
Endof2018 | Endof2017 | Increase/Decreaseoftheendofthereportingyearovertheendofthepreviousyear | Endof2016 | |
Totalassets(inCNY) | 3,599,691,650.26 | 3,579,789,692.90 | 0.56% | 4,004,897,562.72 |
NetprofitattributabletotheCompany’sshareholders,inCNY | 2,570,134,782.90 | 2,467,967,361.20 | 4.14% | 2,371,370,535.17 |
VII.DiscrepancyinaccountingdatabetweenIASandCAS1.Differencesinthenetprofitdisclosedinthefinancialreport&thenetassetsattributabletotheCompany’sshareholdersrespectivelyaccordingtotheIASandtheCAS.Inapplicable2.Differencesinthenetprofitdisclosedinthefinancialreport&thenetassetsattributabletotheCompany’sshareholdersaccordingtoboththeIASandtheCASInapplicableVIII.FinancialDataSummarybasedonQuarters
InCNY
Thefirstquarter | Thesecondquarter | Thethirdquarter | Thefourthquarter | |
Operatingrevenue | 851,815,980.69 | 844,075,452.03 | 868,796,654.10 | 835,762,513.08 |
NetprofitattributabletotheCompany’sshareholders | 59,518,000.75 | 52,849,920.69 | 50,293,172.83 | 21,174,001.02 |
Netprofitlessthenon-recurringprofit/lossattributabletotheCompany’sshareholders | 54,825,312.90 | 44,934,058.26 | 48,421,717.55 | 14,576,972.29 |
Netcashflowsarisingfromoperatingactivities | 67,632,201.86 | 157,040,072.23 | 65,916,200.63 | 41,039,314.90 |
DoesthereexistanysignificantdifferencebetweentheabovefinancialindicatorsortheirsumtotalandthecorrespondingfinancialindicatorsasdisclosedbytheCompanyinitsquarterlyreportsorsemi-annualreportNoIX.Extraordinaryitemsandamount
InCNY
Items
Items | Amountin2018 | Amountin2017 | Amountin2016 | Notes |
Gain/lossfromdisposalofnon-currentassets,includingthepartoffsetfromtheprovisionforimpairmentofassets. | -180,302.24 | 7,321,993.36 | -660,129.92 | Itwasmainlytheincomefromdisposalofthenon-operatingrealestateofStation68Ltd.in2017. |
Governmentsubsidiesincludedincurrentprofitorloss,otherthanon-goinggovernmentsubsidieswhicharecloselyrelatedtotheCompany’snormaloperation,meettherequirementsofgovernmentpoliciesandaresubjecttocertainlimitsandconditions. | 19,375,618.48 | 17,508,255.98 | 17,234,482.25 | |
Reversaloftheimpairmentprovisionforreceivableswhicharetestedindividuallyforimpairment | 7,533,121.86 | 1,903,056.74 | 0.00 | |
Othernon-operatingincomeandexpensesapartfromtheaforesaiditems | 792,842.56 | 1,238,972.99 | 935,294.98 | |
Less:Amountaffectedbytheincometax | 6,444,246.37 | 8,669,699.37 | 4,047,506.36 | |
Amountaffectingtheminorityshareholders’equity(aftertax) | 3,004,849.17 | 0.00 | ||
Total | 21,077,034.29 | 16,297,730.53 | 13,462,140.95 | -- |
FortheCompany’snon-recurringgain/lossitemsasdefinedintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingtheirSecuritiestothePublic–Non-recurringGainsandLossesanditsnon-recurringgain/lossitemsasillustratedintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingtheirSecuritiestothePublic–Non-recurringGainsandLosseswhichhavebeendefinedasrecurringgainsandlosses,itisnecessarytoexplainthereason.Inapplicable
Section3BusinessSummary
I.PrincipalBusinessesintheReportingPeriod(1)PrincipalBusinessandOperationModelFIYTAconcentratesitselfinwatchindustry,takesthebrandstrategyastheguidance,integrateswatchR&D,design,manufacture,salesandservices,andhasformedtwocorebusinesses-watchbrandmanagementandwatchretailandservices.TheCompanypossessesitsproprietarywatchbrands,includingFIYTA,EmileChouriet,JONAS&VERUSandlicencedcooperativebrands-JEEPandBEIJING,whichhavedifferentstylesandcansatisfysegmentizedmarketdemands;haswatchretailandservicebrands-HARMONYandBRANDGALLERY,whichcoverthenationwidemarketandsatisfyhighandmediumandfashionconsumptiondemands.
(2)DevelopmentStatusofWatchIndustryandtheCompany'sPositionintheIndustryModernwatchindustryisanadvancedmanufacturewithhighprecisionmachineryintegratedwithinformationtechnologyandisaspecialhighlysophisticatedandaccuratetime-keepingproduct.Watchisalsoaconsumerproductwithaestheticandfashioncharacterandculturalconnotation,aswellashighqualityconsumergoodswithoutstandingbrandvalue.Underafavorabletrendofthepeople’spursuanceforbetterlifeandconsumptionupgrading,watchindustry,whichintegrateshigh-endsophisticatedmanufactureandbrandaesthetics,enjoysagooddevelopmentprospect.In2018,underthebackgroundthatthemacroeconomyheldpressureandtheconsumptionmarketwasweakingrowth,theCompanyconductedin-depthstudyontheconsumptiondemandandfashiontrendinitsbrandmanagementbusiness,workedhardonbreakthroughandinnovationintechnology,processandproductdesignandconstantlyimprovedtheproductqualityandcontinuouslysatisfiedthecustomers’demand.Meanwhile,inlightofthesegmentedmarket,theCompanycontinuedtoincreasetheinputinmulti-brandstrategicalplanning,channelconstruction,marketingandpromotion,etc,continuouslyenrichthebrandconnotationandbuildbrandswithdifferentiation.Duringthereportingperiod,theCompanyconstantlymaintainedpowerfulcompetitionsuperioritywithitbrandbusinessesinthedomesticwatchmarketofwhichFIYTABrandfurthertooktheleadingpositionintheindustryintermsofitsinfluence.Inrespectofretailservices,theCompanyseizedtheopportunityofsalesrecoveryofmedium-andhigh-endbrands,positivelyadjustedtheshopbrandstructureandchannellayout,continuouslydevelopedthemedium-andhigh-endqualitychannels,keptdoingagoodjobinservicequalityimprovementandarrangementofthetechnicalservicenetwork.Duringthereportingperiod,theCompany'ssuperiorityinretailservicebusinesscompetitionwasfurtherconsolidated;whereHarmonyWorldWatchkepttheleadingpositionintheindustryintermsofsalessizeandchannelarrangement.TheCompanycreatedagainanewhistoricalrecordinannualrevenueandtotalprofitandkeptadvancingtowardsthevisionof“becomingaleadinginternationalizedwatchbrandenterprise”.II.SignificantChangesinthePrimeAssets1.SignificantChangesinthePrimeAssetsInapplicable2.PrimeAssetsAbroadInapplicableIII.AnalysisonCoreCompetitivenessI.UniqueBusinessLayoutof“WatchBrandManagement+WatchRetailServices”intheIndustryIncorporatedin1987,FIYTAexperiencedoverthreedecades’accumulationandinnovationbreakthrough,constructedthebrandmanagementbusinesswithFIYTABrandasthecoreandwatchretailbusinesswithHarmonyasthecoreandthetwobusinessessupplementedeachotheranddevelopedinacoordinatedway;bothtaketheleadingpositioninthe
domesticmarketatpresent.Theuniquebusinesslayoutof“WatchBrandManagement+WatchRetailServices”haveprovidedaguaranteefortheCompany'ssustainabledevelopmentand“becomingaleadinginternationalizedwatchbrandenterprise”.II.ProfoundBrandManagementExperienceandClearSetmentedMarketPositioningWithreferencetotheexperienceofbrandmanagementexperienceofvariousworldwatchesdistributedbyHARMONYretailbusinessaswellasitsownFIYTABrandmoldingexperience,theCompanytookaleadinconstructingmulti-brandtribewithwatchbrandsofFIYTA,EmileChouriet,JONAS&VERUS,JEEPandBEIJINGasthekeybrands,constantlyconstructedbrandidentitiesofprofessionalwatchmanufacture,classicandelegance,youngfashion,intelligenceandoutdoors,orientalaethetics,etc.Thesebrandshavebecometheleadingbrandsinthesegmentedmarket.III.NationalWatchBaseandFirstClassProductDesignAbilityTheCompanyisanationaltechnologicalinnovationdemonstrationenterprise,nationalindustrialdesigncenterandnationaltechnologycertificationcenterforenterprises,andanorganizationintegratingandimplementingthestandardsforinformationizationandindustrializationbytheMinistryofIndustryandInformationTechnology.Allitssubordinativemanufacturersarenationalhi-techenterprises;hasconstructeditsprofessionalwatchmanufactureabilityinrespectofdrivingunitmanufacture,spacewatchdevelopment,high-endwatchmanufactureteniques,etc.Meanwhile,theCompanyhaskeptaleadingpositionintheindustryintermsofproductqualityandcreativedesignability.IV.HighQualityBrand,ChannelResourcesandNationwideRetailServiceNetworkInwatchretailbusinesswithHARMONYasthecore,theCompanyhasestablishedclosecooperativerelationshipwithagreatmanyworldtopbrandsandmainstreambrands,includingOmega,Breguet,Blancpain,GlashutteOriginal,JaquetDroz,Longines,Tissot,etc.subordinatetoSwatchGroup;RolexandTUDORsubordinatetoRolex;A.LANGE&SOHNE,JAEGERLE-COULTRE,CARTIER,PIAGET,IWC,etc.subordinatetoRichemontGroup;GIRARDPERREGAUXandULYSSENARDINsubordinatetoKeringGroup;aswellassuchindependentbrandsasCHOPARD,Bucherer,BREITLING,etc.TheCompanyhasalsoestablishedstrategiccooperativerelationshipwithvarioushighgradeshoppingmalls,suchasMIXCaswellasvarioushighgradedepartmentstoresinChina,possessestopqualitybrandsandchannelresourcesintheindustry.TheCompanyhasestablishednationwidewatchretailservicenetwork.V.ProfoundManagementExperienceandSustainableTalentsReserveTheCompanyconstantlyenhancedconstructionofthe“BrandPeople”team,continuouslyimprovedtheprofessionandcomprehensivequalificationoftheteam,activelycreatedateamatmosphereofprogressiveness,struggle,continuousimprovementanddevotiontowork.ThemajormembersofthemanagementandbusinessbackbonesoftheCompanyhavebeenengagedinwatchindustryforlongtimeandhaverichexperienceinbrandmanagementandchanneloperation,enjoygoodprofessionalqualificationandhaveprofoundunderstandingofwatchindustry.Inaddition,theCompanyhasestablishedlongtermandstableenterprise-schoolcooperativerelationshipwithvariousfamouscollegesanduniversitiesinChina.TheCompanyisabletocontinuouslyandsteadilyobtainagreatnumberofhighqualityprofessionalsandinfusenewbloodfortheCompany'sdevelopment.TheCompanyhascontinuedtoholdthehonorabletitleof“YearlyBestEmployer”grantedbyInternalAssociationofHumanResourcesandCHINACHR.COMsuccessivelyfor12years.
Section4DiscussionandAnalysisoftheManagement
I.GeneralInChina,thedomesticeconomysloweddowningrowth,theSino-UStradeconflictwasfullofcomplications,theconsumptionmarketdemandwasbearish,andthewatchindustrywasconfrontedwithseriousmarketpressure.Duringthereportingperiod,theCompanyfocusedonvaluecreation,sparedineffortincarryingforwardrefinedmanagementandspecializedoperation,exerteditselfonupgradingthebrandidentityandcustomerservices,improvedtheoperationefficiency;underthesituationofrelativelyweakmarket,theCompanystillrealizedcontinuousincreaseofprofit.In2018,theCompanyrealizedrevenueamountingtoCNY3400.4506millionwithyear-on-yeargrowthof1.63%andrealizedtotalprofitamountingtoCNY231.1969millionwithayear-on-yeargrowthof21.87%;realizednetprofitamountingtoCNY183.8351millionwithayear-on-yeargrowthof31.11%.TheCompanyhasonceagainachievedahistoricalrecordinoperationperformance.Duringthereportingperiod,theCompanycarriedoutthefollowingkeywork.I.PuttingfortheffortinpromotingupgradingofFIYTABrandandcontinuouslysupportingquickdevelopmentofvariousbrandsFIYTABrandcloselyfollowedthetrendofupgradingconsumptionandthecustomers’consumptiondemandof“quality-orientationandpersonalization”andcarriedforwardindepthupgradingofthebrandsbasedonproducts,marketingandchannels,etc.In2018,FIYTABrandadheredtothespiritofbeingspecializedinwatchmaking,insistedonindependentaestheticdesign,launched“FENGZHI”,“SOLO”Series,etc.andenrichedtheserialproductsof“QUORRA’SCORD”,“CLOVER”,etc.Meanwhile,forthepurposeofsatisfyingthecustomers’demandonhighqualityandcustomization,theCompanyannouncedahigh-endcustomizeddesignerbrand-MOONYANGatBasellworld;forthepurposeofcomplyingwiththelifestyleofrejuvenationandintelligenceofconsumers,theCompanyenhancedthedigitalizednewmediamarketing;forthepurposeofpressingclosetothechangeofcustomers’consumptionscene,vigorouslydevelopingthechannelsofbrandflagshipstoreandshoppingcenterandtheproportionofsalesinshoppingcenterwascontinuouslyincreasing.In2018,inlightofFIYTABrand'soutstandingperformanceinspecializedwatchmakingandinnovativedesign,FIYTABrandSpaceWatchseriesandtheapplicationprojectwererewardedwithanumberof“theFifthChinaIndustrialAward”andmanymodelsofFIYTABrandwererewardedwithprincipalindustrialawards,including“2018ChinaDesignRedStarAward”,“HonorableMentionofChinaDesign”and“GovernorCupIndustrialDesignAward”,“ShenzhenGift”,etc.Duringthereportingperiod,theCompanycompliedwithconsumers’consumptiondemandofpersonalizationanddiversification,continuedtoreinforcetheinfluenceofthebrandsof“EmileChouriet”,“JONAS&VERUS”,“JEEP”and“BEIJING”,improvedthecompetitionsuperiorityonthesegmentedmarket;theproportionofsalesofmultiplebrandsexceeded25%ofthetotalofthewatchbrandmanagementbusinessandstillkeptquickdevelopment.II.ContinuingtooptimizethewatchretailservicenetworkandconstantlyupgradingcustomerservicequalityHarmonyWorldWatchCenterfirmlygraspedtheopportunityofrevivedgrowthofmedium-andhigh-endwatches,deepenedstrategiccooperationwithSwatch,Rolex,Richemont,Kering,etc.andindividualwatchmakers,acquiredmorehighqualityinternationalbrandresources;andatthesametime,keptcarryingforwardtheworkofchannelupgradinganddevelopmentofkeymedium-andhigh-endchannels.In2018,theunitpriceofHarmonyworldwatchcustomerswas
significantlyimprovedandthechannelswerefurtherconcentratedonmedium-andhigh-end.Sofar,HarmonyWorldWatchCenterhas190channelsoffamousbrandwatchesofmedium-andhigh-end.Atthesametime,forthepurposeofsatisfyingcustomers’newdemandofconsumingonlineinternationalbrands,Harmonyacceleratedlayoutofonlinechannelsbyunitinginternationalbrands;basedontheexistingbrands,includingOris,Titoni,whichhavebeenauthorizedforonlinesale,HarmonyhasopenedCarlF.BuchererBrandJDofficialflagshipstoreandTISSOTBrandT-MallFranchiseStore.Forthepurposeofcontinuouslyimprovingcustomerservicequalityandsharingthehugespaceoffamousbrandwatchinventorymarket,Harmonycontinuedtodeveloptechnicalservicebusiness.In2018,HarmonyandSwatchGroupjointlyopenedthefirstbrandcomprehensiveafter-saleservicecenter.Nowthesaidtechnicalservicecenterhas150channels.Inthereportingperiod,theCompanycontinuedtocarryforwardupgradingofBRANDGALLERYoperationandchanneldevelopmentwork,haspossessed150BRANDGALLERYfamousbrANdchannelsbasedonmediumendandfashionandthechannelinfluencehasbeenfurtherimproved.III.EnthusiasticallyMakingLayoutofNewBusinessesandStartingIntelligentRetailinaCooperativeWayBasedonthequickgrowthofsmartwatchmarket,theCompanyspeededuplayoutofsmartwatchbusinessandpromotedbusinessinnovation.In2018,FIYTABrandlaunchedthefirstpointertypeaerobiccapacitysmartwatch-JOYUPseriesandJEEPBrandlaunchedsmartall-realmwatch;where,theCompanyachievedinnovativebreakthroughinthefieldofheavysmartwatchbyJEEPBrandsmartwatch,inwhichtheCompanyappliedQUALCOMMradiotechnologyandcreated4Gall-netindependentcommunicationwiththefunctionsofsports,navigation,payment,etc.Itenjoysfirstmoveradvantageintermsoffunctionsandtechnologyintheindustry,hasreceivedgoodresponseinmarketsalesandmorethan10,000unitsweresoldinthreemonthsaftercomingintothemarket.Inlightofthenewdevelopmenttrendofintelligentretail,forthepurposeofbringthesuperiorityoftheCompany'sretailnetworkandprofoundmedium-andhigh-endmemberresourceintobetterplay,in2018,theCompany,centeringthetrendofcustomers’experience,improvementofoperationefficiencyandwhole-channelintegrationdevelopment,etc,startedtheintelligentretailprojectwithcooperationofOC&C,aninternationalconsultinginstitution.IV.InsistingonIndependentScience&TechnologyInnovationandConsolidatingtheCoreTechnologyPowerIn2018,theCompanybroughttheadvantageofthewatchmanufacturebasesinShenzhenandSwitzerlandintogoodplay,integrateddomesticandforeignresources,constantlyincreasedinvestmentinthefieldofkeytechnologies,includingthedrivingunitsofmechanicalwatches,researchonapplicationofnewmaterials,spacewatchandsmartwatches,keptenhancingitsleadingpositionofindependentinnovationinChinawatchbrands,achievedquiteanumberofscientificresearchresultsandachievedgreatprogressinpartialkeytechnologyR&Dofdrivingunits,materials,etc.In2018,theCompanyaccumulativelyappliedfor57patents,including15inventionandutilitymodelpatents.Relyingontheaccumulationinaspectsofinnovationmechanism,innovationabilityandinnovationtalents,theCompanywaselectedanationalconsumergoodsstandardizationdemonstrationbaseandapost-doctorialinnovationpracticebaseinShenzhen.V.FocusingonCreationofEnterpriseValuesandCarryingforwardRefinedOperationManagementIn2018,theCompanyfocusedonvaluecreationandsparednoeffortincarryingforwardrefinedoperationmanagement.Inthebrandmanagementbusiness,theCompanyactivelyadjustedthebusinessandorganizationstructure,compressedthemanagementlevels,vigorouslycarriedforwardcostandexpenditurecontrol,furtherimprovedtheorganizationefficiency,removedlowefficiencyandloss-makingshopswithfirmdetermination,andeffectivelycontrolledtheoperationcost;intheretailservicebusiness,theCompanybroughttheadvantageofchannelsizeintoplay,carriedoutsalesdiscountandimprovedcomparableunitshopoutput.Asaresult,thegrossprofitofHarmonyworldwatchbusiness
increasedby1.96%andcomparableunitshopoutputgrewby4%.In2018,theCompany,withthehelpofscientificmanagementtools,systematicallysolvedthekeyandtoughproblemsexistingintheoperationmanagement,continuouslycarriedforwardprocessoptimizationandconstructionofprecisesupplychain,furtheroptimizedtheinventorystructure,withthetotalamountdroppedbyCNY38.2204millionovertheyearbeginningandinterest-bearingliabilitiesdroppedbyCNY88.8778millionovertheyearbeginning.VI.CarryingforwardConstructionoftheIncentiveMechanismandCultureandFurtherImprovingOrganizationVitalityForthepurposeadaptingitselftothechangeofthemarketenvironmentandcustomers,theCompanyinsistedontheenterprisespiritofinheritanceandinnovationandestablishedandreleasedthenewculturalsystem.Inaddition,theCompanypracticedA-sharerestrictivestockincentiveprogramwithavalidtermof5years(PhaseI)andgranted4.224millionA-sharerestrictivestockto128backboneemployees.Bymeansofconstructionofthenewculturesystemandlong-termincentivemechanism,theCompanyfurtherimprovedthevitalityoftheorganization,supportedthenewturnofdevelopmentstrategyinlandingandarrivalofvariousoperationobjectives.MovementoftheMajorFinancialItemsin2018:
StatementItems
StatementItems | 2018 | 2017 | Increase/Decrease(%) | Notetothemovement |
Balancesheetitems | ||||
Advancepayments | 13,666,816.33 | 24,663,314.53 | -44.59% | Itwasmainlyduetodecreaseofadvancepaymentforgoodsattheendofthereportingperiod |
Otherreceivables | 45,870,582.26 | 34,990,539.09 | 31.09% | Itwasmainlyduetoincreaseofthedepositinsecurityandcashdepositattheendofthereportingperiodovertheyearbeginning. |
Othercurrentassets | 73,703,312.24 | 24,616,815.21 | 199.40% | ItwasmainlyduetoincreaseoftheinputVATtobeoffsetattheendofthereportingperiodovertheyearbeginning. |
Interestpayable | 772,351.26 | 1,464,729.11 | -47.27% | Itwasmainlyduetobankloanattheendofthereportingperiodandthecorrespondingdecreaseoftheinterestpayableattheendofthereportingperiod. |
Non-currentliabilitiesduewithinayear | 347,470.00 | 35,000,000.00 | -99.01% | Itwasmainlyduetothatthelong-termloanduewithinayearwasrepaidattheendofthereportingperiod. |
Long-termborrowings | 4,517,110.00 | 79,870,353.00 | -94.34% | Itwasmainlyduetothatthespecial-purposeloanforthewatchindustrybaseinGuangmingNewZonewasrepaidinthereportingyear. |
Deferredincome | 3,672,855.36 | 5,904,000.00 | -37.79% | Itwasmainlyduetothatthepartialgovernmentsubsidytoberecognizedattheyearbeginningwasrecognizedasotherincomeduringthereportingyear. |
ProfitStatementItems | ||||
Interestcost | 27,552,558.81 | 41,825,035.34 | -34.12% | Itwasmainlyduetothatasthebankloandecreasedinthereportingyearandthepaymentforinterestcostdecreasedcorrespondingly. |
Lossfromimpairmentofassets
Lossfromimpairmentofassets | 3,264,956.18 | 62,427,499.61 | -94.77% | Itwasmainlyduetodecreaseoftheprovisionforpricefallingofinventoriesinthereportingyearoverthesameperiodofthepreviousyear. |
Incomefromdisposalofassets | -181,302.24 | 7,321,993.36 | -102.48% | Theincomefromdisposalofassetsinthesameperiodofthepreviousyearwasmainlytheincomefromdisposalofthenon-operatingrealestateofStation68Ltd.,oneoftheCompany'ssolely-fundedsubsidiaries,andthereexistednosuchcaseinthereportingyear. |
CashFlowStatementItems | ||||
Rebatedtaxesreceived | 4,793,245.20 | 886,252.20 | 440.84% | ItwasmainlyduetoincreaseoftherebatedinputVATinthereportingyearoverthesameperiodofthepreviousyear. |
Netcashfromdisposaloffixedassetsandintangibleassetandrecoveryofotherlongtermassets | 53,280.03 | 10,678,135.25 | -99.50% | Itwasmainlytheincomefromdisposalofthenon-operatingrealestateofStation68Ltd.inthesameperiodofthepreviousyear. |
II.AnalysisonPrincipalBusinesses
1.General
Referto“I.General”of“DiscussionandAnalysisofBusinessConditions”
2.IncomeandCosts(1)Compositionofoperatingrevenue
InCNY
2018 | 2017 | Year-on-yearincrease/decrease | |||
Amount | Proportionintheoperatingrevenue | Amount | Proportionintheoperatingrevenue | ||
Totaloperatingrevenue | 3,400,450,599.90 | 100% | 3,345,809,703.98 | 100% | 1.63% |
Sectors | |||||
Watches | 3,193,280,311.30 | 93.91% | 3,182,377,477.24 | 95.12% | 0.34% |
Sophisticatedmanufacture | 70,742,449.85 | 2.08% | 34,886,779.43 | 1.04% | 102.78% |
Leases | 118,323,969.04 | 3.48% | 109,451,504.76 | 3.27% | 8.11% |
Others | 18,103,869.71 | 0.53% | 19,093,942.55 | 0.57% | -5.19% |
2018
2018 | 2017 | Year-on-yearincrease/decrease | |||
Amount | Proportionintheoperatingrevenue | Amount | Proportionintheoperatingrevenue | ||
Products | |||||
Watchretailandservices | 2,090,970,707.50 | 61.49% | 2,039,729,647.67 | 60.96% | 2.51% |
Watchbrandbusiness | 1,102,309,603.80 | 32.42% | 1,142,647,829.57 | 34.15% | -3.53% |
Sophisticatedmanufacture | 70,742,449.85 | 2.08% | 34,886,779.43 | 1.04% | 102.78% |
Leases | 118,323,969.04 | 3.48% | 109,451,504.76 | 3.27% | 8.11% |
Others | 18,103,869.71 | 0.53% | 19,093,942.55 | 0.57% | -5.19% |
Regions | |||||
SouthChina | 1,536,911,140.58 | 45.20% | 1,490,763,984.16 | 44.56% | 3.10% |
NorthwestChina | 588,628,213.03 | 17.31% | 546,462,280.48 | 16.33% | 7.72% |
NortheastChina | 249,884,958.89 | 7.35% | 270,574,447.95 | 8.09% | -7.65% |
EastChina | 439,292,101.70 | 12.92% | 422,998,372.46 | 12.64% | 3.85% |
NortheastChina | 269,671,243.83 | 7.93% | 285,363,830.58 | 8.53% | -5.50% |
SouthwestChina | 316,062,941.87 | 9.29% | 329,646,788.35 | 9.85% | -4.12% |
(2)Sector,productorregionwhichtakesover10%oftheCompany'soperationrevenueoroperationprofit
InCNY
Operatingrevenue | Operatingcost | Grossprofitrate | Year-on-yearincrease/decreaseofoperatingrevenueoverthesameperiodofpreviousyear | Year-on-yearincrease/decreaseofoperatingcostoverthesameperiodofpreviousyear | Year-on-yearincrease/decreaseofgrossprofitrateoverthesameperiodofpreviousyear | |
Sectors | ||||||
Watches | 3,193,280,311.30 | 1,910,998,452.65 | 40.16% | 0.34% | -1.18% | 0.92% |
Sophisticatedmanufacture | 70,742,449.85 | 59,432,940.99 | 15.99% | 102.78% | 89.07% | 6.09% |
Leases | 118,323,969.04 | 22,474,447.92 | 81.01% | 8.11% | 26.37% | -2.74% |
Others | 18,103,869.71 | 903,932.64 | 95.01% | -5.19% | -75.55% | 14.37% |
Products | ||||||
Watchretailandservices | 2,090,970,707.50 | 1,576,862,763.43 | 24.59% | 2.51% | -0.65% | 2.40% |
Watchbrandbusiness
Watchbrandbusiness | 1,102,309,603.80 | 334,135,689.22 | 69.69% | -3.53% | -3.57% | 0.01% |
Sophisticatedmanufacture | 70,742,449.85 | 59,432,940.99 | 15.99% | 102.78% | 89.07% | 6.09% |
Leases | 118,323,969.04 | 22,474,447.92 | 81.01% | 8.11% | 26.37% | -2.74% |
Others | 18,103,869.71 | 903,932.64 | 95.01% | -5.19% | -75.55% | 14.37% |
Regions | ||||||
SouthChina | 1,536,911,140.58 | 875,599,755.20 | 43.03% | 3.10% | 2.64% | 0.25% |
NorthwestChina | 588,628,213.03 | 353,457,194.81 | 39.95% | 7.72% | 7.23% | 0.27% |
NortheastChina | 249,884,958.89 | 137,166,812.45 | 45.11% | -7.65% | -10.46% | 1.72% |
EastChina | 439,292,101.70 | 262,001,509.80 | 40.36% | 3.85% | 1.29% | 1.51% |
NortheastChina | 269,671,243.83 | 187,589,738.67 | 30.44% | -5.50% | -7.03% | 1.15% |
SouthwestChina | 316,062,941.87 | 177,994,763.27 | 43.68% | -4.12% | -6.49% | 1.43% |
AsthecalculationspecificationoftheCompany’sprincipalbusinessdataunderwentadjustmentduringthereportingperiod,theprincipalbusinessdataofthepastyearwerethedatabasedonthatafterthespecificationadjustmentattheendofthereportingyear.
Operatingrevenue | Operatingcost | Grossprofitrate | Year-on-yearincrease/decreaseofoperatingrevenueoverthesameperiodofpreviousyear | Year-on-yearincrease/decreaseofoperatingcostoverthesameperiodofpreviousyear | Year-on-yearincrease/decreaseofgrossprofitrateoverthesameperiodofpreviousyear | |
Sectors | ||||||
Watches | 3,182,377,477.24 | 1,933,734,832.90 | 39.20% | 12.71% | 11.96% | 0.40% |
Sophisticatedmanufacture | 34,886,779.43 | 31,434,866.13 | 9.90% | -11.77% | 11.22% | -18.62% |
Leases | 109,451,504.76 | 17,785,254.56 | 83.80% | 2.31% | 31.31% | -3.59% |
Others | 19,093,942.55 | 3,697,637.98 | 80.60% | -19.78% | -4.85% | -3.04% |
Products | ||||||
Watchretailandservices | 2,039,729,647.67 | 1,587,232,279.88 | 22.20% | 12.73% | 10.87% | 1.31% |
Watchbrandbusiness | 1,142,647,829.57 | 346,502,553.02 | 69.70% | 12.68% | 17.28% | -1.19% |
Sophisticatedmanufacture | 34,886,779.43 | 31,434,866.13 | 9.90% | -11.77% | 11.22% | -18.62% |
Leases | 109,451,504.76 | 17,785,254.56 | 83.80% | 2.31% | 31.31% | -3.59% |
Others | 19,093,942.55 | 3,697,637.98 | 80.60% | -19.78% | -4.85% | -3.04% |
Regions
Regions | ||||||
SouthChina | 1,490,763,984.16 | 853,045,559.52 | 42.80% | 23.43% | 24.62% | -0.55% |
NorthwestChina | 546,462,280.48 | 329,631,915.00 | 39.70% | 3.31% | 0.75% | 1.53% |
NortheastChina | 270,574,447.95 | 153,182,543.86 | 43.40% | -2.17% | -3.33% | 0.68% |
EastChina | 422,998,372.46 | 258,663,712.98 | 38.80% | 7.68% | 9.00% | -0.74% |
NortheastChina | 285,363,830.58 | 201,782,412.95 | 29.30% | 1.46% | 5.02% | -2.40% |
SouthwestChina | 329,646,788.35 | 190,346,447.25 | 42.30% | 7.56% | 9.90% | -1.23% |
ReasonofthechangeofthespecificationsTheCompanyreclassifiedandadjustedthedisclosingspecificationsbasedondifferentsectors,productsandregionsaccordingtothepracticalconditionsofbusinessoperationandrequirementsofsegmentedmanagement.Therelevantdataofthereportingperiodofthepreviousyearunderwentadjustmentaccordingtothesamespecifications;wherethespecificationsbasedonsectorsandproductshavebeenadjustedfromtheoriginalclassificationbasedonbusinessmanagementplateintoclassificationbasedonbusinessattributioncategories;thespecificationsforclassificationbasedonregionshavebeenadjustedfromtheoriginalclassificationbasedonthelocationofbranchcompaniesintotheclassificationbasedonthelocationofshops.
(3)Isthephysicalsalesincomegreaterthantheserviceincome
Yes
Classifiedbasedonsectors | Items | InCNY | 2018 | 2017 | Year-on-yearincrease/decrease |
Brandwatches | Salesvolume | pcs | 1,032,886 | 1,169,341 | -12.00% |
Output | pcs | 1,085,929 | 1,443,902 | -25.00% | |
Inventory | pcs | 1,326,997 | 1,273,954 | 4.00% |
Notetothecauseoftheyear-on-yearmovementoftherelevantdatabyover30%Inapplicable
(4)ImplementationofImportantSaleContractsConcludedattheEndoftheReportingPeriod
Inapplicable
(5)CompositionofOperatingCosts
Classifiedbasedonsectorsandproducts
InCNY
Classifiedbasedonsectors | Items | 2018 | 2017 | Year-on-yearincrease/decrease | ||
Amount | Proportionintheoperatingcosts | Amount | Proportionintheoperatingcosts | |||
Watches | Goodspurchase | 1,576,862,763.43 | 79.09% | 1,587,232,279.88 | 79.89% | -0.65% |
Classifiedbasedon
sectors
Classifiedbasedonsectors | Items | 2018 | 2017 | Year-on-yearincrease/decrease | ||
Amount | Proportionintheoperatingcosts | Amount | Proportionintheoperatingcosts | |||
cost | ||||||
Rawmaterials | 298,467,328.86 | 14.97% | 318,023,289.64 | 16.01% | -6.15% | |
Laborcosts | 25,602,142.25 | 1.28% | 23,200,389.66 | 1.17% | 10.35% | |
Depreciationexpense | 1,124,500.75 | 0.06% | 1,025,084.88 | 0.05% | 9.70% | |
Waterandelectricityfees | 582,727.38 | 0.03% | 462,540.76 | 0.02% | 25.98% | |
Rent | 2,100,422.82 | 0.11% | 466,825.54 | 0.02% | 349.94% | |
Others | 6,258,567.16 | 0.31% | 3,324,422.53 | 0.17% | 88.26% | |
Sophisticatedmanufacture | Rawmaterials | 39,129,570.45 | 1.96% | 13,450,268.43 | 0.68% | 190.92% |
Laborcosts | 12,770,838.35 | 0.64% | 10,882,923.92 | 0.55% | 17.35% | |
Depreciationexpense | 1,440,723.29 | 0.07% | 1,511,974.62 | 0.08% | -4.71% | |
Waterandelectricityfees | 1,443,140.38 | 0.07% | 1,204,598.61 | 0.06% | 19.80% | |
Rent | 275,118.68 | 0.01% | 125,227.28 | 0.01% | 119.70% | |
Others | 4,373,549.85 | 0.22% | 4,259,873.27 | 0.21% | 2.67% | |
Leases | Depreciationexpense | 13,170,394.47 | 0.66% | 10,568,722.86 | 0.53% | 24.62% |
Laborcosts | 2,983,488.04 | 0.15% | 2,992,768.29 | 0.15% | -0.31% | |
Others | 6,320,565.41 | 0.32% | 4,223,763.41 | 0.21% | 49.64% | |
Others | Purchasecost | 903,932.64 | 0.05% | 3,697,637.98 | 0.19% | -75.55% |
InCNY
Classifiedbasedonproducts | Items | 2018 | 2017 | Year-on-yearincrease/decrease | ||
Amount | Proportionintheoperatingcosts | Amount | Proportionintheoperatingcosts | |||
Watchretailandservices | Goodspurchasecost | 1,576,862,763.43 | 79.09% | 1,587,232,279.88 | 79.89% | -0.65% |
Watchbrandbusiness | Rawmaterials | 298,467,328.86 | 14.97% | 318,023,289.64 | 16.01% | -6.15% |
Laborcosts | 25,602,142.25 | 1.28% | 23,200,389.66 | 1.17% | 10.35% | |
Depreciationexpense | 1,124,500.75 | 0.06% | 1,025,084.88 | 0.05% | 9.70% | |
Waterandelectricityfees | 582,727.38 | 0.03% | 462,540.76 | 0.02% | 25.98% |
Classifiedbasedon
products
Classifiedbasedonproducts | Items | 2018 | 2017 | Year-on-yearincrease/decrease | ||
Amount | Proportionintheoperatingcosts | Amount | Proportionintheoperatingcosts | |||
Rent | 2,100,422.82 | 0.11% | 466,825.54 | 0.02% | 349.94% | |
Others | 6,258,567.16 | 0.31% | 3,324,422.53 | 0.17% | 88.26% | |
Sophisticatedmanufacture | Rawmaterials | 39,129,570.45 | 1.96% | 13,450,268.43 | 0.68% | 190.92% |
Laborcosts | 12,770,838.35 | 0.64% | 10,882,923.92 | 0.55% | 17.35% | |
Depreciationexpense | 1,440,723.29 | 0.07% | 1,511,974.62 | 0.08% | -4.71% | |
Waterandelectricityfees | 1,443,140.38 | 0.07% | 1,204,598.61 | 0.06% | 19.80% | |
Rent | 275,118.68 | 0.01% | 125,227.28 | 0.01% | 119.70% | |
Others | 4,373,549.85 | 0.22% | 4,259,873.27 | 0.21% | 2.67% | |
Leases | Depreciationexpense | 13,170,394.47 | 0.66% | 10,568,722.86 | 0.53% | 24.62% |
Laborcosts | 2,983,488.04 | 0.15% | 2,992,768.29 | 0.15% | -0.31% | |
Others | 6,320,565.41 | 0.32% | 4,223,763.41 | 0.21% | 49.64% | |
Others | Purchasecost | 903,932.64 | 0.05% | 3,697,637.98 | 0.19% | -75.55% |
(6)Isthereanychangeintheconsolidationscopeinthereportingperiod
No
(7)IsthereanysignificantchangeoradjustmentrelatedsituationtakenplaceintheCompany’sbusiness,productsorservicesinthereportingperiod
Inapplicable
(8)Majorsalescustomersandmajorsuppliers
Informationaboutthemajorsalescustomers
Totalsalestothetopfivecustomers,inCNY | 466,297,023.36 |
Proportionofthetotalsalestothetopfivecustomersinthetotalsalesoftheyear, | 13.72% |
Proportionofthesalesvolumetothetopfivecustomersinthetotalsalestotherelatedpartiesintheyear | 2.11% |
Note:Thecustomerscontrolledbythesameactualcontrollershouldbepresentedafterconsolidationexceptthatactuallycontrolledbythesamestate-ownedassetsmanagementinstitution.Informationofthetop5customers
SerialNo.
SerialNo. | Customers | Sales(inCNY) | Proportioninthetotalsalesoftheyear |
1 | ChinaResources(Shenzhen)Co.,Ltd | 143,815,196.14 | 4.23% |
2 | VIP.COM | 106,605,479.95 | 3.14% |
3 | ChinaResources(Shenyang)RealEstateCo.,Ltd. | 73,398,392.21 | 2.16% |
4 | YonganDepartmentStoreCo.,Ltd. | 70,713,098.56 | 2.08% |
5 | RainbowDepartmentStoreCo.,Ltd. | 71,764,856.50 | 2.11% |
Total | -- | 466,297,023.36 | 13.72% |
OtherInformationaboutthemajorcustomersInapplicableMajorsuppliers
Totalamountofpurchasefromtopfivesuppliers,inCNY | 1,214,053,934.87 |
ProportionofthepurchaseamountfromthetopfivesuppliersintheCompany’stotalpurchaseamount | 61.06% |
Proportionofpurchaseamountfromthetop5suppliersinthetotalpurchaseamountfromtherelatedpartiesintheyear | 0.00% |
Note:Thesupplierscontrolledbythesameactualcontrollershouldbepresentedafterconsolidationexceptthatactuallycontrolledbythesamestate-ownedassetsmanagementinstitution.Informationaboutthetop5suppliers
SerialNo. | Suppliers | Purchaseamount,inCNY | Proportioninthetotalpurchasesoftheyear(%) |
1 | SMHSwissWatchTrading(Shanghai)Co.,Ltd. | 603,264,969.67 | 30.34% |
2 | NingboShanghengWatchesCo.,Ltd. | 280,192,821.62 | 14.09% |
3 | Rolex(Guangzhou)Ltd. | 178,191,143.82 | 8.96% |
4 | LifengCommerceCo.,Ltd. | 93,139,200.03 | 4.68% |
5 | SMHBusinessServices(Shanghai)PtyLtd. | 59,265,799.73 | 2.98% |
Total | -- | 1,214,053,934.87 | 61.06% |
OtherinformationaboutthemajorsuppliersInapplicable
3.Expenses
InCNY
2018 | 2017 | Year-on-yearincrease/decrease | Notetosignificantchanges | |
Salescosts | 856,970,173.10 | 811,437,932.01 | 5.61% | Inapplicable |
Administrativeexpenses | 224,796,280.12 | 190,589,582.24 | 14.99% | Inapplicable |
Financialexpenses | 35,916,240.16 | 49,186,742.91 | -26.98% | Inapplicable |
R&Dexpenditures | 47,350,342.82 | 49,453,899.35 | -4.25% | Inapplicable |
4.InvestmentinR&D
InvestmentinR&DwasmainlyforconsolidatingtheCompany'sleadingpositioninself-dependentinnovationinChina'swatchbrands.TheCompanycontinuouslyincreasedinvestmentinpersonnel,equipment,researchbudget,etc.forsuchkeytechnologyfieldsasspacewatches,drivingunitsofmechanicalwatches,industrialdesign,smartwatches,researchonapplicationofnewmaterials,etc.,andhadcreatedanumberofscientificresearchachievements.In2018,theCompany’stotalinvestmentinR&DamountedtoCNY47,350,342.82,taking1.84%ofthenetassetsasauditedinthemostrecentperiodandtaking1.39%oftheoperationrevenueasauditedinthemostrecentperiod.In2018,theCompanyappliedfor57patents,ofwhich15werepatentsofinventionandutilitymodels.Byvirtueoftheaccumulationininnovationmechanism,innovationability,innovativetalentsandinnovationachievements,etc.,inadditiontotheexistingtitlesof"NationalCertifiedEnterpriseTechnologyCenter","NationalIndustrialDesignCenter","NationalTechnologyInnovationDemonstrationEnterprise",theCompanyhasbeenelectedannationalconsumergoodsstandardizationdemonstrationbaseandapost-doctarialinnovationpracticebaseinShenzhen.SummaryofInvestmentinR&D
2018
2018 | 2017 | Proportionofmovements | |
NumberofR&Dstaff(persons) | 47 | 45 | 4.44% |
ProportionofR&Dstaffintotalemployees | 0.91% | 0.84% | 0.07% |
AmountofinvestmentinR&D,inCNY | 47,350,342.82 | 49,453,899.35 | -4.25% |
ProportionofinvestmentinR&Dinoperatingrevenue | 1.39% | 1.48% | -0.09% |
AmountofcapitalizedinvestmentinR&D(inCNY) | 0.00 | 0.00 | 0.00% |
ProportionofcapitalizedinvestmentinR&DinthetotalinvestmentinR&D | 0.00% | 0.00% | 0.00% |
Cause(s)ofsignificantchangeofthetotalinvestmentinR&DintheoperatingrevenueInapplicableNotetothecauseofsignificantchangeinthecapitalizationrateofinvestmentinR&DandnotetothereasonabilityInapplicable
5.CashFlow
InCNY
Items | 2018 | 2017 | Year-on-yearincrease/decrease |
Subtotalofcashflowinfromoperatingactivity | 3,864,826,375.05 | 3,849,407,740.68 | 0.40% |
Subtotalofcashflowoutfrom | 3,533,198,585.43 | 3,284,453,178.71 | 7.57% |
operatingactivity
operatingactivity | |||
Netcashflowsarisingfromoperatingactivities | 331,627,789.62 | 564,954,561.97 | -41.30% |
Subtotalofcashflowinfrominvestmentactivity | 53,280.03 | 10,448,081.56 | -99.49% |
Subtotalofcashflowoutfrominvestmentactivity | 146,877,130.29 | 136,914,522.99 | 7.28% |
Netcashflowsarisingfrominvestmentactivities | -146,823,850.26 | -126,466,441.43 | 16.10% |
Subtotalofcashflowinfromfundraisingactivity | 741,192,340.23 | 575,282,350.00 | 28.84% |
Sub-totalcashflowpaidforfinancingactivities | 949,023,364.54 | 1,255,793,728.74 | -24.43% |
Netcashflowsarisingfromfinancingactivities | -207,831,024.31 | -680,511,378.74 | -69.46% |
Netincreaseofcashandcashequivalents | -22,324,831.35 | -242,279,864.49 | -90.79% |
Notetothemajorinfluencefactorsforthesignificantchangeintherelevantyear-on-yeardata:
1.NetcashflowarisingfromoperatingactivitiesamountingtoCNY331,627,789.62wasmainlyduetoincreaseoftherecoveredreceivablesbroughtaboutfromrevenuegrowthinthereportingyear;andinaddition,theinventorysizeeffectivelyreducedattheyearendbyenhancingcontroloverinventory;inthereportingyear,theCompanyrealizedthenetcashflowfromoperatingactivitiesgreaterthanthenetprofitoftheCompany.2.NetcashflowarisingfrominvestmentactivitiesamountingtoCNY-146,823,850.26,increasedbyCNY20,357,408.83overthesameperiodofthepreviousyear,wasmainlyduetoincreaseoftherenewedinvestmentinshopsandcountersinthereportingyearoverthesameperiodofthepreviousyear.3.NetcashflowarisingfromfinancingactivitiesamountingtoCNY-207,831,024.31inthereportingyearwasmainlyduetorepaymentofthebankloansandpaymentofdividendsandinterest,wherethecashflow-outfromrepaymentoftheinterest-bearingliabilitiesamountedtoCNY91,140,868.40,paymentofthedividendsamountedtoCNY87,748,976.20andpaymentoftheloaninterestamountedtoCNY28,941,179.71.4.NetincreaseofcashandcashequivalentinthereportingyearamountingtoCNY-22,324,831.35wasmainlyduetorepaymentofpartialbankloanswithmonetarycapitalinthereportingyearandasaresultthesizeofinterest-bearingliabilitieswasreducedattheendofthereportingyear.Cause(s)ofsignificantdifferenceinthenetcashflowarisingfromtheoperatingactivitiesandthenetprofitinthereportingyearInapplicable
III.AnalysisonNon-PrincipalBusinesses
Inapplicable
IV.AssetsandLiabilities
1.SignificantChangesinAssetsComposition
InCNY
Endof2018
Endof2018 | Endof2017 | Proportionincreased/decreased | Notetosignificantchanges | |||
Amount | Proportionintotalassets | Amount | Proportionintotalassets | |||
Monetaryfund | 164,828,059.97 | 4.58% | 187,152,891.32 | 5.23% | -0.65% | Inapplicable |
Accountsreceivable | 370,545,656.61 | 10.29% | 326,254,624.94 | 9.11% | 1.18% | Inapplicable |
Inventories | 1,782,306,301.70 | 49.51% | 1,820,526,676.26 | 50.86% | -1.35% | Inapplicable |
Investmentrealestate | 377,319,433.03 | 10.48% | 305,493,987.77 | 8.53% | 1.95% | Inapplicable |
Long-termequityinvestment | 44,881,063.15 | 1.25% | 43,879,518.09 | 1.23% | 0.02% | Inapplicable |
Fixedassets | 425,649,562.85 | 11.82% | 523,699,592.65 | 14.63% | -2.81% | Inapplicable |
Construction-in-process | 12,041,126.00 | 0.33% | 10,947,300.53 | 0.31% | 0.02% | Inapplicable |
Shorttermloans | 547,118,452.97 | 15.20% | 525,990,510.00 | 14.69% | 0.51% | Inapplicable |
Long-termborrowings | 4,517,110.00 | 0.13% | 79,870,353.00 | 2.23% | -2.10% | Inapplicable |
2.Assetsandliabilitiesmeasuredbasedonfairvalue
Inapplicable
3.Restrictiononrightsintheassetsendedthereportingperiod
ApropertyownedbySwitzerlandbasedMontresChourietSAwithnetvalueofCNY14,978,058.57wasusedasacollateralfortheoverseaslongtermloanamountingtoCNY4,517,110.00.
V.Investment
1.General
Inapplicable
2.Significantequityinvestmentacquiredinthereportingperiod
Inapplicable
3.Significantnon-equityinvestmentinprocessinthereportingperiod
InCNY
Descripti
on
Description | Wayofinvestment | Isitaninvestmentinfixedassets? | Industryinvolvedbytheinvestmentproject | Amountinvestedduringthereportingperiod | Accumulativeamountactuallyinvestedbytheendofthereportingperiod | Capitalsource | Projectprogress | Predictedearning | Earningsaccumulativelyrealizedbytheendofthereportingperiod | Causeofthefailureinarrivingattheplannedprogressandpredictedearnings | Dateofdisclosure(ifany) | Disclosureindex(ifany) |
ThesupportingengineeringworksatthewatchindustrybaseinGuangmingNewZone | Self-built | Yes | Manufacture | 1,093,825.47 | 12,041,126.00 | Self-raisedcapital | 35.36% | 0.00 | 0.00 | Inapplicable | March10,2017 | http://www.cninfo.com.cn/ |
Total | -- | -- | -- | 1,093,825.47 | 12,041,126.00 | -- | -- | 0.00 | 0.00 | -- | -- | -- |
4.Financialassetsinvestment
(1)Portfolioinvestment
Inapplicable
(2)Investmentinderivatives
Inapplicable
5.Applicationoftheraisedcapital(1)Generalapplicationoftheraisedcapital
InCNY10,000
Yearofraising
Yearofraising | Wayofraising | Totalcapitalraised | Totalamountofraisedcapitalusedinthereportingperiod | Totalaccumulativeamountofraisedcapitalusedaccumulated | Totalraisedcapitalwhoseapplicationpurposehasbeenchangedinthereportingperiod | Totalaccumulativeraisedcapitalwhoseapplicationpurposehasbeenchanged | Proportionofthetotalaccumulativeraisedcapitalwhoseapplicationpurposehasbeenchanged | Totalraisedcapitalnotyetused | Applicationandstatusoftheraisedcapitalunused | Amountoftheraisedcapitalidledformorethan2years |
2015 | Non-publicissuingofA-shares | 60,000 | 3,119.79 | 58,583.07 | 0 | 0 | 0.00% | 0 | Inapplicable | 0 |
Total | -- | 60,000 | 3,119.79 | 58,583.07 | 0 | 0 | 0.00% | 0 | -- | 0 |
NotetoGeneralApplicationoftheRaisedCapital | ||||||||||
TheCompanyheldthe18thsessionoftheSeventhBoardofDirectorsand2014AnnualGeneralMeetingrespectivelyonApril16,2015andJune17,2015.ThemeetingsreviewedandapprovedtheProposalonthePlanforNon-publicIssuingofA-sharestotheSpecifiedInvestors,etc.,accordingtowhichtheCompanyplannedtoissueinanon-publicwayA-sharestonomorethan10(with10inclusive)specifiedinvestorswiththetotalraisedcapitalnotexceedingCNY600million,whichwouldbeappliedforfourprojects,includingtheprojectoflaunchingnewFIYTAwatchesandsupplementtheworkingcapital.Theapplicationfornon-publicissuingofA-shareswasreviewedandapprovedbyCSRCSecuritiesIssuanceExaminationCommittee(CSIEC)onOctober30,2015.OnNovember17,2015,theCompanyreceivedOfficialReplytoFIYTAHoldingsLtd.onApprovalforNon-publicIssuing(ZHENGJIANXUKE[2015]No.2588whichauthorizedtheCompanytoissuenomorethan46,911,649newsharesinnon-publicway.TheactualnumberofA-sharesactuallyissuedinthenon-publicissuingactivitywas45,977,011sharesandtheraisedcapitalamountedtoCNY599million.Afterdeductionoftheunderwritingfee,theraisedcapitalamountedtoRMB585million.Afterdeductionoftheissuingcosts,thenetraisedcapitalamountingtoCNY583millionwasremittedtothebankaccountdesignatedbytheCompanyonDecember18,2015.GrantThorntonCertifiedPublicAccountants(SpecialGeneralPartnership)issuedtheCapitalVerificationReportsZHITONGYANZI(2015)No.441ZC0653,ZHITONGYANZI(2015)No.441ZC0652respectivelyfortheraisedcapital.Uptonow,thecapitalraisedfromnon-publicissuingofA-sharesisgoingtobeappliedfortheoriginallydesignatedapplicationpurposeandthereexistsnosuchacasethattheapplicationpurposehasbeenchanged.Theconcernedfollow-upcommitmentshavebeencompletedinimplementation. |
(2)PromisedProjectswithRaisedCapital
InCNY10,000
Promisedinvestmentprojectsandinvestmentwith | Hastheprojectbeen | Totalpromisedinvestmen | Totalinvestmentafter | Amountinvestedduringthe | Amountaccumulatively | Investmentprogress | Datewhentheproject | Resultrealizedinthe | Hasthepredictedoperation | Hassignificantchange |
theover-raisedcapital
theover-raisedcapital | changed(includingpartialchange) | twithraisedcapital | adjustment(1) | reportingperiod | investeduptotheendofthereportperiod(2) | bytheendofthereportperiod(%)(3)=(2)/(1) | hasreachedthepredictedapplicablestatus | reportingperiod | resultbeenreached? | takenplaceinthefeasibilityoftheproject? |
Investmentprojectsaspromised | ||||||||||
1.ProjectofLaunchingNewFIYTAWatches | No | 18,000 | 18,000 | 0 | 18,000 | 100.00% | 0 | Inapplicable | No | |
2.FIYTAE-commerceproject | No | 12,000 | 12,000 | 1,523.44 | 12,068.85 | 100.00% | 2,511.51 | Yes | No | |
3.FIYTABrandMarketingPromotionProject | No | 10,000 | 10,000 | 0 | 10,000 | 100.00% | 0 | Inapplicable | No | |
4.TechnicalServiceWebsiteConstructionProject | No | 5,000 | 5,000 | 1,572.87 | 5,022.62 | 100.00% | 254.49 | Yes | No | |
5.Replenishingworkingcapital | No | 15,000 | 15,000 | 23.48 | 13,491.6 | 89.94% | 0 | Inapplicable | No | |
Subtotalofinvestmentprojectsascommitted | -- | 60,000 | 60,000 | 3,119.79 | 58,583.07 | -- | -- | 2,766 | -- | -- |
Intendedinvestmentwiththeover-raisedcapital | ||||||||||
Inapplicable | ||||||||||
Subtotaloftheintendedinvestmentwiththeover-raisedcapital | -- | 0 | 0 | 0 | 0 | -- | -- | 0 | -- | -- |
Total | -- | 60,000 | 60,000 | 3,119.79 | 58,583.07 | -- | -- | 2,766 | -- | -- |
Causeoffailuretosatisfytheplanprogressorpredictedrevenueandthecause(basedonspecificproject) | Inapplicable | |||||||||
Notetothesignificantchangeinthefeasibilityofaproject | Inapplicable | |||||||||
Amount,applicationandapplicationprogressoftheover-raisedcapital | Inapplicable | |||||||||
Changeofthesiteforimplementationoftheprojectinvestedwiththe | Inapplicable |
raisedcapital
raisedcapital | |
Adjustmentofthewayofimplementationoftheprojectinvestedwiththeraisedcapital | Inapplicable |
Earlierinvestmentinandreplacementoftheprojectinvestedwiththeraisedcapital | TheCompanyprovidedCNY63.5839millionoftheself-raisedfundintheprojecttobeinvestedwiththeraisedcapital.Aftertheraisedcapitalwasavailablefortheproject,accordingtothespecialauditor'sreportandtheresolutionoftheBoardofDirectorsandasagreedbythesponsor,theraisedcapitalwasappliedintheprojectrespectivelyonJanuary20,2016andJanuary21,2016andtheself-raisedfundasinvestedpreviouslywasreplaced. |
Theidledraisedcapitalusedtoreplenishworkingcapitalfortimebeing | Inapplicable |
Amountofthebalanceoftheraisedcapitalincurredinprojectimplementationandthecause | Inapplicable |
Applicationandstatusoftheraisedcapitalunused | EndedDecember31,2018,theCompany'sraisedfundhadbeenusedup. |
Applicationoftheraisedcapitalandtheissuesexistingintheinformationdisclosureorotherinformation | Inapplicable |
Note:TheaccumulativeinvestmentwiththeraisedcapitalamountedtoCNY585.8307millionwhilethenetraisecapitalasreceivedamountedtoCNY582.9244million.ThebalancebetweenthetwoamountingtoCNY2.9063millionwasduetothat1)theCompanyhadinvestedthenetinterestincomeamountingtoCNY0.9509millionarisingfromtheaccountdepositoftheraisedcapitalintheprojectsinvestedwiththeraisedcapital;2)theCompanypaidtheissuingexpensesforraisingthecapitalamountingtoCNY1.9554millionfromtheownfund.
(3)ChangeoftheProjectsInvestedwiththeRaisedCapital
Inapplicable
VI.SalesofSignificantAssetsandEquity
1.SalesofSignificantAssets
Inapplicable
2.SalesofSignificantEquity
Inapplicable
VII.AnalysisonPrincipalSubsidiariesandMutualShareholdingCompanies
ParticularsabouttheprincipalsubsidiariesandmutualshareholdingcompanieswhichmayaffecttheCompany’snetprofitbyover10%.
InCNY
Company
Names
CompanyNames | Companytype | Principalbusiness | Registeredcapital | Totalassets | Netassets | Operatingrevenue | Operatingprofit | Netprofit |
ShenzhenHarmonyWorldWatchesCenterCo.,Ltd. | Subsidiaries | Purchase&saleandrepairingserviceofwatchesandcomponents | 600,000,000 | 1,525,299,380.86 | 771,047,827.36 | 2,107,171,019.37 | 117,994,574.06 | 92,675,275.97 |
FIYTASalesCo.,Ltd. | Subsidiaries | Design,R&Dandsalesofwatchesandcomponents&parts | 450,000,000 | 742,574,904.27 | 401,872,117.88 | 1,027,778,790.49 | -13,350,224.65 | -10,380,652.52 |
ShenzhenFIYTASophisticatedTimepiecesManufactureCo.,Ltd. | Subsidiaries | Manufactureandproductionofwatchesandcomponents | 10,000,000 | 199,287,290.22 | 126,817,895.59 | 391,743,894.54 | 92,231,635.04 | 79,917,680.30 |
ShenzhenFIYTATechnologyDevelopmentCo.,Ltd. | Subsidiaries | Productionandmachiningofsophisticatedcomponentsandparts | 10,000,000 | 93,175,666.69 | 66,854,230.98 | 107,109,049.70 | 7,673,840.30 | 7,552,309.14 |
FIYTA(HongKong)Limited | Subsidiaries | Tradingofwatchesandaccessoriesandinvestment | 137,737,520 | 250,553,071.46 | 166,857,380.72 | 127,815,302.37 | -9,991,088.62 | -13,926,872.13 |
ShiyuehuiBoutique(Shenzhen)Co.,Ltd. | Subsidiaries | Design,R&Dandsalesofwatchesandcomponents& | 5,000,000 | 20,074,338.88 | -3,792,098.52 | 27,288,251.21 | 217,825.72 | -252,234.02 |
parts
parts | ||||||||
LiaoningHengdaruiCommerce&TradeCo.,Ltd. | Subsidiaries | Purchase&saleofwatchesandcomponents&parts | 51,000,000 | 143,835,959.26 | 40,062,997.77 | 9,111,983.83 | 1,220,621.29 | 914,215.97 |
HarbinHarmonyWorldWatchDistributionCo.,Ltd. | Subsidiaries | Purchase&saleofwatchesandcomponents&parts | 500,000 | 14,804,401.11 | 3,632,411.43 | 38,734,268.74 | 196,739.56 | 66,430.83 |
EmileChouriet(Shenzhen)Limited | Subsidiaries | Design,R&Dandsalesofwatchesandcomponents&parts | 41,355,200 | 126,442,604.19 | 62,866,037.60 | 107,143,080.33 | 1,885,427.05 | 1,361,927.90 |
ShanghaiWatchIndustryCo.,Ltd. | Mutualshareholdingcompany | Productionandsalesofwatchesandcomponents&parts | 15,350,000 | 115,360,493.17 | 104,526,575.69 | 97,282,978.95 | 4,487,189.00 | 4,006,180.22 |
SubsidiariesacquiredanddisposedinthereportingperiodInapplicableNotetotheprincipalmutualshareholdingcompaniesInapplicable
VIII.StructurizedEntitiesControlledbytheCompany
Inapplicable
IX.DevelopmentProspect
I.DevelopmentTrendoftheIndustryIn2019,thesituationthatthedomesticeconomicgrowthmayfurtherslowdownandtheremayexistuncertaintyintheconsumermarketshallbecome“thenewnormal”;superpositionofsuchtechnologiesasInternetofThings,AI,communication,etc.shallfurtherpromotetransformationofthecommercialecologyandwatchindustryshallstillbeconfrontedwithvariouschallenges.Ontheotherhand,however,inthelongrun,benefitedbygrowthofthepeople'sdisposableincome,riseofmiddleclassandriseofhighqualityconsumptiondemand,themedium-andhigh-endconsumergoodsshallenterthefasttrafficlaneofdevelopment.Thefavorablepolicies,suchasthepreferentialpoliciesofadjustmentofcustomsduties,taxreduction,tobeintroduced,shallbeexpectabletospeedupthisprogress.Inaddition,withriseofChina'scomprehensivestrength,consumers’recognitionofexcellenthome-madebrandsandtheproductswhichcanbebetterintegratedinChina'straditionalcultureshallbequicklyraised.Inaword,in2019,theChinese
consumermarketshallbreedandpromptmoredevelopmentopportunities.Thedomesticwatchmarketshallpresentasituationofgeneralstabilitywithconstantgrowthofthemedium-andhigh-endmarket.II.DevelopmentStrategyTheCompanytakes“tocreatequalitylife”asitsmission,focusesonwatchbusiness,insistsonbrandstrategyandpersistsininnovationanddevelopment,anddevotesitselftobuildtheCompanyintoa“leadinginternationalizedwatchbrandenterprise”andcreatesatisfactoryvaluereturnforitsshareholders.III.KeyWorkin2019In2019,theCompanyshall,centeringonleanoperationofthetwoprincipalcorebusinesses-watchbrandmanagementandwatchretailservices,ensurestablegrowthoftheCompany'sbusinessperformances.Thekeyworkissummarizedasfollows:
1.Complywiththeconsumptionupgradingtrend,continuetocarryforwardthebrandupgradingworkwithFIYTABradasthecore,speedupdevelopmentofthebrands,includingFIYTA,EmileChouriet,JONAS&VERUS,JEEP,BEIJING,etc.,consolidatethecompetitionsuperiorityandimprovethesegmentedmarketshareandbrandinfluence.2.Seizethegrowthopportunityofmedium-andhigh-endbrands,carryforwardchannelupgradingwithHarmonyasthecoreandserviceupgrading,speedupoptimizationanddevelopmentofthewatchretailservicesofHARMONYandBRANDGALLERY,continuouslyimprovethechanneloperationefficiency,stabilizethepositionofHARMONYintheindustryandimprovethechannelinfluenceofBRANDGALLERY.3.Quicklyintegratemoderninformationtechnology,speeduppromotonofwhole-channelintegrationdevelopmentandintelligentretailworkandconstruct“BigData”ofbrandoperationmanagement.4.ContinuetoexploreintegrationoftheInternetofThings,AItechnologyandcommunicationtechnologywithmodernwatchindustryandspeedupbusinessinnovationdevelopmentofsmartwatches,etc.IV.CapitalNecessaryforFutureDevelopmentAccordingtotheCompany'sbusinessdevelopmentplanandfinancialbudgetplanningin2019andforthepurposeofsatisfyingthedemandoninvestmentandoperationcapitalandatthesametimetimelyseizingthedevelopmentopportunitypossiblybroughtaboutfromthemarketchange,theCompanyplanstoapplyforfinancingcreditlinewithamountnotexceedingCNY900millionbyvariousmeans,includingcredit,guarantee,loantosubsidiaries,mortgage,etc.in2019.V.RisksPossiblytobeConfrontedwith1.In2019,itisnotoptimisticforgrowthofmacro-economyandtheconsumptionconfidenceisstillinprocessofrecovery,whichmaycausetheconsumerstobemorecautiousinshopping,andconsumerdiscretionaryindustrymaybeconfrontedwithgrowthpressure.2.Youngconsumergroup'sdemandtendstobepersonalizedanddiversifiedanditismoredifficulttofocuswhatbrandsconsumersmaychoose.Theindustrialcompetitionandfightingforseizingconsumersamongvariousbrandsshallbecomemorefierce.3.Greatchangemaytakeplaceinoff-lineshoppingenvironmentduetoquickdevelopmentofshoppingcenterandit
wouldbemoredifficulttoguideflowforoff-linesaleschannels;onlinecostsandexpensesincreaseconstantlyandtheperformanceofonlinechannelsmaybeaffected.4.Thereexistsbigdifferenceinproductfeatures,operationmodelandinvestmentbetweensmartwatchesandtraditionalwatches.TheCompanyshallberequiredtohavehigherresourcesintegrationcapability,investmentinkeytechnologiesandtalentsreserve.
X.StatementofSuchActivitiesasReceptionofSurvey,Communications,Interview,etc.
1.RegistrationFormoftheActivities,suchasReceptionofSurvey,Communications,Interviews,etc.intheReportingPeriod
Receptiontime
Receptiontime | Wayofreception | Typesofvisitorsreceived | Indexofbasicinformationofsurvey | |
January11,2018 | Fieldsurvey | Institution | http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcode=000026 | |
January23,2018 | Fieldsurvey | Institution | http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcode=000026 | |
March22,2018 | Fieldsurvey | Institution | http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcode=000026 | |
October23,2018 | Fieldsurvey | Institution | http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcode=000026 | |
Numberofreception | 4 | |||
Numberofinstitutionsreceived | 25 | |||
Numberofpersonsreceived | 28 | |||
Numberofothervisitorsreceived | 0 | |||
Isthereanyimportantinformationdisclosed,revealedorleakedtothepublic? | No |
Section5SignificantEvents
I.ProfitDistributionforCommonStockandConversionofCapitalReserveintoShareCapitalPreparation,ImplementationorAdjustmentofthePolicyforCommonStockProfitDistribution,EspeciallythePolicyforCashDividendDistributionTheCompany's2017ProfitDistributionPlanwasreviewedandapprovedatthe24thsessionoftheEighthBoardofDirectorsheldonMarch8,2018and2017AnnualGeneralMeetingheldonJune21,2018.ItwasresolvedthatwiththeCompany’stotalsharecapitalof438,744,881sharesasatDecember31,2017asthebase,theCompanywoulddistributecashdividendattherateofCNY2.00forevery10shares(withtaxinclusive),bonusshareattherateof0shareforevery10shares(withtaxinclusive)tothewholeshareholdersandcapitalizenocapitalreservetothewholeshareholders.TheimplementationoftheprofitdistributionplanwasfinishedonAugust1,2018.Forthedetail,refertotheAnnouncementonImplementationoftheProfitDistributionforYear2017(2018-014).
SpecialNotetoCashDividendDistributionPolicy
SpecialNotetoCashDividendDistributionPolicy | |
DoesitcomplywiththeArticlesofAssociationortheresolutionoftheGeneralMeeting? | Yes |
Aretheprofitdistributioncriteriaandproportionsdefiniteandclear? | Yes |
Aretherelevantdecision-makingprocessandmechanismcomplete? | Yes |
Doindependentdirectorsdotheirbestinperformingtheirdutiesandbringtheirdutiesintodueplay? | Yes |
Dominorityshareholdershaveopportunitytomakefullexpressionoftheiropinionsandappeal?Havetheirlawfulrightsandinterestsbeenfullyprotected? | Yes |
Incaseofadjustmentorvariationofthecashdividenddistributionpolicy,dotheconditionsandprocedurescomplywiththeregulationsandtransparent? | Inapplicable |
Theprofitdistributionplanorproposalandthepreplanorproposalofconversionofthecapitalreserveintosharecapitalinthepastthreeyears(withthereportingperiodinclusive):
AccordingtotheprovisionsconcerningcashdividenddistributionintheArticlesofAssociation,theCompanypreparedspecificcashdividenddistributionplanaftertheBoardofDirectorsandtheShareholders’GeneralMeetinghavereviewedstrictlyaccordingtotherequirements.Inthepastthreeyears,theCompanyhaswellimplementedthecashdividenddistributionpolicy,fullyaskedfortheindependentdirectors’opinions,effectivelyensuredtheminorityshareholders’benefitandmadetimelyandaccuratedisclosureinitsannualreportandtherelevantmedia.ProfitDistributionPlanin2016:Withthetotalsharecapitalof438,744,881sharesasatDecember31,2016asthebase,theCompanyisgoingtodistributetothewholeshareholderscashdividendatCNY1.00forevery10shares(withtaxinclusive),0bonusshareforevery10shares;convertednoreserveintosharecapital.
ProfitDistributionPlanin2017:Withthetotalsharecapitalof438,744,881sharesasatDecember31,2017asthebase,theCompanyisgoingtodistributetothewholeshareholderscashdividendatCNY2.00forevery10shares(withtaxinclusive),0bonusshareforevery10shares;convertednoreserveintosharecapital.ProfitDistributionPlanin2018:Withthetotalsharecapitalof438,744,881sharesasatDecember31,2018asthebase,theCompanyisgoingtodistributetothewholeshareholderscashdividendatCNY2.00forevery10shares(withtaxinclusive),0bonusshareforevery10shares;convertednoreserveintosharecapital.Theaccumulativeamountofcashdividenddistributedinthepastthreeyearstook151.39%oftheannualaveragenetprofitinthepastthreeyears,whichcomplieswiththerulesandregulations.Statementofcashdividendsdistributedinthepastthreeyears(withthereportingperiodinclusive)
InCNY
YearofDividend
Distribution
YearofDividendDistribution | AmountofCashDividend(includingtax) | NetprofitattributabletotheCompany’sshareholdersintheconsolidatedstatementsoftheyearofdividenddistribution | RatioofthenetprofitattributabletotheCompany’sshareholderstakenintheconsolidatedstatements | Amountofcashdividenddistributedinotherway(s)(suchassharesrepurchased) | Proportionofthecashdividenddistributedinotherway(s)inthenetprofitattributabletotheCompany’sshareholdersofordinarysharesintheconsolidatedstatements | Totalamountofcashdividend(includingotherway(s)) | Ratioofthetotalamountofcashdividend(includingotherway(s))inthenetprofitattributabletotheCompany’sshareholdersofordinarysharesintheconsolidatedstatements |
2018 | 87,748,976.20 | 183,835,095.29 | 47.73% | 0.00 | 0.00% | 87,748,976.20 | 47.73% |
2017 | 87,748,976.20 | 140,216,258.28 | 62.58% | 0.00 | 0.00% | 87,748,976.20 | 62.58% |
2016 | 43,874,488.10 | 110,662,681.59 | 39.65% | 0.00 | 0.00% | 43,874,488.10 | 39.65% |
Inthereportingperiod,boththeCompany’sprofitandtheparentcompany’sprofitavailableforshareholdersofordinaryshareswerepositivebutnocommonstockcashdividenddistributionproposalhasbeenputforward.InapplicableII.PreplanforProfitDistributionandConversionofCapitalReserveintoShareCapitalintheReportingPeriod
Bonussharesdistributedattherateof___(share)forevery10shares | 0 |
DividenddistributedattherateofCNY___forevery10shares(withtaxinclusive) | 2.00 |
Numberofsharesconvertedforevery10shares(shares) | 0 |
Sharecapitalbaseforthedividenddistributionpreplan(shares) | 438,744,881 |
Totalcashdividenddistributed(withtaxinclusive) | 87,748,976.20 |
Amountofcashdividenddistributedinotherway(s)(suchassharesrepurchased)
Amountofcashdividenddistributedinotherway(s)(suchassharesrepurchased) | 0.00 |
Totalamountofcashdividend(includingotherway(s)) | 87,748,976.20 |
Profitavailablefordistribution(CNY) | 683,798,086.83 |
Proportionofthecashdividendinthetotalprofitavailablefordistribution(%) | 100% |
CashDividendDistributionfortheReportingYear | |
Others | |
Detailedinformationforprofitdistributionorconversionofcapitalreserveintosharecapitalpreplan | |
TheCompany's2018ProfitDistributionPlanwasreviewedandapprovedatthe6thsessionoftheNinthBoardofDirectorsheldonMarch13,2019andbroughtto2018AnnualGeneralMeetingforreview.ItwasplannedthatwiththeCompany’stotalsharecapitalof438,744,881sharesasatDecember31,2018asthebase,theCompanywoulddistributecashdividendattherateofCNY2.00forevery10shares(withtaxinclusive),bonusshareattherateof0shareforevery10shares(withtaxinclusive)tothewholeshareholdersandcapitalizenocapitalreservetothewholeshareholders.TheprofitdistributionplanissubjecttoreviewandapprovaloftheGeneralMeetingbeforeimplementation. |
III.ImplementationofCommitments
1.CommitmentsfinishedinimplementationbytheCompany,shareholders,actualcontroller,acquirer,directors,supervisors,seniorexecutivesorotherrelatedpartiesinthereportingperiodandcommitmentsunfinishedinimplementationattheendofthereportingperiod
Commitments | Promiser | Commitmenttype | Description | Commitmenttime | Commitmentdeadline | Implementationstatus |
CommitmentforEquitySeparationReform | ||||||
Commitmentsintheacquisitionreportorthewrittenreportonchangeofequity | ||||||
Commitmentmadeatthetimeofassetreorganization | ||||||
CommitmentmadeatIPOorre-financing | ||||||
Equityincentivecommitment | ||||||
Othercommitmentstotheminorityshareholders | HuangYongfeng,ChenLibin,LuBingqiang,LuWanjun,LiuXiaoming,PanBo,LiMing,ChenZhuo | Commitmentforsalesrestrictiononshares | ThesaiddirectorsandseniorexecutivesincreasedholdingoftheCompany'ssharesandcommittedthatwithinsix | December16,2017 | 6months | Completedinimplementation |
monthsoftheincreasetheyshallnotreducetheholdingsizeinitiatively,shallnotbeengagedinanyinsidetrading,tradingthesharesduringsensitiveperiodorshortswingtrading.
monthsoftheincreasetheyshallnotreducetheholdingsizeinitiatively,shallnotbeengagedinanyinsidetrading,tradingthesharesduringsensitiveperiodorshortswingtrading. | |||
Hasthecommitmentbeentimelyimplemented | Yes | ||
Ifthecommitmenthasnotbeenimplementedattheendofthereportingperiod,itisnecessarytoexplainthespecificreasonoffailureinimplementationandthefutureworkplan. | Inapplicable |
2.ThereexistedprofitanticipationfortheCompany’sassetsorprojectswhilethereportingperiodwasstillwithinthedurationoftheprofitanticipation.TheCompanymadeexplanationonwhethertheassetsorprojectsreachedtheanticipatedprofitandthecauseInapplicableIV.Non-operationalOccupancyoftheCompany’sCapitalbytheControllingShareholderanditsRelatedPartiesInapplicableV.ExplanationoftheBoardofDirectors,theSupervisoryCommitteeandIndependentDirectors(ifany)onthe“QualifiedAuditor’sReport”issuedbytheCPAsintheReportingPeriodInapplicableVI.ExplanationontheChangesintheAccountingPolicy,AccountingEstimate,andAccountingMethodinComparisonwiththeFinancialReportofthePreviousYearInapplicableVII.ExplanationonSeriousAccountingErrorsOccurredintheReportingPeriodNecessarytobeRestatedRetrospectivelyInapplicable
VIII.ExplanationontheChangesintheScopeoftheConsolidatedStatementsinComparisonwiththeFinancialReportofthePreviousYearInapplicableIX.Engagement/DisengagementofCPAsCPAscurrentlyengagedbytheCompany
NameofthedomesticCPAs
NameofthedomesticCPAs | RuihuaCertifiedPublicAccountants(SpecialGeneralPartnership) |
SuccessiveyearsofthedomesticCPAsofferingauditingservices | 3 |
NameofthecertifiedpublicaccountantsfromthedomesticCPAs | WangYuqiaoandLiuXin |
SuccessiveyearsofthedomesticCPAsofferingauditingservices | 3 |
HastheCPAsbeenchangedforthereportingperiod?NoEmploymentofCPAs,financialconsultantorsponsorforauditingtheinternalcontrolThe24thSessionoftheEighthBoardofDirectorsheldonMarch8,2018and2017AnnualGeneralMeetingheldonJune21,2018reviewedandapprovedtheProposalforPaymentoftheAuditingFeeofYear2017andEngagementoftheCPAsastheAuditorofYear2018,anddecidedtorenewRuihuaCertifiedPublicAccountants(SpecialGeneralPartnership)astheCompany'sAuditorforauditingtheCompany's2018FinancialReportandInternalControlforatermofoneyear.Duringthereportingperiod,theCompanypaidtheauditfeeamountingtoCNY700,000.00toRuihuaCertifiedPublicAccountants(SpecialGeneralPartnership)forauditingthefinancialreportandCNY300,000.00forauditingtheinternalcontrol.X.ListingSuspensionorDelistingPossiblytobeConfrontedwithafterDisclosureoftheAnnualReportInapplicableXI.MattersconcerningBankruptcyReorganizationInapplicableXII.SignificantLawsuitsandArbitrationsInapplicableXIII.PenaltyandRectificationInapplicable
XIV.IntegrityoftheCompanyanditsControllingShareholderandActualControllerInapplicableXV.ImplementationoftheCompany’sEquityIncentivePlan,EmployeeStockOwnershipPlanorotherEmployeeIncentiveMeasuresThe3rdsessionoftheNinthBoardofDirectorsheldonNovember12,2018and20191stExtraordinaryGeneralMeetingheldonJanuary11,2019decidedtostart2018A-ShareRestrictiveStockIncentiveProgram(PhaseI),whichwaslateronreviewedandapprovedatthe5thsessionoftheNinthBoardofDirectorsheldonJanuary11,2019,andtheCompanyeventuallygranted4.224millionrestrictiveA-sharesto128personseligiblefortheincentive。Forthedetail,refertotherelevantannouncementdisclosedintheSecuritiesTimes,HongKongCommercialDailyandwww.cninfo.com.cnonJanuary12,2019.ThispartofA-sharerestrictivestockwasallgrantedandregisteredforlistingbyJanuary31,2019.XVI.SignificantRelatedTransactions1.RelatedTransactionsRelatedwithDay-to-DayOperationsInapplicable2.RelatedtransactionsconcerningacquisitionandsalesofassetsorequityInapplicable3.RelatedtransactionsconcerningjointinvestmentinforeigncountriesInapplicable4.CurrentAssociatedRightsofCreditandLiabilitiesInapplicable5.OtherSignificantRelatedTransactionsThe4thsessionoftheNinthBoardofDirectorsheldonDecember25,2018and20191stExtraordinaryGeneralMeetingheldonJanuary11,2019reviewedandapprovedtheProposalforConclusionoftheFinancialServiceAgreementwithAVICFinanceCo.,Ltd.,anddecidedtoterminatetheoriginalagreementwithAVICFinanceCo.,Ltd.andconcludeanewFinanceServiceAgreement.Forthedetail,refertotheAnnouncementontheResolutionofthe4thSessionoftheNinthBoardofDirectorsNo.2018-029,AnnouncementontheConclusionoftheFinancialServiceAgreementwithAVICFinanceCo.,Ltd.-RelatedTransactionNo.2018-031andAnnouncementoftheResolutionof20191stExtraordinaryGeneralMeetingNo.2019-008).Inquiryonthewebsitefordisclosingtheprovisionalreportconcerningsignificantrelatedtransactions
Descriptionoftheprovisional
announcements
Descriptionoftheprovisionalannouncements | Dateofdisclosure | Disclosurewebsite |
AnnouncementontheResolutionofthe4thSessionoftheNinthBoardofDirectors,2018-029 | December27,2018 | www.cninfo.com.cn |
AnnouncementontheFinancialServiceAgreementwithAVICFinanceCo.,Ltd.aRelatedTransaction,2018-031 | December27,2018 | www.cninfo.com.cn |
AnnouncementonResolutionof20191stExtraordinaryGeneralMeeting2019-008 | January12,2019 | www.cninfo.com.cn |
XVII.ImportantContractsandImplementation1.Custody,ContactingandLeases
(1)Custody
Inapplicable
(2)Contracting
Inapplicable
(3)Leases
Inapplicable2.SignificantGuarantees
(1)Guarantees
InCNY10,000
OutwardguaranteesOfferedbytheCompanyanditsSubsidiaries(excludingguaranteetothesubsidiaries) | ||||||||
NamesofGuarantees | Dateoftheannouncementontheguaranteeline | Guaranteeline | Dateofoccurrence | Actualamountofguarantee | Typeofguarantee | Guaranteeperiod | Implementationstatus | Guaranteetorelatedparty? |
Inapplicable | ||||||||
Totalamountofoutwardguaranteeapprovedinthereportperiod(A1) | 0 | Totalamountofoutwardguaranteeactuallyincurredinthe | 0 |
reportperiod(A2)
reportperiod(A2) | ||||||||
Totalamountofoutwardguaranteealreadyapprovedattheendofthereportperiod(A3) | 0 | Totalendingbalanceofoutwardguaranteeattheendofthereportperiod(A4) | 0 | |||||
Guaranteetothesubsidiaries | ||||||||
NamesofGuarantees | Dateoftheannouncementontheguaranteeline | Guaranteeline | Dateofoccurrence | Actualamountofguarantee | Typeofguarantee | Guaranteeperiod | Implementationstatus | Guaranteetorelatedparty? |
Harmony | March10,2018 | 20,000 | December30,2018 | 8,000 | Guaranteewithjointresponsibility | 1year | No | No |
theHongKongCo. | March10,2018 | 7,016.8 | April26,2018 | 2,631.3 | Guaranteewithjointresponsibility | 1year | No | No |
theHongKongCo. | March10,2018 | 3,508.4 | September10,2018 | 348.67 | Guaranteewithjointresponsibility | 1year | No | No |
theHongKongCo. | March10,2018 | 0 | October15,2018 | 557.86 | Guaranteewithjointresponsibility | 1year | No | No |
theHongKongCo. | March10,2018 | 0 | November13,2018 | 418.4 | Guaranteewithjointresponsibility | 1year | No | No |
theHongKongCo. | March10,2018 | 0 | November27,2018 | 263.13 | Guaranteewithjointresponsibility | 1year | No | No |
Totalguaranteequotatothesubsidiariesapprovedinthereportingperiod(B1) | 30,525.2 | Totalamountofguaranteetothesubsidiariesactuallyincurredinthereportingperiod(B2) | 12,219.36 | |||||
Totalguaranteequotatothesubsidiariesapprovedattheendofthereportingperiod(B3) | 30,525.2 | Totalbalanceofactualguaranteetothesubsidiariesattheendofthereportingperiod(B4) | 12,219.36 | |||||
Guaranteeamongthesubsidiaries | ||||||||
NamesofGuarantees | Dateoftheannouncementontheguaranteeline | Guaranteeline | Dateofoccurrence | Actualamountofguarantee | Typeofguarantee | Guaranteeperiod | Implementationstatus | Guaranteetorelatedparty? |
Inapplicable
Inapplicable | ||||
Totalguaranteequotatothesubsidiariesapprovedinthereportingperiod(C1) | 0 | Totalamountofguaranteetothesubsidiariesactuallyincurredinthereportingperiod(C2) | 0 | |
Totalguaranteequotatothesubsidiariesapprovedattheendofthereportingperiod(C3) | 0 | Totalbalanceofactualguaranteetothesubsidiariesattheendofthereportingperiod(C4) | 0 | |
Totalamountofguarantees(i.e.Totalofthepreviousthreemajoritems) | ||||
Totalguaranteequotatothesubsidiariesapprovedinthereportingperiod(A1) | 30,525.2 | Totalamountofoutwardguaranteeactuallyincurredinthereportperiod(A2) | 12,219.36 | |
Totalamountofguaranteesalreadyapprovedattheendofthereportperiod(A3) | 30,525.2 | Totalendingbalanceofguaranteesattheendofthereportperiod(A4) | 12,219.36 | |
ProportionoftheactualguaranteesintheCompany’snetassets(namelyA4+B4+C4) | 4.75% | |||
Including: | ||||
Amountofguaranteesofferedtotheshareholders,actualcontrolleranditsrelatedparties(D) | 0 | |||
Amountofguaranteeforliabilitiesdirectlyorindirectlyofferedtotheguaranteeswiththeasset-liabilityratioexceeding70%(E) | 0 | |||
Guaranteewithtotalamountexceeding50%ofthenetassets(F) | 0 | |||
Totalamountoftheaforesaidthreeguarantees(D+E+F) | 0 | |||
Fortheguaranteenotyetdue,guaranteeresponsibilityincurredinthereportingperiodordescriptionofthepossiblerelateddischargeduty(ifany) | Inapplicable | |||
Notetotheoutwardguaranteeagainsttheestablishedprocedures(ifany) | Inapplicable |
DescriptionoftheguaranteewithcomplexmethodInapplicable
(2)Outwardguaranteeagainstregulations
Inapplicable
3.EntrustingaThirdPartytoManagetheCashAssets(1)FinanceManagementonCommission
Inapplicable
(2)EntrustedLoan
Inapplicable4.OtherImportantContractsInapplicableXVIIISocialResponsibilities1.Implementationofsocialresponsibilities"TheSocialResponsibilityReport"waspublishedonwww.cninfo.com.cnonMarch15,2019.2.ImplementationofthesocialresponsibilityofprecisepovertyreliefDuringthereportingperiodofhalfayear,theCompanyhadneitherprecisepovertyreliefworknorfollow-upprecisepovertyreliefplannecessarytobecarriedout.3.EnvironmentalProtectionDoestheCompanyoranyofitssubsidiariesbelongtoakeypollutantdischargingunitasannouncedtothepublicbytheenvironmentalprotectionauthority?Yes
NameoftheCompanyoritsSubsidiary
NameoftheCompanyoritsSubsidiary | Descriptionofthemajorpollutantsorspecificpollutant | Wayofdischarging | Numberofdischargingoutlets | Distributionofthedischargingoutlets | Dischargingconcentration | PollutantDischargeStandardsinForce | Totaldischargevolume | Totaldischargevolumeverified | Over-discharging |
ShanghaiWatchIndustryCo.,Ltd. | Nickelandchromiumeffluent | Intermittentandinterruption | 1 | Attheportofeffluenttreatmentequipment | Nickel﹤0.01, | Nickel:0.1;chromium:0.3 | 2640tons/year | 3960tons/year | None |
ConstructionandoperationofthepollutionpreventionandcontrolfacilitiesShanghaiWatchCo.,Ltd.reconstructedthecleanproductionfacilityin2016andadded2setsofequipmentin2018forthepurposeofensuringdischargingofnickelandchromiumeffluenttocomplywiththeEmissionStandardofPollutantsforElectroplatingduring2018.Sofar,thefacilityhasbeenrunningnormallyandhasneverover-dischargedthepollutants;andhasnownetworkedtheplatformofthelocalenvironmentalprotectionauthority.EnvironmentalimpactassessmentonconstructionprojectsandotherenvironmentalprotectionadministrativelicensingIn2018YangpuDistrictEnvironmentalProtectionBureauofShanghaiorganizedandheldtheCleanProductionAuditingandAssessmentSeminarofShanghaiWatchCo.,Ltd.wherethecompany'scleanproductionworkwasassessed,auditedandapproved.
ShanghaiWatchCo.,Ltd.haspassedthepollutiondischargeverificationorganizedbyYangpuDistrictEnvironmentalProtectionBureauofShanghaiwiththeNoticeofPollutionDischargingVerificationNo.:YANGHUANJIANHUANJIANFEIHEZI[2007]No.05363;InaccordancewiththeprovisionsofShanghaiEnvironmentalProtectionBureau,theCompanyisgoingtoapplyforthepollutantdischarginglicencebeforetheendof2019.Atpresent,thecompanyismakingtherelevantpreparationworkforapplicationforthepollutantdischarginglicence.ContingencyPlanforEmergentEnvironmentalIncidentsShanghaiWatchCo.,Ltd.preparedtheEmergencyResponsePlanagainstEmergentEnvironmentalIncidentsandregularlyorganizestrainingandexerciseeveryyear.TheaforesaidplanhasbeenapprovedandfiledforrecordbyYangpuDistrictEnvironmentalProtectionBureauofShanghaiandhasbeenpublishedontheEnvironmentalInformationDisclosurePlatformofEnterprisesandInstitutionsofShanghai.EnvironmentSelf-MonitoringProgramYangpuDistrictEnvironmentalProtectionBureauofShanghaiconductssupervisiononceeveryquarter.ThecompanyentrustsShanghaiLightIndustryEnvironmentProtectionandPressureVesselMonitoringGeneralStation,acompetentindependentagent,toconductthemonitoringeveryyear.Thecompanyisitselfequippedwithmonitoringinstrumentsandconductsself-monitoringatleast4timeseverymonth.OtherenvironmentinformationnecessarytobedisclosedThecompanyhasdisclosedtheconcernedinformationontheEnvironmentalInformationDisclosurePlatformofEnterprisesandInstitutionsofShanghaiaccordingtotherequirementsofthelocalenvironmentalprotectionauthorities.Website:http://xxgk.eic.sh.cnOtherinformationinconnectionwiththeenvironmentalprotectionNoneXIX.NotestoOtherSignificantEvents1.AmendmentoftheArticlesofAssociationThe26thSessionoftheEighthBoardofDirectorsheldonAugust21,2018and20182ndExtraordinaryGeneralMeetingheldonSeptember11,2018reviewedandapprovedtheProposalonAmendmentoftheArticlesofAssociation.Forthedetail,refertotheAnnouncementontheResolutionofthe26thSessionoftheEighthBoardofDirectorsNo.2018-015,theAnnouncementontheResolutionof20182ndExtraordinaryGeneralMeetingNo.2018-021andtheProposalonAmendmentoftheArticlesofAssociationdisclosedontheSecuritiesTimes,HongKongCommercialDailyandwww.cninfo.com.cn.2.ElectionfortheNewBoardofDirectorsandtheNewSupervisoryCommitteeThe26thSessionoftheEighthBoardofDirectorsheldonAugust21,2018and20182ndExtraordinaryGeneralMeetingheldonSeptember11,2018reviewedandapprovedtheProposalonElectionfortheNewBoardofDirectorsandNominationofon-independentDirectorCandidatesandtheProposalonElectionfortheNewBoardofDirectorsand
NominationofIndependentDirectorCandidates.Mr.HuangYongfeng,Mr.WangMingchuan,Mr.FuDebin,Mr.XiaoZhanglin,Mr.WangBo,Mr.ChenLibinwereelectednon-independentdirectorsoftheNinthBoardofDirectors;Mr.WangJianxin,Mr.ZhongHongmingandMr.TangXiaofeiwereelectedindependentdirectorsoftheNinthBoardofDirectors.Forthedetail,refertotheAnnouncementontheResolutionofthe26thSessionoftheEighthBoardofDirectorsNo.2018-015,theAnnouncementontheResolutionof20182ndExtraordinaryGeneralMeetingNo.2018-021disclosedontheSecuritiesTimes,HongKongCommercialDailyandwww.cninfo.com.cn.The19thSessionoftheSupervisoryCommitteeheldonAugust21,2018and20182ndExtraordinaryGeneralMeetingheldonSeptember11,2018reviewedandapprovedtheProposalonElectionfortheNewSupervisoryBoard;Mr.WangBaoyingwaselectednon-staffsupervisoroftheNinthSupervisoryCommittee.Forthedetail,refertotheAnnouncementontheResolutionoftheNinthSupervisoryCommitteeNo.2018-016andtheAnnouncementontheResolutionof20182ndExtraordinaryGeneralMeetingNo.2018-021disclosedontheSecuritiesTimes,HongKongCommercialDailyandwww.cninfo.com.cn.2018StaffRepresentativeCongressheldonAugust30,2018reviewedandapprovedtheProposalonElectionoftheStaffRepresentativeSupervisorsoftheNinthSupervisoryCommittee;MadamShengQingandMr.ZouZhixiangwereelectedstaffrepresentativesupervisorstheNinthSupervisoryCommittee.Forthedetail,refertotheAnnouncementontheResolutionoftheStaffRepresentativeCongressNo.2018-019disclosedontheSecuritiesTimes,HongKongCommercialDailyandwww.cninfo.com.cn.XX.SignificantEventsoftheCompany'sSubsidiariesInapplicable
Section6ChangeofSharesandParticularsaboutShareholders
I.ChangeofShares1.ChangeofShares
Inshares
Beforethechange
Beforethechange | Increase/Decrease(+/-) | Afterthechange | |||||||
Quantity | Proportion | Newissuing | Bonusshares | Sharesconvertedfromreserve | Others | Sub-total | Quantity | Proportion | |
I.Restrictedshares | 380,513 | 0.09% | 0 | 380,513 | 0.09% | ||||
1.Sharesheldbythestate | 0 | 0.00% | 0 | 0 | 0.00% | ||||
2.Statecorporateshares | 0 | 0.00% | 0 | 0 | 0.00% | ||||
3.Otherdomesticshares | 380,513 | 0.09% | 0 | 380,513 | 0.09% | ||||
Including:Domesticcorporateshares | 0 | 0.00% | 0 | 0 | 0.00% | ||||
Sharesheldbydomesticnaturalpersons | 380,513 | 0.09% | 0 | 380,513 | 0.09% | ||||
4、Foreigninvestedshares | 0 | 0.00% | 0 | 0 | 0.00% | ||||
Including:Foreigncorporateshares | 0 | 0.00% | 0 | 0 | 0.00% | ||||
Sharesheldbyforeignnaturalpersons | 0 | 0.00% | 0 | 0 | 0.00% | ||||
II.Unrestrictedshares | 438,364,368 | 99.91% | 0 | 438,364,368 | 99.91% | ||||
1.CNYordinaryshares | 356,716,368 | 81.30% | 0 | 356,716,368 | 81.30% | ||||
2.ForeigninvestedshareslistedinMainlandChina | 81,648,000 | 18.61% | 0 | 81,648,000 | 18.61% | ||||
3、Foreigninvestedshareslistedabroad | 0 | 0.00% | 0 | 0 | 0.00% | ||||
4.Miscelleneous | 0 | 0.00% | 0 | 0 | 0.00% | ||||
III.Totalshares | 438,744,881 | 100.00% | 0 | 438,744,881 | 100.00% |
CauseofthechangeofsharesInapplicable
ApprovalofChangeoftheSharesInapplicableTransferoftheSharesChangedInapplicableProgressofimplementationofthestockrepurchaseInapplicableProgressofimplementationofreductionoftheholdingsizeofthesharesrepurchasedbycentralizedbiddingInapplicableInfluenceofthechangeofthesharesuponsuchfinancialindicatorsasthebasicEPSanddilutedEPS,netassetvaluepershareattributabletothecommonstockholdersinthepastyearandthelatestperiodInapplicableOtherinformationtheCompanyconsidersnecessaryorrequiredbythesecuritiesregulatoryauthoritytobedisclosed.The3rdsessionoftheNinthBoardofDirectorsheldonNovember12,2018and20191stExtraordinaryGeneralMeetingheldonJanuary11,2019decidedtostart2018A-ShareRestrictiveStockIncentiveProgram(PhaseI),whichwaslateronreviewedandapprovedatthe5thsessionoftheNinthBoardofDirectorsheldonJanuary11,2019,andtheCompanyeventuallygranted4.224millionrestrictiveA-sharesto128personseligiblefortheincentive。ThedateofgrantingthispartofrestrictiveshareswasJanuary11,2019(Thelock-upperiodoftheserestrictiveshareswastwoyearscommencingfromthedateofgranting).ByJanuary302019,theworkofgrantingthesharesandregistrationforlistingwascompleted.Afterthesharegranting,theCompany'stotalcapitalstockincreasedto442,968,881shares.2.ChangeoftheRestrictedSharesInapplicableII.IssuingandListing1.Issuingofsecurities(withpreferredstockexclusive)inthereportingperiodInapplicable2.Notetochangesofthecompany’stotalsharesandthestructureofshareholdersaswellasthestructureofassetsandliabilitiesInapplicable3.ExistingEmployeeSharesInapplicable
III.ShareholdersandActualControllingShareholder1.NumberofShareholdersandShareholding
Inshares
Totalcommonshareholdersattheendofthereportingperiod
Totalcommonshareholdersattheendofthereportingperiod | 31,855 | Totalcommonshareholdersattheendofthemonthbeforethedateofdisclosingtheannualreport | 31,352 | Totalpreferenceshareholderswiththevotingpowerrecoveredattheendofthereportingperiod(ifany)(RefertoNote8) | 0 | TotalpreferenceshareholderswiththevotingpowerrecoveredattheendofthemonthbeforethedayofdisclosingtheAnnualReport(ifany)(RefertoNote8) | 0 | ||||||||
Sharesheldbytheshareholdersholdingover5%sharesorthetoptenshareholders | |||||||||||||||
NameoftheShareholder | Natureoftheshareholder | Shareholdingproportion | Numberofsharesheldattheendofthereportingperiod | Increase/decreaseinthereportingperiod | Numberoftherestrictedsharesheld | Quantityofunrestrictedsharesheld | Pledgingorfreezing | ||||||||
Statusoftheshares | Quantity | ||||||||||||||
AVICInternationalHoldingLimited | Statecorporate | 37.15% | 162,977,327 | 0 | 0 | 162,977,327 | |||||||||
ChongqingInternationalTrustCo.,Ltd.-YUXINNo.2Trust | Domesticnaturalpersons | 4.19% | 18,389,227 | 6,904,000 | 0 | 18,389,227 | |||||||||
MoJiadong | Domesticnaturalpersons | 2.90% | 12,703,968 | 12,703,968 | 0 | 12,703,968 | |||||||||
#YangZugui | Domesticnaturalpersons | 2.52% | 11,069,727 | 1,568,758 | 0 | 11,069,727 | |||||||||
NationalSocialSecurityFund114Portfolio | Statecorporate | 2.20% | 9,657,744 | 0 | 0 | 9,657,744 | |||||||||
XizangInvestmentCo.,Ltd. | Statecorporate | 1.13% | 4,976,551 | 0 | 0 | 4,976,551 | |||||||||
MANULIFETEDAFund-MinshengBank-MANULIFE | Domesticnon-state-ownedcorporate | 1.12% | 4,893,559 | 0 | 0 | 4,893,559 |
TEDAValueGrowthOrientedAdditionalIssueNo.351AssetsManagementProgram
TEDAValueGrowthOrientedAdditionalIssueNo.351AssetsManagementProgram | ||||||||
ShenzhenHeliFengyuanCommerce&TradeCo.,Ltd. | Domesticnon-state-ownedcorporate | 0.62% | 2,704,000 | -596,000 | 0 | 2,704,000 | ||
ShenzhenRongliyuanCommercialInformationCo.,Ltd. | Domesticnon-state-ownedcorporate | 0.37% | 1,630,500 | 1,030,500 | 0 | 1,630,500 | ||
ChinaConstructionBankCo.,Ltd.-INVESCOGREATWALLQuantizedSelectedStockTypeSecuritiesInvestmentFund | Domesticnon-state-ownedcorporate | 0.31% | 1,376,533 | -1,531,100 | 0 | 1,376,533 | ||
Aboutthefactthatastrategicinvestororordinarycorporatebecameoneofthetoptenshareholdersduetoplacementofnewshares(ifany)(RefertoNote3) | Inapplicable | |||||||
Explanationonassociatedrelationshiporconsistentactionoftheaboveshareholders | Inapplicable | |||||||
Sharesheldbytop10shareholdersofunrestrictedshares | ||||||||
NameoftheShareholder | Quantityofunrestrictedsharesheldattheendofthereportingperiod | Sharetype | ||||||
Sharetype | Quantity | |||||||
AVICInternationalHoldingLimited | 162,977,327 | CNYordinaryshares | 162,977,327 | |||||
ChongqingInternationalTrustCo.,Ltd.-YUXINNo.2Trust | 18,389,227 | CNYordinaryshares | 18,389,227 | |||||
MoJiadong | 12,703,968 | CNYordinaryshares | 12,703,968 | |||||
#YangZugui | 11,069,727 | CNYordinaryshares | 11,069,727 | |||||
NationalSocialSecurityFund114Portfolio | 9,657,744 | CNYordinaryshares | 9,657,744 | |||||
XizangInvestmentCo.,Ltd. | 4,976,551 | CNYordinaryshares | 4,976,551 | |||||
MANULIFETEDAFund-MinshengBank-MANULIFETEDAValueGrowthOriented | 4,893,559 | CNYordinaryshares | 4,893,559 |
AdditionalIssueNo.351AssetsManagementProgram
AdditionalIssueNo.351AssetsManagementProgram | |||
ShenzhenHeliFengyuanCommerce&TradeCo.,Ltd. | 2,704,000 | CNYordinaryshares | 2,704,000 |
ShenzhenRongliyuanCommercialInformationCo.,Ltd. | 1,630,500 | CNYordinaryshares | 1,630,500 |
ChinaConstructionBankCo.,Ltd.-INVESCOGREATWALLQuantizedSelectedStockTypeSecuritiesInvestmentFund | 1,376,533 | CNYordinaryshares | 1,376,533 |
Explanationtotheassociatedrelationshiporconsistentactionamongthetop10shareholdersofnon-restrictednegotiablesharesandthatbetweenthetop10shareholdersofnon-restrictednegotiablesharesandtop10shareholders. | Inapplicable | ||
Notetothetop10shareholdersinvolvedinmarginfinancing&securitieslending(ifany)(RefertoNote4) | Inapplicable |
Didthetoptencommonshareholdersortoptenshareholdersofunrestrictedcommonsharesconductcontractualrepurchaseduringthereportingperiod?No2.ControllingShareholderNatureofthecontrollingshareholder:State-ownedshareholdingdirectlyunderthecentralgovernmentTypeofthecontrollingshareholder:corporate
NameoftheControllingShareholder | LegalRepresentative/Leader | Dateofincorporation | OrganizationCode | Leadingbusinessactivities |
AVICInternationalHoldingLimited | LiuHongde | June20,1997 | 91440300279351229A | Investingandinitiatingentities(separateapplicationistobesubmittedforaspecificproject);domesticcommerce,supplyandsalesofgoodsandmaterials(excludingthegoodsforexclusivesale,underspecialcontrolandmonopolizedgoods);importandexport. |
Equityinotherdomesticandforeignlistedcompaniesheldbythecontrollingshareholderbymeansofcontrolandmutualshareholdingin | AVICInternationalHoldingLimitedholds22.35%equityinAVICSundaHoldingCompanyLimited(AVICSUNDA000043);14.24%equityinTianmaMicro-electronicsCo.,Ltd.(SHENTIANMAA000050);69.74%equityinShennanCircuitsCo.,Ltd.(ShennanCircuits002916);and73.87%equityinAVICInternationalMaritimeHoldingsLimited(aSingaporelistedcompany,O2I). |
thereportingperiod.
ChangeofthecontrollingshareholderinthereportingperiodInapplicable3.ActualControlleranditsConcertedPartiesNatureoftheactualcontroller:State-ownedassetsregulatoryagencydirectlyunderthecentralgovernmentTypeoftheactualcontroller:corporate
thereportingperiod.
NameoftheActualController
NameoftheActualController | LegalRepresentative/Leader | Dateofincorporation | OrganizationCode | Leadingbusinessactivities |
AVICInternationalHoldingCorporation | LiuHongde | April12,1983 | 911100001000009992 | Import&export;warehousing;investmentandmanagementofindustry,hotel,property,realestate;development,salesandrepairingserviceofnewenergyequipment;exhibition;transferoftechnologyandtechnicalservicesinconnectionwiththeaforesaidbusinesses;dispatchcontractworkerstoimplementoverseasengineeringworks;salesofpoisonablechemicals. |
Equityinotherdomesticandforeignlistedcompaniescontrolledbytheactualcontrollerinthereportingperiod | AVICInternationalholds8.40%equityinTianmaMicro-electronicsCo.,Ltd.(SHENTIANMAA000050). |
ChangeoftheactualcontrollerinthereportingperiodInapplicableBlockDiagramoftheOwnershipandControlRelationsbetweentheCompanyandtheActualController
100%
14.31%14.31%62.52%8.86%
100%
37.50%
33.93%
37.15%
TheactualcontrollercontrolstheCompanybymeansoftrustormanagingtheassetsinotherways:
Inapplicable4.OtherCorporateShareholderHoldingover10%oftheCompany’sSharesInapplicable5.ShareholdingReductionRestrictionontheControllingShareholder,theActualController,theReorganizingPartyandotherCommittingPartyInapplicable
100%14.31%14.31%62.52%8.86%100%37.50%33.93%37.15% | ||||||||||||||
State-ownedAssetsSupervisionandAdministrationCommissionoftheStateCouncil | ||||||||||||||
NationalCouncilforSocialSecurityFund | BeijingPutuoHanhuaInvestmentManagement | AviationIndustryCorporationofChina | AVICCCBAviationIndustryEquityInvestment(Tianjin)Co., | |||||||||||
AVICInternationalHoldingCorporation | ||||||||||||||
AVICInternationalShenzhenCompanyLimited | ||||||||||||||
AVICInternationalHoldingsCorporation | ||||||||||||||
FiytaHoldingsLtd. | ||||||||||||||
Section7AboutthePreferredShares
Inapplicable
Section8Directors,Supervisors,SeniorExecutivesandEmployees
I.ChangeinSharesHeldbyDirectors,SupervisorsandSeniorExecutives
Name
Name | Title | OfficeStatus | Gender | Age | Startingdateoftenure | Expirydateoftenure | Numberofsharesheldatthebeginningofthereportingperiod(shares) | Shareholdingincreasedinthereportingperiod(shares) | Shareholdingdecreasedinthereportingperiod(shares) | Otherincrease/decrease(shares) | Numberofsharesheldatendofthereportingperiod(shares) |
HuangYongfeng | Chairman | Inoffice | Male | 45 | September11,2018 | September11,2021 | 80,000 | 0 | 0 | 0 | 80,000 |
WangMingchuan | Director | Inoffice | Male | 53 | September11,2018 | September11,2021 | 0 | 0 | 0 | 0 | 0 |
FuDebin | Director | Inoffice | Male | 42 | September11,2018 | September11,2021 | 0 | 0 | 0 | 0 | 0 |
XiaoZhanglin | Director | Inoffice | Male | 43 | September11,2018 | September11,2021 | 0 | 0 | 0 | 0 | 0 |
WangBo | Director | Inoffice | Male | 40 | September11,2018 | September11,2021 | 0 | 0 | 0 | 0 | 0 |
ChenLibin | Director&GM | Inoffice | Male | 55 | September11,2018 | September11,2021 | 80,000 | 0 | 0 | 0 | 80,000 |
WangJianxin | Independentdirector | Inoffice | Male | 49 | September11,2018 | September11,2021 | 0 | 0 | 0 | 0 | 0 |
Zhong | Independ | Inoffice | Male | 44 | 0 | 0 | 0 | 0 | 0 |
Hongming
Hongming | entdirector | September11,2018 | September11,2021 | ||||||||
TangXiaofei | Independentdirector | Inoffice | Male | 45 | September11,2018 | September11,2021 | 0 | 0 | 0 | 0 | 0 |
WangBaoying | ChairmanoftheSupervisoryCommittee | Inoffice | Male | 55 | September11,2018 | September11,2021 | 0 | 0 | 0 | 0 | 0 |
ShengQing | Supervisor | Inoffice | Female | 43 | September11,2018 | September11,2021 | 0 | 0 | 0 | 0 | 0 |
ZouZhixiang | Supervisor | Inoffice | Male | 35 | September11,2018 | September11,2021 | 0 | 0 | 0 | 0 | 0 |
LuBingqiang | DeputyGM | Inoffice | Male | 58 | October08,2018 | October08,2021 | 96,311 | 0 | 0 | 0 | 96,311 |
LuWanjun | DeputyGMandSecretaryoftheBoard | Inoffice | Male | 52 | October08,2018 | October08,2021 | 50,000 | 0 | 0 | 0 | 50,000 |
LiuXiaoming | DeputyGM | Inoffice | Male | 48 | October08,2018 | October08,2021 | 50,000 | 0 | 0 | 0 | 50,000 |
PanBo | DeputyGM | Inoffice | Male | 43 | October08,2018 | October08,2021 | 50,000 | 0 | 0 | 0 | 50,000 |
LiMing | DeputyGM | Inoffice | Male | 46 | October08,2018 | October08,2021 | 50,040 | 0 | 0 | 0 | 50,040 |
ChenZhuo | ChiefAccountant | Inoffice | Male | 43 | October08,2018 | October08,2021 | 51,000 | 0 | 0 | 0 | 51,000 |
ZhangHongguang | Independentdirector | Retired | Male | 63 | August31,2015 | September11,2018 | 0 | 0 | 0 | 0 | 0 |
ZhangShunwen | Independentdirector | Retired | Male | 53 | August31,2015 | September11,2018 | 0 | 0 | 0 | 0 | 0 |
WangYan | Independ | Retired | Male | 62 | August | 0 | 0 | 0 | 0 | 0 |
entdirector
entdirector | 31,2015 | September11,2018 | |||||||||
WangJingqi | Supervisor | Retired | Male | 39 | October14,2016 | September11,2018 | 0 | 0 | 0 | 0 | 0 |
Total | -- | -- | -- | -- | -- | -- | 507,351 | 0 | 0 | 0 | 507,351 |
II.PersonnelChangeinDirectors,SupervisorsandSeniorExecutives
Name | OfficeTaken | Type | Date: | Cause |
WangJianxin | Independentdirector | Appointment&removal | September11,2018 | ElectedindependentdirectoroftheNinthBoardofDirectorsatthe26thSessionoftheEighthBoardofDirectorsand20182ndExtraordinaryGeneralMeeting. |
ZhongHongming | Independentdirector | Appointment&removal | September11,2018 | ElectedindependentdirectoroftheNinthBoardofDirectorsatthe26thSessionoftheEighthBoardofDirectorsand20182ndExtraordinaryGeneralMeeting. |
TangXiaofei | Independentdirector | Appointment&removal | September11,2018 | ElectedindependentdirectoroftheNinthBoardofDirectorsatthe26thSessionoftheEighthBoardofDirectorsand20182ndExtraordinaryGeneralMeeting. |
ZouZhixiang | Supervisor | Appointment&removal | September11,2018 | ElectedstaffsupervisoroftheNinthSupervisoryCommitteeat20181stStaffRepresentativeCongress. |
ZhangHongguang | Independentdirector | Retireduponexpiryofthetenure | September11,2018 | RetireduponexpiryofthetenureoftheEighthBoardofDirectors |
ZhangShunwen | Independentdirector | Retireduponexpiryofthetenure | September11,2018 | RetireduponexpiryofthetenureoftheEighthBoardofDirectors |
WangYan | Independentdirector | Retireduponexpiryofthetenure | September11,2018 | RetireduponexpiryofthetenureoftheEighthBoardofDirectors |
WangJingqi | Supervisor | Retireduponexpiryofthetenure | September11,2018 | RetireduponexpiryofthetenureoftheEighthSupervisoryCommittee |
III.ProfileofSeniorExecutives
ProfessionalBackground,CVandMajorDutiesofDirectors,SupervisorsandSeniorExecutivesinOfficeMr.HuangYongfeng,borninMay,1974,seniorengineer,masterofmanagementengineeringofBeijingUniversityofAeronautics&Astronautics,andEMBAofChinaEuropeInternationalBusinessSchool.HeisnowtheSecretaryoftheCPCCommitteeandChairmanoftheBoardoftheCompany.Mr.HuangusedtobethechairmanandgeneralmanagerofAVICINTLZhuhaiCo.,Ltd.,assistanttothegeneralmanagerofAVICInternationalHoldingCorporation,deputygeneralmanager,assistanttothegeneralmanager,manageroftheenterprisestrategyandmanagementdepartmentofAVICInternationalShenzhenCo.,Ltd.,directorofAVICSundaHoldingCompanyLimited,directorofRainbowDepartmentStoreCo.,Ltd.,directorofTianmaMicroelectronicsCo.,Ltd.andchairmanofShenzhenZhongshiMechanicalEquipmentCo.,Ltd.
Mr.WangMingchuan,borninDecember1966,senioraccountant,masterofmanagementengineeringofTongjiUniversity.HeisadirectoroftheCompany,deputyGMandchiefaccountantAVICInternationalShenzhenCo.,Ltd.,adirectorofTianmaMicroelectronicsCo.,Ltd.,adirectorofRainbowDepartmentStoreCo.,Ltd.andadirectorofShennanCircuitsCo.,Ltd.HeusedtobeafinancialsupervisorofthefinancialdivisionofChengduEngineCompany,managerofthefinancialdepartmentofShenzhenShenrongEngineeringPlasticCompany,managerofthecomprehensivemanagementdepartmentandchieffinancialofficerofShenzhenCATICTradingCo.,Ltd.,managerofthefinancialandauditdepartment,managerofthefinancialdepartmentandvicechiefaccountantofAVICInternationalShenzhenCo.,Ltd.andchiefofthefinancialdepartmentandvicechiefaccountantofAVICInternationalHoldingCorporation.Mr.FuDebin,borninFebruary1977,masterofengineeringanddoctorofengineeringofBeijingUniversityofAeronautics&Astronautics.HeisadirectorinofficeoftheCompanyandtheheadofH.R.departmentofAVICInternationalHoldingCorporation,adirectorofTianmaMicroelectronicsCo.,Ltd.andadirectorofShennanCircuitsCo.,Ltd.HeusedtobetheheadoftheadministrationandmanagementdepartmentanddeputyheadofthemanagementdepartmentofAVICInternationalHoldingCorporation,deputydirectorofthepartypolicyofficeanddeputysecretaryofthegeneralPartybranchofPowerSchoolofBeijingUniversityofAeronautics&Astronautics.Mr.XiaoZhanglin,borninJanuary1976,seniorengineer,MBAofShanghaiJiaotongUniversity.HeisadirectorinofficeoftheCompany,companysecretaryofAVICInternationalHoldingLimited,directorofAVICSundaHoldingCompanyLimited,directorofShennanCircuitsCo.,Ltd.adirectorofRainbowDepartmentStoreCo.,Ltd.,adirectorofShenzhenAeroFastenersMFGCo.,Ltd.Mr.Xiaousedtobethechiefoftheretailandhigh-endconsumergoodsoffice,deputysectionchiefofthestrategydevelopmentdepartmentofAVICInternationalHoldingCorporationandtheassistanttothesectionchiefoftheenterprisestrategyandmanagementdepartmentofAVICInternationalShenzhenCo.,Ltd.,adirectorofShenzhenAVICCommerceandTradeCo.,Ltd.AndadirectorofTianmaMicroelectronicsCo.,Ltd.Mr.WangBo,borninJuly,1979,MBAofRenminUniversityofChina.HeisadirectorinofficeoftheCompany,sectionchiefoftheHRdepartmentofAVICInternationalShenzhenCo.,Ltd.,adirectorofShennanCircuitsCo.,Ltd,adirectorofShenzhenAeroFastenersMFGCo.,Ltd.,adirectorofShenzhenGrandSkylightHotelManagementCompanyLimitedandadirectorofShenzhenShanghaiHotel.Mr.WangusedtobedeputysectionchiefoftheHRdepartmentofAVICInternationalHoldingCorporation,adirectorofAVICINTLGuangzhouCo.,Ltd.,andadirectorofAVICINTLZhuhaiCo.,Ltd.andadirectorofShenzhenAVICCommerceandTradeCo.,Ltd.Mr.ChenLibin,borninJune1964,masterofeconomicsofthePartySchoolofGuangdongProvincialCPCCommitteeandEMBAofSunYat-SenUniversity.Heisadirectorinoffice,ViceSecretaryoftheCPCCommitteeandtheGMoftheCompany.Mr.ChenusedtobethedeputyGeneralManagerandSecretaryoftheBoardoftheCompany,deputysectionchiefandsectionchiefoftheParty’saffairsoftheParty-massesWorkDepartmentandseniorcommissioner,deputymanagerandmanageroftheenterpriseculturedepartmentofCATICShenzhen.Mr.WangBaoying,borninJuly,1964,seniorengineeratresearchfellowlevel,bachelorofBeijingUniversityofAeronautics&Astronautics,EMBAofChinaEuropeInternationalBusinessSchool.HeistheChairmanoftheSupervisoryCommittee,managingdirectorofAVICInternationalShenzhenCo.,Ltd.,thechairmanofthesupervisorycommitteeofTianmaMicroelectronicsCo.,Ltd.,thechairmanofthesupervisorycommitteeofRainbowDepartmentStoreCo.,Ltd.andthechairmanofthesupervisorycommitteeofShennanCircuitsCo.,Ltd.HeusedtobeadirectoroftheCompany,section-chiefofAVICTianjinAviationElectro-mechanicalCo.,Ltd.,deputyGMofShenzhenRainbowDepartmentStore
Co.,Ltd.,firstdeputyGMofShenzhenNamKwong(Group)CompanyLimited,manageroftheenterprisestrategyandmanagementdepartmentandassistantoftheGMofCATICShenzhen,executivedirectorofAVICInternationalHoldingLimited,managingdirectorofShenzhenAVICResourcesCo.,Ltd.,managingdirectorofAVICNewEnergyDevelopmentCo.,Ltd.andmanagingdirectorofAVICInternationalHoldingCorporation.Ms.ShengQing,borninApril,1976,accountant,seniorHRadministrator,bachelorofinternationalaccountingspecializationofJiangxiUniversityofFinanceandEconomics,masteroforganizationandHRmanagementoftheUniversityofHongKong.Sheisthemanagerofthedisciplineinspection,supervisionandauditdepartmentoftheCompany.SheusedtobeasupervisoroftheEighthSupervisoryCommittee,managerofHRdepartmentandseniorbusinessmanageroftheauditdepartmentoftheCompany.Mr.ZouZhixiang,borninMarch1984,mediumauditor,accountantandbacheloroffinancialmanagementofHunanUniversity.Heisnowanassistanttothemanagerofthedesciplineinspection,supervisionandauditdepartmentoftheCompany.Mr.ZouusedtobetheseniorbusinessmanageroftheauditdepartmentoftheCompanyandtheauditingcommissionerofthesupervisionandauditdepartmentofAVICInternationalHoldingLimited.Mr.WangJianxin,borninJune,1970,graduatedfromZhongnanUniversityofEconomicsandLaw,aChineseCPA.Mr.WangisapartnerofShineWingCertifiedPublicAccountants(SpecialGeneralPartnership)andindependentdirectorofChongqingFulingZhacaiGroupCo.,Ltd.Mr.ZhongHongming,borninJanuary1975,graduatedfromRenminUniversityofChina,doctoroflaw.Mr.ZhongisanassociateresearchfellowofLawResearchInstituteofSichuanAcademyofSocialSciences,aresearcheroftheunitedpost-doctorialresearchcenterofSichuanAcademyofSocialSciences,amemberofChinaSecuritiesLawResearchCouncil,anindependentdirectorofMangoExcellentMediaCo.,Ltd.andXianDagangRoadMachineryCo.,Ltd.Mr.TangXiaofei,borninMay,1974,graduatedfromSouthwestJiaotongUniversity,professoranddoctorialtutor.Mr.TangisaprofessoranddoctorialtutoroftheBusinessSchoolofSouthwestJiaotongUniversity,directorofUrbanBrandStrategyResearchInstituteofSouthwestUniversityofFinanceandEconomics,enjoyingthetitleofOutstandingTalentoftheNewCenturygrantedbytheMinistryofEducation,Secretary-generalandexecutivecouncilmemberoftheInternationalBrandStrategySociety,acouncilmemberofChineseAssociationofMarketDevelopment,consultantofAPEXOgilvy,expertconsultantofbranddevelopmentofChengduMunicipalGovernment,expertofChengduFamousTrademarkDeterminationBoard,executivedirectorofCCTVWDY,independentdirectorofSichuanLanguangDevelopmentCo.,Ltd.Mr.LuBingqiang,borninDecember1961,senioreconomist,bachelorofGuangzhouJinanUniversity.Mr.LuisthemanagingdirectorofFIYTA(HongKong)Limited.ShenzhenCo.,Ltd.HeusedtobetheassistanttotheGManddirectoroftheCompany,andGMandchairmanofShenzhenHarmonyWorldWatchesCenterCo.,Ltd.,thepresidentsecretaryofAVICInternationalShenzhenCo.,Ltd.Mr.LuWanjun,borninFebruary,1967,accountant,EMBAofSino-EuropeanInternationalManagementInstitute.Mr.LuistheSecretaryofCommitteeforDisciplineInspection,adeputyGMandtheSecretaryoftheBoardoftheCompany.HeusedtobetheassistanttotheGMoftheCompany,executivedeputyGManddeputyGM,theassistanttotheGMandconcurrentlythemanagerofthefinancialdepartmentofShenzhenHarmonyWorldWatchesCenterCo.,Ltd.
Mr.LiuXiaoming,bornin1971,engineer,economist,bachelorofmechanicalengineeringofBeijingUniversityofAeronautics&Astronautics,andEMBAofChinaEuropeInternationalBusinessSchool.HeisadeputyGMoftheCompany,themanagingdirectorofShenzhenHarmonyWorldWatchesCenterCo.,Ltd.HeusedtobetheassistanttotheGMoftheCompany,adeputyGMandtheassistanttotheGMofShenzhenHarmonyWorldWatchesCenterCo.,Ltd.Mr.PanBo,borninMarch,1976,bachelorofelectromechanicalengineeringofBeijingUniversityofAeronautics&Astronautics,andEMBAofChinaEuropeInternationalBusinessSchool.HeisnowadeputyGMoftheCompanyandthemanagingdirectorofFIYTASalesCo.,Ltd.Mr.PanusedtobetheassistanttotheGMoftheCompany,executivedeputyGM,deputyGM,theassistanttotheGM,managerofthesalesdepartment,managerofthelogisticdepartment,manageroftheafter-saledepartment,etc.ofFIYTASalesCo.,Ltd.Mr.LiMing,borninSeptember,1973,bachelorofmarketingofZhongnanUniversityofEconomicsandLawandEMBAofChinaEuropeInternationalBusinessSchool.HeisnowadeputyGMoftheCompany.Mr.LiusedtobetheassistanttotheGMandchiefHRofficeroftheCompany,adeputyGM,theassistanttotheGMandmangeroftheHRdepartmentofShenzhenHarmonyWorldWatchesCenterCo.,Ltd.;chiefHRofficerandtheGMofthemarketingcenterofChinaNetcomShenzhen;managerofbigcustomermarketplanningofChinaTelecomShenzhen.Mr.ChenZhuo,borninSeptember1976,accountant,MBAofWuhanUniversity,EMBAofChinaEuropeInternationalBusinessSchool.HeisthechiefaccountantoftheCompany.Mr.Chenusedtobeasupervisor,theassistanttotheGM,managerofthestrategyandinformationdepartment,deputymanagerofthestrategyandinformationdepartmentandsecuritiesaffairsrepresentativeoftheCompany,deputyGMandmanagerofthefinancialinformationdepartmentofFIYTASalesCo.,Ltd.Officetakinginshareholdercompanies
Namesofthepersonsinoffice
Namesofthepersonsinoffice | NamesoftheShareholders | Titlesengagedintheshareholders | Startingdateoftenure | Expirydateoftenure | Doeshe/shereceiveremunerationorallowancefromtheshareholder |
WangMingchuan | AVICInternationalShenzhenCo.,Ltd. | DeputyGMandChiefAccountant | January23,2017 | Yes | |
FuDebin | AVICInternationalHoldingCorporation | HeadoftheHRDept. | July01,2016 | Yes | |
XiaoZhanglin | AVICInternationalHoldingLimited | Companysecretary | February05,2018 | Yes | |
WangBo | AVICInternationalShenzhenCo.,Ltd. | HeadoftheHRDept. | April25,2017 | Yes | |
WangBaoying | AVICInternationalShenzhenCo.,Ltd. | Specialcommissioner | April11,2017 | Yes | |
Explanationontheofficetakinginshareholder | Inapplicable |
companies
Officetakinginotherorganizations
companies
Namesofthepersonsinoffice
Namesofthepersonsinoffice | Namesofotherorganizations | Titlesengagedintheotherorganizations | Startingdateoftenure | Expirydateoftenure | Doeshe/shereceiveremunerationorallowancefromotherorganizations |
WangJianxin | ShineWingCertifiedPublicAccountants | Partner | December01,2006 | Yes | |
ZhongHongming | LawResearchInstituteofSichuanAcademyofSocialSciences | Associateresearchfellow | November24,2017 | Yes | |
ZhongHongming | MangoExcellentMediaCo.,Ltd. | Independentdirector | June14,2017 | Yes | |
ZhongHongming | XianDagangRoadMachineryCo.,Ltd. | Independentdirector | October27,2017 | Yes | |
TangXiaofei | BusinessSchoolofSouthwestJiaotongUniversity | Doctorialtutor | September01,2008 | Yes | |
TangXiaofei | BusinessSchoolofSouthwestJiaotongUniversity | Professor | December01,2011 | Yes | |
Explanationontheofficetakinginotherorganizations | Inapplicable |
Punishmentimposedbythesecuritiesregulatoryauthorityonthedirectors,supervisorsandseniorexecutivesbothinofficeandhavinglefttheirpostsinthereportingperiod.InapplicableIV.RemunerationtoDirectors,SupervisorsandSeniorExecutivesDecision-makingprocedures,basisfordeterminingtheremunerationandactualpaymenttodirectors,supervisorsandseniorexecutivetodirectors,supervisorsandseniorexecutives:
TheCompanypracticedtheannualsalarysystemforitsseniorexecutives.Theannualsalarystructureconsistsofthebasicannualsalaryandperformancebasedannualsalary;andperformancebasedannualsalaryconsistsoffinancialperformanceannualsalaryandnon-financialperformanceannualsalary.WheretheassessmentfortheannualsalarytotheChairmanisconductedaccordingtotheassessmentmeasuresconcludedbytheshareholderorganizationwhiletheassessmentofseniorexecutivesisconductedaccordingtotheMeasuresforAdministrationoftheRemunerationtoSeniorExecutives.RemunerationtoDirectors,SupervisorsandSeniorExecutivesduringtheReportingPeriod
InCNY10,000
Name
Name | Title | Gender | Age | OfficeStatus | TotalpretaxremunerationreceivedfromtheCompany | IstheremunerationfromoneoftheCompany'srelatedparties |
HuangYongfeng | Chairman | Male | 45 | Inoffice | 102.25 | No |
WangMingchuan | Director | Male | 53 | Inoffice | 0 | No |
FuDebin | Director | Male | 42 | Inoffice | 0 | No |
XiaoZhanglin | Director | Male | 43 | Inoffice | 0 | No |
WangBo | Director | Male | 40 | Inoffice | 0 | No |
ChenLibin | Director&GM | Male | 55 | Inoffice | 153.02 | No |
WangJianxin | Independentdirector | Male | 49 | Inoffice | 3.48 | No |
ZhongHongming | Independentdirector | Male | 44 | Inoffice | 3.48 | No |
TangXiaofei | Independentdirector | Male | 45 | Inoffice | 3.48 | No |
WangBaoying | ChairmanoftheSupervisoryCommittee | Male | 55 | Inoffice | 0 | No |
ShengQing | Supervisor | Female | 43 | Inoffice | 101.43 | No |
ZouZhixiang | Supervisor | Male | 35 | Inoffice | 31.76 | No |
LuBingqiang | DeputyGM | Male | 58 | Inoffice | 129.14 | No |
LuWanjun | DeputyGMandSecretaryoftheBoard | Male | 52 | Inoffice | 135.89 | No |
LiuXiaoming | DeputyGM | Male | 48 | Inoffice | 144.23 | No |
PanBo | DeputyGM | Male | 43 | Inoffice | 148.89 | No |
LiMing | DeputyGM | Male | 46 | Inoffice | 135.89 | No |
ChenZhuo | ChiefAccountant | Male | 43 | Inoffice | 135.89 | No |
ZhangHongguang | Independentdirector | Male | 63 | Retired | 4.5 | No |
ZhangShunwen | Independentdirector | Male | 53 | Retired | 6.21 | No |
WangYan | Independentdirector | Male | 62 | Retired | 6.21 | No |
WangJingqi | Supervisor | Male | 39 | Retired | 66.56 | No |
Total | -- | -- | -- | -- | 1,312.31 | -- |
EquityincentivetodirectorsandseniorexecutivesoftheCompanyduringthereportingperiodInapplicable
V.Employees1.Number,JobCompositionandEducationBackgroundofEmployees
Numberofemployeesworkingfortheparentcompany
Numberofemployeesworkingfortheparentcompany | 125 |
Numberofemployeesworkingforthemajorsubsidiaries | 5,037 |
Totalemployeesonactiveduty | 5,162 |
Totalemployeesreceivingremunerationinthereportingperiod | 5,162 |
Numberoftheretiredemployeesforwhomtheparentcompanyandthemajorsubsidiariesneedtosharethepension | 0 |
JobComposition | |
JobCompositionCategories | Numberofpersonsinvolvedinthejobcomposition |
Production | 339 |
Sales | 3,842 |
Technical | 352 |
Financial | 148 |
Administrative | 481 |
Total | 5,162 |
Educationbackground | |
Educationlevels | Numberofpersons |
Master'sdegreeorhigher | 77 |
Undergraduate | 774 |
Juniorcollege | 1,279 |
Belowjuniorcollege | 3,032 |
Total | 5,162 |
2.RemunerationPolicyforStaffTheCompany’sremunerationpolicyisbasedontheprincipleofpostvalueorientation,performanceorientation,efficiencypriority,isbasedontheprincipleofstrategy,market,performancesandjobvaluewithconsiderationoffairness,sustainabledevelopmentandmarketorientation.TheCompanyaimstoestablisharemunerationsystemwhichmaymatchtheCompany'sstrategy,complywiththeCompany'sdevelopmentstrategyandcorrespondtotheCompany'soverallefficiency,cansurelyattracthighqualitytalents,retainthekeytalents,activatethehumanresourceandimprovetheCompany’scorecompetitiveness.3.TrainingProgramTheCompanyisconcentratedonwatchindustry,insistsontheprincipleofguidingvariousbusinesseswiththebrandstrategy,takesabroadviewoftheworldandhasestablisheditsvisionof“becomingaleadinginternationalizedwatch
brandenterprise”.Whilespeedingupdevelopment,theCompanyfirmlybelievesthat“tobuildbrandistointegratethebrandworkandlifestyle”,thecorespecialityoftheorganizationandstaffandthequalificationofthestaffasbrandpersonnelarethekeyelementsdeterminingthefuturedevelopment.Forthispurpose,inrespectofemployeetraining,theCompanyhasestablishedFIYTACollegeandtakesthecollegeasanimportantbaseforpopularizingandimplementingtheenterpriseculture,promotingpracticeofthestrategyandmoldingbrandpeople.Basedonthecollege,theCompanyconstructsatrainingsystemofvarioustalents,focusesontheechelonleadership,cultivatingyounggenerations,andprofessionalabilitytrainingofvariouskeytalents.Throughtheprojects,suchasreservoirofmastercraftsmen,salestraining,CSSGBtrainingandmediumandhigh-levelleadershiptraining,younggeneralpowercamp,etc.,carryforwardtheconstructionofintegratedtalentscultivationsystemoftheCompanyandassisttheCompanytobecomealearningorganizationwithpowerfulvitality.4.LaborOutsourcingInapplicable
Section9CorporateGovernanceI.General
Inyear2018,theCompanykeptimprovingtheCompany’scorporategovernancestructurestrictlyaccordingtothePRCCompanyLaw,thePRCSecuritiesLawandtheregulationsofChinaSecuritiesRegulatoryCommissionconcerninggovernanceoflistedcompanies,andtriedtoenhanceconstructionofmodernenterprisesystem,upgradedthelevelofregulatoryoperationoftheCompany.Asaresult,therewasnodiscrepancybetweenthesituationoftheCompany’scorporategovernanceandtheregulatorydocumentsofChinaSecuritiesRegulatoryCommissionconcerninggovernanceoflistedcompanies.TheCompanyestablishedandimprovedrelativelystandardizedcorporategovernancestructureandrulesofproceduresstrictlyaccordingtolaw,rulesandregulations,includingthePRCCompanyLaw,andtheArticlesofAssociationoftheCompany,formedadecision-makingandoperationmanagementsystemwiththeShareholders’Meeting,theBoardofDirectors,theSupervisoryCommitteeandthemanagementoftheCompanyastheprincipalstructure.TheyimplementedtheirrespectivedutiesaccordingtothePRCCompanyLawandtheArticlesofAssociation.TheGeneralMeetingistheCompany’ssupremeorganandhasthepowerofdecidingtheCompany’soperationpolicyandinvestmentplan,reviewingandapprovingtheCompany’sannualfinancialbudgetscheme,settlementscheme,profitdistributionplan,lossmake-upplan,changeoftheapplicationoftheproceedsraisedthroughissuing,etc.,makesresolutiononincreaseanddecreaseoftheCompany’sregisteredcapital,issuingbond,etc.,electionandreplacementofdirectors,non-staffsupervisorsanddecisionontheirremunerationandwayofpayment.TheBoardofDirectorsistheCompany’sdecision-makingorgan,takeschargeofimplementingthedecisionsmadebytheShareholders’GeneralMeeting,assumesresponsibilitytotheShareholders’GeneralMeetingandreportstheworktoit.WithintheauthorizationfromtheGeneralMeeting,decidestheCompany’sexternalinvestment,acquisitionandsalesofassets,assetspledge,externalguarantee,relatedtransactions,etc.,decidesestablishmentoftheCompany’sinternalmanagementorgans,engagementanddisengagementoftheCompany’sgeneralmanager,theBoardsecretaryandotherseniorexecutives,etc.TheBoardofDirectorsconsistsofninedirectors,includingthreeindependentdirectors.TheBoardofDirectorshasestablishedthreesubordinatespecialcommittees,namelytheStrategyCommittee,theAuditCommitteeandNomination,EmolumentandAssessmentCommittee.TheSupervisoryCommitteeistheCompany’ssupervisoryorganinchargeofsupervisingthedirectors,managersandotherseniorexecutivesinperformingdutiesaccordingtothelawandproposesdismissalofanydirectororseniorexecutivewhobreachesthelaw,theadministrativerulesandregulations,theArticlesofAssociationortheGeneralMeeting’sresolutions.TheSupervisoryCommitteeconsistsofthreesupervisorsincludingtwostaffsupervisors.ThemanagementassumesresponsibilitytotheBoardofDirectorsandtheGeneralManagertakesfullresponsibilityfortheCompany’sroutineoperationandmanagementanddevelopmentundertheleadershipoftheBoardofDirectors,supervisestheworkofeveryfunctionaldepartment,assessestheworkresultofeachfunctionaldepartmentandcoordinatetherelationshipofalldepartments.
Doesthereexistanydifferenceincompliancewiththecorporategovernance,thePRCCompanyLawandtherelevantprovisionsofCSRC.NoII.IndependenceinBusiness,Personnel,Assets,Organization,Finance,etc.fromtheControllingShareholdersTheCompanyisindependentinbusiness,personnel,assets,organizationandfinancefromitscontrollingshareholder.TheCompanyhascompleteandindependentbusinessandtheabilityofautonomousoperation.Business.TheCompanyismainlyengagedintimepiecebusinessesandhasindependentproduction,auxiliaryproductionsystemandcomplementaryfacilities,andpossessesitsownprocurementandsalessystems.ThereexistsnocompetitioninthesamesectorbetweentheCompanyanditscontrollingshareholder.Personnel:TheCompanyiscompletelyindependentinorganizationandhassoundsystemsinlabor,personnelandsalariesmanagement.ExceptMr.WangMingchuan,Mr.FuDebin,Mr.XiaoZhanglinandMr.WangBo,thefourdirectors,andMr.WangBaoying,thechairmanoftheSupervisoryCommittee,noneofotherseniorexecutivestakesanyconcurrentofficeintheshareholdersandnoneofthefinancialstaffworksconcurrentlyforanyrelatedparties.Assets:TheassetsoftheCompanyanditscontrollingshareholderarehighlydistinct.TheCompanyenjoysthecorporateownershipoveritsassetsandtheassetsarecompletelyindependentfromitscontrollingshareholder.Inaddition,theCompanyenjoyssoleownershipofsuchtrademarksasFIYTA,HARMONY,etc.Organization:TheBoardofDirectors,theSupervisoryCommitteeandtheotherinternalorgansarewellestablishedandworkindependently.Thereexistneithersubordinaterelationsbetweenthecontrollingshareholder/itsfunctionaldepartmentsnordoingjointofficework.ThecontrollingshareholderenjoysitsrightsandundertakesthecorrespondingobligationsaccordingtothelawandhasneverbeeninvolvedinanyactionwhichdirectlyorindirectlyinterferestheCompany’sbusinessactivitiessurpassingtheauthorityoftheGeneralMeeting.Finance:TheCompanyhasestablishedindependentfinancialdepartment,workedoutsoundandindependentfinancialandaccountingsystemandfinancialmanagementsystemandindependentlyopenedbankaccounts.ThecontrollingshareholderhasneverinterferedtheCompanyinitsfinancialandaccountingactivities.III.HorizontalCompetitionsInapplicableIV.AnnualGeneralMeetingandExtraordinaryGeneralMeetingsintheReportingPeriod1.GeneralMeetings
Sessions
Sessions | Meetingtype | Proportionofattendanceoftheinvestors | Meetingdate | Dateofdisclosure | Disclosureindex |
20181stExtraordinaryGeneralMeeting | ExtraordinaryGeneralMeeting | 7.37% | January16,2018 | January17,2018 | http://www.cninfo.com.cn/ |
2017Annualgeneralmeeting
2017Annualgeneralmeeting | Annualgeneralmeeting | 39.07% | June21,2018 | June22,2018 | http://www.cninfo.com.cn/ |
20182ndExtraordinaryGeneralMeeting | ExtraordinaryGeneralMeeting | 37.76% | September11,2018 | September12,2018 | http://www.cninfo.com.cn/ |
2.Extraordinarygeneralmeetingrequestedforholdingbythepreferredshareholderswiththevotingpowerrecovered.InapplicableV.DutyPerformanceofIndependentDirectorsintheReportingPeriod1.AttendanceforBoardMeetingsandGeneralMeetings
AttendanceforBoardMeetingsandGeneralMeetings | |||||||
Namesofindependentdirector | NumberofBoardmeetingswhichshouldbebeattendedinthereportingperiod | NumberofSpotAttendances | NumberofMeetingsAttendedbyCommunication | Numberofattendancesofboardmeetingbyrepresentative | Numberofabsence | Failuretopersonallyattendboardmeetingssuccessivelytwice | NumberofattendanceoftheGeneralMeeting |
ZhangHongguang | 3 | 2 | 1 | 0 | 0 | No | 0 |
ZhangShunwen | 3 | 2 | 1 | 0 | 0 | No | 3 |
WangYan | 3 | 1 | 1 | 1 | 0 | No | 0 |
WangJianxin | 4 | 1 | 3 | 0 | 0 | No | 1 |
ZhongHongming | 4 | 1 | 3 | 0 | 0 | No | 0 |
TangXiaofei | 4 | 1 | 3 | 0 | 0 | No | 0 |
NotetofailuretoattendtheboardmeetingsuccessivelytwiceInapplicable2.ObjectionofindependentdirectorsonsomerelevantissuesHavetheindependentdirectorsproposedanyobjectionontherelevantissuesoftheCompanyNo3.OtherNotetoDutyPerformanceofIndependentDirectorsInapplicable
VIDutyPerformanceofSpecialCommitteesundertheBoardofDirectorsintheReportingPeriodSummaryReportonPerformancesoftheStrategyCommitteeoftheBoardofDirectorsDuringthereportingperiod,theStrategyCommitteeperformeditsdutiesstrictlyaccordingtothelawandregulations,theArticlesofAssociationandtheRulesforImplementationoftheStrategyCommitteeoftheBoardofDirectors,continuedtodoresearchworkonthestrategicplanningfortheCompany’slongtermdevelopmentandsupervisedtheCompanyinimplementationofvariousstrategies.TheStrategyCommitteehelditsfirstmeetingofyear2018onMarch8,2018.ThemeetingreviewedandapprovedtheWorkReportoftheBoardofDirectorsofYear2017andtheProfitDistributionforYear2017;thesecondmeetingoftheStrategyCommitteeforyear2018washeldonNovember12,2018.Themeetingreviewedandapproved2018A-ShareRestrictiveStockIncentivePlan(PhaseI)(Draft),etc.SummaryReportonPerformancesoftheAuditCommitteeoftheBoardofDirectors:
InaccordancewiththeRulesontheContentandFormatofInformationDisclosureofCompaniesthatPubliclyOfferSecuritiesNo.2(ContentsandFormatofAnnualReports)(Revision2017)promulgatedbyChinaSecuritiesRegulatoryCommission,theBasicRegulationsonEnterpriseInternalControl,MemorandumofMainboardInformationDisclosureNo.1–RelevantInformationtobeDisclosedintheRegularReportpromulgatedbyShenzhenStockExchangeandtheCompany’sEnforcementRegulationsoftheSpecialCommitteesoftheBoardofDirectors,theAuditCommitteeoftheBoardofDirectorscarriedoutcomprehensiveexaminationoftheCompany'sfinancialreportandinternalcontrolauditworkofyear2018.ThefollowingisthesummaryoftheperformancesoftheAuditCommitteeandtheworkofRuihuaCertifiedPublicAccountants(SpecialGeneralPartnership)(hereinafterreferredtoasthe“CPAs”):
1.CollectingGeneralInformationoftheCompanyintheReportingPeriodandReviewingtheFinancialStatementsPreparedbytheCompanyandProgressofInternalControlImplementationOnFebruary1,2019,theAuditCommitteeheardthemanagement’soverallreportontheproductionandoperationandprogressofsignificanteventsduringthereportingperiodandreviewed2018FinancialandAccountingStatementspreparedbytheCompanyandheardtheprogressofimplementationoftheCompany’sinternalcontrol.Initsopinion,thedatainthefinancialandaccountingstatementspreparedbytheCompanybasicallyreflectedthefinancialpositionandoperationresultsoftheCompanyasendedatDecember31,2018,andapprovedtocarryouttheauditworkforyear2018withthefinancialstatementsasthebase.TheinternalcontrolimplementationworkcarriedoutbytheCompanyhasbeendulycarriedforwardaccordingtotheCompanyLaw,theSecuritiesLaw,BasicStandardsforEnterpriseInternalControlandotherrelevantlawsandregulations.IthasbasicallyreflectedtheCompany’sinternalcontrolconstructionworkendedDecember31,2017andapprovedtopreparetheSelf-AssessmentReportontheInternalControlonthisbasisandcarryouttheinternalcontrolauditworkin2018.2.DeterminationoftheOverallAuditPlanOnDecember5,2018,theAuditCommitteereviewedtheReportofFIYTAonArrangementoftheAuditWorkof2018submittedbytheCPAsanddeterminedthetimescheduleoftheauditworkof2018.3.SupervisionoftheAuditWorkOnDecember26,2018,theCPAsformallystartedtheauditwork.Duringtheauditing,theAuditCommitteefrequentlyurgedtheCPAstocompletetheauditworkaccordingtothetimescheduleofauditsoastoensuretimelydisclosureoftheCompany’sannualreportandrelevantdocuments.OnFebruary1,2019,theAuditCommitteereviewedtheReportontheProgressoftheAuditWorkof2018submittedbytheCPAs.
4.PreliminaryAuditor’sOpinionsafterReviewingtheFinancialandAccountingStatementsOnMarch11,2019,theCPAsissuedapreliminaryauditor’sopinionsonthefinancialandaccountingstatementsandinternalcontrolassessment,andtheAuditCommitteeonceagainreviewedtheCompany’sfinancialandaccountingstatementsandinternalcontrolassessmentreportaspreliminarilyauditedbytheCPAs.IntheopinionoftheAuditCommittee,thesefinancialstatementstruly,accuratelyandcompletelyreflectedthefinancialpositionandoperationresultoftheCompanyendedDecember31,2018andapproved2018AnnualReportandSummarypreparedonthebasisofthesestatements.Thesaidinternalcontrolassessmentreporthastruly,accuratelyandentirelyreflectedtheCompany’sachievementininternalcontrolconstructionendedDecember31,2018andapprovedtocompletetheinternalcontrolassessmentreportandinternalcontrolauditreportbasedonsaidreport.Meanwhile,theauditcommitteedemandedtheCPAstocompletetheauditworkaccordingtotheplanassoonaspossiblesoastoensuretheCompanytodisclose2017AnnualReportasscheduled.5.SummaryWorkaftertheFormalReportOnMarch13,2019,theCPAscompletedtheauditingproceduresasscheduledandissuedastandardunqualifiedauditor’sreportandotherrelevantdocumentstotheAuditCommittee.TheAuditCommitteeheld20191stSessionoftheAuditCommitteeontheverydayandconcludedaresolutionandsubmittedittotheBoardofDirectorsforreview;andatthesametimesubmittedtheSummaryReportonthePerformancesoftheAuditCommitteeandtheAuditWorkoftheCertifiedPublicAccountantsin2018.IntheopinionoftheAuditCommittee,RuihuaCertifiedPublicAccountants(SpecialGeneralPartnership),thedomesticandinternationalauditorengagedbytheCompanyfaithfullyperformedthedutiesinprocessofofferingauditperformancesaccordingtotheprofessionalprincipleofindependence,objectivenessandfairnessanddidagoodjobinauditing2018AnnualAccountingStatementsandtheinternalcontrolauditing.6.CPAs’PerformanceofBasicPrincipleoftheProfessionalEthics
(1)Independence
NoneofthestafffromtheCPAsworkedfortheCompany;theCPAsreceivedneithercashnoreconomicinterestinanyotherformfromtheCompanyotherthanthestatutoryauditfee.ThereexistedneitherdirectorindirectmutualinvestmentbetweentheCPAsandtheCompanynorcloseoperationrelationship;thereexistednoself-assessmentontheCompany’sauditworkandthereexistednorelatedrelationbetweenthememberoftheauditingteamandtheCompany’sdecisionmakers;theCPAsandtheauditingstaffkeptindependencebothinformandsubstanceintheauditingworkandcompliedwiththerequirementonkeepingindependenceasspecifiedinthebasicprincipleoftheprofessionalethics.
(2)ProfessionalCompetence
Allthemembersoftheauditingteampossessedtheprofessionalknowledgeandrelevantprofessionalqualificationcertificatesnecessaryfortheauditingwork,werecompetentfortheauditingworkandatthesametimemaintainednecessaryattentionandprofessionalcautiousness.SummaryReportonPerformanceoftheCommitteeofNomination,RemunerationandAssessmentoftheBoardofDirectorsInthereportingperiod,theCommitteeofNomination,RemunerationandAssessmentoftheBoardofDirectorsperformeditsfunctionsstrictlyaccordingtothelawandregulations,theArticlesofAssociationandtheRulesforImplementationoftheCommitteesofNomination,RemunerationandAssessmentoftheBoardofDirectors.20181stsessionofthe
CommitteesofNomination,RemunerationandAssessmentheldonMarch8,2018reviewedandapprovedtheproposalsonemolumentstotheseniorexecutivesforyear2017;20182ndsessionoftheCommitteesofNomination,RemunerationandAssessmentheldonAugust21,2018reviewedandapprovedtheproposalonelectionandnominationofnon-independentdirectorcandidatesforthenewBoardofDirectorsandindependentdirectorcandidatesforthenewBoardofDirectors;20183rdsessionoftheCommitteeofNomination,RemunerationandAssessmentheldonOctober8,2018reviewedandapprovedtheproposalonelectionoftheChairmanoftheBoard,appointmentoftheGM,deputyGMs,chiefaccountant,theBoardsecretary,etc.;20184thsessionoftheCommitteeofNomination,RemunerationandAssessmentheldonNovember12,2018reviewedandapproved2018A-ShareRestrictiveStockLongTermIncentivePlan(Draft),2018A-ShareRestrictiveStockIncentivePlan(PhaseI)(Draft),etc.;20185thsessionoftheCommitteeofNomination,RemunerationandAssessmentheldonDecember25,2018reviewedandapproved2018A-ShareRestrictiveStockLongTermIncentivePlan(RevisedDraft),2018A-ShareRestrictiveStockIncentivePlan(PhaseI)(RevisedDraft),etc.
VII.WorkSummaryoftheSupervisoryCommitteeDidtheSupervisoryCommitteefindanyriskexistinginperformingthesupervisionactivitiesinthereportingperiodNoVIII.AssessmentandIncentiveMechanismforSeniorExecutives(1)AssessmentofSeniorExecutivesThe5thsessionoftheSixthBoardofDirectorsheldonSeptember18,2009reviewedandapprovedtheMeasuresforManagementofRemunerationtoSeniorExecutives.Duringthereportingperiod,theCompanystrictlyimplementedtheMeasuresforManagementofRemunerationtoSeniorExecutives.(2)IncentivetoSeniorExecutivesThe3rdsessionoftheNinthBoardofDirectorsheldonNovember12,2018and20191stExtraordinaryGeneralMeetingheldonJanuary11,2019decidedtostart2018A-ShareRestrictiveStockIncentiveProgram(PhaseI),whichwaslateronreviewedandapprovedatthe5thsessionoftheNinthBoardofDirectorsheldonJanuary11,2019,andtheCompanydecidedtogrant4.224millionrestrictiveA-sharesto128personseligiblefortheincentive,including7directorsandseniorexecutiveswhoweregranted600,000restrictiveA-shares,taking0.14%oftheCompany'stotalcapitalstockwiththedetailsasfollows:
Name
Name | Title | Quantityofrestrictivesharesreceived(in10,000shares) | EquityreceivedProportioninthetotalquantitygranted(%) | EquityreceivedProportioninthetotalcapitalstock(%) |
HuangYongfeng | Chairman | 10 | 2.37% | 0.02% |
ChenLibin | Director&GM | 10 | 2.37% | 0.02% |
LuWanjun | DeputyGMandSecretaryoftheBoard | 8 | 1.89% | 0.02% |
LiuXiaoming | DeputyGM | 8 | 1.89% | 0.02% |
PanBo | DeputyGM | 8 | 1.89% | 0.02% |
LiMing
LiMing | DeputyGM | 8 | 1.89% | 0.02% |
ChenZhuo | ChiefAccountant | 8 | 1.89% | 0.02% |
Othercoremanagement,business,professionalandtechnicalbackbones(121persons) | 362.4 | 85.81% | 0.83% | |
Total(128persons) | 422.4 | 100% | 0.97% |
ThepriceofthispartofrestrictivesharesgrantedwasCNY4.40/share;thegrantingdatewasJanuary11,2019(Thelock-upperiodoftheserestrictiveshareswastwoyearscommencingfromthedateofgranting).ByJanuary302019,theworkofgrantingthesharesandregistrationforlistingwascompleted.
IX.InternalControl
1.Particularcasefoundinvolvingmaterialdefectsintheinternalcontrolduringthereportingperiod
No
2.Self-assessmentReportoftheInternalControl
Dateofdisclosingthefulltextoftheinternalcontrolassessmentreport | March15,2019 | |
Indexofdisclosureofthefulltextoftheinternalcontrolassessmentreport | www.cninfo.com.cn | |
ProportionofthetotalassetsoftheorganizationsinvolvedintheassessmentinthetotalassetsoftheCompany’sconsolidatedfinancialstatements | 99.00% | |
ProportionoftheoperationrevenueoftheentitledinvolvedintheassessmentinthetotaloperationrevenueoftheCompany’sconsolidatedfinancialstatements | 99.00% | |
Criteriaforaffirmingthedefects | ||
Categories | Financialreport | Non-financialReport |
Qualitativecriteria | (1)Thedefectinvolvingfraudofthedirectors,supervisorsandseniorexecutives;(2)correctionofthefinancialstatementsalreadypublished;(3)TheCPAfoundthatthereexistedseriousmisstatementinthefinancialstatementsofthereportingperiodwhiletheinternalcontrolfailedtofindthemisstatementinprocessofoperation;(4)TheCompany'sauditingcommitteeandsupervisionandauditdepartmentconductedineffectivesupervisionoftheinternalcontrol. | (1)seriouslyviolatingthePRClaws,administrativeregulationsandnormativedocuments;(2)"decisiononmajorissues,importantofficerappointmentand/orremovalandarrangementofimportantprojectsaswellasapplicationofbigsumoffundhavenotundergonecollectivedecision-makingprocedures;(3)seriousrunningoffofofficersandtechniciansofthekeypositions;(4)thereisnosystemcontrolavailablefortheCompany’sproductionandoperationpracticeorthesystemno |
longerworks;(5)theinternalcontrolforinformationdisclosurenolongerworks,havingcausedtheCompanycensuredpubliclybytheregulatoryauthority;(6)theresultsoftheinternalcontrolassessments,especiallythematerialdefectsorimportantdefectshavenotbeenrectified.
longerworks;(5)theinternalcontrolforinformationdisclosurenolongerworks,havingcausedtheCompanycensuredpubliclybytheregulatoryauthority;(6)theresultsoftheinternalcontrolassessments,especiallythematerialdefectsorimportantdefectshavenotbeenrectified. | ||
Quantitativecriterion | (1)Materialdefects:Misstatement≥5%ofthepre-taxprofit;(2)Importantdefects:1%ofprofitbeforetax≤Misstatement<5%ofprofitbeforetax;(3)Commondefects:Misstatement<1%ofprofitbeforetax. | (1)Materialdefects:Misstatement≥5%ofthepre-taxprofit;(2)Importantdefects:1%ofprofitbeforetax≤Misstatement<5%ofprofitbeforetax;(3)Commondefects:Misstatement<1%ofprofitbeforetax. |
Numberofmaterialdefectsinthefinancialstatements(pcs) | 0 | |
Numberofmaterialdefectsinthenon-financialstatements(pcs) | 0 | |
Numberofimportantdefectsinthefinancialreport(pcs) | 0 | |
Numberofimportantdefectsinthefinancialreport(pcs) | 0 |
X.InternalControlAuditReport
DeliberationOpinionsintheInternalControlAuditReport | |
Inouropinion,FIYTAHoldingsLimitedmaintainedeffectiveinternalcontrolonthefinancialreportinallmaterialaspectaccordingtotheBasicRegulationsforEnterpriseInternalControlandtherelevantprovisionsendedDecember31,2017. | |
Disclosureoftheinternalcontrolauditreport | Disclosed |
Dateofdisclosingthefulltextoftheinternalcontrolassessmentreport | March15,2019 |
Indexofdisclosingthefulltextoftheinternalcontrolauditreport | www.cninfo.com.cn |
Typeoftheonionsintheinternalcontrolauditreport | Standardunqualifiedauditor’sreport |
Arethereanymaterialdefectsinthenon-financialreport | No |
HastheCPAsissuedaqualifiedauditor’sreportofinternalcontrolNoDoestheinternalcontrolauditreportissuedbytheCPAsagreewiththeself-assessmentreportoftheBoardofDirectorsYes
Section10BondRelatedInformation
DidthereexistanycompanybondswhichwereissuedtothepublicandlistedwiththestockexchangefortradingandwasduebythedatewhentheAnnualReportwasapprovedforissuingorfailedtobefullycashedbytheendofthereportingperiod.
Section11Financialreport
AUDITORS’REPORT
RuihuaShenZi[2019]No.01210010
TotheShareholdersofFIYTAHoldingsLtd.:
I.Opinion
WehaveauditedthefinancialstatementsofFIYTAHoldingsLtd.(“FIYTALtd.”orthe“Company”),
whichcomprisetheconsolidatedandtheCompany’sbalancesheetasat31December2018,the
consolidatedandtheCompany’sincomestatement,theconsolidatedandtheCompany’scash
flowstatementfortheyearthenendedandconsolidatedandtheCompany’sstatementof
changesinshareholders’equity,andnotestothefinancialstatements.
Inouropinion,thefinancialstatementsgiveafairpresentationoftheconsolidatedandthe
Company’sfinancialpositionofFIYTALtd.asat31December2018,andofitsconsolidatedand
theCompany’sfinancialperformanceanditsconsolidatedandtheCompany’scashflowsforthe
yearthenendedinallmaterialaspectsinaccordancewithAccountingStandardsforBusiness
Enterprises.
II.BasisforOpinion
WeconductedourauditinaccordancewithChinaStandardsonAuditing.Ourresponsibilities
underthosestandardsarefurtherdescribedintheAuditors’ResponsibilitiesfortheAuditofthe
FinancialStatementssectionofourreport.WeareindependentoftheFIYTALtd.inaccordance
withtheCodeofEthicsforChineseCertifiedPublicAccountants,andwehavefulfilledourother
ethicalresponsibilitiesinprofessionalethics.Webelievethattheauditevidencewehave
obtainedissufficientandappropriatetoprovideabasisforouropinion.
III.KeyAuditMatters
Keyauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificance
inourauditofthefinancialstatementsofthecurrentperiod.Thesematterswereaddressedinthe
contextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,
andwedonotprovideaseparateopiniononthesematters.Keyauditmattersthatneedto
communicateinourauditreportareidentifiedasfollows:
1.Existence,valuationandallocationofinventories
(1)Description
AsdescribedinNoteIV11andNoteVI.5Inventory,thebalanceandprovisionofinventorywere
RMB1,870,015,903.32andRMB87,709,601.62respectively.Thecarryingamountofinventory
wasRMB1,782,306,301.70asat31December2018.
(i)AsthemainbusinessofFIYTALtdissellingFIYTAbrandwatchesandbrandedwatches,the
maininventoryofFIYTALtdarefinishedwatchesandwatchcomponents.Theinventoriesare
distributedinstores,regionalwarehouses,resellers’warehousesandtheCompany’s
warehouseswhichincreasedthedifficultyofstockobservation;
(ii)ThemanagementofFIYTALtdmeasuresinventoryatlowerofcostandnetrealizablevalue
(NRV)atbalancesheetdate.WherethecostofaninventoryexceedsitsNRV,thedifferenceis
recognizedasprovision.ThedeterminationofNRVinvolvesmaterialmanagementjudgmentand
estimates.
TheinventorieshavesignificantimpacttotheCompany’sassets,asaresult,weidentified
existence,valuationandallocationofinventoriesasakeyauditmatter.
(2)Howourauditaddressedthekeyauditmatter
(i)Understanding,assessingandtestingthedesignandoperatingeffectivenessofinternal
controlsofpurchaseandpayment,productionandstorage,andtheaccrualofinventory
provision;
(ii)UnderstandingandevaluatingtheappropriatenessoftheCompany’sinventoryprovision
policy;
(iii)Understandinglocationsofinventorystorage,accountingmethodofinventoryand
determiningthescopeofinventoryobservation;
(iv)Discussingphysicalstocktakingstatuswiththemanagementandattendingthephysical
stocktakingtothelocationsandinventorieswithinthescopeofinventoryobservationand
conductingobservationandtestcountonsite;
(v)Performingalternativeproceduresofconfirmationandinspectingcontracts,goodsdelivery
notesandaccountstatementsfortheinventoriesoutsidethescopeofinventoryobservationand
storedinreseller'swarehouses;
(vi)Obtainingscheduleofinventoryprovisioncalculation,reviewingwhethertheprovisionwas
madeaccordingtorelatingaccountingpoliciesandre-calculatingtheprovisiontoevaluatethe
accuracyofinventoryprovision;
(vii)Reviewingandevaluatingtheappropriatenessofthematerialestimatesmadebythe
managementindeterminingtheNRVofinventory;
(viii)Agreeingcurrentperiodpurchasesinlargeamounttocorrespondingcontract,taxinvoice
andinspectingpurchaserequisitionformandgoodsreceiptnotesetc...
2.Revenuerecognition
(1)Description
TheCompany’srevenuemainlycomesfromsalesofFIYTAbrandwatchesanddistributionof
brandedwatches.FIYTAbrandwatchesandbrandedwatchesaremainlysoldthroughshopsin
departmentstoreexceptforminordirectsaleandconsignmentsale.RefertoNoteIV.24for
accountingpoliciesrelatingtorevenuerecognition.
AsdescribedinNoteVI.30Operatingrevenueandoperatingcost,theCompany’srevenuefrom
mainbusinesswasRMB3,382,346,730.19inyear2018.Operatingrevenuerepresentsmajorline
iteminincomestatementandismainsourceofprofit.Accuracyandcompletenessofrevenue
recognitionhavesignificantimpacttotheCompany’sprofit,asaresult,weidentifiedrevenue
recognitionasakeyauditmatter.
(2)Howourauditaddressedthekeyauditmatter
(i)Understanding,assessingandtestingthedesignandoperatingeffectivenessofinternal
controlsrelatingtorevenuerecognition;
(ii)Checkingwhetherthecondition,methodandtimingofrevenuerecognitionisinconformance
withprincipleofAccountingStandardsforBusinessEnterprises;
(iii)Selectingsamplesfromcurrentyear’stransactionrecord,agreeingtosupportingdocuments
suchascontract,taxinvoiceandgoodsdispatchnoteetc…toevaluateoccurrenceofrevenue
recognition;
(iv)Inconnectionwithauditofaccountsreceivable,selectingmajorcustomersandconfirming
correspondingsalesincurrentyeartoevaluatethecompletenessofrevenuerecognition;
(v)Conductingcut-offtesttosalestransactionsbeforeandafterthebalancesheetdateto
evaluatewhethertherevenuewasrecordedinappropriateaccountingperiod;
IV.OtherInformation
ThemanagementofFIYTALtdareresponsiblefortheOtherInformation.TheOtherInformation
comprisesalloftheinformationincludedintheCompany’s2018annualreportotherthanthe
financialstatementsandourauditors’reportthereon.
OuropinionexpressedonthefinancialstatementsdoesnotcovertheOtherInformationandwe
donotexpressanyformofassuranceconclusionthereon.
Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadtheOther
Informationand,indoingso,considerwhethertheOtherInformationismateriallyinconsistent
withthefinancialstatementsorourknowledgeobtainedintheauditorotherwiseappearstobe
materiallymisstated.
If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementof
thisOtherInformation,wearerequiredtoreportthatfact.Wehavenothingtoreportinthis
regard.
V.ResponsibilitiesoftheManagementandthoseChargedwithGovernancefortheFinancial
Statements
ThemanagementoftheFIYTALtd(the“Management”)isresponsibleforthepreparationofthe
financialstatementsthatgiveafairviewinaccordancewithAccountingStandardsforBusiness
Enterprisesanddesign,implementingandmaintainingnecessaryinternalcontrolstoenablethe
preparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraud
orerror.
Inpreparingthefinancialstatements,theManagementisresponsibleforassessingthe
Company’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedto
goingconcernandusingthegoingconcernbasisofaccountingunlesstheManagementeither
intendtoliquidatetheCompanyortoceaseoperations,orhavenorealisticalternativebuttodo
so.
ThosewhochargedwithgovernanceisresponsibleforoverseeingtheCompany’sfinancial
reportingprocess.
VI.Auditors’ResponsibilitiesfortheAuditoftheFinancialStatements
Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasa
wholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditors’
reportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnota
guaranteethatanauditconductedinaccordancewithChinaStandardsonAuditingwillalways
detectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorand
areconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedto
influencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.
AspartofanauditinaccordancewithChinaStandardsonAuditing,weexerciseprofessional
judgmentandmaintainprofessionalskepticismthroughouttheaudit.Wealso:
1.Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whether
duetofraudorerror,designandperformauditproceduresresponsivetothoserisks,and
obtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.The
riskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforone
resultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,
misrepresentations,ortheoverrideofinternalcontrol.
2.Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignaudit
proceduresthatareappropriateinthecircumstances.
3.Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessof
accountingestimatesandrelateddisclosuresmadebytheManagement.
4.ConcludeontheappropriatenessoftheManagement’suseofthegoingconcernbasisof
accountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexists
relatedtoeventsorconditionsthatmaycastsignificantdoubtontheCompany’sabilityto
continueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,weare
required,accordingtoChinaStandardsonAuditing,todrawattentioninourauditors’reportto
therelateddisclosuresinthefinancialstatementsor,ifsuchdisclosuresareinadequate,to
modifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedate
ofourauditors’report.However,futureeventsorconditionsmaycausetheCompanyto
ceasetocontinueasagoingconcern.
5.Evaluatetheoverallpresentation,structureandcontentofthefinancialstatements,including
thedisclosures,andwhetherthefinancialstatementsrepresenttheunderlyingtransactions
andeventsinamannerthatachievesfairpresentation.
6.Obtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentities
orbusinessactivitieswithinFIYTALtdtoexpressanopiniononthefinancialstatements.We
areresponsibleforthedirection,supervisionandperformanceofthegroupaudit.Weremain
solelyresponsibleforourauditopinion.
Wecommunicatewiththosechargedwithgovernanceregarding,amongothermatters,the
plannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificant
deficienciesininternalcontrolthatweidentifyduringouraudit.
Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwith
relevantethicalrequirementsregardingindependence,andtocommunicatewiththemall
relationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,
andwhereapplicable,relatedsafeguards.
Fromthematterscommunicatedwiththosechargedwithgovernance,wedeterminethose
mattersthatwereofmostsignificanceintheauditofthefinancialstatementsofthecurrentperiod
andarethereforethekeyauditmatters.Wedescribethesemattersinourauditor’sreportunless
laworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrare
circumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecause
theadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublic
interestbenefitsofsuchcommunication.
RuihuaCertifiedPublicAccountants(SpecialGeneralPartnership) | ChineseCPA(EngagementPartner):___________YuqiaoWang |
Beijing,China | ChineseCPA:____________XinLiu |
15March,2019 |
FinancialStatements
ThecurrencyappliedinthefinancialnotesandstatementsisRenminbi(CNY)
1.ConsolidatedBalanceSheet
PreparedbyFIYTAHOLDINGSLTD.
December31,2018
InCNY
Items
Items | Endingbalance | Openingbalance |
Currentassets: | ||
Monetarycapital | 164,828,059.97 | 187,152,891.32 |
Settlementreserve | ||
Inter-banklending | ||
Financialassetswhichismeasuredbasedonthefairvalueandwhosemovementiscountedtothecurrentgain/loss | ||
Derivativefinancialassets | ||
Notesreceivableandaccountsreceivable | 377,597,503.46 | 335,948,508.62 |
Where:Notesreceivable | 7,051,846.85 | 9,693,883.68 |
Accountsreceivable | 370,545,656.61 | 326,254,624.94 |
Advancepayments | 13,666,816.33 | 24,663,314.53 |
Receivablepremium | ||
Reinsuranceaccountsreceivable | ||
Reserveforreinsurancecontractreceivable | ||
Otherreceivables | 45,870,582.26 | 34,990,539.09 |
Including:Interestreceivable | ||
Dividendsreceivable | ||
Redemptorymonetarycapitalforsale | ||
Inventories | 1,782,306,301.70 | 1,820,526,676.26 |
Held-for-saleassets | ||
Non-currentassetsduewithinayear | ||
Othercurrentassets | 73,703,312.24 | 24,616,815.21 |
Totalcurrentassets | 2,457,972,575.96 | 2,427,898,745.03 |
Non-currentassets: | ||
Loanissuingandadvanceincash | ||
Available-for-salefinancialassets | 85,000.00 | 85,000.00 |
Held-to-dueinvestments |
Longtermaccountsreceivable
Longtermaccountsreceivable | ||
Long-termequityinvestment | 44,881,063.15 | 43,879,518.09 |
Investmentrealestate | 377,319,433.03 | 305,493,987.77 |
Fixedassets | 425,649,562.85 | 523,699,592.65 |
Construction-in-process | 12,041,126.00 | 10,947,300.53 |
Productivebiologicalasset | ||
Oilandgasassets | ||
Intangibleassets | 43,545,477.61 | 44,223,280.21 |
Developmentexpenses | ||
Goodwill | ||
Long-termexpensestobeapportioned | 128,572,545.15 | 109,409,785.49 |
Deferredincometaxasset | 100,675,706.09 | 105,905,944.80 |
Othernon-currentassets | 8,949,160.42 | 8,246,538.33 |
Totalnon-currentassets | 1,141,719,074.30 | 1,151,890,947.87 |
Totalassets | 3,599,691,650.26 | 3,579,789,692.90 |
Currentliabilities: | ||
Shorttermborrowings | 547,118,452.97 | 525,990,510.00 |
Borrowingsfromcentralbank | ||
Depositstakingandinterbankplacement | ||
Loansfromotherbanks | ||
Financialliabilitiesmeasuredbasedonthefairvalueandwhosechangewaschargedtothecurrentgainandloss. | ||
Derivativefinancialliabilities | ||
Notespayableandaccountspayable | 259,913,612.34 | 263,256,495.65 |
Advancesfromcustomers | 16,459,445.00 | 15,141,587.79 |
Fundsfromsellingoutandrepurchasingfinancialassets | ||
Servicechargeandcommissionpayable | ||
Salariespayabletotheemployees | 69,779,037.83 | 71,564,367.14 |
Taxespayable | 55,923,171.92 | 55,857,236.59 |
Otherpayables | 71,819,930.30 | 59,232,265.75 |
Including:interestpayable | 772,351.26 | 1,464,729.11 |
Dividendspayable | ||
Payablereinsurance | ||
Reserveforinsurancecontract | ||
Actingtradingsecurities |
Incomefromsecuritiesunderwritingoncommission
Incomefromsecuritiesunderwritingoncommission | ||
Held-for-saleliabilities | ||
Non-currentliabilitiesduewithinayear | 347,470.00 | 35,000,000.00 |
Othercurrentliabilities | ||
Totalcurrentliabilities | 1,021,361,120.36 | 1,026,042,462.92 |
Non-currentliabilities: | ||
Long-termborrowings | 4,517,110.00 | 79,870,353.00 |
Bondspayable | ||
Including:preferredshares | ||
Perpetualbond | ||
Long-termaccountspayable | ||
Longtermaccruedpayroll | ||
Predictedliabilities | ||
Deferredincome | 3,672,855.36 | 5,904,000.00 |
Deferredincometaxliability | ||
Othernon-currentliabilities | ||
Totalnon-currentliabilities | 8,189,965.36 | 85,774,353.00 |
Totalliabilities | 1,029,551,085.72 | 1,111,816,815.92 |
Owner’sequity: | ||
CapitalStock | 438,744,881.00 | 438,744,881.00 |
Otherequityinstruments | ||
Including:preferredshares | ||
Perpetualbond | ||
CapitalReserve | 1,062,455,644.22 | 1,062,455,644.22 |
Less:sharesinstock | ||
Othercomprehensiveincome | -5,442,139.78 | -11,523,442.39 |
Specialreserve | ||
SurplusReserve | 223,015,793.80 | 206,805,713.35 |
Reserveagainstgeneralrisks | ||
Retainedearnings | 851,360,603.66 | 771,484,565.02 |
Totalowners’equityattributabletotheparentcompany | 2,570,134,782.90 | 2,467,967,361.20 |
Minorityshareholders’equity | 5,781.64 | 5,515.78 |
Totalowner’sequity | 2,570,140,564.54 | 2,467,972,876.98 |
Totalliabilitiesandowners’equity | 3,599,691,650.26 | 3,579,789,692.90 |
Legalrepresentative:HuangYongfengChiefFinancialOfficer:ChenZhuo
PersoninchargeoftheAccountingDepartment:TianHui2.BalanceSheet(ParentCompany)
InCNY
Items
Items | Endingbalance | Openingbalance |
Currentassets: | ||
Monetarycapital | 137,175,466.27 | 131,163,944.43 |
Financialassetswhichismeasuredbasedonthefairvalueandwhosemovementiscountedtothecurrentgain/loss | ||
Derivativefinancialassets | ||
Notesreceivableandaccountsreceivable | 737,636.38 | 6,832,006.11 |
Where:Notesreceivable | ||
Accountsreceivable | 737,636.38 | 6,832,006.11 |
Advancepayments | ||
Otherreceivables | 870,739,378.37 | 831,952,437.86 |
Including:Interestreceivable | ||
Dividendsreceivable | ||
Inventories | ||
Held-for-saleassets | ||
Non-currentassetsduewithinayear | ||
Othercurrentassets | 10,081,272.94 | 9,089,170.12 |
Totalcurrentassets | 1,018,733,753.96 | 979,037,558.52 |
Non-currentassets: | ||
Available-for-salefinancialassets | 85,000.00 | 85,000.00 |
Held-to-dueinvestments | ||
Longtermaccountsreceivable | ||
Long-termequityinvestment | 1,376,129,654.08 | 1,375,128,109.02 |
Investmentrealestate | 297,042,937.87 | 270,241,724.52 |
Fixedassets | 297,517,472.81 | 340,765,873.45 |
Construction-in-process | 12,041,126.00 | 10,947,300.53 |
Productivebiologicalasset | ||
Oilandgasassets | ||
Intangibleassets | 35,337,052.82 | 36,932,963.95 |
Developmentexpenses | ||
Goodwill | ||
Long-termexpensestobeapportioned | 4,500,638.97 | 4,418,287.94 |
Deferredincometaxasset
Deferredincometaxasset | 952,857.33 | 1,499,126.32 |
Othernon-currentassets | 4,493,971.35 | 2,687,910.84 |
Totalnon-currentassets | 2,028,100,711.23 | 2,042,706,296.57 |
Totalassets | 3,046,834,465.19 | 3,021,743,855.09 |
Currentliabilities: | ||
Shorttermborrowings | 505,000,000.00 | 470,000,000.00 |
Financialliabilitiesmeasuredbasedonthefairvalueandwhosechangewaschargedtothecurrentgainandloss. | ||
Derivativefinancialliabilities | ||
Notespayableandaccountspayable | 52,324,191.98 | 60,520,874.66 |
Advancesfromcustomers | 1,636,520.02 | 4,212,930.07 |
Salariespayabletotheemployees | 11,589,634.34 | 9,291,422.00 |
Taxespayable | 943,919.26 | 1,038,481.26 |
Otherpayables | 57,997,397.28 | 21,596,100.44 |
Including:interestpayable | 685,419.80 | 929,155.39 |
Dividendspayable | ||
Held-for-saleliabilities | ||
Non-currentliabilitiesduewithinayear | 35,000,000.00 | |
Othercurrentliabilities | ||
Totalcurrentliabilities | 629,491,662.88 | 601,659,808.43 |
Non-currentliabilities: | ||
Long-termborrowings | 74,861,928.00 | |
Bondspayable | ||
Including:preferredshares | ||
Perpetualbond | ||
Long-termaccountspayable | ||
Longtermaccruedpayroll | ||
Predictedliabilities | ||
Deferredincome | 3,672,855.36 | 5,904,000.00 |
Deferredincometaxliability | ||
Othernon-currentliabilities | ||
Totalnon-currentliabilities | 3,672,855.36 | 80,765,928.00 |
Totalliabilities | 633,164,518.24 | 682,425,736.43 |
Owner’sequity: | ||
CapitalStock | 438,744,881.00 | 438,744,881.00 |
Otherequityinstruments |
Including:preferredshares
Including:preferredshares | ||
Perpetualbond | ||
CapitalReserve | 1,068,111,185.32 | 1,068,111,185.32 |
Less:sharesinstock | ||
Othercomprehensiveincome | ||
Specialreserve | ||
SurplusReserve | 223,015,793.80 | 206,805,713.35 |
Retainedearnings | 683,798,086.83 | 625,656,338.99 |
Totalowner’sequity | 2,413,669,946.95 | 2,339,318,118.66 |
Totalliabilitiesandowners’equity | 3,046,834,465.19 | 3,021,743,855.09 |
Legalrepresentative:HuangYongfengChiefFinancialOfficer:ChenZhuo
PersoninchargeoftheAccountingDepartment:TianHui
3.ConsolidatedProfitStatement
InCNY
Items | Amountincurredinthereportingperiod | Amountincurredinthepreviousperiod |
I.Turnover | 3,400,450,599.90 | 3,345,809,703.98 |
Including:operatingincome | 3,400,450,599.90 | 3,345,809,703.98 |
Interestincome | ||
Earnedinsurancepremium | ||
Servicechargeandcommissionincome | ||
II.Totaloperatingcosts | 3,190,243,356.71 | 3,182,619,506.27 |
Including:Operatingcosts | 1,993,809,774.20 | 1,986,652,591.57 |
Interestpayment | ||
Servicechargeandcommissionpayment | ||
SurrenderValue | ||
Compensationexpenses,net | ||
Provisionofreserveforinsurancecontract,net | ||
Paymentofpolicydividend | ||
Reinsuranceexpenses | ||
Taxesandsurcharges | 33,769,344.40 | 32,871,258.58 |
Salescosts | 856,970,173.10 | 811,437,932.01 |
Administrativeexpenses | 219,162,525.85 | 190,589,582.24 |
R&Dexpenditures
R&Dexpenditures | 47,350,342.82 | 49,453,899.35 |
Financialexpenses | 35,916,240.16 | 49,186,742.91 |
Where:Interestcost | 27,552,558.81 | 41,825,035.34 |
Interestincome | 2,269,447.05 | 2,915,602.99 |
Lossfromimpairmentofassets | 3,264,956.18 | 62,427,499.61 |
Plus:Otherincome | 19,375,618.48 | 17,508,255.98 |
Investmentincome(lossisstatedwith“-“) | 1,001,545.06 | 455,893.22 |
Including:returnoninvestmentinassociateandjointventure | 1,001,545.06 | 455,893.22 |
Incomefromchangeoffairvalue(lossisstatedwith“-”) | ||
Exchangeincome(lossstatedwith“-”) | ||
Incomefromdisposalofassets(lossstatedwith“-”) | -181,302.24 | 7,321,993.36 |
III.OperatingProfit(lossisstatedwith“-“) | 230,403,104.49 | 188,476,340.27 |
Plus:Non-operatingincome | 1,446,357.53 | 2,607,653.91 |
Less:Non-operatingexpenses | 652,514.97 | 1,368,680.92 |
IV.Totalprofit(totallossisstatedwith“-”) | 231,196,947.05 | 189,715,313.26 |
Less:Incometaxexpense | 47,361,851.76 | 47,098,954.06 |
V.NetProfit(netlossisstatedwith“-“) | 183,835,095.29 | 142,616,359.20 |
(I)NetProfitfromsustainableoperation(netlossisstatedwith“-“) | 183,835,095.29 | 142,616,359.20 |
(II)Netprofitfromterminationofbusinessoperation(netlossisstatedwith“-“) | ||
Netprofitattributabletotheparentcompany’sowner | 183,835,095.29 | 140,216,258.28 |
Minorityshareholders’gain/loss | 2,400,100.92 | |
VI.Netofothercomprehensiveincomeaftertax | 6,081,568.47 | -28,676.16 |
Netofothercomprehensiveincomeaftertaxattributabletotheparentcompany’sowner | 6,081,302.61 | 255,055.85 |
(I)Othercomprehensiveincomewhichcannotbere-classifiedintogainandloss | ||
1.Movementofthenetliabilitiesandnetassetsre-measuredforsettingthebeneficialplan | ||
2.Othercomprehensiveincomewhichcannotbeconvertedintogainandlossbasedontheequitymethod |
(II)Othercomprehensiveincomewhichshallbere-classifiedintogainandloss
(II)Othercomprehensiveincomewhichshallbere-classifiedintogainandloss | 6,081,302.61 | 255,055.85 |
1.Othercomprehensiveincomewhichcanbeconvertedintogainandlossbasedontheequitymethod | ||
2.Gain/lossfromchangeinthefairvalueofthefinancialassetsavailableforsale | ||
3.Gain/lossfromwhichtheheld-to-maturityinvestmentisre-classifiedasavailable-for-salefinancialassets | ||
4.Validpartofthegain/lossfromcashflowhedge | ||
5.Conversiondifferenceinforeigncurrencystatements | 6,081,302.61 | 255,055.85 |
6.Others | ||
Netamountofothercomprehensiveincomeaftertaxattributabletominorityshareholders | 265.86 | -283,732.01 |
VII.Totalcomprehensiveincome | 189,916,663.76 | 142,587,683.04 |
Totalcomprehensiveincomeattributabletotheparentcompany’sowner | 189,916,397.90 | 140,471,314.13 |
Totalcomprehensiveincomeattributabletominorityshareholders | 265.86 | 2,116,368.91 |
VIII.Earningspershare: | ||
(I)Basicearningspershare | 0.4190 | 0.3196 |
(II)Dilutedearningspershare | 0.4190 | 0.3196 |
Legalrepresentative:HuangYongfengChiefFinancialOfficer:ChenZhuoPersoninchargeofthe
AccountingDepartment:TianHui
4.StatementofProfit,ParentCompany
InCNY
Items | Amountincurredinthereportingperiod | Amountincurredinthepreviousperiod |
I.Revenue | 130,901,823.99 | 117,746,387.79 |
Less:Operatingcost | 19,010,293.07 | 17,785,254.56 |
Taxesandsurcharges | 4,340,938.33 | 4,244,709.29 |
Salescosts | 5,024,222.36 | |
Administrativeexpenses | 62,841,044.26 | 56,597,226.83 |
R&Dexpenditures | 24,155,557.54 | 24,358,700.54 |
Financialexpenses | 9,231,733.69 | 11,051,564.46 |
Where:Interestcost
Where:Interestcost | 10,189,512.00 | 12,432,288.90 |
Interestincome | 1,756,834.88 | 1,384,504.01 |
Lossfromimpairmentofassets | 46,068.70 | 62,283.14 |
Plus:Otherincome | 7,689,684.27 | 11,482,400.00 |
Investmentincome(lossisstatedwith“-“) | 144,001,545.06 | 117,455,893.22 |
Including:returnoninvestmentinassociateandjointventure | 1,001,545.06 | 455,893.22 |
Incomefromchangeoffairvalue(lossisstatedwith“-”) | ||
Incomefromdisposalofassets(lossstatedwith“-”) | -51,942.13 | -54,661.87 |
II.OperatingProfit(lossisstatedwith“-“) | 162,915,475.60 | 127,506,057.96 |
Plus:Non-operatingincome | 38,080.00 | 231,994.49 |
Less:Non-operatingexpenses | 446,782.97 | 320,029.00 |
III.Totalprofit(totallossisstatedwith“-“) | 162,506,772.63 | 127,418,023.45 |
Less:Incometaxexpense | 405,968.14 | -1,022,105.57 |
IV.NetProfit(netlossisstatedwith“-“) | 162,100,804.49 | 128,440,129.02 |
(I)NetProfitfromsustainableoperation(netlossisstatedwith“-“) | 162,100,804.49 | 128,440,129.02 |
(II)Netprofitfromterminationofbusinessoperation(netlossisstatedwith“-“) | ||
V.Netofothercomprehensiveincomeaftertax | ||
(I)Othercomprehensiveincomewhichcannotbere-classifiedintogainandloss | ||
1.Movementofthenetliabilitiesandnetassetsre-measuredforsettingthebeneficialplan | ||
2.Othercomprehensiveincomewhichcannotbeconvertedintogainandlossbasedontheequitymethod | ||
(II)Othercomprehensiveincomewhichshallbere-classifiedintogainandloss | ||
1.Othercomprehensiveincomewhichcanbeconvertedintogainandlossbasedontheequitymethod | ||
2.Gain/lossfromchangeinthefairvalueofthefinancialassetsavailableforsale | ||
3.Gain/lossfromwhichtheheld-to-maturityinvestmentisre-classifiedas |
available-for-salefinancialassets
available-for-salefinancialassets | ||
4.Validpartofthegain/lossfromcashflowhedge | ||
5.Conversiondifferenceinforeigncurrencystatements | ||
6.Others | ||
VI.Totalcomprehensiveincome | 162,100,804.49 | 128,440,129.02 |
VII.Earningspershare: | ||
(I)Basicearningspershare | ||
(II)Dilutedearningspershare |
Legalrepresentative:HuangYongfengChiefFinancialOfficer:ChenZhuo
PersoninchargeoftheAccountingDepartment:TianHui
5.ConsolidatedCashFlowStatement
InCNY
Items | Amountincurredinthereportingperiod | Amountincurredinthepreviousperiod |
I.Cashflowsarisingfromoperatingactivities | ||
Cashreceivedfromsalesofgoodsandsupplyoflaborservice | 3,810,404,536.16 | 3,799,342,843.85 |
Netincreaseofcustomers’depositandduefrombanks | ||
Netincreaseofborrowingsfromthecentralbank | ||
Netincreaseofborrowingsfromotherfinancialinstitutions | ||
Cashreceivedfromthepremiumoftheoriginalinsurancecontract | ||
Netcashreceivedfromthereinsurancebusiness | ||
Netincreaseofthereservefrompolicyholdersandinvestment | ||
Netincreasefromdisposaloffinancialassetswhichismeasuredbasedonthefairvalueandwhosemovementiscountedtothecurrentgain/loss | ||
Cashreceivedfrominterest,servicechargeandcommission | ||
Netincreaseofloanfromotherbanks |
Netincreaseoffundfromrepurchasebusiness
Netincreaseoffundfromrepurchasebusiness | ||
Rebatedtaxesreceived | 4,793,245.20 | 886,252.20 |
Otheroperationactivityrelatedcashreceipts | 49,628,593.69 | 49,178,644.63 |
Subtotalofcashflowinfromoperatingactivity | 3,864,826,375.05 | 3,849,407,740.68 |
Cashpaidforpurchaseofgoodsandreceptionoflaborservices | 2,189,921,981.01 | 2,070,318,097.62 |
Netincreaseofloansandadvancestocustomers | ||
Netincreaseofduefromcentralbankandduefrombanks | ||
Cashfrompaymentforsettlementoftheoriginalinsurancecontract | ||
Cashpaidforinterest,servicechargeandcommission | ||
Cashforpaymentofpolicydividend | ||
Cashpaidtoandforstaff | 583,417,253.40 | 516,928,806.69 |
Taxespaid | 305,622,391.83 | 285,279,057.38 |
Otherbusinessactivityrelatedcashpayments | 454,236,959.19 | 411,927,217.02 |
Subtotalofcashflowoutfromoperatingactivity | 3,533,198,585.43 | 3,284,453,178.71 |
Netcashflowarisingfromoperatingactivities | 331,627,789.62 | 564,954,561.97 |
II.Cashflowsarisingfrominvestmentactivities: | ||
Cashreceivedfromrecoveryofinvestment | ||
Cashreceivedfrominvestmentincome | ||
Netcashfromdisposaloffixedassets,,intangibleassetsandrecoveryofotherlongtermassets | 53,280.03 | 10,678,135.25 |
Netcashreceivedfromdisposalofsubsidiariesandotheroperatingunits | -230,053.69 | |
Otherinvestmentrelatedcashreceipts | ||
Subtotalofcashflowinfrominvestmentactivity | 53,280.03 | 10,448,081.56 |
Cashpaidforpurchase/constructionoffixedassets,Intangibleassetsandotherlongtermassets | 146,877,130.29 | 136,914,522.99 |
Cashpaidforinvestment | ||
Netincreaseofthepledgedloan | ||
Netcashpaidforacquisitionofsubsidiariesandotheroperationunits |
Otherinvestmentrelatedcashpayments
Otherinvestmentrelatedcashpayments | ||
Subtotalofcashflowoutfrominvestmentactivity | 146,877,130.29 | 136,914,522.99 |
Netcashflowsarisingfrominvestmentactivities | -146,823,850.26 | -126,466,441.43 |
III.Cashflowsarisingfromfundraisingactivities | ||
Cashreceivedfromabsorbinginvestment | ||
Incl.:Cashreceivedfromthesubsidiaries’absorptionofminorityshareholders’investment | ||
Cashreceivedfromloans | 741,192,340.23 | 575,282,350.00 |
Cashreceivedfrombondissuing | ||
Otherfund-raisingrelatedcashreceipts | ||
Subtotalofcashflowinfromfundraisingactivity | 741,192,340.23 | 575,282,350.00 |
Cashpaidfordebtrepayment | 832,333,208.63 | 1,167,061,934.80 |
Cashpaidfordividend/profitdistributionorrepaymentofinterest | 116,690,155.91 | 85,355,204.78 |
Including:Dividendandprofitpaidbythesubsidiariestominorityshareholders | ||
Cashpaidforotherfinancingactivities | 3,376,589.16 | |
Sub-totalcashflowpaidforfinancingactivities | 949,023,364.54 | 1,255,793,728.74 |
Netcashflowsarisingfromfundraisingactivities | -207,831,024.31 | -680,511,378.74 |
IV.Changeofexchangerateinfluencingthecashandcashequivalent | 702,253.60 | -256,606.29 |
V.Netincreaseofcashandcashequivalents | -22,324,831.35 | -242,279,864.49 |
Plus:Openingbalanceofcashandcashequivalents | 184,947,891.32 | 427,227,755.81 |
VI.Endingbalanceofcashandcashequivalents | 162,623,059.97 | 184,947,891.32 |
Legalrepresentative:HuangYongfengChiefFinancialOfficer:ChenZhuo
PersoninchargeoftheAccountingDepartment:TianHui
6.CashFlowStatement,ParentCompany
InCNY
Items | Amountincurredinthereportingperiod | Amountincurredinthepreviousperiod |
I.Cashflowsarisingfromoperatingactivities | ||
Cashreceivedfromsalesofgoodsandsupplyoflaborservice | 116,016,128.07 | 118,206,419.70 |
Rebatedtaxesreceived | ||
Otheroperationactivityrelatedcashreceipts | 3,085,141,911.13 | 938,657,962.92 |
Subtotalofcashflowinfromoperatingactivity
Subtotalofcashflowinfromoperatingactivity | 3,201,158,039.20 | 1,056,864,382.62 |
Cashpaidforpurchaseofgoodsandreceptionoflaborservices | 300,000.00 | |
Cashpaidtoandforstaff | 58,785,131.65 | 52,908,089.08 |
Taxespaid | 10,909,143.22 | 13,645,601.66 |
Otherbusinessactivityrelatedcashpayments | 3,050,352,344.19 | 560,857,112.69 |
Subtotalofcashflowoutfromoperatingactivity | 3,120,346,619.06 | 627,410,803.43 |
Netcashflowarisingfromoperatingactivities | 80,811,420.14 | 429,453,579.19 |
II.Cashflowsarisingfrominvestmentactivities: | ||
Cashreceivedfromrecoveryofinvestment | ||
Cashreceivedfrominvestmentincome | 143,000,000.00 | 117,000,000.00 |
Netcashfromdisposaloffixedassets,intangibleassetsandrecoveryofotherlongtermassets | 1,430.00 | 30,112.00 |
Netcashreceivedfromdisposalofsubsidiariesandotheroperatingunits | ||
Otherinvestmentrelatedcashreceipts | ||
Subtotalofcashflowinfrominvestmentactivity | 143,001,430.00 | 117,030,112.00 |
Cashpaidforpurchase/constructionoffixedassets,Intangibleassetsandotherlongtermassets | 27,763,546.06 | 47,230,065.02 |
Cashpaidforinvestment | ||
Netcashpaidforacquisitionofsubsidiariesandotheroperationunits | 114,299,236.67 | |
Otherinvestmentrelatedcashpayments | ||
Subtotalofcashflowoutfrominvestmentactivity | 27,763,546.06 | 161,529,301.69 |
Netcashflowsarisingfrominvestmentactivities | 115,237,883.94 | -44,499,189.69 |
III.Cashflowsarisingfromfundraisingactivities | ||
Cashreceivedfromabsorbinginvestment | ||
Cashreceivedfromloans | 700,000,000.00 | 540,000,000.00 |
Cashreceivedfrombondissuing | ||
Otherfund-raisingrelatedcashreceipts | ||
Subtotalofcashflowinfromfundraisingactivity | 700,000,000.00 | 540,000,000.00 |
Cashpaidfordebtrepayment | 774,861,928.00 | 986,000,000.00 |
Cashpaidfordividend/profitdistributionorrepaymentofinterest | 115,249,277.23 | 79,277,672.20 |
Cashpaidforotherfinancingactivities |
Sub-totalcashflowpaidforfinancingactivities
Sub-totalcashflowpaidforfinancingactivities | 890,111,205.23 | 1,065,277,672.20 |
Netcashflowsarisingfromfundraisingactivities | -190,111,205.23 | -525,277,672.20 |
IV.Changeofexchangerateinfluencingthecashandcashequivalent | 73,422.99 | -90,699.34 |
V.Netincreaseofcashandcashequivalents | 6,011,521.84 | -140,413,982.04 |
Plus:Openingbalanceofcashandcashequivalents | 128,958,944.43 | 269,372,926.47 |
VI.Endingbalanceofcashandcashequivalents | 134,970,466.27 | 128,958,944.43 |
Legalrepresentative:HuangYongfengChiefFinancialOfficer:ChenZhuo
PersoninchargeoftheAccountingDepartment:TianHui
7.ConsolidatedStatementofChangesinOwner’sEquity
Amountinthereportingperiod
InCNY
Items | Reportingperiod | ||||||||||||
Owners’equityattributabletotheparentcompany | Minorityshareholders’equity | Totalowner’sequity | |||||||||||
CapitalStock | Otherequityinstruments | CapitalReserve | Less:sharesinstock | Othercomprehensiveincome | Specialreserve | SurplusReserve | Reserveagainstgeneralrisks | Retainedearnings | |||||
Preferredshares | Perpetualbond | Others | |||||||||||
I.Endingbalanceofthepreviousyear | 438,744,881.00 | 1,062,455,644.22 | -11,523,442.39 | 206,805,713.35 | 771,484,565.02 | 5,515.78 | 2,467,972,876.98 | ||||||
Plus:Changeinaccountingpolicy | |||||||||||||
Correctionofpreviouserrors | |||||||||||||
Consolidationofenterprisesunderthesamecontrol | |||||||||||||
Others | |||||||||||||
II.Openingbalanceofthereportingyear | 438,744,881.00 | 1,062,455,644.22 | -11,523,442.39 | 206,805,713.35 | 771,484,565.02 | 5,515.78 | 2,467,972,876.98 | ||||||
III.Decrease/increaseofthereportyear(decreaseisstated | 6,081,302.61 | 16,210,080.45 | 79,876,038.64 | 265.86 | 102,167,687.56 |
with“-“)
with“-“) | ||||||||
(I)Totalcomprehensiveincome | 6,081,302.61 | 183,835,095.29 | 265.86 | 189,916,663.76 | ||||
(II)Owners’inputanddecreaseofcapital | ||||||||
1.Commonsharescontributedbytheowner | ||||||||
2.Capitalcontributedbyotherequityinstrumentsholders | ||||||||
3.Amountofpaymentforsharescreditedtoowners’equity | ||||||||
4.Others | ||||||||
(III)ProfitDistribution | 16,210,080.45 | -103,959,056.65 | -87,748,976.20 | |||||
1.Provisionofsurplusreserve | 16,210,080.45 | -16,210,080.45 | ||||||
2.Provisionofreserveagainstgeneralrisks | ||||||||
3.3.Distributiontotheowners(orshareholders) | -87,748,976.20 | -87,748,976.20 | ||||||
4.Others | ||||||||
(IV)Internalcarry-overofowners’equity | ||||||||
1.Conversionofcapitalreserveintocapital(orcapitalstock) | ||||||||
2.Conversionofsurplusreserveintocapital(orcapitalstock) | ||||||||
3.Lossmadeupwithsurplusreserve | ||||||||
4.Settingoftheamountinvolvedin |
themovementofthebeneficialplancarriedovertotheretainedearnings
themovementofthebeneficialplancarriedovertotheretainedearnings | |||||||||||
5.Others | |||||||||||
(V)Specialreserve | |||||||||||
1.Provisioninthereportingperiod | |||||||||||
2.Appliedinthereportingperiod | |||||||||||
(VI)Others | |||||||||||
IV.Endingbalanceofthereportingperiod | 438,744,881.00 | 1,062,455,644.22 | -5,442,139.78 | 223,015,793.80 | 851,360,603.66 | 5,781.64 | 2,570,140,564.54 |
Amountinthepreviousperiod
InCNY
Items | Previousperiod | ||||||||||||
Owners’equityattributabletotheparentcompany | Minorityshareholders’equity | Totalowner’sequity | |||||||||||
CapitalStock | Otherequityinstruments | CapitalReserve | Less:sharesinstock | Othercomprehensiveincome | Specialreserve | SurplusReserve | Reserveagainstgeneralrisks | Retainedearnings | |||||
Preferredshares | Perpetualbond | Others | |||||||||||
I.Endingbalanceofthepreviousyear | 438,744,881.00 | 1,062,455,644.22 | -11,778,498.24 | 193,961,700.45 | 687,986,807.74 | 3,577,654.56 | 2,374,948,189.73 | ||||||
Plus:Changeinaccountingpolicy | |||||||||||||
Correctionofpreviouserrors | |||||||||||||
Consolidationofenterprisesunderthesamecontrol | |||||||||||||
Others | |||||||||||||
II.Openingbalanceofthereportingyear | 438,744,881.00 | 1,062,455,644.22 | -11,778,498.24 | 193,961,700.45 | 687,986,807.74 | 3,577,654.56 | 2,374,948,189.73 | ||||||
III.Decrease/increaseofthereportyear(decreaseisstatedwith“-“) | 255,055.85 | 12,844,012.90 | 83,497,757.28 | -3,572,138.78 | 93,024,687.25 |
(I)Totalcomprehensiveincome
(I)Totalcomprehensiveincome | 255,055.85 | 140,216,258.28 | 2,116,368.91 | 142,587,683.04 | ||||
(II)Owners’inputanddecreaseofcapital | -5,688,507.69 | -5,688,507.69 | ||||||
1.Commonsharescontributedbytheowner | ||||||||
2..Capitalcontributedbyotherequityinstrumentsholders | ||||||||
3.Amountofpaymentforsharescreditedtoowners’equity | ||||||||
4.Others | -5,688,507.69 | -5,688,507.69 | ||||||
(III)ProfitDistribution | 12,844,012.90 | -56,718,501.00 | -43,874,488.10 | |||||
1.Provisionofsurplusreserve | 12,844,012.90 | -12,844,012.90 | ||||||
2.Provisionofreserveagainstgeneralrisks | ||||||||
3.Distributiontotheowners(orshareholders) | -43,874,488.10 | -43,874,488.10 | ||||||
4.Others | ||||||||
(IV)Internalcarry-overofowners’equity | ||||||||
1.Conversionofcapitalreserveintocapital(orcapitalstock) | ||||||||
2.Conversionofsurplusreserveintocapital(orcapitalstock) | ||||||||
3.Lossmadeupwithsurplusreserve | ||||||||
4.Settingoftheamountinvolvedinthemovementofthe |
beneficialplancarriedovertotheretainedearnings
beneficialplancarriedovertotheretainedearnings | |||||||||||
5.Others | |||||||||||
(V)Specialreserve | |||||||||||
1.Provisioninthereportingperiod | |||||||||||
2.Appliedinthereportingperiod | |||||||||||
(VI)Others | |||||||||||
IV.Endingbalanceofthereportingperiod | 438,744,881.00 | 1,062,455,644.22 | -11,523,442.39 | 206,805,713.35 | 771,484,565.02 | 5,515.78 | 2,467,972,876.98 |
Legalrepresentative:HuangYongfengChiefFinancialOfficer:ChenZhuo
PersoninchargeoftheAccountingDepartment:TianHui
8.ConsolidatedStatementofChangesinOwner’sEquity,ParentCompany
Amountinthereportingperiod
InCNY
Items | Reportingperiod | ||||||||||
CapitalStock | Otherequityinstruments | CapitalReserve | Less:sharesinstock | Othercomprehensiveincome | Specialreserve | SurplusReserve | Retainedearnings | Totalowner’sequity | |||
Preferredshares | Perpetualbond | Others | |||||||||
I.Endingbalanceofthepreviousyear | 438,744,881.00 | 1,068,111,185.32 | 206,805,713.35 | 625,656,338.99 | 2,339,318,118.66 | ||||||
Plus:Changeinaccountingpolicy | |||||||||||
Correctionofpreviouserrors | |||||||||||
Others | |||||||||||
II.Openingbalanceofthereportingyear | 438,744,881.00 | 1,068,111,185.32 | 206,805,713.35 | 625,656,338.99 | 2,339,318,118.66 | ||||||
III.Decrease/increaseofthereportyear(decreaseisstatedwith“-“) | 16,210,080.45 | 58,141,747.84 | 74,351,828.29 | ||||||||
(I)Totalcomprehensive | 162,100,804.49 | 162,100,804.49 |
income
income | ||||
(II)Owners’inputanddecreaseofcapital | ||||
1.Commonsharescontributedbytheowner | ||||
2.Capitalcontributedbyotherequityinstrumentsholders | ||||
3.Amountofpaymentforsharescreditedtoowners’equity | ||||
4.Others | ||||
(III)ProfitDistribution | 16,210,080.45 | -103,959,056.65 | -87,748,976.20 | |
1.Provisionofsurplusreserve | 16,210,080.45 | -16,210,080.45 | ||
2.Distributiontotheowners(orshareholders) | -87,748,976.20 | -87,748,976.20 | ||
3.Others | ||||
(IV)Internalcarry-overofowners’equity | ||||
1.Conversionofcapitalreserveintocapital(orcapitalstock) | ||||
2.Conversionofsurplusreserveintocapital(orcapitalstock) | ||||
3.Lossmadeupwithsurplusreserve | ||||
4.Settingoftheamountinvolvedinthemovementofthebeneficialplancarriedovertotheretainedearnings | ||||
5.Others |
(V)Specialreserve
(V)Specialreserve | |||||||
reportingperiod | |||||||
2.Appliedinthereportingperiod | |||||||
(VI)Others | |||||||
IV.Endingbalanceofthereportingperiod | 438,744,881.00 | 1,068,111,185.32 | 223,015,793.80 | 683,798,086.83 | 2,413,669,946.95 |
Amountinthepreviousperiod
InCNY
Items | Previousperiod | ||||||||||
CapitalStock | Otherequityinstruments | CapitalReserve | Less:sharesinstock | Othercomprehensiveincome | Specialreserve | SurplusReserve | Retainedearnings | Totalowner’sequity | |||
Preferredshares | Perpetualbond | Others | |||||||||
I.Endingbalanceofthepreviousyear | 438,744,881.00 | 1,068,111,185.32 | 193,961,700.45 | 553,934,710.97 | 2,254,752,477.74 | ||||||
Plus:Changeinaccountingpolicy | |||||||||||
Correctionofpreviouserrors | |||||||||||
Others | |||||||||||
II.Openingbalanceofthereportingyear | 438,744,881.00 | 1,068,111,185.32 | 193,961,700.45 | 553,934,710.97 | 2,254,752,477.74 | ||||||
III.Decrease/increaseofthereportyear(decreaseisstatedwith“-“) | 12,844,012.90 | 71,721,628.02 | 84,565,640.92 | ||||||||
(I)Totalcomprehensiveincome | 128,440,129.02 | 128,440,129.02 | |||||||||
(II)Owners’inputanddecreaseofcapital | |||||||||||
1.Commonsharescontributedbytheowner | |||||||||||
2.Capitalcontributedbyotherequityinstrumentsholders | |||||||||||
3.Amountofpaymentforsharescreditedto |
owners’equity
owners’equity | |||||||
4.Others | |||||||
(III)ProfitDistribution | 12,844,012.90 | -56,718,501.00 | -43,874,488.10 | ||||
1.Provisionofsurplusreserve | 12,844,012.90 | -12,844,012.90 | |||||
2.Distributiontotheowners(orshareholders) | -43,874,488.10 | -43,874,488.10 | |||||
3.Others | |||||||
(IV)Internalcarry-overofowners’equity | |||||||
1.Conversionofcapitalreserveintocapital(orcapitalstock) | |||||||
2.Conversionofsurplusreserveintocapital(orcapitalstock) | |||||||
3.Lossmadeupwithsurplusreserve | |||||||
4.Settingoftheamountinvolvedinthemovementofthebeneficialplancarriedovertotheretainedearnings | |||||||
5.Others | |||||||
(V)Specialreserve | |||||||
1.Provisioninthereportingperiod | |||||||
2.Appliedinthereportingperiod | |||||||
(VI)Others | |||||||
IV.Endingbalanceofthereportingperiod | 438,744,881.00 | 1,068,111,185.32 | 206,805,713.35 | 625,656,338.99 | 2,339,318,118.66 |
Legalrepresentative:HuangYongfengChiefFinancialOfficer:ChenZhuo
PersoninchargeoftheAccountingDepartment:TianHui
NotestotheFinancialStatements
fortheYearEnded31December2018
(ExpressedinRMBYuanunlessotherwiseindicated)
I.Companystatus
FIYTAHoldingsLtd.(the“Company”)wasfounded,undertheapprovalofShenFuBanFu(1992)1259issuedby
theGeneralOfficeofShenzhenMunicipalGovernment,throughtherestructuringofformerShenzhenFIYTATime
IndustrialCompanybythepromoterofChinaNationalAero-TechnologyImportandExportShenzhenIndustry&
TradeCenter(namechangedto“ChinaNationalAero-TechnologyShenzhenCo.,Ltd”lately)on25December
1992,andthenamechangedto“ShenzhenFIYTAHoldingsLimited”.TheheadquartersislocatedatFIYTA
Hi-TechBuilding,GaoXinNanYiDao,NanshanDistrict,Shenzhen,GuangdongProvince.
PursuanttotheapprovalofShenRenYinFuZi(1993)070issuedbythePeople’sBankofChinaShenzhen
SpecialEconomicZoneBranch,theCompanyissuedRenminbiordinaryshares(Ashares)andRenminbispecial
shares(Bshares)publiclyon10March1993.On3June1993,boththeCompany’sAsharesandBshareswere
listedandtradedonShenzhenStockExchangepursuanttotheapprovalofShenZhengBanFu[1993]20issued
byShenzhenSecuritiesRegulatoryOfficeandShenZhengShiZi(1993)16issuedbyShenzhenStockExchange.
On30January1997,thecompanynamechangedtoShenzhenFIYTAHoldingsLimitedwiththeapprovalof
ShenzhenMunicipalAdministrationforIndustryandCommerce.
On4July1997,ChinaNationalAero-TechnologyShenzhenCo.,Ltd.("CATICShenzhenCompany")transferred
72,360,000corporateshares(accountingfor52.24%oftheCompany'stotalsharecapital)toShenzhenChina
AviationGroupCompanyLimited(previouslyknownas"ShenzhenChinaAviationIndustryCompanyLimited",
hereinafterreferredtoas"ChinaNationalAviationGroup")accordingtosharetransferagreementsignedbyboth
parties.Asaresult,theCompany’scontrollingshareholderchangedfromCATICShenzhenCompanytoChina
NationalAviationGroup.
On26October2007,theCompanyimplementedsplit-sharereform.Underthepremiseofmaintainingthe
Company'stotalof249,317,999sharesunchanged,theCompany'sshareholdersofnon-tradablesharespaid3.1
sharesper10tradablesharestoallthetradableshareshareholdersregisteredonoptionregistrationdate
designatedbythesplit-sharereformprogram.Atthatpoint,afterthereform,thesharesheldbyChinaNational
AviationGroupreducedto44.69%from52.24%.
On29February2008,duetoexpandingthescopeofbusiness,theCompany’scorporatebusinesslicensewas
alteredfromShenSiZiNo.4403011001583toNo.440301103196089withtheapprovalofShenzhenMunicipal
AdministrationforIndustryandCommerce.
Withtheapprovalof“ReplyofChinaSecuritiesRegulatoryCommission(CSRC)totheApprovalofPrivate
PlacementofShenzhenFIYTAHoldingsLimited”(ZhengJianXuKe[2010]1703)and“ReplyofState-owned
AssetsSupervisionandAdministrationCommissionoftheStateCouncil(SASAC)onIssuesinPrivatePlacement
ofShenzhenFIYTAHoldingsLimited”(SASAC(2010)430)in2010,theCompanyisapprovedtoissuenotmore
than50,000,000ordinaryshares(Ashares)byprivateplacement.Afterthecompletionoftheplacementon9
December2010,theCompany’sregisteredcapitalincreasedtoRMB280,548,479.00andtheequitycapitalofthe
CompanyheldbyChinaNationalAviationGroupreducedto41.49%.
On3March2011,thecompanynamechangedtoFIYTAHoldingsLimitedwiththeapprovalofShenzhen
MunicipalAdministrationforIndustryandCommerce.
On8April2011,theCompanyincreaseditssharecapitalby4sharesforevery10sharesbycapitalizingthe
capitalreservesonthebasisoftotalsharesof280,548,479asat31December2010.Totalsharesofthe
Companychangedto392,767,870sharesaftertheincrease.
On11November2015,withtheapprovalofChinaSecuritiesRegulatoryCommission(CSRC)“Replyof
non-publicofferingofstocksofShenzhenFIYTAHoldingsLimited”(ZhengJianXuKe[2015]2588)andtheapproval
ofState-ownedAssetsSupervisionandAdministrationCommissionoftheStateCouncil(SASAC)“Replyof
non-publicofferingofstocksofShenzhenFIYTAHoldingsLimited”(SASAC(2015)415),theCompanywas
approvedtoissuenotmorethan46,911,649ordinaryshares(Ashares)throughnon-publicoffering.Afterthe
completionofthenon-publicofferingofstockson22December2015,theCompany’sregisteredcapitalwas
increasedtoRMB438,744,881.00andtheequitycapitaloftheCompanyheldbyChinaNationalAviationGroup
reducedto37.15%.
Asat31December2018,theCompanyhasaccumulativelyissued438,744,881sharesintotal(refertoNotesVI.
25“Sharecapital”fordetail).
CorporategovernanceinstitutionsthatwereestablishedbytheCompanyincludeGeneralMeetingof
Shareholders,BoardofDirectors,BoardofSupervisors,StrategyCommittee,AuditCommittee,andNomination,
RemunerationandEvaluationCommittee.TheCompany’sfunctionaldepartmentsincludeAdministration,Party
Affairs,DisciplineInspectionandAudit,Finance,HumanResources,StrategyandOperating,Dataand
Information,InnovativeDesignCenter,R&D,andPropertyManagementdepartments.
ThefinancialstatementshavebeenapprovedandauthorisedforissuebytheBoardofDirectorsoftheCompany
on13March2019.
Thereare11subsidiariesthatareincludedintheCompany’sscopeofconsolidationforyear2018,seeNoteVIII
“Equityinotherentities”fordetail.Comparingwithprioryear,thestatusofchangesinscopeofconsolidationis:
zeroadditionandonedecrease.SeeNoteVII“Changesinscopeofconsolidation”fordetail.
ThebusinessscopeoftheCompanyanditssubsidiariesmainlyincludes:producingandsellingofanalogue
indicationmechanicalwatches,quartzwatchesanditsmovements,components,varioustimingdevices,
processingandwholesalingkaratgoldjewellerywatches,intelligentwatches;domesticcommercialandmaterial
supplyanddistributingbusiness(excludinggoodsunderexclusiveoperationalrights,specialcontroland
exclusivesales);propertymanagementandleasing;providingdesignservice.Importandexportbusinessof
self-designandconstruction;importandexportbusiness(accordingtoShenMaoGuanDengZhengZi
No.2007-072).ThelegalrepresentativeoftheCompanyisHuangYongfeng.
II.Basisofpreparation
ThefinancialstatementsoftheCompanyhavebeenpreparedbasedongoingconcernassumptionandbasedon
actualtransactionsandeventsoccurred.Itispreparedinaccordancewiththerequirementsof“Accounting
StandardsforBusinessEnterprises-BasicStandard”(promulgatedunderDecreeNo.33oftheMinistryof
FinanceandrevisedunderDecreeNo.76oftheMinistryofFinance)and42SpecificStandardsissuedand
revisedbytheMinistryofFinanceonandafter15February2006,andapplicationguidance,illustrationstothe
standardsandrelatedpronouncements(collectivelyknownas“AccountingStandardsforBusinessEnterprises”
or“CAS”).Thesefinancialstatementsalsocomplywiththedisclosurerequirementsof“Regulationonthe
PreparationofInformationDisclosuresofCompaniesIssuingPublicShares,No.15:GeneralRequirementsfor
FinancialReports”(revisedin2014)issuedbyChinaSecuritiesRegulatoryCommission(CSRC).
AccordingtoAccountingStandardsforBusinessEnterprises,accrualbasisisadoptedfortheCompany’s
accountingactivity.Exceptforsomefinancialinstruments,thefinancialstatementsaremeasuredusinghistorical
cost.Incaseofimpairmentoccurredonassets,provisionsforimpairmentareprovidedforinaccordancewith
relatedrules.
III.Statementofcompliancewithcorporateaccountingstandards
ThefinancialstatementsoftheCompanyhavebeenpreparedinaccordancewiththerequirementsofAccounting
StandardsforBusinessEnterprises.Thesefinancialstatementspresenttrulyandcompletelythefinancialposition
asat31December2018,theresultsofoperationsandthecashflowsfortheyearthenendedoftheCompany.In
addition,thefinancialstatementsoftheCompanycomplywith,inallmaterialrespects,thedisclosure
requirementsforfinancialstatementsandnotestothefinancialstatementsunder“RegulationonthePreparation
ofInformationDisclosuresofCompaniesIssuingPublicShares,No.15:GeneralRequirementsforFinancial
Reports”asrevisedbyCSRCin2014.
IV.Significantaccountingpoliciesandestimates
TheCompanyandeachsubsidiariesdeterminesspecificaccountingpoliciesandestimatesforrevenue
recognition,depreciationoffixedasset,amortizationofintangibleassetsandR&Dexpensesaccordingtothe
characteristicsoftheirproductionandoperationandbasedonCAS.RefertoNotesIV.24“Revenue”,NoteIV15
“FixedAsset”,NoteIV18(1)“IntangibleAsset”andNoteIV18(2)“R&DExpenses”fordetail.Forexplanationof
significantaccountingjudgementandestimatemadebythemanagement,refertoNoteIV30“Significant
accountingjudgementandestimate”fordetail.
1.Accountingperiod
TheaccountingperiodoftheCompanyincludesaccountingyearandinterimaccountingperiod.Aninterimperiod
referstoareportingperiodwhichisshorterthanafullaccountingyear.TheaccountingyearoftheCompanyisthe
calendaryear,i.e.from1Januaryto31Decemberofeachyear.
2.Operatingcycle
Normaloperatingcyclerefertotheperiodstartfrompurchasingassetformanufacturinguntilrealizationofcashor
cashequivalent.TheoperatingcycleoftheCompanyis12months,whichisthebasisfordistinguishingliquidityof
assetsandliabilities.
3.Recordingcurrency
Renminbi(RMB)isthefunctionalcurrencyofthemaineconomicenvironmentinwhichtheCompanyandits
domesticsubsidiariesoperate.TheCompanyanditsdomesticsubsidiariesadoptRenminbiastherecording
currency.
ExceptfortheSwiss-basedsubsidiaryMontresChourietSA(the“SwissCompany”),whichisasubsidiaryof
FIYTA(HongKong)Limited(FIYTAHongKong),usesSwissFrancastherecordingcurrencyaccordingtothe
maineconomicenvironmentwheretheSwissCompanyoperated,allothersubsidiariesoutsidethemainland
China,includingFIYTAHongKonganditssubsidiaryStation68Limited(Station68)useHongKongDollar(HKD)
astherecordingcurrencyandtranslatetoRenminbiwhenpreparingfinancialstatements.
ThecurrencyusedinpreparingtheCompany’sfinancialstatementsisRenminbi.
4.Accountingtreatmentforbusinesscombinationsinvolvingentitiesundercommoncontrolandnot
undercommoncontrol
Businesscombinationreferstotransactionsoreventsthatcombinetwoormoreseparateenterprisesandform
onereportingentity.Businesscombinationsareclassifiedintobusinesscombinationsinvolvingenterprisesunder
commoncontrolandbusinesscombinationsinvolvingenterprisesnotundercommoncontrol.
(1)Businesscombinationinvolvingentitiesundercommoncontrol
Iftheenterprisesinvolvedinacombinationaresubjecttocontrolofthesamepartyorpartiesbothbeforeandafter
thecombination,andthatcontrolisnottemporaryinnature,itisbusinesscombinationundercommoncontrol.
Thepartywhoobtainscontroloverotherparticipatingenterprisesonthecombinationdateisthecombiningparty,
andtheotherparticipatingenterprisesarecombinedpartiesinabusinesscombinationundercommoncontrol.
Combinationdatemeansthedateonwhichthecombiningpartyactuallyobtainscontroloverthecombined
parties.
Assetsandliabilitiesthatthecombiningpartyobtainedaremeasuredusingbookvalueofthecombinedparty’s
accountsoncombinationdate.Differencebetweenbookvalueofnetassetsthecombiningpartyobtainedand
bookvalueofcombinationconsiderationpaid(ortheaggregatenominalamountofsharesissued)isrecognized
incapitalreserve(sharepremium).Ifthecapitalreserve(sharepremium)isinsufficienttooffset,retained
earningswillbeadjustedaccordingly.
Alldirectexpensesincurredbytheacquirerinrelationtothecombinationareincludedinthecurrentprofitorloss
atthetimesuchexpensesincurred.
(2)Businesscombinationsinvolvingentitiesnotundercommoncontrol
Iftheenterprisesinvolvedinacombinationarenotsubjecttocontrolofthesamepartyorpartiesbothbeforeand
afterthecombination,itisthebusinesscombinationinvolvingentitiesnotundercommoncontrol.Thepartywho
obtainscontrolovertheotherparticipatingenterprisesonacquisitiondateistheacquirer,andtheother
participatingenterprisesaretheacquireeinabusinesscombinationnotundercommoncontrol.Theacquisition
dateisthedateonwhichtheacquireractuallyobtainsthecontrolovertheacquirees.
Asforbusinesscombinationsinvolvingenterprisesnotundercommoncontrol,combinationcostincludesassets
paid,liabilitiesincurredorassumed,andthefairvalueofequitysecuritiesissuedbytheacquirertoobtaincontrol
overtheacquireeontheacquisitiondate.Feesforauditing,legalservice,evaluationandconsultation,andother
administrativeexpensesincurredforthecombinationarerecognizedinprofitorlossintheperiodinwhichsuch
expensesincurred.Transactioncostsincurredbytheacquirerforissuingequitysecuritiesordebtsecuritiesas
combinationconsiderationarerecognizedininitialrecognitionamountofequitysecuritiesordebtsecurities.
Contingentconsideration,ifany,isincludedinacquisitioncostatitsfairvalueontheacquisitiondate.If,within12
months,neworfurtherevidencerevealedregardingconditionsthatalreadyexistedonacquisitiondate,the
contingentconsiderationrequiredtobeadjusted,adjustingthegoodwillarisingfromtheacquisitionaccordingly.
Foracquisitionthatrealizedstepbystepthroughmultipletransfertransactions,theequityoftheacquireeheldby
theacquirerbeforetheacquisitiondatearere-measuredusingfairvalueontheacquisitiondate.Anydifference
betweenthefairvalueanditscarryingamountisrecognizedasinvestmentincomeandtransferother
comprehensiveincomerelatedtothispartofequitytoinvestmentgainintheperiodwheretheacquisitiondate
falls.Theacquisitioncostistheaggregateoffairvalueofacquiree’sequityheldbytheacquirerbeforethe
acquisitiondateandfairvalueofadditionalequityacquiredontheacquisitiondate.
Acquisitioncostincurredbytheacquirerandidentifiablenetassetsacquiredintheacquisitionaremeasuredat
fairvalueontheacquisitiondate.Iftheacquisitioncostisgreaterthanthefairvalueofthepartofidentifiablenet
assetsacquiredontheacquisitiondate,thedifferenceisrecognizedasgoodwill.Iftheacquisitioncostislesser
thanthefairvalueofthepartofidentifiablenetassetsacquiredontheacquisitiondate,reviewthefairvalueof
eachidentifiableasset,liabilityandcontingentliabilitythatacquiredandthecalculationofacquisitioncost.If,after
thereview,theacquisitioncostisstilllesserthanthefairvalueofthepartofidentifiablenetassetsacquired,the
differenceisrecognizedinprofitorlossincorrespondingperiod.
Deductibletemporarydifferencesthattheacquirerobtainedfromtheacquiree,whicharenotrecognizedon
acquisitiondateduetotheconditionsofrecognitionasdeferredtaxassetsarenotfulfilled,arerecognizedas
deferredtaxassetsandcorrespondinglydeductgoodwillifneworfurtherevidenceshows,within12monthsafter
theacquisitiondate,thatrelevantconditionsexistontheacquisitiondateanditisprobablethattheeconomic
benefitarisingfromthedeductibletemporarydifferencesonacquisitiondatecanberealized.Ifthegoodwillis
insufficienttothededuction,theexcesspartisrecognizedinprofitorlossincorrespondingperiod.Deferredtax
assetsrecognizedinrelationtoacquisitionthatotherthanthecircumstancesmentionedabovearerecognizedin
profitorlossincorrespondingperiod.
Forbusinesscombinationinvolvingentitiesnotundercommoncontrolthatachievedinstagesthatinvolves
multipletransactions,judgementofwhetheratransactionbelongsto“abaskettransaction”requirestobecarried
outinaccordancewiththe“NoticeoftheMinistryofFinanceonCirculatingtheFifthInterpretationtoAccounting
StandardsforBusinessEnterprise”(CaiKuai(2012)No.19)andcriteriaof“abaskettransaction”statedinclause
51of“AccountingStandardsforBusinessEnterpriseNo.33–FinancialStatementsConsolidation”(seeNoteIV5
(2)fordetail).Ifitis“abaskettransaction”,theaccountingtreatmentshallbereferredtodescriptionsinabove
paragraphsandNoteIV13“Long-termequityinvestment”.Ifitisn’t“abaskettransaction”,theaccounting
treatmentshallbedifferentiatedforindividualandconsolidatedfinancialstatements.
Intheindividualfinancialstatements,theinitialinvestmentcostisthesumofthecarryingamountofequity
investmentoftheacquireeheldpriortotheacquisitiondateandtheadditionalinvestmentcostattheacquisition
date.Whendisposinganequityheldpriortheacquisitiondatethatinvolvingothercomprehensiveincome,the
othercomprehensiveincomeshallbeaccountedforonthesamebasisaswouldhavebeenrequiredifthe
investeehaddirectlydisposedoftherelatedassetsorliabilities(i.e.exceptfortheportionresultedfromchanges
inre-measuringtheacquiree’snetliabilityornetassetofadefinedbenefitplanaccordingtoequitymethod
accounting,therestshallberecordedincurrentperiodinvestmentgain).
Intheconsolidatedfinancialstatements,thecostofequityinvestmentoftheacquireeheldpriortotheacquisition
dateisre-measuredatthefairvalueontheacquisitiondate,thedifferencebetweenthefairvalueandcarrying
valueisrecognizedasinvestmentgainforthecurrentperiod.
Foranequityheldpriortheacquisitiondatethatinvolvingothercomprehensiveincome,theothercomprehensive
incomeshallbeaccountedforonthesamebasisaswouldhavebeenrequirediftheinvesteehaddirectly
disposedoftherelatedassetsorliabilities(i.e.exceptfortheportionresultedfromchangesinre-measuringthe
acquiree’snetliabilityornetassetofadefinedbenefitplanaccordingtoequitymethodaccounting,therestshall
berecordedincurrentperiodinvestmentgain).
5.Methodofpreparingconsolidatedfinancialstatements
(1)Principlesindeterminingthescopeoftheconsolidation
Thescopeofconsolidationisdeterminedonthebasisofcontrol.ControlreferstotherightthattheCompanyis
abletomakedecisiononfinancialandoperationalpoliciesoftheinvestedcompany,andreceivingbenefitsfrom
thebusinessactivitiesconductedbytheinvestedcompany.ThescopeoftheconsolidationincludestheCompany
andallitssubsidiaries.SubsidiarymeansenterpriseorentitythatiscontrolledbytheCompany.
TheCompanywillre-evaluatethescopeofconsolidationoncerelatedfactsandsituationchanges,whichinturn
resultsinchangestokeyfactorsthatdefinecontrol.
(2)Methodofpreparingconsolidatedfinancialstatements
TheGroupbeginstoincludeasubsidiaryinthescopeofconsolidationfromthedatethattheCompanyacquires
thenetassetsandeffectivecontrolovertheoperationandbusinessdecisionsofthesubsidiary.Asubsidiaryis
excludedoutofthescopeoftheGroup’sconsolidationfromthedatetheCompanylosseseffectivecontroloverit.
Forsubsidiarythatisdisposed,theoperatingperformanceandcashflowsbeforethedisposaldateareproperly
includedintheconsolidatedincomestatementandconsolidatedcashflowstatement.Theopeningbalanceofthe
consolidatedbalancesheetisnotadjustedifthedisposaloccursinthesameperiod.Thebusinessperformance
andcashflowsoftheadditionofsubsidiarythroughcombinationinvolvingentitiesnotundercommoncontrolafter
theacquisitiondatehavebeenproperlyincludedintheconsolidatedincomestatementandconsolidatedcash
flowstatement,andnoadjustmentsaremadetotheopeningbalanceandcomparativefiguresoftheconsolidated
financialstatements.Foradditionofsubsidiarythroughcombinationinvolvingentitiesundercommon
control,thebusinessperformanceandcashflowsfromthebeginningoftheperiodtothecombinationdateare
properlyincludedintheconsolidatedincomestatementandconsolidatedcashflowstatement,andtheopening
andcomparativefiguresoftheconsolidatedfinancialstatementsareadjustedatthesametime.
IftheaccountingpoliciesoraccountingperiodadoptedbythesubsidiaryarenotinlinewiththeCompany,
necessaryadjustmentsaremadetothefinancialstatementsofthesubsidiaryaccordingtotheCompany’s
accountingpoliciesandperiodwhenpreparingconsolidatedfinancialstatements.Ifthesubsidiaryisacquired
throughcombinationsinvolvingentitiesnotundercommoncontrol,theadjustmentsaremadebasedonthefair
valueofitsidentifiablenetassetsontheacquisitiondate.
Allmaterialintra-groupcurrentaccountbalances,transactionsandunrealizedprofitsareoffsetwhenpreparing
theconsolidatedfinancialstatements.
Thepartofsubsidiaryshareholders’equityandcurrentperiodnetprofitorlossthatdonotattributetothe
Companyarepresentedseparatelyundershareholders’equityandnetprofitinconsolidatedfinancialstatements
asminorityshareholders’equityandminorityshareholders’profitorlossrespectively.Portionofsubsidiaries’
currentnetprofitorlossattributabletominorityshareholder’sequityarepresentedunderthetitleof“minority
shareholders’profitorloss”undernetprofitinconsolidatedincomestatement.Ifsubsidiary’slossesthat
attributabletominorityshareholdersexceedtheopeningowners’equityattributabletominorityshareholders,
minorityshareholders’equityisdeducted.
IftheCompanylossescontroloverasubsidiaryduetopartialdisposalofequityinvestmentorotherreasons,the
remainingequityismeasuredatfairvalueonthedatewhenthecontrollost.Thedifferencebetweenthesumof
considerationreceivedfordisposalofequityinterestandthefairvalueofremainingequityinterestlessthenet
assetsattributabletotheCompanycalculatedcontinuouslysincethepurchasedatebasedonshareholding
percentagebeforedisposalarerecognizedininvestmentgainintheperiodwhenthecontrollost.Other
comprehensiveincomerelatedtoequityinvestmentinthesubsidiaryistransferredtoinvestmentgainatthetime
controllost.Theremainingequityinterestsaremeasuredsubsequentlyaccordingto“CASNo.2–Long-term
EquityInvestment”or“CASNo.22–RecognitionandmeasurementofFinancialInstrument”.SeeNoteIV.9
“Financialinstrument”orNoteIV.13“Long-termequityinvestment”fordetails.
IftheCompanylossescontroloverasubsidiarystepbystepthroughmultipledisposaltransactions,judgmentof
whetherthesetransactionsbelongto“abaskettransaction”.It’stypicallyconsideredtoaccountthemultiple
transactionas“abaskettransaction”iftheterms,conditionsoreconomiceffectsofeachofthetransactionsmeet
oneormorecriterialistbelow:
a.Thetransactionsareenteredintoatthesametimeorincontemplationofeachother;
b.Thetransactionstogethercanachieveacompletecommercialeffect;
c.Theoccurrenceofonetransactionisdependentontheoccurrenceofatleastoneothertransaction;
d.Onetransactionisnoteconomicallyjustified,butitiseconomicallyjustifiedwhenconsideredtogetherwith
othertransactions.
Ifthetransactionsdonotbelongtoabaskettransaction,eachtransactionsshallbeaccountedforasadisposal
transactionthatdoesnotresultedinlossofcontrol(refertoNoteIV.13(2)④fordetail)andapplicableprinciple
oflossofcontroloverasubsidiarybecauseofpartialdisposalofequityinvestmentorotherreason(referto
previousparagraph).However,thedifferencebetweeneachconsiderationreceivedfordisposalandportionofnet
assetrelatedtothedisposalshallbeaccountedasothercomprehensiveincomeinconsolidatedfinancial
statementandchargedtoprofitorlossatthetimecontrollossesandintheperiodoflossofcontrol.
6.Categorizingofjointarrangementandaccountingtreatmentforjointoperation
Ajointarrangementisanarrangementofwhichtwoormorepartieshavejointcontrol.TheCompanyclassifies
jointarrangementsintojointoperationsandjointventures.Ajointoperationisajointarrangementwherebythe
jointoperatorshaverightstotheassets,andobligationsfortheliabilities,relatingtothearrangement.Ajoint
ventureisajointarrangementwherebythejointventureshaverightstothenetassetsofthearrangement.
TheCompanyadoptsequitymethodtojointventureinvestmentandaccountedforinaccordancewithaccounting
policiesstatedinNoteIV13(2)②“Long-terminvestmentaccountedforusingequitymethod”.
Asapartyinajointoperation,theCompanyrecognizethefollowings:assetheldindependently;liability
undertakenindependently;theCompany’sshareofassetheldcommonlyandliabilityundertakencommonly;
revenuefromsellingoutputofthejointoperationthatenjoyedbytheCompany;revenuefromsellingoutputofthe
jointoperationbasedontheCompany’sshare;expensesincurredindependentlybytheCompanyandcommon
expensesincurredandshallbebornebytheCompanyaccordingtoitsshares.
WhentheCompany,asapartyinajointoperation,investorsellasset(theassetdoesnotconstitutebusiness)to
thejointoperationorpurchaseassetfromthejointoperation,theCompanyonlyrecognizetheportionofprofitor
lossthatattributetootherpartiesinthejointoperationarisesfromthetransactionbeforetheassetissoldtothird
party.Iftheassetimpairedaccordingto“CASNo.8–Assetimpairment”,theCompanyrecognizethelossinfullif
theassetisinvestedorsoldtothejointoperationbytheCompany,oronlyrecognizetheportionattributabletothe
CompanyshouldberecognizediftheassetispurchasedbytheCompanyfromthejointoperation.
7.Determinationofcashandcashequivalents
TheCompany'scashandcashequivalentsincludecashonhand,depositthatcanbeusedforimmediate
payment,andCompany’sinvestmentsthatarewithcharacteristicsofshortterm(generallymaturesinthree
monthsfromthedateofpurchase),highlyliquid,readilyconvertibletoknownamountofcash,andwith
insignificantrisksofchangesinvalue.
8.Foreigncurrencytransactionsandfinancialstatementstranslation
(1)Translationofforeigncurrencytransactions
InitialrecognitionofforeigncurrencytransactionsincurredbytheCompanyaretranslatedtorecordingcurrency
usingthespotexchangerateatthetradingdate(usuallyreferstomiddlerateofforeignexchangerateonthatday
publishedbythePeople'sBankofChina).Forforeigncurrencyexchangetransactionsandtransactionsrelatedto
foreigncurrencyexchange,theyaretranslatedintorecordingcurrencyusingactualexchangerate.
(2)Translationofmonetaryitemsandnon-monetaryitemsdenominatedinforeigncurrencies
Atthebalancesheetdate,monetaryitemsdenominatedinforeigncurrenciesaretranslatedusingthespotrateat
thebalancesheetdate.Translationdifferencesarisingfromthetranslationarerecognizedincurrentprofitorloss
exceptfor:①Capitalizedexchangedifferenceattributabletoassetspurchasedorconstructed,whichcanbe
capitalized,usingforeigncurrencyspecifiedloan;②Exchangedifferencesonhedginginstrumentsusedfor
effectivehedgingofnetinvestmentsinoverseasoperations(thedifferenceisincludedinothercomprehensive
incomeuntilthenetinvestmentisdisposedoftoberecognizedascurrentgainsandlosses;③Amortizedcostof
availableforsalemonetaryitemsdenominatedinforeigncurrency.Theexchangedifferencearosefromthetwo
scenariomentionedaboveshallbetreatedundertheprincipalofcapitalizingofborrowingcostandchargedto
othercomprehensiveincomerespectively.
Inpreparingoftheconsolidatedfinancialstatementsinvolvingoverseasoperations,ifthereisany
foreign-currencymonetaryitemconstitutingsubstantiallynetinvestmentinoverseasoperation,theexchange
differencearisingfromexchangeratevariationisrecognizedinothercomprehensiveincomeandwillbecharged
toprofitorlossattheperiodtheinvestmentisdisposed.
Non-monetaryitemsdenominatedinforeigncurrenciesthataremeasuredusinghistoricalcostsarestill
measuredusingrecordingcurrencytranslatedatthespotrateattransactiondate.Non-monetaryitems
denominatedinforeigncurrencywhicharemeasuredusingfairvaluearetranslatedatspotrateofthedaythefair
valueisdetermined.Thedifferencesbetweenamountofrecordingcurrencyafterthetranslationandtheoriginal
amountofrecordingcurrencyaretreatedaschangesinfairvalue(includingexchangeratechange)andare
recognizedincurrentprofitorlossorrecognizedincapitalreservesasothercomprehensiveincome.
(3)Translationoffinancialstatementspreparedinforeigncurrencies
Inpreparingoftheconsolidatedfinancialstatementsinvolvingoverseasoperations,ifthereisany
foreign-currencymonetaryitemconstitutingsubstantiallynetinvestmentinoverseasoperation,theexchange
differencearisingfromexchangeratevariationisrecognizedas“translationdifference”underowners’equityin
balancesheet.Incaseofdisposalofoverseasoperation,itischargedtotheprofitandlossoftheperiod.
Financialstatementsofforeignbusinessesthatdenominatedinforeigncurrenciesaretranslatedtofinancial
statementsinRMBusingfollowingrules:assetandliabilityitemsinbalancesheetaretranslatedusingthespot
rateonbalancesheetdate;exceptfor“undistributedprofit”,allotheritemsinowners’equityaretranslatedusing
thespotrateonthedatethecorrespondingtransactionsoccurred.Revenueandexpensesitemsinincome
statementaretranslatedusingtheaveragerateonthetransactiondate.Theundistributedprofitatthebeginning
oftheyearistheyear-endbalancetranslatedattheprioryear.Theundistributedprofitattheyear-endis
presentedusingtranslateditemsinprofitdistribution.Differencebetweenthetranslatedassetsandsumof
liabilitiesandowners’equityisrecognizedinothercomprehensiveincomeastranslationdifferencesandis
presentedseparatelyunderowners’equityinbalancesheet.Whendisposingoverseasoperationsandlosing
controlsovertheoperations,relevanttranslationdifferenceswhichareoriginallypresentedunderowners’equity
arechargedtoprofitorlossentirelyorproportionatelyaccordingtopercentageofdisposal.
CashflowsdenominatedinforeigncurrencyandcashflowsofsubsidiariesoutsideMainlandChinaaretranslated
usingtheaverageexchangerateonthedatewhencashflowsoccur.Theamountofcashchangesdueto
exchangeratevariationsarerecognizedasadjustmentitemandpresentedinthecashflowstatementseparately.
Thebalanceatthebeginningoftheyearandamountactuallyincurredprioryeararepresentedusingfiguresin
prioryear’stranslatedfinancialstatements.
Allforeignexchangetranslationdifferenceofanoverseainvestmentrecordedunderequityandattributabletothe
shareholdersoftheparentcompanyshallbechargedtocurrentperiodprofitorlosswhentheCompanylosses
controloverthisoverseainvestmentduetodisposalofallequityownedorpartialdisposalorotherreasons.
Iftheequityholdinginanoverseainvestmentdecreasedbutstillmaintaincontrolduetopartialdisposalorother
reasons,foreignexchangetranslationdifferencerelatedtothepartdisposedshallbeincludedasminority
shareholders’interestandshouldnotbechargedtocurrentperiodprofitorloss.Ifthepartialdisposalisfor
overseaassociateorjointventuredenterprise,foreignexchangedifferencerelatedtotheoverseaoperationshall
bechargedtoprofitorlosswhenthedisposaloccurredbasedonthepercentagedisposed.
9.Financialinstruments
AfinancialassetorfinancialliabilityisrecognizedwhentheCompanybecomesonepartyoffinancialinstrument
contracts.Financialassetandfinancialliabilityareinitiallyrecognizedatfairvalue.Transactionexpensesforfair
valuethroughprofitorlossfinancialassetandliabilityshallbechargedtotheprofitorlossdirectly.Transaction
expensesforfinancialassetandliabilityotherthanthatshallbeincludedintheinitialrecognitionamount.
(1)Determinationoffairvaluesforfinancialassetsandfinancialliabilities
Fairvalueistheamountforwhichanassetcouldbeexchanged,oraliabilitysettled,betweenknowledgeable,
willingpartiesinanarm’slengthtransaction.Ifthereisanactivemarketforafinancialinstrument,thequotedprice
intheactivemarketshallbeusedtoestablishthefairvalueofthefinancialinstruments.Quotedpricesfroman
activemarketarepricesthatarereadilyandregularlyavailablefromanexchange,broker,industryassociationor
pricingserviceagencyetc…andrepresentpricesusedinactualmarkettransactionsonanarm’slengthbasis.If
noactivemarketexistsforafinancialinstrument,theGroupestablishesfairvaluesbyusingvaluationtechniques.
Valuationtechniquesincludeusingthepricesquotedinlatestmarkettransactionsbetweenknowledgeable,willing
partiesforreference,referencingtothecurrentfairvalueofanotherinstrumentthatissubstantiallythesamein
nature,discountedcashflowmethodandoptionpricingmodel,etc...
(2)Classification,recognitionandmeasurementoffinancialassets
Financialassetswhicharetradedinconventionalmannerarerecognizedorderecognizedonthetransactiondate.
Oninitialrecognition,financialassetsareclassifiedintofairvaluethroughprofitorlossfinancialassets,
held-to-maturityfinancialassets,loansandreceivables,andavailable-for-salefinancialassets.
Fairvaluethroughprofitorlossfinancialasset
Fairvaluethroughprofitorlossfinancialassetincludesfinancialassetheldfortradeanddesignateduponinitial
recognitionasatfairvaluethroughprofitorloss.
Financialassetmeetoneofthefollowingcriteriaiscategorizedasfinancialassetheldfortrade:A.thepurposeof
acquiringthefinancialassetisforsellinginshort-term;B.belongstoidentifiablefinancialinstrumentportfoliothat
iscentralizedmanagedandobjectiveevidenceproofedthattheCompanymanagestheportfolioinamannerto
makeprofitinshort-term;C.belongstoderivativeinstrumentexceptforderivativeinstrumentsthataredesignated
aseffectivehedgingtools,financialguaranteecontractorconnectedwithequityinstrumentinvestmentthatdonot
havequotationinanactivemarketandthatthefairvaluecannotbemeasuredreliablyandthesettlementof
derivativeinstrumentmustinvolvedeliveryofthisequityinstrument.
Financialassetcanberecognizedinitiallyasdesignatedfairvaluethroughprofitorlossfinancialassetifoneof
thefollowingconditionsismet:A.thedesignationcaneliminateorreducesignificantlythesituationof
inconsistencyinrecognitionormeasurementofprofitorlosscausedbydifferentmeasurementbasis;B.the
officialdocumentsoftheCompany’sriskmanagementorinvestmentstrategystatethatthefinancialasset
portfolioorportfoliocombinesfinancialassetandfinancialliabilitythatcontainsthefinancialassetaremanaged,
evaluatedandreportedtokeymanagementbasedonfairvalue.
Fairvaluethroughprofitorlossfinancialassetismeasuredconsequentlyusingfairvalue.Profitorlossarosefrom
changesinfairvalueanddividendandinterestincomerelatedtotheassetarerecordedincurrentperiodprofitor
loss.
Held-to-maturityinvestment
Held-to-maturityinvestmentsarenon-derivativefinancialassetswithfixedordeterminablepaymentsandfixed
maturitydatesthattheCompanyhasthepositiveintentionandabilitytoholdtomaturity.
Held-to-maturityinvestmentsaresubsequentlymeasuredatamortizedcostusingtheeffectiveinterestmethod;
gainsandlossesarisingfromde-recognition,impairmentoramortizationisrecognizedinprofitorlossforthe
currentperiod.
Effectiveinterestratemethodreferstothemethodthatcalculatesamortizedcostandinterestincomeorexpenses
foreachperiodbasedonactualinterestrateofafinancialassetorfinancialliability(oragroupoffinancialasset
orfinancialliability).Effectiveinterestrateistheratethatusedtodiscountfuturecashflowsofafinancialassetor
financialliabilityinitsholdingperiodorashortertimeapplicabletoitscurrentbookvalue.
Whencalculatingeffectiveinterest,theCompanyestimatesfuturecashflows(donotconsiderfuturecreditloss)
basedonallcontractualtermsofthefinancialassetorfinancialliability,andtakingintoconsiderationofexpenses,
transactionfeeanddiscountorpremium,whichconsistpartoftheactualinterestrate,thatarepaidtoorreceived
fromdifferentpartiesofthefinancialassetorfinancialliabilitycontract.
③Loanandreceivables
Loanandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquoted
inanactivemarket.TheCompany’sassetsfallunderthiscategoryincludenotesreceivable,accountsreceivable,
interestreceivable,dividendsreceivableandotherreceivablesetc…
Loanandreceivablesaresubsequentlymeasuredatamortizedcostusingtheeffectiveinterestmethod;gains
andlossesarisingfromde-recognition,impairmentoramortizationisrecognizedinprofitorlossforthecurrent
period.
④Available-for-salefinancialasset(AFSfinancialasset)
AFSfinancialassetsarethosenon-derivativefinancialassetsthataredesignatedasavailableforsaleandthose
financialassetsinadditiontothoseabovementioned.
ThecostofAFSdebtinstrumentinvestmentatperiodendisdeterminedaccordingtoamortizedcost,i.e.theinitial
recognizedamountminusprincipalrepaidplusorminustheaccumulatedamortizationofdifferencebetween
initialrecognizedamountandamountatthematuritydate,andminusimpairmentlossincurred.ThecostofAFS
equityinstrumentatperiodendistheinitialcostwhenitisacquired.
AFSfinancialassetsaresubsequentlymeasuredatfairvalue.Gainandlossesarisingfromchangesinfairvalue
ofAFSfinancialassets(otherthanimpairmentlossesandforeignexchangegainsandlossesresultedfrom
foreigncurrencymonetaryassetswhicharerecognizedinprofitorlossforthecurrentperiod)arerecognizedas
othercomprehensiveincome,untilthefinancialassetsarederecognized,aretransferredtoprofitorlossforthe
currentperiod.Equityinstrumentinvestmentwithnoquotedpriceinactivemarketsandwithnotreliablymeasured
fairvalue,andderivativefinancialassetsfortheequityinstrumentandsettledbypayingtheequityinstrumentare
subsequentlymeasuredatcost.
InterestincomeanddividendsrelatedtotheAFSfinancialassetsarerecognizedasinvestmentgainforthe
currentperiod.
(3)Impairmentoffinancialassets
TheCompanyassessesthecarryingamountoffinancialassetsateachbalancesheetdateotherthanthoseat
fairvaluethroughprofitorloss,ifthereisobjectiveevidencethatfinancialassetsareimpaired,theCompany
determinestheamountofimpairmentloss.
TheCompanyconductsimpairmenttestonindividuallysignificantfinancialassetsseparately.Financialassets
thatarenotindividuallysignificantinamountaretestedforimpairmentseparatelyorgroupedintodifferentasset
portfoliosbasedonsimilarityandcorrelationofthecreditriskcharacteristics.Financialassetsthatarenot
impairedafterstandaloneimpairmenttestswillbetestedagainbyincludingitinaportfoliooffinancialassetswith
similarcreditriskcharacteristics.Financialassetsthathavebeenimpairedinstandalonetestwillnotbetested
againbyincludingitinaportfoliooffinancialassetswithsimilarcreditriskcharacteristics.
①Impairmenttoheld-to-maturity,loanandreceivables
Thecarryingamountoffinancialassetsthataremeasuredatcostoramortizedcostshallbereducedtothe
presentvalueofestimatedfuturecashflows.Theamountreducedshallberecognizedasimpairmentlossand
chargedtocurrentperiodprofitorloss.Ifthereisobjectiveevidenceshowsthatthevalueofthefinancialasset
recoveredafterimpairmentlosswasrecognized,andtherecoveryisconnectedwithmattershappenedafterthe
recognitionofimpairmentloss,thelossrecognizedpreviouslycouldbereversed.Thecarryingamountafterthe
reversalshallnotexceedtheamortizedcostatthereversaldateasifthereisnoimpairmentbefore.
②Available-for-salefinancialassets
ItindicatedthatimpairmentincurredtotheAFSfinancialassetiftheairvaluedecreaseisjudgedassevereand
nottemporarybyconsideringallrelevantfactors.
IfAFSfinancialassetsareimpaired,accumulatedlossesduetodecreasesinfairvaluepreviouslyrecognized
directlyinothercomprehensiveincomearereversedandchargedtoprofitorlossforthecurrentperiod.The
reversedaccumulatedlossesaretheasset'sinitialacquisitioncostsafterdeductingamountsrecoveredand
amortized,currentfairvalueandimpairmentlossespreviouslyrecognizedinprofitorloss.
If,inasubsequentperiod,thefairvalueoffinancialassetsincreasesandtheincreasecanberelatedobjectively
toaneventoccurringaftertheimpairmentwasrecognized,thepreviouslyrecognizedimpairmentlossescanbe
reversed.ThereversalofimpairmentlossesofAFSequityinstrumentsaretobeincludedinothercomprehensive
incomeandtheAFSdebtinstrumentimpairmentsaretobereversedthroughcurrentperiodprofitorloss.
Theimpairmentforderivativefinancialassetthatdonothavequotationinanactivemarketandthatthefairvalue
cannotbemeasuredreliablyandthesettlementofderivativeinstrumentmustinvolvedeliveryofthisequity
instrumentarenotallowedtobereversed.
(4)Conditionofrecognitionandmeasurementoftransferoffinancialassets
Financialassetisderecognizedifoneofthefollowingconditionsissatisfied:①thecontractualrightsofreceiving
cashflowsfromthefinancialassetisterminated;②financialassethasbeentransferred,andsubstantiallyall
risksandrewardassociatedwiththeownershipofthefinancialassethavebeentransferredtotransferee;③the
financialassethasbeentransferred.Theenterpriseneithertransfersnorretainssubstantiallyalltherisksand
rewardsassociatedwiththeownershipofthefinancialasset,butithasnotretainedcontroloverthefinancial
asset.
Iftheenterpriseneithertransfersnorretainssubstantiallyalltherisksandrewardsassociatedwiththeownership
ofafinancialasset,anditretainscontroloverthefinancialasset,itrecognizesthefinancialassettotheextentof
itscontinuinginvolvementinthetransferredfinancialassetandrecognizingassociatedliability.Theextentof
continuinginvolvementinthetransferredassetistheextenttowhichtheenterpriseisexposedtorisksofchanges
inthevalueofthetransferredasset.
Foranentiretransferofafinancialassetthatsatisfiesthede-recognitioncriteria,thedifferencebetweenthe
carryingamountofthefinancialassettransferredandthesumoftheconsiderationreceivedfromthetransferand
anycumulativegainorlossthathadbeenrecognizedinothercomprehensiveincomeisrecognizedincurrent
profitorloss.
Ifapartofthetransferredfinancialassetqualifiesforde-recognition,thecarryingamountofthetransferred
financialassetinitsentiretyshallbeallocatedbetweenthepartthatisderecognizedandtheremainingportion
proportionatelybasedontherelativefairvalueofeachpart.Thedifferencebetweenthecarryingamount
allocatedtothepartderecognizedandthesumoftheconsiderationreceivedforthepartderecognizedandany
cumulativegainorlossattributabletoitthathadbeenrecognizedinothercomprehensiveincomeisrecognizedin
currentprofitorloss.
Forfinancialassetsoldwithrecourseorendorsed,itneedstoassurethatalmostallriskandrewardsassociated
withthefinancialassethavebeentransferred.Ifalmostallriskandrewardsassociatedwiththefinancialasset
havebeentransferredtotherecipient,thefinancialassetshallbede-recognized.IftheCompanyretainsalmost
allriskandrewardsassociatedwiththefinancialasset,itshallnotbede-recognized.IftheCompanyneither
transfersnorretainsalmostallriskandrewardsassociatedwiththefinancialasset,judgmentofwhetherthe
Companyretainscontrolovertheassetneedstobecarriedoutanditshallbeaccountedforbasedonprincipals
statedinaboveparagraphs.
(5)Classificationandmeasurementoffinancialliabilities
Oninitialrecognition,financialliabilitiesareclassifiedinfinancialliabilitiesatfairvaluethroughprofitorlossand
otherfinancialliabilities.Afinancialliabilityisinitiallyrecognizedatfairvalue.Transactioncostsforfinancial
liabilityatfairvaluethroughprofitorlossarechargedtocurrentprofitorloss.Transactioncostsforotherfinancial
liabilitiesareincludedintheirinitialrecognitionamounts.
①Fairvaluethroughprofitorlossfinancialliability
Theconditionofcategorizingfairvaluethroughprofitorlossfinancialliabilityanddesignatedasfairvaluethrough
profitorlossfinancialliabilityisthesameasfairvaluethroughprofitorlossfinancialassetanddesignatedfair
valuethroughprofitorlossasset.
Fairvaluethroughprofitorlossfinancialliabilityismeasuredsubsequentlyusingfairvalueandgainorlosses
resultedfromchangesinfairvalueanddividendorinterestpaymentrelatedtothefinancialliabilityshallbe
chargedtocurrentperiodprofitorloss.
②Otherfinancialliability
Derivativefinancialliabilities,whichconnectedwithequityinstrumentwithoutquotationinanactivemarketand
thatthefairvaluecannotbemeasuredreliablyandthesettlementofsuchfinancialliabilitiesrequiredeliveryofthe
equityinstrument,aremeasuredsubsequentlyatcost.Otherfinancialliabilitiesaremeasuredatamortizedcost
usingeffectiveinterestratemethod.Gainorlossesarisingfromderecognizingoramortizationarechargedto
currentprofitorloss.
③Financialguaranteecontract
Financialguaranteecontractsthatarenotbelongtofinancialliabilitiesdesignatedasfairvalueandrecord
changesinprofitorlossareinitiallyrecognizedatfairvalue,andinitiallyrecognizedatthedeterminedamountin
accordancewiththe"CASNo.13-Contingencies"andthehigheroftheinitialbalanceafterdeductingthe
accumulatedamortizationaccordingtothe"CASNo.14-Income".
(6)De-recognitionoffinancialliability
Afinancialliabilityorpartofitcanonlybederecognizedonlywhenthepresentobligationsarefullyorpartly
discharged.IfanagreementbetweentheCompany(thedebtor)andcreditorindicatesthatthepresentfinancial
liabilityaretobereplacedwithanewfinancialliabilitywhichhassubstantiallydifferenttermscomparewiththe
presentfinancialliability,thepresentfinancialliabilityisderecognizedandthenewfinancialliabilityisrecognized.
Whenafinancialliabilityisentirelyorpartlyderecognized,thedifferencebetweenthecarryingamountofthe
derecognizedfinancialliabilityandtheconsiderationpaid(includinganynon-cashassetstransferredornew
financialliabilitiesundertook)ischargedtocurrentprofitorloss.
(7)Derivativeinstrumentandembeddedderivativeinstrument
DerivativefinancialinstrumentsoftheCompanyareinitiallymeasuredatthefairvalueofthedateaderivative
contractenteredintoandsubsequentlymeasuredattheirfairvalue.Gainorlossesarisingfromchangesinfair
valueofderivativeinstrumentthatdesignatedhedginginstrumentandhighlyeffectivearechargedtoprofitorloss
basedonhedgingaccounting.Anygainsorlossesarisingfromchangesinfairvaluewhichdonotmeetthe
requirementsofhedgeaccountingaredirectlyrecognizedtoprofitorlossforthecurrentperiod.
Forhybridinstrumentwithembeddedderivative,wherefinancialassetsorliabilitiesnotdesignatedasfairvalue
throughprofitorloss,theeconomicfeaturesandrisksoftheembeddedderivativearenotcloselyrelatedtothatof
thehostcontract,andasimilarinstrumentwiththesametermsastheembeddedderivativewouldmeetthe
definitionofaderivative,thenembeddedderivativeisseparatedfromhybridinstrumentandaccountedforasa
derivative.Ifembeddedderivativeisunabletomeasureseparatelyeitheratacquisitionorsubsequentlyat
balancesheetdate,hybridinstrumentasawholeisdesignatedasfinancialassetsorliabilitiesatfairvalue
throughprofitorloss.
(8)Offsettingoffinancialassetsandfinancialliabilities
Financialassetsandfinancialliabilitiescanbepresentedinthebalancesheetusingnetfigureafteroffsettingonly
whentheGrouphasthelegalrightstooffsetthefinancialassetsandliabilitiesthatarealreadyrecognizedand
planstoexecutesuchrights,andtheGroupintendstosettlecorrespondingfinancialassetsandliabilitiesonnet
basisortorealizethefinancialassetandsettlethefinancialliabilitysimultaneously.Otherthansituations
mentionedabove,financialassetsandliabilitiesarepresentedseparatelyinbalancesheetandcannotbeoffset.
(9)EquityInstrument
AnequityinstrumentisacontractthatevidencesanyresidualinterestintheassetsoftheGroupafterdeducting
allofitsliabilities.Theequityinstrumentwillincreasetheowners’equitybydeductingtransactioncostsfrom
considerationreceivedfortheissuanceoftheequityinstrument.
Allkindsofdistributionstotheownersofequityinstrument(excludingstockdividends)decreasetheowners’
equity.TheCompanydoesnotrecognizefairvaluechangesofequityinstrument.
10.Accountsreceivable
Receivablesincludeaccountsreceivableandotherreceivables.
(1)Recognitionprincipleforbaddebtsprovision
TheCompanyexamines,atthebalancesheetdate,thecarryingamountsofreceivablesandimpairment
provisionisrecognizediffollowingobjectiveevidencesthatindicatingimpairmenttoreceivablesoccurs:①severe
financialdifficultiesofthedebtor;②abreachofcontractbythedebtor(suchasadefaultorbreachofcontractin
interestorprinciplerepayments);③itisprobablethatthedebtorwillbebankruptedorconductotherfinancial
reorganization;and④otherobjectiveevidencesindicatingthereisanimpairmentofthereceivables.
(2)Methodofrecognizingbaddebtprovision
①Determinationandprovidingbaddebtprovisionforreceivableswhichareindividuallysignificantinamountand
providedforbaddebtindividually
TheCompanyidentifiessingleaccountsreceivableitemthataboveRMB800,000.00(inclusive)andsingleother
receivableitemthataboveRMB500,000.00(inclusive)asreceivablesthatindividuallysignificantinamount.The
Companyconductsimpairmenttestonindividuallysignificantreceivablesseparately.Financialassetsthatarenot
impairedafterstandaloneimpairmenttestswillbetestedagainbyincludingitinaportfoliooffinancialassetswith
similarcreditriskcharacteristics.Receivablesthathavebeenimpairedinstandalonetestwillnotbetestedagain
byincludingitinaportfoliooffinancialassetswithsimilarcreditriskcharacteristics.
②Determinationofreceivablesthatrecognizebaddebtprovisionundercreditriskportfolioandbaddebtprovision
recognition.
A.Basisofdeterminingportfoliowithsimilarcreditriskcharacteristics
Receivablesthatarenotindividuallysignificantinamountandreceivablesthatareindividuallysignificantin
amountbutnotimpairedafterindividualimpairmenttestaregroupedintodifferentassetportfoliosbasedon
similarityandcorrelationofthecreditriskcharacteristics.Thesecreditriskcharacteristicsreflecttheabilityofthe
debtortorepayallamountsdueaccordingtotermsofcontractsrelatedtotheassetsundertestandarein
connectionwithestimationoffuturecashflowsexpectedtobegeneratedbytheseassets.
Basisofportfoliodetermination
Item | Basisofportfoliodetermination |
Portfolioofaging | Basedonagingofreceivables |
Portfolioofspecificaccounts | Receivablesfrompettycashadvancedtoemployees,fromsubsidiariesoftheCompanyandsalesrevenuebetweenthelastsettlementdatewiththedepartmentstoreandthebalancesheetdate |
Iftheimpairmenttestiscarriedoutforaportfolioofassets,theamountofbaddebtprovisionisrecognizedbased
onthestructureoftheportfolioandsimilarcreditriskcharacteristics(theabilityofrepaymentbythedebtor
accordingtocontractterms)byassessinghistoricalexperienceonassetsimpairmentwithsimilarcreditrisk
characteristics,currenteconomiccondition,andlossesthatarealreadyexistintheportfolio.
Methodofrecognizingbaddebtprovisionfordifferentportfolios
Item | Method |
Portfolioofaging | Analyzingtheagingofreceivables |
Portfolioofspecificaccounts | Nobaddebtprovisionisrecognized |
Aging | Percentageofprovisionrecognizedforaccountsreceivable(%) | Percentageofprovisionrecognizedforotherreceivables(%) |
Within1year(inclusive) | 5 | 5 |
1-2years(inclusive) | 10 | 10 |
2-3years(inclusive) | 30 | 30 |
Above3years | 50 | 50 |
Nameofportfolio | Percentageofprovisionrecognizedforaccountsreceivable(%) | Percentageofprovisionrecognizedforotherreceivables(%) |
Portfolioofspecificaccounts | Nobaddebtprovisionisrecognizedastheriskofimpairmentdoesnotexistaccordingtoitscreditriskcharacteristics |
subsidiariesoftheCompanyandsalesrevenuebetweenthelastsettlementdateofthesamedepartmentstore
andthebalancesheetdatearewithhighrecoverabilityandlowpossibilityofincurringbaddebt,asaresult,no
baddebtprovisionsareprovidedforsuchreceivables.
③Receivablesthatareinsignificantinamountindividuallybutrecognizebaddebtprovisionindividually
TheCompanyconductsimpairmenttesttoreceivablesthatinsignificantinamountindividuallybutwiththe
followingcharacteristics:receivablesthatinvolvingdisputeorlegalcase,arbitrationwiththeotherparty;obvious
indicatorsshowthatitisprobablethatthedebtorisunabletofulfiltherepaymentobligation.Standalone
impairmenttestiscarriedoutforthiskindofreceivables.Ifanyobjectiveevidenceindicatethatthereceivables
impaired,impairmentlossesarerecognizedbasedonthedifferencebetweenthecarryingamountandthe
presentvalueofestimatedfuturecashflows.Baddebtprovisionisrecognizedaccordingly.
(3)Reversalofbaddebtprovision
If,subsequenttotherecognitionofanimpairmentlossonareceivable,thereareobjectiveevidencesofa
recoveryinvalueofthereceivableandtherecoveryisrelatedobjectivelytoeventsoccurredaftertheimpairment
wasrecognized,theimpairmentlossrecognizedpreviouslyisreversedandrecognizedinprofitorloss.The
carryingamountafterthereversalshallnotexceedtheamortizedcostofthereceivableonthereversaldateasif
thereisnoimpairmentpreviously.
AccountsreceivabletransferredbytheCompanytofinancialinstitutionswithoutrecourse,thedifferencebetween
transactionamountminusthecarryingamountofreceivableandrelatedtransactiontaxesandfeesischargedto
currentperiodprofitorloss.
11.Inventory
(1)Classificationofinventory
Inventorymainlyincludesrawmaterial,work-in-processandstoredgoods.
(2)Costingmethodofacquiringanddeliveringofinventory
Theinventoryisvaluedusingactualcostwhenitisacquired.Thecostofinventoryincludescostofpurchase,
manufacturingcostandothercosts.Costingmethodsusedforinventoryusageandshipmentinclude:weighted
averagecosting(exceptforbrandedwatches),specificidentificationmethod(forstoredgoodsofbranded
watches).
(3)Determinationofnetrealizablevalueoftheinventoryandmethodofrecognizingimpairmentprovision
Netrealizablevalue(NRV)equalstoestimatedsellingpricelessestimatedcostsofcompletion,estimatedselling
costsandrelatedtaxesintheordinarycourseofbusiness.Thedeterminationofnetrealizablevalueofthe
inventoryisbasedonreliableevidenceandtakingintoconsiderationoftheintentsofholdingtheinventoryand
impactsofeventsafterthebalancessheetdate.Inparticular:(a)theNRVofinventoriesthatareavailableforsale
suchasfinishedgoodsandmaterialsheldfortradingaredeterminedusingtheestimatedsellingpriceless
estimatedsellingexpensesandrelatedtaxesifthebusinessisintheordinarycourseofoperation;(b)theNRVof
materialsthatneedtobeprocessedaredeterminedusingestimatedsellingpriceoffinishedgoodswhichis
manufacturedfromthemateriallessestimatedcostofcompletion,estimatedsellingexpensesandrelatedtaxesif
thebusinessisintheordinarycourseofoperation.
TheCompanyrecognizesinventoryimpairmentprovisionforFIYTAbrandwatchesbasedonmodels.
Impairmentprovisionsforbrandedwatchesarerecognizedbyspecificitem.
ImpairmentprovisionsforrawmaterialsofFIYTAwatchesarerecognizedbycategoriesbasedonterminalselling
statusofFIYTAfinishedwatchestakingintoconsiderationsoftheexchangeabilityofthesparepartsandthe
specialusageofmaterials.
If,aftertheimpairmentprovisionisrecognized,theinfluenceconditionsarenolongerexistandasaresult,the
NRVoftheinventoryishigherthanitscarryingamount,theimpairmentprovisionrecognizedpreviouslycanbe
reversed.Theamountreversedistoberecognizedincurrentprofitorloss.
(4)Theinventorysystemisperpetualinventorysystem
(5)Amortizationoflow-valueconsumablesandpackagingmaterial
Thelow-valueconsumablesandpackagingmaterialareamortizedusingone-offmethodatthetimeitisused.
12.Assetheldforsaleanddisposalgroup
IftheCompanymainlyrecoversanon-currentassetordisposalgroupbydisposal(includingnon-monetary
transactionwithcommercialsubstance,thesamebelow)ratherthancontinuouslyusage.Theassetisthen
classifiedasassetsheldforsale.Thefollowingconditionsaretobemetatthesametime:Anon-currentassetor
disposalgroupcanbeimmediatelysoldundercurrentconditionsbasedonthepracticeofsellingsuchassetsor
disposalgroupinasimilartransaction;theCompanyhasalreadydecidedonthesalesplanandhasbeen
confirmedthepurchasecommitment;thesaleisexpectedtobecompletedwithinoneyear.Amongthem,the
disposalgroupreferstoagroupofassetsthataredisposedofbythesaleorothermeanstogetherina
transaction,andtheliabilitiesdirectlyrelatedtotheseassetstransferredinthetransaction.Thedisposalgroup
belongstotheassetgrouportheassetgroupcombinationinaccordancewith"CASNo.8–Assetimpairment"to
sharethegoodwillacquiredinthebusinesscombination,thedisposalgroupshallincludethegoodwillallocatedto
thedisposalgroup.
WhentheCompanyinitiallymeasuresorre-measuresthenon-currentassetsheldforsaleandthedisposalgroup
onthebalancesheetdate,ifthebookvalueishigherthanthenetamountafterthefairvalueminustheselling
expenses,thenthebookvalueisreducedtothenetamountafterdeductingthesellingexpensesfromthefair
valueshallberecognizedastheassetimpairmentlossandrecordedinthecurrentprofitsandlosses,andatthe
sametime,provisionshallbemadefortheimpairmentofassetsheldforsale.Forthedisposalgroup,the
recognizedimpairmentlossonassetsisoffsetagainstthecarryingamountofthegoodwillinthedisposalgroup,
andthenreducedinproportiontotheapplicable"CASNo.42-Non-currentAssetsHeldforSale,DisposalGroup
andDiscontinuedOperations"("Held-for-SaleStandard")measurementrequirementsofthenon-currentassetsof
thebookvalue.Onthesubsequentbalancesheetdate,ifthefairvalueminusthesellingexpensesincreases,the
amountpreviouslywritten-downshouldberestoredandtheapplicablesale-for-salecriterionshouldbeapplied
afterclassificationasheld-for-salecategoryreversaloftheamountoftheassetimpairmentlossrecognizedinthe
measurementofnon-currentassetsshallberecordedintotheprofitsandlossesofthecurrentperiod;and
accordingtothebookvalueofthenon-currentassetsheldbythedisposalgroupotherthangoodwill,thecarrying
amountofthegoodwillthathasbeenoffsetagainstandthenon-currentassetssubjecttothemeasurementofthe
heldforsalecriteriacannotbereversed.
Non-currentassetsheldforsaleordisposalofnon-currentassetsinthedisposalgrouparenotsubjectto
depreciationoramortization.Theinterestonliabilitiesheldinthedisposalgroupforsaleandotherexpensesare
continuouslyrecognized.
Non-currentassetsordisposalgroupnolongermeettheclassifiedconditionsforholdingthesalecategory,the
Companywillnolongerbeclassifiedasheldforsaleorremovenon-currentassetsfromheld-for-saledisposal
group,andshallbemeasuredatthelowerofthefollowing:(1)Thecarryingamountbeforeclassificationasheld
forsaleisadjustedaccordingtothedepreciation,amortizationorimpairmentthatshouldberecognizedifitisnot
classifiedasheldforsale;(2)recoverableamount.
13.Long-termequityinvestment
Long-termequityinvestmentreferstoequityinvestmentswheretheCompanyhascontrol,jointcontrolor
significantinfluenceover,aninvestee.EquityinvestmentwheretheCompanycannotcontrol,jointcontrolor
exercisesignificantinfluenceovertheinvestee,shallbeaccountedforasAFSfinancialassetorFairvalue
throughprofitorlossfinancialasset,ofwhichtheaccountingpoliciesarestatedinNoteIV9“Financial
instrument”.
Jointcontrolmeansjointlycontrolofacertainbusinessactivityaccordingtotheagreementofcontract.Itexists
onlywhentheagreementonimportantaccountingandbusinesspoliciesthatneedstobereachedbetween
investorswhosharethecontrolrights.Significantinfluencemeansparticipationindecisionmakingtoa
company’sfinanceandbusinesspolicies,butcouldnotcontrolorjointlycontrolwithotherpartiestothepolicy
making.
(1)Determinationofinvestmentcost
Foralong-termequityinvestmentacquiredthroughabusinesscombinationinvolvingentitiesundercommon
control,theinvestmentcostofthelong-termequityinvestmentistheattributableshareofthecarryingamountof
theshareholders'equityoftheacquireeatthedateofcombination.Thedifferencebetweentheinitialcostofthe
long-termequityinvestmentandthepaymentincash,non-cashassetstransferredaswellasthebookvalueof
thedebtsbornebytheacquirershalloffsetagainstthecapitalreserve.Ifthecapitalreserveisinsufficientto
deduct,retainedearningsshallbeadjusted.Iftheconsiderationispaidbyissuingequitysecurities,itshall,onthe
dateofacquisition,regardtheshareofthebookvalueoftheshareholder'sequityoftheacquireeonthe
consolidatedfinancialstatementoftheultimatecontrolpartyastheinitialcostofthelong-termequityinvestment.
Thetotalfacevalueofthestocksissuedshallberegardedasthecapitalstock,whilethedifferencebetweenthe
initialcostofthelong-termequityinvestmentandtotalfacevalueofthesharesissuedshalloffsetagainstthe
capitalreserve.Ifthecapitalreserveisinsufficienttodilute,theretainedearningsshallbeadjusted.Theequities
ofthecombinedpartywhichrespectivelyacquiredthroughmultipletransactionunderthesamecontrolthat
ultimatelyformintothecombinationoftheenterprisesunderthecommoncontrol,shouldbedisposedaccording
whetherbelongstoabaskettransaction.Ifitbelongstoabaskettransaction,eachtransactionshallbeaccounted
forbytheCompanyasatransactionofacquiringthecontrolright.Ifnotbelongstopackagedeal,itshall,onthe
dateofmerger,regardtheenjoyedshareofthebookvalueoftheshareholder'sequityofthemergedenterprise
ontheconsolidatedfinancialstatementoftheultimatecontrolpartyastheinitialcostofthelong-termequity
investment,andasforthedifferencebetweentheinitialinvestmentcostofthelong-termequityinvestmentand
sumofthebookvalueofthelong-termequityinvestmentbeforethecombinationandthebookvalueofthe
considerationofthenewpaymentthatfurtherrequiredonthecombinationdate,shouldadjustthecapitalreserve.
Ifthecapitalreserveisinsufficienttodilute,theretainedearningsshallbeadjusted.Theequityinvestmentheld
beforethecombinationdatewhichadoptedtheequitymethodforaccounting,ortheothercomprehensiveincome
confirmedfortheavailable-for-salefinancialassets,shouldnothaveanyaccountingdisposalforthemoment.
Forthelong-terminvestmentrequiredacquiredfromthebusinesscombinationinvolvingentitiesnotunder
commoncontrol,theinitialinvestmentcostregardedaslong-termequityinvestmentonthepurchasingdate
accordingtothecombinationcost,thecombinationcostsshallbethesumofthefairvaluesoftheassetspaid,the
liabilitiesincurredorassumedandtheequitysecuritiesissuedbytheCompany.Theequityoftheacquireeswhich
respectivelyacquiredthroughmultipletransactionsthatultimatelyformintothecombinationoftheentitiesunder
commoncontrol,shouldbedisposedaccordingwhetherbelongstoabaskettransaction.Ifitbelongstoabasket
transaction,eachtransactionwouldbeaccountedforbytheCompanyasatransactionofacquiringthecontrol
right.Ifitdoesnotbelongtoabaskettransaction,thesumofthebookvalueoftheoriginalheldequityinvestment
oftheacquireesandthenewlyaddedinvestmentcostshouldberegardedastheinitialinvestmentcostofthe
long-termequityinvestmentthatchangedtobeaccountedbycostmethod.Iftheoriginalheldequityiscalculated
bycostmethod,theotherrelevantcomprehensiveincomewouldnothaveanyaccountingdisposalforthe
moment.Iftheoriginalheldequityinvestmentisthefinancialassetsavailableforsale,itsdifferencebetweenthe
fairvalueandthebookvalueaswellastheaccumulativechangesofthefairvaluethatincludeintheother
comprehensiveincome,shouldtransferintothecurrentgainsandlosses.
Agentfeesincurredbytheacquirerforthebusinesscombinationsuchasaudit,legalservice,andvaluationand
consultationfees,andotherrelatedadministrationexpensesarechargedtocurrentprofitorlossatthetimesuch
expensesincurred.
Equityinvestmentsthatotherthanthekindoriginatedfrombusinesscombinationsaremeasuredatcostinitially.
Theinvestmentcostdiffersbasedonwaysofacquiringthelong-termequityinvestment.Itcanbedetermined
basedoncashconsiderationactuallypaidbytheCompany,fairvalueofequitysecuritiesissuedbytheCompany,
valuestimulatedininvestmentcontractoragreementreached,fairvalueorcarryingamountofassetsthatis
exchangedinanon-monetaryassettransfertransaction,orthefairvalueofthelong-termequityinvestmentitself.
Expensesthatdirectlyrelatedtotheacquisitionofthelong-termequityinvestment,taxesandothernecessary
expenditureareincludedintheinvestmentcost.Costforlong-termequityinvestmentthathassignificant
influencesovertheinvesteesbecauseofadditionoftheinvestmentorexecutejointcontrol,shallbeaccountedfor
basedonthesumofthefairvalueoftheequityinvestmentoriginalheldaccordingto“CASNo.22–Recognition
andMeasurementofFinancialInstrument”andthenewlyaddedinvestmentcost.
(2)Subsequentmeasurementandrecognitionofgainorlosses
Equitymethodisusedformeasurementoflong-termequityinvestmentifthereiscommoncontrol(exceptjoint
operation)withorsignificantinfluenceovertheinvestedentity.Costmethodisusedformeasurementoflong-term
equityinvestmentifthereiscontrolovertheinvestedentity.
①Long-termequityinvestmentsthataremeasuredusingcostmethod
Undercostmethod,long-termequityinvestmentismeasuredatinitialinvestmentcost.Currentperiodinvestment
gainorlossesarerecognizedaccordingtothecashdividendorprofitdistributionthatisannouncedbythe
investedentity,exceptforcashdividendorprofitdistributionthatisalreadyannouncedbutnotdistributedwhichis
includedintheconsiderationthatactuallypaid.
②Long-termequityinvestmentsthataremeasuredusingequitymethod
Iftheinitialinvestmentcostofalong-termequityinvestment,whichismeasuredusingequitymethod,isgreater
thantheportionoffairvalueoftheidentifiablenetassetsoftheinvestedentityattributabletotheCompany,the
initialinvestmentcostofthelong-termequityinvestmentisnotadjusted.Otherwise,thedifferenceischargedto
currentprofitorloss,andthecostoflong-termequityinvestmentisadjustedaccordingly.
Whenmeasuredbyadoptingequitymethod,respectivelyrecognizeinvestmentincomeandothercomprehensive
incomeaccordingtothenetgainsandlossesaswellastheportionofothercomprehensiveincomewhichshould
beenjoyedorbeshared,andatthesametimeadjustthebookvalueofthelong-termequityinvestment;
correspondingreducethebookvalueofthelong-termequityinvestmentaccordingtoprofitswhichbedeclaredto
distributebytheinvesteesortheportionofthecalculationofcashdividendswhichshouldbeenjoyed;forthe
otherchangesexceptforthenetgainsandlosses,othercomprehensiveincomeandtheowners’equityexceptfor
theprofitsdistributionoftheinvestees,shouldadjustthebookvalueofthelong-termequityinvestmentaswellas
includeinthecapitalreserve.Theinvestingenterpriseshall,onthegroundofthefairvalueofallidentifiable
assetsoftheinvestedentitywhenitobtainstheinvestment,recognizetheattributableshareofthenetprofitsand
lossesoftheinvestedentityafteritadjuststhenetprofitsoftheinvestedentity.Iftheaccountingpoliciesadopted
bytheinvesteesisnotaccordwiththatoftheCompany,shouldbeadjustedaccordingtotheaccountingpolicies
oftheCompanyandthefinancialstatementoftheinvesteesduringtheaccountingperiodandaccordingwhichto
recognizetheinvestmentincomeaswellasothercomprehensiveincome.Forthetransactionhappenedbetween
theCompanyandassociatedenterprisesaswellasjointventures,iftheassetslaunchedorsoldnotforminto
business,theportionoftheunrealizedgainsandlossesoftheinternaltransaction,whichbelongstotheGroup
accordingtothecalculationoftheenjoyedproportion,shouldrecognizetheinvestmentgainsandlossesonthe
basis.ButthelossesoftheunrealizedinternaltransactionhappenedbetweentheCompanyandtheinvestees
whichbelongstotheimpairmentlossesofthetransferredassets,shouldnotbeneutralized.Theassetslaunched
bytheCompanytotheassociatedenterprisesorthejointventuresifcouldformintobusiness,thelong-term
equityinvestmentwithoutcontrolrightwhichacquiredbytheinvestors,shouldregardthefairvalueofthe
launchedbusinessastheinitialinvestmentcostthenewlyaddedlong-termequityinvestment,andforthe
differencebetweentheinitialinvestmentcostandthebookvalueofthelaunchedbusiness,shouldbeincluded
intothecurrentgainsandlosseswithfullamount.TheassetssoldbytheCompanytotheassociatedenterprises
orthejointventuresifcouldformintobusiness,thedifferencebetweentheacquiredconsiderationandthebook
valueofthebusinessshouldbeincludedinthecurrentgainsandlosseswithfullamount.Theassetspurchased
bytheCompanytotheassociatedenterprisesorthejointventuresifcouldformintobusiness,shouldbe
accountingdisposedaccordingtotheCAS-No.20–“BusinessCombination”,andshouldberecognizedgainsor
lossesrelatedtothetransactionwithfullamount.
TheCompanyshallrecognizethenetlossesoftheinvestedenterpriseuntilthebookvalueofthelong-termequity
investmentandotherlong-termrightsandinterestswhichsubstantiallyformthenetinvestmentmadetothe
investedentityarereducedtozero.However,iftheCompanyhastheobligationtoundertakeextralosses,itshall
berecognizedastheestimatedliabilitiesinaccordancewiththeestimateddutiesandthenrecordedinto
investmentlossesatcurrentperiod.Iftheinvestedentityrealizesanynetprofitslater,theCompanyshall,afterthe
amountofitsattributableshareofprofitsoffsetsagainstitsattributableshareoftheun-recognizedlosses,resume
recognizingitsattributableshareofprofits.
Forthelong-termequityinvestmentintheassociatesandjointventuresheldbytheCompanyforthefirsttime
beforetheimplementationofthenewaccountingstandards,ifthereisadebitbalanceoftheequityinvestment
relatedtotheinvestment,thedifferenceshallbeamortizedandchargedtocurrentprofitorlossusingstraightline
methodbasedonoriginalremainingperiod.
③Purchasingminorityequity
Whenpreparingconsolidatedfinancialstatements,thedifference,resultedfromadditionoflong-termequity
investmentandsharesofnetassetscalculatedcontinuouslysinceacquisitiondate(orcombinationdate)
accordingtonewshareholding,isadjustedtocapitalreserve.Ifthecapitalreserveisinsufficienttooffset,
adjustingretainedearnings.
④Disposaloflong-termequityinvestment
Inconsolidatedfinancialstatements,theparentcompanycandisposepartofthelong-termequityinvestmenttoa
subsidiarygiventhattheparentdoesnotlosecontroloverthesubsidiary.Thedifferencebetweenconsideration
receivedforthedisposalandthepartofnetassetsdisposedattributabletotheparentisrecognizedinowners’
equity.Iftheparentcompanylossescontroloverasubsidiarybecauseoflong-termequityinvestmentdisposal,
theaccountingtreatmentshallrefertoaccountingpoliciesstatedinNoteIV.5(2)–“Preparingconsolidated
financialstatements”.
Forlong-termequityinvestmentdisposalotherthansituationsmentionedabove,thedifferenceofcarrying
amountofdisposedequityandtheconsiderationactuallyreceivedischargedtocurrentprofitorloss.
Forthelong-termequityinvestmentmeasuredbyadoptingequitymethod,iftheremainedequityafterdisposal
stilladoptstheequitymethodformeasurement,theothercomprehensiveincomeoriginallyrecordedintoowners’
equityshouldadoptthesamebasisoftheaccountingdisposaloftherelevantassetsorliabilitiesdirectlydisposed
bytheinvesteesaccordingtothecorrespondingproportion.Theowners’equityrecognizedowningtothechanges
oftheotherowners’equityexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofits
distributionoftheinvestees,shouldbetransferredintothecurrentgainsandlossesaccordingtotheproportion.
Forthelong-termequityinvestmentwhichadoptsthecostmethodofmeasurement,iftheremainedequitystill
adoptthecostmethod,theothercomprehensiveincomerecognizedowningtoadoptingtheequitymethodfor
measurementortherecognitionandmeasurementstandardsoffinancialinstrumentbeforeacquiringthecontrol
oftheinvestees,shouldadoptthesamebasisoftheaccountingdisposaloftherelevantassetsorliabilities
directlydisposedbytheinvesteesandshouldbecarriedforwardintothecurrentgainsandlossesaccordingto
theproportion;thechangesoftheotherowners’equityexceptforthenetgainsandlosses,othercomprehensive
incomeandtheprofitsdistributionamongthenetassetsoftheinvesteeswhichrecognizedbyadoptingtheequity
methodformeasurement,shouldbecarriedforwardintothecurrentgainsandlossesaccordingtotheproportion.
IftheCompanylostcontrolovertheinvesteebydisposingpartoftheequityinvestmentandtheremainedequity
afterdisposalcouldexecutejointcontrolorsignificantinfluencesovertheinvestees,itshouldchangetomeasure
byequitymethodwhenpreparingtheindividualfinancialstatementandshouldadjustthemeasurementofthe
remainedequitytoequitymethodasadoptedsincethetimeacquired.Iftheremainingequityafterdisposalcould
notexecutejointcontrolorsignificantinfluencesontheinvestees,itshouldchangetheaccountingdisposal
accordingtotherelevantregulationsoftherecognitionandmeasurementstandardsoffinancialinstrument,and
itsdifferencebetweenthefairvalueandbookvalueonthedatelosethecontrolrightshouldbeincludedinthe
currentgainsandlosses.Fortheothercomprehensiveincomerecognizedbyadoptingequitymethodfor
measurementortherecognitionandmeasurementstandardsoffinancialinstrumentbeforetheCompany
acquiredthecontroloftheinvestees,shouldexecutetheaccountingdisposalbyadoptingthesamebasisofthe
accountingdisposaloftherelevantassetsorliabilitiesdirectlydisposedbytheinvesteeswhenlosethecontrolof
them,whilethechangesoftheotherowners’equityexceptforthenetgainsandlosses,othercomprehensive
incomeandtheprofitsdistributionamongthenetassetsoftheinvesteeswhichrecognizedbyadoptingtheequity
methodformeasurement,shouldbecarriedforwardintothecurrentgainsandlossesaccordingtotheproportion.
Ofwhich,forthedisposedremainedequitywhichadoptedtheequitymethodformeasurement,theother
comprehensiveincomeandtheotherowners’equityshouldbecarriedforwardaccordingtotheproportion;forthe
disposedremainedequitywhichchangedtoexecutetheaccountingdisposalaccordingtotherecognitionand
measurementstandardsoffinancialinstrument,theothercomprehensiveincomeandtheotherowners’equity
shouldbechargedtoprofitorlossinfull.
ForthosetheCompanylostthecontroloftheinvesteesbydisposingpartoftheequityinvestment,thedisposed
remainedequityshouldchangetocalculateaccordingtotherecognitionandmeasurementstandardsoffinancial
instrument,anddifferencebetweenthefairvalueandbookvalueonthedatelosethecontrolrightshouldbe
includedinthecurrentgainsandlosses.Fortheothercomprehensiveincomerecognizedfromtheoriginalequity
investmentbyadoptingtheequitymethod,shouldexecutetheaccountingdisposalbyadoptingthesamebasisof
theaccountingdisposaloftherelevantassetsorliabilitiesdirectlydisposedbytheinvesteeswhenterminatethe
equitymethodformeasurement,whilefortheowners’equityrecognizedowningtothechangesoftheother
owner’sequityexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionofthe
investees,shouldbetransferredintothecurrentinvestmentincomewithfullamountwhenterminateadoptingthe
equitymethod.
TheCompanyrespectivelydisposestheequityinvestmentofthesubsidiariesthroughmultipletransactionsuntil
losethecontrolright,iftheabovetransactionsbelongstothepackagedeal,shouldexecutetheaccounting
disposalbyregardingeachtransactionasadealofdisposingtheequityinvestmentofthesubsidiariesuntillose
thecontrolright,whilethedifferencebetweeneachexpensesofthedisposalandthebookvalueofthelong-term
equityinvestmentinaccordwiththedisposedequitybeforelosingthecontrolright,shouldfirstlyberecognizedas
othercomprehensiveincomethenbetransferredintothecurrentgainsandlossesoflosingthecontrolrightalong
untilthetimewhenloseit.
14.Investmentproperty
Investmentpropertyispropertyheldtoearnrentalsorforcapitalappreciationorboth.Itincludesbuildingsthatare
alreadyleasedout.Besides,forthevacantbuildingsheldbytheCompanyforthepurposeofoperatingleases,if
theboardofdirectors(orsimilarinstitution)makesawrittenresolutionthatexpresslyindicatesthatitwillbeused
foroperatingleasesandtheintentiontokeepnolongerchangesintheshort-term,italsocanserveasan
investmentrealestate.
Aninvestmentpropertyismeasuredinitiallyatcost.Ifitisprobablethatthebenefitrelatedtosubsequent
expendituresincurredforaninvestmentpropertywillflowintotheCompanyandthatthecostcanbemeasured
reliably,theexpenditureisincludedinthecostofinvestmentproperty.Othersubsequentexpendituresare
chargedtoprofitorlossintheperiodinwhichtheyareincurred.
TheCompanyadoptscostmethodforsubsequentmeasurementtoinvestmentproperty.Depreciationor
amortizationpolicyforinvestmentpropertiesarethesameastheoneforplantsandbuildingsorlanduserights.
PleaserefertoNoteIV.20“ImpairmentofLong-termassets”fordetailsofimpairmenttestandimpairment
provisionrecognitionforinvestmentproperty.
Iftheusageofapropertychangedfromself-usetoinvestmentorviceversa,thecarryingamountbeforechange
shallbeusedasinitialrecognitionamountafterthechange.
Whentheusageofthepropertychangedfrominvestmentpropertytoself-useproperty,thepropertyistransferred
frominvestmentpropertytofixedassetorintangibleassetonthechangingdate.Iftheusageoftheproperty
changesfromself-usetoearnrentalorcapitalappreciation,thepropertyisswitchedtoinvestmentpropertyfrom
fixedassetorintangibleasset.Ifitswitchedtoinvestmentpropertythatmeasuredusingcostmethod,itis
recognizedusingthecarryingamountbeforetheswitch.Ifitswitchedtoinvestmentpropertythatmeasuredusing
fairvaluemethod,itisrecognizedusingthefairvalueontheswitchingdate.
Theinvestmentpropertyisderecognizedwhenitisdisposedorceasedusagepermanentlyanditisestimated
thatnobenefitcanbeobtainedfromthedisposal.Disposalincomearisingfromselling,transfer,disposingand
damagingtheinvestmentproperty,lessitscarryingamountandtaxesrelatedtothedisposal,isrecognizedin
profitorloss.
15.Fixedasset
(1)Recognitionprinciples
Fixedassetsrefertotangibleassetsthatareheldforthepurposeofgoodsproduction,providingservices,lease,
orforadministrativepurposeswithusefullifeofmorethanoneaccountingyear.Fixedassetisrecognizedonly
whentheeconomicbenefitassociatedwiththefixedassetisprobabletoflowintotheCompanyandthecostcan
bemeasuredreliably.Fixedassetisrecognizedinitiallyatcostbyconsideringestimateddisposalexpenses.
(2)Depreciationmethod
Thefixedassetisdepreciatedonstraight-linebasisoveritsestimatedusefullifefromthenextmonthafterit
reachedestimatedusefulcondition.Theusefullives,estimatedresidualratiosandannualdepreciationratesfor
eachcategoryoffixedassetsareasfollows:
Categories | Methodofdepreciation | Estimatedusefullives(year) | Estimatednetresidualvalueratios(%) | Annualdepreciationrates(%) |
Plantsandbuildings | straight-line | 20-35 | 5.00 | 2.70-4.80 |
Machineryequipment | straight-line | 10 | 5.00-10.00 | 9.00-9.50 |
Electronicsdevices | straight-line | 5 | 5.00 | 19.00 |
Transportationvehicles | straight-line | 5 | 5.00 | 19.00 |
Otherequipments | straight-line | 5 | 5.00 | 19.00 |
disposaloftheasset,afterdeductingtheestimatedcostsofdisposal,iftheasset’susefullifeispassedandinthe
conditionexpectedattheendofitsusefullife.
(3)Impairmenttestandimpairmentprovisionrecognitionforfixedasset
Forimpairmenttestandimpairmentprovisionrecognitionforfixedasset,pleaserefertoNoteIV.20“Impairment
ofLong-termasset”.
(4)Recognitionbasisandpricingmethodoffinancingleasedfixedassets
Afinancingleaseisaleasethattransfersalltherisksandrewardsincidentaltotheownershipoftheassetin
substanceandtheownershipmayormaynoteventuallybetransferred.Thedepreciationaccruedmethodofthe
fixedassetsrentedoutunderfinancingleasesusingasamepolicyasitsownfixedassets.Ifitisreasonably
certainthattheownershipoftheleasedassetcanbeacquiredwhentheleasetermexpires,depreciationis
accruedovertheusefullifeoftheleasedasset.Ifitcannotreasonablydeterminethattheownershipoftheleased
assetcanbeacquiredwhentheleasetermexpires,thedepreciationwillbeaccruedintheshorterofleaseterm
andtheusefullifeofleasedasset.
(5)Others
Subsequentexpenditureinrelationtofixedassetisrecognizedinthecostofthefixedassetandderecognizing
thecarryingamountofthepartreplacedifitisprobablethattheeconomicbenefitrelatedtothefixedassetwill
flowintheentityandthecostcanbemeasuredreliably.Subsequentexpendituresotherthanthisarechargedto
currentprofitorloss.
Whenafixedassetissold,transferred,retiredordamaged,thedisposalproceednetofthecarryingamountand
relatedtaxesischargedinprofitorlossforthecurrentperiod.
TheCompanyconductreviewstotheusefullife,estimatednetresidualrateanddepreciationmethodatleastat
eachendoftheaccountingyear.Anychangeswillbetreatedaschangesinaccountingestimates.
16.Constructioninprogress
Constructioninprogressismeasuredatactualprojectexpenditurewhichincludesconstructionexpenditures,
capitalizedborrowingcostsbeforetheprojectreachesestimatedusefulconditionandotherrelatedexpenses.
Constructioninprogressistransferredtofixedassetwhentheassetreachesitsestimatedusefulcondition.
Forimpairmenttestandimpairmentprovisionrecognitionforconstructioninprogress,pleaserefertoNoteIV.20
“ImpairmentofLong-termasset”.
17.Borrowingcost
Borrowingcostincludesloaninterest,associatedexpensesincurredinconnectionwiththearrangementof
borrowingsandexchangedifferencearisingfromforeigncurrencyloans.Borrowingcoststhataredirectly
attributabletotheacquisition,constructionorproductionofaqualifyingassetcanbecapitalizedstartingfromthe
timethenecessaryacquisitionorproductionforbringingtheassettoitsestimatedusefulorsellablecondition
started,andgiventhatthecapitalexpenditureandborrowingcosthavebeenincurred.Thecapitalizationstops
whentheassetreachesitsestimatedusefulorsellableconditions.Otherborrowingcostsarechargedtoprofitor
lossatthetimetheyareincurred.
Theinterestexpensesactuallyincurredcurrent-periodspecialborrowinglessunusedborrowingfundsinbank
interestearnedorinvestmentincomeonthetemporaryinvestmentofthosefunds,theabovementionedamount
shallbecapitalized.Theweightedaverageassetdisbursementofgeneralborrowingmultipliesthecapitalization
ratetodeterminetheamountofcapitalizationbasedontheaccumulativeassetdisbursementsofspecialloans.
Thecapitalizationrateistheweightedaverageinterestrateofthegeneralborrowing.
Duringthecapitalizationperiod,exchangedifferencesonforeigncurrencyborrowingsareallcapitalized;
Exchangedifferencesonforeigncurrencyborrowingsaregenerallyincludedintocurrentprofitorloss.
Theassetswhichhavequalifiedconditionofcapitalizationistheassetsnecessarilytakeasubstantialperiodof
timeaftertheacquisition,constructionorproductionactivitiesinordertoachievetheirintendeduseorsaleof
fixedassets,investmentproperty,inventoriesandotherassets.
Iftheprocessofacquiring,constructingorproducingoftheassetsthatarecapableforcapitalizationisinterrupted
abnormallyandtheinterruptionlastsmorethanthreemonths,thecapitalizationofborrowingcostsshallbe
suspendeduntiltheacquisition,constructionorproductionresumes.
18.Intangibleassets
(1)Intangibleassets
AnIntangibleassetistheidentifiablenon-monetaryassetwithoutphysicalsubstancesthatisownedorcontrolled
bytheCompany.
Anintangibleassetisinitiallymeasuredatitscost.Expendituresrelatedtotheintangibleassetareincludedinits
costifitisprobablethattherelatedeconomicbenefitwillflowintotheCompanyandthecostcanbemeasured
reliably.Otherexpendituresapartfromthiswillbechargedtoprofitorlossincorrespondingperiodatthetimeit
incurred.
Landuserightisgenerallyaccountedforasintangibleasset.Whentheplantsorbuildingsareconstructedbythe
Group,expendituresonthelanduserightandonthebuildingsshallberecognizedastheintangibleassetandthe
fixedassetrespectively.Whentheplantsorbuildingsarepurchased,theconsiderationpaidshallbeallocated
betweenthelanduserightandthebuildings.Ifitcanbeallocatedreasonably,recognizeentirelyasfixedassets.
Anintangibleassetwithafiniteusefullifeshallbeamortizedbyusingthestraight-linemethodoveritsestimated
usefullifewhenitisavailableforuse.Thedepreciableamountofanintangibleassetisitscostlessestimated
residualvalueandimpairmentprovision.Anintangibleassetwithanindefiniteusefullifeisnotamortized.
Methodofamortizationforintangibleassetwithfiniteusefullifeisasfollows:
Category | Usefullife(year) | Methodofamortization |
Landuseright | 50 | straight-line |
Software | 5 | straight-line |
Branduseright | 5-10 | straight-line |
eachaccountingperiod.Anychangeswillbetreatedunderchangesinaccountingestimates.Besides,theuseful
lifeoftheintangibleassetswithindefiniteusefullifewillbereviewedattheendofeachaccountingperiod.Ifthere
isevidenceindicatingthatitisforeseeablethattheperiodduringwhichtheeconomicbenefitassociatedwiththe
assetwouldflowintotheentity,itsusefullifewillbeestimatedandtheassetwillbeamortizedinaccordancetothe
amortizationpoliciesapplicableforanintangibleassetwithfiniteusefullife.
(2)Researchanddevelopmentexpenditure
TheCompany’sexpenditureoninternalresearchanddevelopmentprojectsareclassifiedintoexpenditure
ontheresearchphaseandexpenditureonthedevelopmentphase.
Expenditureontheresearchphaseisrecognizedinprofitorlossintheperiodinwhichitisincurred.
Expenditureonthedevelopmentphaseiscapitalizedandrecognizedasintangibleassetonlywhenallofthe
followingconditionsaresatisfied.Expendituresonthedevelopmentphase,failingtomeetthebelowconditions,
arerecognizedinprofitorlossintheperioditisincurred:
①Thetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuseorsale;
②Theintentiontocompletetheintangibleassetanduseorsellit;
③Theintangibleassetwillgenerateeconomicbenefits.Amongotherthings,theCompanycandemonstratethe
existenceofamarketfortheoutputoftheintangibleassetortheintangibleassetitselfor,ifitistobeused
internally,theusefulnessoftheintangibleasset;
④Theavailabilityofadequatetechnical,financialandotherresourcestocompletethedevelopmentandtheability
touseorselltheintangibleasset;and
⑤Theexpenditureattributabletotheintangibleassetduringitsdevelopmentphasecanbemeasuredreliably.
Expenditureswhichcannotbedividedintoexpendituresonresearchphaseandexpendituresondevelopment
phasearechargedentirelyincurrentprofitorloss.
(3)Impairmenttestandimpairmentprovisionrecognitionforintangibleassets
Forimpairmenttestandimpairmentprovisionrecognitionforintangibleasset,pleaserefertoNoteIV.20
“ImpairmentofLong-termasset”.
19.Long-termdeferredexpenses
Long-termdeferredexpensesrefertoexpenditureswhichareincurredbutshallbeexpensedoverthebeneficiary
periodofmorethanoneyear.TheCompany’slong-termdeferredexpensesmainlyincludecounterfabrication
anddecorationexpenses.Long-termdeferredexpensesshallbeamortizedonstraight-linebasisoverits
beneficiaryperiod.
20.ImpairmentofLong-termassets
TheCompanyassesses,onbalancesheetdate,whetherthereareindicatorsforimpairmenttofixedassets,
constructioninprocess,intangibleassetswithfiniteusefullife,investmentpropertymeasuredatcost,and
long-termequityinvestmenttosubsidiaries,jointventuredcompaniesandassociatedcompanies.Ifthereareany
indictorsofimpairment,recoverableamountisestimatedandimpairmenttestisconducted.Impairmenttestsare
conductedeachyeartogoodwill,intangibleassetsthatwithindefiniteusefullifeandintangibleassetsthathave
notreacheditsusefulconditiondespitewhetherthereisindicatorsofimpairment.
Iftherecoverableamountofanassetislessthanitscarryingamountintheimpairmenttest,provisionfor
impairmentshallbemadeforthedifferenceandrecognizedasanimpairmentloss.Therecoverableamountofan
assetisthehigherofitsfairvaluelesscoststosellandthepresentvalueofthefuturecashflowsexpectedtobe
derivedfromtheasset.Thefairvalueofanassetisdeterminedaccordingtothepriceinasaleagreementinan
arm’slengthtransaction.Ifthereisnosaleagreementbutanactivemarketfortheasset,thefairvalueshallbe
determinedaccordingtothecurrentbidprice.Ifthereisnosaleagreementoractivemarketfortheasset,thefair
valueshallbebasedonthebestinformationavailable.Costsofdisposalincludelegalcostsrelatedtothedisposal
oftheasset,relatedtaxes,costofremovingtheassetanddirectcosttobringtheassetintoitsconditionofsale.
Thepresentvalueofexpectedfuturecashflowsofanassetshallbedeterminedbyestimatingthefuturecash
flowstobederivedfromcontinuinguseoftheassetandfromitsultimatedisposalandapplyingtheappropriate
discountratetothosefuturecashflows.Provisionforimpairmentshallbemadeandrecognizedonanindividual
basis.Ifitisnotpossibletoestimatetherecoverableamountoftheindividualasset,theCompanyshalldetermine
therecoverableamountoftheassetgrouptowhichtheassetbelongs.Anassetgroupistheminimumgroupof
assetswhichcangeneratecashflowsindependently.
Whenconductingimpairmenttestongoodwill,whichispresentedseparatelyinbalancesheet,thecarrying
amountofgoodwillwillbeallocatedtoassetgrouporcombinationofassetgroupwhichareexpectedtoenjoy
benefitfromthesynergyeffectinabusinesscombination.Ifthetestresultsindicatethattherecoverableamount
oftheassetgrouporcombinationofassetgroup,whichconsistgoodwillallocated,islowerthanitscarrying
amount,impairmentlossisrecognizedaccordingly.Theimpairmentlossreducesthecarryingamountofgoodwill
thatallocatedtotheassetgrouporcombinationofassetgroup.Ifthegoodwillisinsufficienttodeduct,then
offsettingotherassetswithintheassetgrouporcombinationofassetgroupproportionatelybasedontheweight
ofthecarryingamountofassetsotherthangoodwillintheassetgrouporcombinationofgroup.
Onceanimpairmentlossisrecognized,itshallnotbereversedinsubsequentperiods.
21.Employeebenefit
Employeebenefitincludeshort-termemployeebenefit,post-employmentbenefitsandterminationbenefits.
Short-termbenefitmainlyincludesemployeesalary,bonus,allowance,employeewelfare,maternityinsurance,
workinjuryinsurance,housingfund,laborunionfee,employeeeducationfundandnon-monetarywelfareetc…
TheCompanyrecognizeshort-termbenefitasliabilitiesthroughprofitorlossorrelatedcostofassetsforthe
financialyearinwhichtheemployeesrendertherelatedservices.Non-monetarywelfareismeasuredatfair
value.
Post-employmentbenefitmainlyincludebasicendowmentinsurance,unemploymentinsuranceandannuityetc…
Post-employmentbenefitplanincludesdefinedcontributionplans.Definedcontributionplansare
post-employmentbenefitplansunderwhichanentitypaysfixedcontributionsintoanescrowfundandtheamount
shallbechargedtocostofrelatedassetorcurrentperiodprofitorloss.
WhentheCompanyterminatestheemploymentrelationshipwithemployeesbeforetheemploymentcontracts
expireorprovidescompensationasanoffertoencourageemployeestoacceptvoluntaryredundancy,aprovision
shallberecognizedatthedateearlieroftheCompanycannotunilaterallywithdrawfromtheterminationplanor
theredundancyofferandtheCompanydeterminedthereconstructioncostrelatedwiththepaymentof
terminationbenefit.Terminationbenefitshallberecognizedasemployeebenefitpayableandchargedtotheprofit
orlossforthecurrentaccountingperiod.Iftheterminationbenefitcannotbepaidwithin12monthafterthe
balancesheetdate,itshallbetreatedaslong-termemployeebenefit.
Theearlierretirementplanshallbeaccountedforinaccordancewiththeaccountingprinciplesforcompensation
forterminationofemployment.Thesalariesorwagesandthesocialcontributionstobepaidfortheemployees
whoretirebeforeschedulefromthedateonwhichtheemployeesstoprenderingservicestotheCompanytothe
scheduledretirementdate,shallberecognized(ascompensationforterminationofemployment)inthecurrent
profitorlossiftherecognitionprinciplesforprovisionsaresatisfied.
Ifotherlong-termemployeewelfareprovidedbytheCompanymeetsthecriteriaofdefinedcontributionplan,it
shallbeaccountedforaccordingtodefinedcontributionplan,otherwise,definedbenefitplanaccounting
treatmentisapplicable.
22.Provision
Aprovisionisrecognizedwhenobligationrelatedtocontingenciessatisfiesfollowingcondition:(1)theobligation
isapresentobligationoftheCompany;(2)itisprobablethatanoutflowofeconomicbenefitswillberequiredto
settletheobligation;and(3)andtheamountoftheobligationcanbemeasuredreliably.
Atthebalancesheetdate,aprovisionshallbeinitiallymeasuredatthebestestimateoftheexpenditurerequired
tosettletherelatedpresentobligation,takingtherisks,uncertaintiesandtimevalueofmoneythatrelatedtothe
contingenciesintoconsideration.
Whenallorpartoftheexpenditurethatneededforsettlingaprovisionisexpectedtobereimbursedbyathird
party,thereimbursementshallberecognizedasanassetseparatelyonlywhenitisvirtuallycertainthat
reimbursementwillbereceived.Theamountrecognizedforthereimbursementshallnotexceedthecarrying
amountoftheestimatedliability.
(1)Onerouscontract
Anonerouscontractisacontractinwhichtheaggregatecostrequiredtofulfiltheagreementishigherthanthe
economicbenefittobeobtainedfromit.Ifthecontracttobeexecutedbecomesanonerouscontract,andthe
obligationarisingfromtheonerouscontractmeetstheconditionsfortherecognitionoftheabove-mentioned
provision,theportionofthecontract'sestimatedlossthatexceedstherecognizedimpairmentloss(ifany)ofthe
contractedassetisrecognizedasaprovision.
(2)Restructuringobligations
Fordetailedandformalrestructuringplansthathavebeenpubliclyannounced,ifitmeetstherecognition
conditionsofaliabilitymentionedabove,aprovisionisdeterminedbasedonthedirectexpensesrelatedtothe
restructuring.
23.Share-basedpayment
(1)Accountingtreatmentofshare-basedpayment
Ashare-basedpaymentisatransactionthatgrantsanequityinstrumentorassumesaliabilitydeterminedonthe
basisofanequityinstrumentinordertoobtainservicesfromemployeesorotherparties.Share-basedpayments
aredividedintoequity-settledshare-basedpaymentsandcash-settledshare-basedpayments.
Equity-settledshare-basedpayments
Theequity-settledshare-basedpaymentinexchangefortheservicesprovidedbytheemployeeismeasuredat
thefairvalueoftheequityinstrumentsgrantedtoemployeesatthegrantdate.Iftheoptioncanonlybeexercised
aftercompletingtheservicewithinthevestingperiodormeetingtherequiredperformanceconditions,theamount
ofthefairvalueshallbechargedtocostorexpensesbasedonstraight-linemethodduringthevestingperiod
usingthebestestimateoftheamountofexercisableequityinstrument.Iftherightcanbeexercisedimmediately
afterthegrant,therelevantcostsorexpensesareincludedinthegrantdate,andthecapitalreserveare
increasedaccordingly.
Oneachbalancesheetdateduringthewaitingperiod,theCompanymakesthebestestimatebasedonthelatest
informationonthechangesinthenumberofemployeeswithvestingrights,andcorrectsthenumberofequity
instrumentsthatareexpectedtobeexercised.Theimpactoftheaboveestimatesisrecognizedinthecurrent
relatedcostsorexpenses,andthecapitalreserveisadjustedaccordingly.
Equity-settledshare-basedpaymentsinexchangeforotherparties'services,ifthefairvalueofotherparties'
servicescanbereliablymeasured,ismeasuredatthefairvalueofotherservicesonthedateofacquisition.Ifthe
fairvaluecannotbemeasuredreliably,itismeasuredatthefairvalueoftheequityinstrumentontheacquisition
date,andisincludedintherelevantcostorexpense,whichincreasestheshareholders'equityaccordingly.
②Cash-settledshare-basedpayments
Thecash-settledshare-basedpaymentismeasuredatthefairvalueoftheliabilitiesdeterminedbytheCompany
basedonsharesorotherequityinstruments.Iftherightcanbeexerciseimmediatelyafterthegrant,therelevant
costsorexpensesareincludedinthegrantdate,andtheliabilitiesareincreasedaccordingly.Iftheoptioncan
onlybeexercisedaftercompletingtheservicewithinthevestingperiodormeetingtherequiredperformance
conditions,theserviceobtainedbytheCompanyincurrentperiodshallbechargedtoprofitorlossbasedonfair
valueoftheliabilitiesundertakebytheCompany,calculatedonthebasisofthebestestimationoftheexercisable
optiononeachbalancesheetdateofthevestingperiod.Theliabilitiesshallbeincreasedaccordingly.
Thefairvalueoftheliabilityisre-measuredateachbalancesheetdateandsettlementdatebeforethesettlement
ofrelatedliabilities,thechangesareincludedinthecurrentprofitandloss.
(2)Modifyingandterminatingtherelevantaccountingtreatmentoftheshare-basedpaymentplan
WhentheCompanychangestheshare-basedpaymentplan,ifthemodificationincreasesthefairvalueofthe
grantedequityinstruments,theincreaseinthefairvalueoftheequityinstrumentsisrecognizedaccordingly.The
increaseinthefairvalueofequityinstrumentsreferstothedifferencebetweenthefairvalue,measuredonthe
modificationdate,oftheequityinstrumentsbeforeandafterthemodification.Ifthemodificationreducesthetotal
fairvalueoftheshare-basedpaymentoradoptsothermethodsthatarenotinfavorofemployees,theaccounting
treatmentofitwillnotbechanged,asifthemodificationneverhappenedunlesstheCompanycancelledpartorall
ofthegrantedequityinstruments.
Duringthevestingperiod,ifthegrantedequityinstrumentiscancelled,theCompanyshalltreatthecancelled
equityinstrumentasacceleratedexercise,andshallimmediatelychargetheamountthatshouldberecognizedin
theremainingvestingperiodintothecurrentprofitandlossandadjustingthecapitalreservesatthesametime.If
theemployeeorotherpartycanchoosetomeetthenon-vestingconditionsbutfailsduringthevestingperiod,the
Companywilltreatitasacancellationoftheequityinstrument.
(3)Accountingtreatmentinvolvingshare-basedpaymenttransactionsbetweentheCompanyandits
shareholdersoractualcontrollersoftheCompany
Inrespectoftheshare-basedpaymenttransactionbetweentheCompanyanditsshareholdersoractual
controllersoftheCompany,ifoneofthesettlementcompanyandtheservicerecipientisintheCompany,andthe
otherisoutsidetheCompany,theaccountingtreatmentiscarriedoutintheconsolidatedfinancialstatementsof
theCompanyaccordingtothefollowingrules:
Ifthesettlementcompanysettleswithitsownequityinstrument,theshare-basedpaymenttransactionshall
betreatedasequity-settledshare-basedpayment;otherwise,itshallbetreatedasacash-settledshare-based
payment.
Ifthesettlementcompanyistheinvestoroftheservicerecipient,itshallrecognizedasthelong-termequity
investmenttotheservicerecipientaccordingtothefairvalueoftheequityinstrumentatthegrantdateorthefair
valueoftheliabilitytobeundertaken.Thecapitalreserve(othercapitalreserve)orliabilitiesshallberecognized
atthesametime.
Iftheservicerecipientdoesnothaveasettlementobligationortheequityinstrumentsgrantedtoits
employeesareitsownequityinstruments,theshare-basedpaymenttransactionshallbetreatedasequity-settled
share-basedpayment.Iftheenterprisethatacceptsservicehasthesettlementobligationandtheequity
instrumentgrantedtoemployeesarenotitsownequityinstrument,thesharepaymenttransactionshallbetreated
asacash-settledshare-basedpayment.
Forshare-basedpaymenttransactionsoccurredbetweencompanieswithintheCompany,iftheservicerecipient
andthesettlementcompanyarenotthesameentity,therecognitionandsubsequentmeasurementofthe
share-basedpaymenttransactionintheirindividualfinancialstatementsshallbetreatedinaccordancewith
principlesabove.
24.Revenue
(1)Generalprincipal
①Revenuefromsaleofgoods
Revenuefromthesaleofgoodsshallberecognizedonlywhenallofthefollowingconditionsaresatisfied:(a)
significantriskandrewardsofownershipofthegoodshavebeentransferredtothebuyer;(b)thesellerretains
neithercontinuingmanagerialinvolvementtothedegreeusuallyassociatedwithownershipnoreffectivecontrol
overthegoodssold;(c)theamountofrevenuecanbemeasuredreliably;(d)itisprobablethattheassociated
economicbenefitswillflowtotheseller,and(e)theassociatedcostsincurredortobeincurredcanbemeasured
reliably.
②Revenuefromrenderingofservice
Whentheoutcomeofatransactioninvolvingtherenderingofservicescanbeestimatedreliably,revenue
associatedwiththetransactionarerecognizedusingthepercentageofcompletionmethodonbalancesheetdate.
Thepercentageofcompletioniscalculatedbasedontheproportionofservicesperformedtodatetothetotal
volumeofservicestobeperformed.
Theoutcomeofatransactioninvolvingtherenderingofservicescanbeestimatedreliablywhenallofthe
followingconditionsaresatisfied:(a)theamountofrevenuecanbemeasuredreliably;(b)itisprobablethatthe
associatedeconomicbenefitswillflowtotheentity:(c)thepercentageofcompletioncanbemeasuredreliably;
and(d)thecostsincurredandtobeincurredforthetransactioncanbemeasuredreliably.
Whentheoutcomeofatransactioninvolvingtherenderingofservicescannotbeestimatedreliably,revenueshall
berecognizedtotheextentofcostsincurredandexpectedtoberecovered.Costsofserviceprovidedare
chargedtothecurrentprofitorlossasservicecosts.Ifthecostsincurredarenotexpectedtoberecoverable,no
revenueisrecognized.
③Revenuefromrenderingusagerights
Therevenueisrecognizedonaccrualbasisandbasedonrelatedcontractsoragreements.
④Interestincome
TheinterestincomeshallbecalculatedbasedonthetenureoftheCompany’smonetaryfundsusedbyothersand
theactualinterestratesused.
(2)Detailedmethodofrevenuerecognition
ThewatchessoldbytheCompanyincludestwotypes,oneistheself-manufacturedFIYTAwatch,thesalesof
whichismanagedbybranchofficesandprovincial-levelsalesectionsbyregionssetupbySalesCompany,a
subsidiaryoftheCompany.Theotherisbrandwatches,thesalesofwhicharecontrolledbyShenzhen
HARMONYWorldWatchCenterCo.,Ltd.,asubsidiaryoftheCompany,andtheCompanyactasagent
Regardingtosalesmodes,aportionofthesalesofself-manufacturedFIYTAwatchesissoldthroughdirectsales
tocustomerandconsignmentsaleswhilemostoftheself-manufacturedFIYTAwatchesandbrandwatchesare
soldundertwosalesmodes,namelyexclusiveshopandshop-in-shop.Detailedmethodofrevenuerecognitionas
follows:
Directsalestothecustomer
Underdirectsalestothecustomermode,theCompanydeliversproductstocustomersandrecognizessales
incomeaftercustomerinspectionandacceptance.
Exclusiveshop
Underexclusiveshopmode,theCompanydeliversproductstocustomersandrecognizessalesincomeafter
customerinspection,acceptanceandpay.
③Shop-in-shop
Undershop-in-shopmode,theCompanydeliversproductstocustomers,salesstaffissuesnotestoretail
customersandrecognizessalesrevenueaftercustomerinspectionandacceptanceandthedepartmentstore
collectsthepaymentfromthecustomer.
④Consignmentsales
Underconsignmentsalesmode,theCompanyreceivesthedetailofthesaleslistfromdistributorsandrecognizes
revenuewhileissuinginvoicetodistributors.
25.Governmentgrants
Governmentgrantsaremonetaryassetsornon-monetaryassetsobtainedbytheCompanyfromthegovernment
freeofcharge.Itdoesnotincludecapitalcontributionsfromthegovernmentasanowner.Governmentgrantsare
classifiedintogovernmentgrantsrelatedtoassetsandgovernmentgrantsrelatedtoincome.TheCompany
definesthegovernmentgrantsobtainedfortheacquisitionorotherformationoflong-termassetsasthe
governmentgrantsrelatedtotheassets;theremaininggovernmentgrantsaredefinedasthegovernmentgrants
relatedtoincome.Ifthegovernmentdocumentsdonotclearlydefinetheobjectofsubsidy,thesubsidyshallbe
dividedintothegovernmentgrantrelatedtoincomeandthegovernmentgrantrelatedtoassetsinthefollowing
ways:(1)Ifthegovernmentdocumentspecifiesthespecificprojectforwhichthesubsidyistargeted,thebudgetof
theprojectwillbedividedintotherelativeproportionoftheexpenditureamountoftheassetsandtheexpenses
includedintheexpenses,andthedivisionratioshallbereviewedoneachbalancesheetdateandchangedwhen
necessary;(2)Ifthegovernmentdocumentsuseonlyforgeneralstatement,andnotspecifyaspecificproject,it
willbeasincome-relatedgovernmentgrants.Ifagovernmentgrantisinformofmonetaryasset,itismeasuredat
theamountreceivedorreceivable.Ifagovernmentgrantisintheformofnon-monetaryasset,ismeasuredatfair
value.Ifthefairvaluecannotbemeasuredreliably,itismeasuredatanominalamountandrecognizedirectlyin
thecurrentprofitorloss.
TheCompanyusuallyconfirmsandmeasuresgovernmentgrantsaccordingtotheactualamountreceived.
However,whenthereisconclusiveevidencethatcanmeetthefinancialsupportpoliciesandregulationsrelatedto
theconditionsexpectedtobeabletoreceivefinancialsupportfundsfortheendoftheyear,itwillmeasure
accordingtotheactualamountreceived.Thegovernmentgrantsmeasuredaccordingtothereceivableamount
shallmeetthefollowingconditionsatthesametime:(1)Theamountofthegrantsreceivablehasbeenauthorized
bythegovernmentdepartmenttoissuethedocumentsorcanbereasonablymeasuredaccordingtotherelevant
provisionsoftheformallypromulgatedfinancialcapitalmanagementmeasures;(2)Itisbasedonthefinancial
supportitemsformallypromulgatedbythelocalfinancedepartmentandproactivelydisclosedinaccordancewith
theprovisionsofthe"RegulationsGoverningtheDisclosureofGovernmentInformation"andthefiscalfund
managementmeasures,andthemanagementmeasuresshouldbegeneralized(anyeligibleenterprisescan
apply),ratherthanspecificallyforaspecificcompany;(3)therelevantgrantapprovalhasbeenclearlycommitted
tothedeadlinefordisbursement,andthedisbursementoffundshascorrespondingbudgetasaguarantee,so
thatitcanreasonablyensurethatitcanbereceivedwithintheprescribedtimelimit;(4)Otherrelevantconditions
(ifany)thatshouldbesatisfiedaccordingtotheCompanyandthespecificcircumstancesofthegrants.
Agovernmentgrantrelatedtoassetisrecognizedasdeferredincome,andevenlyamortizedandchargedtoprofit
orlossoveritsusefullife.Ifagovernmentgrantrelatedtoincomeisusedtocompensaterelatedexpensesand
lossesinsubsequentperiods,itisrecognizedasdeferredincomeandchargedtocurrentprofitorlosswhen
recognizetherelevantcostandexpenseorloss.Ifitisusedtocompensaterelatedexpensesandlossesthatare
alreadyincurred,itischargedtocurrentprofitorlossdirectly.
Governmentgrantsincludingassets-relatedpartsandincome-relatedpartsatthesametimeshouldbetreated
separately.Ifitisdifficulttodistinguishthem,theywillbeclassifiedasincome-relatedgovernmentgrants
completely.
ThegovernmentgrantsrelatedtothedailyactivitiesoftheCompanyareincludedinothergainoroffsetthe
relatedcostsaccordingtotheessenceoftheeconomicbusiness.Thegovernmentgrantsthatarenotrelatedto
thedailyactivitiesareincludedinthenon-operatingincomeandexpenses.
Ifagovernmentgrantalreadyrecognizedneedstoberepaid,thecarryingamountofrelateddeferredincome,if
any,istobereduced.Anyexcessarechargedtocurrentprofitorloss.Ifthereisnodeferredincome,the
repaymentischargedtocurrentprofitorlossdirectly.
26.Deferredtaxasset/deferredtaxliability
(1)Currentperiodcorporateincometax
Atthebalancesheetdate,currentincometaxliabilities(orassets)forthecurrentperiodandpriorperiodsshallbe
measuredattheamountexpectedtobepaid(refunded)accordingtotherequirementoftaxationlaws.The
taxableincomeusedtocalculatecurrentperiodincometaxexpensesiscalculatedbymakingcorresponding
adjustmentstocurrentperiodprofitbeforetaxinaccordancewithrelevanttaxationregulations.
(2)Deferredtaxassetanddeferredtaxliability
Temporarydifferencescanberecognizedasdeferredtaxassetanddeferredtaxliabilityusingbalancesheet
liabilitymethod.Temporarydifferencesarisefrom:thedifferencebetweenthecarryingamountandtaxbaseof
certainassetsandliabilities;thedifferencebetweenthecarryingamountandthetaxbaseofanitemwhicharenot
recognizedasassetsandliabilitiesbutitstaxbasecanbedeterminedaccordingtorelevanttaxationlaws.
Adeferredtaxliabilityshallnotberecognizedforthetaxabletemporarydifferencesarisingfromthefollowing
events:(a)theinitialrecognitionofgoodwill;(b)theinitialrecognitionofanassetorliabilityinatransactionwhich
containsbothofthefollowingcharacteristics:(i)thetransactionisnotabusinesscombination;(ii)atthetimeof
thetransaction,itaffectsneitheraccountingprofitnortaxableprofit(ordeductibleloss).Fortaxabletemporary
differencesassociatedwithinvestmentinsubsidiaries,associatesandinterestsinjointlycontrolledenterprises,a
deferredtaxliabilityshallnotberecognizedifbothofthefollowingconditionsaresatisfied:(a)theCompanyis
abletocontrolthetimingofthereversalofthetemporarydifferences;and(b)itisprobablethatthetemporary
differencewillnotreverseintheforeseeablefuture.Exceptforexceptionsmentionedabove,theCompany
recognizesallothertaxabletemporarydifferenceasdeferredtaxliability.
Adeferredtaxassetshallnotberecognizedforthedeductibletemporarydifferencesassociatedwiththeinitial
recognitionofanassetorliabilityinatransactionwhichcontainsbothofthefollowingcharacteristics:(a)the
transactionisnotabusinesscombination;(b)atthetimeofthetransaction,itaffectsneitheraccountingprofitnor
taxableprofit(ordeductibleloss).Fordeductibletemporarydifferencesassociatedwithinvestmentinsubsidiaries,
associatesandinterestsinjointlycontrolledenterprises,adeferredtaxassetshallnotberecognizedifoneofthe
followingconditionsissatisfied:(a)itisprobablethatthetemporarydifferencewillnotreverseintheforeseeable
future;and(b)taxableprofitswillnotbeavailableinthefuture,againstwhichthetemporarydifferencecanbe
utilized.Exceptforexceptionsmentionedabove,theCompanyrecognizesdeductibletemporarydifferenceas
deferredtaxassettotheextentofthefuturetaxableprofitwhichisprobablyachievedbytheCompany.
Adeferredtaxassetshallberecognizedforthecarryforwardofunuseddeductiblelossesandtaxcreditstothe
extentthatitisprobablethatfuturetaxableprofitwillbeavailableagainstwhichthedeductiblelossesandtax
creditscanbeutilized.
Atthebalancesheetdate,deferredtaxassetsanddeferredtaxliabilitiesshallbemeasuredatthetaxratesthat
areexpectedtoapplytotheperiodwhentheassetisrealizedortheliabilityissettled,accordingtothe
requirementoftaxlaws.
Atthebalancesheetdate,thecarryingamountofadeferredtaxassetshallbereviewed.TheCompanyshall
reducethecarryingamountofadeferredtaxassettotheextentthatitisnolongerprobablethatsufficienttaxable
profitwillbeavailableinfutureperiodstoallowthebenefitofthedeferredtaxassettobeutilized.Anysuch
reductioninamountshallbereversedtotheextentthatitbecomesprobablethatsufficienttaxableprofitwillbe
available.
(3)Corporateincometax
Thecorporateincometaxincludescurrentperiodincometaxanddeferredincometax.
Thecurrentincometaxanddeferredincometaxshallberecognizedinthecurrentprofitorlossexceptfor:(a)the
incometaxarisingfromeventsortransactionswhicharerecognizedinthecomprehensiveincomeorowners’
equityarerecognizedinthecomprehensiveincomeorowners’equityaccordingly;and(b)theincometaxarising
frombusinesscombinationswhichareadjustedtothecarryingamountofgoodwill.
(4)Offsettingofincometax
Whenlegalrighttonettingsettlementisowned,netsettlementorintenttoacquiretheassetsandsettlethe
liabilitieshappensimultaneously,theGrouphadnetcurrenttaxassetsagainstcurrenttaxliabilitiesarenetting
presentationafteroffset.
Whenthelegalrighttooffsetcurrenttaxassetsagainstcurrenttaxliabilitiesisownedandthedeferredtaxassets
anddeferredtaxliabilitiesrelatetothesametaxationauthorityonthesametaxableincomeleviedbyorrelatedto
differenttaxableentities,butwithinthereverseperiodofsignificantamountsofdeferredtaxassetsandliabilities
ineachfutureperiod,andthetaxpayer'sintentiontooffsetcurrenttaxassetsandliabilitiesorbothtoobtain
assetsorrepaydebts,thedeferredincometaxanddeferredtaxassetsandliabilitiesoftheGrouptonetting
presentationafteroffset.
27.Leasing
Afinanceleaseisaleasethattransferssubstantiallyalltherisksandrewardsassociatedwiththeownershipofan
asset.Titleoftheassetmayormaynoteventuallybetransferred.Anoperatingleaseisaleaseotherthana
financelease.
(1)AccountingtreatmentfortheCompanyaslesseeunderoperatingleases
Leasepaymentsunderanoperatingleasearerecognizedascostofrelevantassetsorchargedtoprofitorlossfor
thecurrentperiodonstraight-linebasisovertheleaseterm.Initialdirectcostsincurredarechargedtoprofitor
lossforthecurrentperioddirectly.Contingentrentalsarechargedtoprofitorlossintheperiodinwhichtheyare
actuallyincurred.
(2)AccountingtreatmentfortheCompanyaslessorunderoperatingleases
Leasereceiptsunderanoperatingleasearerecognizedbytheinthecurrentprofitorlossonastraight-linebasis
overtheleaseterm.Significantinitialdirectcostsarecapitalizedwhentheyareincurred,andarerecognizedin
profitorlossovertheleasetermonthebasisonwhichtheleaseincomeisrecognized.Insignificantinitialdirect
costsshallbechargedtothecurrentprofitorlossdirectly.Contingentrentalsarechargedtoprofitorlossinthe
periodinwhichtheyareactuallyincurred.
(3)AccountingtreatmentfortheCompanyaslesseeunderfinanceleases
Ontheleasebeginningdate,theCompanyshallrecordtheloweroneofthefairvalueoftheleasedassetandthe
presentvalueoftheminimumleasepaymentsontheleasebeginningdateastheenteringvalueinanaccount,
recognizetheamountoftheminimumleasepaymentsastheenteringvalueinanaccountoflong-termaccount
payable,andtreatthebalancebetweentherecordedamountoftheleasedassetandthelong-termaccount
payableasunrecognizedfinancingcharges.Besides,theinitialdirectcostsdirectlyattributabletotheleaseditem
incurredduringtheprocessofleasenegotiatingandsigningtheleasingagreementshallberecordedintheasset
valueofthecurrentperiod.Thebalancethroughdeductingunrecognizedfinancingchargesfromtheminimum
leasepaymentsshallberespectivelystatedinlong-termliabilitiesandlong-termliabilitiesduewithin1year.
Unrecognizedfinancingchargesshallbeadoptedbytheeffectiveinterestratemethodintheleaseterm,soasto
calculateandrecognizecurrentfinancingcharges.Thecontingentrentsshallberecordedintotheprofitsand
lossesofthecurrentperiodinwhichtheyactuallyarise.
(4)AccountingtreatmentfortheCompanyaslessorunderfinanceleases
Onthebeginningdateoftheleaseterm,theCompanyshallrecognizethesumoftheminimumleasereceiptson
theleasebeginningdateandtheinitialdirectcostsastheenteringvalueinanaccountofthefinancinglease
valuesreceivable,andrecordtheunguaranteedresidualvalueatthesametime.Thebalancebetweenthesumof
theminimumleasereceipts,theinitialdirectcostsandtheunguaranteedresidualvalueandthesumoftheir
presentvaluesshallberecognizedasunrealizedfinancingincome.Thebalancethroughdeductingunrealized
financingincomesfromthefinanceleaseaccountsreceivableshallberespectivelystatedinlong-termclaimsand
long-termclaimsduewithin1year.
Unrecognizedfinancingincomesshallbeadoptedbytheeffectiveinterestratemethodintheleaseterm,soasto
calculateandrecognizecurrentfinancingrevenues.Thecontingentrentsshallberecordedintotheprofitsand
lossesofthecurrentperiodinwhichtheyactuallyarise.
28.Othermainaccountingpoliciesandestimates
Discontinuedoperation
Discontinuedoperationrefertothecomponentsthatcanbeseparatedanddisposedoforclassifiedasheldfor
saleseparatelybyoneofthefollowingconditions:①Thecomponentrepresentsanindependentmainbusiness
oraseparatemainoperationarea;②Thiscomponentispartofarelatedplantobedisposedofbyan
independentmajorbusinessoraseparatemajoroperatingarea;③Thiscomponentisasubsidiaryacquired
exclusivelyforresale.
RefertoNoteIV.12"DescriptionofAssetsHeld-for-SaleandDisposalGroup"fordetailsofaccountingtreatment
ofdiscontinuedoperations.
29.Changesinmainaccountingpoliciesandestimates
(1)Changeofaccountingpolicies
TherewasnochangesofaccountingpoliciesoftheCompanyinthereportingperiod.
(2)Changesofaccountingestimates
TherewasnochangesofaccountingestimateoftheCompanyinthereportingperiod.
30.Significantaccountingjudgmentandestimates
Whenadoptingtheaccountingpolicies,theCompanyneedstomakejudgments,estimatesandassumptionsfor
thecarryingamountofitemswhicharepresentedinfinancialstatementsandcannotbemeasuredaccuratelydue
tointernaluncertaintiesofbusiness.Thejudgments,estimatesandassumptionsthataremadeaccordingto
historicalexperienceofthemanagementandwithconsiderationofotherrelevantfactorswillhaveeffectsonthe
reportedamountsofrevenue,expenses,assetsaswellasliabilitiesandthedisclosureofcontingentliabilitiesat
thebalancesheetdate.Theuncertaintiesoftheseestimateswillprobablyresultinsignificantadjustmentsonthe
carryingamountsofassetsorliabilitieswhichwillbeaffectedbythosejudgments,estimatesandassumptionsin
futureaccountingperiods.
Thejudgments,estimatesandassumptionsarereviewedbytheCompanyperiodicallyongoingconcernbasis.If
thechangesinaccountingestimatesaffectcurrentperiodonly,theamountsaffectedarerecognizedincurrent
period.Ifthechangeaffectsbothcurrentandfutureperiods,theamountsaffectedarerecognizedinthecurrent
accountingperiodaswellassubsequentaccountingperiods.
Atthebalancesheetdate,significantareasthatrequiretheCompanytomakejudgments,estimatesand
assumptionstotheamountsoffinancialstatementsitemsareasfollows:
(1)Theclassificationoflease
Accordingtothe“CASNo.21–Leasing”,theCompanyclassifiesleasesasoperatingleasesandfinanceleases.
Whencategorizing,managementneedstomakeanalysisandjudgmentonwhetheralltherisksandrewards
associatedwiththeownershipoftheleasedassetbetransferredsubstantiallytolessee,orwhethertheCompany
tookalltherisksandrewardsassociatedwiththeownershipoftheleasedassetssubstantially.
(2)Baddebtprovisionrecognition
TheallowancemethodisadoptedbytheCompanytoaccountforlossesonbaddebtsinaccordancewiththe
accountingpoliciesforreceivables.Impairmentofaccountsreceivableismadebasedonestimationofits
recoverability,whichrequiresthemanagementtomakejudgmentsandestimates.Thedifferencebetweenthe
actualoutcomeandtheestimateswillhaveeffectsonthecarryingamountsofaccountsreceivableandon
provisionorreversaloftheprovisionforbaddebtsoftheaccountingperiodinwhichtheestimateswillbe
changed.
(3)Provisionforimpairmentofinventories
Accordingtotheaccountingpoliciesofinventories,itismeasuredatlowerofcostandthenetrealizablevalue
(NRV).ForinventorycostthatishigherthanitsNRVandobsoleteandslowmovinginventory,impairment
provisionshallbeaccrued.Evaluatingtheimpairmentofinventoriesneededthemanagementlevelgainthevalid
evidenceandtakefullconsiderationofthepurposeofinventories,influenceofeventsafterbalancesheetdate
andotherfactors,andthenmaderelevantjudgmentsandestimates.Theactualamountandthedifferenceof
previousestimatewouldaffectthebookvalueofinventoriesandtheaccrualandreversalofprovision.
(4)Theimpairmentofavailable-for-salefinancialassets
Whetheranavailable-for-salefinancialassetisimpairedrelieslargelyonthejudgmentandassumptionofthe
management,soastodecidewhetherrecognizedtheimpairmentlossesintheincomestatement.Duringthe
processofmakingthejudgmentandassumption,theCompanyneededtoappraisethebalanceofthecostofthe
investmentexceedingitsfairvalueandthecontinuousperiod,thefinancialstatusandbusinessforecastinashort
period,includingtheindustrialsituation,technicalreform,creditlevel,defaultrateandriskofcounterparty.
(5)Impairmentprovisionforlong-termasset
Atthebalancesheetdate,theCompanyjudgeswhetherthereareindicatorsofimpairmentfornon-currentassets
otherthanfinancialassets.Foranintangibleassetwithanindefiniteusefullifeexceptforannuallyimpairmenttest,
animpairmenttestwillbeconductedifthereareanyindicatorsofimpairmentoccur.Fornon-currentassetsother
thanfinancialassets,animpairmenttestshallbemadeifthereareevidencesindicatingthecarryingamounts
cannotberecoveredinfullamount.
Anassetorassetgroupisimpairedwhenitscarryingamountishigherthanitsrecoverableamounti.e.thehigher
ofitsfairvaluelessthedisposalexpensesandthepresentvalueoftheestimatedfuturecashflows.
Thenetamountoffairvaluelessthedisposalexpensesaredeterminedwithreferencetothequotedpriceof
similarassetsinasalesagreementinanarm’slengthtransactionoranobservablemarketpricelessincremental
costsdirectlyattributabletodisposaloftheasset.
Whenestimatingthepresentvalueoffuturecashflows,significantjudgmentsareinvolvedtotheproduction
output,sellingprice,relevantbusinesscostsoftheasset(orassetgroup)andthediscountrateadoptedin
calculatingthepresentvalue.Inestimatingtherecoverableamount,theCompanywilladoptallinformation
available,suchasforecastsfortheproductionoutput,thesellingpriceandrelevantbusinesscosts,whichare
madeaccordingtoreasonableandsupportiveassumptions.
TheCompanyconductsimpairmenttesttogoodwillatleastonceayear.Thisrequiresestimatingthepresent
valueoffuturecashflowsofassetgrouporcombinationofassetgrouptowhichgoodwillhasbeenallocated.In
estimatingthepresentvalueoffuturecashflows,theCompanyneedsestimatefuturecashflowsgeneratedfrom
theassetgrouporthecombinationofassetgroupsandchooseappropriatediscountrates.
(6)Depreciationandamortization
Takingtheresidualvalueintoconsideration,aninvestmentproperty,fixedassetandintangibleassetare
depreciatedoramortizedonastraight-linebasisoveritsusefullife.TheCompanyreviewstheusefullife
periodicallytodeterminetheamountofdepreciationoramortizationwhichshallberecognizedineachaccounting
period.Theusefullifeisdeterminedaccordingtohistoricalexperienceofsimilarassetsandtechnological
renovationestimated.Theamountofdepreciationoramortizationshallbeadjustedinfutureaccountingperiodsif
therearematerialchangesinestimatesmadebefore.
(7)Deferredincometaxasset
Adeferredtaxassetshallberecognizedfortheunuseddeductiblelossestotheextentthatitisprobablethat
futuretaxableprofitwillbeavailableagainstwhichthedeductiblelossescanbeutilized.Takingthetaxation
planningintoconsideration,themanagementoftheCompanyisrequiredtomakesignificantamountof
judgmentstoestimatethetimeandtheamountoffuturetaxableprofitinordertodeterminetheamountof
deferredincometaxassetstoberecognized.
(8)Corporateincometax
ForsometransactionsintheCompany’sordinarycourseofbusiness,uncertaintiesexistintheirtaxtreatmentand
calculation.Anapprovalfromthetaxauthorityisneededtodeterminewhetheranitemisdeductiblebeforetax.If
thefinalconfirmationfromthetaxauthoritydifferswiththeoriginalestimation,thedifferencewillhaveeffectson
thecurrentincometaxanddeferredincometaxoftheperiodinwhichthefinalconfirmationismadebythetax
authority.
(9)Provision
TheCompanyestimatesandaccruesrelatedprovisiononitsafter-salequalitywarrantycommitmenttocustomers
withrespecttothegoodssold,estimatedonerouscontractandpenaltyfordelayindeliverybasedoncontract
terms,currentknowledgeandhistoricalexperience.Incasethatthecontingenteventbecomesacurrent
obligationandperformanceofthecurrentobligationmaybeverylikelytocauseeconomicbenefitflowoutofthe
Company,theCompanyrecognizesprovisionbasedonthebestestimatesforfulfillingtherelatedcurrent
obligation.Recognitionandmeasurementofcontingentliabilityislargelydependonthemanagement’sjudgment.
Inthecourseofmakingjudgement,theCompanyneedtoevaluatefactorsofrisk,uncertaintyandtimevalueof
moneyrelatedtothecontingentevent.
TheCompanywillmakeprovisionforaftersalequalitycommitmentforproductsold,maintenanceand
re-fabricationofproductsold.Whenaccruingtheprovision,itneedstoconsidertherecentmaintenancedata
whichmaynotbelikelytoreflectthefuturemaintenancesituations.Anyincreaseorreductionoftheprovisionmay
possiblyaffecttheprofitorlossinfutureyears.
V.Taxation
1.Maintaxesandtaxrates
Tax | Taxrate |
Value-addedtax(Note(1)) | Outputtaxiscalculatedat3%、5%、6%、10%、16%oftaxableincomeandVATispaidafteroffsettheoutputtaxwithinputtaxallowedatcurrentperiod |
Tax
Tax | Taxrate |
Consumptiontax | Consumptiontaxisapplicableforimportedormanufacturedluxurywatcheswithunitpriceabove10,000(inclusive). |
Urbanmaintenanceandconstructiontax | 5%、7%ontheturnovertaxactuallypaid |
Propertytax(Note(2)) | 1.2%onthebasisof70%oftheoriginalcostofthepropertyand12%forrentalincome. |
Corporateincometax | SeeNote(3)fordetail. |
Value-addedtaxrateoriginallyappliedto17%,11%whentheCompanyhaveVATtaxablesalesorimportgoods.
Accordingto“NoticeoftheMinistryofFinanceandtheStateAdministrationofTaxationonAdjustingthe
Value-AddedTaxRate”(withCaiShui(2018)No.32),applicabletaxrateadjustedto16%,10%sinceMay1st,
2018
OthertaxableincomearisingfromtheCompanyiscalculatedonthebasisoftheapplicabletaxrate.
Note(2):PropertyTax
InaccordancewithArticle5of“NoticetoPublish“ReplytoIssuesRelatedtoPropertyTaxandVehicleandVessel
UsageTax””,ShenDiShuiFa(1999)No.374issuedbyShenzhenLocalTaxationBureau,propertyleasedoutby
manufacturingorbusinessentityaretaxedat1.2%onthebasesof70%oftheoriginalcostoftheproperty.
PropertiesoftheCompanythatsituatedinShenzhenaretaxedaccordingtothisnotice.Propertiessituatedin
othercitiesaretaxedaccordingtolocalregulations.
Note(3):Corporateincometax
Nameofentitysubjecttocorporateincometax | Applicabletaxrate |
TheCompany(Note①②⑤) | 25.00% |
ShenzhenHARMONYWorldWatchCenterCo.,Ltd.(HARMONYCompany)(Note①⑤) | 25.00% |
ShenzhenFIYTAPrecisionTimerManufacturingCo.,Ltd.(ManufacturingCompany)(Note②③) | 15.00% |
FIYTAHongKong(Note④) | 16.50% |
Station68(Note④) | 16.50% |
ShenzhenFIYTATechnologyDevelopmentCo.,Ltd(TechnologyCompany)(Note②③) | 15.00% |
TEMPORAL(Shenzhen)Co.,Ltd.(TEMPORALCompany)(Note⑤) | 25.00% |
Nameofentitysubjecttocorporateincometax
Nameofentitysubjecttocorporateincometax | Applicabletaxrate |
HarbinHarmonyWorldWatchesDistributionCo.,Ltd.(HarbinCompany)(Note⑤) | 25.00% |
EmileChoureitTiming(Shenzhen)Ltd.(EmileChoureitShenzhenCompany)(Note⑤) | 25.00% |
FIYTASalesCo.,Ltd(SalesCompany)(Note①⑤) | 25.00% |
LiaoningHengdaruiCommercial&TradeCo.,Ltd(HengdaruiCompany)(Note⑤) | 25.00% |
SwissCompany(Note⑥) | 30.00% |
LevyofCorporateIncomeTaxtoEnterprisethatOperatesCross-regionally”,theheadofficeoftheCompanyand
itsbranchoffices,theheadofficeofHARMONYCompanyanditsbranchoffices,andtheheadofficeofSales
Companyanditsbranchofficesadopttaxsubmissionmethodof“unifiedcalculation,managingbyclasses,
pre-paidinitsregisteredplace,settlementintotal,andadjustmentbyfinanceauthorities”startingfrom1January
2008.Branchofficesmentionedaboveshare50%oftheenterpriseincometaxandprepaylocally;and50%will
beprepaidbytheheadofficesmentionedabove.
Note②:Accordingto“NoticeoftheMinistryofFinance,theStateAdministrationofTaxationandMinistryof
ScienceonImprovingthePre-taxSuperDeductionRatioofResearchandDevelopmentExpenses”(CaiShui
(2018)No.99),iftheresearchanddevelopmentcosts,whichwereincurredfordevelopingnewtechnologies,new
products,andnewprocessesbytheCompany,theManufacturingCompanyandtheTechnologyCompany,are
notcapitalizedasintangibleassetsbutchargedtocurrentprofitsandlosses,thecompaniescanenjoya75%
superdeductionontopoftheR&Dexpensesthatallowedtodeductbeforeincometaxduringtheperiodfrom
January1,2018toDecember31,2020.
Note③:Thecompanyenjoyedfor“ReductionandExemptioninCorporateIncomeTaxRateforHighandNew
TechnologyEnterprisesthatRequireKeySupportfromtheState”.
Note④:ThesecompaniesareregisteredinHongKongandtheincometaxrateofHongKongapplicableis
16.50%thisyear.
Note⑤:AccordingtothePeople'sRepublicofChinaEnterpriseIncomeTaxLaw,theincometaxrateis25%for
residentialenterprisessince1January2008.
Note⑥:Thecomprehensivetaxrateof30%isapplicableforSwissCompanyasitregisteredinSwitzerland.
2.Preferentialtreatmentandcorrespondingapproval
Accordingtoclause2inShenDishuiFa(2003)No.676“NoticeofForwardingStateAdministrationofTaxationon
PoliciesRelatedtoPropertyTaxandUrbanLanUsageTax”,fornewlyconstructedorpurchasedpropertybytax
payer,propertytaxisexemptedfor3yearsfromthenextmonthitisconstructedorpurchased.Thepropertytax
forFIYTAWatchBuildingownedbytheCompanylocatedinShenzhenGuangmingNewDistrictisexemptedfor3
yearsfromthenextmonthwhenconstructioniscompleted.
VI.Notestotheconsolidatedfinancialstatements
Unlessotherwiseindicated,thebeginningoftheyearforitems(includingnotesfortheCompany’sfinancial
statements)listbelowrefersto1January2018andtheendoftheyearrefersto31December2018.Prioryear
referstoyear2017andcurrentyearreferstoyear2018.
1.Cashandbankbalances
Item | 31Dec2018 | 1Jan2018 |
Cashonhand | 420,783.85 | 414,210.14 |
Bankdeposit | 160,135,454.62 | 184,528,160.32 |
Othermonetaryfunds | 4,271,821.50 | 2,210,520.86 |
Total | 164,828,059.97 | 187,152,891.32 |
Incl:depositoutsideMainlandChina | 9,192,653.31 | 7,880,620.64 |
depositwithBankforissuingofunconditionalandirrevocableletterofguarantee;amountofRMB630,000.00was
judicialfreezeduetothelegalproceedings.
2.Noteandaccountsreceivables
Item | 31Dec2018 | 1Jan2018 |
Notesreceivables | 7,051,846.85 | 9,693,883.68 |
Accountsreceivables | 370,545,656.61 | 326,254,624.94 |
Total | 377,597,503.46 | 335,948,508.62 |
①Notesreceivableclassification
Item | 31Dec2018 | 1Jan2018 |
Banker'sacceptancebill | - | 2,398,579.72 |
Commercialacceptancebill | 7,051,846.85 | 7,295,303.96 |
Total | 7,051,846.85 | 9,693,883.68 |
③Endorsednotesthatisnotyetdueattheendoftheperiod.
Item | Amountderecognizedatyearend | Amountnotderecognizedatyearend |
Banker'sacceptancebill | 1,294,584.13 | - |
④Thereisnonotesreceivabletransferredtoreceivablesduetoissuer’sdefaultattheendoftheperiod.
(2)Accountsreceivable
①Accountsreceivablespresentedbytypes
Types | 31Dec2018 | ||||
Bookbalance | Baddebtprovision | Carryingamount | |||
Amount | Percentage(%) | Amount | Percentage(%) | ||
Receivablesthatareindividuallysignificantinamountandprovidedforbaddebtseparately | 1,702,371.94 | 0.44 | 1,702,371.94 | 100.00 | - |
Receivablesprovidedforbaddebtbyportfolio | 381,434,944.02 | 99.53 | 10,889,287.41 | 2.85 | 370,545,656.61 |
Incl.Agingportfolio | 189,655,491.08 | 49.49 | 10,889,287.41 | 5.74 | 178,766,203.67 |
Portfolioofspecificaccounts | 191,779,452.94 | 50.04 | - | - | 191,779,452.94 |
Receivablesthatareindividuallyinsignificantinamountbutprovidedforbaddebtseparately | 97,147.84 | 0.03 | 97,147.84 | 100.00 | - |
Total | 383,234,463.80 | 100.00 | 12,688,807.19 | 3.31 | 370,545,656.61 |
Types | 1Jan2018 | ||||
Bookbalance | Baddebtprovision | BookValue | |||
Amount | Percentage(%) | Amount | Percentage(%) | ||
Receivablesthatareindividuallysignificantinamountandprovidedforbaddebtseparately | 6,985,493.80 | 2.04 | 6,985,493.80 | 100.00 | - |
Receivablesprovidedforbaddebtbyportfolio | 334,903,968.85 | 97.93 | 8,649,343.91 | 2.58 | 326,254,624.94 |
Incl.Agingportfolio | 160,056,201.19 | 46.80 | 8,649,343.91 | 5.40 | 151,406,857.28 |
Portfolioofspecificaccounts | 174,847,767.66 | 51.13 | - | - | 174,847,767.66 |
Receivablesthatareindividuallyinsignificantinamountbutprovidedforbaddebtseparately | 97,147.84 | 0.03 | 97,147.84 | 100.00 | - |
Types
Types | 1Jan2018 | ||||
Bookbalance | Baddebtprovision | BookValue | |||
Amount | Percentage(%) | Amount | Percentage(%) | ||
Total | 341,986,610.49 | 100.00 | 15,731,985.55 | 4.60 | 326,254,624.94 |
separately
Accountsreceivable(bycompany) | 31Dec2018 | |||
Accountsreceivable | Baddebtprovision | Percentage(%) | Reason | |
GinwaXi’anQujiangShoppingCenterCo.,Ltd. | 1,702,371.94 | 1,702,371.94 | 100.00 | Chancesofrecoveringisremoteduetomanagementcondition |
Aging | 31Dec2018 | ||
Accountsreceivable | Baddebtprovision | Percentage(%) | |
Within1year | 176,490,750.08 | 8,818,234.89 | 5.00 |
1~2years | 10,632,348.03 | 1,063,234.80 | 10.00 |
2~3years | 1,291,893.89 | 387,568.17 | 30.00 |
over3years | 1,240,499.08 | 620,249.55 | 50.00 |
Total | 189,655,491.08 | 10,889,287.41 | 5.74 |
Nameofportfolio | 31Dec2018 | ||
Accountsreceivable | Baddebtprovision | AccountPercentage(%) | |
Portfolioofspecificaccounts | 191,779,452.94 | - | - |
accountsreceivablefromsubsidiariesoftheCompanyandsalesrevenuebetweenthelastsettlementdateofthe
samedepartmentstoreandthebalancesheetdatearewithhighrecoverabilityandlowpossibilityofincurringbad
debt,asaresult,nobaddebtprovisionsareprovidedforsuchreceivables.
②Statusofbaddebtaccrual,recoveryorreversedincurrentyear
In2018,baddebtaccrualisRMB4,506,633.93,andtheamountofrecoveryorreversalofbaddebtprovisionis
RMB7,549,812.29.
Incl.theamountofsignificantrecoveryorreversalofbaddebtprovisionthisyear
Nameofaccounts | Theamountofrecoveryorreversal | Recoverymethod |
GinwaXinjiangTimeSquireShoppingCenterCo.,Ltd | 2,250,000.00 | Bankdeposit |
GinwaXi’anCenturyShoppingCo.,Ltd. | 5,283,121.86 | Bankdeposit |
Total | 7,533,121.86 | - |
③Noaccountsreceivablewaswritten-offduringtheyear④Top5receivableaccounts
Theamountoftop5receivablesbasedonyear-endreceivablebalanceisRMB65,652,234.68,accountsfor
17.13%oftotalreceivablesasat31Dec2018.CorrespondingbaddebtprovisionisRMB602,002.24.
3.Prepayments
(1)Prepaymentspresentedbyaging
Accountaging | 31Dec2018 | 1Jan2018 | ||
Amount | Percentage(%) | Amount | Percentage(%) | |
Within1year | 12,886,273.93 | 94.29 | 20,284,829.30 | 82.25 |
1~2years | - | - | 2,034,407.41 | 8.25 |
2~3years | 780,542.40 | 5.71 | 2,344,077.82 | 9.50 |
Over3years | - | - | - | - |
Total | 13,666,816.33 | 100.00 | 24,663,314.53 | 100.00 |
Theamountoftop5prepaymentaccountsbasedonyear-endbalanceisRMB9,393,700.19,accountsfor68.73%
oftotalprepaymentsasat31Dec2018.
4.Otherreceivables
Item | 31Dec2018 | 1Jan2018 |
Otherreceivables | 45,870,582.26 | 34,990,539.09 |
①Otherreceivablespresentedbytypes
Types
Types | 31Dec2018 | ||||
Bookbalance | Baddebtprovision | Carryingamount | |||
Amount | Percentage(%) | Amount | Percentage(%) | ||
Otherreceivablesthatindividuallysignificantinamountandprovidedforbaddebtseparately | 7,093,237.65 | 12.69 | 7,093,237.65 | 100.00 | - |
Otherreceivablesprovidedforbaddebtbyportfolio | 48,249,486.72 | 86.30 | 2,378,904.46 | 4.93 | 45,870,582.26 |
Incl.Agingportfolio | 45,771,039.24 | 81.87 | 2,378,904.46 | 5.20 | 43,392,134.78 |
Portfolioofspecificaccounts | 2,478,447.48 | 4.43 | - | - | 2,478,447.48 |
Otherreceivablesthatindividuallyinsignificantinamountbutprovidedforbaddebtseparately | 565,400.00 | 1.01 | 565,400.00 | 100.00 | - |
Total | 55,908,124.37 | 100.00 | 10,037,542.11 | 17.95 | 45,870,582.26 |
Types | 1Jan2018 | ||||
Bookbalance | Baddebtprovision | Carryingamount | |||
Amount | Percentage(%) | Amount | Percentage(%) | ||
Otherreceivablesthatindividuallysignificantinamountandprovidedforbaddebtseparately | 6,847,372.68 | 15.23 | 6,847,372.68 | 100.00 | - |
Otherreceivablesprovidedforbaddebtbyportfolio | 38,090,257.88 | 84.73 | 3,099,718.79 | 8.14 | 34,990,539.09 |
Incl.Agingportfolio | 33,690,435.20 | 74.94 | 3,099,718.79 | 9.20 | 30,590,716.41 |
Portfolioofspecificaccounts | 4,399,822.68 | 9.79 | - | - | 4,399,822.68 |
Otherreceivablesthatindividuallyinsignificantinamountbutprovidedforbaddebtseparately | 20,000.00 | 0.04 | 20,000.00 | 100.00 | - |
Total | 44,957,630.56 | 100.00 | 9,967,091.47 | 22.17 | 34,990,539.09 |
A.Year-endbalanceofotherreceivablesthatareindividuallysignificantinamountandprovidedforbaddebt
separately
Accounts | 31Dec2018 | |||
Otherreceivable | Baddebtprovision | Percentage(%) | Reasons | |
ChinaResources(ChongQing)IndustrialCo.,Ltd. | 800,000.00 | 800,000.00 | 100.00 | Thepossibilityofrecoveryisremoteduetotheterminationofcooperativeproject. |
BeatBlattmanMarketing | 4,041,632.05 | 4,041,632.05 | 100.00 | Businessfacesbankruptcy,thepossibilityofrecoveryisremote. |
LibertyTimeCenterGmbH | 2,251,605.60 | 2,251,605.60 | 100.00 | Businessfacesbankruptcy,thepossibilityofrecoveryisremote. |
Total | 7,093,237.65 | 7,093,237.65 | — | — |
Ageing | 31Dec2018 | ||
Otherreceivable | Baddebtprovision | Percentage(%) | |
Within1year | 44,291,589.79 | 2,214,579.51 | 5.00 |
1to2years | 1,438,499.45 | 143,849.95 | 10.00 |
2to3years | - | - | - |
Over3years | 40,950.00 | 20,475.00 | 50.00 |
Total | 45,771,039.24 | 2,378,904.46 | 5.20 |
Nameofportfolio | 31Dec2018 | ||
Otherreceivable | Baddebtprovision | Percentage(%) | |
Portfolioofspecificaccounts | 2,478,447.48 | - | - |
subsidiariesoftheCompanyandsalesrevenuebetweenthelastsettlementdateofthesamedepartmentstore
andthebalancesheetdatearewithhighrecoverabilityandlowpossibilityofincurringbaddebt,asaresult,no
baddebtprovisionsareprovidedforsuchreceivables.
②Amongtheportfolio,otherreceivablesthatareprovidedforbaddebtusingothermethods
Nature | 31Dec2018 | 1Jan2018 |
Employeepettycash | 2,478,447.48 | 4,399,822.68 |
Downpaymentanddeposit | 38,091,767.87 | 30,200,936.65 |
Productpromotionexpenses | 7,827,524.03 | 3,387,360.70 |
Others | 7,510,384.99 | 6,969,510.53 |
Total | 55,908,124.37 | 44,957,630.56 |
③Statusofbaddebtaccrual,recoveryorreversedincurrentyear:
In2018,baddebtaccrualisRMB70,450.64.Therewasnorecoveryorreversalofbaddebtprovisionthisyear.
④Therewasnootherreceivablesactuallywritten-offduringthisyear
⑤Top5otherreceivableaccounts
Nameofaccounts | Nature | Amount | Aging | Percentageoftotalotherreceivables(%) | Balanceofprovision |
BeatBlattmanMarketing | Tradereceivables | 4,041,632.05 | Over3years | 7.23 | 4,041,632.05 |
ChinaResources(Shenzhen)Co.,Ltd | Deposit | 3,010,024.00 | Within1year | 5.38 | 150,501.20 |
LibertyTimeCenterGmbH | Tradereceivables | 2,251,605.60 | Over3years | 4.03 | 2,251,605.60 |
BeijingJingdongCenturyTradingCo.,Ltd. | Deposit | 1,906,697.76 | Within1year | 3.41 | 95,334.89 |
ChinaResourcesSunHungKaiRealEstate(Hangzhou)Co.,Ltd. | Deposit | 1,497,003.00 | Within1year | 2.68 | 74,850.15 |
Total | —— | 12,706,962.41 | —— | 22.73 | 6,613,923.89 |
(1)Inventoryclassification
Item | 31Dec2018 | ||
Bookbalance | Provision | Carryingamount | |
Rawmaterial | 183,679,226.95 | 28,296,729.51 | 155,382,497.44 |
Item
Item | 31Dec2018 | ||
Bookbalance | Provision | Carryingamount | |
Work-in-progress | 10,787,777.81 | - | 10,787,777.81 |
Goodsinstock | 1,675,548,898.56 | 59,412,872.11 | 1,616,136,026.45 |
Total | 1,870,015,903.32 | 87,709,601.62 | 1,782,306,301.70 |
Item | 1Jan2018 | ||
Bookbalance | Provision | Carryingamount | |
Rawmaterial | 192,872,336.46 | 26,899,506.29 | 165,972,830.17 |
Work-in-progress | 16,744,428.79 | - | 16,744,428.79 |
Goodsinstock | 1,708,413,402.70 | 70,603,985.40 | 1,637,809,417.30 |
Total | 1,918,030,167.95 | 97,503,491.69 | 1,820,526,676.26 |
Item | 1Jan2018 | Increase | Decrease | 31Dec2018 | ||
Accrual | Others | Reversed | Others | |||
Rawmaterials | 26,899,506.29 | 3,625,562.93 | - | 2,228,339.71 | - | 28,296,729.51 |
Goodsinstock | 70,603,985.40 | 5,922,928.30 | - | 17,114,041.59 | - | 59,412,872.11 |
Total | 97,503,491.69 | 9,548,491.23 | - | 19,342,381.30 | - | 87,709,601.62 |
thisyear.
Item | Basisforrecognizingprovision | Reasonforreversalofprovisionthisyear | Reasonsforwritten-off |
Rawmaterials | NRVislowerthancost | - | Disposed |
Goodsinstock | NRVislowerthancost | - | Sales |
Item | 31Dec2018 | 1Jan2018 |
DeductibleinputtaxofVAT | 52,444,448.67 | 18,745,349.24 |
CITprepaid | 7,846,471.11 | 314,917.39 |
Item
Item | 31Dec2018 | 1Jan2018 |
Others | 13,412,392.46 | 5,556,548.58 |
Total | 73,703,312.24 | 24,616,815.21 |
(1)StatusofAFSfinancialassets
Item | 31Dec2018 | 1Jan2018 | ||||
Bookbalance | Impairmentprovision | Carryingamount | Bookbalance | Impairmentprovision | Carryingamount | |
AFSequityinstrument | 385,000.00 | 300,000.00 | 85,000.00 | 385,000.00 | 300,000.00 | 85,000.00 |
Incl:measuredatcost | 385,000.00 | 300,000.00 | 85,000.00 | 385,000.00 | 300,000.00 | 85,000.00 |
Total | 385,000.00 | 300,000.00 | 85,000.00 | 385,000.00 | 300,000.00 | 85,000.00 |
Investee | Bookbalance | Provision | %ofequityheldininvestee | Cashdividend | ||||||
1Jan2018 | increase | decrease | 31Dec2018 | 1Jan2018 | increase | decrease | 31Dec2018 | |||
ShenzhenZhonghangCultureCo.Ltd | 300,000.00 | - | - | 300,000.00 | 300,000.00 | - | - | 300,000.00 | 15.00 | - |
Xi’anTangchengLimited | 85,000.00 | - | - | 85,000.00 | - | - | - | - | 0.10 | - |
Total | 385,000.00 | - | - | 385,000.00 | 300,000.00 | - | - | 300,000.00 | — | - |
TypesofAFSfinancialasset | AFSequityinstrument | Total |
Balanceofimpairmentprovisionatthebeginningoftheyear | 300,000.00 | 300,000.00 |
Accrualincurrentyear | - | - |
Incl:transferredfromothercomprehensiveincome | - | - |
Decreaseincurrentyear
Decreaseincurrentyear | - | - |
Incl:reversedduetofairvalueincreases | —— | —— |
Balanceofimpairmentprovisionattheendoftheyear | 300,000.00 | 300,000.00 |
Investee | 1Jan2018 | Changesduring2018 | ||||
Addition | Withdraw | Investmentgainrecognizedunderequitymethod | Adjustmentofothercomprehensiveincome | Changesofotherequityitem | ||
company | ||||||
ShanghaiWatchCo.,Ltd.(ShanghaiWatch) | 43,879,518.09 | - | - | 1,001,545.06 | - | - |
Investee | Changesduring2018 | 31Dec2018 | Balanceofimpairmentprovisionasat31Dec2018 | ||
Cashdividenddeclaredorprofitdistribution | Impairmentprovisionaccrued | Others | |||
I.Associatedcompany | |||||
ShanghaiWatchCo.,Ltd.(ShanghaiWatch) | - | - | - | 44,881,063.15 | - |
(1)Detailsofinvestmentpropertymeasuredatcost
Item | Propertyandbuildings |
I.Totaloriginalcost | |
1.Balanceatthebeginningoftheyear | 449,153,501.16 |
2.Increasedincurrentyear | 97,541,932.65 |
Item
Item | Propertyandbuildings |
(1)purchased | - |
(2)Transferredfromfixedasset | 97,541,932.65 |
(3)increasedduetobusinesscombination | - |
3.Decreasedincurrentyear | - |
(1)Disposal | - |
(2)Otherdecrease | - |
4.Balanceattheendoftheyear | 546,695,433.81 |
II.Totalaccumulateddepreciationandamortization | |
1.Balanceatthebeginningoftheyear | 143,659,513.39 |
2.Increasedincurrentyear | 25,716,487.39 |
(1)Accrualoramortization | 13,170,394.47 |
(2)Transferredfromfixedasset | 12,546,092.92 |
3.Decreasedincurrentyear | - |
(1)Disposal | - |
(2)Otherdecrease | - |
4.Balanceattheendoftheyear | 169,376,000.78 |
III.Impairmentprovision | |
1.Balanceatthebeginningoftheyear | - |
2.Increasedincurrentyear | - |
(1)Accrual | - |
3..Decreasedincurrentyear | - |
(1)Disposal | - |
(2)Otherdecrease | - |
4.Balanceattheendoftheyear | - |
IV.Totalbookvalue | |
1.Bookvalueattheendoftheyear | 377,319,433.03 |
2.Bookvalueatthebeginningoftheyear | 305,493,987.77 |
(2)Reasonoftheinvestmentpropertywithoutthecertificateforpropertyright:
Asof31December2018,investmentpropertywithoutthecertificateforpropertyrightdidnotexist.
(3)Changesofpurposeofproperty
InJuly2018,theCompanyleasesoutapropertypreviouslyuseditself.Thepropertyistransferredfromfixed
assettoinvestmentpropertyandaccountedforusingcostmethod.ThebookvalueofitwasRMB84,995,839.73
atthetimechanged.
10.Fixedasset
Item | 31Dec2018 | 1Jan2018 |
Fixedasset | 425,649,562.85 | 523,699,592.65 |
①Detailoffixedasset
Item | Propertyandbuildings | Machinery | Transportationvehicles | Electronicdevices | Otherequipments | Total |
I.Totalcost | ||||||
1.Balanceatbeginningofyear | 548,203,064.99 | 76,359,195.91 | 15,572,717.72 | 43,168,802.82 | 56,767,439.55 | 740,071,220.99 |
2.Additions | 7,960,183.62 | 4,481,681.31 | - | 3,481,827.98 | 3,127,468.34 | 19,051,161.25 |
(1)Purchasing | 7,960,183.62 | 4,481,681.31 | - | 3,481,827.98 | 3,127,468.34 | 19,051,161.25 |
(2)Transferfromconstructioninprogress | - | - | - | - | - | - |
(3)Increaseduetobusinesscombination | - | - | - | - | - | - |
3.Decrease | 97,541,932.65 | 41,222.22 | - | 2,513,094.39 | 1,472,743.27 | 101,568,992.53 |
(1)Disposalorretired | - | 41,222.22 | - | 2,513,094.39 | 1,472,743.27 | 4,027,059.88 |
(2)transferredintoinvestmentproperty | 97,541,932.65 | - | - | - | - | 97,541,932.65 |
4.Balanceatendoftheyear | 458,621,315.96 | 80,799,655.00 | 15,572,717.72 | 44,137,536.41 | 58,422,164.62 | 657,553,389.71 |
depreciation | ||||||
1.Balanceatbeginning | 94,955,404.27 | 36,106,695.76 | 12,805,115.03 | 25,960,630.90 | 46,543,782.38 | 216,371,628.34 |
Item
Item | Propertyandbuildings | Machinery | Transportationvehicles | Electronicdevices | Otherequipments | Total |
ofyear | ||||||
2.Increase | 15,490,407.34 | 6,940,310.81 | 859,797.03 | 5,027,186.68 | 3,372,846.73 | 31,690,548.59 |
(1)Accrual | 15,490,407.34 | 6,940,310.81 | 859,797.03 | 5,027,186.68 | 3,372,846.73 | 31,690,548.59 |
3.Decrease | 12,546,092.92 | 34,032.10 | - | 2,280,132.22 | 1,298,092.83 | 16,158,350.07 |
(1)Disposalorretire | - | 34,032.10 | - | 2,280,132.22 | 1,298,092.83 | 3,612,257.15 |
(2)Transferredintoinvestmentproperty | 12,546,092.92 | - | - | - | - | 12,546,092.92 |
4.Balanceatendoftheyear | 97,899,718.69 | 43,012,974.47 | 13,664,912.06 | 28,707,685.36 | 48,618,536.28 | 231,903,826.86 |
III.Provisionforimpairment | ||||||
1.Balanceatbeginningoftheyear | - | - | - | - | - | - |
2.Additions | - | - | - | - | - | - |
(1)Accrual | - | - | - | - | - | - |
3.Decrease | - | - | - | - | - | - |
(1)Disposalorretire | - | - | - | - | - | - |
4.Balanceatendoftheyear | - | - | - | - | - | - |
IV.Totalbookvalue | ||||||
1.Balanceatendoftheyear | 360,721,597.27 | 37,786,680.53 | 1,907,805.66 | 15,429,851.05 | 9,803,628.34 | 425,649,562.85 |
2.Balanceatthebeginningoftheyear | 453,247,660.72 | 40,252,500.15 | 2,767,602.69 | 17,208,171.92 | 10,223,657.17 | 523,699,592.65 |
Item | Bookvalue | Reasonfornothavingcertificateforpropertyrights |
OfficeroomsforHarbinBranch | 287,345.82 | Defectiveinpropertyright |
PropertyforZhengzhouBranch | 6,138,196.00 | Underapplicationprocess |
11.Constructioninprogress
Item | 31Dec2018 | 1Jan2018 |
Constructioninprogress | 12,041,126.00 | 10,947,300.53 |
①Detailsofconstructioninprogress
Item | 31Dec2018 | 1Jan2018 | ||||
Bookbalance | Impairmentprovision | Carryingamount | Bookbalance | Impairmentprovision | Carryingamount | |
Clock&WatchbaseinGuangmingNewDistrictauxiliaryprojects | 12,041,126.00 | - | 12,041,126.00 | 10,947,300.53 | - | 10,947,300.53 |
②Changesformaterialconstruction-in-progressprojects
Projectname | Budget | 31Dec2017 | Increase | Transferredtofixedassetincurrentyear | Otherdecrease | 31Dec2018 |
Clock&WatchbaseinGuangmingNewDistrictauxiliaryprojects | 34,050,900.00 | 10,947,300.53 | 1,093,825.47 | - | - | 12,041,126.00 |
Projectname | Percentageofinvestmenttobudget(%) | Progress(%) | Totalcapitalizedinterest | Incl.capitalizedincurrentyear | Rateofcapitalizationincurrentyear(%) | Sourceoffunding |
Clock&WatchbaseinGuangmingNewDistrictauxiliaryprojects | 35.36 | 35.36 | - | - | - | Self-raised |
(1)Detailsofintangibleassets
Item | Land-useright | Softwaresystem | Righttousetrademarks | Total |
I.Totaloriginalcost |
Item
Item | Land-useright | Softwaresystem | Righttousetrademarks | Total |
1.Balanceatbeginningoftheyear | 34,854,239.40 | 19,904,736.57 | 9,547,313.86 | 64,306,289.83 |
2.Additions | 79,583.00 | 3,982,478.51 | 545,994.75 | 4,608,056.26 |
(1)Purchase | 79,583.00 | 3,982,478.51 | 545,994.75 | 4,608,056.26 |
(2)InternalR&D | - | - | - | - |
(3)Increasedduetobusinesscombination | - | - | - | - |
3.Decreases | - | - | - | - |
(1)Disposal | - | - | - | - |
4.Balanceatendoftheyear | 34,933,822.40 | 23,887,215.08 | 10,093,308.61 | 68,914,346.09 |
II.Totalaccumulatedamortization | ||||
1.Balanceatbeginningoftheyear | 9,887,164.24 | 6,951,113.14 | 3,244,732.24 | 20,083,009.62 |
2.Additions | 3,694,544.65 | 1,124,998.55 | 466,315.66 | 5,285,858.86 |
(1)Accrual | 3,694,544.65 | 1,124,998.55 | 466,315.66 | 5,285,858.86 |
3.Decreases | - | - | - | - |
(1)Disposal | - | - | - | - |
4.Balanceatendoftheyear | 13,581,708.89 | 8,076,111.69 | 3,711,047.90 | 25,368,868.48 |
III.Totalimpairmentprovision | ||||
1.Balanceatbeginningoftheyear | - | - | - | - |
2.Additions | - | - | - | - |
(1)Accrual | - | - | - | - |
3.Decreases | - | - | - | - |
(1)Disposal | - | - | - | - |
4.Balanceatendoftheyear | - | - | - | - |
IV.Totalbookvalue |
Item
Item | Land-useright | Softwaresystem | Righttousetrademarks | Total |
1.Balanceatendoftheyear | 21,352,113.51 | 15,811,103.39 | 6,382,260.71 | 43,545,477.61 |
2.Balanceatbeginningoftheyear | 24,967,075.16 | 12,953,623.43 | 6,302,581.62 | 44,223,280.21 |
Item | 1Jan2018 | Increase | Amortization | Otherdecrease | 31Dec2018 |
Counterfabricationexpenses | 49,334,415.56 | 49,200,596.00 | 49,230,011.46 | - | 49,305,000.10 |
Renovationexpenses | 58,392,053.11 | 50,885,181.89 | 34,625,947.87 | - | 74,651,287.13 |
Others | 1,683,316.82 | 7,333,478.59 | 4,400,537.49 | - | 4,616,257.92 |
Total | 109,409,785.49 | 107,419,256.48 | 88,256,496.82 | - | 128,572,545.15 |
(1)Detailofdeferredincometaxbeforeoffsetting
Item | 31Dec2018 | 1Jan2018 | ||
Deductibletemporarydifferences | Deferredincometaxasset | Deductibletemporarydifferences | Deferredincometaxasset | |
Assetimpairmentprovision | 79,775,704.17 | 17,676,690.28 | 93,805,178.33 | 22,891,430.26 |
Unrealizedprofitforrelatedpartytransaction | 272,840,911.63 | 67,717,517.83 | 309,982,920.90 | 76,608,130.54 |
Deferredincome | 3,672,855.36 | 918,213.84 | 5,904,000.00 | 1,476,000.00 |
Deductibleloss | 61,529,125.81 | 14,363,284.14 | 27,342,976.03 | 4,930,384.00 |
Total | 417,818,596.97 | 100,675,706.09 | 437,035,075.26 | 105,905,944.80 |
Item | 31Dec2018 | 1Jan2018 |
Impairmentofassets | 30,660,246.75 | 29,691,944.68 |
Deductibleloss | 65,181,936.05 | 41,326,518.50 |
Total | 95,842,182.80 | 71,018,463.18 |
incometaxassetasit’suncertainthatthecompaniescangetsufficienttaxableincomeinfuture.
HongKongCompany,asubsidiaryoftheCompany,doesnotneedtorecognizethedeferredincometaxassets
forimpairmentprovisionaccordingtothelocaltaxpolicy.
15.Othernon-currentasset
Item | 31Dec2018 | 1Jan2018 |
Prepaymentforprojectandequipmentpurchase | 8,949,160.42 | 8,246,538.33 |
(1)Short-termloanclassification
Item | 31Dec2018 | 1Jan2018 |
Guaranteedloan | 187,118,452.97 | 120,990,510.00 |
CreditLoan | 360,000,000.00 | 405,000,000.00 |
Total | 547,118,452.97 | 525,990,510.00 |
(3)RefertoNoteXIV.2fordetailsofguaranteedloansbetweenparentcompaniesandsubsidiaries.
17.Noteandaccountspayables
Item | 31Dec2018 | 1Jan2018 |
Accountspayable | 259,913,612.34 | 263,256,495.65 |
Item | 31Dec2018 | 1Jan2018 |
Tradepayables | 188,957,240.00 | 197,139,603.70 |
Payablesformaterialpurchased | 18,632,180.36 | 5,596,017.29 |
Payablesforproject | 52,324,191.98 | 60,520,874.66 |
Total | 259,913,612.34 | 263,256,495.65 |
(1)Presentationofadvancesreceived
Item | 31Dec2018 | 1Jan2018 |
Advancesreceivedfortrade | 14,822,924.98 | 10,928,657.72 |
Rentalreceived | 1,636,520.02 | 4,212,930.07 |
Total | 16,459,445.00 | 15,141,587.79 |
(1)Presentationofemployeebenefitpayable
Item
Item | 1Jan2018 | Increase | Decrease | 31Dec2018 |
I.Short-termbenefit | 67,145,581.32 | 533,345,700.37 | 536,685,964.81 | 63,805,316.88 |
contributionplans | 4,418,785.82 | 46,014,765.45 | 44,459,830.32 | 5,973,720.95 |
III.Dismissalwelfare | - | 2,271,458.27 | 2,271,458.27 | - |
IV.Otherwelfarewithinoneyear | - | - | - | - |
Total | 71,564,367.14 | 581,631,924.09 | 583,417,253.40 | 69,779,037.83 |
Item | 1Jan2018 | Increase | Decrease | 31Dec2018 |
1.Wages,bonusesandallowances | 66,712,129.20 | 477,129,729.95 | 480,534,845.69 | 63,307,013.46 |
2.EmployeeWelfare | - | 9,959,168.00 | 9,959,168.00 | - |
3.Socialinsurance | - | 19,465,988.82 | 19,465,988.82 | - |
Incl.:(1)medicalinsurance | - | 17,305,121.22 | 17,305,121.22 | - |
(2)work-relatedinjuryinsurance | - | 814,287.85 | 814,287.85 | - |
(3)maternityinsurance | - | 1,346,579.75 | 1,346,579.75 | - |
4.Housingfund | - | 17,311,498.67 | 17,311,498.67 | - |
5.Expenditureforlaborunionandemployeetraining | 433,452.12 | 9,479,314.93 | 9,414,463.63 | 498,303.42 |
6.Othershort-termbenefits | - | - | - | - |
Total | 67,145,581.32 | 533,345,700.37 | 536,685,964.81 | 63,805,316.88 |
Item | 1Jan2018 | Increase | Decrease | 31Dec2018 |
1.Endowmentinsurance | 1,044.89 | 42,071,562.15 | 41,599,355.66 | 473,251.38 |
2.Unemploymentinsurance | - | 1,136,009.40 | 1,136,009.40 | - |
3.Enterpriseannuitypayment | 4,417,740.93 | 2,807,193.90 | 1,724,465.26 | 5,500,469.57 |
Total | 4,418,785.82 | 46,014,765.45 | 44,459,830.32 | 5,973,720.95 |
Item | 31Dec2018 | 1Jan2018 |
Item
Item | 31Dec2018 | 1Jan2018 |
Valueaddedtax | 32,344,121.18 | 28,234,436.08 |
Corporateincometax | 21,599,264.54 | 24,051,749.74 |
Propertytax | 248,795.56 | 640,117.90 |
Citymaintenance&constructiontax | 321,914.01 | 948,001.89 |
Individualincometax | 998,190.73 | 779,154.31 |
Educationalsurcharges | 229,955.09 | 677,393.80 |
Others | 180,930.81 | 526,382.87 |
Total | 55,923,171.92 | 55,857,236.59 |
Item | 31Dec2018 | 1Jan2018 |
Interestpayable | 772,351.26 | 1,464,729.11 |
Otherpayables | 71,047,579.04 | 57,767,536.64 |
Total | 71,819,930.30 | 59,232,265.75 |
Item | 31Dec2018 | 1Jan2018 |
Interestpayableforinstalmentlong-termloan | - | 152,151.14 |
Interestpayableforshort-termloan | 772,351.26 | 1,312,577.97 |
Total | 772,351.26 | 1,464,729.11 |
①Otherpayablespresentedbynature
Item | 31Dec2018 | 1Jan2018 |
Securitydeposit | 22,954,307.95 | 23,026,920.95 |
Shopactivityfund | 17,461,589.65 | 15,096,271.16 |
Personalaccountspayable | 3,058,122.71 | 4,911,856.36 |
Decorationexpenses | 6,096,460.99 | 3,175,612.64 |
Downpayment | 612,659.73 | 1,132,084.26 |
Others | 20,864,438.01 | 10,424,791.27 |
Item
Item | 31Dec2018 | 1Jan2018 |
Total | 71,047,579.04 | 57,767,536.64 |
②Significantotherpayableswithagingover1year:
Item | Balanceasat31Dec2018 | Reasonsforunpaidorunsettled |
ShenzhenTencentComputerSystemCo.,Ltd. | 4,693,429.16 | withinleaseterm |
ShenzhenZhongshenCommercialPropertyServiceCo.,Ltd. | 903,166.80 | withinleaseterm |
OracleResearchandDevelopmentCenter(Shenzhen)Co.,Ltd. | 804,000.00 | withinleaseterm |
TropicalRainforestRestaurant,NanshanDistrict,Shenzhen | 791,320.00 | withinleaseterm |
ShenzhenKemanMedicalEquipmentCo.,Ltd. | 734,775.68 | withinleaseterm |
ChinaMerchantsBankCo.,Ltd.ShenzhenBranch | 654,532.30 | withinleaseterm |
BeijingYuanteTechnologyCo.,Ltd.ShenzhenBranch | 519,007.36 | withinleaseterm |
ShenzhenBeigaozhiElectronicsCo.,Ltd. | 506,358.16 | withinleaseterm |
AVICPropertyManagementCo.,Ltd. | 678,154.06 | withinleaseterm |
Total | 10,284,743.52 | —— |
Item | 31Dec2018 | 1Jan2018 |
Long-termloansduewithin1year(NoteVI.23) | 347,470.00 | 35,000,000.00 |
Item | 31Dec2018 | 1Jan2018 |
Pledgeloans | 4,864,580.00 | 5,008,425.00 |
Guaranteedloan | - | 109,861,928.00 |
Less:Long-termloanduewithinoneyear(NoteVI.22) | 347,470.00 | 35,000,000.00 |
Total | 4,517,110.00 | 79,870,353.00 |
(2)SeeNoteVI.46fortypeandamountofpledgedassets.
(3)Thereisnoguaranteeinthebalanceoflong-termloan.
(4)Theinterestrateforlong-termloanis3.00%.
24.Deferredincome
Item
Item | 1Jan2018 | Increase | Decrease | 31Dec2018 | Formingreasons |
Governmentgrant | 5,904,000.00 | 66,037.74 | 2,297,182.38 | 3,672,855.36 | Incometoberecognizedinlaterperiods |
Subsidizedproject | 1Jan2018 | Increase | Recognizedinnon-operatingIncome | Recognizedinothergains | OtherChanges | 31Dec2018 | Relatedtoassets/income |
SpecialfundforShenzhenindustrialdesignindustrydevelopment(Note(1)) | 2,000,000.00 | - | - | 1,066,988.78 | - | 933,011.22 | Assetrelated |
FundingprojectforconstructionofNationalEnterpriseTechnologyCenter(Note(2)) | 2,000,000.00 | - | - | 488,578.43 | - | 1,511,421.57 | Assetrelated |
ResearchingprojectforkeytechniqueofbenchmarktimingsystemofDF101(Note(3)) | 480,000.00 | - | - | 480,000.00 | - | - | Incomerelated |
2017NanshanDistrictIndependentInnovationIndustryDevelopmentSpecialFund | 124,000.00 | - | - | 124,000.00 | - | - | Incomerelated |
2017ProvincialSpecializedFundforIndustrialandInformationTechnology(Note | 1,300,000.00 | - | - | 137,615.17 | - | 1,162,384.83 | Incomerelated |
Subsidizedproject
Subsidizedproject | 1Jan2018 | Increase | Recognizedinnon-operatingIncome | Recognizedinothergains | OtherChanges | 31Dec2018 | Relatedtoassets/income |
(4)) | |||||||
Specialfundsforconsumergoodsstandardsandqualityimprovement | - | 66,037.74 | - | - | - | 66,037.74 | Incomerelated |
Total | 5,904,000.00 | 66,037.74 | - | 2,297,182.38 | - | 3,672,855.36 | —— |
JingmaoXinxiJishuZi(2013)No.227-OperatingSpecificationforAffirmationandFundPlanofShenzhen
IndustrialDesignCenter(Trial)whichisjointlyissuedbyEconomy,TradeandInformationCommissionof
ShenzhenMunicipalityandFinanceCommissionofShenzhenMunicipality.
Note(2):FundingprojectforconstructionofShenzhenEnterpriseTechnologyCenterwasobtainedaccordingto
theNoticeforthe1stSupportiveProjectin2015ofFundingProjectforConstructionofShenzhenEnterprise
TechnologyCenterwhichwasissuedbyShenzhenDevelopmentandReformCommission(ShenJingMaoXinXi
Yu[2015]No.129).
Note(3):Specialfundforuniversity-industrycooperationin2013wasobtainedaccordingtoYueKeGongShi
[2014]No.13–PublicityaboutProjectswhichwouldbeSupportedbySpecialFundofComprehensiveStrategic
CooperationbetweenProvinceandCollegeandSpecialFundofProvince-MinistryUniversity-Industry
Cooperationin2013,issuedbyGuangdongScienceandTechnologyDepartment.
Note(4):AccordingtotheNoticeofGuangdongProvincialEconomicandInformationTechnologyCommissionon
DoingaGoodJobofApplyingforProvincialSpecialProjectsinProductionandServiceIndustryin2017(the
CircularoftheMinistryofEconomicAffairsandInformationTechnologyofGuangdongProvinceandGuangdong
ProvincialDepartmentofFinance)GuangdongLetterofManufacture[2016]No.53)obtainedprovincial2017
specialfundsforindustrialandinformatization.
25.Sharecapital
Item | 1Jan2018 | Additionsorreduction(+,-) | 31Dec2018 | ||||
Issuanceofnewshare | Bonusshares | Capitalizationofcapitalreserves | Others | Subtotal |
Item
Item | 1Jan2018 | Additionsorreduction(+,-) | 31Dec2018 | ||||
Issuanceofnewshare | Bonusshares | Capitalizationofcapitalreserves | Others | Subtotal | |||
Totalshares | 438,744,881 | - | - | - | - | - | 438,744,881 |
Item | 1Jan2018 | Increase | Decrease | 31Dec2018 |
Sharepremium | 1,047,963,195.57 | - | - | 1,047,963,195.57 |
Othercapitalreserves | 14,492,448.65 | - | - | 14,492,448.65 |
Total | 1,062,455,644.22 | - | - | 1,062,455,644.22 |
27.Othercomprehensiveincome
Item | 1Jan2018 | Movement | 31Dec2018 | ||||
Amountincurredbeforeincometaxincurrentperiod | Less:recordedinothercomprehensiveincomeinpriorperiodandtransferredtoprofitorlossincurrentperiod | Less:Incometaxexpenses | Attributetoparentcompanyaftertax | Attributetominorityshareholdersaftertax | |||
I.Othercomprehensiveincomeitemswhichwillnotbereclassifiedsubsequentlytoprofitorloss | - | - | - | - | - | - | - |
II.Othercomprehensiveincomeitemswhichwillbereclassifiedsubsequentlytoprofitorloss | -11,523,442.39 | 6,081,568.47 | - | - | 6,081,302.61 | 265.86 | -5,442,139.78 |
Incl.translationdifferenceofforeigncurrencyfinancialstatements | -11,523,442.39 | 6,081,568.47 | - | - | 6,081,302.61 | 265.86 | -5,442,139.78 |
Totalothercomprehensiveincome | -11,523,442.39 | 6,081,568.47 | - | - | 6,081,302.61 | 265.86 | -5,442,139.78 |
28.Surplusreserve
Item | 1Jan2018 | Increase | Decrease | 31Dec2018 |
Statutorysurplusreserve | 144,820,819.35 | 16,210,080.45 | - | 161,030,899.80 |
Discretionarysurplusreserve | 61,984,894.00 | - | - | 61,984,894.00 |
Total | 206,805,713.35 | 16,210,080.45 | - | 223,015,793.80 |
10%ofnetprofit.Ifthestatutorysurplusreserveisover50%oftheCompany’sregisteredcapital,drawingof
statutorysurplusreservestopped.
TheCompanycandrawdiscretionarysurplusreserveafterdrawingstatutorysurplusreserve.Ifapproved,
discretionarysurplusreservecanbeusedtomakeupforlossesinpreviousyearsorincreasesharecapital.
29.Undistributedprofit
Item | 2018 | 2017 |
Undistributedprofitattheendofprioryearbeforeadjustments | 771,484,565.02 | 687,986,807.74 |
Adjustmentstoundistributedprofitatthebeginningofyear | - | - |
Undistributedprofitatthebeginningofyearafteradjustment | 771,484,565.02 | 687,986,807.74 |
Plus:Netprofitattributabletotheowneroftheparentcompanyfortheyear | 183,835,095.29 | 140,216,258.28 |
Less:statutorysurplusreservedrawn | 16,210,080.45 | 12,844,012.90 |
Dividendspayabletoordinaryshares | 87,748,976.20 | 43,874,488.10 |
Undistributedprofitattheendofyear | 851,360,603.66 | 771,484,565.02 |
Pursuanttothe“ResolutionofEquityDistributionforYear2017”approvedatthe2017AnnualGeneralMeeting
heldon21June2018,theCompanydistributedtoallshareholderscashdividendofRMB2.00(taxinclusive)for
every10sharesheldbasedontotalsharesof438,744,881asat31December2017.Totalcashdividend
distributedwasRMB87,748,976.20.
30.Operatingrevenueandoperatingcost
Item | 2018 | 2017 | ||
Operatingrevenue | Operatingcost | Operatingrevenue | Operatingcost | |
Revenuefrommainbusiness | 3,382,346,730.19 | 1,992,905,841.56 | 3,326,715,761.43 | 1,982,954,953.59 |
Item
Item | 2018 | 2017 | ||
Operatingrevenue | Operatingcost | Operatingrevenue | Operatingcost | |
Revenuefromotherbusiness | 18,103,869.71 | 903,932.64 | 19,093,942.55 | 3,697,637.98 |
Total | 3,400,450,599.90 | 1,993,809,774.20 | 3,345,809,703.98 | 1,986,652,591.57 |
Item | 2018 | 2017 |
Urbanmaintenanceandconstructiontax | 14,746,181.35 | 14,218,262.08 |
Educationalsurcharge | 6,338,803.59 | 6,122,809.94 |
Localeducationalsurcharge | 4,221,251.51 | 4,099,162.87 |
Propertytax | 3,858,983.33 | 4,057,806.73 |
Stampduty | 2,216,200.85 | 2,322,319.03 |
Landusetax | 387,741.44 | 461,094.63 |
Consumptiontax | 56,184.87 | 68,144.07 |
Taxforusageofvehicleandship | 7,785.00 | 8,085.00 |
Others | 1,936,212.46 | 1,513,574.23 |
Total | 33,769,344.40 | 32,871,258.58 |
32.Sellinganddistributionexpenses
Item | 2018 | 2017 |
Salary | 284,754,162.08 | 282,332,694.94 |
Employeewelfare | 5,639,512.33 | 5,021,378.47 |
Housingfund | 11,646,901.18 | 10,766,215.15 |
Socialinsurance | 45,976,594.63 | 40,320,843.22 |
Departmentstoreexpenseandrental | 137,788,340.17 | 129,811,336.38 |
Marketpromotionexpenses | 186,814,362.00 | 177,352,152.54 |
Depreciationandamortization | 91,323,930.38 | 90,339,654.46 |
Packagingexpenses | 17,013,895.11 | 13,166,738.72 |
Utilitiesandpropertymanagementexpenses | 18,464,692.62 | 12,459,271.35 |
Item
Item | 2018 | 2017 |
Shippingfees | 12,444,864.89 | 11,637,994.76 |
Officeexpenses | 10,934,189.89 | 6,953,441.44 |
Travelexpenses | 12,076,624.12 | 11,774,153.69 |
Others | 22,092,103.70 | 19,502,056.89 |
Total | 856,970,173.10 | 811,437,932.01 |
Item | 2018 | 2017 |
Salary | 132,152,678.81 | 116,005,739.67 |
Socialinsurance | 11,333,830.56 | 13,262,398.74 |
Depreciationandamortization | 23,465,976.86 | 20,786,423.56 |
Enterpriseannuity | 2,318,455.78 | 3,706,212.20 |
Unionfunds | 4,967,113.07 | 2,748,390.12 |
Trainingfee | 2,817,832.13 | 1,431,427.23 |
Travelexpenses | 7,436,745.07 | 5,917,863.79 |
Officeexpenses | 4,411,920.54 | 4,896,447.32 |
Housingfund | 4,217,069.96 | 4,134,079.62 |
Agentsfees | 2,397,253.16 | 2,632,061.65 |
Employeewelfare | 2,908,900.50 | 2,645,453.19 |
Others | 20,734,749.41 | 12,423,085.15 |
Total | 219,162,525.85 | 190,589,582.24 |
Item | 2018 | 2017 |
Salary | 24,158,997.53 | 22,773,695.65 |
Employeewelfare | 466,603.29 | 301,488.36 |
Socialinsurance | 2,270,552.06 | 1,560,336.14 |
Housingfund | 705,146.39 | 747,618.62 |
Materialcost | 3,062,922.51 | 4,216,717.28 |
Item
Item | 2018 | 2017 |
Samplefee | 2,042,439.14 | 4,620,567.85 |
Processingfee | 2,150,154.58 | 198,047.66 |
Depreciationandamortization | 4,869,828.83 | 4,559,562.30 |
Technicalcooperationfee | 1,254,524.99 | 2,611,783.01 |
Others | 6,369,173.50 | 7,864,082.48 |
Total | 47,350,342.82 | 49,453,899.35 |
Item | 2018 | 2017 |
Interestexpense | 27,552,558.81 | 41,825,035.34 |
Less:Interestcapitalization | - | - |
Less:Interestincome | 2,269,447.05 | 2,915,602.99 |
Exchangegainorlosses | 713,080.72 | 1,082,289.43 |
Bankchargesandothers | 9,920,047.68 | 9,195,021.13 |
Total | 35,916,240.16 | 49,186,742.91 |
Item | 2018 | 2017 |
Baddebtloss | -5,488,944.07 | 11,818,649.06 |
Inventoryimpairmentloss | 8,753,900.25 | 50,608,850.55 |
Total | 3,264,956.18 | 62,427,499.61 |
Item | 2018 | 2017 | Amountincludedincurrentyear’snon-recurringprofitorloss |
Governmentgrant | 19,375,618.48 | 17,508,255.98 | 19,375,618.48 |
Fordetailsofgovernmentgrants,refertoNoteVI.48.
38.Investmentgain
Item | 2018 | 2017 |
Investmentgainfromthelong-termequityinvestmentmeasuredbyequity | 1,001,545.06 | 455,893.22 |
Item
Item | 2018 | 2017 |
method |
Item | 2018 | 2017 | Amountincludedincurrentyear’snon-recurringprofitorloss |
Totalgain/lossondisposalofthenon-currentassets | -181,302.24 | 7,321,993.36 | -181,302.24 |
Item | 2018 | 2017 | Amountincludedincurrentyear’snon-recurringprofitorloss |
Totalgainondamageandretirementofnon-currentassets | 1,000.00 | - | 1,000.00 |
Clearingofpayablesthatcannotbepaid | 2,810.50 | 2,256,661.00 | 2,810.50 |
Others | 1,442,547.03 | 350,992.91 | 1,442,547.03 |
Total | 1,446,357.53 | 2,607,653.91 | 1,446,357.53 |
Item | 2018 | 2017 | Amountincludedinnon-recurringprofitorlossincurrentyear |
Finesandlatepaymentexpenses | 154,626.88 | - | 154,626.88 |
Externaldonation | 380,000.00 | 399,250.00 | 380,000.00 |
Others | 117,888.09 | 969,430.92 | 117,888.09 |
Total | 652,514.97 | 1,368,680.92 | 652,514.97 |
(1)Detailsofincometaxesexpenses
Item | 2018 | 2017 |
Currentincometax | 42,131,613.05 | 57,825,323.60 |
Deferredincometax | 5,230,238.71 | -10,726,369.54 |
Total | 47,361,851.76 | 47,098,954.06 |
Item
Item | 2018 |
Profitbeforetax | 231,196,947.05 |
Incometaxexpensescalculatedatlegal(orapplicable)taxrate | 57,799,236.76 |
Impactofdifferenttaxrateincertainsubsidiaries | -12,360,815.15 |
Adjustmentforincometaxinprioryear | 413,122.52 |
Incomenotsubjecttotax | -250,386.27 |
Expensesnotdeductiblefortaxpurposes | 1,286,216.68 |
Taxationinfluencebyusingunrecognizeddeductiblelossanddeductibletemporarydifferenceofpriorperiods | -250,920.28 |
Taxationinfluenceofunrecognizeddeductiblelossanddeductibletemporarydifference | 7,158,514.85 |
Effectoftaxratechangeoncarryingamountofopeningdeferredincometaxasset | - |
EffectofsuperdeductionofR&Dexpenses | -6,433,117.35 |
Incometaxexpenses | 47,361,851.76 |
DetailsofothercomprehensiveincomerefertoNoteVI.27.
44.Notestocashflowstatement
(1)Cashreceivedfromotheroperatingactivities
Item | 2018 | 2017 |
Governmentgrant | 17,144,473.84 | 17,432,255.98 |
Productpromotionfee | 7,388,696.14 | 7,256,201.41 |
Securitydeposit | 9,977,697.98 | 9,327,099.78 |
Interestincome | 2,269,447.05 | 2,915,602.99 |
Pettycash | 4,066,408.69 | 4,615,494.88 |
Others | 8,781,869.99 | 7,631,989.59 |
Total | 49,628,593.69 | 49,178,644.63 |
Item | 2018 | 2017 |
Marketingpromotionfee | 158,123,421.13 | 116,083,360.98 |
Item
Item | 2018 | 2017 |
Rental | 88,198,420.82 | 80,557,649.30 |
Departmentalstoreexpenses | 27,617,954.29 | 40,296,610.32 |
Advertisingfee | 25,754,222.71 | 32,028,348.16 |
Travelexpenses | 16,716,869.03 | 15,287,674.97 |
R&Dexpenses | 18,696,076.85 | 22,883,770.79 |
Officeexpenses | 14,807,127.70 | 10,087,223.06 |
Transportationexpenses | 13,966,858.83 | 10,445,774.44 |
Exhibitionexpenses | 7,794,285.04 | 10,686,979.91 |
Postingandtelecommunicationexpenses | 1,284,007.36 | 4,942,120.45 |
Businessentertainment | 3,881,281.50 | 5,909,392.82 |
Packagingexpenses | 2,123,627.83 | 1,010,445.61 |
Utilities | 18,131,634.75 | 15,035,484.37 |
Pettycash | 5,131,463.98 | 4,405,955.94 |
Agentsfees | 3,417,891.86 | 3,602,250.55 |
Conferenceexpenses | 1,856,933.80 | 3,477,562.92 |
Insuranceexpense | 2,447,666.64 | 2,720,711.50 |
Securitydeposit | 19,915,997.96 | 2,803,293.12 |
Vehicleexpenses | 1,296,416.06 | 2,110,291.06 |
Bankcharges | 9,723,496.15 | 9,036,367.69 |
Others | 13,351,304.90 | 18,515,949.06 |
Total | 454,236,959.19 | 411,927,217.02 |
(1)SupplementtoCashFlowStatement
Supplement | 2018 | 2017 |
1.Reconciliationofnetprofittocashflowfromoperatingactivities: | ||
Netprofit | 183,835,095.29 | 142,616,359.20 |
Supplement
Supplement | 2018 | 2017 |
Add:Impairmentforassets | 3,264,956.18 | 62,427,499.61 |
Depreciationoffixedassets,andgasassets,andproductivebiologicalassets | 44,860,943.06 | 43,011,539.25 |
Amortizationofintangibleassets | 5,285,858.86 | 3,453,462.25 |
Amortizationoflong-termdeferredexpenses | 88,256,496.82 | 92,532,517.56 |
Lossondisposaloffixedassets,intangibleassets,andotherlong-termassets(“-“forgain) | 181,302.24 | -7,321,993.36 |
Lossonretirementoffixedassets(“-“forgain) | -1,000.00 | - |
Lossonchangesoffairvalue(“-“forgain) | - | - |
Financialexpenses(“-“forincome) | 27,552,558.81 | 41,825,035.34 |
Investmentloss(“-“forgain) | -1,001,545.06 | -455,893.22 |
Decreaseindeferredtaxassets(“-“forincrease) | 5,230,238.71 | -10,726,369.54 |
Increaseindeferredtaxliabilities(“-“fordecrease) | - | - |
Decreaseininventories(“-“forincrease) | 30,900,223.04 | 126,768,439.60 |
Decreaseinoperatingreceivables(“-“forincrease) | -36,309,812.09 | -19,073,303.46 |
Increaseinoperatingpayables(“-“fordecrease) | -20,427,526.24 | 89,897,268.74 |
Others | - | - |
Netcashflowsfromoperatingactivities | 331,627,789.62 | 564,954,561.97 |
2.Significantinvestmentorfinancingactivitiesnotinvolvingcash: | ||
Debtsconvertedtocapital | - | - |
Convertibledebtsmaturewithinoneyear | - | - |
Fixedassetsacquiredunderfinanceleases | - | - |
3.Netchangesincashandcashequivalents: | ||
Cashatendofyear | 162,623,059.97 | 184,947,891.32 |
Less:cashatbeginningofyear | 184,947,891.32 | 427,227,755.81 |
Plus:cashequivalentsatendofyear | - | - |
Less:cashequivalentsatbeginningofyear | - | - |
Netincreaseincashandcashequivalents | -22,324,831.35 | -242,279,864.49 |
(2)Cashandcashequivalents
Item | 31Dec2018 | 31Dec2017 |
I.Cash | 162,623,059.97 | 184,947,891.32 |
Incl.Cashonhand | 420,783.85 | 414,210.14 |
Bankdepositavailableforimmediatepayment | 160,135,454.62 | 184,528,160.32 |
Othermonetaryfundsavailableforimmediatepayment | 2,066,821.50 | 5,520.86 |
II.Cashequivalents | ||
Incl.Bondinvestmentdueinthreemonths | - | - |
III.Cashandcashequivalentsattheendofyear | 162,623,059.97 | 184,947,891.32 |
Incl.RestrictedcashandcashequivalentsfortheCompany | - |
amounts.
46.Assetsofrestrictedownershiporuserights
Item | Amountasof31Dec2018 | Restrictionreason |
Currencyfunds | 2,205,000.00 | SecuritydepositofRMB1,575,000.00,judicialfrozenfundofRMB630,000.00. |
Fixedassets | 14,978,058.58 | Guarantee |
Total | 17,183,058.58 | — |
(1)Monetaryitemdenominatedinforeigncurrency
Item | Balancedenominatedinforeigncurrencyasat31Dec2018 | Exchangerate | BalancetranslatedinRMBasat31Dec2018 |
Currencyfund | |||
Incl:USD | 634,531.28 | 6.8632 | 4,354,915.08 |
HKD | 3,646,197.04 | 0.8762 | 3,194,797.85 |
CHF | 620,245.24 | 6.9494 | 4,310,332.27 |
EUR | 1,943.58 | 7.8473 | 15,251.86 |
Item
Item | Balancedenominatedinforeigncurrencyasat31Dec2018 | Exchangerate | BalancetranslatedinRMBasat31Dec2018 |
Accountsreceivable | |||
Incl:USD | 688,191.90 | 6.8632 | 4,723,198.65 |
HKD | 6,007,034.35 | 0.8762 | 5,263,363.50 |
EUR | 34,266.75 | 7.8473 | 268,901.47 |
CHF | 185,687.50 | 6.9494 | 1,290,416.71 |
Prepayments | |||
Incl:CHF | 681,143.82 | 6.9494 | 4,733,540.86 |
Otherreceivable | |||
Incl:HKD | 299,737.08 | 0.8762 | 262,629.63 |
EUR | 4,250.00 | 7.8473 | 33,351.03 |
CHF | 905,580.00 | 6.9494 | 6,293,237.65 |
Accountspayable | |||
Incl:HKD | 3,030,447.60 | 0.8762 | 2,655,278.19 |
Advancesfromcustomer | |||
Incl:HKD | 74,499.32 | 0.8762 | 65,276.30 |
Otherpayable | |||
Incl:HKD | 42,812.50 | 0.8762 | 37,512.31 |
CHF | 65,094.65 | 6.9494 | 452,368.76 |
Short-termloan | |||
Incl:HKD | 33,000,000.00 | 0.8762 | 28,914,600.00 |
CHF | 1,900,000.00 | 6.9494 | 13,203,860.00 |
Non-currentliabilitythatdueinoneyear | |||
Incl:CHF | 50,000.00 | 6.9494 | 347,470.00 |
Long-termbankloan | |||
Incl:CHF | 650,000.00 | 6.9494 | 4,517,110.00 |
(2)Overseasoperationalentity
Formainbusinesslocationandrecordingcurrencyofimportantoverseasoperationalentity,refertoNoteIV.3.
48.Governmentgrant
(1)Thestatusofthegovernmentgrants
Item | Amount | Accountingsubject | Amountincludedincurrentprofitorloss |
2017ShenzhenStandardSpecialFund(Note(1)) | 496,000.00 | Otherincome | 496,000.00 |
2017GuangmingDistrictWatchExhibitionFunding | 50,000.00 | Otherincome | 50,000.00 |
ScienceandTechnologyCommission2017CorporateResearchandDevelopmentFunding(Note(2)) | 1,890,000.00 | Otherincome | 1,890,000.00 |
2017ShenzhenPatentAward | 2,000.00 | Otherincome | 2,000.00 |
Specialfundforindustrialtransformationandupgradingin2018(Note(3)) | 500,000.00 | Otherincome | 500,000.00 |
2018annualindustrialtransformationandupgradingspecialfundandinnovationrewards(Note(4)) | 4,480,000.00 | Otherincome | 4,480,000.00 |
2018IndependentInnovationIndustryDevelopmentSpecialFund,NanshanDistrict | 6,000.00 | Otherincome | 6,000.00 |
SpecialFundfortheDevelopmentofIndependentInnovationIndustry,NanshanDistrict,2018(Note(5)) | 479,200.00 | Otherincome | 479,200.00 |
FundingforInformatizationandIndustrializationIntegrationproject,2018(Note(6)) | 400,000.00 | Otherincome | 400,000.00 |
FundingforthedomesticmarketdevelopmentofthedemonstrationenterpriseunderChineseEntrepreneurshipandInnovationStrategyin2018 | 128,920.00 | Otherincome | 128,920.00 |
BaselWatchandClockExhibitionInternationalTradeDevelopmentFund(Note(7)) | 779,907.74 | Otherincome | 779,907.74 |
High-techEnterpriseRecognitionAward,BaoanDistrict | 30,000.00 | Otherincome | 30,000.00 |
ChinaDisabledPersons’Federationsubsidy | 6,000.00 | Otherincome | 6,000.00 |
Exportcreditinsurance | 57,605.00 | Otherincome | 57,605.00 |
ActivityfundforGuangmingdivisionduringtheSecondInternationalBrandWeek | 28,301.89 | Otherincome | 28,301.89 |
Item
Item | Amount | Accountingsubject | Amountincludedincurrentprofitorloss |
The18thChinaDesignExcellenceAward(Note(8)) | 250,000.00 | Otherincome | 250,000.00 |
SpecialsupportfundforeconomicdevelopmentinGuangmignDistrict(Note(9)) | 208,000.00 | Otherincome | 208,000.00 |
StandardizationStrategyFunding,GuangmingNewDistrict(Note(9)) | 600,000.00 | Otherincome | 600,000.00 |
ConventionandExhibitionIndustryFinancialSubsidy,GuangmingNewDistrict(Note(9)) | 50,000.00 | Otherincome | 50,000.00 |
Disabledcareandmedicalinsurancesubsidyforthefirsthalfoftheyearin2018,GuangMingNewdistrict | 2,882.30 | Otherincome | 2,882.30 |
R&DFunding,GuangmingNewDistrict(Note(10)) | 360,000.00 | Otherincome | 360,000.00 |
ExhibitionSubsidy,GuangmingNewDistrict(Note(10)) | 50,000.00 | Otherincome | 50,000.00 |
Annualfeeincentivefordomesticpatentinvention | 2,000.00 | Otherincome | 2,000.00 |
GovernmentfundsgrantedforadmissiontotheChinaInternationalImportExpo | 6,154.00 | Otherincome | 6,154.00 |
SpecialFundfortheDevelopmentoftheServiceIndustryoftheEconomicandTradeCommission(Note(11)) | 1,000,000.00 | Otherincome | 1,000,000.00 |
CrystalProductsExhibitionSpecialFunding | 103,267.00 | Otherincome | 103,267.00 |
CorporateR&DFundingbyScienceandTechnologyCommission,2017(Note(12)) | 1,155,000.00 | Otherincome | 1,155,000.00 |
CreatingexcellenceandratingfundingprojectbyEconomicPromotionBureau,NanshanDistrict | 200,000.00 | Otherincome | 200,000.00 |
FundingforInformatizationandIndustrializationIntegrationprojectbyEconomicPromotionBureau,NanshanDistrict | 100,000.00 | Otherincome | 100,000.00 |
SpecialfundforindependentinnovationindustrydevelopmentbyNanshanDistrictScienceandTechnologyCommission | 250,000.00 | Otherincome | 250,000.00 |
ProjectfundedbyCommerceCirculationIndustry | 360,800.00 | Otherincome | 360,800.00 |
SubsidyunderShenzhenNanshanFinanceBureauHeadquartersCorporateOfficeHousingSupportProject | 724,900.00 | Otherincome | 724,900.00 |
Item
Item | Amount | Accountingsubject | Amountincludedincurrentprofitorloss |
(Note(13)) | |||
CommerceCirculationIndustryFundingProjectbyShenzhenNanshanDistrictFinanceBureau(Note(13)) | 549,500.00 | Otherincome | 549,500.00 |
CommerceCirculationIndustryFundingProjectbyShenzhenNanshanDistrictEconomicPromotionBureau(Note(13)) | 215,100.00 | Otherincome | 215,100.00 |
FundingfortheTalentQualityImprovementProjectoftheIndustrialInnovationTalentsbytheHumanResourcesBureauofNanshanDistrict,Shenzhen(Note(13)) | 21,500.00 | Otherincome | 21,500.00 |
PatentsubsidybyShenzhenMunicipalMarketandQualitySupervisionandAdministrationCommittee,2017 | 10,000.00 | Otherincome | 10,000.00 |
The19thChinaPatentAwardoftheMarketandQualityCommittee(Note(14)) | 330,000.00 | Otherincome | 330,000.00 |
FundsonEnterpriseIntellectualPropertyManagementStandardsCertificationbyMarketSupervisionCommittee(Note(15)) | 200,000.00 | Otherincome | 200,000.00 |
Subsidyforenhancinginternationaloperatingcapacity | 60,000.00 | Otherincome | 60,000.00 |
Subsidyforkeepingstablejobpositions | 229,106.17 | Otherincome | 229,106.17 |
Demonstrationspecialfund,financialaidprojectinexhibitionindustry,forsmallandmicroenterpriseentrepreneurshipinnovationbase(Note(16)) | 159,810.00 | Otherincome | 159,810.00 |
Watchexhibitionsubsidyofsmallandmicroenterprises | 128,008.00 | Otherincome | 128,008.00 |
Governmentexhibitionindustryspecialfund | 128,008.00 | Otherincome | 128,008.00 |
GovernmentTalentQualityImprovementProjectSubsidy | 100,000.00 | Otherincome | 100,000.00 |
ChinaLightIndustryFederation'sinternationalstandardsfunding | 16,000.00 | Otherincome | 16,000.00 |
16-26batchspecialsubsidyforCentralForeignTradeandEconomic | 60,000.00 | Otherincome | 60,000.00 |
Governmentspecialsubsidyfundforcentralforeigneconomicandtradeprojects | 114,466.00 | Otherincome | 114,466.00 |
Item
Item | Amount | Accountingsubject | Amountincludedincurrentprofitorloss |
ShenzhenIndustrialDesignIndustryDevelopmentSpecialFund(NoteVI.24note(1)) | 2,000,000.00 | Deferredincome | 1,066,988.78 |
NationallyRecognizedEnterpriseTechnologyCenterConstructionFundingProject(NoteVI.24.note(2)) | 2,000,000.00 | Deferredincome | 488,578.43 |
KeytechnologyresearchanddevelopmentprojectofDF101aircraftbenchmarktimingsystem(NoteVI.24.note(3)) | 480,000.00 | Deferredincome | 480,000.00 |
DevelopmentSpecialFundforIndependentInnovationIndustry,NanshanDistrict,2017 | 124,000.00 | Deferredincome | 124,000.00 |
2017provincialindustrialandinformationspecialfunds(NoteVI.24.(note(4)) | 1,300,000.00 | Deferredincome | 137,615.17 |
Specialfundsforconsumergoodsstandardsandqualityimprovement | 66,037.74 | Deferredincome | - |
Total | 23,048,473.84 | — | 19,375,618.48 |
ConstructionoftheShenzhenStandardSpecialFundStandardsProject”issuedbyShenzhenMunicipalMarket
andQualitySupervisionandManagementCommittee.
Note(2):The2017ShenzhenEnterpriseResearchandDevelopmentFundingobtainedaccordingto
“ManagementMeasuresofShenzhenScienceandTechnologyResearchandDevelopmentFund”issuedby
ShenzhenFinanceCommitteeandShenzhenScienceandTechnologyInnovationCommittee(ShenCaike[2012]
No.168).
Note(3):ThespecialfundsforindustrialtransformationandupgradingobtainedaccordingtotheNoticeofthe
ShenzhenEconomicandTradeandInformatizationCommissiononthe“Applicationof2018AnnualIndustrial
TransformationandUpgradingSpecialFundsforDevelopingIndustrialZoneofCommunityJoint-stock
Companies”(ShenJingmaoXinxiGuihuaZi[2017]No.243)
Note(4):The2018annualindustrialtransformationandupgradingspecialfundandinnovationrewardsobtained
accordingtotheNoticeissuedbytheShenzhenEconomicandTradeInformationCommission,onthepublicityof
projectstobefundedby2018annualindustrialtransformationandupgradingofspecialfund(ShenJingmaoXinxi
XinxingZi[2018]No.208).
Note(5):SpecialFundfortheDevelopmentofIndependentInnovationIndustry,NanshanDistrict,obtained
accordingtothe“ManagementMeasuresforSpecialFundsforIndependentInnovationIndustryDevelopmentin
NanshanDistrict(Trial)”(ShenNanFubanGui[2018]No.3).issuedbytheOfficeofthePeople'sGovernmentof
NanshanDistrict,Shenzhen.
Note(6):FundforInformatizationandIndustrializationIntegrationprojectobtainedaccordingtothe“Shenzhen
CityIndustrialTransformationandSpecialFundManagementMeasures”(ShenCaigui[2016]No.9),issuedby
ShenzhenMunicipalFinanceCommitteeandtheShenzhenMunicipalCommissionofEconomy,Tradeand
InformationTechnology.
Note(7):InternationalTradeDevelopmentFundgrantedbyShenzhenMunicipalGovernment,obtainedaccording
tothe“NoticeontheRelevantWorkontheSpecialFundforForeignEconomicandTradeDevelopmentin2017”
issuedbytheMinistryofCommerce(ShangCaihan[2017]No.314)and“ImplementationRulesforthe
AdministrationofFundsforEnhancingInternationalOperationalCapabilitiesofLessthanUS$65Million”issued
bytheMunicipalEconomicandTradeInformationCommitteeandtheMunicipalFinanceCommittee(Shen
JingmaoXinxiYusuanZi[2015]No.180).
Note(8):Patentawardobtainedaccordingtothe“DecisionontheAwardofthe18thChinaPatentAward”issued
bytheStateIntellectualPropertyOffice(GuoZhiFaGuanZi[2016]No.95).
Note(9):ProjectfundingfortheEconomicDevelopmentSpecialFundStandardizationStrategicProjectinthefirst
halfof2018,GuangmingNewDistrict,theInternationalCertificationProjectandactivitysupportforeconomicand
tradeexhibitionfundedbyEconomicDevelopmentSpecialFundinGuangmingDistrict.Fundsareobtained
accordingtothe“GuangmingNewDistrictEconomicDevelopmentSpecialFundManagementMeasuresand
SupportingImplementationRules”issuedbytheShenzhenGuangmingNewDistrictManagementCommittee
(ShenGuanggui[2017]No.16)
Note(10):2017GuangmingNewDistrictEconomicDevelopmentSpecialFundforR&DInvestmentandactivity
supportforDomesticTradeExhibitionobtainedaccordingto"ShenzhenGuangmingNewDistrictEconomic
DevelopmentSpecialFundManagementMeasuresandSupportingImplementationRules"(ShenGuangGui
[2017]No.16)issuedbyShenzhenGuangmingNewDistrictManagementCommittee.
Note(11):ThesecondbatchofShenzhenCitye-commercedevelopmentspecialfundprojectawardin2018
obtainedaccordingto“NoticeoftheMunicipalEconomicandTradeInformationCommissiononthePublic
AnnouncementoftheSecondBatchofShenzhenE-CommerceDevelopmentSpecialFundProjects”issuedby
theShenzhenEconomicandTradeInformationCommission(ShenJingmaoXinxiShengchanZi[2018]No.100)
Note(12):Subsequentsubsidiesforcorporateresearchanddevelopmentgrantsobtainedaccordingtothe
"ShenzhenCity-levelIndustrySpecialFundsDisbursementOperationRegulations"(ShenCaike[2010]No.173)
and"Releaseof<ShenzhenCitySpecialFundsEntrustedCommercialBankSupervisionScheme>"(ShenCaike
[2012]No.1)issuedbyShenzhenMunicipalScienceandTechnologyInnovationCommittee.
Note(13):SpecialfundsforNanshandistrictindependentinnovationindustrydevelopmentobtainedaccordingto
“NanshanDistrictIndependentInnovationIndustryDevelopmentSpecialFundManagementMeasures(Trial)”
issuedbytheOfficeofthePeople'sGovernmentofNanshanDistrict,Shenzhen(ShennanFubanGui[2017]No.
2)
Note(14):Patentawardobtainedaccordingto“NoticeoftheShenzhenMunicipalMarketandQualitySupervision
CommissionondistributingtheFifthGuangdongPatentAwardandthe19thChinaPatentAwardforGuangdong
ProvinceIntellectualPropertySupportA
Note(15):FundforEnterpriseIntellectualPropertyManagementStandardCertificationobtainedaccordingto
“ShenzhenMunicipalPeople'sGovernmentofShenzhenMunicipality’snoticeonSeveralMeasuresforPromoting
ScientificandTechnologicalInnovation"issuedbytheShenzhenMunicipalMarketandQualitySupervisionand
ManagementCommittee(Shenfa[2016]No.7)andtheShenzhenMunicipalPeople'sGovernmentofShenzhen
MunicipalCommitteeoftheCommunistPartyofChinaPrintingandDistributingtheNoticeonSeveralMeasures
toSupportEnterprisestoEnhanceTheirCompetitiveness(Shenfa[2016]No.8)
Note(16):2018SmallandMediumEnterprisesDevelopmentSpecialFund(Under“Innovationand
Entrepreneurship”Strategy),EnterpriseDomesticMarketDevelopmentProjectFunding,obtainedaccordingto
the"InterimMeasuresfortheAdministrationofSpecialFundsfortheDevelopmentofPrivateandSMEsin
Shenzhen"issuedbyShenzhenMunicipalCommissionofEconomy,TradeandInformationandShenzhen
MunicipalFinanceCommittee(ShenJingmaoXinxiGui[2017]No.8),and“TheDetailedRulesforthe
ImplementationoftheSpecialDemonstrationFundfortheSmallandMediumEnterpriseEntrepreneurship
InnovationBaseinShenzhen”issuedbyShenzhenEconomicandTradeandInformationCommission(Shen
JingmaoXinxiZhongxiaoZi[2016]No.217).
VII.Changesofconsolidationscope
1.Changesofconsolidationscopeforotherreasons
On9March,2018,WorldWatchesInternationalobtainedthecompanyrevocationannouncement(No.1554)
issuedbytheHongKongCompaniesRegistry.Attheendoftheperiod,theCompanydidnotincludeitinthe
scopeofconsolidation.
VIII.Equityinotherentities
1.Equityinsubsidiaries
(1)Structureofenterprisegroup
Nameofsubsidiary | Mainbusinesslocation | Placeofregistration | Natureofbusiness | Shareholdingratio% | Waysacquired | |
Direct | Indirect | |||||
HARMONYCompany | Shenzhen | Shenzhen | Commerce | 100.00 | - | Establishmentorinvestment |
Nameofsubsidiary
Nameofsubsidiary | Mainbusinesslocation | Placeofregistration | Natureofbusiness | Shareholdingratio% | Waysacquired | |
Direct | Indirect | |||||
ManufacturingCompany | Shenzhen | Shenzhen | Manufacture | 90.00 | 10.00 | Establishmentorinvestment |
FIYTAHongKong | HongKong | HongKong | Commerce | 100.00 | - | Establishmentorinvestment |
Station68 | HongKong | HongKong | Commerce | - | 60.00 | Establishmentorinvestment |
HarbinCompany | Harbin | Harbin | Commerce | 100.00 | - | Establishmentorinvestment |
TechnologyCompany | Shenzhen | Shenzhen | Manufacture | 100.00 | - | Establishmentorinvestment |
TEMPORALCompany | Shenzhen | Shenzhen | Commerce | 100.00 | - | Establishmentorinvestment |
EmileChoureitShenzhenCompany | Shenzhen | Shenzhen | Commerce | 100.00 | - | Establishmentorinvestment |
FIYTASalesCompany | Shenzhen | Shenzhen | Commerce | 100.00 | - | Establishmentorinvestment |
HengdaruiCompany | Shenyang | Shenyang | Commerce | 100.00 | - | Businesscombinationundercommoncontrol |
SwissCompany | Switzerland | Switzerland | Commerce | - | 100.00 | Businesscombinationnotundercommoncontrol |
(1)Significantassociates
Name | Principalplaceofbusiness | Registrationplace | Businessnature | Shareholdingratio(%) | Accountingtreatmentforassociates | |
Direct | Indirect | |||||
ShanghaiWatch | Shanghai | Shanghai | Manufacture | 25.00 | - | Equitymethod |
Item | Balanceasof31Dec2018or2018 | Balanceasof1Jan2018or2017 |
Currentassets | 99,901,286.09 | 88,035,307.16 |
Non-currentassets | 15,459,207.08 | 17,515,363.92 |
Totalassets | 115,360,493.17 | 105,550,671.08 |
Currentliabilities | 10,833,917.48 | 5,527,973.92 |
Non-currentliabilities | - | - |
Item
Item | Balanceasof31Dec2018or2018 | Balanceasof1Jan2018or2017 |
Totalliabilities | 10,833,917.48 | 5,527,973.92 |
Minorityshareholders’interests | - | - |
Owners’equityattributabletoparentcompany | 104,526,575.69 | 100,022,697.16 |
Shareofnetassetscalculatedasshareholdingpercentage | 26,131,643.92 | 25,005,674.29 |
Adjustmentmatters | ||
-Goodwill | - | - |
-Unrealizedprofitorlossesfrominternaltransaction | - | - |
-Others | - | - |
Bookvalueofinvestmenttoassociates | 44,881,063.15 | 43,879,518.09 |
Operatingrevenue | 97,282,978.95 | 79,475,581.06 |
Netprofit | 4,006,180.22 | 1,823,572.89 |
Othercomprehensiveincome | - | - |
Totalcomprehensiveincome | 4,006,180.22 | 1,823,572.89 |
Dividendsreceivedfromassociatedcompanyduringtheyear | - | - |
MainfinancialinstrumentsoftheCompanyincludemonetaryfund,noteandaccountsreceivable,otherreceivables,available-for-salefinancialassets,equityinvestment,noteandaccountspayable,otherpayables,andloansetc.DetailsoffinancialinstrumentsrefertorelateditemsinNoteVI.TherisksassociatedwiththesefinancialinstrumentsandtheriskmanagementpoliciesadoptedbytheCompanytomitigatetheserisksaredescribedbelow.ThemanagementoftheCompanymanagesandmonitorstheseexposurestoensurethattheaboverisksarecontrolledinalimitedextent.TheCompanyadoptssensitivityanalysistechniquetoanalysethereasonabilityofriskvariables,impactofpossiblechangeoncurrentprofitandlossorshareholder’sequity.Sinceriskvariablesbarelychangeinisolation,andcorrelationbetweenvariableshavesignificantimpactonthefinalamountaffectedbyonevariable,the
followingcontentisbasedontheassumptionthateachvariablechangesinisolation.
1.Riskmanagementgoalsandpolicies
Thegoalofriskmanagementistokeepproperbalancebetweenriskandprofit,toreducenegativeinfluenceof
financialrisktofinancialperformanceoftheCompanytotheminimumandmaximizethebenefitofshareholders
andotherequityinvestors.Basedonthegoal,thefundamentalriskmanagementpoliciesoftheCompanyareto
identifyandanalyseriskstheCompanyfaces,setproperacceptableriskleveltomanagerisk,supervisevarious
riskreliablyandtimelyandcontrolriskwithinlimitedrange.
(1)MarketRisk
①Exchangeraterisk
Exchangerateriskreferstotheriskoflosscausedbyexchangeratechange.Themainexchangerateriskthe
companyundertakesisrelevanttoHongKongdollarandSwissFranc.Exceptseveralsubsidiarieswhich
purchaseandsellwithHongKongdollarandSwissFranc,othermajorbusinesstransactionsaresettledinRMB.
On31December,2018,exceptbalanceoffollowingassetsandliabilitiesshowninthetableareinHongKong
dollar,SwissFrancandUSdollar,balanceofotherassetsandliabilitiesofthecompanyareinRMB.The
exchangerateriskduetotheseassetsandliabilitieswithbalanceinforeigncurrencycouldhaveimpactonthe
financialperformanceoftheCompany.
Item | Balanceasof31Dec2018 | Balanceasof1Jan2018 |
Cashandbankbalance | 11,875,297.06 | 9,103,319.22 |
Noteandaccountsreceivables | 11,545,880.33 | 11,193,694.31 |
Prepayments | 4,733,540.86 | 12,872,520.90 |
Otherreceivables | 6,589,218.31 | 6,290,491.67 |
Noteandaccountspayables | 2,655,278.19 | 1,330,403.14 |
Advancesfromcustomers | 65,276.30 | 185,101.44 |
Otherpayables | 489,881.07 | 794,190.64 |
Short-termloans | 42,118,460.00 | 50,990,510.00 |
Non-currentliabilitiesduewithinoneyear | 347,470.00 | - |
Long-termloans | 4,517,110.00 | 5,008,425.00 |
TheCompanyhasnottakenanymeasurestoavoidforeignexchangerisks.
Foreignexchangeraterisksensitivityanalysis:
Foreignexchangeraterisksensitivityanalysisassumption:allthehedgesofthenetinvestmentinanoverseas
operationandcashflowhedgingarehighlyeffective.Underthisassumption,controllingothervariables,the
pre-taximpactoncurrentprofitandshareholders’equityduetoreasonablechangeofexchangerate,areshown
asfollowing.
Item | Fluctuationinexchangerate | 2018 | 2017 | ||
Impactonprofit | Impactonshareholders’equity | Impactonprofit | Impactonshareholders’equity | ||
Cashandbankbalance | AppreciateagainstRMBby5% | 593,764.85 | 593,764.85 | 455,165.96 | 455,165.96 |
DepreciateagainstRMBby5% | -593,764.85 | -593,764.85 | -455,165.96 | -455,165.96 | |
Noteandaccountsreceivables | AppreciateagainstRMBby5% | 577,294.02 | 577,294.02 | 559,684.72 | 559,684.72 |
DepreciateagainstRMBby5% | -577,294.02 | -577,294.02 | -559,684.72 | -559,684.72 | |
Prepayments | AppreciateagainstRMBby5% | 236,677.04 | 236,677.04 | 643,626.05 | 643,626.05 |
DepreciateagainstRMBby5% | -236,677.04 | -236,677.04 | -643,626.05 | -643,626.05 | |
Otherreceivables | AppreciateagainstRMBby5% | 329,460.92 | 329,460.92 | 314,524.58 | 314,524.58 |
DepreciateagainstRMBby5% | -329,460.92 | -329,460.92 | -314,524.58 | -314,524.58 | |
Noteandaccountspayables | AppreciateagainstRMBby5% | -132,763.91 | -132,763.91 | -66,520.16 | -66,520.16 |
DepreciateagainstRMBby5% | 132,763.91 | 132,763.91 | 66,520.16 | 66,520.16 | |
Advancesfromcustomer | AppreciateagainstRMBby5% | -3,263.82 | -3,263.82 | -9,255.07 | -9,255.07 |
Item
Item | Fluctuationinexchangerate | 2018 | 2017 | ||
Impactonprofit | Impactonshareholders’equity | Impactonprofit | Impactonshareholders’equity | ||
DepreciateagainstRMBby5% | 3,263.82 | 3,263.82 | 9,255.07 | 9,255.07 | |
Otherpayables | AppreciateagainstRMBby5% | -24,494.05 | -24,494.05 | -39,709.53 | -39,709.53 |
DepreciateagainstRMBby5% | 24,494.05 | 24,494.05 | 39,709.53 | 39,709.53 | |
Short-termloans | AppreciateagainstRMBby5% | -2,105,923.00 | -2,105,923.00 | -2,549,525.50 | -2,549,525.50 |
DepreciateagainstRMBby5% | 2,105,923.00 | 2,105,923.00 | 2,549,525.50 | 2,549,525.50 | |
Non-currentliabilitiesduewithinoneyear | AppreciateagainstRMBby5% | -17,373.50 | -17,373.50 | - | - |
DepreciateagainstRMBby5% | 17,373.50 | 17,373.50 | - | - | |
Long-termloans | AppreciateagainstRMBby5% | -225,855.50 | -225,855.50 | -250,421.25 | -250,421.25 |
DepreciateagainstRMBby5% | 225,855.50 | 225,855.50 | 250,421.25 | 250,421.25 |
②Interestrisk-riskofchangeincashflow
TheriskofchangeincashflowintheCompanyduetothechangeofinterestrateismainlyrelevanttofloating
interestratebankloans.ThestrategyoftheCompanyistomaintainthefloatingrateoftheseloans.
Interestratesensitivityanalysis:
Interestratesensitivityanalysisisbasedonfollowingassumption:
?Theincomeandexpenseoffinancialinstrumentswithvariableinterestrateisinfluencedbychangeofmarket
interestrate
?Forfixedinterestratefinancialinstrumentsmeasuredbyfairvalue,changeofmarketinterestrateonly
influencestheinterestincomeandexpense
?Forderivativefinancialinstrumentsthatdesignatedashedginginstruments,changeofmarketinterestrate
influencethefairvalueandinterestratehedgingisestimatedtobehighlyeffective
?Thechangeinfairvalueofderivativefinancialinstrumentsandotherfinancialassetsandliabilitiesis
calculatedwithmarketinterestrateonbalancesheetdateunderdiscountcashflowmethod
Onthebasisofaboveassumptions,withothervariablesnotchanged,thepre-taximpactoncurrentprofitand
shareholders’equityduetoreasonablechangeofinterestrateisasfollows:
OnDecember31,2018,theCompanydidnothavealoanwithfloatinginterestrate(On31December2017,ifthe
borrowingratecalculatedwithfloatinginterestrateincreasesofdecreasesby50basispoints,andotherfactors
remainunchanged,thenetprofitandshareholders’equitywasestimatedtodecreaseorincreasebyaround
RMB326,300yuan)
③Otherpricerisk.
Available-for-salefinancialassetsheldbytheCompanyaremeasuredatcostonbalancesheetdate,sothereis
nopricerisktobedisclosed
(2)Creditrisk
ThebiggestcreditriskexposurewhichpossiblyleadstofinanciallossoftheCompanyon31December2018is
defaultofcontractobligationoftransactioncounterparty,whichmayleadtothelossonfinancialassetsofthe
Company.Specifically,itincludesthebookbalanceoffinancialassetsrecognizedinconsolidatedbalancesheet
andthefailureofnotsettinganyguaranteestoanyothercreditrisksthattheCompanymaybear.
Toreducecreditrisk,basedonthefinancialstatusofdebtor,externalrating,guaranteepossibility,creditrecord
gainedfromthethirdpartyandotherfactorsincludingcurrentmarketstatusandthattheCompanyevaluates
creditqualificationofdebtorandsetcorrespondingdebtlimitandcreditperiod.TheCompanywillregularly
supervisecreditrecordofdebtor.Fordebtorwithbadcreditrecord,theCompanywillensurethewholecreditrisk
oftheCompanywithincontrollablerangeintheformsofwrittenreminderletter,reducingcreditperiodand
cancellingcreditperiod.Additionally,theCompanyexaminesthecollectionofreceivablesoneverybalancesheet
datetoensuresufficientprovisionforbaddebts.Hence,themanagementoftheCompanysupposethatthecredit
riskundertakenbytheCompanyhasbeenreducedsignificantly.
TheworkingcapitaloftheCompanyisdepositedinbankwithhighcreditrating,sothecreditriskofworking
capitalislow.
Foramountofaccountsreceivable,theamountoftop5accountsreceivableaccountsfor17.13%oftotal
accountsreceivableoftheCompany.Inotherreceivables,theamountoftop5accountsreceivableaccountsfor
22.73%oftotalotherreceivableoftheCompany.
(3)Liquidityrisk
Inmanagingliquidityrisk,theCompanykeepsthecashandcashequivalentsthattheCompanydeemssufficient
andcontrolsthemtomeetoperatingneeds,reduceinfluenceofcashliquidityfluctuation.TheCompany
managementmonitorstheuseofbankloansandensurestocomplywithborrowingagreement.
ThemainsourceofcapitalisgeneratedbythecashfromCompany’sbusinessoperationsandbankloans.Asat
31December2018,bankborrowingfacilitythattheCompanyhasnotyetusedisaboutRMB1,981,030,000(31
December2017:RMB2,723,970,000).
ThematurityoffinancialassetsandfinancialliabilitiesheldbytheCompanyaccordingtotheundiscounted
remainingcontractualobligationsisasfollows(Unit:inRMBtenthousands):
Item | Within1year | 1to2years | 2to3years | Over3years | Total |
Financialassets: | |||||
Cashandbankbalance | 16,482.81 | - | - | - | 16,482.81 |
Noteandaccountsreceivables | 38,848.67 | - | - | - | 38,848.67 |
Incl:Notesreceivable | 705.18 | - | - | - | 705.18 |
Accountsreceivable | 38,143.49 | - | - | - | 38,143.49 |
Otherreceivables | 4,824.95 | - | - | - | 4,824.95 |
Totalfinancialassets | 60,156.43 | - | - | - | 60,156.43 |
Financialliabilities: | |||||
Short-termloans | 54,711.85 | - | - | - | 54,711.85 |
Noteandaccountspayables | 25,991.36 | - | - | - | 25,991.36 |
Incl:Accountspayable | 25,991.36 | - | - | - | 25,991.36 |
Otherpayables | 7,181.99 | - | - | - | 7,181.99 |
Incl:Interestpayable | 77.23 | - | - | - | 77.23 |
Otherpayables | 7,104.76 | - | - | - | 7,104.76 |
Non-currentliabilitiesdueinoneyear | 34.75 | - | - | - | 34.75 |
Long-termloan | - | 34.75 | 34.75 | 382.21 | 451.71 |
Financialguarantee | 26,711.85 | - | - | - | 26,711.85 |
Totaloffinancialliabilities | 114,631.80 | 34.75 | 34.75 | 382.21 | 115,083.51 |
Item
Item | Within1year | 1to2years | 2to3years | Over3years | Total |
andcontingentliabilities |
(1)Notesreceivablethathavebeenendorsedattheendoftheyearandhavenotexpiredonthebalancesheet
date
Item | Amountderecognizedattheendof2018 | Amountnotderecognizedattheendof2018 |
Banker'sacceptancebill | 1,294,584.13 | - |
1.Financialassetsandliabilitiesmeasuredatfairvalue
On31December2018,theCompanydidnothaveassetsandliabilitiesmeasuredatfairvalue.
2.Financialassetsandliabilitiesnotmeasuredatfairvalue
TheCompany’sfinancialassetsandfinancialliabilitiesmeasuredatamortizedcostmainlyinclude:cashandbank
balances,noteandaccountsreceivables,otherreceivables,short-termloans,noteandaccountspayables,other
payables,andlong-termloans,etc…
Thedifferencebetweenthebookvalueandfairvalueoffinancialassetsandliabilitiesthatarenotmeasuredat
fairvalueissmall.
XI.Relatedpartyrelationshipandtransactions
1.DetailsoftheparentcompanyoftheCompany
Name | Registrationplace | Typeofbusiness | Registeredcapital | ShareholdingratioofparentcompanytotheCompany% | RatioofvoterightofparentcompanytotheCompany% |
ChinaNationalAviationGroup | Shenzhen | Investmentinindustries,domestictrade,materialsupplyanddistribution | 1,166,161,996 | 37.15 | 37.15 |
CompanyisawhollyownedsubsidiaryofChinaAeroSpaceInternationalHoldingsLimited(CASI),andChina
AviationIndustryCorporation(AVIC)directlyholds62.52%oftheequityofCASI.Therefore,theultimate
controllingpartyoftheCompanyisAVIC.
2.Subsidiaries
DetailsofsubsidiariesrefertoNoteVIII.1“Equityinsubsidiary”.
3.Jointventureandassociation
DetailsofjointventuresandassociatesrefertoNoteVIII.2“Equityinjointarrangementorjointventure”.
4.Otherrelatedparties
Name | RelationshipwiththeCompany |
ShenzhenCATICPropertyManagementLimited(CATICPropertyManagement) | Controlledbythesameparty |
ShenzhenCATICBuildingEquipmentCo.,Ltd.(CATICBuildingCompany) | Controlledbythesameparty |
RainbowDepartmentStoreCo.,Ltd.(RainbowDepartmentStore) | Controlledbythesameparty |
ShennanCircuitsCo.,Ltd.(ShennanCircuits) | Controlledbythesameparty |
CATICRealEstateCompany | Controlledbythesameparty |
AVICSecuritiesCo.,Ltd.(AVICSecuritiesCompany) | Controlledbythesameparty |
Xi’anSkytelHotelCo.,Ltd.(SkytelHotel) | Controlledbythesameparty |
ShenzhenCATICCityRealEstateDevelopmentCo.,Ltd.(CATICCityRealEstateCompany) | Controlledbythesameparty |
ShenzhenCATICCityDevelopmentCo.,Ltd.(CATICCityDevelopmentCompany) | Controlledbythesameparty |
CATICGuanlanPropertyDevelopmentCo.,Ltd.(CATICGuanlanProperty) | Controlledbythesameparty |
CATICChangtaiInvestmentDevelopmentCo.,Ltd.(CATICChangtaiCompany) | Controlledbythesameparty |
ShenzhenCATICJiufangAssetManagementLimited(CATICJiufangAssetMgmtCompany) | Controlledbythesameparty |
ShenzhenCATICCityInvestmentCo.,Ltd(CATICCityInvestment) | Controlledbythesameparty |
AVICTrainingCenter | Controlledbythesameparty |
GanzhouCATIC9SquareTradingCo,Ltd(Ganzhou9SquareCompany) | Controlledbythesameparty |
CATICCityEstate(Kunshan)Co,Ltd(KunshanCompany) | Controlledbythesameparty |
ShenzhenCATICHuachengRealEstateDevelopmentCo,Ltd(CATICHuachengCompany) | Controlledbythesameparty |
AVICFinanceCo.,Ltd.(AVICFinanceCompany) | Controlledbythesameparty |
ShenzhenAVICSecurityServiceCo.,Ltd(AVICSecurityService)) | Controlledbythesameparty |
ShenzhenAVICPropertyAssetManagementCo.,Ltd.(AVICPropertyAssetManagement) | Controlledbythesameparty |
Jiujiang9SquareBusinessManagementCo.,Ltd(JiufangBusinessManagement) | Controlledbythesameparty |
Name
Name | RelationshipwiththeCompany |
ShenzhenCATICGrandSkylightHotelCo.,Ltd(GrandSkylightHotel) | Controlledbythesameparty |
ShenzhenCATICCityParkingManagementCo,Ltd(CATICCityParkingManagementCompany) | Controlledbythesameparty |
ShenzhenGrandSkylightHotelManagementCo.,Ltd(GrandSkylightHotelManagementCompany) | Controlledbythesameparty |
ShenzhenCATICTechnicalTestingInstitute(CATICTechnicalTestingInstitute) | Controlledbythesameparty |
GongqingchengCATICCultureInvestmentCo.,Ltd(GongqingchengCATICCultureInvestmentCompany) | Controlledbythesameparty |
AVIC-INTLProjectEngineeringCo.,Ltd(AVIC-INTLProjectEngineeringCompany) | Controlledbythesameparty |
ShenzhenCATICPropertyDevelopmentCo.,Ltd(CATICProperty) | Controlledbythesameparty |
JiujiangCIATICCityRealEstateDevelopmentCo.,Ltd(JiujiangCATICRealEstateCompany) | Controlledbythesameparty |
HuangYongfeng | Keymanagementmember |
WangMingchuan | Keymanagementmember |
FuDebin | Keymanagementmember |
XiaoZhanglin | Keymanagementmember |
WangBo | Keymanagementmember |
ChenLibin | Keymanagementmember |
WangJianxin | Keymanagementmember |
ZhongHongming | Keymanagementmember |
TangXiaofei | Keymanagementmember |
WangBaoying | Keymanagementmember |
ShengQing | Keymanagementmember |
ZouZhixiang | Keymanagementmember |
LuBingqiang | Keymanagementmember |
LuWanjun | Keymanagementmember |
LiuXiaoming | Keymanagementmember |
PanBo | Keymanagementmember |
LiMing | Keymanagementmember |
ChenZhuo | Keymanagementmember |
Name
Name | RelationshipwiththeCompany |
ZhangHongguang | Keymanagementmember |
ZhangShunwen | Keymanagementmember |
WangYan | Keymanagementmember |
WangJingqi | Keymanagementmember |
(1)Relatedtransactionsforthepurchaseandsaleofgoods,provisionandreceiptofservices
①Purchasinggoodsandreceivingservices
Relatedparty | Typeoftransaction | 2018 | 2017 |
CATICPropertyManagement | Propertymanagement | 8,208,102.96 | 8,243,916.72 |
RainbowDepartmentStore | Departmentstoreexpenses/Commoditypurchase | 5,865,816.91 | 5,868,872.26 |
AVICTrainingCenter | Training | 273,596.25 | - |
AVICTechnicalTestingInstitute | Testing | - | 3,207.55 |
ShennanCircuits | Materialpurchase | 29,914.50 | 4,273.50 |
Ganzhou9SquareCompany | Departmentstoreexpenses | 177,372.93 | - |
CATICCityEstate(Kunshan)Company | Departmentstoreexpenses | 76,674.66 | - |
JiufangBusinessManagement | Departmentstoreexpenses | 58,322.11 | - |
Relatedparty | Typeoftransaction | 2018 | 2017 |
RainbowDepartmentStore | Productsalesandservices | 71,764,856.50 | 77,301,661.83 |
GrandSkylightHotelManagementCompany | Productsalesandservices | 5,982.91 | 6,837.60 |
Ganzhou9SquareCompany | Productsalesandservices | 960,563.85 | 1,763,367.26 |
ShennanCircuits | Materialsalesandservices | 5,883,132.72 | 3,810,125.07 |
GongqingchengCATICCultureInvestmentCompany | Productsales | 655,161.45 | - |
AVIC-INTL | Productsales | 10,215.52 | - |
CATICCityEstateCompany | Productsales | 4,051.28 | - |
Relatedparty
Relatedparty | Typeoftransaction | 2018 | 2017 |
AVIC-INTLProjectEngineeringCompany | Productsales | 15,351.72 | - |
①TheCompanyasalessor
Lessee | Typeofleasedassets | Recognizedrentalincomeincurrentyear | Recognizedrentalincomeinprioryear |
CATICPropertyManagement | Property | 6,997,899.09 | 6,761,603.07 |
SkytelHotel | Property | 4,190,476.18 | 4,190,476.18 |
CATICRealEstateCompany | Property | 1,813,948.87 | 1,719,424.99 |
CATICCityInvestment | Property | 364,293.91 | 1,154,505.27 |
AVICSecuritiesCompany | Property | 1,231,342.83 | 1,182,657.15 |
CATICCityRealEstateCompany | Property | 342,330.05 | 702,125.82 |
RainbowDepartmentStore | Property | 529,166.26 | 532,715.48 |
CATICHuachengCompany | Property | 257,234.48 | 404,075.33 |
JiufangAssetMgmtCompany | Property | 1,560,410.13 | 392,865.14 |
AVICSecurityService | Property | 1,160,868.75 | 618,958.25 |
CATICGuanlanProperty | Property | 119,748.00 | 98,012.11 |
AVICPropertyAssetManagement | Property | 57,154.70 | 132,279.06 |
CATICCityDevelopmentCompany | Property | 2,428.57 | 27,131.52 |
CATICRealEstateCompany | Property | 165,612.56 | - |
CATICCityParkingManagementCompany | Property | 9,916.44 | - |
Lessor | Typeofleasedassets | Rentalexpenseschargedincurrentyear | Rentalexpenseschargedinprioryear |
Ganzhou9SquareCompany | Property | 894,582.84 | 1,053,882.06 |
CATICChangtaiCompany | Property | - | 244,255.29 |
CATICCityEstate(Kunshan)Company | Property | 156,942.79 | 211,572.02 |
JiufangBusinessManagement
JiufangBusinessManagement | Property | 337,541.02 | 334,028.93 |
RelatedParty | Amount | Effectivedate | Expiringdate | Recognizedinterestexpensesincurrentyear |
Borrowing: | ||||
AVICFinanceCompany | 150,000,000.00 | 2018-5-14 | 2019-5-14 | 3,805,804.17 |
Item | 2018 | 2017 |
Remunerationforkeymanagementmembers | 13,123,100.00 | 13,564,900.00 |
Theyear-endbalanceoftheCompany’scashwasRMB128,255,699.54,whichwasdepositedwithAVICFinance
Company.InterestsreceivedfromthedepositduringtheyearwereRMB365,094.51.
6.Receivablesfromandpayablestorelatedparties
(1)Receivables
Item | 31Dec2018 | 1Jan2018 | ||
Carryingamount | Baddebtprovision | Carryingamount | BaddebtProvision | |
Accountsreceivable: | ||||
RainbowDepartmentStore | 2,305,867.79 | 115,293.39 | 1,782,356.36 | 89,117.82 |
ShennanCircuits | 1,659,077.38 | 82,953.87 | 786,443.94 | 39,322.20 |
Ganzhou9SquareCompany | 4,000.00 | 200.00 | 115,742.00 | 5,787.10 |
GongqingchengCATICCultureInvestment | 28,269.36 | 1,413.47 | - | - |
JiufangBusinessManagementCompany | 4,288.00 | 214.40 | - | - |
AVICSecuritiesCompany | 101,428.57 | 5,071.43 | - | - |
CATICCityRealEstateCompany | 3.00 | 0.15 | - | - |
CATICJiufangAssetMgmtCompany | 33,331.01 | 1,666.55 | - | - |
CATICGuanlanProperty | 8,315.43 | 415.77 | - | - |
Item
Item | 31Dec2018 | 1Jan2018 | ||
Carryingamount | Baddebtprovision | Carryingamount | BaddebtProvision | |
CATICRealEstateCompany | 148,915.46 | 7,445.77 | - | - |
CATICPropertyManagement | 0.52 | 0.03 | - | - |
Total: | 4,293,496.52 | 214,674.83 | 2,684,542.30 | 134,227.12 |
Notesreceivable: | ||||
ShennanCircuits | - | - | 2,398,579.72 | - |
Total | - | - | 2,398,579.72 | - |
Otherreceivables: | ||||
RainbowDepartmentStore | 761,860.00 | 38,093.00 | 832,774.30 | 41,638.72 |
CATICPropertyManagement | 10,100.00 | 505.00 | 100.00 | 5.00 |
Ganzhou9SquareCompany | 122,665.60 | 6,133.28 | 122,665.60 | 6,133.28 |
JiujiangCATICEstateCompany | - | - | 50,000.00 | 2,500.00 |
CATICCityEstate(Kunshan)Company | 50,400.00 | 2,520.00 | 35,000.00 | 1,750.00 |
GrandSkylightHotel | 32,000.00 | 1,600.00 | 32,000.00 | 1,600.00 |
AVICTrainingCenter | - | - | 150,000.00 | 7,500.00 |
CATICBuildingCompany | - | - | 126,598.73 | 6,329.94 |
GongqingchengCATICCultureInvestment | 5,500.00 | 275.00 | - | - |
JiufangBusinessManagement | 50,000.00 | 2,500.00 | - | - |
CATICRealEstateCompany | 54,923.00 | 2,746.15 | - | - |
AVIC-INTL | 11,101.80 | 555.09 | - | - |
Total | 1,098,550.40 | 54,927.52 | 1,349,138.63 | 67,456.94 |
Item | 31Dec2018 | 1Jan2018 |
AccountsPayable: | ||
CATICBuildingCompany | 24,000.00 | 24,000.00 |
CATICPropertyManagement | 40,821.05 | 40,821.05 |
Item
Item | 31Dec2018 | 1Jan2018 |
Total | 64,821.05 | 64,821.05 |
Advancesfromcustomers: | ||
CATICRealEstateCompany | - | 148,915.46 |
CATICGuanlanProperty | - | 8,315.43 |
CATICJiufangAssetMgmtCompany | - | 33,331.01 |
AVICSecuritiesCompany | - | 101,428.57 |
Total | - | 291,990.47 |
Otherpayables: | ||
CATICPropertyManagement | 1,131,164.13 | 472,032.00 |
CATICRealEstateCompany | 442,407.92 | 442,407.92 |
CATICCityInvestmentCompany | 309,732.00 | 309,732.00 |
AVICSecuritiesCompany | 213,000.00 | 213,000.00 |
CATICBuildingCompany | 116,960.23 | 89,289.47 |
CATICCityRealEstateCompany | 99,052.32 | 99,052.32 |
CATICHuachengCompany | 73,819.68 | 73,819.68 |
CATICJiufangAssetMgmtCompany | 378,483.84 | 66,666.60 |
RainbowDepartmentStore | 60,000.00 | 60,000.00 |
CATICCityDevelopmentCompany | - | 5,100.00 |
CATICChangtaiCompany | 4,064.81 | 4,064.81 |
CATICRealEstateCompany | 51,014.88 | - |
CATICGuanlanProperty | 25,401.60 | - |
AVICSecurityService | 10,533.44 | - |
Ganzhou9SquareCompany | 3,446.22 | - |
ShennanCircuits | 150,000.00 | - |
Total | 3,069,081.07 | 1,835,164.80 |
XII.Commitmentsandcontingencies
1.Significantcommitments
(1)Operatingleasecommitment
Asofthebalancesheetdate,theirrevocableoperatingleasecontractssignedbytheCompanyareasfollows:
Item | 31Dec2018 | 1Jan2018 |
Minimumleasepaymentforirrevocableoperatinglease: | ||
The1styearafterthebalancesheetdate | 54,382,100.37 | 29,799,099.00 |
The2ndyearafterthebalancesheetdate | 28,501,337.58 | 14,570,632.00 |
The3rdyearafterthebalancesheetdate | 12,406,400.37 | 7,533,388.00 |
Yearsinarrears | 9,533,027.43 | 1,121,206.00 |
Total | 104,822,865.75 | 53,024,325.00 |
Asof31December,2018,theCompanyhasnocommitmentthatshallbedisclosed.
2.Contingencies
(1)Contingentliabilitiesandfinancialinfluenceformedbyprovidingliabilityguaranteetootherunits
RefertoNoteXIV.2fordetailsofguaranteebetweenparentcompanyandsubsidiaries.
(2)Othercontingentliabilitiesanditsfinancialinfluence
Asof31December2018,thereisnoothercontingencythatshallbedisclosedbytheCompany.
XIII.Postbalancesheetdateevents
1.Restrictedstockincentiveplan
In2018,theCompanyimplementedarestrictedstockincentiveplan(the“IncentivePlan”)tomotivateandreward
individualswhocontributetotheCompany'soperations.Incentivesincludecompany’sdirectors,senior
management,middlemanagement,coretechnicalstaffandseniormanagementandcorebackboneof
subsidiaries.
On11January,2019,afterthefirstextraordinarygeneralmeetingof2019andthefifthmeetingoftheninthboard
ofdirectors,theCompanyintendstogrant4,224,000A-sharerestrictedsharesto128incentiveindividualsata
priceofRMB4.40pershare.Asof11January,2019(grantdate),theactualnumberofindividualreceivedthe
grantwas128,andatotalof4,224,000restrictedstocksweregranted.Thetotalamountofsubscriptionsreceived
bytheincentiveindividualswasRMB18,585,600.00,ofwhichRMB4,224,000.00increasedsharecapitaland
RMB14,361,600.00wasincludedincapitalreserve(sharepremium).
Theincentiveprogramisvalidfor5years(60months),includingalock-upperiodof2years(24months)andan
unlockperiodof3years(36months).
2.Profitdistribution
Theresolutionof2018profitdistributionproposalhasbeenpassedonthe6thBoardMeetingofthe9thBoardof
Directorson13March2019.ItproposedtodistributecashdividendofRMB2.00(taxinclusive)forevery10
sharesheldbyshareholdersbasedonthetotal438,744,881sharesasat31December2018.Cashdividendthat
proposedtobedistributedamountstoRMB87,748,976.20,nobonussharesandnocapitalizationofreserves.
TheproposalissubjecttoapprovalfromAnnualGeneralShareholders’Meeting.
3.Impactoftheimplementationofthenewaccountingstandardsfrom1January,2019
On31March,2017,theMinistryofFinanceissuedthe"AccountingStandardsforBusinessEnterprisesNo.22-
RecognitionandMeasurementofFinancialInstruments(Revisedin2017)"(Caikuai[2017]No.7)and
"AccountingStandardsforBusinessEnterprisesNo.23"TransferofFinancialAssets(Revisedin2017)(Caikuai
[2017]No.8),"AccountingStandardsforBusinessEnterprisesNo.24-HedgeAccounting(Revisedin2017)"
(Caikuai[2017]No.9),andissuedthe“AccountingStandardsforBusinessEnterprisesNo.37–Financial
InstrumentsPresentation(Revisedin2017)”(Caikuai[2017]No.14)in2May,2017,(theabove-mentioned
standardsarecollectivelyreferredtoasthe“NewFinancialInstrumentsStandards”),andthedomesticlist
companiesshalladoptthenewguidelinesfrom1January,2019.TheCompanywillimplementtheaboveNew
FinancialInstrumentsStandardsfrom1January,2019,andwillchangetherelevantaccountingpoliciesin
accordancewiththeNewFinancialInstrumentStandards.
Thefollowingarethemaincontentsoftheaccountingpolicychangesthatwillbeinvolved:
Allfinancialassetscurrentlyrecognizedshallbesubsequentlymeasuredatamortisedcostorfairvalueunderthe
NewFinancialInstrumentStandards.
OntheimplementationdateoftheNewFinancialInstrumentStandards,thebusinessmodelofmanagingfinancial
assetsisevaluatedbasedonthefactsandcircumstancesoftheCompanyontheday,andthecontractualcash
flowcharacteristicsonthefinancialassetsareevaluatedbasedonthefactsandcircumstancesattheinitial
confirmationofthefinancialassets.Financialassetsareclassifiedintothreecategories:measuredatamortised
cost,fairvaluethroughothercomprehensiveincome,andfairvaluethroughprofitorloss.Whenfairvaluethrough
othercomprehensiveincomeequityinstrumentisderecognised,theaccumulatedgainorlosspreviously
recognisedinothercomprehensiveincomeshallbetransferredfromothercomprehensiveincometoretained
earnings,butnotincludedincurrentprofitandloss.
UndertheNewFinancialInstrumentStandard,theCompanyadoptsexpectedcreditlossesmodeltomake
provisionandrecognizeimpairmentofcreditlossesforfinancialassetsmeasuredatamortizedcost,debt
instrumentinvestmentsmeasuredatfairvaluethroughothercomprehensiveincome,leasereceivables,contract
assetsandthefinancialguaranteecontract.
4.Othersignificantnon-adjustingeventsafterbalancesheetdate
(1)On13March,2019,approvedbythe6thmeetingofthe9thBoardofDirectorsoftheCompany,theCompany
intendstoapplycreditfacilityfornomorethanRMB900,000,000frombanksinvariouswaysincludingcredit,
guaranteeandmortgagein2019.Theabove-mentionedproposalofthetotalcreditlineofthebankissubjectto
theapprovalofthegeneralmeetingoftheCompany.
(2)On13March,2019,approvedbythe6thmeetingofthe9thBoardofDirectorsoftheCompany,theCompany
intendstoapplyforaguaranteeloanofnotexceedingRMB600,000,000forthewhollyownedsubsidiaryat
relevantbanksin2019.ThelineofcreditisincludedintheactuallineofbankloansappliedbytheCompanyin
2019,whichisRMB900,000,000.Theaboveguaranteeamountissubjecttotheapprovalofthegeneralmeeting
oftheCompany.
XIV.Othersignificantevents
1.Deregistrationofsubsidiary
Station68Companyisgoingthroughthederegistrationprocedureandhasnotfinisheduntil31December2018
2.Guaranteesituation
In2018,theCompanyandChinaMerchantsBankCo.,Ltd.ShenzhenBranchsignedacreditfacilityagreement
withacreditlimitofRMB200,000,000.TheCompany'ssubsidiary,HarmonyCompany,providedguarantee,and
theguaranteemethodisjointliabilityguarantee.Theguaranteeperiodisfromthedateoftheguarantee
agreement(2July,2018)toeachdebtmaturitydateunderthecreditagreementplusthreeyears.Theagreement
creditlimitisvalidfrom18June,2018to17June,2019.Asof31December,2018,thetotalbalanceofloans
underthecreditagreementwasRMB110,000,000.
InMay2018,theCompanyandChinaAgriculturalBankofChinaShenzhenCentralBranchsigneda
comprehensivecreditfacilityagreementwithacreditlimitofRMB200,000,000(canbeusedinformofbankloan,
bankguaranteeetc…).Thecreditlimitisvalidfrom21May2018to21May2019.Asof31Dec2018,balanceof
bankloansunderthisfacilitywasRMB10,000,000.InNovember2018,theCompanyappliedtoopena
RMB80,000,000performanceguaranteeletterwithjointliability.Thebeneficiariesoftheperformanceguarantee
letteraresuppliersofHARMONYCompany,oneoftheCompany’ssubsidiary.Thevalidperiodofthe
performanceguaranteeletterisfrom30December2018to29December2019.
InJuly2018,theCompany'ssubsidiary,FIYTAHongKongCo.,Ltd.andChinaTrustCommercialBankCo.,Ltd.
signedacreditlinecontractwithacreditlimitofHKD40,000,000.TheguaranteeisprovidedbytheCompany,and
theexpirationdateoftheguaranteeis31May,2020.Thecontractmaturitydateis31May,2020.AsofDecember
31,2018,thetotalloanbalanceunderthecreditagreementisHKD18,070,000.
InDecember2018,theCompany'ssubsidiary,FIYTAHongKongCo.,Ltd.andNanyangCommercialBank(China)
Co.,Ltd.ShenzhenBranchsignedacreditlineagreementwithacreditlimitofHKD80,000,000.TheCompany
providedguarantee,andtheguaranteemethodwasjointliabilityguarantee.Thetermofguaranteeshallbetwo
yearsfromthedateofexpirationoftherepaymentperiodoftheprincipalclaim.Thecreditfacilityisvalidfrom17
December,2018to12November,2020.AsofDecember31,2018,thetotalloanbalanceunderthecredit
agreementisHKD30,000,000.
InDecember2018,theCompanysignedacomprehensivefinancingcontractwithChinaConstructionBankCo.,
Ltd.ShenzhenBranchwithacreditlimitofRMB300,000,000.TheCompany'ssubsidiary,HarmonyCompany,
providedguarantee,andtheguaranteemethodisjointliabilityguarantee.Theguaranteeperiodstartsfromthe
dateofthesinglecreditextensionandendsthreeyearsafterthematurityofthedebt.Thecontractcreditfacilityis
validfrom4December,2018to8March,2020.Asof31December,2018,thetotalloanbalanceunderthecredit
agreementisRMB35,000,000.
3.Others
Theproposalaboutacquiringwholly-ownedsub-subsidiaryMontresChourietSAhasbeenpassedinthe16th
BoardMeetingoftheeighthBoardofDirectorson2June2017.TheCompanyisgoingtoacquire100%shareof
SwissCompany,ownedbythesubsidiaryoftheCompany,FIYTAHongKong.TheconsiderationofCHF12million
wasmadeonthebasisofauditednetassetasat31December2016.Theacquisitionhasnotbeenfinalizedasof
31December2018.
XV.NotestotheCompany’sfinancialstatements
1.Noteandaccountsreceivables
Item | 31Dec2018 | 1Jan2018 |
Accountsreceivable | 737,636.38 | 6,832,006.11 |
①Accountsreceivablepresentedbycategories:
Category | 31Dec2018 | ||||
Bookbalance | Provisionforbaddebts | Carryingamount | |||
Amount | Percentage% | Amount | Percentage% | ||
Receivablesthatareindividuallysignificantin | - | - | - | - | - |
Category
Category | 31Dec2018 | ||||
Bookbalance | Provisionforbaddebts | Carryingamount | |||
Amount | Percentage% | Amount | Percentage% | ||
amountandprovidedforbaddebtseparately | |||||
Receivablesprovidedforbaddebtbyportfolio | 776,459.35 | 100.00 | 38,822.97 | 5.00 | 737,636.38 |
Incl:Portfolioofaging | 776,459.35 | 100.00 | 38,822.97 | 5.00 | 737,636.38 |
Portfolioofspecificaccounts | - | - | - | - | - |
Receivablesthatareindividuallyinsignificantinamountbutprovidedforbaddebtseparately | - | - | - | - | - |
Total | 776,459.35 | 100.00 | 38,822.97 | 5.00 | 737,636.38 |
Category | 1Jan2018 | ||||
Bookbalance | Provisionforbaddebt | Carryingamount | |||
Amount | Percentage% | Amount | Provisionrate% | ||
Receivablesthatareindividuallysignificantinamountandprovidedforbaddebtseparately | - | - | - | - | - |
Receivablesprovidedforbaddebtbyportfolio | 6,871,446.35 | 100.00 | 39,440.24 | 0.57 | 6,832,006.11 |
Incl:Portfolioofaging | 788,804.75 | 11.48 | 39,440.24 | 5.00 | 749,364.51 |
Portfolioofspecificaccounts | 6,082,641.60 | 88.52 | - | - | 6,082,641.60 |
Receivablesthatareindividuallyinsignificantinamountbutprovidedforbaddebtseparately | - | - | - | - | - |
Total | 6,871,446.35 | 100.00 | 39,440.24 | 0.57 | 6,832,006.11 |
Aging
Aging | 1Jan2018 | ||
Amount | Provision | ProvisionRate(%) | |
Withinoneyear | 776,459.35 | 38,822.97 | 5.00 |
TheamountofBaddebtprovisionaccruedincurrentyearisRMB16,073.16;Theamountofthereversalofbad
debtprovisionincurrentyearisRMB16,690.43.
③Top5accountsreceivableasattheyearend
Theamountoftop5receivablesbasedonyear-endreceivablebalanceisRMB776,458.78,accountsfor
100%oftotalreceivablesasat31Dec2018.CorrespondingbaddebtprovisionisRMB38,822.93.
2.Otherreceivables
Item | 31Dec2018 | 1Jan2018 |
Otherreceivables | 870,739,378.37 | 831,952,437.86 |
①Otherreceivablesdisclosedbycategories:
Category | 31Dec2018 | ||||
Bookbalance | Provisionforbaddebt | Carryingamount | |||
Amount | Percentage% | Amount | Provisionrate% | ||
Otherreceivablesthatareindividuallysignificantinamountandprovidedforbaddebtseparately | - | - | - | - | - |
Otherreceivablesprovidedforbaddebtbyportfolio | 870,839,129.37 | 100.00 | 99,751.00 | 0.01 | 870,739,378.37 |
Incl:Portfolioofaging | 1,426,516.07 | 0.16 | 99,751.00 | 6.99 | 1,326,765.07 |
Portfolioofspecificaccounts | 869,412,613.30 | 99.84 | - | - | 869,412,613.30 |
Receivablesthatareindividuallyinsignificantinamountbutprovidedforbaddebtseparately | - | - | - | - | - |
Total | 870,839,129.37 | 100.00 | 99,751.00 | 0.01 | 870,739,378.37 |
(Continued)
Category | 1Jan2018 | ||||
Bookbalance | Provisionforbaddebt | Carryingamount | |||
Amount | Percentage% | Amount | Provisionrate% | ||
Otherreceivablesthatareindividuallysignificantinamountandprovidedforbaddebtseparately | - | - | - | - | - |
Otherreceivablesprovidedforbaddebtbyportfolio | 832,005,502.89 | 100.00 | 53,065.03 | 0.01 | 831,952,437.86 |
Incl:Portfolioofaging | 727,550.50 | 0.09 | 53,065.03 | 7.29 | 674,485.47 |
Portfolioofspecificaccounts | 831,277,952.39 | 99.91 | - | - | 831,277,952.39 |
Receivablesthatareindividuallyinsignificantinamountbutprovidedforbaddebtseparately | - | - | - | - | - |
Total | 832,005,502.89 | 100.00 | 53,065.03 | 0.01 | 831,952,437.86 |
Aging | 31Dec2018 | ||
Otherreceivable | Provision | Provisionrate(%) | |
Within1year | 1,178,412.07 | 58,920.60 | 5.00 |
1-2years | 208,054.00 | 20,805.40 | 10.00 |
2-3years | - | - | - |
Above3years | 40,050.00 | 20,025.00 | 50.00 |
Total | 1,426,516.07 | 99,751.00 | 6.99 |
Portfolioofspecificaccounts | 31Dec2018 | ||
Otherreceivable | Provision | Provisionrate% | |
pettycashadvancedtoemployees | 431,623.24 | - | - |
Subsidiaryfundswithinthe | 868,980,990.06 | - | - |
Portfolioofspecificaccounts
Portfolioofspecificaccounts | 31Dec2018 | ||
Otherreceivable | Provision | Provisionrate% | |
scopeofconsolidation | |||
Total | 869,412,613.30 | - | - |
subsidiaryfundswithinthescopeofconsolidationandsalesrevenuebetweenthelastsettlementdateofthe
samedepartmentstoreandthebalancesheetdatearewithhighrecoverabilityandlowpossibilityofincurringbad
debt,asaresult,nobaddebtprovisionsareprovidedforsuchreceivables.
②Otherreceivablesclassifiedbynature
Thenatureofreceivables | 31Dec2018 | 1Jan2018 |
Relatedpartybalanceswithinconsolidatedscope | 868,980,990.06 | 831,217,702.17 |
Pettycash | 431,623.24 | 60,250.22 |
Securitydeposit | 248,104.00 | 352,131.00 |
Others | 1,178,412.07 | 375,419.50 |
Total | 870,839,129.37 | 832,005,502.89 |
TheamountofBaddebtprovisionaccruedisRMB46,685.97incurrentyear.Thereisnoreceivedorreversedof
baddebtprovisionincurrentyear.
④Thetop5otherreceivableaccountsasattheyearend
Companyname | Nature | Balance | Aging | Percentageintotalclosingbalanceofotherreceivables(%) | Provisionforbadanddoubtfuldebts |
TEMPORALCompany | Inter-groupmovement | 20,819,991.24 | Within1year | 2.39 | - |
FIYTASalesCompany | Inter-groupmovement | 229,966,446.75 | Within1year | 26.41 | - |
HARMONYCompany | Inter-groupmovement | 488,575,998.73 | Within1year | 56.10 | - |
HengdaruiCompany | Inter-groupmovement | 100,860,500.00 | Within1year | 11.58 | - |
EmileChoureitShenzhenCompany | Inter-groupmovement | 28,758,053.34 | Within1year | 3.30 | - |
Total | — | 868,980,990.06 | — | 99.78 | - |
(1)Typesoflong-termequityinvestment
Item | 31Dec2018 | 1Jan2018 | ||||
Bookbalance | Provision | Carryingamount | Bookbalance | Provision | Carryingamount | |
Investmentinsubsidiaries | 1,331,248,590.93 | 1,331,248,590.93 | 1,331,248,590.93 | - | 1,331,248,590.93 | |
Investmenttoassociatedandjointventurecompanies | 44,881,063.15 | - | 44,881,063.15 | 43,879,518.09 | - | 43,879,518.09 |
Total | 1,376,129,654.08 | 1,376,129,654.08 | 1,375,128,109.02 | - | 1,375,128,109.02 |
Investedunits | 1Jan2018 | Increase | Decrease | 31Dec2018 | Provisionaccruedin2018 | Balanceofprovisionasat31Dec2018 |
HARMONYCompany | 601,307,200.00 | - | - | 601,307,200.00 | - | - |
HarbinCompany | 2,184,484.39 | - | - | 2,184,484.39 | - | - |
ManufacturingCompany | 9,000,000.00 | - | - | 9,000,000.00 | - | - |
TechnologyCompany | 10,000,000.00 | - | - | 10,000,000.00 | - | - |
FIYTAHongKong | 137,737,520.00 | - | - | 137,737,520.00 | - | - |
TEMPORALCompany | 5,000,000.00 | - | - | 5,000,000.00 | - | - |
FIYTASalesCompany | 450,000,000.00 | - | - | 450,000,000.00 | - | - |
HengdaruiCompany | 36,867,843.96 | - | - | 36,867,843.96 | - | - |
EmileChoureitShenzhenCompany | 79,151,542.58 | - | - | 79,151,542.58 | - | - |
Total | 1,331,248,590.93 | - | - | 1,331,248,590.93 | - | - |
Investedunits | 1Jan2018 | Changesin2018 |
Addition
Addition | Withdraw | Investmentincome/lossrecognizedundertheequitymethod | Adjustmentofothercomprehensiveincome | Changesofotherequity | ||
Associates | ||||||
ShanghaiWatch | 43,879,518.09 | - | - | 1,001,545.06 | - | - |
Investedunits | Changesin2018 | 31Dec2018 | Balanceofprovisionat31Dec2018 | ||
Cashdividendorprofitannouncedtobeissued | Provisionforimpairment | Other | |||
Associates | |||||
ShanghaiWatch | - | - | - | 44,881,063.15 | - |
Item | 2018 | 2017 | ||
Revenue | Cost | Revenue | Revenue | |
Mainbusinesses | 130,886,023.99 | 19,010,293.07 | 117,673,738.22 | 17,785,254.56 |
Otherbusinesses | 15,800.00 | - | 72,649.57 | - |
Total | 130,901,823.99 | 19,010,293.07 | 117,746,387.79 | 17,785,254.56 |
Item | 2018 | 2017 |
Investmentincomefromlong-termequityinvestmentmeasuredbycostmethod | 143,000,000.00 | 117,000,000.00 |
Investmentincomefromlong-termequityinvestmentmeasuredbyequitymethod | 1,001,545.06 | 455,893.22 |
Total | 144,001,545.06 | 117,455,893.22 |
XVI.Supplementaryinformation
1.Detailsofnon-recurringgainorlossfortheyear
Item | Amount | Note |
Disposalgainorlossofnon-currentassets | -180,302.24 | |
Overriddenapproval,orwithoutofficialapprovaldocument,orincidentaltaxreturnorexemption | - | |
Governmentgrantsincludedincurrentprofitorloss(exceptforthefixedorquantitativegovernmentgrants,enjoyedinaconsecutiveway,whichcloselyrelatedtotheenterprisebusinessesandaccordingtonationpolicies) | 19,375,618.48 | |
Chargesforthepossessionsoffundscollectedfromnon-monetaryenterprises | - | |
Investmentcostofsubsidiaries,jointventureandcooperativeenterpriseslessthantheprofitincurredinidentifiablenetassetfairvalueofinvestedunitwheninvestment | - | |
Profitandlossofnon-monetaryassetsexchange | - | |
Profitandlossfromentrustingotherstoinvestormanageassets | - | |
Assetimpairmentprovisionaccruedduetoforcemajeuresuchasnaturaldisasters | - | |
Profitandlossofdebtrestructuring | - | |
Enterpriserestructuringexpenses,suchasexpensesforarrangingemployees,integratingcost | - | |
Profitandlossoverfairvaluepartaccruedintransactionsofunreasonabletransactionprice | - | |
Currentnetprofitandlossofsubsidiariesfrombusinesscombinationundercommoncontrolfromtheopeningperiodtocombinationdate | - | |
Profitandlossincurredcontingentmattersunrelatedtonormaloperatingbusiness | - | |
Exceptforeffectivehedgingbusinessrelatedtonormaloperatingbusiness,profitandlossfromchangesinfairvalueincurredinfinancialassetsandfinancialliabilities,andtheinvestmentgainfromdisposaloffinancialassets,financialliabilitiesandavailable-for-salefinancialassets | - | |
Impairmentprovisionreversalofaccountsreceivableunderstandaloneimpairmenttest | 7,533,121.86 | |
Profitandlossobtainedinexternalentrustingloans | - | |
Profitandlossincurredinfairvaluechangeofinvestmentpropertysubsequentlymeasuredinfairvaluemode | - | |
Influenceoncurrentprofitandlosscausedbyone-offadjustmentaccordingtorequirementsof | - |
Item
Item | Amount | Note |
lawsandregulationsabouttaxationandaccounting | ||
Incomefromtrusteefeeobtainedbytrustingoperation | - | |
Othernon-operatingincomeandexpensesotherthantheaboveitems | 792,842.56 | |
Profitandlossitemspursuanttothedefinitionofnon-recurringprofitandloss | - | |
Subtotal | 27,521,280.66 | |
Effectofincometaxofnon-recurringprofitorloss | 6,444,246.37 | |
Effectofnon-recurringprofitorlossesattributabletominorityshareholders(aftertax) | - | |
Total | 21,077,034.29 |
TheCompanyrecognizenon-recurringgainorlossaccordingto“InterpretationAnnouncementtoInformationDisclosureof
CompanieswithSharesOfferedPubliclyNo.1–Non-recurringgainorloss”(CSRC(2008)No.43.)
2.ReturnonEquity(ROE)andEarningspershare(EPS)
Profitofthereportingperiod | WeightedaverageROE% | EPS | |
BasicEPS | DilutedEPS | ||
NetprofitattributabletoordinaryshareholdersoftheCompany | 7.30 | 0.4190 | 0.4190 |
NetprofitattributabletoordinaryshareholdersoftheCompanyafterdeductingnon-recurringprofitorloss | 6.46 | 0.3710 | 0.3710 |
Section12DocumentsAvailableforInspection
I.FinancialStatementssignedbyandunderthesealofthelegalrepresentative,chiefaccountantandaccountingsupervisors;II.OriginaloftheAuditors’Reportunderthesealoftheaccountingfirmandsignedbyandunderthesealsofcertifiedpublicaccountants.III.OriginalsofalldocumentsandmanuscriptsofannouncementsoftheCompanydisclosedinSecuritiesTimesandHongKongCommercialDailyasdesignatedbyChinaSecuritiesRegulatoryCommission.
BoardofDirectorsofFIYTAHOLDINGSLTD.
March15,2019